When Money Gets Complicated, Clarity and Wisdom Matter Most

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Normal is broke in common since it's weird, so we're here to help you transform your

life.

From the Ramsey Network in the Fairwinds Credit Union Studio, this is the Ramsey Show.

I'm Jade Warshaw next to me, George Campbell taking your calls, go into the phone lines

where we have Heather, an Indianapolis Indiana Heather.

What's up?

Hi.

How are you guys?

Doing good.

How can we help?

Long story short, I got married in August and once we combined some finances, I found

out that my husband had a lot of gambling debt.

I had a baby in October and my husband tore his Achilles in May.

So he's currently not working and I just went back to work from having my baby.

Basically I found out in December that he's got 150K in debt.

Most of it is from gambling and he didn't think he was going to be alive to face the consequences

that led up to this debt, unfortunately, but he met me and we got married and had a baby

and things have changed.

Wow.

So you quite literally saved his life?

Correct.

Yeah, we both saved each other and I fell in love with him, I guess.

Wow.

So do you know about this gambling issue before you got married?

I knew he gambled, when we won 25,000 in Vegas, it's great when he lost 16,000 in one

day.

It's not.

So I knew about it.

I just didn't know how bad it was until after the fact, right?

I started asking more questions once I knew about it.

How long of a process was this that he went into all this debt before you were married

and during?

No, it stopped as soon as we got together, but he gambled like seven years maybe.

So over the course of seven years, it's accumulated 150,000.

Correct.

He's got two payday loans, he's got some 401K and then just whatever on the app, you

can like take money.

I'm not a big gambler.

Is he still current?

Is he currently, because you just said he's not accumulated since you got married.

So he hasn't, he hasn't continued to gamble since we got married, but he hasn't paid any

of his debt.

Are you sure that he's not?

How do you know if he stuck at home all day since May and he hasn't opened a gambling

app or went to a website, I would be shocked if he's not going to gamblers anonymous.

Well, we did get into therapy and did some couples counseling, but I control the finances.

So I mean, unless he's doing something behind my back and taking out additional loans,

there's nothing to my knowledge.

I would be pulling his credit report to get a full picture and freeze his credit.

Have you done that?

I haven't freeze his credit, but I did pull up and found out like all the creditors that

he has.

So he was withholding this information.

This wasn't just like, well, he did let me know you found this out.

Correct.

It kind of got like breadcrumbed along, right?

And then once I knew my spot, I was like, what's happening?

There's all your money going, what's, what's, how do we get in a situation?

Okay.

Then he was opening on us, right?

That's how I got help and took control.

Okay.

So you guys, it sounds like you've turned the corner.

This is no longer happening.

You've got control of the money.

You've done all the due diligence there.

So how can we help today?

Is it, how do I pay this off?

Is that just the biggest question?

Yeah.

So I want to know how we approach a judgment this large.

Is this a snowball method realistic in a situation should we consider bankruptcy or

are there other options?

Is this the only debt of all the 150, 153, the houses in my name, the cars are in my name.

I don't really, I only have like 4,000 maybe credit card debt.

It's all his debt.

Okay.

The cars are paid off.

No.

Okay.

So tell me all the debt.

I owe 127,000 on my house, but we have about 4,000 left on my car to pay.

He might have 11,000 left in his truck to pay.

Okay.

We got a $53,000 judgment on the one creditor, 19,000, the other one, and then he took all

of his 401K out.

Okay.

Okay.

So what's you guys' income is, I mean, is, I guess he's not working yet?

Will he go back to work?

Tell me more about that.

So we toured the key lease and he's currently ceiling.

I hope and pray he can go back to work.

He's got a physical job at UPS.

So he does have a good job and makes good money, but right now he's not working.

Only I am and I make $68,000 a year.

Okay.

And what did he make when he was working?

Eight years, a little different depending on overtime, but at least six figures.

If he's not like 95 to 110, depending on the bonuses and how many hours we get.

Is there any disability income coming in or workers comp, anything like that?

He was on workman's comp, but they cut him off.

They only gave him six months and then they stopped.

So it's all in limbo right now.

We're waiting for his IME and what to do.

Yeah.

Super able to walk on it.

What is his current status?

He's in physical therapy.

So he just got into a shoe in December and he can't really do a lot of steps.

He cannot drive like going from the gas pedal to the brake.

So he's still at some healing to do and it's kind of all on me.

Yeah.

Well, that's really stopping you guys from being able to crush through the stat right

now.

You're just in survival mode until we get his income back in place.

Is there anything else he can do that isn't physical to bring in some income?

No, like you can't walk or drive.

So like I don't know.

I'm saying any other job.

If he can't work right now, he needs to do something even from home.

Can he do customer service for your kids?

His mind is not broken.

His Achilles is broken.

Correct.

But he's watching the baby.

So then we would have to figure out childcare right now and I just picked up a second job.

Is there any family around that could help with that?

Do you have a local church?

Is there anybody that you can reach out to?

Even if it's part time right because the baby sleeps at night.

So even if he's doing some sort of night customer service, right?

Yeah, like we can look into that but with workman's comp, it would definitely like, I don't

want to commit fraud on that.

He's not getting paid anymore.

I have said it stopped.

Yeah.

Yeah.

I don't know how any of this works.

I've never done in a situation like that before.

So here's what I want.

I want you to be open to solutions because I think that you're kind of camped out on,

mate, we'll just file bankruptcy, but I want you to be open to the solutions that George

and I give and I just want to be upfront and saying, they're going to all suck.

Like none of them are going to be fun and none of them are going to be things that you want

to do with your time.

They're going to be things that feel like impositions because they are.

They're going to be very uncomfortable.

It's going to require him to do jobs and work that he doesn't want to do at times that

he doesn't want to do it.

Like at night, when most of us are watching Netflix, it's going to cause you to be doing

things that are uncomfortable, like calling workmen's comp, whoever that is and figuring

out what does it mean?

Are we getting any more money?

Will there be any repercussions if we go ahead and work since the payment stopped, right?

These are all the things that you guys are going to have to do.

And the challenge for you beyond the finance of this, Heather is going to be not feeling

resentful towards him for having piled up all this debt and now you're having to sort

through it.

You're having to have this discomfort in your lives because of it.

I would not file bankruptcy, you know, just yet, George, I would work through this.

You're going to have a timeline on your horizon, but he heard us Achilles.

He's not.

He didn't have heart surgery.

So he's going to recover.

He's going to go back to work.

It's just really hard right now.

Correct.

I'm sorry.

I had to get you off for the clock.

But I really, I really, really want you to understand that this is something you can

work through.

I would do the debt snowball, which is what you asked, smallest to largest minimum payments.

And right now, if all you can do is the four walls, that's okay until he gets back and

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All right, back to the phone lines we go.

We've got Maggie, who's in Atlanta, Georgia.

Hey, Maggie.

Hi, yes.

I'm trying to find out if the way my husband is treating me financially is considered abusive

or if it's acceptable and what I should do.

Really?

Tell us more.

I'm in my mid-40s, so is he.

And we have six kids.

And I have been financially dependent on him for 20 years, well more than our entire

marriage.

I don't work and I've never worked.

Last year, he artificially reduced the amount of money and our family income so that it

was below how much we needed to have just sufficient funds.

And so over the course of the year, we basically blew through all of the extra savings that

were in that account.

And then towards the end of the year, there were some medical problems with our family

and we really tipped the budget over the top.

We did not go into debt because he's putting aside money somewhere else also.

Where do you know he's putting it into savings accounts.

I used to be able to see them, but I can't see them anymore because he hid them.

I don't, because I'm dependent and I'm not really that into the finances stuff, I could

see them through a budgeting app, but now I can't.

And that was all your question.

Yes.

And he's doing this to punish you?

Yes.

So he sent me a text saying that since I wasn't ready to talk to him, he just went ahead

and made decisions himself and so he cut me off from the family credit card, which was

in his name, right?

It was a card for him.

And he told me that he had reduced the amount in our family budget more substantially.

And that he told me to use a credit card that two months before then he had asked me to

open in my own name.

And I didn't like, I didn't know that that was going to be a problem.

But now he wants me to use that.

And obviously that makes me financially responsible.

And he said he's threatened to ruin my credit and not to pay anything that went over.

So now I feel really nervous to use that credit card at all because I'm not the only one

drawing from this account, like he draws from the account.

And so he's controlling what amount is even in the account for you to spend on the family.

Yes.

So can you use a debit card attached to that bank account?

I don't yet have a debit card, but if that's a good option, then I could go back.

So your name isn't even on the bank account.

It is.

My name is on the bank account.

So you should be able to get access to a card tied to that account.

You can go down to the bank and ask for one.

Okay.

I would do that today.

And that way you don't need to use this credit card.

You don't need to even have the chance of racking up any debt.

And then it becomes an issue of, hey, we don't have enough to cover the bills.

And I don't even know what we need to cover because you have accessed everything and won't

let me even see it.

And so you guys have some deep marriage issues and the financial part is just a symptom.

Yeah.

This is, for me, it's a major problem.

For me, this has nothing to do with finances.

I mean, obviously what George said is important just for the here and now.

But this guy is 100% controlling.

And that's 100% a financially abusive situation.

So tell me, I guarantee you this is not the only place that he's asserting control guaranteed.

Well, I've recently been walking out of that with a therapist because I've just started

to assert my own autonomy.

Okay.

What does that mean?

I stopped presenting things to him as a can I do this or whatever and just doing what

I need to do.

Like I'm not doing anything stupid.

I'm running a house.

And what does that work?

Well, sort of, he's not happy about it.

Yeah, he's not like, like the only escalation is him.

I don't know.

I guess you could call it like berating or that kind of thing, not, he's not like physical

or anything.

And you're okay with that.

Well, I do believe that he will get better.

What makes you believe that?

The Lord told me, hmm, how long have you been married?

Over 20 years.

And how long has he been asserting this berating behavior since before we got married?

But I was also part of that.

Can I ask you a question?

Really like that.

Can I ask you just a, so you went there, so I'm going to go there with you.

Do you think that you have to be in the house for him to get better or do you think you

could be somewhere safe and he could get better?

You think you think you have to be there for him to berate you or do you think that you

could be somewhere safe, him not berate you and get better?

So that's kind of like what caused this whole thing is that I basically refused to sit

there and listen to him berate me.

And I told him that I wanted to have conversations by email.

So that's why he said that I wasn't talking to him.

Understood.

But you're still living in the house now?

Yes.

Okay.

And most of the days are peaceful.

It's just, you know, he has some growing to do for sure.

Understood.

Well, I have one other question about money.

He, we got Christmas gifts that were like a check.

I got one in my name.

He got one in his name.

And I mentioned putting mine in my own private account.

He didn't like that.

He said that that needed a lot more conversation.

So I was really wanting to know if it's wise or foolish of me to put this large cash

sum into.

At this point, you're protecting yourself because I don't know if this marriage is going

to survive.

And so at this point, you have to then go, I need to create my own bubble over here because

this person isn't safe.

Yeah.

I would 100% say that.

Okay.

So that is actually wise to do in this moment.

And I know God told you, but it doesn't mean that this marriage survives.

Sometimes he, maybe it takes this marriage not working for him to get better.

I don't know.

I hope this marriage survives.

But I'm also not, I'm not a betting man, but I'm betting he's not going to change

tomorrow and just go, wow, I had a revelation.

I've decided to give you full access to the accounts and be transparent for the rest

of my life.

Right.

I'm also thinking about your safety and security.

You're just not in a financially safe or secure environment.

Therefore your kids are not either.

So there's part of me that is, I'm way more concerned with that.

Obviously, you called this show than I am with his comfort at this point at all.

Because there's kids involved and if you can't have access, if you're home taking care

of the kids, but you're not allowed access to money that it takes to do such work, then

what are we even, what are we doing here?

Right.

So I'm concerned about that.

I'm with George.

I have a concern.

There's also something more nefarious happening, some financial infidelity on his part

of why he's hiding this.

If you are correct in that there is no wild overspending happening, then he's hiding

this for a different reason that maybe beyond just control because he doesn't trust you.

And so that is also something to consider here.

And so I would demand transparency.

I would demand that you have equal access to the money and that you have an equal vote

in this marriage.

Yeah.

And if that doesn't happen, then you guys need to go to counseling and if he's unwilling

to go to counseling, you go alone and then you'll have to make your own decisions whether

this is safe and healthy.

Does he go to counseling or is he willing to go?

We've tried in the past, but yeah, he left it.

I didn't want to do it anymore.

Uh-huh.

Yeah.

Maggie.

So do you think that it's wrong if he made the decision unilaterally not to put his entire

income into the account?

Yeah.

I think that's wrong.

Yes.

I think that's very good.

Listen, Maggie.

My wife stays at home.

She has full access and transparency into everything that we do.

There are no hidden accounts.

There's no mind in hers.

She sees the budget.

I see the budget.

She can check the savings account at any moment.

What is a healthy marriage?

And any other picture is going to lead to unhealthy behaviors and an unhealthy marriage.

And so we can't continue on this way and pretend like it's going to all going to work out.

Yeah.

There has to be a come to Jesus moment.

And that means him going to counseling as a last ditch effort to go, hey, if this is

going to work, you're coming with me and we're going to figure this out.

Yeah, I think Maggie, from where you sit, you called about a financial issue, but you

know, George and I both know money touches everything and it's never just compartmentalized.

It's never just money.

These characteristics float into all the other areas of our life.

And I know based on what you said, what you're experiencing is not just happening with

the bank account.

There's a control issue here.

And the fact that this other person is not interested in bettering themselves, whether

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Lender.

You're listening to the Ramsey show we've got Lily who's in New York City, New York.

What's up, Lily?

Hi.

Are you better than you deserve?

I think so.

How about you?

I'm also.

So I have students myself, I'm in baby step 2 and a $1,000 emergency saving fund and

then my dad and mom collectively have about $150,000 of parent plus loans in my name or

not in my name.

They're legally theirs, but they took them out from me to go to college and as Georgia

say is kind of like a spit shaker agreement that I'd paid them back that was about 10 years

ago.

So the expectation is that I pay for them, but and they recently changed it, changed the

payment so that I am technically able to afford it, but that way almost cut what I'm paying

to my loans off in half and drastically increase them out of time that it takes for me to pay

my loans back and also they're making, they've chronically made poor financial decisions

and I don't want to be enabling them, like for example, they just bought a car that's

going to cost them $60,000 by the time they pay it back.

So I don't want to make a lot of sacrifices in my life if they're not willing to change

their lifestyle and these loans are easily in their name.

Are you, when you pay it, are you logging on and making the payment yourself or are you

giving them the money?

I'm logging on, I'm able to log on and pay the money myself from my bank account.

Okay.

Help me understand, help me understand the last part of your argument, which is the agreement

was yeah, you pay these things off, you know that you're not arguing that point.

If you pay off the 150, what's the problem with that?

What's that got to do with them and their lifestyle basically?

Because so right now if I were to not pay the loans at all, like no one's going to come

after me, they're really in my parents' name.

Right, but you didn't need to pay them back.

Yeah, but so I just, my thought was if I am like worried about myself first and focus

on paying off my things first and then helping them.

But you did, well you're not helping them, hold up, you're not helping them, you told

us that 10 years ago it was from the beginning that it was, we'll take these loans, you'll

pay them back.

They were not, it wasn't a bait and switch, you knew that going in.

So you, at that point, you signing up for these loans is no different from you signing up

for a credit card or a card note in my mind because you agreed, and this is my debt.

Morely and relationally, legally you're right, it's in their name.

This is just as much their problem if you decide to not pay, it's on them.

But at this point, the relationship is soured because you're not, you know, Thanksgiving

looks different now when they're like, you're looking at their card in the driveway

going, you shouldn't about that, you could have paid off my, a bunch of my student loans

without kind of money.

Right.

And they're looking at you going, homegirl took out 200 grand in loans and isn't paying

back after she said she would, right?

What is your degree in?

Um, I can't call engineering, I think, um, 91,500 a year.

Great.

And how much do you have in your name?

I have just under 20,000.

That's your all student loans?

1,000 a month, 13,000 are in our federal loans and then the other 7,000 is a private

loan.

Okay.

And that's it.

No other debt to your name?

No other debt.

I paid off all my credit cards and I'm not going to use credit cards today.

No car loan?

No.

I own my car.

Great.

Okay.

So the parent plus loans, I'm assuming those are also broken up into probably at least

four by semester, right?

I actually, there's three, but yeah.

Okay.

So what I would do is I take off all the loans, all the individual loans, the three parent

plus loans, the federal loans, however they're broken up and the private loan, however,

it's broken up.

And I would debt snowball it, smallest to largest, minimum payments and knock out the

smallest one first and put these $150,000 a parent plus loans right in there wherever they

fall, smallest to largest, and just knock it out.

This has gone on for 10 years, aren't you know, the longer you let this hang, those

parent plus loans have a higher interest rate.

And so the longer you wait on this step, it's going to balloon to 175,000 if we just fight

over this for the next few years.

So, okay, so the next snowball is you make minimum payments.

So my loans are lower than there.

So I would be paying off my loans first, but at the same time making minimum payments

on there.

Is that what you're saying?

You make minimum payments on all of your debt, regardless of what the minimum payment

is.

And then whatever the smallest loan is, maybe it's one of the federal loans or maybe it's

one of the parent plus loans, whatever the smallest balance is, not by monthly payment,

by balance, whatever the smallest balance is, that's the one you put all the extra money

on.

And that's the one that you're going to knock out first.

And so, and then the idea is you start feeling the momentum off of this and then you feel

good and you do the next, you put all the money on the next smallest debt.

Then that one's paid off.

You have all that freed up money and then you put it on the next smallest debt.

And that's how this works.

That's a good clarifier when you're doing the debt snowball.

It is by balance, not by monthly payment.

So that's a good thing to remember going forward.

Thank you for the call.

We've got Janay, who's a Baltimore Maryland.

Janay, you're on the line, my friend.

Hi.

So, I'm 22 years old and I'm currently back in college.

I took around like a break for, for a bid.

However, the college that I go to right now, it's like a private, um, Christian college.

And I own them around like $36,000.

They've been allowing me to push the balance off for the past three semesters, but they're

saying that I need to get that balance down to $1,000 by the next semester.

So essentially, I will have to be able to pay 35,000 by closer to the end of all case.

What is it?

Is it because it's a Christian school?

Is it because it's like, are you borrowing directly from a school or something that it's

not allowing you to wait until you've graduated to pay these things back?

Um, no.

So when I first went to college, I kind of messed up with my grades and things like that.

And so when it came down to me doing my financial aid, again, when I finally decided to get

a series about school, that's for just getting covered the full amount.

Okay.

Um, so is this such a payment plan directly with the school?

Yeah.

Yeah.

It's not technically alone, it's just a balance that you haven't paid yet.

Yes.

Okay.

So it's just a balance.

Are you currently going to that school?

Yes, I know.

Okay.

So what's likely going to happen is they're not going to let you continue going to the school

after the six months if you don't pay it.

Did you get clarity on what happens then?

Because at this point, it may be moot for you to even go to class right now.

You might need to take a gap and solve this.

So they essentially told me that if I can't get it down to $1,000 on its own, then I

just won't be able to register for exactly.

And so you can't afford six grand a month right now.

Are you working?

Yes.

Yes, I am.

How much do you make a month?

I have two jobs, one through the school and one throughout this outside of school.

The job that I work outside of school and maybe can bring like $3,000, possibly $4,000,

sorry, possibly $2,000, $2,500 a month and my school maybe maybe like $500, $6,500 to $600

a month.

So you got $3,000 a month total.

Do you have any money saved anywhere?

No.

Okay.

So my family wouldn't do a black patch, so I've been given them pretty much any spare money

and...

Here's a thing today.

You need to work with their office and just be clear with them.

I don't have this money.

I can't pay.

I don't make $6,000 a month.

I got to cover my own bills.

And so that might mean you can't go to school right now.

You need to get to work full time, over time, pay what you owe and then maybe go to a different

school that you can actually afford because clearly this private Christian one is costing

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Alright, you guys asked for it and we listened.

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Just seeing that ship brought me back.

Good memories.

Watch back to the Caribbean.

All right, Jessica, who was far from the Caribbean is in Phoenix, Arizona.

Hey, Jessica.

Hi.

What's up?

How can we help?

So I'm sure you'll ask questions on more specifics, but my essential question is

I'm 44, Mary, no kids, and completely debt free with a paid off home.

Unfortunately, my dad did pass away about a year ago.

He did own his home free and clear.

I have two additional sisters.

The home is worth about 700,000.

My mom, who is not married to my father and is financially set with about a million

in retirement and own her home free and clear is considering selling it and moving it

to Arizona.

And our question is, should we gift this house to my mom, obviously, I can get into specifics

about our finances to see if that's a good idea, but just kind of want to know the proven

cons of that and any potential pitfalls of that decision.

So let me just make sure you set all that very quickly.

So you're doing fine.

Mom is doing fine.

And then you have this home with your other three sisters.

Other two sisters?

Yeah.

Other two sisters.

Do they want to sell it or do they want to gift it to your mom?

Do they both agree?

So my older sister and I are both very financially well off.

We sold the business.

We each have about $8 million invested in the market and homes that are over 1.5 million

in debt free and earn about 250 a year.

My younger sister does well, but she's not in the exact same position.

So our thought was, my mom pays her $250,000 for the house.

Melissa and I forego receiving that money from my mom that way she can upgrade the house

and do anything she wants and still be within her budget.

And then she finally gets to live out home with the next 30 years actually living because

she's worked her butt off her entire life and provided for us and an incredible mom and

she's never done anything for her.

So I don't know if there's good.

That's what I wanted to hear.

I hope that I didn't know if you were like a huge red flag.

I mean,

if everyone's good with this, if everyone's happy with the decision and mom, does mom actually

want this house?

If she can redo it, how she wants it.

Yes.

Can she and she can afford to redo it, how she wants you're not going to fund that as

well?

Absolutely.

Because we're not having her pay us each to 200 that X or 400 will allow to do exactly

what she wants.

Okay.

So she's getting a free house plus 400 grand.

Correct.

That's a pretty sweet deal.

So one thing to think about is the step up and basis.

So when you inherit at the home, you get a step up and value, but when you gift it, you

know, that's a different situation.

And so what is the house worth today?

About 700.

And my dad passed away about a year ago.

So I think the basis, you know, step up is limited.

But obviously when we go to sell the house eventually, when my mom passes, if it remains

in the trust or even not with her will, then we would have that amount to pay.

Yeah.

And I would definitely work within a state attorney on this and a CPA to make sure that

you, you know, dot the eyes and cross the T's here.

But there's no big red flags other than understanding the financial components.

Obviously your dad let this, you know, let you guys inherit the home.

I don't know what the relationship was with your mom.

And if there's any bad blood there and if that's odd or awkward for her, but as far as

the money, the financial part, okay, everyone's happy.

I love the idea.

I don't see why there's any problem in it.

I think that you guys are good daughters, especially the $400,000 cash part.

That's pretty.

That's a good place.

These are good problems to have.

Very good.

We already have $10 million.

Yeah.

Exactly.

I don't need this extra house sitting around.

We needed the wind.

Thank you, Jessica, for the call.

We needed that one.

We got Jimmy who's in Salt Lake City, Utah.

Hey, Jimmy.

How can we help today?

Hey.

Can you hear me?

I can.

Awesome.

So I just want to say I'm a great fan of what you guys do for people.

And everything.

So I unexpectedly received the largest bonus of my life this week and I wanted to tell

that word ago before my wife decided on how to burn through it.

Okay.

How much is the bonus we have to know?

Well, before taxes, we're talking like $7,300 is also probably after we're like three

grand or something.

Okay.

Well, way to go.

It's your largest bonus to date.

Yes.

And so I had a couple of places that I itemized that it should possibly go.

And I needed help with making the right decision.

One, we have about a, an emergency fund that would last me till about Tuesday of next

week.

So wondering if, wondering if we should do that to create, create our non-existent emergency

fund.

Okay.

Two, we got married over a decade ago.

At the time, you know, we had a lot of young kids and stuff.

And we decided to, you know, go for cheap and we haven't gone on our honeymoon yet.

We promised we would go at 10 years.

10 years has come and went this year and we're still not, you know, we still don't have

the money saved up for that.

So the possibility to spend that to take her on a honeymoon or my third option was to

use it to buy the IPO of SpaceX when it releases.

Oh boy.

Do you guys have any debt?

Yes.

Yes, we do.

Okay.

We don't work.

We've no more going through it.

It's just home loans multiple.

No, it's one.

We do have a hillock we use to purchase another property, but we'll be all the way through

paying that off within the next two years.

Okay.

We'll be down to our mortgage only, which right now we're sitting at like a $220,000 balance.

I think it's worse about six.

How much is the hillock that you took out?

Well, it ended up getting out of hand and I think it got all the way up to 80, but I

think we're down to owing like 40 on it now.

Oh, and how much is your income?

Which is our income.

Oh, that's a loaded question, probably about 90,000 a piece, maybe.

Okay.

Okay.

You guys make 180.

Yep.

So this hillock we would put in baby step two, which means bad news, but the vacation's

going to wait.

Yeah.

You need to do what you said, which is stock up that emergency fund to a thousand bucks

because getting you to Tuesday isn't going to work.

And then, yeah, the other two or three thousand needs to go towards baby step two, my guy.

Okay.

And I would let the honeymoon be the why to kick it into gear, to get this, this heatlock

paid off this 40,000 if that's all the debt you have to your name and then let that be

the way you celebrate is we're doing an amazing honeymoon once we pay the step off because

we owe it to ourselves.

Okay.

I like that plan a lot.

Thank you.

I do too.

You guys work really hard.

You have a great income.

And so the fact that it's been a decade and we have almost nothing in the emergency fund

were taken out the hillock.

It just tells me there's some other behavior things we got to fix and you guys can fix it

really fast with this income.

That's the good news.

You'll knock out the hillock real fast if you put all of your attention toward it.

You'll get the emergency fund on real fast if you really focus on it and then the vacation

will be really fun instead of a sinking feeling like, oh, why are we here?

We have a hillock on the back.

We don't have anything in savings.

Why did we do this?

Yeah.

That's right.

So George, why don't you explain how you arrived at putting their hillock in baby step

six versus baby step two?

Yeah.

So when it comes to hillocks, if the hillock balance is more than half of your annual

income, we would make it a baby's baby step six item.

Yes.

It's large enough that it feels like another mortgage in your world.

And if it's less than half your annual income, put it in baby step two inside of the dead

snowball and knock it out because that tells me it can get rolled up in there and it'll

get knocked out fast.

It's not going to take seven years.

That's right.

Yeah.

They were right at the line with the 80,000.

Just under the line to put it at baby step two, I'm sure they were excited about that.

I know.

That stinks.

But you know, you throw four grand a month at it's done in 10 months.

If you can throw more than that, it's done even faster.

So 12 months from now, I think you guys could be in a place where you go, let's book this

trip.

Yeah.

Absolutely.

Absolutely.

And that's the thing, guys.

When you set out to do baby step two, you set out to pay off your debt.

You have to have a really great why, almost like that carrot dangling in front of you so

that you know why you're going after this.

In their case, having a honeymoon after 10 years, that's a pretty good reason why.

Maybe yours is a trip that you want to take.

Maybe it's to pay for your kid's college.

Maybe it's to have your dream house.

Or it is, your why should be so strong because that's going to be your ultimate motivator.

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All right, welcome back to the Ramsey show.

We're here in the fair one's credit union studio taking your calls.

George, what do we say?

We go back to the phone lines.

I'm down.

We've got one here in our neck of the woods.

Robert is in Nashville, Tennessee.

Hey, Robert, how are you?

Hey, guys, I'm fine.

How are you today?

Excellent.

How can we help out?

OK, I'll tell you my question first, and then I'll give you all the particulars if

you want them.

OK.

I'm looking at retiring at the end of the year, and I'm looking at all the indicators.

Gold's high, dollars down, one, but it's moved a bunch of cash.

Has the biggest cash, cash position ever.

Should I take part of my 401K and move it into my cash mutual fund for now?

How much money do you have?

What's your total nest egg?

OK, total nest egg.

My wife and I have 400K and a 401K and Roth.

We have 100,000 in the high yield savings account.

We plan on using that interest draw off it yearly for part of our retirement

living.

My annual rate of return on my mutual funds is 10.89% over the last 23 years.

Quite a go.

That's exactly what we tell people where you should be.

So you've been doing it right.

So you're heavy in equities.

You don't have a lot of bonds right now?

What's the split?

It's probably I've been very aggressive because I found date later in life.

OK.

So I've been very aggressive.

It's worked out.

I'm probably 93% in stocks right now.

Dave Ramsey would like it.

So here's the deal.

Dave is not a fan of the asset allocation theory of let's move you to 60% bonds because

we're spooked because the truth is you're missing out on a whole lot of returns because

you could live another 30 years, right?

How old are you?

Well, I'm 70.

My wife plans to be 100, but I'm going to die first.

Well, she'll outlive you out of sheer will.

That's how the women are.

She fights me.

Yes.

So you're saying you want to pull it into cash?

No.

No.

I have a money market fund within my rock and in with it with him.

You want to pull it out of the market.

It would be basically a high yield savings account at that point.

Yes.

I would not do that.

And is it because you're spooked by the indicators?

I'm spooked by the indicators, you know, I've I've lived through these corrections before.

But now I'm 11 months from retirement.

Yeah.

Well, here's a good one.

You guys have some cash.

And so if the market was way down, what would you do?

You would cut way down on your spending for a little bit and maybe dip into your high

yield savings and try to not touch retirement, right?

Correct.

Which means you can weather the storm.

Because here's the truth.

If you ignored headlines for the rest of your life, I'd guarantee you you would be twice

as wealthy than the person who goes, well, I'm spooked.

Let me jump out.

Let me jump back in.

I always say time in the market beats timing the market.

And right now you think you have the crystal ball and so does everyone else.

But I'm telling you, put away the crystal ball and just keep it right in.

But Robert, you also have the gift of time, which means you have the gift of knowledge.

And think back, because you said you've survived it all, think back on those times where

there was a dip and think how quickly the market corrected itself.

What was it?

A year, two years?

Yeah.

That's true, because I jumped out when COVID hit.

And what happened?

It spiked back up, didn't it?

It did.

And do you regret that?

I did because I missed a big part of that roller coaster.

You're living proof.

Most of the best days happen right after the worst days.

And nobody knows how long the worst days are going to be, but usually you stick around

in cash sitting on the sidelines way longer than you should.

And then you jump back in way later when the market's already back up.

And so if I'm you, I'm just going to let it sit there and let it grow.

And again, if there is a market correction, not a crash, if there's a dip, you'll be

able to ride it out.

OK.

I just need somebody to talk me off the cliff.

Yeah.

We're happy, too.

I hope I did.

And you're right.

There are indicators that are freaking people out right now.

And a lot of people are taking advantage of that.

And it gets clicks.

It gets views.

It gets you to buy their crypto and their course and their gold and silver.

But man, I would not adjust anything you're doing right now.

I wouldn't either.

And like I said, somebody like Robert, who's had 70 years to watch this all play out,

he knows better than you and I, me and my 30s and you and your 40s, that was a joke

George.

Thank you.

I am an old soul.

I'm a 70-year-old.

I'm in my 40s.

But the point is, he's seen this happen.

And he knows better than all of us that the recovery is real.

And usually in a couple of years, you're right back, actually in a better position than

you were before the negative downturn.

So remember that, Robert?

Yeah.

Whether you're 25 or 75, heed that advice.

I'm in the market.

Beats timing the market.

Yes.

All right.

We've got time to take Josh, who's in Minneapolis, Minnesota.

What up Josh?

Hi.

How are you?

Doing good.

How can we help today?

Yeah.

So I'm 26 with a network of about 800,000.

Nice.

Nice.

Thank you.

And I'm just trying, I put my job two years ago.

I'm deciding whether or not I should return to that high-paying job, which I do not

like.

Or use my savings of the runway to transition into a different career more aligned with my

interest.

Why would you go back to a job that you quit, that you don't like when you have an $800,000

net worth, and you can use it as a runway to get to the job.

Yeah.

This is like running back to the toxic ex.

Yeah.

I think it's because, I mean, to be more specific, I want to build a career as a musician.

And I understand that the odds of that pain off are low.

It depends on what you mean by that.

If you want to be the next Bruno Mars, maybe the odds are low.

But if you want to make a career in the many, many, many ways that people work in the

music industry, I'm sure there's plenty of objects.

Jay has lived it.

Yeah.

Yeah.

I mean, I'd love to like make music and like spend time developing marketable skills like

content creation, advertising, and running campaigns where if it doesn't work out as an

artist, I'd be able to sign a job more aligned in that industry.

I just trying to make sure I'm making our financial, you know, responsible decision and

have enough runway, you know, well, I wouldn't drain your savings just because you're trying

to pursue music.

You can go do marketing for a full-time job, and you got plenty of time nights and weekends

at 26 to do the music and try to get that off the ground.

What kind of artist are you trying to be?

It was like pop rap a little bit.

Okay.

How old are you?

26.

26.

How long have you been pursuing music, or is you're just getting started at 26?

I've been making music for maybe about 10 years, but I haven't, have you released it?

I've put effort into like, yeah, I've been releasing, I just haven't been putting any

effort really into content creation or advertising or, you know, ad management or anything like

that.

Interesting.

Let's all talk about ad management.

This feels very separate.

Are you wanting to be in marketing and you're sort of like, well, I have these skills

like, and fall back on in case the music doesn't work out?

Or are you using that to get discovered?

I think they have the skills like to fall back on in case the music doesn't work out.

Okay.

I can tell you this, you know, and this is an unpopular opinion, but when it comes to

wanting to be an artist, those folks who really make it, they don't have a fall back plan.

They go hard into it.

It's only think about.

It's all they think about.

And so I'm just going to level with you right here.

I'm not trying to shoot a dream down, but the way you're talking doesn't sound

like the person who's going to go all in on this and really go get it.

Um, I mean, having you had two years on the sidelines should be working on it.

What happened?

Uh, I was traveling and learning Spanish and Argentinian.

I was.

I was.

I was.

I didn't go, bro.

Don't tell me you have this dream of being a musician that you didn't do it with this

two-year gap you've just had.

You might be a free spirit.

And I do hear that.

And for that reason alone, I would not go back to this old job, but I don't hear the

go get it factor of sacrificing it all to be the next Bruno Mars.

If, I mean, otherwise, send us in your tape and we'll, we'll tell you the real truth.

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All right, to the phone lines, we've got Kevin who's in telehassy Florida.

Kevin, you're up.

All right.

Hey guys, I just had a quick question.

I really want to be able to get my finances in order to help my new wife be able to transition

as a state home mom, but I'm not really sure how to go about that.

Well, I love that you're thinking about that and thinking ahead.

The first place to start is, is it an affordable thing for you today to move that direction?

So George and I can help you with that.

What are you making with her working and what would you be making if she stayed home?

So right now with the both of us working, we make, it's about 8,000 a month, that would

put without her working, that brings us to about, sorry.

That's okay.

I hear the carries.

About 1,000.

Okay.

So about half.

It'll have the income.

Ooh, that's a big jump.

The question is, can you afford to do this?

So obviously the first questions that I have or do you guys have debt?

So she, when we got married, she came in with no debt and I came in with all of that.

We just have, at this point, I just have a $4,000 auto loan.

I do have some credit cards that we're taking to collection about two or three years ago,

along with a lease card that went into repo.

How much are the credit cards?

It was two of them.

One was $1,000 and one was $3,000.

Okay.

So about a 4,000 balance on that or there are more penalties and fees.

As far as I've seen, it was just the $4,000.

Okay.

So that's the deficit on this repo that you still owe.

So they said that when they took the car, that I would just be free and clear and that

it would just take the seven years for it to fall off my credit.

Really?

They didn't come after you for the difference?

No.

Positive.

So far they haven't.

How long ago did that happen?

About it in February in 2025.

I would double it.

I would just look into that.

I would hate for that to come back as like a zombie debt that you thought was gone and

next thing you know, you owe like a $10,000 deficit or something.

You get served a lawsuit over this thing because you didn't pay and one guy on the phone

told you, now you're good, man.

Yeah.

I'd want whatever it is in writing that I owe nothing and I would keep that paper laminated

and like under glass for life.

Framing.

Okay.

Okay.

So that will be your homework getting off this call.

So you got 8,000 bucks in debt, nothing else to speak of, no student loans, nothing else.

No student loans, nothing currently no.

Okay.

Do you have any money and savings?

I currently have a thousand dollars in an emergency fund.

I just got that in there.

Congrats.

Is she right now or are you guys looking to start a family?

No.

We're looking to start a family.

Great.

Okay.

You got lots of runway.

We're expecting to start trying within a year to be able to make this transition happen.

I love it.

Okay.

So I mean, it looks like you're familiar with the baby steps.

You've already got the thousand dollars saved.

So next on the list is let's pay off this 8,000 and here's a fun experiment.

Let's pretend like we only live on the 4,000.

Oh, I like that.

And that way we can take 4,000 this month and 4,000 next month, throw it towards the debt.

Dets gone and in the meantime we got to experience running our household on 4,000 dollars a month

to see how does that feel.

Do you like that experiment?

And then continue putting the four grand in savings and five, six months later you've

got a fully funded emergency fund.

Now we're investing for the future and we've experimented for months living off of your

one income.

I like that.

It's pretty good.

So that's really the baron.

It's can we cover all of our expenses from my one income and still accomplish our financial

goals, which means we got to be investing 15% of our income.

And for that baby we have to have a little leftover to put towards college and pay off the

house eventually.

Are you guys renting right now?

We are currently.

Okay.

Great.

So the next step after that might be we want to save up a down payment.

Once babies here, once we're investing, that might be a longer term goal, but that's

really the math on it.

And I hope your income continues to go up.

I found that once you know mom staying at home, the husband's like, all right, I've got

to go grind a little bit and maybe that means you're going to get a promotion and kind

of move up in your career as well.

What do you do for work?

So right now I'm a correctional officer for the state.

Okay.

What's the sort of ladder in your field to move up?

Well, right now we're actually looking at getting a pay raise from $23 an hour to $28.

No, that's excellent.

That's like 10 grand a year.

Yeah, that's it would be super exciting.

Yeah, that's wonderful.

If we get it.

But and then we can always promote up and make a little bit more, but I'm actually looking

at doing a career change for possible and even higher.

Yeah.

What do you want to get into?

I kind of want to get into being a paramedic firefighter.

Oh, no, that's cool.

Yeah, the main thing to be thinking about, thinking about, I love these career changing

discussions.

I love the fact that you're thinking about the wife being a stay at home mom.

Number one thing is just to make sure whatever you do, you have savings built up because

that's a bridge that you're coming up against and to have money saved is going to help you

be able to do that.

And then also, yeah, just making sure you're thinking ahead, especially with things like

home buying, making sure that on the $4,000 you guys feel good about it, you don't buy

it off more than you can chew, especially knowing that you might have a career change coming

up.

I'm not sure which is going to come first if you're thinking about the career change or

if you're thinking about, you know, maybe one day buy in a house and get in that down

payment ready.

As much money as you can have set aside on hand, ready to make this transition and the

most research that you can do ahead of time, kind of like what you're doing now, getting

all the answers, as many answers as you can anyway, is really going to set you up for

success.

Yeah.

And you may want to make that career change before babies here because it's harder.

If there's a gap in income and babies here and it's solo income, that's going to be

a lot harder.

And so I would really work your way through these baby steps fast knowing I want to make

this career change.

Yeah.

That's good.

So I want to make sure that any money move you make is from a place of stability and

strength, not from desperation and weakness.

Well, yeah, then you know you're really doing what it is that you want to do and you can

kind of take, take your time in the way that is appropriate in order to do that.

So very, very good question.

Thank you for the question.

George, let's do one of these social questions.

We haven't done with these in a while.

And I like them.

I hit it.

All right.

This is Keith from the Ramsey Baby Steps community.

He says, how do you get through years of the boring gazelle intensity grind?

Wow.

Listen, if it's boring, you're doing it wrong.

If you're not sitting on the couch, yes, like you don't have time to be bored.

That's true.

But I think he's saying it just feels like a slog.

Yeah.

I mean, if you've got the average person when they do baby step two, it's really a two

year deal, right?

That's that's what we're seeing.

18 to 24 months is the average.

Yeah.

And so, but there, I mean, there's plenty of you who call in and took you three years or

four years.

It took my husband and I seven and a half years.

What was your time?

Mine was.

I mean, mine was pretty fast.

I had a smaller amount of debt.

18 months.

Oh, yeah.

Right on.

Right on.

And so, no matter where you are, there is going to be some moment.

Even if you're one of the 18 monthers who is like, I don't feel like going to my side hustle

today, or I don't, for the love of God, can I just order a pizza, you know, whatever it

is that it is that you want to do, that's going to pop up.

And I think it's so important, George, to have that reason why number one, because that's

kind of like the North Star on this whole thing is, why do I want to do this?

The reason why can't just be because I want to get out of debt or because I want more

money.

Dave said it's a good idea.

Yeah.

Don't let Dave be your why.

It's not deep enough.

He's going to be proud of you, but don't let that be your why.

He needs something more.

Maybe baby step three is also, I mean, that one is boring.

Baby step three is way less exciting than two when you're paying off debt, because three

are just like, all right, I got to stack some cash over here.

I'm not seeing much progress as far as paying off debt and freeing up the payment.

Yeah.

You're just sort of building your little, you know, acorns for the winter.

Baby step three is a sleeper.

I will say in many ways, and I know it's hard to believe, but I actually think that that

might be the hardest of the baby steps.

I would agree.

I would agree.

Yeah.

Because you thought, after two, like the hard part was over, you ran a marathon and you're

like, wait, there's a 5K after this.

Yeah.

Oh, man.

You got to start warming up again.

Can't catch a break.

You know, I think the big thing as far as answering the question and how to stay intense

through years of the grind, for me, the unlock has been finding ways to reward myself throughout

the journey.

Whether you're on two, whether you're on three, whether you're on four, five, and six,

and baby step two, it's little things like, after I pay off this amount of debt, I am ordering

the pizza.

And baby step three, it might be a small thing that, another, but then as you move on,

it's, okay, I'm going to buy the new couch, okay, we're going to take the vacation,

okay, we're going to upgrade the cars.

So make sure that you're rewarding yourself throughout the process.

Nothing that could throw you off track, but just enough to keep you going until the next

step.

Hey guys, George here.

Listen just because it's 2026 now, doesn't mean 2025's ideas all go away.

Some things are timeless.

Like if you want to win with money, it's still the same playbook, budget like your money

depends on it, avoid debt like $10 lattes, and build wealth on purpose.

But here's the truth almost nobody tells you, most banks make money when you lose yours.

They want you swiping, overdrafting, and racking up fees, because that's how they stay

rich while you stay broke.

And that's why I tell people to go with Fairwind's credit union instead.

They actually want you to win with money and become debt free.

And their smart bundle gives you a no fee checking account, a high yield savings account,

and my favorite, the new Ramsey branded debit card that says debt is normal, be weird,

right on the front.

It's not just a piece of plastic with your money attached, it is a declaration.

It says you're not buying the line anymore, you're taking control of your money for real.

So this year forget the gimmicks from the big banks, forget so-called rewards that keep

you broke, and instead partner with a credit union that actually backs you working the baby

steps.

Go to fairwinds.org slash ramsey to get started, that's fairwinds.org slash ramsey,

insured by the NCUA.

All right, tax time is just around the corner, 2026 taxes, don't worry, George, and I have

you covered with everything that you need to know, George, this feels like a talk nerdy

to me segment.

It is.

That's that we had to brand it so that people would listen in.

Yeah, so talk nerdy to me about tax day, which this year is going to be April 15th, it's

always April 15th, 2026, extension deadline, October 15th, 2026, tell us everything we need

to know.

Okay, this is the important part, these are the changes for 2026, and the big highlights

are tax brackets have been adjusted for inflation, and tax rates stay the same, that's 10% to

37%.

So those tax rates for the bracket stay the same, the income thresholds have increased

if you're watching on or tell me more.

If you're watching on YouTube or Spotify, we have the visuals up, so you can see the

table because this is one of the most confusing things about taxes.

People get it twisted.

People say, well, Jade, I don't want to make a dollar more because it'll push me into

the next bracket.

Yeah, I'm assuming the wrong thing.

Only that new dollar is taxed at the new rate, so you got to understand that, so let me

go over the numbers.

So 10% bracket is up to 12,400 if you're single, 24,800 if you're married filing jointly.

Then, from that number, up to 50,400 if you're single, 12% bracket, and for married filing

jointly, $100,800, and then we move to the 22% bracket, which is from that 50 grand

up to 105,700 if you're single, and up to 211,400 if you're married filing jointly.

If you're doing the math at home, it doubles for those married filing jointly, keeps it simple,

and then 37%, which is the highest bracket, any money you make over $640,600 if you're

single, will be taxed at 37%, and married filing jointly.

Any dollar you make over $768,700 will be taxed at 37%, have you fallen asleep yet?

I wanted to, but I forced myself to stay awake in order to say the words, yes, paying

taxes sucks, but making money is always going to feel nicer.

Yes, so you need to think about what the marginal tax rate is versus effective, so effective

meaning, yes, you got up into that 22% tax rate, but when you average it all out, it

was really 15%, is what you paid on your total income.

So there you go, that's the federal brackets, what the adjusted thresholds, what about standard

deduction increases, George?

Don't get me started on the standard deduction.

Why did it up?

Let's go.

So this is, most people will benefit from taking the standard deduction, and so this is

probably you, if you're listening, the standard deduction lowers your taxable income, and

is now higher again for 2026, which is good news.

So standard deduction, if you're single, is $16,100, so the IRS basically says, we didn't

see that money.

It's a freebie.

The rest we're going to touch, but that part we won't, married filing jointly, $32,200.

That ain't bad.

And head of household 24,150.

So for all of you saving up every single receipt, thinking that maybe you can outdo it,

you're probably not going to.

Yeah.

So unless you're a business owner, you got a very complex schedule situation, you're self-employed.

Some people are $10.99, sometimes it makes sense to itemize, and you can check with

a CPA or tax pro on that.

Now there's a lot surrounding the one big, beautiful bill act, and I know people, I

know one big, beautiful bill.

There's a lot of questions around that.

How's it going to affect us, this tax term, George, what do you have to say about that?

So for anyone that makes tips, you're happy about this.

No tax on most tips, which is a first for many workers.

I love that.

I have to say, I think that's great.

They're hustling out there.

Yeah.

Let them have it.

And then you've got overtime paid deduction for hourly workers.

So that's nice as well, if you do overtime.

And then senior, shout out to the AARP members out there.

You get a deduction, a new $6,000 deduction, available whether you go standard or itemized

for taxpayers age 65 plus subject to income limits.

Okay.

Do you know what those are?

Dave Ramsey.

Sorry.

Yeah.

Yeah.

He hits the age, but not the income.

Not the income.

That's okay.

He'll be fine.

He will survive.

That's good.

All right.

I love that.

So just a couple of smart tax tips going forward.

Make sure that you're gathering up your documents early guys.

Don't wait to the last minute.

You're going to need your W2s, your 1099s, any receipts.

Start gathering that stuff now.

Put it in a folder because they're going to need it.

Also, you need to decide whether you're going to do this thing yourself or whether you're

going to hire a tax pro again.

If it's simple, just your basic W2, you probably can handle it yourself.

But if it's a little bit more complex, you're probably going to need a pro.

If needed, make sure to file your extension, okay?

File the extension, but you still got to pay April 15th.

Yes.

Don't get it.

It's illegal to not pay in time.

It's not illegal to file the extension.

That's right.

So it's okay if you don't file in time, file the extension, but you got to pay what you

owe.

And you can use tax planning to reduce surprises next year.

I always ask my tax guy, hey, what can I do?

Better next year.

That's right.

What are you saying?

I want to always improve and pay the government a little bit less if I can.

And so the bottom line for 2026, higher deductions and inflation-adjusted brackets may lower your

tax burden, but deadlines and planning still matter.

So be proactive to keep more of your income and avoid stress.

That's right.

And George, good tax planning isn't about the loopholes, although we might go find you

some of those.

It's about being intentional.

You work really hard.

Don't give more than you need to to the IRS.

Which is what a refund is, by the way.

If you get a refund this year, just know you overpaid the government as a blessing to

them.

And they said, no, we can't take that legally.

You can have it back.

That's right.

That's what you're saying.

That you could be putting towards whatever baby step your own.

So take a closer look at that.

But for any questions around how to file taxes or if you need to work with one of our

pros, go ahead and head to ramsysolutions.com slash taxes.

That's ramsysolutions.com slash taxes.

All right, George.

We did it.

I feel good.

That was very, very nerdy.

That might be the nerdiest we've ever gotten.

No insults, no injuries.

We all learned something.

Hi.

We'll love it.

Use that at your next trivia night.

All right.

Let's go back to the phone lines.

Taylor and Chattanooga.

Take us back down to earth.

What's up?

Yeah.

So me and my wife have accumulated about $92,000 in consumer debt.

And we have a plan to get out in the next 24 months.

But I just want to make sure it's the right plan.

Yeah.

Tell us.

Is it the Ramsey plan?

Tell us what your plan is.

Well, so it's actually kind of complicated.

So we owe in bills about $3,000 a month that we're just trying to survive on at the moment.

Okay.

But we also want to take anything extra and throw it at bills and we don't have $1,000

emergency fund.

We just can't afford to do that.

And I'm 100% commission based real estate agent.

So checks don't always come.

But you're saying you're going to afford to pay off $92,000 in 24 months.

But you can't afford $1,000 emergency fund.

Not at this moment.

Why?

What does that mean?

Explain why you feel that way.

So so basically my wife is a full-time student and she's a full-time worker.

And she makes just enough to cover the bills.

So my checks are kind of foreign to have a lot of space in between them at times.

Okay.

So when we do make the money, we just sort of just plan.

That is.

This is the first month.

So the money that we just had, we wanted to make sure we were good for the next couple

months because there's that really ways on me.

What kind of debt is this?

Can you break down the 92,000?

Yeah.

So about $45,000 is her core.

And we're upside down on that one.

It's about 33.

So we're upside down about 13.

17 is my core.

17 is a personal loan.

And then the rest is credit courts.

Okay.

How much is the credit card?

So I don't have to do the math.

I'd probably say about 8 to 9,000.

Okay.

Maybe 10.

So my first order of business, I really would be trying to get out of this $45,000 car.

It's worth it to get the $13,000 loan.

And figure out a way to just get a cash beater, spend $40,000.

I think that's going to be worth it to you.

And at the end of the day, you're more like $18,000 in on a car versus $45,000 in on a car.

Have you tried that?

We have not.

We've looked into a lot of options into getting out of the car.

But at this point, we just kind of gave up on trying to get out and just more trying to pay it off.

What did you look into?

Selling it and trying to get something super cheap, but we don't have cash saved up.

We're actually like, you know, right at times or $100.

So what you would need to do.

What you'd need to do is you'd have to get a loan for the difference.

Since you don't have it, you wouldn't be able to sell this car for $45,000 because it's not worth that.

What you would need to do is go down to a credit union, go to a bank.

I don't care how you get the loan.

Anything's going to be better than this $45,000.

And then from there, you have an irregular income.

It doesn't mean you can't contribute.

It just means that you need a peaks and dollars fund over to the side and use your income to build that up.

So you always have a month's worth of income there.

That way you feel the freedom to actually use your monthly cash flow towards the debt and towards an active budget.

And I get two jobs in between these checks coming in to keep some stability to get you guys moving on this plan.

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Back to the phone lines we've got Saber in Atlanta, Georgia.

That's a strong name.

I like it. What's up, Saber?

I have a quick question.

My husband and I are disagreeing on the buy or not the buy a house.

To buy or not to buy that is the question.

Tell us, tell us both sides of the equation.

So he is 68 and I am 57.

And I feel like I don't want to take on that risk because he's older.

So I don't know.

So I have a fear factor of doing that.

Now the fear factor of having older is it will get this house.

We won't pay it off in time.

There's not enough money there and I'll be left if he passes with this huge mortgage.

Is that what you're saying?

Yes.

Okay.

Tell us about you guys as net worth.

So we have our baby step three.

We have our fully funded emergency fund.

Okay.

We have about $20,000 in savings.

And we have about $100,000 in investment.

Okay.

$100,000 in retirement investments.

Correct.

And that's all you've got?

Yes.

Okay. Now when you said the $20,000 saved, that's the emergency fund or was that above the emergency fund?

Above.

Okay.

You both work in full time?

Yes.

Okay.

What do you guys make as a household?

We bring home about $120,000.

Okay.

And what's the plan for the house purchase and the down payment and the price, all of that?

Well, that's what we're kind of having an issue because I want to put all the extra money into retirement funds and he wants to not do that and get a chance for a down payment.

Yeah.

I do think at this age, you're going to want to do that simultaneously because with no debt, you're going to want to take advantage of that 15% as much as you can at age 57 and 68.

How much of the $120,000 income is his and how much of it is yours and how long does he plan to continue working?

We make about the same right now.

I'm working at least until 75.

Okay.

Yeah, because I don't think he has a choice.

Okay.

Good.

You guys have any debt?

No.

Okay.

That's good news.

So if you look at the baby steps, you guys are square and baby step four, which means you're investing 15% of your household income.

So that's step number one.

We want to at least be doing that.

So for you guys at 120, that's 18,000 a year going into retirement accounts.

Then anything above and beyond that, we can now put in a separate account for a down payment.

So based on that, how long will it take you to have a solid down payment and then have a mortgage payment that you guys can actually afford based on your take home pay?

That's the big question mark.

What is a house cost that you guys are looking at?

Probably about 350.

Okay.

And we're starting from zero here where they're down payment.

So what is your down payment goal?

Have you guys crunching those numbers to go, hey, we'd like to have $50,000 to put down?

Well, I hear Dave all the time say 20%.

I would like to have a little more.

I'd like to have $60,000 to $75,000 to put down.

Yeah.

I think for you guys' equation, the way you have to look at it these days is what you have to put down to get it to where it's no more.

25% of your take home and at this point, it usually is going to be more than that 20% rule that kind of got squeezed out with the housing market.

So I would be looking in a calculator and say, okay, what do we need to put down?

What do we need to solve for in order to have that take home pay where it's no more than, I'm sorry to have that mortgage where it's no more than 25% of our take home pay after taxes?

And so that's what I'd be looking for.

What's your monthly take home pay?

And in my every dollar, we do about 6,000 average a month.

Okay, and that's just after taxes.

That feels really low.

Well, we've already had money taken out for the investments at that point.

Okay, so what you want to do is find out the number that's just the after tax number.

It's probably closer to 8,000.

We put 2,800 a month into retirement.

Oh, you guys are really socking it away.

So you may want to ratchet that down.

Otherwise, it's going to take you seven years to save up a down payment.

Do you see how we need to split the difference here?

Ratchet it down to 15,000%.

Now it's 1,500 going into retirement, which just freed up 1,300 to go into savings.

You see what we did there?

Yes.

And now we can start saving more measurably to go, hey, we can have 20 grand a year.

So in three years, we'll have the down payment to put down.

You know, that might get you close.

Right now on my calculator, I'm seeing about 2,500 bucks a month for that mortgage

with the numbers you just gave me on a 15 year.

Okay.

Which means we either need to save a little more.

Rates need to come down a little more, the home value.

We need to maybe look at a $300,000 home.

So there's going to be some compromises here.

Or we go make more and we speed up this whole process

and we can increase the amount of mortgage we can take on.

We need to also understand seven years from now, he's not going to be working anymore.

Well, now you need to be able to cover that mortgage off of whatever income you have.

Social security, you continuing to work, all of that.

Right.

So I think those are the problems, or they're not problems.

They're equations that you need to solve for in order to go into this with a peaceful state.

I'm all for you guys having a place of your own and going into retirement

with something that you can call yours as opposed to in a renters position.

I think that the mortgage is the biggest line item on your budget

and you want to go into retirement having control over that.

So what George said is just right.

It's going to take some time for you to sit down and think of this.

But the advice that I want you to take away from us

and that I want you to share with your husband so you guys can discuss is

you got to do the investing and the saving for the down payment simultaneously.

And it's really going to help you do that by keeping the investment

at its proper amount at 15%.

If you try to do more than that,

it's really going to make this thing lopsided.

And it's going to be harder for you guys to do the things that you need to do

to put you in the safest position in the right amount of time.

So that's my final word on that.

Yeah, I'm going, if you could do 1,500 to retirement

and throw 3,000 into the down payment fund that's 36 grand a year,

you got your down payment two years while investing.

I like that plan.

Yeah, I like that plan too.

And let's kind of zoom out on this a little bit because I do think that this is something that people ask us a lot.

Even if it's somebody who was in baby step two,

maybe it took them a really long time to do baby step two.

Maybe they're already in their 40s or something like that.

And they're thinking about buying a house.

Once you get into baby steps four, five, and six,

you really guys don't want to delay.

You don't want to delay the down payment really any more than two to three years

delay it by your investing if that makes sense.

So if you think that it's going to take you more than two to three years

to save your down payment,

you should probably go ahead and start investing beyond that two years

because we really don't want you to miss out any more time in the market

is basically what that boils down to.

And that's why I suggested what I suggested with them

is because they're already 57 and 68 years old.

Like they don't have the time to waste.

I will be projecting, hey, based on the real numbers of our social security

what I'll be making, can we afford to cover this mortgage payment

without his current income?

Yeah, that's the big number that you're going to want to know

because the truth is they're probably not going to have time

to pay off a mortgage before heat retires.

Yeah, I mean that's seven years from now.

And if they get the house in two years,

we've got five years to knock out this entire mortgage

with that income, it's not going to happen.

So we need to look at reality.

Yes, and another good reason for a 15-year mortgage

versus a 30-year mortgage

because that's going to give her a lot more security.

She'll pay it off in her lifetime.

Exactly, exactly.

So there's a lot of reasons, there's a lot of methods

to the madness of what we teach George

and a lot of it has to do with setting you up to really be

in the most secure position that you could possibly be in.

It's very conservative, but at the end of the day,

you're not going to be worried about your house.

Yeah.

15-year mortgage, you're not going to be worried about

if you have enough in retirement,

if you do the things that we teach in the order that we teach it.

So it's super, super important.

And remember this, retirement is not an age,

it's a financial number.

So I don't care if you go, well, I'm 67.

It's time to retire.

Not if you're broke.

That's right.

So you don't just get to because it's time for everyone

to go live in the, you know,

they're 55-plus community, you get to retire

when you can afford to cover all of your expenses

from the investments you have

and maybe Social Security is gravy on top,

but never rely on that, especially the younger generations.

We all see the writing on the wall.

All right.

We know Social Security.

I mean, it has the ability.

I've been reading articles that say that it could be depleted

as early as 2034.

Yeah.

Uncle Sam is not doing great financially.

They're like $38 trillion in debt.

Sure.

They're running out of money left and right.

And so we got to look at the cards and go,

we got to invest for ourselves.

We can't rely on any government program

to save us in retirement.

You got to create your own ship here, build your own arc.

And of course, you'd want to do that anyway

because the way they're investing that money, obviously,

there's not enough of it to go around anymore.

It was never meant to replace a hundred percent of your income.

That's right.

Yeah, exactly.

So, let this be a word to the wise.

Do your own investing.

Think ahead and be proactive, guys.

Work these baby steps.

All right.

Welcome back to the Ramsey Show.

We're here in the fairwinds.

Credit Union Studio.

George Campbell, Jay Warshaw.

You ready to get to these phones?

I'm your hype, man.

Let's go.

I'm ready.

Keegan's ready.

He's in Cincinnati, Ohio.

What's up, Keegan?

Hi.

I was going in because we live in a hotel.

Then we just totaled our cards.

We used for Instaart.

How do we recover?

From one part.

The hotel.

All three.

All three.

Okay.

So you want to get out of the hotel.

We want to get out of it.

First, we need to get a new card.

Second, we want to get out of the hotel,

because she's pregnant.

And how long have you been in the hotel?

And why?

Then why?

Because some family things with her family.

And we've lived up in Columbus.

And she had some stuff going on with her family.

And we decided to move.

Okay.

So you did not have your own place prior to this.

You were living with family?

I was living with my parents.

How old are you guys?

I'm 21. She's 24.

Okay.

So you're in the hotel.

How long have you been in the hotel?

Since about July.

Oh, boy.

Goodness.

What's the rate to stay there?

It's like, it's expensive.

It's like 1,400 a month or something.

Okay.

1,400 a month.

And what's your income?

I mean, I know the car got told.

But what are you earning?

So we were earning about like $800 a week.

Was that both of you doing InstaCard or what?

I was both of us doing it together in one car.

Yeah.

Okay.

Can I ask why?

Why is one of you not working outside of the car, basically?

So I was.

But then I just had to quit my job because I wasn't getting paid well enough for us to like kind of survive off of it.

And InstaCard was just better for both of us because situations we really couldn't control.

But I wasn't getting paid overtime and I was working so much that they didn't pay me overtime for it.

So.

And what kind of job are you working?

I was working for marketing firm.

Okay.

And so you would get a marketing job today if you could.

Yeah, I would.

Okay.

And how about her?

She would probably do something server related.

Okay.

And can you do that as we speak?

Can you work at this hotel?

That would probably be a better bet right now.

Like what do you mean?

Oh, no.

I tried, but they said they don't have anything.

What about cleaning rooms?

I have.

They have someone who just said.

Okay.

And did you not have insurance?

I did, but we only had no ability.

Okay.

So it's on you.

Okay.

Yeah.

Yeah.

What must happen?

I mean, this is as quickly as you can.

InstaCard's not an option anymore clearly.

So both of you have got to.

I don't care if it's walking down to the nearest fast food place.

Or walking over to Walmart or Target.

You've got to.

You got to get something somewhere.

That's within walking distance or bus riding distance.

Yeah.

I can read over some places, but that just gets expensive.

How much money do you guys have?

That's why I said bus riding.

Not enough to keep us afloat for like another week.

Maybe.

Do you have like a few hundred bucks?

Yeah.

Okay.

Do you have any debt?

Yeah.

We both personally do.

I have like five, six grand in credit card.

And she has like four.

So all credit cards about 10 grand total.

Yeah.

Okay.

Yeah.

And there was no car loan to speak of.

No, no, we paid the car in cash.

Okay.

That's good.

Yeah, that's good.

Do you guys have any friends or family that you can lean on right now?

A church community?

Anything?

Not.

I mean, honestly, no.

Okay.

Well, you're going to need to find something because this hotel is about to kick you out.

Yeah.

Yeah.

I talked to them before and we kind of talked to them.

So like, I was hoping maybe they could help us out just by a little bit of time.

But I don't know if that really is realistic or not.

How often are they having you pay?

Is it every week?

Is it how often do you have to make the payment?

I'm usually weekly, but sometimes they let me get, like I'll be up.

They let me get a little behind and they at back if I need to.

Okay.

I let them know what happened number one and say, yeah, I know I've been paying you weekly.

Can I pay you, you know, at the end of the month?

Can we make this more of a monthly deal?

Because right now you guys are kind of like this.

This is desperate.

Can you get a bicycle off Facebook marketplace for $40 and make it somewhere and work?

What is the closest retail options by the hotel?

They're crogr.

Perfect.

There's like a crogr.

How close?

Is it walkable?

Yeah.

Within like a mile.

Okay.

That's what I want you to do.

That's your homework after this call.

Both of you are getting a job at crogr today.

Yeah.

After this call, literally right after, talk to your girlfriend and you guys sit down and make a list of everything that's in a two to three mile radius,

a waffle house, crogr, McDonald's, everything.

And I want you guys, that's your field trip.

This afternoon and tomorrow you're going to apply at every one of those locations until you get a job.

This is the gap between you guys and homelessness.

You understand how on fire this is?

Yeah, exactly.

In Central.

Like you don't even have a car to sleep in at this point.

Yeah.

No, exactly.

That's what made it like scary today.

It's because like we've at least had options like, okay, this is it.

So I'm sure if I like, it's just scary because like I don't, we don't know where with the next plan is,

especially like I'm hoping they can help.

I'm sure they, I know the owner and the manager pretty well here and I'm, we're pretty like close to each other.

That's good.

But that's not going to last you long until you stop paying.

Yeah.

So do that.

Yeah.

Exactly.

Like don't only ask me maybe two weeks.

Yeah.

Do that homework that I just gave you.

And then the second piece of homework is I want you to find a local church.

And I want you to walk up in there after you've applied it all these places.

And I want you to walk up in there and say, here's the deal.

And I want you to tell them exactly what you just told George.

We're scared.

We're borderline homelessness.

We're just, we're good people.

We just want to find some promise work.

And I want them to say, I, I, we can, can we serve and get a wage?

Is there something that we can do to earn some money?

We really need help and we're willing to work in order to have it.

Okay.

So those are the two things that I want you to do.

Okay.

I said, there's like a, because we gone to the church over here a couple of times.

And there was a Catholic church that kind of helped.

If that was right, like not the past month.

Mm-hmm.

So if there's people that I think may help, I just don't know if we should ask the church.

The same Catholic church again and be like, hey.

Okay.

If you're willing to work, I would, I would say I'm not just asking for like benevolence.

Can, can I work?

Is there something I can do?

Sure.

Can I, you know, help with parking in the morning?

Can I help with this or that?

Do you need something out of store?

Like, whatever it is, I would be willing to work.

And whatever, I mean, go to a couple and say we're just trying to get back on our feet.

And we're willing to work and serve to do that.

And I think this is, you guys can pull yourself out of this.

At one point, you were making $3,200 a month, right?

So I want you to remember that.

And you worked at a marketing firm.

And so I would be looking for that next gig so that you can afford to get a car.

And that might mean we start with the bicycle and then we upgrade to the moped.

And then we upgrade to the beater car and then we go from there.

But you just need the next right thing to get you to survive another day right now.

And then long term, we need to figure out a life plan.

Because whatever got us here ain't it.

And I heard a lot of, well, we had to.

And then this thing happened in the family.

At some point, we have to just look in the mirror and go, dude, I can only control the guy in the mirror.

And everything can't just happen to us.

You have to start happening to your life.

Otherwise, you're going to be right back here next week.

Yeah, so that's that's current order of business.

Just to recap, you're making a top 10 list of everything in a three mile radius.

And you're going there.