Bigger Financial Problems Leave Less Room for Bad Decisions

Summary

The Ramsey Show – “Bigger Financial Problems Leave Less Room for Bad Decisions”

Date: April 3, 2026
Hosts: Rachel Cruze, George Campbell, and Dave Ramsey

---

Overview

This episode of The Ramsey Show focuses on how people get trapped in difficult financial situations through a combination of optimism, avoidance, and bad decisions—often led by a desire to “fix” problems by throwing more money at them or making risky moves. The hosts, joined by a range of callers, offer tough love, practical suggestions, and reality checks for getting out of debt, recovering from business and personal mistakes, and building a future free from financial stress. The recurring theme: when the stakes are high, there’s no room for more mistakes—only disciplined action and a refusal to dig the hole deeper.

---

Key Calls and Discussion Points

---

1. Drowning in Business Debt: When to Call It Quits

[00:12–09:00]
Caller: Jimmy from Los Angeles

• Situation: Jimmy, a retired military member, opened a detailing shop after service. He’s $580k in business debt ($165k in credit cards; rest from SBA/lines of credit), after consecutive years of significant net losses. He is unpaid and borrowing to cover both personal and business expenses; his wife works and the couple takes home about $10k/month.
• Reality Check:
  • "I have a PhD in being a bozo." – Jimmy [05:07]
  • “You’re still throwing money at this thing… This is just a very expensive hobby at this point. This isn’t a business.” – Rachel Cruze [04:15]
  • “What’s the stop loss here? A million dollars in debt and then we call it quits?” – George Campbell [02:46]
• Advice:
  • Stop taking on new debt immediately.
  • Consider shutting the business and selling equipment, even if it’s only $50k toward the debt.
  • Accept that all the loans are likely personally guaranteed—Jimmy’s on the hook, no distinction between business and personal.
  • Explore all options before considering bankruptcy, but endless support from spouse isn’t helping if it means enabling bad decisions.
  • Start over; need a solid job and begin attacking debt as if it’s consumer debt (using the debt snowball approach).

---

2. Learning from Financial Scams

[10:51–15:01]
Caller: George from New Jersey

• Situation: Was scammed by a gym acquaintance, lost $38k; legal battle and debt collection efforts added up to $45k in losses. Even with a court judgment, the scammer has no assets.
• Advice:
  • “It may be time to emotionally write this off, call it a stupid tax, and move on.” – George Campbell [13:38]
  • Letting go emotionally is necessary; further chasing could result in more wasted money.
  • Focus energy on becoming completely debt free and rebuilding.
  • Memorable Moment: Rachel and George recall their own brush with financial scams and the importance of not letting anger dictate financial decisions.

---

3. Mortgage and Zero Credit Scores

[16:15–19:54]
Caller: Dominic from South Bend

• Situation: Wondering if having only a mortgage (no other forms of credit) will allow for a strong credit score when applying for the next mortgage.
• Advice:
  • If you pay your mortgage on time, you should have a solid credit score.
  • Don’t take out any extra forms of credit just to boost the score.
  • Manual underwriting is an option if the score disappears after mortgages are paid off.

---

4. Early Retirement Dreams Versus Reality

[21:54–31:23]
Caller: Trina from Florida

• Situation: Wants to retire by 40 like her dad; has $44k in debt post-bankruptcy—car loan, credit cards, personal loan, private school bills. Recent entrepreneurial venture failed, causing bankruptcy after depleting retirement and college funds.
• Main Issue: Persistent mindset of using debt to “create opportunity.”
• Quotes:
  • “There’s a pattern of you using debt. Can we say yes to that?” – Rachel Cruze [27:42]
  • “Debt is not an option. I am going to save up and pay for things.” – Rachel Cruze [27:45]
  • “Creative financing just means, hey, I’m going to do stupid.” – George Campbell [29:06]
• Advice:
  • Abandon the creative financing and flipping plans.
  • Switch focus to a goal of living debt free—no new debt.
  • Aggressive two-and-a-half-year plan to pay off all debt and build security.

---

5. IRS Debt and Selling Assets

[33:05–42:54]
Caller: Matt from Colorado Springs

• Situation: Owes $40–60k in IRS debt (some unfiled returns), $20k on a HELOC. Wants to know whether tax relief companies are useful.
• Advice:
  • “There’s really no use for a tax relief program in this situation… They’re just paid middlemen.” – George Campbell [34:59]
  • Contact IRS directly for payment plan; prioritize IRS debt first.
  • Stop extra payments to mortgage, redirect toward IRS debt.
  • Consider selling unused business equipment ($15–20k value) to make a dent in debts.
  • Once tax debts are gone, roll freed-up cash flow to HELOC and rebuild savings.

---

6. Student Loan Fallout and Family Promises

[44:11–54:22]
Caller: Charlotte from Columbia, SC

• Situation: $100k in student loans her father promised to pay—but relationship has since ended. Husband earns $100k as a lawyer, Charlotte $20k; new parents.
• Advice:
  • Live frugally—on “broke law student” standards.
  • Make student loan repayment a family mission; aim to throw $4,000/month at the debt for a two-year payoff.
  • Consider cashing in a $75k CD (received from inheritance) to pay part/all of the debt, and compare penalties versus interest on loans.
  • Quote: “You’ve got to live like a broke law student, not like a lawyer.” – George Campbell [46:57]

---

7. Family Loans = Tension

[54:22–64:08]
Caller: Shane from Vegas

• Situation: Student loans in caller’s name ($70k+); parents paying only minimums per their old agreement, but mother uses it as leverage/guilt. Father is willing to pay off but prefers to invest elsewhere.
• Advice:
  • Set clear, direct boundaries with parents regarding passive-aggressive comments.
  • “This is really between mom and dad because they have a disagreement.” – George Campbell [61:07]
  • Either insist parents pay them off as agreed or take responsibility to pay and end the toxic dynamic.

---

8. Should You Borrow from Family for Real Estate?

[65:24–74:30]
Caller: Matthew from Denver

• Situation: Wants to buy, with wife, an 8-unit rental property for $900k. Plan involves borrowing $100k from dad, using $100k in own savings, rest is owner finance with odd “in-kind” money/mentorship arrangement.
• Advice:
  • “I see 85 ways this could go sideways. It’s not worth it.” – Rachel Cruze [68:27]
  • Never borrow for a rental property and never borrow from family. Pay off your own home first, then save and buy rental with cash.
  • Start slow in real estate—one property at a time, learn as you go, not with a $900k project.

---

9. Pricing, Profit, and Generosity in Business

[86:12–94:43]
Caller: Katie from South Carolina

• Situation: Runs small seasonal trucking business with husband, feels guilty about charging higher prices (matching competition), sometimes with large profits on individual jobs.
• Advice:
  • Charging what the market will bear is not immoral if it’s honest and competitive.
  • Use success to create room for generosity—give some jobs away if you feel led, but don’t sabotage business structure out of guilt.
  • “If you charge too much, you’ll go out of business.” – George Campbell [93:53]

---

10. Stretched by Lifestyle Creep and Credit Cards

[95:31–104:47]
Caller: C.J. from Phoenix

• Situation: Making $103k (was higher as travel nurse), $110k in non-mortgage debt ($60k in credit cards, $45k student loans, $5k car loan). Mortgage alone is half of take-home pay; wife just had baby and isn't working.
• Advice:
  • Extreme cutbacks in lifestyle needed. All extra money (from new side hustles, etc.) goes into the debt snowball.
  • Consider selling the car or even moving to a cheaper home if there’s no foreseeable income jump.
  • “You need a massive, six-figure income to pay this off… Two, three, four years of intense sacrifice, not 20 years making minimums.” – George Campbell [103:13]

---

11. Paying Off Your House: Is Deed Fraud a Risk?

[106:09–107:59]
Question: Lucy in Oregon, worried about deed fraud if she pays off mortgage.

• Advice:
  • Don’t let fear of fraud keep you in debt—protect yourself with title insurance, deed alerts, and credit freezes.
  • Risk of deed fraud is lower than risk of never achieving debt freedom.

---

12. Surplus 529 Plan Funds = Generational Wealth

[108:18–113:31]
Caller: Alan in Colorado

• Situation: After son finishes college, $120k will remain in 529 college fund.
• Advice:
  • Leave it and let it grow for grandchildren (huge compounding potential; could top $1.4M by next generation’s college).
  • May convert up to $35k to Roth IRA under new laws, or use for another family member.
  • “It becomes like an endowment for your family—generational wealth.” – George Campbell [109:09]
  • Don’t worry about “overfunding”—future family will be grateful.

---

13. Living Cheap with Family: How Long?

[121:18–125:32]
Caller: Brian in Alaska

• Situation: Living in parents’ second home for below-market rent in order to save for a house, but only $3k saved so far despite a $120–140k income.
• Advice:
  • Use this opportunity to save and pay off all debt, but set a deadline (e.g., by age 30) for moving out and becoming fully independent.
  • “People have this idea… and end up spending it on restaurants and trips instead. Actually save it.” – Rachel Cruze [124:02]

---

Notable Quotes and Moments

• “If you keep doing what you’ve been doing, you’re going to keep getting what you’ve been getting.” – Rachel Cruze [30:21]
• “Debt equals risk. More debt equals more risk. Creative financing is just adding more risk to the puzzle.” – George Campbell [31:12]
• “It may be time to emotionally write this off, call it a stupid tax, and move on.” – George Campbell [13:38]
• “You’ve got to live like a broke law student, not like a lawyer.” – George Campbell [46:57]
• On emotions after family drama and lost financial support: “It’s going to be tight, but in less than two years, the baby won’t remember it. Remember that time we worked our tails off for two years to get to a place of financial stability?” – George Campbell [49:03]

---

Pro Tips & Summing Up

1. When in a big hole, first: stop digging.
   Success starts with halting new debt and facing reality, even if it’s tougher than you’d like to admit.

2. Separation of business and personal debt is often an illusion.
   If you signed for it, you are on the hook; structure your debt snowball accordingly.

3. Letting go of lost money is sometimes the most cost-effective solution.
   Know when to stop chasing and invest energy in future progress instead.

4. Family and money rarely mix well.
   Clear boundaries, open communication, and refusal to co-sign or interweave finances is key. Deal only in gifts—not loans or vague promises.

5. Big goals are great, but you need a debt-free mindset.
   Financial freedom comes from discipline, not magical flips or creative debt.

6. Leverage financial mistakes as life lessons—not life sentences.
   With perseverance and a new plan, you can still build wealth and change your family tree.

---

The tone throughout is supportive but direct, blending empathy with practical, often blunt, analysis. Callers get encouragement, but never empty platitudes: the hosts hold people accountable for patterns of avoidance, emotional entanglement, and wishful thinking, all in the service of getting them back on the path to lasting financial peace.

---

[Scripture of the Day]

“For all those who exalt themselves will be humbled, and those who humble themselves will be exalted.” (Luke 14:11)

---

Transcript

[Dave Ramsey]

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

[Rachel Cruz]

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, and I'm Rachel Cruz hosting this hour with my good friend and co host of Smart Money Happy Hour, George Campbell. And we'll be answ your calls, so give us a call at 888. 825. 5225. And we'll be talking about your life and your money. First up, we have Jimmy in Los Angeles. Hi, Jimmy. Welcome to the show.

[Caller]

Hey, Rachel. Hey, George. Big fan of yalls. Thank you so much for what you do. I really appreciate everything that you guys do, and I've gained a lot of knowledge these past few weeks learning more about what you guys do and how to kind financially plan my future. But I've kind of gotten myself into a sticky situation, and I'm just trying to see if I can, like, maybe get some guidance on trying to find a way out.

[Rachel Cruz]

Sure. So what's going on?

[Caller]

So late 2024, you know, I retired from the military, served for 22 years, and earlier that year, I decided to open up, like, a kind of like a shop and where we just do, like, detail services and paint protection, film wraps, and things like that. And it actually cost me a lot of money throughout that year, I'm sure. How much to the point? Well, we're at a point now where we're like $580,000 in debt at this point.

[Rachel Cruz]

Okay.

[Caller]

That first year, we took, like, a $220,000 loss. Admittedly, I think I hired too many people full time, kind of went in too fast and too hard on that, and it kind of really hurt me. So I had to take, like, an SBA loan to kind of get caught up and used a bunch of credit cards. And then the year after, we netted. So just last year, we netted about 35% net loss. So we had another net loss, but it was a better net loss. And.

[Rachel Cruz]

And you're still throwing money at this thing.

[Caller]

I'm still throwing money at this thing. I mean, it seems like you're. It seems like we're kind of, like, making a way out of that. And I mean, what's.

[George Campbell]

What's the stop loss here? A million dollars in debt, and then we'll call it quits. I mean, at some point, you just gotta go, this ain't it. I would rather pack it up now versus try to. It's like a gambler where they lost a bunch of money in Vegas and they go back to go like, well, now I gotta win even bigger to get out of this mess.

[Caller]

Right. That's what I was afraid of. And, you know, through this process, I kind of been, you know, a free labor. So I haven't been getting paid by my business.

[George Campbell]

On top of that, you're. How are you paying your bills? Through more debt? Do you have retirement through military?

[Caller]

I do. Okay.

[George Campbell]

What's that per month?

[Caller]

My wife, My wife works too. Okay. I pull in about 5,500 take home per month from my military retirement. And then what she makes about, she makes about like take home 4500ish per month.

[George Campbell]

So 10 grand a month is what we're taking home. And that's, that's the hard truth is that's the number we need to actually pay down this over half million dollars in debt.

[Caller]

Right.

[George Campbell]

What does the trajectory look like for revenue?

[Caller]

It's, it's, it's looking positive because, you know, last year, like I said, even though we had a net loss, it was a smaller net loss. And I think this year we'll be in the positive. But I'm struggling because, like, I've been working for free for two years essentially in this business.

[Rachel Cruz]

Well, and digging deeper in debt. I mean, 35% loss. I mean, this is just a very expensive hobby at this point. This isn't a business.

[George Campbell]

Even if it breaks even, this isn't worth it.

[Caller]

No. Right.

[Rachel Cruz]

Yeah. Jimmy, what, when you, when you project out, what do you. With all these loans, how much is the. Is it half a million now or how much debt in general? I'm just trying to, I'm trying to project out, like, what by, I don't know, in the next, like, month or two, like, how much total debt are you guys in?

[Caller]

So I've written everything down. So as it stands right now on the business side, we're at $580,000 in debt. I know. I have a PhD in being a bozo.

[Rachel Cruz]

How much of that is credit card? How much of that is small business loans?

[Caller]

So 165,000 of that is credit, and then the rest is split up between SBA working capital and a line of credit.

[Rachel Cruz]

Okay. Because I'm just thinking the credit cards, you know, if you get behind those, will be easier to settle than some of these loans directly the SBA loan from the bank.

[George Campbell]

What does your wife think about this? What does she think you should do?

[Caller]

She's not very happy with it, but she's been very supportive and very understanding throughout the process. So an absolute blessing to me. Definitely not an added stressor. She's been an anchor for me, for sure.

[Rachel Cruz]

Yeah. I mean, a little bit, Jimmy, But a part of me also is like, you guys aren't living in reality. Like, she should be kind of flipping out. Do you know what I mean? I'm like, I mean, I understand the anchor of feeling supported, but you're feeling supported and doing something that's continually getting you guys deeper and deeper into a problem versus saying, stop, stop where we are and we're done. Because we can't just keep doing this. And the problem, too, is that the guesswork for what you're possibly going to do this year. I mean, you know what I mean? It's like, you can't. You can't predict it. And. And so you guys either have to say, we're going to try to stick this out for a year with no more debt. No more debt. And if that means we have to close up parts of the business in order to do that. Okay. To see if we can get some revenue in here. But you guys can't just keep digging yourselves in a hole and expect just to come out the other side.

[Caller]

Right, Right.

[Rachel Cruz]

So I would sit down and you guys. I mean, you either need to make a decision if you were to stop this completely. Do you guys have things that you can sell off in the business? Like, is there any way that you could gain any of this money back if you were to close shop today from, like, a real estate perspective or, like, you know what I mean?

[George Campbell]

Equipment you have in the business?

[Caller]

Yeah, I have about $50,000 worth of equipment, but I think that's tied up in the SBA loan. They. They would have to, you know, I'd have to get permission to. To pay that loan down.

[Rachel Cruz]

Yeah.

[Caller]

And that's why I was like, worst case, you know, I really want to avoid bankruptcy. It's definitely not my first choice. And I even thought about getting, like, a job, like, so I can just get some sort of income and then using that job to pay down this debt. But since it's a business, I don't really want to, like, create murky waters with me paying off business debt with my own personal income.

[Rachel Cruz]

It's all tied to you anyways, Jimmy.

[George Campbell]

Go back to the papers. Look who signed it.

[Rachel Cruz]

It's you. Yeah, Yeah. I mean, it's all. They're all going to come for you.

[George Campbell]

It's not like car detailer llc. Well, they owe the money, not Jimmy.

[Caller]

Right.

[George Campbell]

It's guaranteed by you. And so that's the. Yeah, that's the hard news is you have to now picture this like it's just consumer debt that you took on. And so you're going to begin the business of cleaning it up. And I hope that you can find a new job that can create a better income that will allow you to clean this up faster. But if you just even sell the 50 grand worth of equipment, that's 10% of your debt you just knocked out. And so you got to start making progress. I would not sink more money into this thing just to be 600,000 in debt. 650. And hope we have less of a net loss. Oh, I'm heartbroken for you, man. Thank you for your service, too. 22 years, that's. That's incredible. I hope you guys can climb out of this. Dave, we got a lot of calls on this show where life happens. One day someone's healthy, they're working, providing for their family, and then a curveball hits.

[Dave Ramsey]

You know, we hear it all the time. A car accident, a cancer diagnosis, a heart attack, and suddenly everything changes.

[George Campbell]

Yeah. And that's why you've always said that having term life insurance from Zander is essential because it protects your family if the worst happens.

[Dave Ramsey]

Yeah, that's right. You need 10 to 12 times your income in coverage. No gimmicks, no whole life junk, just straightforward term life protection. But there's another piece that people often overlook, and that's long term disability insurance.

[George Campbell]

Yeah, it's important to understand the difference between them. Life insurance steps in when you die. Disability insurance steps in while you're alive but can't work. So it replaces a large part of your income so the bills still get paid while you get back on your feet.

[Dave Ramsey]

Now, if your employer gives you free disability insurance, great, take it. If it's discounted there at a better price, take it. But if not, Zander can help you find the right plan. Whether you're single or married. It's not optional. If you're going to be out of work for a while, then you need to make sure the money still showing up.

[George Campbell]

And that's why Zander is our go to. They make it super simple to get the right coverage at the best price. No pressure, no upselling.

[Dave Ramsey]

I've trusted Jeff, Zander and Zander insurance for over 25 years and so has my family.

[George Campbell]

So don't wait. It's fast, it's easy, and it could make all the difference. Go to zander.com or call 800-356-4282.

[Dave Ramsey]

Protect yourself, protect your income, protect your family.

[George Campbell]

George is up next in Newark, New Jersey. George, welcome to the show. Are you with us?

[Caller]

Thank you. Thank you. Sorry about that.

[George Campbell]

Oh, absolutely.

[Caller]

Oh, yes.

[George Campbell]

What's going on?

[Caller]

How's it going, guys? Rocking and rolling. First off, you guys are awesome. I've been working with you all for maybe like going on two years, about to be debt free this year and everything like that. Working with the smartvestor pro in Maryland.

[Rachel Cruz]

Oh, good. Amazing.

[Caller]

I had a quick question for you. Hopefully this is your area expertise. If not, then hopefully you guide me in the right direction. I, before I was working with you all, you know, I was ignorant to a lot of stuff. So I got mixed up back in maybe 2016 with a guy from my gym. Long story short, he was running the LLC or supposedly and I was investing into a high interest savings account. So basically I got scammed. Long story short, he got me for 38 grand. Oh, no. And then I hired lawyers. Lawyers and everything like that. So I, all in all, I was out maybe like 40, about 45 grand.

[Rachel Cruz]

Oh, my gosh, George. So sorry. Was it like a Ponzi scheme kind of thing or like a, like or he would take your money and invest, you know, put it somewhere else, thinking he would make a difference, and then he ended up not and lost all your money.

[Caller]

Exactly.

[Rachel Cruz]

Oh, exactly.

[Caller]

So I, you know, again, this is before I met you guys. I wish I would have met you guys sooner, but that's done. So it's kind of a thorn in my side because I'm trying to figure out whether I should continue going after him because I already went to court, we already got the judgment, he didn't show up and everything like that. You know, he got served and everything. But the thing is, you know, I had to learn about the law because the judgment is just basically right now. Because he got rid of all. Yeah, exactly.

[George Campbell]

If he doesn't have assets, doesn't have income, you can garnish, there's not much they can do.

[Caller]

That's basically what I wanted.

[George Campbell]

When you say you've been chasing for four years, who has actually been the person trying to track him down and, and get him to pay?

[Caller]

I debt collection company. And then at first it was, you know, it was free and everything like that because, you know, they would, you know, they get paid, I get paid kind of kind of deal. But then after maybe like a year or two, then they want, they asked me if I Wanted to, like, increase the.

[Female Caller]

Some.

[Caller]

Some kind of excuse they gave me, and it was like another two grand or whatever. I think to push that for. Because this is during the pandemic. Yeah. So to push, like, paperwork for it. And so that added to the money that I'm out. And I wanted to see if you guys think I should just count it as a loss or just, you know, because without assets, you know, now that I know that, it's just.

[George Campbell]

Yeah, that's my fear. If you spend 25 grand chasing this guy down and then it turns out you don't get a dime from him, well, now you just lost another 25 grand, so it may be time to emotionally write this off and call it a stupid tax and move on.

[Caller]

Yeah.

[George Campbell]

If it's been four years, I mean, this is. This is weighing on you. It's living rent free in your head. And I think it's time to move on.

[Caller]

Oh, yeah.

[George Campbell]

People do all kinds of dumb moves and lose 40 grand. You know, I went in 40 grand in consumer debt back in the day. And so I'm going to chalk it up to a life lesson that was hard to learn and never let it happen again.

[Caller]

Got you. Okay, I figured that.

[George Campbell]

I'm so sorry, man.

[Rachel Cruz]

Sorry, George.

[George Campbell]

I'm like, like when I. I'm like a dog who's like, I want to.

[Rachel Cruz]

I want to get this guy on justice.

[George Campbell]

I want to go full John Wick, man. You know? But at some point, and it was

[Rachel Cruz]

$38,000, you know, it's not 3, 800. Like, that's a lot of money. That's a lot of money. A lot of money.

[Caller]

Yep.

[Rachel Cruz]

But the crazy thing is, is I do think once you emotionally kind of just get over it, right? You detach and you're like, okay, I am moving on. You start to really, really see what you can do and what you have the power to do. As you're experiencing now on baby step two, George, like, you're getting yourself out of debt. Like, that money will come back, right? Like, you will be able to turn all this around, but it's just emotionally having Just to. To let it go, which sucks.

[George Campbell]

Sorry. You're dealing with that. Maybe this will get you debt free faster. If you allocate all of your energy and focus and resources towards that, I think you'll feel a whole lot better and it'll be a fun story you share with your kids one day when you're a multimillionaire.

[Caller]

Okay. Okay.

[George Campbell]

Best of luck, my friend. Oh, that's brutal, Rachel. That Reminds me, when I got scammed long ago, fraud happened. People opened up AT&T accounts, Verizon accounts, under my name, Social Security number, past address.

[Rachel Cruz]

Horrible.

[George Campbell]

Racked up 1700 bucks on both accounts, never paid a dime. And so I had to deal with that. And luckily I had Xander ID theft, and so they stepped in and helped clean this mess up. Yeah. But I found who the people were because I was a sleuth.

[Rachel Cruz]

You found who? It was like the Individuals.

[George Campbell]

Yeah. And I really wanted to go full, you know, wishbone on the case and go, I'm gonna investigate. I'm gonna bring them to justice. And then I just. I'm like, what am I doing? What am I doing?

[Rachel Cruz]

Just Nancy Drew.

[George Campbell]

I don't know how dangerous these women are.

[Rachel Cruz]

Yeah. Was it women?

[George Campbell]

It was two women.

[Rachel Cruz]

No way.

[George Campbell]

Still have their names here.

[Rachel Cruz]

Like in America.

[George Campbell]

They were in Boston. In the Boston area. I lived in Tennessee at the time, but they opened these accounts up in Boston. So, yeah, there you go. I'm not gonna. I'm gonna. I'll leave that for future investigations. But goodness gracious, it's hard. It's a hard pill to swallow when it happens. All right, Dominic is in South Bend up next. Dominic, welcome to the show.

[Caller]

Thank you.

[George Campbell]

What's going on?

[Caller]

So I've heard you guys speak about zero credit score and buying houses with manual underwriting. I purchased a home years before hearing about you, so having zero credit score when buying my next one won't be an option.

[George Campbell]

Sure. You have a credit score now due to your mortgage payment?

[Caller]

Correct. Is that alone gonna be enough to maintain a good enough score or what's the.

[George Campbell]

Have you made your mortgage payments on time?

[Caller]

Yeah. That's great.

[George Campbell]

You likely have a great score, so there's no need to open up new credit accounts and credit cards to try to increase it. When you go to get another mortgage, they're just gonna look at yours and go, okay, is your debt to income ratio good? Do you have a history of on time payments and they'll grant you that. So unless you. Have you checked your credit score, is it in the tank or is it solid?

[Caller]

No, it's solid. I just. I wasn't sure if just a mortgage alone would be enough in the future.

[George Campbell]

Yes.

[Caller]

Or if they needed more history now, you'll be good.

[George Campbell]

And if you ever have questions about it, you can always contact, you know, Churchill Mortgage, and they can walk you through what they actually look for. But you're. The score is the score. That's what they're looking for. And so they're not going to say, well, you don't have enough types of debt. That's all factored into your score. And so if your score is solid, you're going to be fine. And once you pay off the mortgage, then six to 12 months after that, your credit score will disappear again.

[Caller]

Okay.

[George Campbell]

Until you'll go back through that process. But you're on, you're on the path, man. Good for you. How long until you pay off the house?

[Caller]

I don't think I'll pay it off.

[George Campbell]

Not with that attitude. Dominic, what's left on the mortgage?

[Caller]

First home. I owe 160 on it.

[Rachel Cruz]

Okay, because you're saying you'll probably move homes, move houses. Yeah, Gotcha. Yeah.

[George Campbell]

Okay.

[Rachel Cruz]

Yeah, I know. That's it. But it's a good question because we do talk about people not having to worship at the altar of, you know, the credit. The, the FICO score. The credit score, because you can actually get a house called, you know, through manual underwriting. But if you have a bad credit score and you go and apply for a mortgage, they're going to pull your credit score regardless.

[George Campbell]

That will hurt you.

[Rachel Cruz]

Yes. If you have one that's undetermined, then you can do manual underwriting. But if you have a bad credit score, when you go and get a mortgage and, and as you're getting out of debt, George, for a lot of people, consumer debt, your score will lower as you, you know what I mean? Like, as you're starting to get out.

[George Campbell]

That's how stupid the credit score game is. You're like, wait, I'm doing good things. I'm knocking out debt. And they're like, yeah, but we don't like that.

[Rachel Cruz]

And we'd rather you keep penalizing.

[George Campbell]

Perfectly.

[Rachel Cruz]

Yeah. So on baby step two, you guys, if you're paying off your debt and then you try to go and get a mortgage which is not part of the, you know, that's baby step 3B. But if you try to do it earlier and they pull your credit score, it may not be great because you're paying off your debt, your consumer debt,

[George Campbell]

but very few people, and they always go, what about once I'm out of debt? I'm like, well, then you still need to save up your emergency fund that. Still save up your down payment. And so you're talking potentially years of not having a score, which is fine. So your credit score will not be in the tank as long as you actually close all accounts.

[Rachel Cruz]

Yes.

[George Campbell]

If you still have any accounts open or you still have a credit card open, that will show up on your credit report and keep your credit score alive. And so make sure when you pull that credit report, nothing is active. And then six to 12 months later. There's no real exact timeline, but that's what I've experienced and many that I've talked to. Your credit score just becomes indeterminable. It doesn't actually go to zero.

[Rachel Cruz]

Yeah, it's not actually technically a zero credit score.

[George Campbell]

We just like to say that because it sounds cool.

[Rachel Cruz]

That's fun.

[George Campbell]

Zero. What's your credit score? Zero.

[Rachel Cruz]

Zero. I don't have one.

[George Campbell]

That's the real flex. And that's honestly how they operated back in the day. Like in our parents day. The credit score has only existed since the 90s. So before then you're like, well, how do people get homes? Well, they looked at your actual tax return. You got a relationship with the bank. And they looked at your income and savings.

[Rachel Cruz]

And I went, okay, your other bills.

[George Campbell]

Here's a mortgage.

[Rachel Cruz]

Pay on time. You know, if you're a trustworthy borrower that they can lend money to, like they looked at you, the person, which is what manual underwriting does.

[George Campbell]

Anyway, instead of the computers going, good credit score, give them a loan. And so it's really not that difficult. I've done it myself. I'm alive to tell the tale. So it's worth pursuing to become completely debt free and then do it the right way.

[Dave Ramsey]

At Ramsey, we don't partner with companies chasing trends or pushing gimmicks. Trust is earned. And that's why we send people to Fairwinds Credit Union. See, a lot of banks rely on teaser rates, marketing hype and fine print. But that's not how Fairwinds operates. They've been serving members for 75 years. And you don't last that long by cutting corners. You last by serving people well. There's a reason their name is on the studio wall. They built products that help you manage money and intentionally not pull you into debt. If you're looking for a practical way to organize your money the Ramsey way, check out the Fairwinds Smart bundle. It pairs a high yield savings account for your emergency fund with a checking account that doesn't drain your balance with fee after fee after fee after fee. Open your Fairwinds Smart Bundle today at Fairwinds.org Ramsey and get the Ramsey Be Weird debit card. That's Fairwinds.org Ramsey insured by the NCUA.

[George Campbell]

Trina is in Florida. Up next, Trina, welcome to the Ramsey Show. How can we help today?

[Female Caller]

Hi. Hi. I'm so excited, you guys.

[George Campbell]

We're excited as well.

[Rachel Cruz]

We're glad you called, Trina. We're excited to talk to you.

[Female Caller]

Okay, guys, I'm having this, like, issue. I always said I wanted to retire by the time I was 40. I am almost 40.

[Rachel Cruz]

Wow.

[George Campbell]

It's an aggressive plan.

[Female Caller]

My dad did it twice before he turned 40, and I'm just like, wait.

[Rachel Cruz]

I can't wait. Hold on. He retired twice? What do you mean?

[Female Caller]

So he retired from the city and then he retired from boxing. So he, like, got to retire twice before.

[George Campbell]

Was he retirement? Yeah, he was a professional boxer?

[Female Caller]

Yeah, he was like semi pro.

[Rachel Cruz]

But he. Did he have to do it to earn money?

[Caller]

Yes.

[Rachel Cruz]

Okay, so he didn't really, like, get to retire.

[George Campbell]

He was semi retired while Semi pro and then fully retired.

[Female Caller]

Yeah.

[George Campbell]

Okay.

[Rachel Cruz]

And he's trying to relieve some pressure for you.

[George Campbell]

Is that where this idea came from? Then you're like, I want to be like, dad, I want to retire by 40?

[Female Caller]

Well, it inspired me.

[Caller]

Yes.

[Female Caller]

Okay. Like that I've always been like an overachiever or like.

[Rachel Cruz]

Yeah. An aggressive goal, you know, of something big that you're like, I want to work for that. I get that. Okay. Okay, perfect.

[George Campbell]

Keep going.

[Rachel Cruz]

So, yeah, how can we help?

[Female Caller]

So I ran into a financial situation. It's not a lot of debt. It's like $44,000 worth of debt. And I make about. So I want to pay this debt off.

[George Campbell]

What kind of debt is it?

[Female Caller]

It's like 20,000 in a car, like 4,000 about in personal loans and like 2,000 in my son's private school that I still owe. And oh, credit card. It's like 16,000 in credit card.

[George Campbell]

It doesn't feel like a recipe to early retirement. Like, if I was trying to retire early, I'd probably go, hey, I'm going to make sure I don't owe people money and have money saved on top of that.

[Female Caller]

I know.

[George Campbell]

So how long. How long has this been floating around? How long have you had this debt for?

[Female Caller]

So I filed a bankruptcy about two years ago. This is when all of this started.

[George Campbell]

So all this debt was post bankruptcy or did it get. Were you on a payment plan? What happened?

[Female Caller]

So actually, the only debt that I don't technically, like, I don't have to pay back one of the personal loans or one of the credit cards. And. Yeah, because.

[Rachel Cruz]

Because of the bankruptcy.

[Female Caller]

Because of the bankruptcy issue is that I want to keep the relationship with that bank and I want to pay them their money back because I never wanted to Put the items in bankruptcy. I was still paying it, but they said that because I filed a chapter seven that they had to put it in the.

[Rachel Cruz]

What caused you to file bankruptcy two years ago? What was the, what were your numbers then?

[Female Caller]

So then I was making about. It kind of flip flopped. I was making about 40, then I went back to 60. Then I think before that I made 80. So what happened was I was working for this company, I had moved, I was working for this company. Basically I decided I wanted to open up my own company. Because we're under government contracts, we have a certain criteria that we have to meet. When I said that I wanted to open up my company, the government's agency said that they had to take away all my clients. So basically I went from having, you know, a decent income to like having nothing the next day.

[Rachel Cruz]

Okay. And it was all because of this new business?

[Female Caller]

Yes.

[Rachel Cruz]

So the new business never, never took off, but you took out loans to float the business for a bit and that's what caused the bankruptcy?

[Female Caller]

No. So when they took my clients, it took a while. It took about a year and a half for me to open up and to get clients. So I started having clients in September. I had like maybe 15. Now I have like 25. And that's all I need. Yes.

[Rachel Cruz]

But Trina, what caused the bankruptcy two years ago? That was it consumer debt? Was it business loans? What was it?

[Female Caller]

So I had these student loans and I put them in an at theory proceeding where I filed bankruptcy to get rid of the student loans while I was waiting for my agency to open. When the agency, when the agency didn't take off right away, I started using my kids college funds, my retirement. I started pulling everything out and so I started listing and I started working as with another company, but that company just didn't pay that much. Okay.

[Rachel Cruz]

So Trina, I have a new goal for you. I think instead of retiring at 40, we are going to learn to live debt free,

[Female Caller]

which I usually do.

[George Campbell]

Trina, so far it's been everyone else's fault. And the government took your clients away.

[Rachel Cruz]

Oh no, I'm not saying she's pushing on everyone's fault, but like no, Trina, you got to be able to say like, yes. I'm used to living with debt though. From student loans to where you are now, there's a pattern of you using debt. Can we say yes to that?

[Female Caller]

Well, that makes sense. Yeah, I wasn't looking at it like that. Sorry.

[Rachel Cruz]

No, you're great. No, I just wanna make sure we're tracking so I think in order to have a completely new mindset with money from where you've been of saying I'm living completely debt free. Debt's not an option. Debt is not an option. I am going to save up and pay for things. I'm not gonna be making unwise decisions about purchases and pulling money out of retirement or kids, college or investments. Cause that's not wise. Right. That stuff is all for the future. And I'm gonna learn to live within my income and my means. And that means making hard decisions about lifestyle and about, you know. Yeah. I mean, life choices and everything. And so I mean, genuinely, I would make that the goal. I would make it a aggressive goal to get out of debt in, I don't know what, two years. Like make a. Make a goal to aggressive goal to get out of debt to save up a fully funded emergency fund and freeze your credit.

[Female Caller]

That way it stops debt free plan.

[George Campbell]

Two and a half years is the plan. Okay.

[Rachel Cruz]

Okay. That's so great.

[George Campbell]

We never even got to your question, Trina. I'm sorry, there's so much details to jump into. What is your actual question we can help you with?

[Female Caller]

Well, I wanted to basically flip this piece of property. They have a piece of land that's for sale. It hasn't been impacted yet. I wanted to do like a creative finance to see.

[Rachel Cruz]

No, we're off the bat.

[George Campbell]

Remember 10 seconds ago we're the new.

[Rachel Cruz]

Talk about the new goal.

[George Campbell]

Remember, creative financing just means, hey, I'm going to do stupid.

[Rachel Cruz]

That's right. That was her original question. That's fair. We made a new goal 10 seconds ago. Yeah. Okay, so, so how would you answer. How would you answer this? Now, Trina, answer your own question with your new goals in mind.

[Female Caller]

So I am going to stick to my two and a half year budget that literally just looks like this month.

[Rachel Cruz]

That's what we're talking about, Trina.

[Female Caller]

See, be debt free after that and then maybe save the money instead of.

[George Campbell]

Look at you and how old, how old are you, Trina?

[Female Caller]

I'm 38.

[George Campbell]

38. Okay. Can I tell you if you don't retire by 40, you're not a failure.

[Rachel Cruz]

I promise.

[George Campbell]

Can I just promise you that if you don't retire by 60, you're not a failure? How about this? You're not a failure, period. Oh, there you go. That's the most encouraging thing I've said today. Rachel can attest to that. But the truth is we have these aggressive goals and we need to create actions to get there and we can't hold ourselves to these goals because life is going to happen. And so it's okay to pivot the dream, but one thing we can't do is pivot in going backwards and rob our future, rob our children's future. You are worth more than that. And so from today forward, you're a person who doesn't go into debt, who doesn't owe people money.

[Rachel Cruz]

And all your decisions can be based off of that value system because that brings you freedom. Trina. There's no shortcut. There's no, like, okay, I can do this creative financing here and do this and I'll make 20 grand just like that. And look at that. Like, that doesn't work. That's not the real world. It is hard work. It is the long game. It is a marathon. It's not a sprint. And it's just a different mindset you have to be in to get true financial freedom and true control over your money. And so you do have to shift the way you've been doing it. Trina. If you keep doing what you've been doing, you're going to keep getting what you've been getting. And so, yeah, I'm glad that Trina answered her own question.

[George Campbell]

We got there.

[Rachel Cruz]

We're not going to finance a piece of land to build a home to flip it. We are going to work on getting

[George Campbell]

out of debt, de risk your life. Debt equals risk. More debt equals more risk. And so this creative financing is just adding more risk to the puzzle. And so be free. That's your best path to an early retirement.

[Rachel Cruz]

You're awesome, Trina. Thanks. Thanks for calling.

[Dave Ramsey]

If you run a business, you already know this. Bad information leads to bad decisions. And right now, AI is everywhere. But AI is only as good as the data behind it. The best AI is built on the best data. That's why I recommend NetSuite. NetSuite is the number one AI cloud ERP and more than 43,000 businesses run on it, including us here at Ramsey Solutions. Their AI isn't bolted on, it's built in. And it connects everything that runs your business. Accounting, inventory, customer data, all in one place. Because when your numbers are connected, AI actually works like it's supposed to. NetSuite's AI helps flag cash flow problems, spot inventory issues, close your books faster, and cut down on manual reporting. If your revenue is at least seven figures, go to netsuite.com Ramsey for a free product tour. That's netsuite.com Ramsey Foreign.

[George Campbell]

If you have a simple tax situation like you haven't had any major life changes or big investments, Check out Ramsey Smart Tax. At Ramsey Smart Tax is affordable, keeps filing simple, plus it has built in support in case you need a little help. Filing early means getting the best deals, and you get that tax stress off your shoulders. So as soon as you get all your tax documents, head to ramseysolutions.com smarttax and start filing. Matt is in Colorado Springs. What's going on, Matt?

[Caller]

First. First thing I just want to say is y' all are such a blessing to so many people.

[George Campbell]

Thank you.

[Caller]

I've listened for quite some time, and I'm just thankful for what y' all do. And now I find myself in a situation where I could use some advice. Yeah.

[Rachel Cruz]

Thank you, Matt.

[Caller]

Yeah. So I guess the brass tax of the situation is I've got a pretty considerable amount of IRS debt. I own two businesses, and I've just kind of got myself in a little bit of a hole. And so the question is if there's any credibility to tax relief programs and things of that nature.

[George Campbell]

Well, they're often marketed to people who are desperate and vulnerable, which is never a good sign. You know, when they're. That usually means they're predatory and they're promising, way over promising and under delivering. So what they tell you to do is basically, hey, don't pay a dime. You pay us instead. And what's gonna happen is tanks your credit, which with the irs, not the people you want to not pay. And so they then try to settle for you and save you money, which, by the way, you can do all of this yourself. And with the irs, they can already set up a payment plan. So there's really no use for a tax relief program in this situation.

[Caller]

Okay.

[George Campbell]

They're just paid middlemen between you and the irs.

[Caller]

Right. And the other office that I contacted was more of like a tax attorney that talks more about the future plan for the taxes, for the business to avoid this issue in the future, which may be beneficial. Yeah. But then his office was saying, you know, we don't recommend these tax relief programs because they're over promising under delivering. So.

[George Campbell]

Perfect. I'm in line with an attorney. That's a good day for me.

[Caller]

Okay, so I guess the question is, in your. If you were in this situation, what. What steps you might take?

[Rachel Cruz]

Yeah. How much do you make a year, Matt?

[Caller]

It's kind of relative. Probably somewhere around 100 or so.

[Rachel Cruz]

Okay. And do you have anything in savings?

[Caller]

Yeah, I typically try not to dip below 15 or 20 in savings.

[Rachel Cruz]

So you have 20?

[Caller]

Yeah, about about right there. Right now.

[Rachel Cruz]

Yeah.

[Caller]

The issue with my particular business is extremely seasonal with construction. So, you know, I kind of hunker down in the wintertime and, you know, rice and beans and just about nothing. So. But then in the busier season, it's easier to tackle some of these things.

[George Campbell]

What kind of construction?

[Caller]

Outdoor fence and deck and a lot of carpentry kind of stuff, so.

[George Campbell]

Cool. Well, the good news is you can still work during that time and make money and you can definitely pay this money back in a reasonable amount of time. Do you have any other debts that are holding you back from creating the margin to knock this out quick?

[Caller]

Yeah. There's still about 20,000 remaining on a HELOC. Okay. And I already know that's a teeth grinding word for you probably, but that, you know, it's one of those situations where, sure, I could pay that off, but then, you know, you have to worry about the bills right now. So if I were to pay it off, I would wait until the money's coming in more fluently.

[George Campbell]

Okay. In the busier case, you got 40 to the IRS, 20 on the HELOC. Anything else?

[Caller]

That's about it. I've paid off, I don't know, 20,000 something in credit cards. Great.

[Rachel Cruz]

Good for you.

[George Campbell]

No car loan.

[Rachel Cruz]

Yeah, well, I would. This changes the debt snowball a little bit because IRS debt gets moved to the front. So even before the HELOC, I would be tackling this 40 and I would just make it an aggressive goal. And again, I don't know if it's a payment plan that you contact the IRS with, but I would try to have this all paid off in less than a year.

[George Campbell]

Yeah.

[Caller]

So I guess other pieces of the equation are I've got to file the last two years of taxes. I'm behind on that. So there'll be probably another 10 to 15, all the expenses and whatnot.

[George Campbell]

So let's call it 60. Is that fair?

[Caller]

Sure.

[George Campbell]

So if we call it 60, you know, you owe 60, set up a payment plan with them, and maybe it's, hey, you're going to pay 1,000amonth or 2,000amonth. And then once you get down to that, you know, you got 15 grand left. I would use your savings to just knock it out and then you can replenish the savings. Really what you do is then attack the heloc, then replenish the savings.

[Caller]

So I guess the questions then become, you know, I pay a considerable amount of additional principal on my home, or does it make more sense to factor that into this equation?

[George Campbell]

Yeah, I would just pay more the minimum mortgage payment. Why are you paying extra on the principal of your home right now?

[Caller]

Generally just, you know, you look at the amortization schedule and all of that and it, you know, over a course of time, it just makes sense. Yeah.

[Rachel Cruz]

And it does in the right order. But you want to get this stuff cleaned up. So if you, if you went down to just your mortgage payment, how much does that free up a month?

[Caller]

Probably about another thousand or so.

[Rachel Cruz]

Oh, great.

[George Campbell]

So how much could you reasonably put towards this IRS debt every month if you got aggressive?

[Caller]

Well, this is where it gets tricky because, you know, I listen to your show constantly and people are like, well, I make this exact amount every month or every two weeks. And for me I have months where it's 15, 20,000 and I have months where it's.

[Rachel Cruz]

You've been doing this a while, so you probably could look at a calendaring semi guess like this probably will be good months here, low months here. So yeah, so you may be putting, you know, maybe, you know, 13, 1400 towards this on a low month. But a good month, you could be throwing 3,000 at it. Right, sure. So I would kind of just map that.

[Caller]

And I'm already set up on like their minimum amounts, 400 something a month. So I've been actively attacking it for a couple of years. But it seems like every dollar that goes into it's just paying off the accruing interest, you know.

[Rachel Cruz]

Right, right.

[George Campbell]

You need to get way more aggressive on this. Which means all focus is on this IRS debt. No extra on the mortgage. Your budget is bare bones. You are just covering four walls, food, utility, shelter, transportation, insurance, anything else is going towards this and try to make, make it to where there's no gap in income. Now, I understand you're going to have some really good months and some rough months, but I don't want you just sitting around going, well, there's no work to be done right now.

[Caller]

Sure. I guess in general you wouldn't, you know, I mean, I could run the HELOC up more and pay that and it might be less percentage that I'm paying.

[George Campbell]

We are not adding a cent to the heloc. We're not going to keep going with this line of credit. We are done with that. So just keep it where it is, keep up with the minimum payment and then all of your guns are pointed toward this IRS debt for the time being.

[Caller]

Do you think it would make sense to sell off additional assets to try to do this?

[George Campbell]

What do you Have.

[Caller]

Well, I've got a considerable number of vehicles and machinery that are mostly associated with the business. I mean, they're for all intents and purposes mine, but the business owns them.

[George Campbell]

Yeah. Would it decimate the business income if you sold these off?

[Rachel Cruz]

Do you need it, though, to run your business?

[Caller]

Well, it's probably like a half and half kind of number. I mean, you know, skid steers and tractors and things that are relatively essential.

[Rachel Cruz]

You have one piece of machinery, you're thinking of that, you're like, okay, I could sell that and be okay.

[George Campbell]

Doesn't get a lot of use, doesn't create a lot of revenue right now.

[Caller]

Yeah, yeah.

[Rachel Cruz]

What could you get for that?

[Caller]

I mean, probably somewhere between 15 and 20. Wow.

[Rachel Cruz]

Thousand.

[Caller]

Yeah.

[George Campbell]

That paired with your savings gets you out of the IRS debt like tomorrow. Yes.

[Caller]

Yeah.

[Rachel Cruz]

Yeah.

[Caller]

I kind of figured y' all would be on that. That boat.

[George Campbell]

And you can always buy use later if you need it.

[Caller]

Right?

[George Campbell]

With cash.

[Caller]

Sure.

[Rachel Cruz]

Yeah. And again, that's all saying that that's not affecting your business. I don't want you to have to turn.

[George Campbell]

I don't want you to lose half your income because you sold this thing.

[Rachel Cruz]

Right, right, right. So you want to be smart about it, but if it's something that you're really not using or really need and you get 20 grand off of it.

[George Campbell]

Yeah, for sure.

[Caller]

Yeah. I'm a huge advocate of not having car loans and I fix them all myself and whatnot, so that's great.

[Rachel Cruz]

Yeah. Anything you have, Matt, I would. Because I think if you had no IRS debt and no heloc, how would you feel?

[Caller]

Like I could scream, like amazing.

[Female Caller]

Hi.

[Rachel Cruz]

I could scream. I'm debt free. Exactly. Yeah. So I'm like, yeah, whatever you could do to get to that level of peace and control is what we're after. And then later, when the business is doing great and you have all this freed up money because you don't have debt you're able to save. And if you need to go buy

[George Campbell]

some equipment, cash flow, some equipment. I'm changing the Dave quote now. It sells so much stuff, the skid steer thinks it's next. Because it is, my friend. Good luck selling it. Hope you get a great buyer who's happy to pay you what it's worth.

[Dave Ramsey]

Getting married changes something in you. It sure did in me. When you say I do, all of the sudden, life isn't just about you anymore. It's about we. And one of the most grown up things you can do for that we is to make a [e-mail] See, being a grown up isn't just about jobs and rent and splitting up the chores. It's about having a plan so the person you love is protected. And a will isn't about dying. It's about deciding. It puts your wishes in writing so no one has to guess. And judges don't have the final say. That's why I recommend Mama Bear legal forms with Mama Bear. Making your will is easy. It's completely online, no lawyers required. You can get it done in about 20 minutes. The price you see at the start is the price you pay with Mama Bear. So if you're serious about being an adult, do this today. Go to mamabearlegalforms.com use the promo code Ramsey and save 20% on your will. That's Mama Bear legalforms.com promo code Ramsey.

[George Campbell]

Welcome back. Welcome to the Ramsey show and the Fairwinds Credit Union Studio. I'm George Camel, joined by best selling author and my co host of Smart Money Happy Hour, Rachel Cruz. We're taking your calls at 888-825-5225. Up next, we head to Charlotte, who is in Columbia, South Carolina. Charlotte, welcome to the Ramsey Show.

[Female Caller]

Hi, how are you?

[George Campbell]

We are doing great. How can we help today?

[Caller]

I'm.

[Female Caller]

My question is. Well, my husband and I are. We have $100,000 of student loan debt that we just started paying off and my dad had promised us that he would help pay this debt off. However, in the last year we had to.

[George Campbell]

Sorry, you're breaking up with us. Charlotte, can you speak directly in your phone or try to get to a better spot? I heard your 100,000 student loans. Dad said he would help pay them off and you recently had to cut him off.

[Female Caller]

Yes, we did. We had to cut ties with him

[George Campbell]

and so we are now like the relationship is over. Okay. Yes, got it.

[Female Caller]

Correct. Yes. So we are now just looking into this debt now for our own to pay off. And my question is, what tips would you have to pay this off quickly? I don't want this to to be looming over our heads for longer than it needs to.

[George Campbell]

We agree.

[Rachel Cruz]

What did you get your degrees in

[Female Caller]

it? My husband got a law degree so that.

[Rachel Cruz]

Oh gosh. Okay, perfect. So is he practicing law right now?

[Female Caller]

Yes.

[Rachel Cruz]

Okay, and how much is he making a year?

[Female Caller]

He is making a little over 100k.

[Rachel Cruz]

Okay. And what are you making a year?

[Female Caller]

I'm just making a little over 20k. I'm working part time. We just had Our first child back in October.

[Rachel Cruz]

Okay. Aw, Congratulations.

[Female Caller]

Thank you.

[Rachel Cruz]

Okay, great. So, yeah, I mean, the. The most efficient way to do this, Charlotte, is. Is if you have multiple student loans. Do you. Or is it all one loan?

[Female Caller]

It's just one loan.

[Rachel Cruz]

Okay. Yeah. So it's just going to be, you

[George Campbell]

know, take in the mountain.

[Rachel Cruz]

Yeah.

[George Campbell]

Throwing as much as you can every month on top of the minimum payment. Just throwing as much as you guys can. So it's. Make as much as we can every month, spend as little as we can, and use that difference, that margin to knock out this debt fast.

[Rachel Cruz]

Because if you guys make 120 a year, if you lived on 60,000, Charlotte, and you guys basically had no lifestyle, you're just like, listen, we are just gonna just live on what we got. And you threw 60 at it. I mean, in a year and a half, you guys will have this paid off.

[Female Caller]

Okay. Okay.

[George Campbell]

So it's just. You got to live like a broke law student and not like a lawyer. And that might be a. I don't know what your lifestyle is like, but that's going to be a big shift.

[Female Caller]

Yeah.

[Rachel Cruz]

Yeah. Do you guys have margin every month in your budget?

[Female Caller]

We definitely could. We could have more. Yeah.

[George Campbell]

Make it a goal. Could you. This month, with the next paychecks coming in, throw $4,000 on top of the minimum at the debt, you're done in less than two years. I mean, that's the math of it. There's no, like, life hack shortcut. Now if you're doing the debt snowball and you had multiple debts, we'd say attack the little one first, minimums on the rest and create some progress. This is a little bit harder because it's just, you're. It's like paying off a mortgage. You're just staring down this mountain going, all right, I would celebrate the wins every $10,000 you pay off. You guys have a little fun, whatever you decide to do, and that'll keep you motivated along the way. Maybe make it visual. Maybe you have, like, you know, rings and chains across the house and. Or on the fridge. Whatever you guys decide to do. Making it visual, having a deep why. Maybe this child is your deep why of. I want this kid to grow up in a house that doesn't know debt, that has financial stability.

[Rachel Cruz]

Yeah. And it probably is. There's probably a painful element too, right. That it came. You guys are doing this because of a relationship that was fractured. So every. You know what I mean? It's kind of like the sad reminder, too, of having this around of like why we have to pay this off. So there is a part two of like, oh, I just want to.

[George Campbell]

You don't want it to drag out.

[Rachel Cruz]

I just want it out of my life, you know?

[Female Caller]

Definitely.

[George Campbell]

Is your husband on board with this?

[Female Caller]

Yes, he is. We're in the very beginning stages of really talking about it, which I feel, I feel behind because it's been almost a year that we've had to cut ties with my dad. But it really does just kind of feel like the dust has now settled more with that and then with having our son. But so yeah, we're just in the beginning stages of like really coming up with.

[Rachel Cruz]

Okay, tell me this, Charlotte. He wasn't. Your dad wasn't paying your husband's debt for law school though, just yours. Right.

[Female Caller]

He was going. He never paid any debt because when all this came out with my dad, we had just like maybe for two weeks been put on a payment plan for the debt.

[Rachel Cruz]

Okay. Yeah. But was. Was the expectation that he was going to pay your husband's law degree?

[Female Caller]

He had said he would.

[Rachel Cruz]

Oh, okay. Okay, okay. So it was the whole day. Cause I was thinking is if he just promised your debt and yours is ten thousand of the hundred thousand. You know, I was going to ask why you didn't address, but he. But, but it was said out loud that it would even.

[George Campbell]

So this wasn't on your radar and all of a sudden relationship's broken and now you've got a hundred thousand sitting in your lap to pay off on top of the grief. And so this is a lot. Yeah, it is sad and it's going to be. It's going to be tight, but you know, less than two years, the baby won't remember it. It'll be a memory for you guys. Remember that time we worked our tails off for two years to get to a place of financial stability? And you will not regret the sacrifice you're making right now, I'll tell you that much.

[Female Caller]

Yeah. Yeah. Would you take out. We have a high, a highish amount of money and a CD account. That's a two year CD account. So I don't think we can't touch it for like another year.

[Caller]

But how much is in there?

[Female Caller]

Like a little over 75,000.

[George Campbell]

Fantastic. Well, I would also look at what the penalties are for taking it out before it matures because if you're going to pay more interest in student loans than the penalty is, then it's worth cashing out.

[Female Caller]

Okay.

[George Campbell]

And that gets you out of debt so much faster.

[Female Caller]

Yeah, yeah.

[George Campbell]

What Was that money earmarked for?

[Female Caller]

We didn't really have any sort of plan for other than just to kind of keep it in there. And then maybe once it was done, divvied up more, we were probably going to buy another house or like sell the house right now, buy a little bit bigger house. As our family grew, that money actually was given to us from the death of my grandfather. So it was kind of unexpected. So we really didn't have much of a plan. And then it was like, we got that my husband started paying the student loan debt and then everything happened with my debt. So, yeah, we haven't thought about it that much.

[George Campbell]

Okay, gotcha. Well, the other part you have to grieve is, hey, this was going to be like house upgrade money and now it's paying off debt money, which is less exciting.

[Rachel Cruz]

But I would do that in a heartbeat, 100%.

[George Campbell]

I would look into that tonight to see what the penalties are.

[Rachel Cruz]

And then depending on how aggressive you guys want to move up in half house, still look at cutting back some lifestyle and, and saving up some margin and say, okay, if we were to replenish this, you know, you could do that in a year and a half still and get that money back. But I would go ahead and yes,

[George Campbell]

this new plan is we're out of debt six months. By the summer, we're debt free.

[Rachel Cruz]

Yes, I would do that in a heartbeat. And then you guys save your income and decide how quickly you want to save, how slow. But no one else is determining that for you. Or you guys could say, no, we're good and for the next year we're gonna just enjoy our life and yeah,

[George Campbell]

and maybe you can quit the part time job.

[Rachel Cruz]

No one's making you do it. Where? Student loan. You have to make this payment.

[George Campbell]

Yeah, life is going to be on your terms soon enough. And so far, life has just been happening to you and everything's been unexpected. And I hope soon you can start to get intentional and happen to your life. Charlotte, we're rooting for you. Thanks for calling. This show is sponsored by Better Health. Financial stress does not just damage our bank accounts. It can also take a toll on our mental and emotional health and our relationships. Money worries cause anxiety and they are one of the leading sources of conflict for all types of couples. I know this. My wife and I have struggled with money conflicts for years. Listen, therapy can help. Even with money conversations. Therapy is not about financial advice, but it can help you build healthier ways of coping, give you strategies to communicate about money, and give you a plan moving forward, I want you to consider talking to my friends at BetterHelp. BetterHelp is an online therapy platform that matches you with a licensed therapist based on your goals and preferences. BetterHelp therapists work according to a strict code of conduct and they are fully licensed in the United States. You can message your therapist and schedule sessions right in the platform. And if the first therapist isn't a great fit, you can switch at any time for no additional cost. When life feels overwhelming, therapy can help. Visit betterhelp.com Ramsey to get 10% off your first month. That's BetterHelp. H-E-L-P.com Ramsey. Shane is in Vegas. Up next. What's going on, Shane?

[Caller]

Hey, y', all, thanks for having me on. It's an honor to be speaking to you today.

[George Campbell]

Thank you. How can we help today?

[Caller]

Yeah. Favorite topic for you guys, Money and family. Long time ago, when I was 18, took out student loans with the agreement with my father that they would pay until the balance is 0:35. Now. Balance is still in the mid-70s to.

[George Campbell]

What was it originally?

[Caller]

Yeah, it was over 120. So they've been paying it down. They've been making minimum payments.

[George Campbell]

Well, that's a problem.

[Caller]

I agree with you. The issue I'm really having is that my dad is. He's totally fine paying it. He still makes the payments. But my mother constantly brings up the fact that they are paying for my student loans. Feels like there's strings attached when at the very beginning, there were never those

[George Campbell]

agreements and there was a clear agreement. Hey, we're going to pay these off. We don't have the money to cover it, but take out the loan and we'll cover it. Is it in your name or their name or both?

[Caller]

They're. They're in my name.

[George Campbell]

They have the money.

[Caller]

I mean, right now they could snap their fingers and pay it off. But the way my father sees it is he can make more money in the stock market, so he just chooses to.

[Rachel Cruz]

Are your parents still together?

[Caller]

Yeah, they're still together. Are you married financially? I am married, yes.

[Rachel Cruz]

Okay, so when you guys are around your parents, how often is that? How often do you all see them?

[Caller]

We, I mean, we live on separate sides of the country, so once, twice a year. But even in some phone calls.

[Rachel Cruz]

And what does she say, like, are her comments.

[Caller]

A lot of the times it's like revolved around like, oh, you just bought a truck, like that could have gone to the student loans or you took a nice vacation. Like, why Is that money? But, you know, going back to what I said, it's. That was never part of the agreement, so I'd never feel obligated. But then, you know, my father, he's like, yeah, I don't care. I'm still paying them. It's whatever.

[Rachel Cruz]

So have you.

[Caller]

Rather frustrating.

[Rachel Cruz]

Yeah. Do you push back on her at all?

[Caller]

I do. I try to keep it, you know, calm and light, but my wife is really the one that gets frustrated by.

[Rachel Cruz]

That's why I was asked if you were married, because I feel like I would be like, oh, my gosh. See, this is the issue with the student loan stuff is these parents are like, sure, go take out whatever you want to go take out. And you're 18, Shane. Right. And, sure, you sign it. I mean, yeah, you're 18. You're an adult. So, yes, you have some responsibility in the sense of, like, you chose to make that decision, but you also had fully functioning adults in your life that said, yes, and we would pay for this. So I almost would have a very kind but a very clear conversation with her around the boundaries of these comments because it starts to erode the relationship.

[George Campbell]

I'm guessing it already has.

[Caller]

Yeah.

[George Campbell]

Doesn't sound like the holidays are fun.

[Rachel Cruz]

I mean, that's why you're calling, right? This is your. This is.

[Caller]

Yeah. A lot of tension.

[Rachel Cruz]

Yes. Okay.

[Caller]

Okay.

[Rachel Cruz]

So, yeah, I mean, I would. I would tell her, and I. And I would be very kind, but I'd be very, very clear and to be honest with her and say, you know, mom, there have been multiple comments made. I mean, you could give her some examples. And the truth is, when I was 18, you all told me that you would take them out and you would pay for this. And I'm holding y' all to that word. I mean, that's what was said. If something has changed and you and dad agree on a different plan, I'm happy to have a discussion with you if that's the case. But that's not been the discussion. And so I need you to stop. Stop making these comments. They're passive aggressive, and it's eroding our relationship. Can you do that, Mom? And at that point, that's up to her. She's the adult that gets to make the decision if she wants to continue a healthy, healthy relationship.

[George Campbell]

I don't control yalls money. That's your decision. So this is now a marital problem they have of mom disagrees with how dad is handling a debt they agreed to pay.

[Rachel Cruz]

That's a good point, too.

[George Campbell]

Yeah. So Legally, yes, it's yours. They could stop paying today, and it's going to come to you. Now, they haven't done that yet, and I'm glad that they're not intentionally trying to tank your life, but this might be another conversation with dad of saying, hey, listen, you have the money. I don't care how much you could make in the freaking stock market. This is eroding our relationship, which is way more important than some spread you could make. And so you can try to also influence him to, you know, sort of. This would solve everything, wouldn't it, if dad just wrote the check, paid him off, and went, dude, it's been seven years pissed.

[Rachel Cruz]

I don't know. Would your mom be mad at that?

[Caller]

Yeah. Who knows?

[George Campbell]

So she just doesn't want to even use any of their money anymore to pay for these loans.

[Caller]

I'm sorry, can you say it again?

[George Campbell]

She doesn't want any of their money to be used to pay for any more of their student loans. She's just done with this whole thing.

[Caller]

I. It's hard to say. I know they're financially well off. Like, they're. My mom is retired. My dad, he makes fairly decent living, and I know what their nest egg is, and liquid and retirement. So I know, like, this is not

[George Campbell]

a big part of their world.

[Caller]

It's not a big part of their world. And, you know, my wife and I, we make decent money. So, like, the payment could. It would be totally fine for us to take on. It's just like, yeah, I need to know if I need to start paying my $80,000.

[George Campbell]

You guys have the money to write a check and pay this off today?

[Caller]

Not in, like, liquid assets. I mean, I could save a couple more months and it would be fine, but then it would just wipe out all of our liquid investments. So not. My wife doesn't really want to do that one. So it would probably just be.

[George Campbell]

What I'm hearing is, either way, someone's gonna be angry. And so that's the thing we have to make peace with, is who do we want to upset? And the truth is, you can't control how they react or respond. All you can do is be a person of integrity and have the conversation.

[Caller]

That's fair.

[George Campbell]

So I don't. I was just saying, if you wanted to. This is the other option, is you write a check and say, mom, I don't want this to come between us and destroy our relationship. Here's the freaking check to pay off the loans. Yep, that's the other option.

[Caller]

I don't want to destroy the relationship.

[Rachel Cruz]

Yeah. Because they've been. They freaking have had this for almost 20 years.

[George Campbell]

Yes. The immaturity is on mom's side at this point. And dads for.

[Rachel Cruz]

And I'm basically agreeing to pay exhausted.

[Female Caller]

But yes.

[George Campbell]

It's been two decades, man.

[Rachel Cruz]

When your 18 year old wants to go and take out $120,000, you say no, but no, they didn't. They said, yes, we will do this and take this on. And so they're the ones that have been dragging their feet. It's not his. It's not your fault, Shay. I mean, you know what I mean. To that degree. Because there was a deal. There was a deal that was made. Yeah. I'm sorry, that's so frustrating. But I would, I mean, for the, for your, your wife's sake, for your sake to like be in her presence and have passive aggressive comments constantly. Yeah, I would, Yeah, I would be clear and draw a boundary there. But again, kind but clear.

[George Campbell]

And there might be help, guys. Yeah, there might be a compromise where you go, hey, listen, here's how much I'm willing to chip in to just.

[Rachel Cruz]

Man, you're really.

[George Campbell]

Here's the thing.

[Rachel Cruz]

Bail the parents out. But they're fine if they were on food stamps, like, I get that.

[George Campbell]

No, they have the ability to.

[Rachel Cruz]

Yeah.

[George Campbell]

So that's where I go. This is really between mom and dad because they have a disagreement.

[Rachel Cruz]

Yeah.

[George Campbell]

Mom should be mad at dad, not the son, because dad's been dragging his feet for 17 years. Can I remind you.

[Rachel Cruz]

No, they both have.

[George Campbell]

Goodness gracious, that's. And clearly mom doesn't have a vote when it comes to finances.

[Rachel Cruz]

I feel like we're getting more and more of these. I don't know why. I feel like we hear more and more parent resentment, guilt calls to adult children with the student loan debacle in the mix of someone said they were going to pay, they're not paying, or they're paying and they're mad.

[George Campbell]

But this is asking me for money again.

[Rachel Cruz]

This is the original deal. Yeah, I mean, it's just, it's so much.

[George Campbell]

So can we talk about our parameters around family and money? I think it's a good reminder for everyone listening here, which is this. Never loan money to family or friends. If you want to give money, make it a gift. And please don't go into debt for said gift. That's not really a gift. We've heard that with like, well, mom got me a car, it has a loan on it. And so I, you know, I gotta Pay it.

[Rachel Cruz]

But she got me the car, Right? Yes.

[George Campbell]

And so it's fine if you want

[Rachel Cruz]

to give and if the giving ends up becoming a pattern of enabling bad behavior or irresponsibility, that's another stop. Right. We're not doing that. But the gets, because I mean, part of the show is about changing your family tree. Right. Getting yourself in a position where you can change your life, you change your family's life, you change others lives. The ripple effect is beautiful and wonderful and we want that to be, but we also want the people on the other side that are receiving it to be in a healthy, good spot themselves, to have their own dignity as adults. So that. And then the other thing, George, no co signing ever. Please, please no co sign. We had a grandma who co signed. That was last week on the show. I think. I know. She was like 92 and this guy's like, yeah, my grandma co signed. I was like, poor grandmother. You're. He's broke. He's probably not gonna be able to make the pay.

[George Campbell]

Yeah. They require a co signer. Because nobody trusts you to pay it off.

[Rachel Cruz]

Yes.

[George Campbell]

And so what happens is you end up not paying it off and they go after poor grandma.

[Rachel Cruz]

Yeah.

[George Campbell]

Who thought you were going to make the payments perfectly. And she was just more of a, you know, more of just like a nice thing. I'll sign it, but I won't ever have to deal with it.

[Rachel Cruz]

Right, right.

[George Campbell]

Never think that it will destroy a relationship and cause resentment. And so it's so much easier to just either put the boundary up and say no or give a one time gift if it's going to be a blessing. And you're not enabling terrible time though.

[Rachel Cruz]

You think just once for the rest of their life.

[George Campbell]

Well, not like an ongoing, hey, I'm going to give you a thousand bucks every month, forever.

[Rachel Cruz]

The pattern. Yes.

[George Campbell]

You know what I mean. If you reward bad behavior, that's when it turns into entitlement.

[Rachel Cruz]

Agreed.

[George Campbell]

I'm gonna come back to bank of dad. Why would I go? Work harder. That's silly. This is the Ramsey Show.

[Rachel Cruz]

If you're looking for a more budget friendly way to save on medical costs and stay true to your values, Christian Healthcare Ministries is a great option to think about. CHM is not health insurance. It's a health cost sharing ministry. A biblical community based way for Christians to share each other's medical bills. That means no enrollment deadlines and you can choose any doctor or hospital you want. That kind of freedom is big, especially if you're self employed between jobs or you just need something that fits your budget better. CHM has been around for decades, faithfully serving the Christian community. And many members save hundreds of dollars a month compared to traditional health insurance. And that margin gives you breathing room when you're working the baby step and trying to steward your money well. And right now, CHM is offering new members a 50% credit towards their first month of membership. Get [e-mail] budget and use promo code RAMSEY. That's chministries.org budget and promo code Ramsey.

[George Campbell]

Matthew is in Denver up next. Matthew, welcome to the show.

[Caller]

Hey, thanks for taking my call. How are y' all doing this afternoon?

[George Campbell]

We're doing great. How can Rachel and I help?

[Caller]

So I just, I was going to get some advice. My wife and I are looking at taking a $100,000 loan from my father to buy an eight unit rental property. And I just kind of wanted to see what you guys thought based on the details of the property and everything else.

[Rachel Cruz]

Yeah, let's hear it because not super excited about this as of now taking out a loan, but from your father in law. But yeah, give me your numbers. What are you thinking?

[Caller]

Okay, so I got a $900,000 property at 3% interest, owner finance. And so it's going to be $100,000 of my money, $100,000 loan from my dad. And then the owner is willing to do $100,000 of in kind money is what she calls it. And that includes repairs and improvements on the property for a period of 10 years. And then she's also willing to mentor my wife and I for two years, the first two years that we own the home. And then at the end of the 10 years it's going to be a balloon payment. And I know this kind of goes against a lot of the Dave Ramsey, I guess, principles, but I wanted to see what you guys thought because I think it might be a good opportunity for us to kind of get a business and start moving that way.

[George Campbell]

Do you guys own a home currently, A primary home?

[Caller]

Yes, we do own a home currently and we have no debts or payments at all. Besides that house.

[George Campbell]

Oh, besides the house, what's left on that mortgage?

[Caller]

190,000.

[Female Caller]

Okay.

[George Campbell]

And what's your household income?

[Caller]

We make around 135,000 and there's a lot of room for growth there. Cool.

[George Campbell]

How did this idea come up of the 8 unit and then your dad loaning you the money? Who brought it up?

[Caller]

So we met this woman at a graduation and we had owned a single family home Investment property. And we got to talking to her, and she and I kind of told her that we're real estate investors. And she's like, oh, I got a deal for you. My husband and I are trying to get out of this property because her husband is pretty sick, and they're just trying to move down to Arizona. And so that's kind of how this got brought up. And then she's the one that's kind of structured this deal.

[Rachel Cruz]

Sounds like it.

[George Campbell]

So she knows your dad and was like, well, if he ponies up 100, you pony up 100, we can make this work.

[Rachel Cruz]

And I'll mentor you for two years.

[Caller]

Yes.

[Rachel Cruz]

From Arizona.

[Caller]

Yeah. She's kind of curtail related to my wife. Not by blood or anything, but, Matthew,

[Rachel Cruz]

I just see 85 ways this could go sideways. It's not worth it. It's not. I mean, from the way the loan structured with the balloon happening in 10 years, all this borrowing from family going into a $900,000 investment property that you don't have the money for, you got. I mean, do you. How much y' all have saved? How much cash do you and your wife have?

[Caller]

So I have a hundred thousand dollars for the down, and then we have about $250,000 in the markets right now.

[Rachel Cruz]

Okay, why don't you. Why do you have to borrow money from your dad? Take your money out if you're gonna do the deal. I wouldn't do the deal. But don't. Don't borrow money from your dad. You have $350,000.

[Caller]

Okay, got it. And I don't know. I guess my thought is if I could keep it in the markets and make 10%, whereas I could pay my dad back 10% on the money that he loans the company.

[George Campbell]

I mean, you're needing the stars to align with this. You need eight tenants who pay on time with no risk there. You need to pay dad back. You need to make money in the markets. There are so many variables here that could go wrong.

[Rachel Cruz]

And all this just tanks, you're screwed, Right? If the market tanks, you're screwed.

[Caller]

Yeah.

[Rachel Cruz]

You can't find renters. You're screwed. If the market goes down. As Dave always says, if. If Trump burps and the market, you

[George Campbell]

know, goes down, he was like, we're going to invade Greenland. The stock market got spooked.

[Rachel Cruz]

That's right. Yeah.

[George Campbell]

And so you just don't know.

[Rachel Cruz]

Well, I mean, yeah, but here.

[George Campbell]

Here's the parameters that are underlying.

[Rachel Cruz]

House, Matthew.

[George Campbell]

Yeah. The underlying principles are we never recommend you buy Investment property until your primary home is paid off. Number two, we never recommend you borrow to invest in a rental property. Always recommend paying cash. And number three, we always tell people, never borrow money from family. And so there's a lot of principles here that are being violated all for the sake of a quote unquote, good opportunity.

[Rachel Cruz]

And can I, I'm going to say this, Matthew, and I don't want it to be rude, but you guys had one single residential investment property, correct? You and your wife.

[Caller]

That is correct.

[Rachel Cruz]

And you tell this lady that you're, you're, you're real estate investors, which I guess technically you are. You have one investment property. And I think she saw. Ding, ding, ding. Here's my ticket out. I got to get out of this horrible situation I'm in because my husband's sick. And again, I don't think it's like ill will on her end. I just think she thought, oh my gosh, here's a guy who's probably doing all these, like, deals that you see on TikTok and he's, he's got eight VRBOs and here. You know what I mean? And he'll do it. I bet, I bet, I bet I could offer him this and we'll, we'll structure the loan where it works for him so I can get out of here. That's what she saw. I mean, honestly, she didn't list it. She didn't go and go to some, you know, investment firm that has, you know, 18 different investors around the country that go and buy property, you know, I mean, like. No, no, no. She found you and your wife and you thought you hit the, hit a great deal and you hit a horrible deal. Not good. Not good.

[Caller]

Okay. Okay. Thank you. I appreciate the advice.

[George Campbell]

Not what you wanted to hear, I know, but.

[Rachel Cruz]

Sorry, Matthew. So listen, what you and your wife did, though, with. I would pay off your house, but I, I'm all about, I think, I think having investment properties is amazing. My husband and I do, my family. I mean, I think it's, I think it is great. You just have to start slow. Like the first one Winston and I got this was, gosh, probably 10 years ago. It was a short sale condo in this like, kind of like sketchy part of Nashville. But it's what. We did it, but we got a deal. We saved up, you know, we, we bought it for really not a lot. Had to go do a lot of work in it. We sold it probably, gosh, seven years later when Nashville was on. And it was amazing. I was like, this is great, right? Like you have to start slow, start small. Don't start with a million dollar eight unit property because you're about to take on all those people. Like that's gonna be a huge headache. Like get some things under your belt. Start small and then start to work your way up, which is not as flashy, not as exciting, but it is, it is peace. That is a peaceful way to do this and not create chaos. Cause you guys are setting yourself up from chaos and maybe to ruin a relationship with your dad if this goes bad too.

[George Campbell]

I've rarely seen it where they go. Yeah, borrowed money from dad. It worked out perfectly. Paid him back and he was happy, I was happy. Usually it becomes, well, dad wants a piece of the pie now. He wants his money back because he needs to retire.

[Rachel Cruz]

That's it.

[George Campbell]

Which means I need to sell the property. Oh, and he wants appreciation and so he wants that too. On top of his hundred thousand, on top of interest and it just always ruins.

[Rachel Cruz]

Yeah. Or he gets family dynamics and he needs a hundred grand back. You know, and I don't know, there's just a, there's a lot, a lot of things.

[George Campbell]

So I would, I would hold off and just go slow and, and it's not exciting. I want to know.

[Rachel Cruz]

But it's worth it.

[George Campbell]

What is the 250 invested for? What is that earmarked for?

[Caller]

Well, what do you, what exactly do you mean by like what am I saving that for?

[George Campbell]

Yeah, you said you had 250,000 in the markets. I'm guessing that's not a retirement just in a brokerage account.

[Caller]

Yes, it's a mix of IRAs and then just the personal brokerage account. And that's just saving for retirement is kind of what I've been doing and kind of learning to trade it on my own and with the help from a financial investor and stuff.

[Female Caller]

So.

[George Campbell]

Okay, I was going to say if you have liquid money that is really earmarked for nothing and you want to take it and throw it at the house, the non retirement portion, you could do that and speed up the process, free up a mortgage payment and then you can stack cash fast.

[Rachel Cruz]

And you guys are amazing savers. So then yeah, stack up some cash and get 300 grand here. You know, like save that over the next five years or whatever your income is and then go buy a rental property with cash and that's it. You know what I mean? Like you can, you can do this slow walking it, but do it in the right order. Pay off the house if you have the money I would pay off your primary home. And the key is just stay away

[George Campbell]

from this is reducing risk. And right now we're just adding more and more and more risk. And your first real investment property to be a $900,000 eight unit just feels like we're biting off a lot here.

[Rachel Cruz]

Yes.

[George Campbell]

I mean for the purposes of helping this woman move right. With her ailing husband.

[Rachel Cruz]

Yeah. I mean eight different families, eight different situation. I mean that's a part time job right there of what you just signed up for as a landlord. So there's not passive income. It's a lot of work. A lot of work.

[Caller]

Sam.

[George Campbell]

If you're working the baby steps, the best and fastest way to do it is by using EveryDollar. It's more than just our budgeting app now. The plan is built right in. You can track your progress plus get personalized recommendations and coaching for your situation that will help you free up more money and work the plan even faster. It's like having one of us walking with you every day 24. 7 showing you the next right step and holding you accountable. So start every dollar for free. You can download it in the App Store or Google Play. Miriam is in New York City. Up next, Miriam, how can we help?

[Caller]

Hi, it's a pleasure to speak to both of you. Thank you for taking my call.

[George Campbell]

Sure.

[Caller]

My question is about life insurance. We pushed off getting life insurance way too long and I thought it would pretty straightforward.

[Female Caller]

I wanted to call vendor insurance and

[Caller]

my husband knew two people who kept bugging him that they wanted his home life insurance.

[Female Caller]

So I said, okay, we need a 20 year term. And I think we got a little

[Caller]

screwed by them because we ended up getting a policy which they said was

[Female Caller]

20 years, but it's extendable 20 years. Oh.

[George Campbell]

So after the 20 years you can re up at the current premiums for your age which is going to be two to five times higher.

[Caller]

But I think when we got the package, which was after, you know, we have 30 days to cancel or whatever. But it's fast with 30 days either way. Either way I'm going to replace it. But it goes up even before the 20 years. I think like there's a whole chart. It's hard to understand. I. Yeah, I'm not really sure.

[George Campbell]

Who'd you get it through, what company?

[Female Caller]

I. Northwestern.

[George Campbell]

Oh boy. Okay, you've said enough. I would cancel yesterday. It's not a scam. And they're, they're a company who does all kinds of financial products. But likely what happens here's what I've seen. It's mostly young guys right out of college who want some sales experience. And they sell the scummiest life insurance products to unsuspecting victims like their family and friends.

[Female Caller]

Right?

[George Campbell]

Yeah, well, that's what I've seen.

[Caller]

That's accurate.

[George Campbell]

So I'm not dogging the whole company.

[Rachel Cruz]

Yep, that's exactly.

[George Campbell]

But that's. That's my brother. Same thing happened to my own brother. Right. Some guy from college reaches out, hey, man, how you doing? And so I would get out of this and I would contact our friends at Zander because they're not going to sell you extendable term life insurance. Term life insurance, by definition.

[Caller]

Ready?

[Female Caller]

Reach out to vendor. Okay, so I just wanted to know, like, basically, should I take 20 years, should I take 30 years?

[Caller]

They said that Dave recommends a child

[Female Caller]

rider, which I never heard on the show.

[George Campbell]

Northwestern said Dave recommends a child rider.

[Female Caller]

No, no, no.

[George Campbell]

For what reason?

[Caller]

I don't know. I have four kids. That's why I never heard it from him. That's why I called, because I wanted to understand. And then somebody else, I'm getting very overwhelmed. But somebody else told me that we

[Female Caller]

should really do a disability rider.

[Caller]

I don't know.

[George Campbell]

There's a lot of riders. And when you hear the word rider, just think gimmick. And so all you need is term life insurance. 20 years should be enough. And here's how to think about it. In 20 years time, you should be self insured. If you follow the Ramsey plan, you become debt free, stay debt free. You have the emergency fund, you invest in retirement for 20 years, you pay the house off in 15 years. If you follow our parameters of a 15 year mortgage and all of a sudden you don't need the life insurance anymore once the term expires. So that's the goal. And if it needs. If you need 25 years to get there, then you get 25.

[Caller]

Well, and that's what I'm asking. How do I. We're in baby step 3B. We live in New York, so that's taking a while. I have four kids, one on the

[Female Caller]

way, and I'm not done.

[Caller]

My husband and I are both from very large families. So I'm thinking my kids are not

[Female Caller]

gonna be out of the house in 20 years.

[Caller]

Should I go longer?

[Female Caller]

Should I look for something in between to add?

[Rachel Cruz]

Yeah, I mean, you could see how much it is because. Are you guys in good health? Would you say?

[Caller]

Yes. Okay.

[Rachel Cruz]

Because that's the great thing about term life is it is so Inexpensive. And then when it comes up for time for renewal, you can always, you know, go back through and recheck things and make different decisions. Right.

[George Campbell]

You can always get additional policies. You know, in a few years now it's gonna be more expensive as you age. So your best. And they can help you run the math is going, hey, let's do a 25 year. Because it's going to end up being cheaper than doing a 20 now and a five later. And so I would confer with them, get the math on it. And always stick to term, no matter what, just term. And if it's 15, 20, 25, that's fine. And always get 10 to 12 times your annual income or your husband's annual income. And both of you should have your own individual policies.

[Caller]

Yeah. And you're saying not 30, 25 should. I shouldn't go more than that.

[George Campbell]

30 feels aggressive. If the kids are still in the house at that point, that's on them. And you guys will be multi millionaires.

[Rachel Cruz]

Yeah, I was gonna say because I mean. And yes, you'll be self insured in 25 years. Yes. Miriam, if you guys are investing 15 of your income, if you guys are working to pay everything off, I'm like, it's just that continues to build. That's where you build wealth. And in 25 years, what that's going to end up being is a lot of money. And so for the kids that are in the home, maybe it's one or two of them, they're gonna have plenty of money. The others should be out living their own lives, you know, and not needing your financial.

[George Campbell]

You'll have a village at that point to take care of each other. So I'm less worried 25 years from now about what life looks like if you follow the plan.

[Caller]

Exactly.

[Female Caller]

Okay, I can ask one more quick question.

[Rachel Cruz]

Sure.

[Caller]

About when your income goes up, you're sort of 10 to 12 times your income. So then do you buy another plan in interim for the difference?

[George Campbell]

You can, you can get a small policy for the difference. I wouldn't cancel the one you currently have and get a new one. You can always. Absolutely.

[Caller]

Would you look at that like in a year, if it goes up every

[George Campbell]

few years, it's a parameter. So if you get a $5,000 raise, you don't need to go out and get an extra policy.

[Caller]

Right.

[George Campbell]

But if you get a substantial raise and your lifestyle's changing, your expenses have changed dramatically, that's when you go, all right, we need to relook at this.

[Rachel Cruz]

Yeah, it's about every four to five years I would re. Look, and in the, you know, the kids situation too, changes it. I mean, for me.

[Caller]

Right.

[Rachel Cruz]

So, yeah, but I'd say yeah, every, every four to five years. I'm trying to think of Winston and I because we just re upped our life insurance maybe like two years ago or something. Because we still get it. I don't know. I like having it, you know, even if we're debt free and everything. There's a part of me that I'm like, yeah, we're young and healthy and it's cheap. And that's the great thing about that.

[George Campbell]

For what it costs. I mean, it's a great policy to

[Caller]

have done it a long time ago.

[Rachel Cruz]

Yeah, yeah. So, yeah. So anything fancy around it? Any words you don't understand? Miriam usually is like a. That's a red flag to me. They're adding things on if it's a young guy that's in the situation. And it's all these weird terms again that they're selling you this package. Probably not a great deal. Like the simpler the better. Just a 20 year, 25.

[George Campbell]

And they always want to prey on your emotions and the what ifs and well, a good parent would do this. You really want to take care of

[Rachel Cruz]

your kids and kids don't need life insurance. Only you. You know, I mean, all of it.

[George Campbell]

So it's meant to do one thing, which is replace income. That's it.

[Caller]

Yeah.

[George Campbell]

Your two year old is not bringing, you know, money into the house here unless he's like a Gerber baby making banks. So you're asking really good questions, Miriam and I love that you're taking care of your family in this way. Most people are going, what the heck are they talking about? I don't have any insurance. And so for everyone out there listening, you need term life insurance. If anybody depends on you, a spouse or children. And it's very affordable. And you can call our friends at Xander and get this done today, 800-356-4282 or go to xander.com they'll take care of you. Rachel and I both have our policies through Xander for our families and it's well worth the money.

[Rachel Cruz]

And Xander's great because they go and shop. They're a broker. Yeah. All different companies versus again, like a Northwestern. Right. To pick on them a little bit. But it's like, okay, it's just one. Or Aflac. It's just one. You know what I mean? I guess their car. I don't know if they do life

[George Campbell]

they probably do it all these days.

[Rachel Cruz]

Probably. But yeah, it's not just the one company that you're getting the price from. What Xander does, they shop all the companies to get you the best price of what you're looking. So.

[George Campbell]

And a lot of these now have no medical exams. Like if you're under, I don't know, a million dollar policy.

[Rachel Cruz]

Oh, really?

[George Campbell]

You don't have to go get the medical exam or. That's nice, you know, so that's. That's always nice. Not have to get convenient, have someone come to the house and get pricked and get your blood done or go somewhere and get the blood work done. I love it. And it's a good idea to get healthy before you shop for life insurance. Cut the bad habits.

[Rachel Cruz]

Be thinking about your diet the night before blood gets drunk.

[George Campbell]

It's like cramming for a test. You're like, well, if I don't eat bad today and drink a lot of water. Because you're like googling, how fast will my blood work be good if I cut? Sweet.

[Rachel Cruz]

I know. Yep.

[George Campbell]

That's a good reminder.

[Rachel Cruz]

Yeah. And I think those are some of the saddest calls, George, of, you know, we'll get, you know, a widower. Widower or a widow calling that their spouse passed away and they have kids and they're trying to pick up the pieces. You know, whether they're trying to find a new job or starting to work because they were a stay at home parent or trying to figure out child care for the kids so they can go to work. I mean, it's just it. And if there is no life insurance. Yeah. Then they are, they have nothing. You know, they're just stuck with what it is. And so it is.

[George Campbell]

And the sad part is a lot of people think they're covered because they're like, well, he has one through work. And I go, well, how much is that policy? They go, it's $50,000. I was like, well, great, we can get by for maybe six to 12 months.

[Rachel Cruz]

Yeah.

[George Campbell]

But what about after that? And so the goal here is if you make $50,000 and you get a $500,000 policy, you could invest that money and it would be able to spit off $50,000 with the average return in the market. And so that's the goal of getting 10 to 12 times your income is because the stock market historically has done about 10 to 12%. And so that's the reason for life insurance. That's the mechanics of it. And it doesn't take long. I know it feels like, well, I'm going to die sooner if I get life insurance. No, you're going to die regardless. Maybe tomorrow, maybe in 50 years. But either way, you need to sleep better knowing that your family's protected and our friends at Zander will hook you up.

[Dave Ramsey]

You spend hours researching before making a major purchase like a home or car. But it's also a good idea to put in the work searching for the right insurance coverage to protect your biggest assets. I recommend using Ramsey Trusted Pros. Whether you're looking for car, home, or any other type of insurance, Ramsey trusted providers have been coached and vetted to serve you like we would. Find what you [e-mail] insurance.

[George Campbell]

Welcome back to the Ramsey show and the Fairwinds Credit Union Studio. I'm George Camel, joined by Ramsey personality Rachel Cruz. We're taking Your calls at 888-825-5225. Katie is in South Carolina. Up next. Katie, what's going on?

[Female Caller]

Hey, thank you guys so much for taking my call. I hope y' all are well.

[George Campbell]

We are. What's going on with you today? How can we help?

[Female Caller]

So, I mean, I, I might sound crazy for you saying this, but I just can't shake the feeling that we're charging a little bit too much money. And I guess I'm looking for a way to justify my guilt or, you know, try and figure out how to process, you know, how fast do we want to grow and how should we scale our company?

[George Campbell]

Okay, so we. Is this your husband?

[Female Caller]

Yeah, My husband started this business before we got married, and I kind of joined him after that. We've been in business for about 11 years.

[George Campbell]

Cool. What kind of business is it?

[Female Caller]

It's a trucking company, so we do some hauling.

[Caller]

Wow.

[George Campbell]

That business has really taken off, hasn't it?

[Female Caller]

Yeah.

[George Campbell]

What do you guys bring in a year?

[Female Caller]

So last year, we brought in 290,000 sales, and then after paying everyone and expenses, we profited about 120,000.

[George Campbell]

And that's as a household. So that's your household income for the year.

[Female Caller]

So that's not the household income. Most of that stayed in the. That was just what the business profited. We paid ourselves about 50,000.

[Caller]

Oh, wow.

[George Campbell]

And that's together. That's total. That came to you guys.

[Caller]

Wow.

[George Campbell]

All right.

[Female Caller]

Yep. Correct.

[George Campbell]

So where did this price hike come into play and why?

[Female Caller]

Yeah, so we our pricing is very simple. We just match what the competition is around us. We don't have a lot of competitors. And, you know, we're one of the Few people that do our special type of hauling in our area. So we really have just always kind of matched what market price is. But I'm kind of looking at case by case, job by job, and realizing that the range of profit we have on each job is super wide. So sometimes it's a small amount of profit, but a lot of the time it's quite large. So I'm just kind of. When I brought up the idea of restructuring how we do our pricing and, you know, taking it from super simple to trying to be a little bit more specific so we can afford to help some people that usually say, oh, no, you're too expensive. Well, you know, if we were willing to make 40% profit on that job instead of 60, maybe that person would have said yes.

[Rachel Cruz]

Because you feel like you need more business? Do you feel like you need more business?

[Female Caller]

Well, so our work is very seasonal. The demand in season is so high we can't keep up with it. But then during the off season, it's not really a thing. So we, you know, we obviously slow down a lot, and that's. We're blessed that, you know, able to work very full time over time. Six months out of the year is enough for us to live off of. And then the rest of the time we can work on side gigs or spending more time with family, which is great. So, yes and no, we definitely don't need more work. We can't handle it in the summer. But the idea is obviously to grow so we can do even more during the summer, if that makes sense.

[Caller]

Got it.

[George Campbell]

So is there a moral profit margin in your mind that it's like, anything above this, it's immoral to charge?

[Female Caller]

Well, I don't have a specific number. It's more the concept of, you know. Is that even a valid question?

[George Campbell]

Well, I mean, if you look at prices, is his reasoning. Hey, everything's gone up. Everything costs us more fuel, insurance, maintenance, tires, labor, permanents. Like, that's all gone up. And so. So it's not like he's tripling the cost just for fun. And you guys are bringing home 50 grand household.

[Rachel Cruz]

And it's a specific type of service that you said there's not a lot of competition and you have high demand. Yeah.

[George Campbell]

I mean, and not a lot of supply, which means you can charge more. And it's not like you're hurting anybody. They're happily paying you for this service that they can't do themselves.

[Female Caller]

Yes. The more I say it out loud, the more I know I'm kind of making My husband sound like a superstar in business. But you know, I just always back to, I always go back to the few cases where people have asked us for help and you know, we give them our price and they're like, oh, you know, that's way over budget. And in my head I'm saying I really know I could have helped this person out, I could have met their needs. And I, you know, I chose not to because I wanted to keep that profit high.

[Rachel Cruz]

Yeah, I hear you. So I wonder if. Because, you know, even here at Ramsey, for instance, like, we give stuff away a lot.

[Caller]

Lot.

[Rachel Cruz]

Whether it's tickets to a live event, books, you know, and some stuff. It's like very nice coaching, you know, one on one coaching that will pay for people's sessions. Like, yeah, we will have life with an open hands business wise. But we're only able to do that because we are making a profit on the other end that is feeding a thousand people that work here and their families and all of it. Right. So, so there, there is room to be, if there is room to be generous. I would talk to your husband about that and say, hey, you know, and I hate to. This sounds so like legalistic and I don't mean to be this like for formulaic about it, but I don't know, Katie, I'm just thinking like four different situations, you know, throughout the summer when you guys are in high demand and people like, we need you, but I can't afford that pricing. You know, are there four times that you can say and you guys agree on that? Like, hey, I just feel something in my spirit that I'm supposed, that I'm supposed to extend some grace to them and help them. And so that way you're at least in the practice of doing that when you feel led. But it's not changing the whole structure of the company because I don't feel like you guys are doing something wrong or immoral, to George's point. And you know, you're, you know, you guys are bringing home 50k a year out of the.

[George Campbell]

We're far from being greedy here.

[Rachel Cruz]

Yeah, yeah. It's not like you're making, you know, 5 million and you're like, oh my gosh, I feel like we're overcharging everyone.

[George Campbell]

Most of your customers are making more than you. And so that's the other thing to think about here is you guys also need to put food on the table and you have financial goals and there's nothing wrong or immoral about making money. Have you screwed anyone over? Have you lied? Have you cheated?

[Female Caller]

Right. No. Yeah, absolutely not.

[George Campbell]

And so it's okay to say, this is what our service is worth and we're going to charge it. And if you can't afford it, that's not a slight on them. It's just saying, hey, you need to go somewhere else that you can afford. And so I can't get everything that I want. There's things that I can't afford and I don't expect that business to go well. Can you just bring the budget down for me? This is not a charity. If you want to start a charity, go for it. You can open a non profit and do all kinds of charitable giving.

[Rachel Cruz]

Yeah. But I wonder, could she kind of like scratch this itch a little bit within it? Right.

[George Campbell]

I like your idea of saying, hey, there's going to be a customer that comes our way, that I just, my heart grieves for them and I want to help them. And that's totally great to say. We want to be generous to this many customers a year or when it comes up, we're going to give some people a break. But I don't think you also need to go, well, whatever your budget is, we'll try to meet that. Because that's how you go out of business.

[Rachel Cruz]

Yeah. I mean, any industry, Katie, there's gonna be people that can't afford. You know what I mean? I'm like, I just think about, I don't know, that's why I thought social media. I'm like people that, you know, need help with social media. There's people that do that as a job that charge insane money because they're really good at it, or people that are starting out and don't charge much and you couldn't afford, you know, the high end. So that's okay. It's a service they provide. And just because they charge a lot, you know, doesn't make them a bad person. It means they're probably really good at their job or they found this niche area of life, which is what you guys have done. So nothing bad, but I would say lean into when you can. And it's not the whole business model, but if there's moments to say, hey, I want to be generous, in this instance, you and your husband get on the same page with that and maybe that'll kind of help free up your spirit some and that generosity.

[George Campbell]

Think about it this way. If you guys charge more and you make more, that gives you the freedom to be more generous. Generous when the time comes without it being a loss. For you. And so I, I think there's nothing wrong with that. And listen, if you charge too much, you'll go out of business eventually. And so you'll know when the price is right, when you have the right amount of supply and demand happening. And so I'm, I don't think anyone's right or wrong here. I think we need to meet in the middle and understand you want to be generous and he needs to pay the bills. Both of you are right.

[Rachel Cruz]

Hey, guys, I've got big news. The Ramsey show is going on tour. And this is your chance to be more than just a listener. You get to be part of the show. So hear questions asked live and experience the kind of momentum that only comes from being in the room. We'll be in Charlotte, Denver, Phoenix and Anaheim with a limited number of seats in each city. So last fall we completely sold out in 72 hours. So do not wait. Get your [e-mail] events or by clicking the link in the show notes.

[George Campbell]

CJ's in Phoenix. Up next. Welcome to the Ramsey Show. CJ, how can we help?

[Caller]

Yes, how y' all doing? Thank you for hosting me. I wanted to get your input and ways to get out of my debt with the credit cards, student loans and a car loan and my house payments. I think when I first got the house, I was making a certain amount of money and I thought it was a good idea to get this two story house. But per paycheck, it's been the house payments. What I paid to escrow is a whole check and so it's half your income check. Half my income? Yes, sir.

[George Campbell]

Your take home pay.

[Caller]

Okay, my take home pay.

[George Campbell]

What do you make?

[Caller]

I make before taxes about 103,000.

[George Campbell]

Okay.

[Caller]

Are you single, married?

[George Campbell]

Married. Okay. Is your spouse working outside of the home or at home?

[Caller]

She, we just, she just had a baby, so she's not working currently.

[George Campbell]

Congrats. That's exciting.

[Caller]

Thank you.

[George Campbell]

Okay, what's your total debt?

[Caller]

My total debt with the house payments, I want to say, not including the mortgage.

[George Campbell]

Just give us the consumer mortgage loan,

[Caller]

credit card, student loans, about 110,000.

[George Campbell]

How much is the car loan?

[Caller]

The car loan is only 5,000. The bigger one is the credit cards and the student loans.

[Rachel Cruz]

What are those break out to be? How much are the student loans?

[Caller]

The student loan is about 40,000 on the government one and 5,000. A Texas loan. I don't, I think private one.

[Rachel Cruz]

Okay.

[Caller]

And the credit card comes out to be all together about 60,000.

[Rachel Cruz]

60,000. How many credit cards do you have it?

[Caller]

Five in between. Five. It's the 60,000.

[George Campbell]

Okay, well what did the 60K get spent on the credit cards and like over what period of time was this?

[Caller]

It's been over the last, I want to say about year and a half where once I got the clinical coordinator position. Not that the pay. I came home as a full time nurse and to get this position and I was doing a travel assignment so I was getting paid more. So that's how I thought in my mind that I was just going to stay together, I mean for a good amount of time traveling. But then we had our first kid and I was, you know, off of home.

[George Campbell]

So your income went down but your spending stayed high. The lifestyle creep never went away and so you were just spending on the cards.

[Caller]

So the house payment was taken, you know, the one payment. And to you know, as a meeting,

[George Campbell]

speak directly in your phone. Zj, we're having a hard time hearing you.

[Caller]

Oh, sorry. Okay. The. So once the house pay. Once I came full time and the house payment was half of what? You know, half of one. One take, one check per month. That's when I was, you know, I'll put it on the card and hopefully I'll, you know, be able to pay it. And it was just.

[Rachel Cruz]

You're putting the mortgage on the card?

[Caller]

Not the mortgage. It was just everything else.

[Rachel Cruz]

Everything else. Okay.

[Caller]

Yes.

[Rachel Cruz]

Oh, because you spent one full paycheck on the mortgage and then anything else lifestyle just went on the card.

[Caller]

Yes, ma'. Am.

[Rachel Cruz]

Okay.

[George Campbell]

Are you and your wife ready to have a very different life?

[Caller]

Yes, sir. We talked about it and we always listen to the show and we always just talk about we need to do better. And with the credit cards, most of them are through to Chase bank and I did call to tell them that I can't pay anymore. So they put me on the plan. But even with that is about just Chase. A loan is about 1200 that I'm paying okay with.

[Rachel Cruz]

With everything CJ with, you're paid twice a month with the mortgage, the credit card bills, your regular utilities. I mean everything. I'm assuming you're coming up short every month if you stayed current with all of your debt.

[Caller]

I do come short. I did pick up this year, I did pick up a home health job which usually it's about 4 or $500 more. And that gives me the ability like that 500 to pay what you need

[Rachel Cruz]

to say to keep your head above water. But, but that's it though. There's nothing extra to be Throwing at this debt to get out of it. It's just. That's just to pay the minimum payments.

[Caller]

Yes, ma'. Am. That. That's just month to month. And you know, it's.

[Female Caller]

Yeah.

[Rachel Cruz]

How many hours are you doing that extra job?

[Caller]

That's per patient.

[Rachel Cruz]

Okay.

[Caller]

Right now it's. I have about three, four patients. Sometimes I'll tell them my days off and they'll try to give me, you know, PRN jobs to just go see a patient, but they don't come often. It's just.

[George Campbell]

It's not reliable.

[Rachel Cruz]

Yeah. So, I mean, that's a good thing to have because I feel like it pays well, but I would have another side hustle because. Yeah, cj, it's something. It's. It's got to shift from the income perspective. I think you guys need to cut your lifestyle if you haven't already.

[George Campbell]

Yeah. No eating out, not. No investing, no saving. All we're doing is trying to pay down the smallest debt. So take that smallest credit card that you have and we're gonna knock that out. Or if it's the car loan, that's the smallest debt or the student loan, we're knocking that balance out first and make minimums on the rest. So we're gonna try to stay current on all the bills and throw extra at the smallest debt we have. That's called the debt snowball method, which

[Rachel Cruz]

will either be that $5,000 private student loan or your $5,000 car, or if there's a. If there's a credit card smaller than 5,000, you're gonna attack that first.

[Caller]

Okay.

[George Campbell]

Is there anything you could sell to come up with some cash to speed this up?

[Caller]

Up everything else we. I've looked and it would just be just minimal stuff, shoes. But you know, it's.

[George Campbell]

What is the car worth? You said you owe five on it. What is it worth?

[Caller]

It's worth about 3,000. Oh, it's a g. But the miles, it's. I have, I think right now it's about 155,000 miles on it.

[Rachel Cruz]

How long ago did you write? Have the baby?

[Caller]

A couple months ago.

[Rachel Cruz]

Okay. You know, I would have a goal for you guys because again, $500 a month shifts, you know, you guys, it. It's so helpful. So I'm thinking for her, what could she do from home to make 500 bucks a month? And that could include selling stuff. She could make a part time job of selling your shoes, cj. Making some money, you know, but for real, like what, what, what. What can she do? And she doesn't have to start today, but maybe you guys look up and say, okay, you're gonna start working CJ Extra, you're cutting lifestyle. And then we're gonna look up and I don't know, I'm making this up. June, she's gonna start doing something through the end of the year, bringing home an extra five to a thousand. 500 to a thousand dollars. Like, I think as much income as you guys can get in, rolling in, which is going to be exhausting. It's going to be so hard. It's so frustrating. But that's gonna make you guys get out of debt that much faster because it's not fun right during this process of sacrifice. But you guys either have to do it really intensely and just go all in, or you kind of just dabble around the edges and you guys will keep it around for another four to five years.

[George Campbell]

Because here's the truth. If we continue at this pace and you can only throw 100 or 200 bucks of this debt, you're going to be in debt for the rest of your life.

[Caller]

Life.

[George Campbell]

And so that's why we're saying six figure debt. You need a massive six figure income to pay this off in a reasonable amount of time. Two, three, four years. That's the goal here of intense sacrifice. Not 20 years of just trying to make our way through and make the minimum payments while the interest racks up. So that's why we want you to have a sense of urgency to get this income up. And you've got a lot of skills that are very valuable. And so if you can go make 150 grand, 200 grand, and she makes another 50 grand, even if the kids are in daycare for a season, they will survive. The goal is for you guys to get above water here.

[Caller]

Okay? So getting our income up, that's the key.

[George Campbell]

Getting expenses down as much as we can. But even then, your income has to go up in order to knock this out quickly.

[Caller]

Yes, sir.

[George Campbell]

So hang on the line, C.J. i'm going to send you a copy of my book, Breaking Free from Broke, along with every dollar. That's our budgeting tool. And you and your wife tonight, you're going to lay out, here's our next paycheck. Here's all of our expenses. Here's our plan to make the most of every dollar.

[Rachel Cruz]

Yeah. And we always caution against moving. I mean, honestly, because it's such a big expense. It's, it's like one of the biggest things to uproot your family out of a home. But I would consider it's half of your income. And unless your main job, you're going to see significant raises in the next one, two, three years. If there's not, and it's looking pretty plateaued, I mean, golly, that's an extra $2,000. If you get it under that to that 24, that 25%, that's an extra two grand a month that you're, you know, that you could save if you guys changed your housing situation, which I know is, that's a big ask, but

[George Campbell]

it changes the whole timeline. You guys can become homeowners again once we're not broke. But right now, that 50 mortgage, it's eating your lunch and hurting your ability to pay down the debt. So hang on the line, C.J. we're going to get you those resources. Wishing you guys the best with this debt payoff.

[Dave Ramsey]

Hey, guys, Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now, now, you can get that same kind of help anytime with Ask Ramsey Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple and free to use. Go to ramseysolutions.com and try Ask Ramsey today. That's ramseysolutions.com.

[George Campbell]

The Ramsey show question of the day is brought to you by WireFi. You don't have to stay stuck in defaulted private student loans forever. WireFi helps borrowers take back control with affordable refinancing options that actually work. Learn more@y refi.com Ramsey that's why R E F y.com Ramsey not available in all states.

[Rachel Cruz]

Today's question comes from Lucy in Oregon. She said, I'm concerned about being a target of deed fraud if we pay off our mortgage, if we keep our current mortgage, the bank would have to notify us if someone tried to take out a second mortgage to steal our equity. We're both in our 70s. I am retired and my husband plans to retire soon. The balance on the mortgage is $48,000 and we have the funds to take out of our 401k to pay it off. What should we do?

[Caller]

Wow.

[George Campbell]

Okay. Well, I mean, deed fraud, it does exist. But I'm not going to be so paranoid that I keep my mortgage around for it.

[Rachel Cruz]

Do it right because you can always, you know, if God forbid, that happened, it's not super common. More when you're like, you know, buying homes Making sure the deeds, you know.

[Female Caller]

Good.

[Rachel Cruz]

And I don't know, there's something.

[George Campbell]

We bought a home recently. We got owner title insurance, which protects you against that.

[Rachel Cruz]

Yes.

[George Campbell]

And so if you're worried about it, I would look into one of those policies.

[Rachel Cruz]

Yeah. To do that, you can sign up

[George Campbell]

with your county and get deed alerts as well. So that's also one way to protect against.

[Rachel Cruz]

You can also, you know, if it did happen, God forbid, you're not going to be on the line for it because it's fraud. And so you can go through the bank and, you know, maybe some, I don't know, lawsuits stuff, but at the end of the day, you're not going to have to owe it because it's fraud at that point. Point.

[George Campbell]

Yeah. So I wouldn't. I wouldn't be so worried that I avoid paying my house off. That's wild. You're in your 70s. There's a much more risk with this mortgage hanging around than there is that you guys experience deed fraud.

[Rachel Cruz]

Y.

[George Campbell]

So I wouldn't worry about that. I would just pay it off and do your due diligence to stay protected. You know, freeze your credit, check the records with your county regularly, get the owner title insurance if you can. All of that good stuff. But it's a good question, and it's a valid concern, so thank you for that. Allen is in Colorado. Up next. What's going on?

[Caller]

Alan, thank you for taking my call. I have a question about a 529 account that my wife and I have for our son. When he is finished with college, which is just a couple years down the road, there'll be approximately 120,000 left in the 529 account.

[Rachel Cruz]

Oh, wow.

[George Campbell]

Way to go.

[Caller]

I have. Yeah. Yeah, it's pretty strong. I have an opinion of what to do with it, but I was just curious to get your take.

[George Campbell]

How old is the 529? When did you open it?

[Caller]

Oh, boy. Our son is 20. So let's say 20 years ago.

[George Campbell]

Oh, great. I was going to say, there's the. With the new Secure 2.0 act, you can roll over up to 35 grand if it's been open for 15 years. You know, you can use that periodically. You can't do all 35 at once, but up to the Roth IRA limit, you can start funding that. So that's one option.

[Rachel Cruz]

Yeah. Do you have other kids, Alan?

[Caller]

No, we don't.

[Female Caller]

Just.

[Rachel Cruz]

Okay. It's just this. Yeah, well, if you do that, you know, that's 35 out. So you got about what, 85 or so. 95 left.

[George Campbell]

You said you had a plan already. I'm curious as to what you wanted to do.

[Caller]

So. So my thought is, keep it. Keep the 529. We're the Guardian of it. Put it in his name. He's an adult now. But don't let him touch it. Just have it be there. So it's generational. When his kids are ready to go to college, that's going to be a pretty large sum. When his kids. Kids get ready to go to college, it'll be astronomical. It's something that you could really just.

[George Campbell]

That's true. A lot of people don't think about that. It becomes like an endowment basically, for your own family. Generational wealth that no one ever goes into debt for education. And that's personally what I'm doing. A lot of people go, well, I don't want to overfund it, because what if they don't go to college and I go, if I overfund it, they're gonna love. Oh, great, great Grandpa George for setting up this 529 many moons ago. And can I do some math for you? Your kid is 20, right?

[Caller]

He's 20.

[George Campbell]

So let's say he has a kid at what, 25? Is that fair?

[Caller]

It's optimistic, but sure.

[George Campbell]

Okay. Should we go 30? Is that more realistic? Yeah, go 30 plus 18 years. That kid then grows up.

[Rachel Cruz]

Yes. So your son will be 48 when your grandson. Granddaughter goes to college. Theoretically, how much would be in the account?

[George Campbell]

So from 20 to 48, if you just left, let's say 90 grand in there. Right.

[Rachel Cruz]

Didn't do anything, you never contributed another

[George Campbell]

dime, you'd have $1.4 million when he's 48. I hope that's enough to cover college at that point.

[Caller]

And something too, I was thinking is even if his kids don't want to go or do go, and there's extra at 65, correct me if I'm wrong, he can start using that for his own retirement with no penalties.

[George Campbell]

Yeah, there's a lot of stipulations with the 529. And even if he used it in before then, you know, you'd pay the 10 penalty. But other than that, it's not like wasted money. Yeah, you'll pay something thrown down the toilet. So I think you're being very wise with this. And I love the idea of creating generational wealth. And a lot of people don't realize the definition of beneficiary family is pretty loose. And so siblings, nieces, Nephews, future kids, yourself, your spouse, a grandchild. There's so many options here that you could bless someone with in your family.

[Caller]

Family, agreed. That's right.

[George Campbell]

So let's say you got a brother and they're like, hey, they didn't prepare, but the kid doesn't deserve to go into crippling debt just because of that. I'd love to transfer this to them. You can change beneficiaries at any time at that point.

[Caller]

Yeah, yeah. There's a lot of ways you can go with it.

[Rachel Cruz]

Yes, for sure. Well done, Alan. That's usually not. It's usually the opposite problem that we talk to people about.

[George Campbell]

So it's like a parent plus loan. This is the exact opposite. So I'm curious, how much money did it cost for your kid to go through school?

[Caller]

So, first off, something else, too. We owe it to Dave Ramsey from, like, 2005. You all have been a blessing to both my wife and I. So much so, we actually taught many, many FPU classes.

[George Campbell]

Thank you.

[Caller]

So. Yeah, you're welcome. You're welcome. So this 529 account, we actually showed him how compounding interest works. We stopped investing in the 529 when he was a freshman in college at 150. That's about where it was at. He's gone through three years of school, and it's at 159. Wow.

[Rachel Cruz]

It's crazy.

[George Campbell]

So you're telling me that it was growing faster than you were withdrawing?

[Caller]

That's what I'm telling you.

[George Campbell]

That's incredible.

[Rachel Cruz]

That's amazing.

[George Campbell]

And it sounds like he went to a reasonably priced school and maybe even got some other scholarships,

[Caller]

a few scholarships. He wasn't, you know, he was an Albert Einstein, but he did okay. And. And yeah, it was. It was a state school, so. 20, 22, 23,000.

[Rachel Cruz]

Totally.

[George Campbell]

That's incredible.

[Caller]

Yeah.

[Rachel Cruz]

That's the dream, Alan. Well done. Well done. We just applaud you. I mean, honestly, that is, if you're

[George Campbell]

in the family tree of Allen, you should be thankful right now.

[Rachel Cruz]

That's right.

[George Campbell]

Pretty awesome. Awesome. Thank you for the call. That's. That's a cool kind of case study. And what actually happens when you do it right.

[Rachel Cruz]

Yes.

[George Campbell]

And so I always recommend get started early on that 529. Even if it's 100 bucks, 200 bucks, 300, 400, 500. Now you're talking six figures in there by the time they're 18, for sure.

[Rachel Cruz]

And the college conversation, I feel like, has been around a little bit. Changing.

[Female Caller]

Right.

[Rachel Cruz]

That college is changing. We don't know what it's going to look like.

[George Campbell]

Are we all going to be YouTubers and AI is going to do all

[Rachel Cruz]

the work for us? Yeah, that's right. Like we don't know know. But just remember it's not stuck in there to your point. It's not like you're, you know, it's an insane amount. If you were to pull it out, just say like God forbid, you're like, listen, we don't, we don't need this at all. But we need the cash. So we're gonna take the penalty. Okay. So then you do that, right and you pay some of the penalty, but then you have your cash. It's not like you lose it completely.

[George Campbell]

So. And people ask, well what if I want to invest for my kid for something else other than school? I say great, do the 529. Don't trade those dollars for, for investing over here. If you want to invest on top of that, you can just open a brokerage account in your name, a non retirement account and put money in there. I'm not a fan of putting the accounts in your kids names because they legally then have access with the, you know, the ugma utma. At 18, this kid might have 120 grand that's legally theirs. That's frightening. I don't know if you know, or any 18 year olds, most of them cannot be trusted with $120,000 pile of money. Most adults can't be trusted with that.

[Rachel Cruz]

Yeah.

[George Campbell]

And so I like the idea of me being able to control how much to give to that child for a, you know, a wedding or a down payment or a car, whatever it is to help them get a leg up.

[Rachel Cruz]

Yeah. Delayed gratification. For a 45 year old, 50 year old, it's probably a little bit more embedded than a 18 year old.

[George Campbell]

So they need to, their prefrontal cortex is not yet fully, fully there. So that's personally what I'm doing for my kids. I got the 529s for each of them and I got the brokerage accounts so they'll be very thankful one day. When homes are $4 million and your grandkids.

[Rachel Cruz]

And my grandkids, great, great, great Uncle George.

[George Campbell]

That's so weird to think about. But I think Grandpa George, I'm going to settle into that.

[Rachel Cruz]

I love it.

[George Campbell]

I'm going to be cranky.

[Rachel Cruz]

You're going to be like George Banks on like Steve Martin on Follow the Bride.

[George Campbell]

Oh, that's a good one. I thought you were going George Bailey. A lot of good Georges out there in movies.

[Rachel Cruz]

Oh, It's a Wonderful Life. That's a good one, too.

[Caller]

Sam.

[George Campbell]

Our scripture of the day, Luke 14:11. For all those who exalt themselves will be humbled, and those who humble themselves will be exalted. CS Lewis said, humility is not thinking less of yourself, but thinking of yourself less. Poetry right there. That's good.

[Rachel Cruz]

Great quote.

[George Campbell]

All right, let's go out to Dave in Denver. What's going on, Dave?

[Caller]

Hey, guys. Thanks for having me. I'm a loan officer for Mortgages. My question is, I often get clients. They come to me needing a mortgage. Most often, it's older clients in this situation, and one spouse has passed away. I have access to their assets or see what they have. And it's a vulnerable situation. And really, they don't need a mortgage. What they need to do is sell some of their assets to get. To get a home, to downsize. I'm just looking for advice on how to bridge that gap with that and how to properly communicate that to them.

[George Campbell]

So you see this going to a dangerous place, and you're like, how do I help these people when my job is to lend them the money that they're approved for?

[Caller]

Yeah. And it's not overly dangerous sometimes, but, like, you know, they have one spouse, maybe had their whole life collecting these assets. And so when I come along, I say, hey, maybe you should look at selling somebody that's kind of a, you know, my husband or whoever put all this together, this whole life. Who are you to tell me to sell this kind of thing?

[George Campbell]

Yeah. You feel like, hey, that's outside the boundaries of my job. But it's like your heart is aching for them to be like, hey, you really need to go do these things.

[Caller]

Yeah. So I'm looking for words of wisdom on how to appropriately navigate that.

[George Campbell]

Well, I think you have the right heart. That's the most important part, is your motive and your spirit and the tone in which you deliver that.

[Caller]

This.

[George Campbell]

But I think just starting with, hey, I want to make sure this house fits your life, not just your approval amount. And as I'm seeing it here, I can see the assets over here. I can see what the mortgage payment's going to be. I think things are going to be tight unless you make some moves, make some sacrifices here, and you could offer, hey, one recommendation you could pursue is selling these assets, which could do xyz.

[Caller]

Yeah. Yeah.

[George Campbell]

And then it's just. It's not. You tell them what they have to do. It's just saying, hey, hey, I try to, I treat people how I want to be treated. And I can see all of your information here. And this is what I'm seeing.

[Rachel Cruz]

Yeah. And it's kind of a, you know, for them, take it or leave it kind of thing. But it's almost for your conscious, you know, you're like, man, I see this and I just want to say it out loud. But at the end of the day, they're going to be the ones, you know, making the decision. And if they don't take that advice and they do something else, that's okay. That's, you know, they're adults and they can do that.

[George Campbell]

At least you're sleeping well at night knowing that you said your piece.

[Caller]

Oh, yeah, absolutely. I just trying to figure out how I sprayed the Dave Ramsey throughout my entire career.

[Rachel Cruz]

Yeah. Love it. I love it.

[George Campbell]

It's hard because you want like, well, Dave says, but you can't do that. It's not going to work. And instead you, you sort of get to the root of it. You say, hey, the families that I see thrive when it comes to buying a home. They have margin outside of their mortgage payment to live and to save and to have fun and go on vacations. And right now, what I'm seeing with your payments, it's going to be a lot of your income taken up by this payment. And so you can go, hey, here's the approval amount. But here would be, let's run the numbers and see what would be a comfortable amount. And then you can kind of get to the principles without saying, well, Dave recommends 25% of your take home pay on 15 year fixed rate mortgage. You know, they get to choose the wisdom at that point.

[Caller]

Yeah, Big Dave. I'm Little Dave. That's Big Dave.

[George Campbell]

Little Dave. Big Dave. I like it. That's true.

[Rachel Cruz]

It's all Dave. I mean, honestly, that's, it's really, it would be so impressive and it would actually garner a lot of trust, I would think, from the people you're working for. Because in some situations, I'm assuming, you know, you're asking for them to pay less for a home, you know, and that's money out of your pocket too, right?

[George Campbell]

If they choose less loan, less origination fee, less commission. All of it.

[Rachel Cruz]

Yeah. I mean, all of it. So there's something I don't know really trustworthy for you to say because you're not, not, you're not doing it the other way to be like, hey, you should spend more here with me. So I Can make more. In some of these cases, it's. It's the opposite. And so they shouldn't be offended by that. Right. There's. I mean, yeah, there's. I don't know, a lot of kindness in you even doing that.

[Caller]

Yeah. Well, thank you.

[George Campbell]

Absolutely. Thanks for actually being, you know, serving well and serving your customers well and being one of the good guys in the mortgage world. That's fantastic. Rachel. I've got a friend in the mortgage world and he, knowing what I do, he's like, dude, you would not believe the debt to income ratios people show up with. You're like, this is bonkers. Like, no one should be giving them this loan. And sadly, a lot of the banks, you run it through the computer and it goes, yep, give them the loan, that's fine.

[Rachel Cruz]

Yep, yep, we'll just do it.

[George Campbell]

And the bank doesn't always care about the reality of your financial situation, which

[Rachel Cruz]

is wild because that's part of what got us into the biggest housing disaster in zero. Wait is because of that kind of stuff too.

[George Campbell]

Lending people money, giving it an amount like candy.

[Rachel Cruz]

I know. Keep on doing it, though. Oh, my gosh.

[George Campbell]

All right, let's go out to Brian in Alaska. Brian, what's up?

[Caller]

Hi. Can you hear me?

[George Campbell]

Yes, loud and clear.

[Caller]

Okay, sweet. So I am in an interesting situation where I actually live in my dad's second home or my parents second home here in Alaska while my family lives out of state. And I'm curious. I feel like I'm getting a smoking good deal on rent here. I just rent a room, but it's way cheaper than I could rent anything else in the area. How long should I stay here saving up for a house? How long should I let this good deal ride? As long as they're willing to give it to me.

[Rachel Cruz]

That's a good question. How old are you?

[Caller]

28.

[Rachel Cruz]

28. Okay. Okay. Are you married?

[Caller]

Nope.

[Rachel Cruz]

Single? Single. Okay. Any debt? Consumer debt.

[Caller]

I owe $12,000 on an airplane, but that's in, like a leasing company that I own.

[Rachel Cruz]

Okay, 12,000 on it. And that Is that it? No credit cards or car loans?

[Caller]

Nope.

[Rachel Cruz]

Okay, great. And how much credit card and how much do you make a year?

[Caller]

Last year. So I started a new job last year. Six months, I made about 55,000. And then this year for the. For the whole year, I guess about 120 to 140.

[Rachel Cruz]

Good for you. Okay. And how much money do you have saved?

[Caller]

I currently only have like $3,000 saved.

[Rachel Cruz]

Okay.

[George Campbell]

How long have you been living in this? Your Dad's place.

[Caller]

So I've been living here about three years. I actually used to own half of it, and then I sold out my half to my stepmom. That paid off a lot of my debt and was able to give me a down payment for this airplane that I lease out.

[George Campbell]

Okay, so this airplane, is this a business you have where you basically rent out the airplane?

[Caller]

Yep.

[George Campbell]

Okay, what do you make from that? Is that on top of your 140?

[Caller]

That. That's completely separate. So I make about $40 an hour every time it flies. And right now it's pretty much just all going back into the business for improvements for the. For the airplane. Got it. I'm paying the principal for. I get a loan from a friend of mine, basically zero interest that I pay the principal out of my personal funds. And then what the airplane makes just kind of gets circulated back into making improvements for the airplane.

[Rachel Cruz]

Okay, gotcha. Okay. So, yeah, the whole living, you know, with parents or on their property or whatever, you know, for a period of time, I'm totally fine with it. I think after a while, there needs to be a point that you, you know, go and you're on your own, and you're living, you know, on your own, doing your own thing. So what worries me is, and I know you just got this job six months ago, you said, so I'm not gonna harp on it too much, but you've had a. You know, you said, I'm getting a great deal, all this, but you only got $3,000 saved. So there's a part of me that's like, you know, people have this idea, I'm gonna go live really cheaply at my parents, but then they don't take what they would have paid in rent or more of what they're saving and actually save it. You know, they end up spending it on restaurants and going on trips and stuff. And so then. And it ends up being this point of, like, okay, you weren't using it actually to benefit yourself or to get you further financially. You were just using it for lifestyle in the moment. So if you're doing this, I want you to be really, really disciplined, and you make a great income. And so, honestly, Brian, I mean, you're a single guy, you're living in Alaska, and basically no rent. If you. If you could live on, I don't know, 40 grand a year or something crazy, like, you could bank so much money, not only pay off this airplane,

[George Campbell]

but you could have six figures saved up.

[Rachel Cruz]

Yes.

[George Campbell]

You know, by the end of the year, maybe into a little into 27 really quickly.

[Rachel Cruz]

And I would. I would use that for a down payment on a home, because as soon as you can get something in your name, building equity, that's the best route for you, Brian. So I'm okay with it for a little bit, maybe a year or two, but I would be so disciplined in that to actually put that money and that savings towards your future and a future home for yourself.

[George Campbell]

I would just say, hey, dad, I'm going to be out in my 30th birthday, and that's the plan. And you go, I'm going to save up like a madman. Until then, I'm going to live off 1000 or 1500 bucks a month, and the other six, seven grand is going to go into savings for that house. Build for your own future and independence, and you will not regret it. That puts this hour of the Ramsey show in the books. Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of peace, Christ Jesus.