We’re $100K in Debt and Living in a Camper

Brought to you by the EveryDollar app, start budgeting for free today.

Normal is broke and common sense is weird, so we're here to help you transform your life.

From the Ramsey Network in the Fairwinds Credit Union studio, this is the Ramsey show,

the phone number to jump in today, triple 8, 825, 525, triple 8, 825, 525 alongside the really,

really sharply dressed George King.

I always like to see what adjective you're going to use on me today.

You know, I got distracted from the adjunct, I was looking at that jacket.

That's a well-appointed jacket, George, as always, I'm Ken Coleman, we're here together

for you.

So, looking good is half the battle, Ken.

It really is, so you're prepared as well.

All right, let's go to Travis and Huntsville, Alabama, Travis.

How can we help today?

Hey, I am in $100,000 a debt, and I'm 22, my two kids, but I make about 70,000

a year.

Okay.

Tell us more, what kind of debt is $100,000?

Break it down for us.

Well, the first one was my, I guess, my 20-year-old idiot purchase, which was, at the time when

I first got it, it was about $75,000 truck from a loan rolled over.

Now it's about at $60,000, at a 1,200 a month on it.

My second one is a $23,000 camper, started at $30,000, paid that $500 a month on it, and

then the last one is a car for my wife, which I currently owe about $16,000 a month.

Okay.

And what is your goal today?

What's the, what's the heart of the question?

Well, I guess, so we, me and my wife have been talking a lot about getting rid of the

truck, because the reason we have the camper and the truck to begin with is because we were

traveling on the road, and I did just, I worked for a renovation company doing renovating

government buildings, made a lot of money the first year, contracts died out, you know,

just slowed down, had to find another job back home where we had one more stability.

Well, we still live in the camper, and then the truck is the way to move the camper around.

So got it.

So you're living the camper full time?

You're not renting?

You don't have a home?

Okay.

No, we're not renting.

So we, and we actually don't pay for rent at the campground because we volunteer for

state parks.

Cool.

So that kind of covers the fee.

They, they kind of make it a wash.

And I'm guessing you don't move around much anymore.

You're not moving this camper much.

No, not very far.

Just around like, you know, like an hour from Huntsville, right now we're an hour so we're

kind of far, but we can move back in a couple of months.

Okay.

And your wife is at home with the kids?

Yeah.

Yeah.

Not working outside the home?

Okay.

So 70K is what we're making.

We've got 100K in debt.

Have you looked into what the truck is currently worth?

What the camper is currently worth?

You sold it privately?

Yes, sir.

So the private value on the Kelly Blue Book website is 36.

So it's, it's just, I'm really under water on it.

There's four under water on the truck and then what about the camper?

The camper, I don't know how much they depreciate, honestly, I haven't looked into it.

They depreciate a whole lot.

That's for sure.

Yeah.

You think it's worth 10 or 15?

20?

I might be able to get 10 out of it and that would leave me a 13.

Yep.

So total, doing the math, you are $37,000 underwater on these vehicles.

I mean, you cannot get rid of these until you come up with the difference somehow to

clear the tide.

Yeah, sir.

There's two ways you can do that.

I have a question.

As I'm listening here to George talk with you, have you run the numbers on, on, on the

most affordable rent, because you're already living in a trailer.

So you, we make 70,000, it's not jump change.

What would rent cost you?

There's some places where I think we could get it for a thousand, but some of those places

with kids, I just wouldn't feel safe putting them in and I know my wife would.

Okay, but you went to the worst common denominator.

So, so what I'm asking you, as I would never recommend, you put your family in a place where

your kids are unsafe.

So let's ask, re-ask the question, what does rent look like in a place where you don't

feel like your kids are under threat?

I would say maybe, maybe somewhere between 14 to 1600.

Okay.

Have you run a budget on what that, could you, you know, what would that do to your budget

with your take home?

Yeah, it would, you know, I, I get five thousand a month, so that minus the car payment

would be, you know, say we had 1500 rent, two, I get three, three again, brand back a

month, I couldn't expenses, but, and the reason I'm walking through this with you, Travis

George, I mean, I want to, George, to hear that ratio, but the reality is, is like, you've

got to get rid of this trailer.

We're essentially paying $1,700 right now for rent, yeah, because the truck and camper

are sinking.

The camper's losing value, so that's why I want you, and George, is that too aggressive?

I'd like for him to, to, let's find a place to live and get renting and let's get rid

of this.

Because if you sell the camper, you lose your housing.

And so we've got to solve for that problem.

The good news is the truck can go sooner, because we don't technically need it right now.

That's true.

The issue is we need that money, either through savings, through future income, or through

a loan from your local credit union.

Is your credit good enough to get a loan from a credit union right now?

Not really.

Like I said, when we were out of contracts, I was out of work for about six months in Seattle.

And so I went, it was just a couple months of trying to get unemployment, just to stay

above water and knock indoors.

But, do you have anything in savings right now, or anything you could sell on?

Anything I could sell, I don't really have anything.

I could sell, per se, we have a camper, so we kind of live minimalistic as much as possible.

Don't really have anything in the camper.

I mean, so it's hobby, lobby, artwork, and nothing in your savings account, correct?

I have a little bit.

I'm working on baby step one, I believe it's getting $1,000, correct, and think out, so we

have maybe 300, and then I have a couple of raw two Roth IRAs and 401K, which I'm not

going to touch.

Good.

Okay.

Well, you're speaking the right language here.

We got to get the $1,000 first, then we need to solve for this truck, because that'll

free you of $1,200 a month.

And so even if you take out a $24,000 loan, it's better than what you got right now at

60K.

And so that's your next goal once you get the $1,000, and that's going to take some time.

This is not going to be like, hey, we can just go do all of this tomorrow, but you're

going to need to explore all of your options and try to get top dollar for these so that

you can get out of this faster.

And that might mean you're working two more jobs.

Yeah.

That's not going to be fun for the next year or two to clean this up, but that's the only

solution I'm seeing here to get you out of this without, you know, dangerous shortcuts.

Yeah.

I'm just going to re-emphasize Travis.

The first step here is you've got to find a place to live so we can sell the camper.

Yeah.

Let's go.

Yeah.

We have some church family, but we wouldn't be able to stay with them long term.

All my other family is saying the same deal, not really.

That really fits.

Let's stay there.

One factor I didn't mention that I've been thinking about is my old boss.

He lives here in Alabama.

He lives fairly close, and he has offered to any time I need to move the camper to he

would let me use his truck for that.

The one thing I would worry about, he's very dependable and reliable, but you never know

it's going to happen.

He could move.

It could be broken down, but I was thinking if we could take care of the camper, we could

still be able to kind of live rent free, essentially, if we can have a camper free job.

We're still in short term thinking now.

We got to think about the bigger picture and getting out of this life we created, man.

Most people just drift through life with their money.

No plan, no budget, stuck on autopilot, but winning with money is intentional.

That's why I love Fair Winds Credit Union.

They've built tools for people who don't want gimmicks or games.

Their smart bundle includes a high yield savings account to help your emergency fund grow,

and their spend smart checking account won't nickel and dime you to death with fees like

other banks.

Plus it comes with the Ramsey Be Weird debit card, which says debt is normal.

Be weird.

Right on the front of it.

It keeps you connected to your budget, and every time you use it, it's a reminder.

You control your money, not the other way around.

Fair Winds Credit Union is for people who are serious about taking control of their money.

So if you're ready to stop drifting and start building wealth on purpose, open your smart

bundle today at fairwinds.org slash ramsie.

That's fairwinds.org slash ramsie ensured by the NCUA.

All right, Marie is up next in New York City Marie.

How can we help today?

So, I have a question in regards to parent plus loans, and if I should pause on paying

them, because my children are still in school, they are technically not due yet, but I've

been paying the amount that they said I would owe.

But I do have credit card debts, so I'm wondering if I could pause on paying the parent plus

loans because they're not technically due yet, and take that money I was paying to that

and put that towards my credit card debt to get my credit card debt to go down faster.

Is that the only debt you have as credit card?

I have a small car loan that I pay 240 a month towards, and I probably owe about $3,800

left on the car, and I have $7,200 in credit card debt, the parent plus loans, and I have

a mortgage of $1,000 that has about $150,000 left on it.

Okay, great.

Are you familiar with our baby steps?

Yes, I have $1,000 saved.

Okay, great.

All right.

And what was the total amount for the parent plus loans?

55,000.

Okay, and I'm assuming that's broken out across some different loans, or is it all one giant

loan?

No, it's two children, three different loans, a four different loans maybe.

Great.

So, this would still fall into your debt snowball, regardless if they're asking for

payments or not, because here's the truth.

The interest is still accruing, and so if the more we kick this cane down the road,

the more that balance is going to balloon.

You're going to wake up to have a $65,000 loan, and so this would just fall right into

your debt snowball.

So, list out your debt small, so largest is the credit cards, is that multiple cards

to make up the 72?

There's two cards, yes.

Okay.

So, like a few grand each.

Yeah, there's two cards, one has $4,700 and the rest is on the other one.

Okay.

So, this becomes pretty simple.

We're going to knock out that first credit card, then the card payment, then the second

credit card, and then start attacking these parent plus loans.

Okay, but still keep making those.

Make the minimum payments that they offer.

Is there a minimum payment that you can pay?

So, it's just not required.

I'm getting, correct, yet like they originally had said, oh, if you started paying today,

you should pay this and that, you should pay three or five a month.

Perfect.

So, that's why I've been paying.

Good.

I would continue down that path and just keep doing minimums and all of your debts except

the smallest one and attack it, because I'm looking at all of these debts.

Are you close to like 70 grand in debt right now?

Without the mortgage.

Without the mortgage.

Yes.

Okay.

And what do you guys make of here?

What's your household income?

I make two jobs, I make a hundred and ten between both of them.

Fantastic.

That's some good news.

So we can clean this up pretty fast.

I mean, if you can throw, let's say, 35, 40 grand a year of your net income towards

this, you're done in two years.

So, that would do you amazing.

That's it.

And so, I think part of this, Cal, it's hard to just like peel back and look at the big

picture versus just staring at all of the variables and debts in front of you.

Well, let's talk about the big picture because you just hit her with that 35 to 40,000 a

year.

And it's almost like Marie, we could hear that you were stunned by that.

You laughed and said, that would be nice.

So let's talk about why we got George with us here on the budget.

He's the budget guru.

Is that believable to you?

It felt like it was almost unbelievable.

It's a little unbelievable because I, and I feel that I work really hard.

I have two jobs.

So, and I listened to you guys and what you say about, and I've been doing the debts

noble.

So, I just got rid of one credit card last week.

So, that was a little celebration, right?

But, so, my mortgage, I only owe 150, but my mortgage takes like $2200 a month.

Okay.

That's why I wanted to lean in because, you know, George has taken a shot there.

But if, let's say George, we use your number of 35, that's just about 3,000, a little

less than 3,000 a month, net.

So realistically, Maria, if you were very disciplined to the best of your knowledge right

now, what do you think you could put away every month with the two jobs, and pay an

amount of money?

So, make the minimums plus the extra.

What could you throw at all of this debt?

I, I usually, I mean, and I hear you and, and I think you are probably right, but it

almost sounds impossible, you know, when you're sitting on this side, because I do pay,

you know, a thousand dollars to the credit card, and I do work extra over time at the

first step.

Well, that's why, that's why I'm pushing in a little bit.

I wanted to see if it is doable.

So could you, what is the most money you could commit, we're not holding you to this.

This is an exercise while we have you.

What do you think is the most, I'm talking like extreme budgeting, saving, cutting expenses

everywhere to George's question after you pay the minimums, and your four walls, what

do you think you could put on debt every month?

What number?

I probably could put a thousand dollars a month.

On top of your minimums is what you're saying.

Yes.

Okay, great, because I'm doing the math here, 2750, gets you out of debt in 24 months.

If you're doing all the minimums plus the extra, that should add up to 2750.

Now, two, two years, that was just, I'm just throwing something out there.

On average, we find that people who follow our plan to a T, we're talking baby steps, budgeting

using every dollar, making the sacrifices, 18 to 24 months is the average.

And based on the numbers you threw at me, with your $110,000 income, 66 grand in debt,

you are right there.

That's going to be 18 to 24 months of sacrifice.

And at first, you're going to feel like you're not making progress.

But I'm telling you, month after month, in six months, you're going to have a few debts

knocked out.

Think about that.

You free up the payments.

Now we're throwing at the next debt.

So the snowball starts to roll, and by the end, you are just, you can see the light

at the end of the tunnel.

Yeah.

I love it.

How about we just, that was a great locker room speech, George, even though you never played

sports.

I don't think I've been in a locker room other than me getting bullied and want to make

it.

So what, so what if we give her breaking free from broke, because I think that's a mindset

book in her situation.

You like that?

Absolutely.

Absolutely.

Absolutely.

Yeah, I don't get you fired up about your debt, give you the path out in, in my voice.

So there's a lot of jokes in there, because you got to have fun along the way.

That's right.

And what you've created right now is not fun, taking on the parent-plus loans, which

is a noble thing to do.

You want to help your kids, but here's the, here's the kicker.

That debt is in your name.

The kids don't legally ever have to pay a dime, and the interest rates are higher.

And so these are not going away, even if it's, you know, the payment is deferred.

The interest is still accruing, and it is brutal.

So I want to do a follow-up on behalf of our larger audience, okay?

Because for the minutia, sometimes I want to make sure people get the principal.

So in a re-situation, you told her to continue making what the minimum payments would be,

even though they're not asking for that money right now.

Why did you get, why would we give that advice, as opposed to saying, do the snowball on

everything else but that, why that advice George?

Well, if you're not making any payments at all, and the interest is accruing, you've

got to double-lammy situations, right?

Because you are not moving the needle at all with the principal, and so the only thing

moving the needle is the interest adding to your balance.

And we hear those stories because people, they weren't taught how interest works, especially

when you're not making a payment.

And so if you go punch the numbers into an interest calculator, you will find that balance

will balloon.

And who knows how long they'll be in school?

What if they're in school for another six years?

And so you've got to just start creating the habit of knocking out this debt systematically,

and the debt snowball method is the way to do it.

So just ignore the interest rates, because the way you're going to hack this thing, the

interest isn't going to add up that fast over the next 18 months.

So I thought it was interesting to hear her brain and her reaction.

It was really fun to hear that, wow, that would be nice.

When we pressed in, right now she's thinking $1,000 a month, I got a hunch, and Marie's

still on the line, I think she could get more than $1,000 out of that budget.

What do you think, based on your experience?

Yeah, I mean, if you take 110 grand minus your taxes, and you're going to pause all investing,

so you're just going to pay your health care if that's through your job and all that.

But whatever comes home, that's your number now that we've got to figure out.

We've got $2,200 in your mortgage.

Okay, whatever's left, how little can we live on to throw as much as we can at the debt?

Right.

So four walls, plus insurance, anything else, that can go.

Everything else is a luxury at this point.

That's right.

And Kudos, Marie, is working two jobs, folks.

I mean, so this is superwoman here.

She's hustling.

In this case, you're looking to sell everything you can possibly sell.

What if you can sell $5,000?

$7,000?

Maybe as much as $8,000 to $10,000 worth of stuff, that again reduces that timeline.

So again, we have a lot of new people joining us all the time and trying to understand

the practicality of these steps.

Listen, we didn't say it was easy.

The steps are simple, but the work and the sacrifice is hard, but boy oh boy, you heard

how she reacted when George said, I think he could get out in 24 months.

That's exciting stuff.

A quicker you get out, the quicker you move on in your life with the dreams that you want

to achieve.

This show is sponsored by BetterHelp.

Sometimes it seems like everyone else's love life is this perfect little hallmark movie.

Here's the truth.

Married, dating, or single and trying to figure it out, everyone is wrestling with what it

means to be in a relationship.

I've been married for 23 and a half years.

I've got a PhD.

My wife has a PhD.

We have all the answers and we're still trying to figure out how to keep our marriage

on track, and both of us have benefited greatly from time with a good therapist.

No matter if you've just met someone or if you've been married forever like I have, therapy

can help you find your way in a relationship, identify what you want, what feels heavy,

and how you can take some pressure off yourself and build a strong relationship.

To do all of this, I recommend BetterHelp.

BetterHelp is an online therapy platform that matches you with a licensed therapist based

on your goals and your preferences.

You can message your therapist and schedule sessions through the platform, and if the first

therapist isn't the right fit, you can switch anytime at no extra cost.

When it comes to love and relationships, everyone is still finding their way.

Find yours with my friends at BetterHelp.

Visit BetterHelp.com slash Ramsey to get 10% off your first month.

That's BetterHelp.

H-E-L-P.

If you have a simple tax situation like you haven't had any major life changes or big

investments, you need to use Ramsey Smart Tax.

Ramsey Smart Tax is affordable and keeps your filing process very simple and it has a

built-in support in case you need some help.

Filing early means getting the best deals and you get that tax stress off your shoulders.

You can do all of this by going to ramseysolutions.com slash smart tax, ramseysolutions.com slash smart

tax.

All right.

Charlotte, North Carolina is where we go next.

John's got some type of a family issue here we need to talk about.

John, what's it going on?

Hey guys, thanks for having me on the show.

My wife's mother and sister, not as well financially as us and we're coming up in our own financial

journey to a point where we may be able to help them, but we're having an issue when

we talk about it because, and please I don't want to paint in the bad light.

I love them, they're great people, but in a lot of aspects of their lives, they are

very much, we can't right now because people, you wouldn't understand because we've got

three kids you don't, that kind of thing.

What is something that we could do when we get to the point that we can, that we could

help these people that we're not crossing a boundary, but we're also kind of naveling

bad financial decisions?

Okay.

Well, you answer that question.

Is there any flip this on it?

I'm going to set you up.

Sorry.

I didn't mean to just...

Yeah, you, no, you called us, you tell us, no, here's what I want to know.

You've already laid out, George and I know exactly what you're saying, you're not in any

way attacking them.

However, here's my question for you.

Let's just fast forward into this future that you just mentioned, where you're going

to have some extra money.

Is that what I might, is that me understanding correctly what you're saying?

Yes, sir.

We're about $38,000 down and we get about 30 to go.

No, no, I know.

Don't worry about that.

We're going to fast forward to your heart of your question.

Okay, let's fast forward to this future where you have some margin to where you could

help them financially.

In what area would you feel confident telling George and I, I helped them, forget about

the number, but I helped them how I could and I feel like this help will actually make

a difference.

Tell me the answer to that question, what area where you could help would actually make

a difference and they wouldn't squander it and they wouldn't just, you know, motor through

it.

Where could you help them where it would make a difference?

The biggest thing that we've discussed that I think could possibly work is if we were

able to pay for a year of child care for their kids so that mom could get work and help

them financially because dad is kind of limited in his position with what he could make.

Okay, if you were to do that, A, would she go get a job, yes or no?

I couldn't tell you how I think so.

And what if she doesn't?

Is it conditional where you go, hey, you got to show proof of, well, I don't like your

answer, John.

You really is what I'm doing here.

I'm walking you through.

Is this a good ROI?

And your answer to that was, I don't know if she'd actually do it.

That's a bad sign, true or false?

True.

You see, so this is how I would come about this.

My heart says I want to help.

But I need to put real plans, real specifics together and I just kind of walked you through

this.

And the first thing you said that you would do to help, there was no certainty at all that

it would actually help because if you pay for child care, but she doesn't go get a job

and thus get extra money.

And then we didn't even ask you, even if she made the extra money, do you think that she

would put it towards removing debt?

What's the answer to that?

I think so.

They've been watching our financial journey.

So hopefully we've been just hoping that they would see what we're doing in there.

Have they asked questions?

Have they even said they want help or is it just more, well, that's for you guys.

But we, that's not a thing we're going to do.

Yeah, I think that's true, George, because we've offered them financial peace because

we have it and we're actually waiting to start it because we want them to go through

it and they've had it and haven't done it and we're getting frustrated because it's

like, I want to, I want to help you.

Let me help you.

Right.

But John, you just said a moment ago until George refrained that.

You said you thought that they would use that income of hers to help themselves.

And now you're questioning that.

So you see, this is the exercise and I'm glad you called us because we can be objective.

We're not related to them.

It sounds like to me that this is a bad investment.

Here's the underlying fear.

You don't help them move forward.

They just get comfortable for a while while you get super resentful because you're helping

them and you're really putting yourself out there paying for child care for a whole year

all for them to not make any progress.

Well now the relationship's gone.

You've lost all respect for them.

And so until they are at a breaking point, until they have enough pain in their life

that they're gone, I guess we should put on that financial peace thing.

We are running out of options here.

Yeah.

I don't know that they're ready for it yet.

I agree.

That reminds me, George, of the old phrase when the student is ready, the teacher appears.

And this is tough with family.

So George, I don't know where you're at.

I'm going to say, John, I would not help until they say that they want help and because

they acknowledge they need help.

And I think those are your two boundaries and I again, I would run through a similar

exercise like I just walked you through and my friend, you answered your own question.

And I know it's a tough situation.

I hate that.

But you guys got your own financial journey.

You got 38,000 to pay off.

Let's go, walk the baby steps, continue to do what you've been doing.

Let's get out of that situation, make your life better and let the chips fall or they fall

with other people.

Let's go to Jonathan Nex, who is in Fairfax, Virginia, Jonathan, how can we help today?

Hi.

Long time listener, first time caller, my dad actually, he's really a big fan of the

show.

And right now, I'm just got a little question about how to find housing at my current

stage of life.

I just graduated college about two years ago and I've been working as an RN for about a

year and a half.

I'm about to get a raise and I'm still looking around trying to find a good housing without

breaking the bank and just like being able to save continuously after that.

It just seems like a really big struggle for me right now.

Give us some real numbers.

I know the Northern Virginia area, if you're in Fairfax area, I know that area.

That's extremely expensive place to live.

Give us the numbers for George and I, what you're looking at for a rent.

So honestly, I take, I'd take really anything, the, I'm really trying to reduce my commute

as well though and in the Fairfax, Fair Oak specific area, which is where my hospital

is, it's around 1500 at base price as far as I've seen, that's asked a few realtors,

but it comes to about there.

What have you been paying in this two years since you've been out of school?

I've, I've just been staying at home.

My dad's very, very since been, he's a lot of me to stay at home for $200 a month,

but additional 50 other utilities in there.

Okay.

What's your income now and you also told us that you're about ready to get a raise.

So give us those two numbers where you are now and then what your new raise will look

like.

Right now, I believe it's 90 a year and further than that in about a month and a half,

I think it goes up to probably 93, 94.

Do you have any, do you have any debt payments?

I do not know.

And you're worried about $1,500 a month?

Just a little bit, but well compared to 200 sure, but that's a false reality.

Yeah.

George is in the middle of the stuff.

George, what do you think about 1500 month?

I mean, if you're, if you're taking home about 6 grand a month, 1500 bucks is right

on the mark.

We tell people 25% of your after tax income is what you want to stay in for housing,

whether it's rent or a mortgage.

Okay.

And here's the other thing.

That's for you living alone, right?

Yeah.

Here we go.

Tell your George, can I tell you I don't want to pull out, you know, like I'm a pioneer

woman or something, but I had roommates all the way up until I was married because I

couldn't afford an apartment on my own.

But you can, but we've already established you could afford it.

But to George's point, if it gives you stomach problems, fine.

If it's good or bad for a two bedroom and now you're rents a thousand bucks, you feel

a little better, wouldn't you?

And you're splitting utilities as well.

I definitely love the aspect of science, but you're right, you're right.

There's, I mean, Facebook groups all over for roommate finders and apps and ask

around to your friends.

I mean, you got young guys you work with, probably.

And so that's, that's, you got to put a little effort

anywhere I'm at, George, on this, what's that?

You've proven that he's fine.

But financially, he's got a great, he's got no debt.

You know what, this is quality of life.

Yeah, I think you've got to focus on how much life is going to be better, not

commuting way out into Fairfax.

I know what that traffic is like.

And it's scary.

That's why the coop can.

He's comfy.

But once you start thinking about not driving in the seventh level of hell every day,

there's a really nice trade off.

Life is about trade offs, George.

That's right.

Hey, what's up?

This is Dr. John Deloney from my friends at Mama Bear legal forms.

I spend a lot of time talking with people about anxiety, relationship

challenges and all kinds of other things that keep people up at night.

One thing I'm always telling everybody is that peace does not come from avoiding

hard things.

Peace comes from facing hard things and directly walking through them.

One of the hard things we all face is our own mortality.

And if you've got kids or people you love, creating a will is one of the most

important things you can give them.

I'm such a big fan of Mama Bear when I moved from Texas to Tennessee.

One of the first things I did was set up my will through Mama Bear so that my

family was protected in my new state.

Mama Bear will help you make a clear, legally valid will in about 20 minutes.

They provide step by step guidance that makes getting a will simple.

Believe me, if you're ready to love your family in a real and practical and

lasting way, go to Mama Bear legal forms dot com and use the promo code Ramsey

to save 20%.

That's Mama Bear legal forms dot com use code Ramsey.

All right, let's go to Kathy, who's joining us in Minneapolis.

Kathy, how can we help?

Hi, my husband refinanced her car and now we have a 25%

APR and wondering what we should do.

Oh, boy, what caused this refinance?

So we what was the original APR?

The original was 14 and he was trying to get money to pay some things and

decided to take out 3,000 on top of the car loan and that's what happened.

Yeah, why would we do that inside of the car loan?

There's so many ways to get 3,000, even though it's a terrible idea to go into

debt for any of it, but why refinance the car loan to get 3 grand out?

I think because it was the fast, well, so he had originally applied for a

personal loan, but his credit wasn't very good.

And so they told him that he could do it through the car loan as like a

secured.

I don't know.

Yeah, it's a secured debt.

He didn't involve me.

And so they go, if this guy can't pay, we get a car out of it.

So we're willing to do it.

Oh, and by the way, his credit shot, so the APR is 25% because he's a risky

borrower.

So I'm going to dig here because you laid it out for us very clearly.

And you said, what do we do?

Is we involved here?

Or is it just you?

Does it sounds like he made a really desperate move?

Yes, he did.

And it is we involved.

But yeah, I wasn't included in that decision.

So yeah, but he's now going, okay, I screwed up and I need some advice.

Mm-hmm.

Okay, all right.

Any other debt because that helps us with this answer?

Yeah, we have a credit card debt student loan debt, personal loan.

What's the total of all the debts?

It's about, oh gosh, like, just under, let's see, like 70,000.

Okay, what do you guys make a year as a household?

About 70,000.

Wow.

Are you guys both working full time?

No, I must stay at home, mom.

Okay, so he's pulling in 70.

Yes, and 13 and one for the ages.

You just got restarted again.

Yep.

All right.

So I have to ask because I think this is this is this kind of level of

intensity.

Are there any type of skills work experience that you have that would

allow you to do some work from home?

I know the one year old is that's a full time job.

Don't want to minimize that in any way.

However, you got 24 hours in a day, just like everybody else.

Is that even possible?

And what do you think you could do to make some money?

Yes, so it is possible.

I actually just finished school.

So I'm going to be pursuing something hopefully from home.

I also home school.

So those that as well.

But is that going to be possible?

If you're working full time outside of probably not full time.

I'm hoping to find something part time from home.

What's your degree in and what will the job be that you're hoping for?

Holistic wellness and like I'm also certified in personal training.

So something with personal training and health and wellness.

So like your private coaching for nutrition, wellness, okay, all of that.

And you that's a little more flexible.

You can kind of do that on your on your own schedule.

Well, I will point out you have to go get clients.

That's a whole different ballgame when you're doing it for yourself.

So I'm going to just point that out that that is difficult.

Not saying you can't do it, but I would give yourself some realistic goals.

And if in a month or two or three months, we're not signing up any clients,

not getting anybody interested, you need to work for somebody else.

And that's just a reality right now.

You know, if you guys got to bring in more income, do you have any savings at all?

No.

What's left on the car balance after this refining?

So he he just refinanced it.

So it's getting around I think 17, 18,000.

Okay.

What is the vehicle worth private party value?

7,200.

Okay.

So we're 10 grand underwater.

So there's our number if we want to get out from under this 25% APR,

which is going to cause the balance to balloon if we're not attacking it,

then we need to get out from under it by creating this 10 grand,

either by saving future income or taking out a loan from a credit union,

which I'm guessing is not an option because he's tried that and his credit is shot.

Is your credit shot as well?

Are you tied to this?

No.

Okay.

I mean, I was on the original loan, but when he refinanced, I was taken off I guess.

Okay.

You would I would see now it's going to be tough because you don't have income.

And so they, I don't know if they'll look at the whole picture.

If you're the one taking out the loan in your name, you know,

they're not going to allow him to be a co-signer.

I don't think.

But if you can go to your local credit union and get a loan for the difference,

that at least gets you out from under this.

Is there another vehicle that you guys can use right now?

No.

This is your one car.

Yeah.

Okay.

Well, the other option is you attack it with a vengeance.

I mean, having an $18,000 worth of vehicles making 70 is not the problem.

The problem is the behavior that got us here, adding to the pile, going back into debt,

crazy interest rates, a lot of desperation.

And it sounds like a lot of this was done without any teamwork.

It was just kind of him on his own at a desperation and you were an unwilling

accomplice or did you know about all this?

Yeah.

No, I didn't know until after it was done.

So the new loan, George, is 17, 17, 18 grand left on the loan at 25%.

All right.

So what does he do for a living?

Um, he drives garbage trucks.

Is he handy?

Yeah.

I'm telling you right now, he is, he's the one.

Now you've already said what you were going to do.

And so if he were on the phone, be going, Hey, buddy, you did this.

You ought to feel a massive burden.

I'm sure he does.

But outside of driving the garbage truck, if he's handy, he's working in a warehouse,

he's doing whatever he can, 25 an hour, whatever he can do.

He's working on the neighborhoods.

I tell you what, the one year old needs you.

And I say this, not knocking him, but saying this as a father of three.

For the next year, the one year old doesn't really need him that much.

He needs to be working.

And the truth is, is he doesn't even work for a year.

It's like, I would be circling $18,000 if I were your husband.

And I would be going, how quickly can I make $18,000 outside of my $70,000 job?

George, that, that would be my intensity.

You agree, disagree on that?

I mean, does that change his, their life initially gets us out from underneath

that massively bad loan that's just putting them in quicksand?

Yeah, when you're, when your debt is the same as your income, I see there's a big problem here.

Now, after debt was 140 grand and you got 70, we could solve this within 18 to 24 months.

And so what that tells me is we need to get aggressive getting this income up.

And that might be him getting two more jobs.

That might be you getting a full time job and we put the kids in school, daycare,

whatever we need to do right now to solve this crisis.

And that's what it is.

It's a crisis.

That's right.

But Kathy, you guys can't get out of this, but it's, it's both of you.

It's two points you want you to walk away with on this call.

Both of you have to work more and make more.

And both of you have got to be super aligned on a budget that allows for no extra spending

on anything other than just the four walls.

You got it?

Got it.

You up for it?

Yep.

Yeah.

Okay.

Game on because this is doable.

George, what's your calculation if they were to do that?

And I know you don't know if they get the income up.

Yeah, I'm saying they can do this and come up two and a half to three years.

If they stay status quo and try to do it with their current income, I think this would take

four to five years.

Yeah.

And the balances would just grow with this level of, I mean, the credit cards are high interest,

the car is high interest, and who knows about the personal loan and student loans,

but there's, there's debt surrounding us right now.

And so we've got to get on that debt snowball.

We've got to get the spending down.

We're going to make some deep sacrifices right now.

In your best selling book, breaking free from broke, you write a lot about traps.

Of course, you coach, you sit here and co-host the show all the time.

I think this is important.

What is happening?

What is the emotional trap that causes a guy like this to take such a crazy,

desperate loan for only $3,000?

What is happening?

What do you know?

Well, it starts with I can afford the payment on this one thing.

And while the student loan doesn't invest in my future and while the personal loan will knock

that out fast.

And so it's a lot of good intentions and they're a little bit delusional and starry

eyed about the fact they can carry this.

And then a spouse wants to stay home and they go,

well, yeah, that's a very noble goal.

You got to stay home.

We'll figure it out.

And then desperation leads to refinancing the car loan.

And so it's not one thing.

It is death by 1,000 cuts that got us there.

And it's death by 1,000 cuts that's going to get us out.

And as much easier to go into debt than it is to get out.

That's the hard truth.

The dealership will always be happy to refinance at 25% APR.

And so you've gone out.

You're going to have to hustle.

Both of you need to be a team maybe for the first time in your marriage to clean this up.

This is Dave Ramsey.

We all want to know that the money we give to charity is doing something that matters.

That it's making a real change, giving someone lasting hope.

And here's one way to make sure of that.

Give to pre-born.

They're the real deal proven, transparent and changing lives every day.

I trust pre-born and you can too.

They're on the front lines of the battle for life, partnering with clinics to offer free

ultrasounds to mothers in crisis.

Because when a mom sees her baby on that screen, something changes.

It's not just a decision anymore.

It's a person and 80% of the time when a mom sees that ultrasound, she chooses life.

Your $28 gift provides one of those ultrasounds.

Just 28 bucks to be the reason someone chooses life.

And at every clinic, the gospel is shared, giving moms the chance to choose life and find real hope in Christ.

$28, one ultrasound, one heartbeat, one mom who realizes she's not alone.

That's the kind of life-changing impact your giving makes through pre-born.

Go now to preborn.com slash Ramsey or call 855-601-2229.

That's preborn.com slash Ramsey.

Welcome back to the Ramsey show in the fair winds, credit union studio.

Alongside George Camel, I'm Ken Coleman.

Excited to have you with us.

The phone number to jump in today.

Triple eight, eight, two, five, five, two, two, five.

George, take lead on your money questions.

I'll take lead on your winning at work.

If you're feeling stuck, a lack of balance in your life, feeling burned out.

That's going to affect all your money stuff, too.

So we can combine any of those calls we'd love to hear from you.

Let's start it off with Sabrina who joins us in Atlanta, Georgia.

Sabrina, how can we help?

Hi, thank you for taking my call.

So, a single mom, I had a retirement in a home, and that scanned out of my retirement from my ex.

He said he'd be in, I could make one money on investments in stocks.

And he was able to do that.

And I pulled out 85K, which of course, I had to pay a penalty and 54 years old currently.

And so now I'm basically starting from scratch.

I have some, so my home, so I have some money saved, and I'm just trying to figure out where I need to go from here.

I do have a special, special needs child, and I just want to make the right decisions going forward.

And really, you know, building for my retirement, because I am, you know, 54.

How much do you have saved off of the sale of the home?

So I had to pay a lot of debt back, because my ex was a splatter for a year and a half in the home.

So 35,000 in a CD, if I dump them in a CD, that matures in March.

My high yield, I put 10,000 in a high yield savings account, and then in another savings, it's $1200, and then I have some debt.

How much debt do you have left?

So 6,500 in credit card, my car, 13,000, it's worth 10,000.

I got it during the pandemic, so it's a little upside down.

What's it before we go forward? What's the car payment on that?

486 a month.

Let's stop right there.

And it's 96,000 miles, and I'm already in the last year of dump, $8500 in repairs.

Yeah, but I mean, it's still, that's a car that, you know, I'm just, I'm going to jump in right there, George, because of the money she's gotten savings.

If we could pay that off, that saves you $486 a month.

Immediately, you would feel that, yes or no?

Yes.

Okay.

Keep going on the debts, but I just wanted to jump in, like that's a, that is low hanging fruit, because you've got cash today to pay that off.

George, you don't have any problem with that, do you?

No.

I mean, this is maturing in March, so today you can knock out the credit cards with your high yield savings.

Okay.

And then as soon as I'm sure as I would use 13 grand of it and knock out the car, what else do you have?

I have an attorney's bill for 10k.

Okay.

Anything else?

Oh, I have a term life insurance that's, I only pay 360 a year, it ends in 2031, and it's for $200,000.

So I didn't even know if I should even like stop that, but.

Do you have any kids you said your single mom?

I'm a single mom special needs child teenager.

Yeah, you're going to need them money.

If something were to happen to you, I mean, even though it's 200k, that's still money that can be used to help take care of your child.

And eventually, you're probably going to need a special needs trust.

Well, that's part of the 10k.

Okay.

5k for the attorney is for the court case that I had or have currently.

And the other 5k was to hire a well-in-trust attorney to set a trust and will.

Do I need to protect my son?

And I just, that's priority for me right now.

It should be.

I love that.

You've got term life insurance.

You've got a will and a trust.

You're doing some good things here.

And the good news is, you have any other debt outside of that?

I heard the three.

Okay.

So you've got 30k in debt and you've got $45,000 essentially liquid.

Yes.

Have you been debt-free in your adult life?

Before my ex, yes.

So why don't we call this a new slate and say this is post ex Sabrina.

She's starting a new chapter.

We've got a lot of life ahead of her.

We're going to go into this thing completely debt-free with $15,000 in the bank.

You hear me?

Okay.

Yes.

Now that we have a foundation, now we can begin investing for the future and rebuilding what we've lost.

How sure are you that that money is gone?

Did he spend it?

What did he do with this money?

Well, I can't get that answer because I tried.

And as soon as I stood up to get an answer, it became from, oh, I went to stock.

Oh, no, I went into a real estate investment.

Now he's telling the attorneys that I agreed on putting it in a business and that business went to fund.

Okay.

But I'm dumping money to get discovery and it's not happening.

And I don't want to dump any more money in the attorneys.

This is the last cause.

And this guy is a piece of work that I would move on and just start investing with your current income.

How much are you making a year?

So I had to take up a W2 to stabilize in the last two years of this case.

So I make $50K gross with the W2 and then I have my own business that brings in $6.75K and gross.

That only pull about 20 to 30.

Okay.

So we'll say you make 80 grand a year?

Yes.

Okay. So you will be in baby step four if you follow what we told you.

Pay off the debt, park the 15K, call that your emergency fund.

Maybe you want to add a little bit to it to get to three to six months of expenses.

Maybe six months since you're a single mom with a special needs kid.

But 15%.

That's 12 grand a year.

You would be investing.

So we're going to do a thousand bucks a month from 54.

And likely the truth is you're going to have to work longer than you wanted to.

Right?

Mm-hmm.

To maybe let's say 68 or 70.

Is that fair?

Okay.

And you're starting with zero out of retirement.

Correct?

Yes.

Okay.

You could have over half a million dollars from 54 to 70 investing grand into mutual funds

inside of retirement accounts.

Okay.

I'd love to know more about the business.

You said you're grossing 75, you're only taking out 20 to 30.

Does that mean that you're stocking away?

Well, we would call retained earnings or that's all you have to be able to take out as a net.

Well, I'm a little funny on those numbers just just so you know,

because I'm new into businesses like my third year in the business.

Okay.

So I do, I do like owner draws that are not consistent.

Okay.

So is the business fairly healthy though?

What I'm saying is, is it mostly profit for you or is it running really tight?

It's mostly profit for me because I don't have overhead.

Well, what's the business?

Tell me in five seconds.

What the business is?

Professional organizer.

I help people declutter.

That's fascinating.

You're the professional organizer and you don't have a grasp on your own numbers.

Get yourself a good bookkeeper.

I'm not chastising you, but I am saying you have it in you.

You want to know those numbers because I see a great path.

The reason I'm asking these questions is as you grow that business George,

I see tremendous potential for you to grow.

Scale that thing.

To scale it, pay yourself more after you run through the advice George gave you.

But this is an opportunity to play catch up.

Get a good tax pro.

Go to RamseySolutions.com.

Finally, mortgage rates have dropped and you know what that means?

People who have been sitting on the sidelines are about to jump back in to the housing market.

So if you've been waiting to buy, this could be your window,

but you've got to be prepared and do it the Ramsey way.

You need to contact Churchill Mortgage.

Their home buyer edge program gives you peace of mind in a wild market.

You can cap your rate for 90 days.

So if rates go up, you're protected.

If rates go down, Churchill will drop yours automatically.

And get this.

Churchill will even back your offer with a $10,000 seller guarantee.

So if your loan falls through due to financing, the seller still gets paid.

That's how confident Churchill is.

Plus when you shop as a Churchill certified home buyer, it's stronger than pre-approval.

It makes you look like a cash buyer, which makes your offer rise to the top.

So don't let this moment pass you by.

Get ready now.

Go to Churchill Mortgage.com to get started today.

That's Churchill Mortgage.com.

This is a paid advertisement.

Home buyer edge and seller guarantee are available for qualifying borrowers and select loan types only,

and not available in all states or locations.

That's it.

1591 in NMLS consumer access dot org eagle housing lender.

All right, Brandon is up next in Oklahoma City.

Brandon, how can we help you today?

Hey, first of all, excited to be on.

Thank you, God for having me.

Sure.

Okay, yeah.

So I'm in an industry.

I'm an oiling gas industry.

And the job volatility in what I do is it's up and down a lot.

I'm on step two.

Pay off your debt using the debt snowball method.

But I already have three to six months of expenses set back in savings.

And I'm ready to start paying down on some of the debts outside of the mortgage.

I'm just having trouble taking that leap because I've been through this cyclical thing of working for a couple years

and then the oil and gas market dies and you lose your job for a year.

And then it comes back and you make good money and then you lose your job.

And so I'm ready to jump in.

But I just wanted to know what you guys take was on it and how you think I should move forward in that situation.

Well, I have a question first before George coaches you want to do.

This has happened to you before in the oil and gas industry.

This idea of where everything's hot, making great money.

And then the market changes I'm guessing.

But this has happened to you more than once or just once.

This is my forward run.

Okay.

So here's my question for you.

What would need to change?

What would need to be true having weathered this before?

If this happens again, what would need to be true?

What would the new reality need to be to where you could weather that storm?

You tell us.

So the new reality would need to be, I mean, I think we would need to be paid down to where it was just on mortgage.

And it would be a lot easier to survive than between those and or move on to something else.

And not get in and out of the industry itself.

Have you gotten into any of this debt while in this industry?

Yes.

Okay.

Can I just poke a little bit and have some fun?

You can ask me anything you want.

If you're truly scared of volatility, why would you go into debt?

Because debt is risk.

And it robs your income.

And so if you know this income might not be there, that in your brain,

the risk factor was broken.

And you just answered my question by saying the thing that would make it easier is that we only had a house payment.

Right.

And we've been in that position before.

What happened?

We decided to buy the loft that was connected to us.

And we built an office here at our house and made some investments.

We felt like we wanted to continue to work or mode and do what we were doing at the time.

So based on what I've heard, Brandon, you presented to George and I that you're afraid of using the cash you have, stocked up,

to pay off your debt when what you should be afraid of is investing in a loft next to you, investing in other things.

Do you see where the fear is misplaced?

Yes.

You're choosing which risk you want to keep.

And we're telling you, if savings is peace, you're right.

You are half right.

Having the savings there gives you peace.

The problem you're forgetting is that debt equals risk.

And the key to permanent peace is getting rid of the debt.

And I think you're a little comfortable because you got three to six months of expenses saved.

Why work that much harder?

Why sacrifice that much more?

We would be okay if something happened for a little bit.

And I think getting rid of that savings and putting it on the debt will light a fire under you.

And it will expose the reality of your situation.

And again, I want to remind you, Brandon, your words.

If you emptied out the savings today and paid off all debt and you get laid off,

you said that you could weather it based on three other times.

You have experience.

So you were speaking from experience to George and I.

Yes.

Correct?

Yes.

So were you telling us the truth?

Yeah, I'm telling you the truth.

I fluctuated in and out of the real estate market in real estate sales as a broker here between those times where I've been an oil and gas.

And I've had success in that also.

So here's the key factor.

You're not scared of hard work.

So if something were to happen and you didn't have the savings,

you would go work your butt off to cover it and then get back on the plan.

Get back on the horse.

Yeah, yeah, for sure.

So let's get tactical.

How much do you have in debt?

Consumer debt.

And how much do you have in savings?

OK.

So total debt's around 200K.

That's with the house.

Skip the house.

Put them over the side.

That's a baby step six item.

Yeah.

So outside of that, I have 30K on a business, business equity,

lots of credit that's attached to an investment property we own.

OK.

And then I have 20K in a lot loan.

So it's a piece of land that's attached to our primary residents.

All right.

And then I have 20K in a home equity law and a credit.

All right.

So we're looking at 70K out of the 200.

Yeah, and we have about, yeah, and we have about 40K in cash.

Great.

Here, tell me.

You can knock out the lot loan and the HELOC today.

Yes.

Do it.

Double-dog Daria.

And the other thing is all of this is tied to your property.

So you're putting your house on the block triple right now.

Because all of this has collateral, doesn't it?

If you don't pay, that's how the HELOC works.

Yeah.

And so for a guy telling me that you're afraid of risk,

you've taken a whole lot of risk on.

Yeah.

So knock both of those out.

You got 30K left.

Use your future income.

Which how much are you making as a household?

Sounds like you guys make good money for the oil field.

Yes.

So I make about 120 when it's going.

And my wife, she got laid off last year.

She's a medical coder.

She got laid off last year to AI.

But she's back right next to temporary.

And she makes about 40K when she's working full time.

Great.

So for both Hustlin, we're making 160.

We got 30 left to pay down on the line of credit at that point

for that business line of credit, which will get knocked out.

Yeah.

Within months, making 160.

Yeah.

I've been talking less than 60.

And I've got one.

Yeah.

And I've got one more question for you guys.

I was going to ask, what are your thoughts on as I'm doing what I'm doing right now in oil and gas?

I'm trying to bust back into the real estate market again.

So I have something to transition back into when this when the oil and gas goes down again.

What are your thoughts on that?

Well, the quick take is you really can't win at real estate part time.

And so if you're talking about being a real estate.

I know that.

So then I don't think that's smart unless that's your goal long term.

So if that's what you want to do long term, let's go.

But let's do it after we take care of what George said.

We got the present.

We need to win.

And let's use what income we have right now to get out of debt.

And we'll walk through baby step three and then be in baby step four.

Okay.

And then let's look at transitioning to whatever.

That's one year from now.

Do you see that?

You pay off the two debts today.

You got 30K left.

That gets knocked out in six months.

Another six months for your fully funded emergency fund to stock back up.

Now we've got a real foundation.

That's actual financial piece.

I like it.

And so at that point, you have options.

You guys are dropping me toward it.

Yeah.

I appreciate that.

Yeah, absolutely.

Listen, you've been afraid of the wrong things.

Okay.

There's no fear walking out the plan George laid out for you.

None.

No fear.

Okay.

There's some hardship.

There's some sacrifice.

Right.

But on the other side of that is to George's point.

If you want to go into real estate full time, then after I got this debt done,

and I got a three to six months, three to six months, and I'd go six months, by the way.

And then I'd go all in on real estate.

Because you got to build up a pipeline.

But you've got some experience.

You've dabbled in it.

It sounds like before.

But now, when I hear real estate, I've been full time in it before.

I'm hearing sales, not you investing.

I'm hearing you're a realtor.

Is that what I'm hearing?

Yes.

I'm a real estate broker.

We have a property that we have a property that we bought.

Oh, I know.

We are invested in it.

We are.

A commercial piece of property.

Right.

Well, real estate people famously have their risk meter broken.

And any cash they do have, they want to immediately deploy back into investments.

Because I can make way more money in real estate.

But then it leaves us in a lurch here.

So I think Ken is right.

You've misplaced the fear.

Your fear right now is what if I have a $30,000 emergency and I don't have the savings?

The true fear is you have $70,000 in debt that is tied to your home.

That's the thing we should be attacking.

And you'll get there no time in.

You work hard.

You make great money.

We just got to retool some things and clean it up.

A year from now, you'll be in a very different place.

The statistics show that half of Americans don't have the money.

The statistics show that half of Americans

don't have enough life insurance.

Or they don't have any at all.

I don't understand this, John.

Why don't people want to take care of their family?

They think they're going to die or something?

Well, I used to be one of those guys.

I didn't even think about it.

And one of my buddies said, hey, the only reason to not have life insurance

is if you hate your wife and kids.

And I immediately went and got term life insurance.

That's a gut punch.

Oh, you're telling me.

And for decades, Dave, I've sat across people who've lost a spouse.

They've lost somebody important to them.

Me too.

And they don't know what to do next.

Me too.

I mean, you're going to have a crisis here.

And you got two options while you're sitting and talking to a young widow.

She's concerned about how she's going to invest all this money properly

and not mess this up.

Or she's concerned how she's going to eat tomorrow.

That's exactly true.

These are the two options.

And take care of your dad-gum family.

And term life insurance can replace income pay.

Of dads, cover funeral expenses.

So your family can actually have the opportunity to just be sad.

Yeah.

To just miss you.

That's exactly what it's supposed to be.

It's saying I love you to your family.

Term life insurance.

Jeff Zander and the team of Zander Insurance makes it easy and affordable.

I've used them personally for 25 years.

They're the only people I trust.

Go to Zander.com or call 800-356-4282.

If you're working the baby steps, the best and fastest way to do it

is by using every dollar.

It's more than a budgeting app now.

This is the entire plan that we teach.

The baby steps all of it right in the middle of this world.

Famous now.

Apple.

It's so fun.

Track your progress.

Get personalized recommendations.

And coaching, actual coaching for your situation to help you free up more money.

It's like having one of the Ramsey hosts with you every day.

Showing you the next right step.

Start it for free.

Just kick the tires.

Download it now in the App Store or Google Play.

Let's go to Carol and Denver now.

Carol, how can we help you today?

My question is, what are your thoughts about using AI in tax planning and preparation?

Ooh, that's a hard pass for me.

George, what got you here?

What made you go?

You know what?

I'm going to let Chad GPT handle this one.

I was presented with a document from the accounting firm requesting that I

authorize AI to be used.

And some of it would be overseas.

And I'm apprehensive about that.

Oh, so you're going through an actual tax planning firm?

Yes.

Okay.

They're just using, they're just sort of speeding up the process by using AI.

And we're going to see this everywhere.

Almost every organization is going to start using AI to help move things along.

You know, reduce the amount of resources they need.

And so that doesn't already make as much.

I thought you were just on your own, trying to do tax planning with an AI tool.

No.

And it's the accounting as well, because the accounting firm does the taxes.

And therefore, would they be using an overseas entity to be able to help?

Well, you just need to ask, you know, this is, here's the thing we preach all the time on any trusted,

trusted service.

We want people to understand what the firm or the person is doing for them.

So they explain it to you to where you go, oh, okay.

So if you have questions about that, okay, what, how is AI being used in the preparation of my taxes?

You know, if overseas, what's going on, just ask those questions.

And somebody with great service who really cares about you and values you as a customer,

certainly has the heart of a teacher is going to have no problem answering those questions.

But George is right.

I'm not sure you're going to be going anywhere in this country or any other country with professional services

that have a decent amount of clerical administrative work where AI is not going to be used.

Okay.

Thank you.

Yeah, absolutely.

Thanks for the call.

That's a good question, George.

Yeah, and if you're not comfortable with it, just go, no, thank you.

And you can reach out to a tax pro.

And you can find one of those at RamseySolutions.com and you can ask them, hey, what role does AI play in the way you do tax planning?

Yeah.

And if you don't like the answer, you can move along to someone who does it old school.

Yeah.

All right, real quick, fun question for our next call.

Are you scared of AI or are you excited for AI?

I'm personally not scared.

Okay, good.

And I'm going to stick to the positives and, you know, how helpful it can be versus is it going to take over and destroy everything?

Maybe.

All right.

But until then, I'm going to just...

And you're a guy that operates with a decent level of anxiety.

So people should take that with a serious shaker of salt.

That is true.

But I'm also very pragmatic.

And I like to be efficient.

Yes.

And I think AI can be a great tool in use properly.

Technology does not scare George Campbell.

Stephanie is up next.

In Detroit, Stephanie, how can we help you?

Yeah, about five months ago, my uncle passed away.

I'm so sorry.

And my husband is home.

Okay.

Thank you.

When he passed away, we wanted to sell the home.

Because there was only a two-bedroom home.

And it's like 30 minutes away from my kids' school.

They're not in the school district.

And since then, we've had issues with property boundary lines.

And we've been working with a realtor.

And now since all this, we've started to love the property.

And I'm wondering what is financial is the best decision to do?

Do they sell the home or do renovations to make it a little bigger?

Okay.

Let's play this out.

You love the home.

And so you started thinking about making improvements.

What would be the future of that?

Why, in other words, why make those improvements?

Why do you love it?

It's on a lake.

Okay.

So would this be a secondary home?

We would sell where we're living now and move in because it's unfair.

That's exactly what I was getting at.

So now it comes down to, okay, the boundary issues.

You brought up, there's been some challenges.

Is that something that's easy to navigate?

And you now have some clear direction on it?

Or is it going to be a headache ongoing?

We're not sure.

We're still in the process of it.

Well, I can tell you just something now.

I wouldn't think about selling my current home and moving into uncle's home no matter how much I love it.

And how awesome the lake is, if there were some boundary issues, that scares me to death, George.

I would get clarity on that before deciding anything.

Here's the key question to ask though.

Would you buy this house today if it weren't inherited?

Let's see, you have the cash.

You knew it was worth.

You could pay cash for it.

And you said the same stuff.

Would you say probably not?

Yeah, probably not.

Why?

In an area we wouldn't really go to because it's out of our kid school district.

Then how would you move there today?

Well, the school is on the way to my husband's work.

Okay, but it would be a pretty big commute for him to get to work for the kids to go to school.

It would be inconvenient for your life as it stands today.

Yeah.

Yeah, you just answered the question.

George asked it as plainly as he could.

You just said, no, I wouldn't buy it if my uncle didn't give it to us.

So, based on that, in the boundary issues, I would solve the boundary issues so that we could sell it.

The other piece of this, do you have financial goals where if you sold this house, it could really solve some other problems?

Do you have any debt?

Do you have a mortgage?

We actually live in a trailer and we have about 60,000 in debt.

Is the long-term plan to live in a trailer?

No.

Okay, what could this house sell for?

We were told about 152,000.

Okay, so think about it this way.

Is that all cash coming to you and does have any debt in other words on the house?

Well, we have about 30 grand on the home.

What do you mean on the home?

And the mortgage for the trailer.

No, no, I'm talking about Uncle's house.

It's paid for.

Oh, no.

It's paid for.

Okay, right, okay.

So, if you could walk away with 200 grand, pay off your 60-cane debt, pay off the 30 on the trailer.

You still have 110 left, potentially, for a down payment on a home.

That will go up in value, unlike the trailer.

Correct.

Yeah, I'm doing that all day long versus taking a vacation home

that you may or may not live in.

You guys have some priorities right now.

So, I'm going to take this inheritance as a blessing that puts you guys on a very different path than the one you're on right now.

Okay.

Because the current path is not a great one.

Can we all say that out loud?

Yeah.

We're $90,000 in debt.

The trailer's going down in value, which means you're probably upside down on it.

And we need some stability.

And what your uncle did is a huge blessing to give you guys a different trajectory for your financial future and for your family tree.

Yeah.

And maybe one day you do buy a house on the lake.

But right now, if you guys had no debt, you had plenty in savings and retirement.

You were on track to be multi-millionaires.

I'd say just keep it and for fun for now and maybe in the future you use it.

But you guys aren't in that place.

And so, I would sell it absolutely.

And get rid of it as soon as you can and use that money to pay down your debt.

Get a fully funded emergency fund and use the rest toward down payment.

Okay.

Yeah.

You got a good plan.

Get a good real estate pro on your team right now helping you solve all those.

Yeah.

Yeah.

Okay.

I'm telling you, get that solved.

Priority number one is to get whatever boundary issues.

Get all that clear so that you can list this house and then follow George's plan to do.

You guys are going to be living it up.

What a great position of being.

You know, so sad that you lost your uncle, but boy did he bless you.

And we want to make sure you maximize this blessing.

Okay.

All right.

Thank you for the call.

I love reverse engineering like that.

What you do this today on your own volition versus it falling in your lap.

And if the answer's no, you got to go, all right, this isn't the move.

Yeah.

I love it as much as you could justify it.

Yeah.

Yeah.

Sure.

Do your shark tank.

I love when you do that.

Oh.

And for those reasons, I'm out.

I love entrepreneurs.

Don't forget, guys, I started my company on a car table myself.

So I know what it's like to have people counting on you.

Your team, your family, not to mention your customers.

And when you're the one signing the paycheck, you can't afford to fly blind.

But I'll be honest early on, one thing that nearly sunk us was wasting time with spreadsheets

that didn't add up because business units didn't talk to each other.

I finally told my team, just fix it.

And they did.

We got NetSuite.

That was years ago.

And we've never looked back.

See, NetSuite isn't just for tech giants.

It's built for growing businesses like yours.

Over 43,000 businesses already run on NetSuite, including a lot that started just like you.

And now with built-in AI, NetSuite is helping them even more.

It's one system connected to every part of your business for real time insights.

Not guesswork.

NetSuite AI flags inventory issues, cash flow risks, even supplier delays before they become problems.

So you can trust the data, stop wasting time, and make the right decisions faster.

Take a free product tour today at NetSuite.com slash Ramsey.

That's NetSuite.com slash Ramsey.

All right.

Today's question of the day is brought to you by YRIFI, Defaulted Private Student Loans.

Do not fix themselves, but they can be fixed.

YRIFI helps you by refinancing Defaulted Private Student Loans into a low fixed rate payment that fits your budget.

So you can clean up the mess and move forward with a plan, visit YRIFI.com slash Ramsey.

That's Y-R-E-F-Y.com slash Ramsey.

It may not be available in all states.

Today's question comes from Colin in Georgia.

My wife and I recently started the baby steps and are quickly paying off debt.

We purchased a home two years ago with a 30-year mortgage.

Once we pay off our debts, should we refinance ourselves to a 15-year mortgage?

The mortgage is currently 25% of our take home.

We can put extra money towards the mortgage once we get past baby step three.

What would you suggest?

This would be a more information needed situation.

I agree.

Because it's not that simple.

Now, we love for people to get the 15-year mortgage.

But if you're already in a 30, it's not a yes, go do this today.

You got to look at the interest rates and how much the refinance is going to cost you to find out how quickly you would break even.

So if you would break even on this loan in six months, then sure, go for it.

But if it's going to take a while to break even because of the current rates and the rate you currently have,

it's okay to keep the 30 that you got and just pay extra like it's a 15 or even better like it's a five or 10.

And just get out of that thing as soon as you can.

But if you want to crunch the numbers, call up our friends at Churchill Mortgage.

They'll be happy to run the numbers for you to tell you honestly, does this make sense for you right now?

Yeah. Love that good advice there.

Thanks for the question.

All right, we're going to go to Jesus in Dallas.

And looks like our notes tell me that he's got a gigantic car payment, George.

It might give you a little indigestion.

So I've got the fake thumbs over here ready to go.

So let's see how we can help out there.

Jesus, tell us what your question is today.

Hello, good afternoon, guys. Happy to be speaking to you guys this afternoon.

My only question is, well, I have other questions that we have time for.

But my main question is, how can I get out of my car loan that I have?

It's $34,000 in total.

My monthly payment is $830 a month.

And I recently got it evaluated for $14,750.

And my bank is maybe federal credit union.

And I asked, I basically asked them if I could get a loan for the.

But they're mainly balanced balance so I can sell it.

And they denied me.

So I was kind of left at a loss.

I don't know what to do next.

And they're the ones that are holding the loan?

No.

Okay.

No.

Yeah.

All right.

So you said you got it evaluated.

What do you mean by that?

Who told you the car is worth $14?

Well, well, uh, carried rule books.

I haven't taken it to like any, any place where it says it can be looked at it.

But, you know, I put all the details.

But you're saying the private party value was $14,750.

Yeah.

If, uh, that's a good number to basically trust Kevin.

Yeah.

I was just making sure it wasn't the trade-in value, which is always going to be much lower.

Okay.

Yeah.

So you are $20,000 underwater.

What other debt do you have?

I have no other debt.

I've been listening to you guys for.

Close to a year now.

Okay.

And I managed to pay off my credit cards.

I just have this call on now.

Good.

What do you make?

$77,000 a year.

And, um, I'm a decent mechanic.

So I might monthly changes to either under or higher.

Okay.

But that's what my salary is.

Do you have options for not just regular over time with your company,

but freelancing, if you will, given your unique skills?

I, you know, definitely thought about it, but I have not exploded because, um,

I'm like so invested in to why I work.

I just work so much over here.

And, uh, how much?

How much is, um, a lot?

Like $65 to $60.

$60.

I wouldn't be like an extreme, but normally $50.

How much were you putting away towards the credit cards while you were paying them off?

What was the, the most amount out of your monthly budgets that you were putting on that debt?

Under credit cards?

I, I kind of wasn't putting, I was just under snow bar and when I, at the end of the month, um,

so it was so weird.

I do it.

I save for, to pay off the month first and then the extra I put towards the cards.

And I just did that.

Anything extra I had, I just throw it at the cards.

Yes.

What was the average amount extra that you had to throw at that per month at 1,000, 2,000, 13, 300,

okay.

Could you do more today now that those payments are gone?

Oh, yeah.

Okay.

I could, I could not that much more maybe like $15,600 a month.

Great.

So here's your options.

Number one, you get alone for the difference, which you've tried one place they said no.

You can always try a different place.

The other option is saving the difference in cash in order to clear the title and sell it.

Now, you still need more money to then go buy a different car, right?

That's your only vehicle.

Well, I bought my fiancee cash car.

We're here recently, like a week ago.

Why'd you buy her a car?

Because I'm the reserves military and I do a lot of driving.

And when I'm away, she has no way of getting to work or not also an important part of information.

We're, we're expecting a baby girl.

Oh, wow.

Congrats.

Thank you.

So for the expected days, I'm supposed to leave.

I leave like five days at a given time.

Okay.

So not only two cars right now, or could you survive as a one car family?

We can survive.

We've been doing one car since we've known each other.

Okay.

So here's your other options and what I'll suggest.

You can either save up the 20k real fast aggressively.

Like, let's say if you can save up 2k a month, we got the 20k in 10 months to get rid of this.

Or you just pay the car off aggressively and keep it.

Now, it's a lot of your world, but you've rolled over negative equity.

So it's not a true picture because generally we say don't let your, you know,

the total amount of vehicles, things with motors and wheels add up to more than half of your annual income.

And with her cash car, you're probably there and we're a little bit over.

But that's your other option.

If you want to keep it, you pay it off aggressively.

It's $34 grand.

If you can put, you know, $1,600 a month, it's going to take a while, but you could do it.

But because you only need one car, I like the plan of you throwing two or three grand a month of this thing

and being done before the end of the year to get rid of it.

Right.

To get out from under this one.

Good idea and everything.

But what?

But given that our baby girl is coming here, maybe April or maybe May.

I'm doing this torque mode.

God, you're stacking up cash.

Okay.

How much do you have saved right now?

I have about three, three and a half thousand right now.

For an expert to have, well, like, seven thousand by the time she's born.

Oh, you guys getting married so that we can put those in comes together.

So, well, we would love to get married immediately.

But my, my mother, it's a situation with like an immigration case.

And the lawyer is basically said, if not again, I get to get married yet.

I really didn't challenge it from there.

I just kind of said, okay.

Because of your mother or because of my mom and an immigration case with her.

I'm trying to get her residency, I believe, or citizenship.

But what does that have to do with you two getting married?

Well, I, I guess I don't know because I never challenge the best paid nut and ask why can't we?

Well, I'll give you the math on it.

Let's say you save up babies home and healthy.

That gives you a pile of cash.

You can throw out the debt within six months after that.

You could have the 20 grand saves to cover the difference for the loan and then sell it and clear the title.

And then you go down to one car and then with every future money.

Now we're saving up to get a second car if you need one or we're just stacking up the emergency fund.

If you're at a debt at that point.

Okay.

There's no shortcuts here.

Do not go further into debt.

The only reason I tell you to take out a loan from a credit union is if you can go down in debt and then get out of that aggressively.

Yeah.

George, I'm wondering why I did not hear you recommend this.

Why not have a third option where he sells the car and gets the max he can get for it because it's going down in value.

Yeah.

If they can truly survive off of one car, which is her cash car, why not sell it?

Well, because when you're underwater, you don't have a clean title.

And so without a clean title, he's not going to be able to hand that title over to the person buying it.

There you go.

And so there's a lien against the vehicle with the lender.

And so to clear that, you got to go to the bank, have the money.

It's not as clean as it sounds.

To pay off the loan.

Yeah.

So it's a process.

And that's the problem.

You can't be underwater on a car you pay cash for.

And it's one of the best reasons to never go into debt for a car on top of many others.

Thank you very much.

Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio.

I'm Ken Coleman, George Campbell is alongside.

We're here for you.

Triple eight eight two five five two two five triple eight eight two five five two two five.

All right.

Let's go to Ryan and Salt Lake City.

Ryan, how can we help today?

Hey, how's it going today?

Good.

How are you?

I'm looking at I'm doing very well.

I was just wanting to ask you what I would have to do at 28 years old this February to retire at 40 years old.

Okay.

You got George over here who does his magical computations.

Yeah.

We can talk about how to do it.

And then I want Ken to talk about should you do it?

Hmm.

I like that.

What caused this goal?

Well, I'm trying to go against the grain.

And I do not want to work until on past 60.

And I believe I have the income in order to do that and kind of break the streak and retire at 40.

Okay.

Well, there's a lot of variables we don't know, but we'll start with what you make today.

So last year, I made 235,000.

Awesome.

And I'm projected this year.

You know, that was with some bonuses last year.

My pre-tax is supposed to be around 206 and 210 this year.

Great.

So we'll market a little over 200 about 147.

Are you single?

I'm married with two children.

Okay.

And that's the household income.

Is your is your spouse at home?

She runs our company that we opened a few years ago.

She does a consulting for a construction company.

But that's her thing.

I got out of the company when I went from 1099 to being a W2.

Okay.

So is that additional income or is that part of the two 35?

That's not including my income.

Okay.

I think it's part time and doesn't get, you know, maybe get 10 hours a week or so, but I'm not factoring that in.

All right.

So what is your, do you have a goal in mind of how much you need to have saved in order to accomplish this?

To be work optional.

I'd like to have at least $7,000 coming in a month, $7,000 to $9,000 for retirement every single month.

Okay.

So you're probably looking at, you know, at least one and a half million bucks or something sitting in an account.

That's invested, you know, heavily in equities and stocks.

And so do you have anything saved right now that are invested?

I have $5,000 in Schwab and $15,000 in savings and my checkment can't usually float around 8,000.

I just got myself out of a ton of debt.

So right now is my time to kind of start the investment process in order to do the retirement.

And I have two loans that I'm still working on.

Okay.

So let's walk through the process that I would personally walk through if this was my goal, which would be to pay off all of my debt.

And that means liquidating most of the savings to do that, to speed this up, getting a fully funded emergency fund of three to six months.

Which if you're saying you're, what's your burn rate every month right now?

How much do you need to get by?

Right now $5,743.

Okay.

So let's call it 35 grand as a six month emergency fund for you guys.

So that's your next goal.

Okay.

Then we need to be investing 15% for retirement because we want to take advantage of any tax advantaged accounts we can first.

And so if you've got a match, let's start there.

Rough accounts.

That's a great move there for tax-free growth and then traditional accounts.

Then beyond that, beyond the 15%, if you wanted to put some money away in a brokerage account, like is what you're, that's what you're talking about with the Schwab account.

Yes, and that's WTSX.

Okay.

Then if you wanted to put money there for it to grow and you put, you know, 50 grand a year, let's say, that would get you about 1.1 and 12 years.

Okay.

So you'd be a little off the mark.

So then you, you know, let's ratchet it up to 70.

Well, I could see it 1.6.

The other factor here is your mortgage.

Are you guys, you guys own?

Yes, my total housing is about 28, 28 and that's including the 21, 23 mortgage, Wi-Fi, water, trash and all that.

Okay.

What's left on the mortgage?

We're at $3.38.

Okay.

I personally would attack the mortgage first before I was doing additional into the brokerage account.

And you'll have time.

What's that?

Well, what would the sort of attack in the mortgage first be rather than maybe get rid of a car payment, which is less than that?

Oh, no, you need to attack the consumer debt first.

Here may say that.

So we talked about knocking out the consumer debt, getting an emergency fund, investing 15%, then anything extra,

we're putting some toward college, paying off the mortgage, which means we're probably going to be delaying this plan.

Okay.

Once the house is paid off, now we can invest beyond the 15%, put money into the brokerage account, because here's the thing.

If you got rid of that mortgage payment, it really reduces how much you actually need in that fund, doesn't it?

I have something to throw at you.

Okay.

So if my, if my housing is 2828 a month, but my vehicles is 2265 a month, I can, I can pretty much free up the same amount.

If I paid off the vehicles a lot quicker than the house, because it's not that big of a number.

Yeah, I know.

I'm, dude, I'm telling you, follow the baby steps.

Consumer debt goes first.

Did you miss that part?

So the, the cars are going to get paid off ASAP.

Then the emergency fund gets stacked up, then you start investing 15% into retirement accounts, then some money to college, then we throw the money at the mortgage.

So I'm not telling you to pay off the mortgage before your cars.

Gotcha.

And by the way, a guy who wants to retire early should not be carrying $2,200 in car loans.

Right.

I agree with that.

Okay. Just want to make sure, because that is flying in the face of your stated goal of financial freedom.

Now, what can to quickly hit on, should you do this?

Because I have followed the fire movement and seen what's happening over there, and it frankly worries me.

Yeah, are you, are you a fan of the financially independent retire early?

That's the fire movement.

I'm not, I'm not aware of that.

Yeah, okay.

Well, here's what we found, and this is all documented.

The guy who started, who's credited with starting this movement.

The idea was work like an absolute maniac.

Don't live life.

Don't enjoy anything until you're 40 and you stack, stack, stack, stack, stack.

And the guy who actually is considered the founder of this actually went back to work two or three years into it.

For a couple of reasons.

Number one, he thought in his mind that he had not actually saved enough, given how the cost of college was going up.

That was one of his stated concerns.

Also, the guy was bored out of his skull.

And, you know, there's nothing wrong with retiring.

And I love, by the way, whenever I say this, people always come at me in the comments and come at me because I'm not going to be in there.

George will tell me.

I'll tell them in.

I'm not saying that there aren't certain people who can retire at any age and never work it in their life and be as happy as a clam.

Fishing, hunting, whatever.

But what I am saying is that we know from research that it has negative effects on us,

because there is this built-in desire in our spirit and our soul to make a contribution.

So I'm not saying you got to work 40 hours a week until the day you fall over.

I am saying that it is proven that it is better for us mentally, emotionally, and physically to have some type of purpose outside of just play as we age.

So, but I will tell you, I love that you called us and threw it out there.

But I'm going to tell you, after George ran those umbers out, you've got a ways to go.

Yeah.

Based on this, after you fall over everything I've told you, you still have to stack.

You still have to stack 100 grand away in that account for a decade for this to even make sense.

So the reason I bring that up is not to discourage you, but to encourage you to have a more realistic goal.

And a healthier one.

And a healthier one so that we can actually reach it.

Because I think you've created a mountain in your mind that's not climbable given your financial realities.

But if you do what George said, you're going to be very happy man and can in fact retire much earlier than most.

Welcome to 2026.

Last year is officially in the rear view and you're fired up to finally make some changes with your money.

New year, new goals, we love it.

But let's be honest, old you said the exact same thing last January and the January before that.

And before you know it, those money goals fizzle out faster than the fleeting flavor of LaCroix.

So here's the truth, new year motivation only gets you so far.

You need an actual plan.

And the good news is you don't have to figure it out on your own.

The $10,000 build a personalized plan based on your goals and your real life.

And it actually coaches you to stick with it.

Plus the every dollar app will help you find extra money hiding in your budget.

And trust me, there's always something hiding.

The average person finds $3,000 and $15 in the first 15 minutes.

That's basically like giving yourself a raise and a much happier new year.

So don't let future you down.

Make them proud.

Go download the every dollar budget app and start for free right now.

All right folks, if you have kicked your debt to the curve, you deserve to celebrate.

Where do they deserve to celebrate George?

Where would somebody, where would you recommend somebody who beat all their debt?

They got it out of their life.

How would you think they might celebrate that?

I think some are warm, some are tropical, and somewhere with Dave Ramsey and the Ramsey personalities.

How about the Caribbean?

I'll go there.

With Dave, you, me, and all the other Ramsey personalities.

Take me there, want to go there.

All right, it's called the live like no one else crews.

Folks, it's coming back after much popular demand.

And I'm not reading for many notes here.

This is a fact.

Extemporaneous.

Those folks loved it who went on it before.

And so my, my, my, this is going to sell out way faster because now everybody knows how great it is.

And I got to tell you, I'm not a cruise guy, George.

Traditionally.

Well, I don't like being on the boat.

I like the clothes that you would wear on a boat.

The attire is what I like the boat attire and I like the Caribbean.

Well, this clue, this cruise was great.

And so here we go.

We're going to roll it back.

I think they say run it back.

Not roll it back.

Run it.

It's your show, Ken.

March 14 through 21.

March 14 through 21.

2027.

That's next year.

If you're looking at your calendars.

In the Bahamas, how about Jamaica, George?

Do I want to take you?

Was that my cue?

It was.

Okay.

The Grand Cayman and Cosymill.

Cabins are limited.

Save up to $300 when you book by February 7.

So, hey, those of you who haven't made any plans, are you kidding me next March?

You got cash.

You want to save 300 bucks?

You got to do it before February 7.

Click the link in the show notes or go to ramsysolutions.com slash events to book your cabin.

I am looking forward to this.

I did not think it was going to be as amazing as it was.

The ship was great.

The people.

Our fans are just amazing.

It was electric energy.

The buffets were next level.

And I will tell you there was, in fact, a pickleball court on top of the ships of your pickleball.

And that is what you can find, Ken.

We had a lot of tournaments going on.

They wore you out, man.

You were up there for, like, seven hours.

People are like, no, no, you're not going anywhere, Ken.

I want to play you.

Yeah.

There's a shot right there with the headband.

Oh, my gosh.

And the lettuce, as the kids call my hair, flowing on top of the ship.

It's on the top deck, George.

That's a bold move to show off your legs, Ken.

Yeah.

With those chicken legs, you got it down there.

Well, there's nothing to be ashamed of.

They're just little.

That's all it is.

So, we'd love to see you on the cruise.

And I wear, by the way, on stage.

Did you like my attire?

I really went with a cruise ship theme last last year.

All of those white pants you own finally came in handy.

Well, I'll say that.

Lots of linen and a lot of loafers.

Yeah, a lot of loafers.

All right.

Carol knows what we're talking about.

Somewhere in sunny Florida.

Carol, how can we help you today?

Thanks for taking my call.

You bet.

What's going on?

My husband and I are both going to be turning 65 this year.

And we want to retire at the end of the year.

And we're trying to decide if we should pay off our house or not.

And it's so where we should pull the money from.

We don't have any other debt.

And we do have some savings.

We have about 1.1 million in an IRA.

90,000 of that is in a 401k.

And we have about 145,000 in savings.

Awesome.

We owe 155,000 on the house.

And the interest rate is 2.75%.

The problem is the maturity date on that loan is 2051.

So we'll be about 90.

Yeah, no, thank you.

But I'm not sure if I pay it off, I'm not sure exactly where to pull the money from.

So you've got 145k and liquid cash.

What is that earmarked for right now?

Initially to live off of when we retire, we'd like to delay drawing our security,

which would be about $4,400 a month if we draw now.

We'd like to wait at least a couple of years and let that grow.

Our monthly expenses are about 5,000.

Great.

So you almost have the cash to do it, but you're saying you need a big chunk of this to basically live,

because you want to retire by the end of the year.

Retirement for me is a great goal.

It's going to be a really big switch mindset for me because I'm a saver, not a spender.

So depleting money out of that savings makes me incredibly uncomfortable.

So that's why I feel like I need a little bit of advice from someone who has a broader outlook.

What's your household income?

Our household income right now is about 160,000.

Awesome.

And we save about 2,500 a month and we put about 15% into our investments with employer match.

Okay. So outside of 15%, you're saying you have 2,500 extra, you can throw at the mortgage?

Yes.

All right.

That'll get you far. That's 30 grand right there.

And by that point, the mortgage is down to 125 grand.

You'll have the money in cash, but you're going to need some of that to float you for a year or two.

It sounds like.

Right.

And do you have any other money outside of the 1.1 nest egg?

I have about 40, I'll say 45,000, no 52,000 in a row.

Okay.

But I didn't start it until 2022.

So I don't think I can withdraw from that without penalty for five years.

Is that correct?

Yes.

Do you have a financial advisor you've used to crunch all these numbers?

I have some of my investments in Schwab and I've talked to them, but the rest of it I've just done on my own.

Okay.

My only fear is that you're riding it pretty tight.

If you're wanting to spend 5 grand of net income a year for the rest of your life,