Break The Cycle And Build Wealth

Summary

The Ramsey Show – Break The Cycle And Build Wealth

Episode Date: March 30, 2026
Hosts: George Campbell, Jade Warshaw
Theme: Taking control of your finances, overcoming mistakes, and building a stable future by breaking destructive financial cycles. The episode is listener-driven, with callers asking real-life money questions and the hosts providing direct, actionable advice with a blend of empathy and tough love.

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Episode Overview

This episode is all about practical strategies to break the cycle of poor financial decisions, address tough money conversations, and set a course for building lasting wealth. George Campbell and Jade Warshaw tackle complex scenarios—from debt secrecy in relationships and boundaries with parents, to breaking paycheck-to-paycheck patterns, setting kids up for success, and making sense of investments and homeownership. Their core message: transforming your relationship with money requires intentionality, honesty, clear boundaries, and a commitment to growth.

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Key Topics & Discussion Points

1. Navigating Financial Transparency in Relationships

Caller: Marie (Washington DC)

Timestamps: 00:38–09:01

• Issue: Marie’s boyfriend refuses to discuss his debt or finances even after four years together.
• Advice:
  • Trust issues likely stem from past interactions, especially a strict loan repayment.
  • Jade: “Financial transparency is emotional transparency. You can’t have one without the other.” (06:00)
  • Moving in together/co-owning property without marriage often leads to power imbalances and resentment.
  • Encouragement to self-reflect on possible judgmental reactions and address the deeper fears.
  • Recommendation: Don’t blend significant finances (like buying a house) without full transparency and a clear, committed partnership.
  • Memorable moment: George: “You can’t build a future with someone who’s hiding their present. It’s impossible.” (07:42)

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2. Preventing Relapse into Debt After a Windfall

Caller: Annie (Boston)

Timestamps: 10:29–19:32

• Issue: Annie is about to receive a car accident settlement and wants to prevent repeat debt cycles.
• Advice:
  • Education is key—don’t just pay off debt, learn the “why” behind avoiding debt.
  • Build community with others following similar financial goals.
  • Set up practical safeguards: emergency fund, monthly budget, create friction for risky behaviors (e.g., freeze credit, remove card info online).
  • Shift mindset: see yourself as a person who doesn’t “owe anyone” and acts with intentionality.
  • Jade: “Money will not solve bad habits. You’ll just burn through it. You’ll blow through it.” (13:16)
  • Annie is gifted Financial Peace University to accelerate her journey.
  • Principle: Invest in growth before you're even out of debt (“Should I wait until I'm in shape to get a personal trainer?”) (19:02)

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3. The Risks of Financial Co-dependency and Moving for Love

Caller: Brandy (Grand Rapids)

Timestamps: 21:20–30:40

• Issue: Brandy moved to a rural area for her partner, expects shared investments, feels unsupported as she struggles without a car and with limited opportunities.
• Advice:
  • Emphasize personal responsibility for decisions.
  • Don't expect financial commitment or support from a boyfriend—clear boundaries are necessary when not married.
  • Watch for buildup of resentment and hidden/unmet expectations.
  • If the relationship/move isn't leading to shared goals, consider moving back or making changes.
  • Jade: “He doesn’t have the motivation to hold up that end of the bargain, because why does he need to?” (27:37)

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4. Budgeting When Self-Employed and Setting Boundaries

Caller: Beth (NYC)

Timestamps: 32:36–41:10

• Issue: Struggles to keep tax savings untouched as a self-employed worker; difficulty maintaining strict boundaries.
• Advice:
  • Set up tax savings at a separate, hard-to-access bank to add friction.
  • If you were an employee, taxes would be withheld—treat it as untouchable.
  • Examine budget to identify where overspending occurs (e.g., groceries, kid’s activities).
  • Be proactive with budgeting and make it a positive, empowering experience.
  • George: “A budget... is not going to control you. You control the budget, but it’s going to reveal where your money’s going.” (40:15)

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5. Talking to Parents About Retirement Boundaries

Caller: Emily (Austin, TX)

Timestamps: 44:04–51:58

• Issue: Emily’s mother hints at moving in but Emily wants to set boundaries; mother has no savings.
• Advice:
  • Be clear, firm, and kind—write down your boundaries and communicate them in writing if needed.
  • “To be unclear is to be unkind.” (47:19, George)
  • Offer help within your limits, pivot to solutions (Medicaid trust, budget help), but stand ground on non-negotiables (not moving in).
  • It’s okay to reinforce boundaries after repeated asks.

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6. Debt Strategies: Prioritizing 401k Loan Repayment Under Threat of Layoff

Caller: Laura (Portland, ME)

Timestamps: 53:49–62:20

• Issue: Facing company downsizing; unsure whether to prioritize 401k loan repayment over other debts.
• Advice:
  • Pause extra debt payments, stockpile cash as a buffer for layoff emergencies.
  • Seek unity in marriage for financial decisions—individualism and secrecy can prevent faster progress.
  • “You guys would have been completely debt free by now if you were doing this thing together.” (60:01, George)

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7. Breaking the Family Financial Cycle: Setting Up Kids for Success

Caller: Cara (Detroit, MI)

Timestamps: 78:07–84:07

• Issue: Wants to avoid her child experiencing the financial struggle she did.
• Advice:
  • Focus on your own financial health (becoming debt free, building wealth) before worrying about college funds.
  • The best gift is a strong foundation—break the “car payment for life” cycle and redirect payments to investments.
  • Use 529 or ESA accounts once debt-free.
  • “The way that we love our family, well, whether it’s our kids or thinking about the future, is we have to have our personal financial life in order.” (84:07, Jade)

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8. Wealth Priorities: Pay Off Investment Property or Start Retirement?

Caller: Ken (Tallahassee, FL)

Timestamps: 85:22–91:36

• Issue: Should they pay off an investment property or begin investing for retirement?
• Advice:
  • Stick to the Baby Steps: invest 15% in retirement before paying off extra mortgages.
  • Consider paying down the primary residence before focusing on investment properties.
  • Use a SmartVestor Pro for strategy; invest first, pay off primary residence, then consider the rental.
  • “You guys make so much money, let’s put it to good use.” (93:21, George)

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9. Permission to Enjoy Life—Balancing Saving and Spending

Caller: Bree (Santa Barbara, CA)

Timestamps: 94:43–103:53

• Issue: Single mom/teacher with good savings, unsure of the balance between saving for the future and enjoying life now.
• Advice:
  • Ensure 15% retirement savings, kids’ college fund, and an emergency fund are covered.
  • Give yourself permission to enjoy small luxuries if you’re on track for bigger goals.
  • Move money from investment accounts to liquid savings for emergencies.
  • “The whole purpose of doing this is so you can enjoy your money and spend it.” (103:00, Jade; 103:46, George)

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10. Other Notable Callers and Topics

• Max (NYC, 26 y/o; Timestamp 65:59–75:27):

  • Overwhelmed by $15k credit card debt, unemployment, past addiction, and high cost of living.
  • Advised to focus on basic needs (“four walls”), avoid more debt, find any possible income—even if outside of NYC.

• J.R. (Atlanta; 109:38–114:49):

  • New homeowners, realize mortgage is too high for single-earner scenario.
  • Options: wife continues working, find a better job, reduce expenses, or move. Consider gradual transition (wife part-time, then full stay-at-home later).

• Michelle (Springfield, IL; 117:20–122:03):

  • Clarification on withdrawal strategy for retirement: don’t fixate on a 10% rule, work with a professional to project a safe, sustainable drawdown based on needs, taxes, and total assets.

• Eliana (Chicago; 122:09–125:24):

  • Has $11,000 in stocks, $4,000 cash, $8k in credit card debt, needs a car and home repairs, and faces a potential trip expense.
  • Advised to prioritize debt, emergency fund, and absolute needs over non-essentials (like the trip or unnecessary car upgrade).

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Notable Quotes & Memorable Moments

• “Financial transparency is emotional transparency. You can’t have one without the other.”
  — George Campbell, 06:00 (on relationships and money)

• “Don’t forget to remember how good it feels to not have any payments.”
  — George Campbell (quoting Dr. John Delony), 14:55

• “You can’t build a future with someone who’s hiding their present. It’s impossible.”
  — George Campbell, 07:42

• “Money can’t solve bad habits.”
  — Jade Warshaw, 13:16

• “To be unclear is to be unkind.”
  — George Campbell, 47:19

• “Budgeting is not about saying no, it’s about having control and giving yourself choices.”
  — Jade Warshaw, paraphrased throughout

• “The way that we love our family…is we have to have our personal financial life in order.”
  — Jade Warshaw, 84:07

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High-Impact Timestamps (Quick Reference)

• 00:38 – Marie: Navigating secrecy and financial transparency in long-term relationships.
• 10:29 – Annie: How to stick to new financial habits after a windfall.
• 21:20 – Brandy: Risks of moving for a partner before marriage; cohabitation and finances.
• 32:36 – Beth: Saving for taxes as a self-employed person.
• 44:04 – Emily: Setting boundaries with retiring, unprepared parents.
• 53:49 – Laura: Debt prioritization when job security is shaky; importance of marital unity.
• 78:07 – Cara: Setting children up for future success—first, focus on your own foundation.
• 85:22 – Ken: Retirement versus paying off investment property.
• 94:43 – Bree: Giving yourself permission to spend after financial hardship.
• 65:59 – Max: Crisis mode—what to do when you’re overwhelmed and in debt in a costly city.
• 109:38 – J.R.: When your new house payment is too big for a single income.
• 117:20 – Michelle: How to plan retirement withdrawals for security and sustainability.

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Conclusion

The episode is a powerful reminder that financial wellness is rooted in self-awareness, clear communication, and intentional action. George and Jade guide callers with sensitivity and directness, addressing not just the numbers but the underlying habits, mindsets, and relationships that shape our money lives. As always, the Ramsey approach centers on practical steps, living with margin, and building a legacy—whatever your starting point.

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For more resources or to ask your own question live, visit www.ramseysolutions.com

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“Remember, there is ultimately only one way to financial peace, and that’s to walk daily with the Prince of Peace, Christ Jesus.”

Transcript

[Caller]

Foreign.

[Sponsor/Advertisement Voice]

To you by the EveryDollar app. Start budgeting for free today.

[George Campbell]

Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit Union studio, this is the Ramsey Show. I'm George Camel joined by Jade Warshaw. This hour, open phones at 888, 825, 225. Marie kicks us off in Washington DC. What's going on, Marie?

[Caller]

Hello, I'm calling with what? I hope it's a very simple ask and recommendation from you guys. I have a boyfriend of four years and he simply refuses to talk to me about his debt or his financial situation. How do I convince him to trust me enough to discuss with me?

[Jade Warshaw]

It's been four years. I don't know if you can.

[George Campbell]

I don't think there's a simple answer here other than get to the root of what's going on here. Why is he. Is he scared? Is there trust issues? Does he have baggage? What do you think is behind it based on what you know about him?

[Caller]

So I talked to him the other day about it just so I can understand why maybe he doesn't. And he reminded me, and I didn't remember this, that I loaned him like $4,000 a few years ago when he was purchasing his house. And he said I treated it like a bank transaction and I was really stringent upon payback payments that he would have to make me.

[Jade Warshaw]

So that. Okay, that's good. That means that he. That means there is a reason. And so there's likely some shame there if he's thinking about that often. Thinking, man, she's strict. Like, she's serious about her money. He's. He's probably afraid that if he reveals what's going on with his money, that you'll be judging him and you'll.

[George Campbell]

Or that you'll leave him, abandon him if he's not cut out for you, if he's not financially responsible enough for you.

[Jade Warshaw]

And by the way, is that true?

[Caller]

Little background on me and him. We're both retired military. He's a retired Marine, I'm retired Army. We both have good six figure jobs. But on my side, I'm gonna pay off my house in four years, I'm gonna fully retire. But he's not at that level because, you know, he's divorced, he has kids in college. So I think because he sees how financially secure I am on my end and how really I budget down to the dime. Right? Yeah. So how strict I am with my budget that I'll expect him to be that way and not understand why he had the debt he had.

[Jade Warshaw]

Well, is that true? Is my question. Now, it's fair for you to say I, like, have a set of expectations. Like, yeah, I expect us to be a little bit more intentional or a lot bit more intentional. I expect certain things. But the question comes in, will you be judging him? Will your tone be judgmental? Will, like, how will. If he tonight says, you know what, Marie, let's talk, and he divulges a lot of things that truly are shocking to you, how will you react? Because that. If you can hold up the mirror and get a sense of who you really are and what you do, you know what I'm saying, And kind of do a little bit of self analysis there, that can help your next conversation with him and say, you know what? I can really see how you would be that way and. And maybe set him up and say, listen, I can't guarantee that I. I won't maybe have a reaction. Are you still willing to engage in this with me and just. You guys really talk like emotionally aware people.

[Caller]

Yeah, I do think I would be judgy. I hate to say that, but. But that's honest because, yeah, he says, your face is going to show it immediately. And I was like, I want to be able to be compassionate and understand your situation, but I'm going to have to get that initial how I feel out so we can develop a plan to get. To get. To assist him into getting better, to help his finances.

[Jade Warshaw]

I think you being able to come into that and basically validate what he's already feeling is a really good first start. I also think more than. I mean, I don't know, George, but the bigger thing is why, like, what's this all headed towards? Because you've been dating for four years. Are you thinking that you're gonna get married? Is this the next step before the proposal? Like, why suddenly is all of this a big deal? Is my biggest question.

[Caller]

So move in together and buy a house together. I'm a divorcee also, so I'm not sure on the marriage part. So that's. That's a scary question for me. But I do believe we can cohabitate. But I don't want to cohabitate and feel that it's not fair between us both on our finances, that one person is putting in more than the other. I want us to go in with everything being equal and that we combine our households and be able to build that part of our.

[George Campbell]

Have you told him that, yeah, he

[Caller]

knows we've looked at houses. And I'm like, once I pay off my house, I'll take everything I put down in this house. The 700,000 I pay on this house, I'll put it on our new house.

[George Campbell]

The issue is, if you do this through cohabitation, it's going to feel like he's a roommate and you've foot the bill. And I would not recommend cohabitation before marriage for a thousand reasons, but especially in your case, it's going to feel like there's a power imbalance.

[Caller]

And I don't want that for him.

[George Campbell]

So what's going to happen over time? I'll tell you what will happen. Ten years from now, we fast forward, you're going to resent him, and he's going to feel a lot of shame.

[Caller]

Yeah.

[George Campbell]

And it's never going to move forward. And so financial transparency is emotional transparency. You can't have one without the other. And so anything he's hiding now is just going to be magnified in marriage or if you cohabitate. And so I think you need to line on the values and tell him straight up, I don't expect you to have the same financial brain and personality I do, but I do expect that we're aligned on financial values. If we're going to combine our lives with in any way, shape or form. Agree that's not high standards. That's the baseline.

[Jade Warshaw]

I agree. I would caution you, Marie, and again, you might have a different outlook on this, and I can keep space for that. However, I've done this show for a little bit of time, and I see this over and over. If you don't set fair expectations going forward, you're going to have a set of unrealistic expectations. And what I mean by that is you're setting yourself up in a scenario where you're viewing it as full commitment, but it's not really full commitment. And so as long as that gray area exists, which is, hey, I have this expectation of full commitment from you, even though there's truly not a full commitment because we're not married, you're over here holding this space for what if by not marrying him. But then you have this expectation of, I expect to be able to have these conversations. I expect you to do this. And all of those things honestly are the things that take place in a fully committed relationship. So because of that, it's always gonna feel a little imbalanced. He's probably always gonna be wondering, like, is this enough, or do I need to do more. Does this count or does this not count? Right. Does it count for me to be able to go out and spend this money or. And not tell her? Or is that in some way wrong?

[George Campbell]

He doesn't wanna disappoint you. Yeah, I think at the root of it, I don't know him. I've never talked to him. But here's my guess. If he was to be fully known, you wouldn't love him the way you do now. That's his fear. And he's been hurt. I mean, you both have been divorced. You both have a lot of emotional baggage you're carrying into this thing. And so you need to understand, what was money like in his past relationship? Was that a part of why it didn't work out? But here's what I do know. And you can put this on your mirror, Marie. You can't build a future with someone who's hiding their present. It's impossible. And so you can't ignore this. This is a giant red flag. And I hope that you guys can resolve this. You get the values. You do remarry, you do find love again. This would be the best hope Hallmark movie of all time if it worked out. So I'm rooting for you guys to make this thing work. But he can't hide this anymore. It's not going to help the relationship move forward.

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[George Campbell]

owned by our Edge and seller guarantee are available for qualifying borrowers and select loan types only. And not available in all states or locations. NMLS ID 1591 nmlsconsumerexcess.org Eagle Housing Lender. Annie is in Boston. Up next, what's going on, Annie?

[Caller]

Hi. How are you guys?

[George Campbell]

We're doing great. How can we help today?

[Caller]

Glad to hear it. So I. Well, first I have to shout out a friend who really has been encouraging me to listen to you guys for a few months now. And she knows I've been in a tight financial situation. I've just been too scared to take the first step. But with her encouragement, I downloaded every dollar this week. And I just had my first doordash shift on my lunch break to try and generate margins.

[George Campbell]

How did she convince you? I'm curious, because there's a lot of people out there who want to convince their friend, and it's, like, awkward, and they don't want to pry. How did she do this?

[Caller]

So she's been, for one, just a huge cheerleader in every aspect of my life. But I actually suffered. I was. I suffered a concussion, a car accident last year. I have an attorney, and I'm supposed to be getting my settlement in about a month or two. And she's really been pushing me to figure out how I'm going to utilize that money to best kind of clear up my financial situation. Because I've been in a significant amount of debt for a couple of years now, living paycheck to paycheck on a $78,000 salary.

[George Campbell]

Wow.

[Jade Warshaw]

How much debt do you have

[Caller]

right now? I have 41,000 and some personal loans and credit card debt.

[Jade Warshaw]

Okay. And do you know.

[Caller]

Sorry. I also have a car payment. I have a car payment that. 7,000. Not 7,000amonth. It's 7,000 remaining on the car.

[Jade Warshaw]

Got it. And when this settlement comes, settlement comes in, do you know how much it's going to be or do you have a ballpark?

[Caller]

I have a ballpark. It'll be between 33 and $40,000.

[Jade Warshaw]

Okay, so tell us a little bit about what caused you to accumulate, you know, 40, $48,000 of debt over the course of however many years.

[Caller]

Honestly, it's down to four. Poor financial planning and no financial education from my parents. Honestly, I ended up taking out credit cards and not really realizing how quickly that would add up. I've also got just some. Some personal stuff that's required me to make some, like, kind of ridiculous purchases over the last year for good reasons. I couldn't finance living paycheck to paycheck while paying off other debt. I won't make excuses for it. It's just been poor planning and just not having a good handle on my money, being impulsive, kind of relying on that endorphin hit of hitting submit on a purchase. So my question really is, I'm about to get out of the majority of my debt. I want to make sure that I don't find myself in this position again in two years. What can I do to shift my mindset to make sure that this sticks and that, you know, once I pay off all my debt or what I can with this settlement, I have a plan to pay off the rest. And, you know, dashing now will help me accelerate that. I just want to make sure, like I said, I don't find myself in this position again in a couple of years. So how can I shift my mindset?

[Jade Warshaw]

Yeah, well, I love that you're thinking ahead like that, even knowing that it could be a potential issue and understanding that anytime you get a large sum of money, George, or even if you have a large income, money is not. It can't solve bad habits. Right. You'll just burn through it. You'll blow through it. And I'm glad that you're seeing that. I can tell you, for me, my husband and I paid off $460,000 of debt over the course of seven and a half years. And the biggest thing that I think allowed us to continue that lifestyle even to this day is over that time. You learn a lot, right? You actually learn, why are credit cards bad? You actually learn why is it better to purchase cars in cash from now on? Not just, I don't like the feeling of debt, I'm paying it off, that won't allow it to stick. And so what you're doing now, I would say is let's bullet point that as education. So getting the education around the, the why, the, the why behind the what? Basically, why am I paying off the debt? Why are credit cards bad? Why do car loans suck? You know, why am I avoiding student loans? That is so powerful. It' same thing of like, you know, when you learn, when you learn what, what goes into McDonald's fries, it makes you not want to go to the drive thru and get McDonald's fries anymore. Because you're like, oh God, that really is really bad. Right? So keep listening to the show. And then the other part of that, that I would say, honestly, it's very underrated, but the community of being around people who are doing the same things you're doing and kind of have the same mindset, it makes it a Lot easier because now you're not the crazy one. You know, when you're.

[Caller]

Your buddy has been so great for that. Yeah.

[Jade Warshaw]

Your buddy who put you onto Ramsey Show. Like, that's the type of folks you want to be around at this point.

[George Campbell]

So there's an emotional side of this, and Jade's been hitting on that. There's a pragmatic side. And I love this Deloney quote. He always says, don't forget to remember. And so think about the end of that sentence. Don't forget to remember how good it feels to not have any payments. Don't forget to remember how stressful life was when you were in crippling debt and you were paycheck to paycheck. And so I think that's part of the emotional side of going, I worked my butt off. I don't want to ever be in that situation again. And then there's the pragmatic side, which is, hey, let's have an emergency fund. That's our never go into debt again insurance plan. If we have three to six months set aside. Because what reason would you really have to go into debt if you had 20 grand laying around? And then on top of that, doing a monthly budget, just paying attention to that amazing $78,000 income going, hey, I'm going to make a plan for this before a marketing company has a plan for it, before this Instagram ad has a plan for it. You've got to get ahead of those plans and so you can create sinking funds so maintenance and repairs. Don't act like everything's a surprise in your life. That's how most people go through life, just reactive. They call the show and say, well, Jed, I didn't have a choice. I had to. Well, it just happened. I didn't know I was gonna ever need new tires. And that's how broke people stay broke. So being proactive, staying ahead of it, get the emergency fund in place when you're out of debt, you gotta stay gazelle intense through that phase. Once you get out of debt, let's build up three to six months of expenses put away. And then what I do is I add friction to my life to make it more difficult to do things that I know are bad for me. Right. If you have donuts in the pantry, you're probably going to eat the donuts. So what I do, financially freeze your credit with all three credit bureaus so that no one, including you, can open debt in your name. So add some layers of friction. Remove your card info from sites that are tempting you you know, those are some pragmatic things you can do on top of the emotional side. I think the emotional side mindset is more important, but I do. I'm a practical guy, so I like to get tactical with the things you can do. And you already have every dollar, so, you know, making a plan for your money is the number one way to get control of it and not go back into debt. But then also, you've changed your identity. Annie. You're a different Annie than you were two years ago, aren't you?

[Caller]

Yeah, I am.

[George Campbell]

You're the kind of person who doesn't want to owe people money. You're the kind of person who doesn't buy things she can't afford, even if it's shiny and she had a hard week at work.

[Caller]

Right.

[George Campbell]

Those are the kinds of people who build wealth. They're just so focused, and they know who they are, and nothing, nobody's gonna change that. That's who you need to become in order to never go back into debt again.

[Caller]

Yeah.

[Jade Warshaw]

Annie, I'm gonna send you a copy of my book. What? No one tells you about money because it really talks about all the things that George and I just laid out for you, and I think it's gonna just help you get a better handle on it. And honestly, I. I don't remember who I was talking to the other day, George. But I was saying the folks who really, really succeed on the baby steps and that it really clicks for them are the people who understand that it's not just about money. Like the principles that we teach, that behavior of being intentional and paying attention. Like you were saying, George, it. If you. If you look at it long enough, you go, wait a second. This is really the equation that causes me to be successful in really any area of life.

[George Campbell]

Yeah.

[Jade Warshaw]

Whether it's you're trying to get in shape, you're trying to affect your diet, you're trying to be, you know, have a more intentional relationship with your loved one. It's all the same thing. It's about being intentional. It's about understanding how to set yourself up for success. It's about understanding, like, the cues that trigger you to do the wrong behaviors versus the things that trigger you to do the right behaviors. It's all the same. And once you get that, that's when it's like no one can stop you. It becomes part of who you are and how you view the world.

[Caller]

Oh, you guys are so great. You're so motivating. I love this.

[George Campbell]

We're happy to do it, Annie. Thank you so much for the call.

[Caller]

I am. Can I ask you one last quick question?

[George Campbell]

Hit us.

[Caller]

Once I have some more margin available in my budget, I would love to invest in some more Ramsey solutions, like opportunities, like Financial Peace University. At what point does that become a smart opportunity versus, like, when should I try and, like, knock out all the debt first? Like what. What comes first?

[Jade Warshaw]

I love that question.

[Caller]

I.

[Jade Warshaw]

There's. There's certain things that it's, like, immediately,

[George Campbell]

you know, reminds me of, like, should I. Should I wait till I'm in shape to get a personal trainer?

[Jade Warshaw]

Yeah.

[George Campbell]

Well, you're too late. You've already done it. And so it's worth the investment in your future. Now, lucky for you, Annie, since we like you so much, we're just going to give you Financial Peace University so you don't have to pay for it. But it would have been worth the investment in baby step two. Think about it. If that gets you at it. If 80 bucks gets you out of debt forever and causes you to build wealth and become a multimillionaire, was it worth the 80 bucks?

[Jade Warshaw]

Yes, ma'.

[Caller]

Am.

[George Campbell]

100 times over.

[Caller]

100%.

[George Campbell]

So I love it. Annie, that's such a great question. We're so pumped for you to become debt free real soon. And Jay's right. At the root of the entire plan is just intentionality, delayed gratification, discipline. Live on less than you make. Burn more calories than you take in. That's how to lose weight. It's how to get out of debt. And it's a principle that will carry you very, very far in life. Thanks for the call. Hang on the line. We'll get you those. Resour.

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[George Campbell]

switch today based on average annual payment of AT&T Verizon and T Mobile customers compared to 12 months on the Boost Mobile Unlimited plan as of January 2026. See website for full details. Brandy is in Grand Rapids. Up next, what's going on? Brandy, welcome to the Ramsey Show.

[Caller]

Hi. Thank you so much for taking my call. It is an honor.

[George Campbell]

Absolutely Honor for us, too. What's going on with you today?

[Caller]

So I am in. It's kind of like an interesting predicament. So I moved from a larger city, you know, so obviously, like, resources, opportunities, and I moved to a more. Not even more, a significantly more rural and secluded area a couple years ago to live with my partner, and because he owns a home, whereas I was living in a bigger city, paying a lot in rent, and we wanted to build our life together. So instead of me paying all that money in rent, I moved away from these resources, away from these opportunities. I work from home, and my money was supposed to go to, like, you know, renovating our home and starting, you know, investing in our. In our life together. And I know if Dave was here, he would say that my first mistake was doing this before there was a ring on my finger. And I don't necessarily.

[George Campbell]

I don't know where the hour is, because it's his home.

[Caller]

Right? Absolutely. And that's absolutely true. But I. I want to invest in. In a life with him and. And his daughter.

[George Campbell]

Okay.

[Caller]

And does he. It's more that. Well, so that's the presumption I've been under, you know, as. As he moved me away from my life, and I made these sacrifices.

[George Campbell]

Hold up.

[Jade Warshaw]

Roll it back. Run it back.

[George Campbell]

He moved you?

[Jade Warshaw]

Yeah. Because he didn't move you. You chose to move.

[George Campbell]

Did he kidnap you, put you in a trunk and. Because if so, we need to call the police.

[Caller]

No, you're totally right. Absolutely.

[George Campbell]

Okay.

[Jade Warshaw]

We're being strong on it, but it's so important that you do own your part of this as you. As you untangle this, because it'll just help you have those fair conversations with him when the time comes for you to talk about all of this.

[Caller]

No, you're completely right. Cool. Cool.

[Jade Warshaw]

So you're kind of trying to. You're thinking ahead, going, okay, I moved out here because I did see a future. And now. Now what? Now. Now what's happening?

[George Campbell]

What's your question?

[Caller]

So a couple years ago, in fall of 2024, my car broke down. And we. We tried to repair it. He's very handy, but it was just a very crappy car. It was beyond repair, unfortunately, to do our. Even beyond our best efforts. So we. We just scrapped it. And I've tried very hard to save, you know, but I. Even the job that I work, I make 37,000 a year doing this job. Pay most of the expenses here because he's a semi truck driver. He's gone almost all week. He's rarely ever home. So we decided that it was fair that I may. I make. I pay most of the expenses here.

[Jade Warshaw]

He doesn't make money. When he's gone driving the truck, he doesn't make money. That doesn't make sense that just because you're home, you pay it. Are you saying, like, physically, I'm the one who puts the check in the mail, or are you saying, like, financially

[George Campbell]

you cover 70% of all expenses.

[Caller]

So he pays for the mortgage and the property taxes. I pay for the. The Internet here. I pay for the electricity here.

[Jade Warshaw]

How does that break out? Like, how does that break out? Percentage wise? Is it like 50? 50, or is it like 60? 40?

[George Campbell]

Are you paying 300 bucks a month and he pays 1500?

[Caller]

Yeah, that. Yeah, he pays significantly more money each month than I do because the mortgage is a lot more than what I pay each month for stuff.

[George Campbell]

And that's essentially your rent because you're not really paying rent.

[Caller]

Right.

[Jade Warshaw]

So you're saying you pay a greater percentage of your money than he does? Is that what you're saying? Because you made it seem like you were doing more.

[Caller]

Wait, sorry, I didn't.

[Jade Warshaw]

It made it.

[George Campbell]

You said I'm covering most of the expenses, but percentage wise, you're covering 10 or 20%.

[Caller]

No. Correct? Yeah. Yep. And then I cover. I cover the groceries in the home. I cover, like, the household essentials and stuff that we need. Any kinds of, like, anything that we use in the home, I cover.

[Jade Warshaw]

Okay, so where. Tell us where the problem is. Tell us where the rub is.

[Caller]

So the. My thing is, is that I. I do a lot to support the home, especially him and his daughter. And the. The issue is that I don't make very much. I don't make enough money to really save a lot. And so I take that back. I do make enough money to save. There have been setbacks. I, like, I got an unexpected ticket from a beach in the next town over because apparently we went on a red flag day and we didn't. Right.

[Jade Warshaw]

But this is normal life. This is life. Tell us where the problem is.

[Caller]

So the problem is, is I have. I have had a car in all this time. And he puts an immense amount of pressure not having a car and does not, like, doesn't want to help me get there. And it's fine that he doesn't want to help me get there, but the problem is, I don't know why I came down here to do it by myself. Because the reason I came here is because I was under the impression that I Was making the sacrifices to be here in order for us to do things together. I stepped away from an area where I had opportunities to make more money.

[George Campbell]

Brandy, I think there's a hard truth here. I think you made a lot of assumptions, you had a lot of unfair expectations, and now you have a lot of resentment toward this guy. And you guys aren't even married. He owes you nothing. I mean, he could break up with you today, right?

[Caller]

Absolutely. No.

[George Campbell]

And I think you need to move back home.

[Caller]

Sure. And that's what I've been thinking about, too. And the thing is, it wasn't assumptions. These were conversations that were had.

[Jade Warshaw]

Right. And I believe that. I believe you guys probably spoke about it, and it sounded really good for both of you. I mean, you're not. It had to have made sense in your mind for you to move out there.

[George Campbell]

But love will make you do some crazy things.

[Jade Warshaw]

The truth is, he doesn't have the motivation to hold up that end of the bargain, because why does he need to? He's got everything he wants. He's got a woman at home that's taking care of his kid. You guys have whatever relationship that you have romantically, and for him, it's like, why. This seems pretty good. It's pretty good for him.

[Caller]

Exactly.

[Jade Warshaw]

And I just. To me.

[George Campbell]

And he's under no obligation to provide for his girlfriend financially.

[Jade Warshaw]

Yeah.

[George Campbell]

Now, if he wanted to, that's his prerogative, but he clearly doesn't want to.

[Jade Warshaw]

Now, can I say something that you might not like? But this is. Take it or leave it. This is just me trying to be, you know, your buddy, us having lunch together. I don't know. But there might be part of this. And you. Can you shoot me straight? There might be part of this that. Because there's two sides to every story, he might be. Be experiencing you in a way that goes, you know, this girl, like, she's kind of, like, left her her whole life, and she's kind of following me, and she's kind of. I just want to see. Can she. Will she do anything for herself? Like, she left her job to do this. I want to see, like, maybe he's having this side where he's like, I want to see what she's gonna do. Is she going to pursue a job that's more than $37,000? Is she going to. Maybe he has a set of expectations that he's waiting to see if you'll do. I don't know if I'm right. I'm him, the bad guy. Are you the Bad guy. I'm just trying to see it from both sides.

[Caller]

Yeah. Oh, and we, we will. We have conversations about this, like, frequently? Because I will. And that's the thing. I lived in this big larger area. I was actively pursuing career opportunities, like actively furthering my career and sacrifice like that. That's what I mean when I made sacrifice a huge sacrifices to be here. Because I thought that we were, you know, we were going to be supporting each other. Like, that's what I mean.

[Jade Warshaw]

Like, you know, and to be fair, that is, that's an initial sacrifice. And I hear you on that. I think you're exactly. That is a huge sacrifice. My question is, do you have to continue to live like that or can you go, okay, I sacrificed my big job and all this. I'm here now. Do I have to stay like this? Or what is it that I can do to make the best of this opportunity? Or have you truly already exhausted everything and you've made the best of everything? Everything that you can? Because if that's the case right then George. Yeah, George is right. It's like, if that's not what you want out of your life. Yeah, you got to move it on.

[Caller]

Because like, when I'm like, I'm not even like asking to be provided with like a nice vehicle. I'm like, I'm just like a way to get from like A to B.

[Jade Warshaw]

I'll be honest with you. I'll be. I'm gonna be dead honest with you. I don't think he needs to provide you for, for a vehicle. I don't think that's going to be. Be good for either of you because then you'll be reliant on him. I really do think that you need to go out and make this happen. And if you don't feel like you can be your best self in that environment, you need to move on and do what's best for you.

[George Campbell]

You've got a lot of resentment build up, Brandi, and I don't know if we can pop that bubble and diffuse it all. I think you just need to reverse course on this plan.

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[George Campbell]

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[Caller]

And.

[George Campbell]

Oh, you're telling me. And for decades, Dave, I've sat across people who've lost a spouse, they've lost somebody important to them, they don't know what to do next.

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[George Campbell]

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[George Campbell]

Tax season is upon us. And if you want to get some free checklists, some guides that'll help you file, go to ramseysolutions.com taxes Beth is in New York City up next. Beth, welcome to the Ramsey Show.

[Caller]

Hi. Thank you so much for taking my call. Sure. Well, first off, so a sister in my church bought me the money makeover book and the workbook and I downloaded the app. So I'm, I'm ready to, you know, take responsibility and make changes to my life. And as I'm, yeah, it's all good stuff. So I just have one problem. So as I'm going through my numbers and I'm literally in the workbook writing like I'm the problem when it comes to self employment tax. So I have to put aside money every month for self employment tax and I can make quarterly or yearly payments, right?

[George Campbell]

Yep.

[Caller]

So I'm finding myself. I did pretty good last year. But what happened was, is if something comes up or if anything, I go into that, into that account, which is part of my bank account, I put it in a savings and I use it and when I get paid the next month and then I put the money back. So I'm not being so strict.

[George Campbell]

So you're dipping into your tax savings and using it and then you don't have enough to Pay the taxes.

[Caller]

Right. But like I said, thanks. I paid for this year. I filed. Everything was good. But I had to. I've been doing this back and forth for three months. I do so well. I'm strict. What. How can I put this money aside and not even look at it as. It's not even. Because my paycheck comes in. And then like, I automatic. Automatic. Have the transfer from my checking to that saving account. But it's there. I see it.

[George Campbell]

Because it's connected. The solution is simple. You put the cookie jar high enough that you can't reach it without a really tall ladder that you gotta go get from a neighbor's house. You know what I mean?

[Caller]

Yeah.

[George Campbell]

So that's what I would do personally. I would go, you know, you can sign up for our Fairwinds High Yield Savings Account, fairwinds.org Ramsey and it's a different bank than you have now. And then send the tax money over there and pay the taxes out of

[Jade Warshaw]

that account and make sure it doesn't have a debit card associated with it. That's what we used to do. We would send it to a savings account that didn't have a debit card attached to it. And because it was a separate bank, and in our case it was an online bank, you couldn't just get it. It would take like three days. You got to get that money, go

[George Campbell]

through a few hoops just to access it. And so that's what I would. Now we need to fix the root problem.

[Jade Warshaw]

Yeah.

[George Campbell]

Which is you needing to dip into savings to cover these expenses. But in the meantime.

[Caller]

Exactly.

[George Campbell]

I still would protect myself from myself.

[Jade Warshaw]

Yeah. What's happening in your month to month that this is constantly being a thing? Because I'm guessing this is like a decent amount of money. I mean, it's probably a couple of thousand bucks. Right? Right.

[Caller]

So I put aside now starting the first year of my income. So I have to put aside 600. I'm sorry, 500 every month.

[Jade Warshaw]

Okay.

[Caller]

Just to put it aside.

[George Campbell]

So 1500.

[Jade Warshaw]

So that means we've got a month to month budget problem of around $500.

[Caller]

Yeah. So I'm a single mom and I do live month to month. That's something also that I realized and accepted while reading the book. I'm not done yet. And also you. The same thing goes with my emergency money. I put the money aside. I do good for a month or two or three. And then something comes up. I have to dig in.

[Jade Warshaw]

What are the types of things that come up? Because what I want to determine is, is this really a. I need more income to cover the things that I really need that I'm forgetting to budget for or is it a thing that, hey, these kind of frivolous things pop up and I just don't say no to them. Which one is it?

[Caller]

So it's that I have to basically be more strict with my money. So the app helped me. When I put in the numbers, I'm like, wow, really do have more money left over than I thought. Right. I spend too much money on groceries.

[Jade Warshaw]

Okay.

[Caller]

Also, things come up like I sign up my son for soccer, which I can, I cannot not do that. I don't want to take away something from he loves just because mom has one income, you know? So there you go. Yeah. So I went into my self employment tax and I paid and I took out $550. Right, right.

[Jade Warshaw]

So we need to find something else. We need to find another category. If you're, if you're saying, hey, soccer is the one thing I'm just not going to budget on, we need to find another category or multiple categories that you can pull this money from or

[George Campbell]

we need to go make more money or more money, that could be it too. But think about it this way. If you worked for someone else, like an employer, that money would have never touched your account. So you need to picture this like untouchable money that is no longer yours because it's not. It is Uncle Sam's.

[Caller]

Yeah.

[George Campbell]

And if you think about it that way, then you're not going to be tempted to touch it. Think about it like you're illegally accessing this money because it's the government.

[Caller]

Right. And if anything, I kind of wish that I wouldn't even get that money with the paycheck.

[George Campbell]

Well, that's what I'm wondering. Can you do a direct, let's say a direct deposit of whatever the 500 bucks is. Let's say that's 20%.

[Caller]

Yeah. No, I have to make, I have to make those payments online myself through the eft, whatever that was.

[Jade Warshaw]

Right. But when you do the IRS payments,

[George Campbell]

I'm saying the direct. The deposits from your. From how you get paid over straight to that account. So it actually never touches your checking account account.

[Caller]

So this is my big question. Where should I put that money so that I don't see it? And why couldn't you something.

[Jade Warshaw]

Why can't you directly. Why can't you directly put it. Pay it to eftps and just h. Do it, do it monthly instead of stacking it up for the quarter because the amount is still going to be the same regardless of when you make the transfer possible. I think that it is check in on that because it's going to, when you go on that site, it's going to ask you to select what, what quarter. Right. For Q1, Q2. And as long as you're selecting, hey, this is for Q1 and you're paying in those taxes, there's no real benefit to waiting for the quarter other than the fact that it typically is a quarterly thing. You can check my information on that. But I remember doing that. I used to handle that for Sam and I's business. And I would just when the money came, because I was like you, I was like, I don't even want to deal with this. I would just go in and pay it directly. And it just made managing the books easier.

[George Campbell]

And you said, you know which account. I was talking about setting up a who different bank account. And as an example, Fairwinds has a great one, a high yield savings account. It's got an account number, a routing number, and so you can set that all up. And again, that's Fairwinds.org Ramsey to get that Smart bundle has a no fee checking and high yield savings along with it. So check that out. I hope that helps as a band aid. But again, we need to get to the root problem so you're not underwater each month.

[Jade Warshaw]

Yeah. So, George, let's for a second talk about budgeting basics. Because this is something that, you know, most people was like, hey, we know what it is, but I'm sure there's plenty of people who, who don't. When we talk about budgeting all the time, it's a very simple equation. We're trying to put our income down, we're trying to subtract all of our expenses. And what you hope to have at the end of that is margin. Right. We hope that we can find a number that's in the positive that we can use to go towards whatever your, your, you know, goals are, whatever baby step you're on. If for some reason you have not done a budget, you need to do that today. Because what you're going to find is you're either going to have a number in the red that that is, oh my gosh, I'm over budget. No wonder I've been using a credit card. No wonder I've been paying for my savings. Or you're going to have, you're going to surprise yourself and you're going to go, wait a second. If I actually have Any bit of discipline here, I could have some real cash at my disposal at the end of every month. And so I just think, George, a lot of people go through. And it's just kind of a guessing game of like, I'll do a little here, a little there, and if I go over, it's okay, I'll just. Credit card.

[George Campbell]

I remember one girl, she said, she said, I don't look at my checking account because I don't need that negative energy in my life.

[Jade Warshaw]

Life.

[George Campbell]

So, wow, that is the most hilarious form of denial ever. And so a budget, all it does is reveal. It's not going to control you. You control the budget, but it's going to reveal where your money's going once you see all of your transactions, once you see your income. And most people go, oh, wow, I didn't realize I was spending that much. Like, I make good money. I can actually solve this problem with the money I'm making right now. But until you pay attention to realize where those money leaks are and where you can do better. And honestly, it gets fun and a little bit addictive once you really realize. What else can I cut down on?

[Jade Warshaw]

Yes.

[George Campbell]

Because you don't need to spend that much money on a cell phone plan. If you're spending 120 bucks and you go down to 25 bucks, you switch to Boost Mobile, it's like, great. You just freed up a hundred bucks a month.

[Jade Warshaw]

I also think part of that is there's an assumption that I'm going to dislike this. There's the assumption that when we think about a budget, we think about. We picture someone telling us, no, like a big voice out of the sky. Like, no, you can't have that. You can't spend. When really, when you start to do a budget for the first time, you start to realize, actually, none of that's tr. I'm just really in control, which that's a great feeling to feel like I'm in control of everything. Actually, no one tells me what to do. I'm just deciding this. And I have, like, power over this. It's a very empowering feeling. And I would challenge the person who has actually never actually tried budgeting, but has a bunch of, like, emotions or thoughts or opinions around it. And I'm like, have you actually even tried it?

[George Campbell]

You know what it feels like? It's. If you don't do a budget, you're like, in the passenger seat of a vehicle grabbing the oh, crap, crap bar. That's what I call it. I don't know. The official name when you're bumping it. Whoa. Gosh. This person's a terrible driver. I'm like yeah, cuz no one's in the driver's seat.

[Jade Warshaw]

Wow.

[George Campbell]

It's just vibes. And so as soon as you get in the driver's seat you go oh, I can avoid that pothole if I just pay attention. But you'd rather be in the passenger seat. Doom scrolling Instagram holding the old crap bar. And so that's what a budget does. And if you want to check out the one that we've got, I think it's the best one out there on the market. It's called Every Dollar. You can jump on EveryDollar.com, download it in the app store and start for free today. It really will give you an amazing sense of control.

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[George Campbell]

Welcome back to the Ramsey show and the Fish Fairwinds Credit Union Studio. I'm George Campbell joined by Jade Warshaw and it's a free call at 888-825-5225 if you need some advice, some help. Just the right next step for where you feel stuck. We will try our best to help you get there. Emily is in Austin, Texas. Up next, Emily, welcome to the show.

[Caller]

Hello.

[George Campbell]

Hey, how can we help?

[Caller]

So I have a question. Me and my husband live a debt free life. We're currently trying to have a family and we're not rich by any means but we're able to live beneath our means and save some each month. My question is my mother is almost 73. She has nothing saved for retirement and and we have her set up for a Medicaid qualifying trust. In the event that she has to go into a nursing home, she can get the care that she needs. She frequently drops hints that she would love to move in with us, and for various reasons, that's not an option. My question is, what is the best way to kind of have and maintain that boundary and also help her that she needs? I feel like I haven't gotten anywhere when I've had to try to have frank conversations with her about where she stands financially. But I also don't want to go into a sinkhole over this.

[Jade Warshaw]

And. And I. I love that you know, that. That that's not even an option. It's very tough to navigate. Um, and I can tell you this. There is. If you have in your mind this picture of you saying, here's what it is, mom, and her coming back and going, oh, okay, that makes sense. It's just likely not going to be like that, because if she's dropping hints, it's because that's what she wants. And you're saying something completely contrary to that. And I think the cleanest way to do this is to kind of have written down what you want to say and to make sure that you don't swerve away from that, to make sure that her reactions don't make you go in a different direction. And you just talk in a very clean. And I'm not saying be robotic, but very clean. Mom. I've talked to my husband. Here's what we've decided. Like, being. Being very clear. Not we were thinking that or we were hoping that. No, here's what we've decided. We have a Medicaid trust here for you. That's what's gonna kick in when this happens. Happens. In the meantime, you will stay, you know, you will live. Xyz. Like, do you see what I'm saying? You're saying what will happen? And then at the end of that, that's it. And then what you can do, and it's something I've done. I've said, you know what? I'm also going to send this to you so that you can look back on it and. And remember what we talked about. And then I'll, you know, send them the text, Send the points in a text, or send it, airdrop the file just so that it's very clean. And it. What it portrays is that I've given this a lot of thought. It portrays that I don't plan on changing my mind because I'm giving you the documentation of it so that you can look back on that instead of continuing to text me the same question over and over again. Right. So that's the way I would handle it. And I'm just letting you know if you can be polite but very clean and just hope for, hope for the best.

[George Campbell]

Basically, we sit around here, to be unclear is to be unkind. And so it's all about clarity. No more hints. Because what that is is her passive aggressively asking without asking.

[Caller]

Right.

[George Campbell]

And if you let the hints float around, then the hard, the conversation just gets harder.

[Caller]

Right. And I have told her before, like, that will not be an option. Like we do not have space and capacity. But also on a deeper level, it's not good for a marriage.

[Jade Warshaw]

Absolutely.

[Caller]

And I think what you said, just having it in writing as well, after having another conversation.

[Jade Warshaw]

Yeah.

[Caller]

And same keep asking, but the answer will stay the same.

[George Campbell]

Well, then you pivot to solutions and you go, okay, we want to help you figure this out, but our house is not the plan.

[Caller]

Right.

[George Campbell]

And so now it becomes we're working on some or looking at something together instead of facing each other in opposition.

[Jade Warshaw]

I think too, when you can say, I don't know your husband's name, but when you can say, Bob and I talked and Bob and I have decided, I think that also reiterates that the family unit has changed. Right. And it's now you and your husband who have your family who are making those sets of decisions. And it's kind of just a subliminal way of reminding her, hey, things have changed and I have to make decisions about my family, with my family. Obviously you're still part of my family, but it's, it's different now.

[George Campbell]

Have you helped her with the actual budget to show, hey, here's how much you're actually making, so here's the kind of life you can actually afford.

[Caller]

I have not done that. I have tried to help her as far as like with savings and things like that. And kind of the conclusion that I've come to, if it's not her idea or if it's not something that she likes, then it's not going to happen.

[Jade Warshaw]

Right.

[Caller]

So I've tried to let her know before. Just because I'm not doing what you like does not mean that I'm not being helpful for you. You also have to take the help that's being offered.

[George Campbell]

I mean, it's. The old beggars can't be choosers. It's. This is the life that you created for yourself. We had no involvement in you having no retirement now, you made choices along the way. Yes, you took care of us, you raised us, and we love you for that. But the truth is, you have nothing in retirement. So we need to figure out how to live off of your Social Security. Any assets she has, can she sell anything? Can she do a little something part time if she's healthy and able to try to bring a little more income if she wants XYZ lifestyle?

[Jade Warshaw]

And you can, you can even remind her of the, the choices that, like, if you, if you've suggested something and she's like, oh, I don't want to do that. Right? But then a couple of days later, she's talking about the results of not doing that. Like, if you've said, hey, you're not going to be able to spend money on this because you don't have it. Right? And then a few days later, she's like, man, I, I'm having a hard time doing this. And you're like, well, I tried to tell you that. What you can do is remind her by saying, saying, I'm not gonna be able to help you because remember we talked about this? And so eventually saying, I'm not able to help with that. And then if she says, why, it's, well, because you've said that you're not willing to. And that's gonna remind her, oh, this really is.

[George Campbell]

Here's the help we are willing to give. You can either choose or to accept or reject that help. Yeah, but that's it. This is what we can do. And that's not a fun conversation. I'm not. We're making this sound like, just do this. And it's gonna be great. This is gonna be on time. But you just need to keep being clear, keep being firm. Because if you budge just one inch, she's going to go, oh, I have an in.

[Caller]

Right.

[George Campbell]

I just keep pushing on this little loose Jenga piece. I can get this thing to crumble.

[Jade Warshaw]

Yeah. And. And you also have the ability, you know, you can decide based on what you know about that relationship. How many times am I going to answer this question? Or how many times am I going to entertain this conversation about this specific topic? So you can decide, hey, after, I'll give her like three or four times on it. But after four, I'm going to then say, I've said this a couple of times now. I'm no longer gonna discuss this one with you. Like, you can say that and then you hold yourself to that. These are really tough things, but they're. They're good boundary exercises to start practicing.

[Caller]

Thank you both so much.

[Jade Warshaw]

Yeah.

[George Campbell]

I'm so sorry, Emily. This is one of those things where it's like you're now kind of having to do the parenting, the roles, flip flop, man. It's so weird. And it's a good reminder that the biggest expense that's facing generation right now is not your kids college, it's your parents care. It's called the burden retirement where you now have to fund your parents care and potentially raise your own kids. So now you've got this kind of sandwich generation.

[Jade Warshaw]

Yes.

[George Campbell]

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[Caller]

Thank you for taking my call. Great to speak with you guys.

[George Campbell]

You as well.

[Caller]

Okay, I am on baby step two. I am Gazelle intense female now. And here's the dilemma. I have two consumer loans. One loan is a vehicle secure loan through my bank and the other one is the dreaded 401k loan. I do have 4000 in credit card of the total is 33,400 roughly of every everything. But do I switch gears and make this 401k loan a priority? And I know now that I listen to the show, that I'm probably never, ever going to recommend a 401k loan to anyone, let alone myself. But further than that, my company is starting to do some downsizing.

[Jade Warshaw]

Oh.

[Caller]

So I also have some work, and I'm on baby step two, so, I mean, my backup is $1,000 savings if anything was to happen.

[Jade Warshaw]

Yeah. So for those listening, she's worried about that, because if you lose your job, that can become due very fast because the loan you owe that money, it can become due as quickly as, like, 60 to 90 days in some cases or a calendar year in other cases. It really just depends potentially by your

[George Campbell]

tax filing deadline for the following year. That might give you some rush Runway. But I would find out that's your first homework assignment.

[Caller]

Yes.

Yes.

Good thought. I would have not dug into that.

[George Campbell]

Yeah. I would just get in touch with HR and say, hey, what would happen to my loan if for some reason I was separated from the company? That's it. And then you'll kind of know what happens and when and what the ramifications are, how soon you'd need to Pay. You have $1,000 in savings now?

[Caller]

I do.

[George Campbell]

Okay. How imminent are these layoffs?

[Caller]

They're random. They. They don't. Right now, My. My area seems to be okay. But that being said, we've had a definite downtick in the amount of work that my area sees.

[George Campbell]

Okay, so what do you make where

[Caller]

I'm 56,000 a year.

[George Campbell]

What's the car loan? What's the balance on that?

[Caller]

13,350.

[George Campbell]

Okay. And the 401k loan balance?

[Caller]

$15,970.

[George Campbell]

Okay. And then the credit cards?

[Caller]

4,100.

[George Campbell]

All right, so the 401k loan would be second in the debt snowball right now. And you're going, hey, should I put that up first because of this layoff situation? It'd be in a precarious spot.

[Caller]

Right.

[George Campbell]

Would there be severance with these layoffs? Have you seen that happen?

[Caller]

I have seen severance. I actually have co workers that I've know that they. They've been put in where they have a severance option. They have. They're given the choice to find something else within the company within 60 days or take the severance, which would be not a horrible plan. I have over 20 years with this company.

[George Campbell]

Yeah. And I'm just tempted to go, hey, should you pause everything and just stack up cash right now? And that way, number one, you have a little emergency padding if you do get laid off, and number two, you might have enough to cover the whole 401k loan by the time this stuff blows over.

[Jade Warshaw]

I. Honestly, if I woke up in your shoes, that's exactly what I would do.

[Caller]

And that's been my. That's what I wake up at 2:00am thinking about. Yeah.

[Jade Warshaw]

Because it's a storm and you have the ability to see the storm coming, which is a little bit. Bit of benefit. And so it's like, yeah, if you can start prepping and start doing all the things that are going to put you in a better situation, 100%, I would do that.

[George Campbell]

Are you single?

[Caller]

Okay.

I'm married.

[George Campbell]

Okay. Is your spouse working outside the home?

[Caller]

Yes.

[George Campbell]

Okay. What do they make?

[Caller]

And he covers most of he. He makes around 130.

[George Campbell]

Oh, so you have a household income of 180k? 186.

[Caller]

Yeah. Yes. He's covering most of the household expenses right now, so I can focus on this. And he's great.

[George Campbell]

I mean, you guys have separate finances. It sounds like.

[Caller]

We do. We do. We're not totally. He's not totally on board with Ramsey's plan.

[George Campbell]

So he wouldn't help you pay off this debt. With his amazing income, he could.

[Caller]

He's. He's. He's balancing everything right now. When I say everything, like, he's paying the mortgage all the way down to the groceries to the Internet.

[Jade Warshaw]

Well, you said he could. We want to know, would he. Obviously he could. He has the money.

[George Campbell]

Would he take a bullet for you?

[Caller]

He would, but he wouldn't help you

[George Campbell]

pay off a 401k loan.

[Caller]

Oh, he would. If he really had to.

[Jade Warshaw]

I mean, it sounds like he really has to. Here's the thing.

[George Campbell]

If you were. Listen, if my wife was stressed to the gill, staying up till 2am worried about this layoff and 401k loan, I'm not going to go, man. Good luck, honey. Sounds like a tough spot. I'm going to go take my $130,000 salary and cover the mortgage.

[Jade Warshaw]

Honestly, that is wild behavior. Yes, I agree.

[George Campbell]

Yeah. So part of this problem is due to the lack of unity in your own marriage.

[Caller]

Yes, I agree.

[George Campbell]

And it's probably what got you here, the fact that you needed to turn to debt because you are basically on your own financially.

[Caller]

Right. I mean, I'm a spender and he's the saver and I'm the worrier and he's the. Don't worry if this happens, honey. We'll handle it. And I'm just like, but how will we.

[Jade Warshaw]

How long have you Guys been married.

[Caller]

We've been together for 24 years, and we've been married for 12.

[George Campbell]

How much does he have in savings?

[Caller]

He's got 2000ish.

[George Campbell]

And he's the saver.

[Caller]

He's the saver. Whoa. He just paid off all his debt, too.

[George Campbell]

Oh, good.

[Caller]

We're not.

We're.

I mean, he. We're doing the plan. We're not doing the plan. Exactly.

[Jade Warshaw]

No, you're not doing the plan. Don't say.

[George Campbell]

Be honest. You guys would have been completely debt free by now if you were doing this thing together.

[Caller]

Yeah, we probably would, because there's zero

[George Campbell]

accountability, zero transparency, and that's caused a lot of this mayhem.

[Jade Warshaw]

So you guys need to get to the bottom of why that is.

[George Campbell]

If you can solve that, then we can be less freaked out about all this other stuff. That's what I'm getting at.

[Caller]

Right.

[George Campbell]

But the band aid is you pause your own debt snowball and try to stack up some cash, but it's going to be a whole lot harder on 56 than it would be on 180. 86.

[Caller]

Right.

[George Campbell]

You could save a 15 grand in three months if you guys work together.

[Caller]

And I think part of it is I feel guilty that I spent and didn't make the best choices. And I, you know, here's the shoes and, oh, I can afford this, and why not do this?

[Jade Warshaw]

And like, I think it's fair to. To have the accountability of being able to look back on previous actions and go, man, that wasn't smart, or I shouldn't have done that. There's health, too, to that and being able to, you know, like, take responsibility for bad choices. But don't you. Don't you agree there comes a point where it's kind of like, all right, that's enough. Like, have you ever talked to. Have you ever been in a conversation with somebody and they keep bringing up something and after a while you go, you have to set that boundary and go, hey, I don't want to keep talking about that.

[Caller]

Right.

[Jade Warshaw]

Don't you think then. Don't you think there's that time that you, with your own self, you go, yeah, I know. I don't want to keep talking about. About that. That was like 10 years ago. Or that was like two years ago. That's enough. I don't want to keep talking about it. Let it go, man. Right, right. So I think you just have to do that with yourself as well, because otherwise you're just gonna. That's gonna be the refrain that is always in your brain. Why you can't work together. Well, after all, I did do that thing 10 years ago. Like, you gotta stop.

[George Campbell]

Yeah.

[Jade Warshaw]

And if he's willing to, if you tell me he's truly willing to do this, but the only reason you're not is because you feel guilty. Guilty. Then. Then I'm singing that even louder to you. Like, hey, let it go, man. Like, you gotta let it stop. Because everybody makes mistakes. He's made mistakes too.

[Caller]

Right, right, right. Oh, yes, we both have. We definitely have learned some lessons when it comes to money. I mean.

[Jade Warshaw]

Yes.

[Caller]

I feel like we need to sit down, both read the Total Money Makeover,

[George Campbell]

talk about it, say that to him. And not leading with an attack, but just leading with, hey, I've done a real terrible job in this marriage and I apologize. And I feel like we have zero unity. And I would love to get on the same page. I know it's been 24 years. I know it's hard to teach an old dog new tricks, but I think our marriage and future are worth it.

[Jade Warshaw]

It's hard to argue with that.

[George Campbell]

Nothing for him to really disagree with there. He's gonna go, yeah, you're right.

[Caller]

And I've learned so much from this show. I mean, he doesn't listen because he's not able to because of the type of work he does, but. But I just have to say, is

[George Campbell]

it illegal for him to listen to the show? I didn't know there was jobs like that.

[Jade Warshaw]

I know, I'm like, at night.

[Caller]

No, he works in construction and he works in the field and he just wouldn't be able to. I mean, he has earplugs in just not, you know, they're not earplugs.

[George Campbell]

On his commute home, he needs just dead silence just to recover from the day, apparently. Well, I'm wishing you guys the best, Laura, in cleaning this mess up. There's a lot of layers to this, but you will be okay in the end, especially if you can get some unity.

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[George Campbell]

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[Jade Warshaw]

What's that?

[George Campbell]

The Live like no One Else cruise is less than a year away. Isn't that weird? Like, one year from now, we'll be back from the cruise, and I'll be tan and better looking.

[Jade Warshaw]

It's gonna take a year for you

[George Campbell]

to get tan and better looking? Yeah. Both of them. Both And. But I really. It really was a blast last time we did it. That was the first one. We're bringing it back in 2027. The live like no One Else cruise. This is for a very specific person. If you are debt free, you've got the emergency fund. You're in baby step four. Plus. This is the cruise to celebrate with us in the Western Caribbean. It's the only cruise where you can hang out with all of us personalities and Dave Ramsey. Seven days in paradise. Poolside chats, live Q and A sessions, so much more. So do not wait. The ship is over halfway full already. The Neptune Suites have already sold out. Go lock in your spot with a $600 deposit before it's too late. You can click the link in the show notes or just go to ramseysolutions.com all right, Max is in New York City. Up next. What's going on, Max?

[Caller]

Yeah, so you're gonna have a ton of questions as to how I got in this hole. But, you know, I'm 26, I'm in New York City, and I found myself and 14, closer to $15,000 in credit card debt, unemployed and renting a shoebox 184 square foot apartment for 27.50amonth. And you know, I'm not. I'm not. I know I'm not the first person to find myself in this hole, but I just don't see a way out of it. And, you know, my best ideas at the moment are take out another credit card with a 0% APR balance transfer for I don't know, 12, 21 months and just push this debt down the road or that's your best idea? Well, you know, we'll get to some of the backstory if you want, but you know, that. Or do I? You know, at 26 years old, is it worth just looking into filing bankruptcy?

[Jade Warshaw]

Are you a New Yorker or did you move there to try to pursue something?

[Caller]

No. So I came here on a suggestion because I had. I was at complete rock bottom and I had nowhere else to go and somebody else was willing to fight float the first six months of my living expenses to be here. I got out of my third residential rehab program for drug and alcohol abuse. You know, I just made it to 18 months clean and sober for the first time in my life.

[George Campbell]

That's impressive.

[Caller]

So, yeah, I'm very proud of that, you know, and I'm, you know, like, diving into spirituality and, you know, trying to strengthen a relationship with God and can't. Can't believe that I got here and now I'm like, what the hell? Where do I even start? I have just no financial literacy. That was never part of my upbringing with my parents. And I'm just feeling. Feeling screwed.

[Jade Warshaw]

Yeah. What was it? What were you doing? What was the work you were doing before it went sideways?

[Caller]

Yeah, after. After applying to every entry level position, I was given a job by someone in a 12 step program. Recovery. Recovery program. He owned a. A bit of a canine concierge service, and he allowed me to walk dogs for him.

[Jade Warshaw]

Wow. Is there anything on your record that would make it tough for you to get employment like anybody else?

[Caller]

Yeah, I mean, I've been turned out. Yeah. Yes, there is. And the reason I feel stuck in New York City is because I am not legally allowed to drive anywhere in the country.

[Jade Warshaw]

Understand.

[Caller]

So I came to New York City for the subway.

[George Campbell]

So you need somewhere with public transit, but there's a lot of options for that. You're. So you're not stuck in New York City. You're stuck in a city that has some way to get around with public transportation.

[Caller]

Yeah.

[George Campbell]

Okay. What were you making doing the K9 concierge.

[Caller]

Right. At about 60 grand a year, that's what I was on par for.

[George Campbell]

Wow. Have you been looking for jobs? Is that where you want to stay right now? Could you jump to a different, similar job?

[Caller]

I just, I've applied everywhere except bars and restaurants, because, I mean, I'll be honest, I'm a little worried about going in back. I was a bartender before I got sober.

[Jade Warshaw]

And we're gonna Say no to that.

[George Campbell]

Like go into that.

[Jade Warshaw]

Yeah, definitely not.

[Caller]

But I mean, I've applied, I've applied for Amazon, I've applied for ups, anything entry level, I've applied to. I just cannot get hired. The one job offer I've gotten in the past two weeks of looking for a job was 100% commission based Verizon. And you know, and I, we need

[George Campbell]

something stable right now. We don't need like a maybe I'll make money in three months.

[Jade Warshaw]

Is, do you think that the reason you weren't able to get on at Amazon and UPS in those places was it because of what might be on your record or do you just think I just didn't get hired, I didn't

[Caller]

even get a callback for Amazon interview.

[Jade Warshaw]

Right. And I'm trying to, what I'm trying to ascertain is do we start, do we need to start thinking about what are things you can do to create income on your own? And if that's the case, that puts me in a different headspace because I go, okay, service oriented things that you could provide for other people that don't require that you can use public transportation to do. That's the headspace I'm kind of going in. And some of that makes me think, man, I wonder if a suburban area would be better for you. Because then it's like, hey, I do yard work, I do lawn services. I, if there's any sort of trade that you can do and become kind of a handyman. Like I'm trying to think of things that you can do that don't require someone else to have to hire you and have to approve of you, that you can just start today and start with what you have, but also navigate the transportation aspect of it.

[Caller]

I get that. And I'm not, I'll do just about anything.

[Jade Warshaw]

I know you will.

[Caller]

Yeah.

[George Campbell]

Get you a bike off of Craigslist and start doing deliveries and courier service services.

[Jade Warshaw]

There you go.

[George Campbell]

I mean the weather's nicer in New York City right now too, which is perfect.

[Caller]

It's. Yeah, I know, it's beautiful out today. I have $25 to my name.

[Jade Warshaw]

Yeah. So right now you're, you're on fire right now. So you're like, hey guys, who, so I'm confused.

[George Campbell]

Who was floating this 2750 rent?

[Caller]

Yeah, it was like somebody who owns

[George Campbell]

you never could have afforded this. Even making the 60 that was eating up all of your income.

[Caller]

It was eating up all my income. I was, I was, you know, my mom, my mom gave me 700 bucks a month to help for the six months of this lease. And she said, this is all I can do after this. You're done. And I graciously accepted it, that six months is up. And I've been, you know, I've been. I've been biting the 2750 and, you know, living off of food stamps.

[George Campbell]

Have you gone back to the 12 step program to seek other employment? If that's who gave you this job?

[Caller]

Right? Yeah, I mean, I've been in. I've been in the rooms, you know, pretty much begging for jobs. And, you know, it's also the beginning of the year and, you know, not everyone is hiring like they are. And, you know, late summer to, you know, getting into the holiday season. I've been. I've tried that route and, you know, I'm going to continue to do so.

[George Campbell]

What's your landlord going to do when you don't make rent next month?

[Caller]

That's. I have no clue.

[George Campbell]

You know, I would be letting them know the situation. I wouldn't wait until the day comes where he's knocking on your door going, where's the check?

[Caller]

I have a feeling I know the answer to this. But you're going to probably say, do not put it on a credit card.

[George Campbell]

Absolutely not. And I would be looking your lease agreement and studying up on that to figure out how do you get out of this thing? Because there's probably going to be some penalties to break the lease and if you don't pay and if you. It's going to be expensive and difficult to evict you. So I'd just be honest with him and say, listen, man, here's where I'm at. I can't pay this rent anymore. I lost my job. I'm in recovery. Like, I can't do this. And you need to go, you know, maybe get a place with seven roommates, and it goes down to 700 bucks a month.

[Jade Warshaw]

What type of support system do you have? I know obviously family helped you kind of get those first few months started, but I'm trying to put myself in your shoes, and my mind is going, is there some place that I can go back to? And go, hey, I tried my hand out here. I need a couple months to get on my feet. I literally have $25, and I'm trying to be responsible and not go into debt. Do you have a buddy, do you have a family member that would float you for a couple of weeks until you can get a lawnmower, basically? Do you see what I'm saying?

[Caller]

Yeah. Financially, everyone I know is tapped out, you know.

[Jade Warshaw]

Well, I'm not saying, I'm not saying ask him for money. That's not what I'm saying. I'm saying if I'm gonna say what I'm thinking and then you put it in terms of your situation, I'd probably call up my sister and be like, farrah, it's hard out here. Like, I made some serious. Like I thought I could come to New York, but here's where I'm at that I'm. What I don't want to do is go into more debt. And so I'm trying to make the most financially responsible decision right now. Could you give me like two weeks, three weeks at your house? Here's my plan. What I want to do is get someplace a little bit more residential. Just get some place where I can start to offer services for people so I can make some really quick money. I'm thinking about doing things like washing windows and repairing people's decks and like. Right, Tell them what your plan is because that's a lot more convincing to let to help somebody rather than, I need money. That's not going to work.

[George Campbell]

And remember to cover your four walls first before you pay the credit card company. You got to cover food, shelter, utilities, transportation and get those down as cheaply as possible. And if you can't pay the credit cards, you don't pay them. And you can contact Guardian [e-mail] Ramsey to help with the settlement collection stuff if you do end up facing that. So sorry. All right, guys, if you haven't heard, ask Ramsey is our free AI tool that's built and trained on proven Ramsey principles. And today we're going to break down the most asked question from the week. Real estate Hot topic. We're getting lots of questions about buying a house. So the main question here, what are the most important factors to consider when buying a house?

[Jade Warshaw]

Love that. Well, definitely financial readiness. Right? You want to be completely debt free. You don't want any non mortgage debt, no credit cards, no car loans, nothing like that. And when you do that, it reduces your risk and allows you to actually be able to handle emergencies that pop up. Obviously, we want you to have a fully funded emergency fund, three to six months of expenses. And we want to make sure that you can afford the mortgage payment in any ongoing maintenance cost. So that's so important we teach that 25% rule.

[George Campbell]

That's right. And then the next piece is naturally, how much house can you afford? Because the thing is that mortgage, lender will be like, you guys can afford $1 million home. And you should be like, no, we actually can't based on our real numbers. And so your mortgage payment, including the principal, the interest, the property taxes, the homeowner's insurance, the HOA fees, even private mortgage insurance at PMI if applicable, should be no more than 25% of your after tax monthly income. So that's after taxes, but before all the other deductions like your 401k, your healthcare. So that'll help bolster that 25% number. And here's the thing, you know it's not a sin to go 26% or 30%, but here's the problem, we get calls where it's 50% and these people are drowning asking if they should sell their home. And so we just don't want you to be house poor. It's not about following strict rules and using a 15 year fixed rate mortgage and avoiding 30 year loans, just rate mortgages, FHA loans if possible. That's the way to go.

[Jade Warshaw]

Yeah, and not only that, but even saving for your down payment, which is a big hot button topic now, you know you want to aim for at least 10% down. If you do 20%, of course you're going to avoid PMI. But the truth is for a lot of us today, you're going to have to put a lot more than that down in order to reach the 25% rule that George was just explaining. So really hop on there and use our, our mortgage calculator to figure out exactly how much you need to put down so the payment is right. Because at the end of the day you don't want to be using any of your emergency funds for this. You should have separate savings and you should also be able to put the right amount down.

[George Campbell]

That's right. And then the mortgage process, you got to get pre approved before you start house hunting. And that shows sellers that you're a serious buyer. This will help when it comes to offers when you're, you know, in the mix there. And it helps you shop within your means. So choose a reputable lender who will prioritize your financial well being instead of just try to throw the biggest mortgage they can at you. And our friends at Churchill Mortgage, they've helped so many people buy a home the Ramsey way. And if you want to know if you're ready to buy, how much house you can afford, how much you need to save all that, ask Ramsey, our free AI tool can personalize those answers for your situation. So that's a great thing. You can go back and forth, have a conversation, save the chat if you log in. So head to Ramsey Solutions.com and try it for yourself. You can also click the link in the description if you're on podcast or YouTube. All right, Cara is in Detroit, Michigan. Up next, what's going on?

[Caller]

Hi. Thank you for taking my call.

[George Campbell]

Absolutely.

[Caller]

I am, I. Sorry. I am calling today because I wanted to get some advice about how to set my son up for success in his future. So a little bit of background. I am 27. I am a PhD student at the University of Michigan, and I have a one and a half year old. And I've been trying to save money for him and figure out the best way to set him up for a future because I have come from a very poor household. I've been homeless several times and I really would not want that for him. Wow.

[Jade Warshaw]

Yeah. I mean, kudos to you for making this all work. I would be very focused on, and this is gonna sound kind of opposite of what you said, but with a one year old, the best thing you can do for him is to make sure you're doing and being the best person you can can be. So what does that look like for you financially? Making sure you're out of debt, making sure you're able to pour into him financially and help with college, Making sure you're setting yourself up in such a way that it's so healthy with you that all that health gets onto him. Does that make sense?

[Caller]

Yes.

[Jade Warshaw]

And so that leads me to my next question, which is how are you doing financially? Like, are you paying off debt? Like, where are you in the whole thing?

[Caller]

So my husband and I, we make just north of 90,000 a year. I don't have any student loans or credit card loans. I actually had a free ride to school and my PhD was paid for by the school.

[Jade Warshaw]

Nice.

[Caller]

The only debt that we do have is we do have two car loans. Our cars took a crap, for lack of better words. And so we do have two car loans, but that's the only debt that we, we have.

[George Campbell]

What are those car loans add up to? What's the Give me both balances.

[Caller]

So my car is at 18,000 and his car is at 21.

[Jade Warshaw]

Okay, and what are the monthly payments on that?

[Caller]

One is $381 a month and the other one is 481.

[Jade Warshaw]

So when I see that number, all I see is Future investing.

[George Campbell]

That's $860 that could be invested if we got rid of this debt. You see what we're doing here.

[Caller]

Yes.

[George Campbell]

Can I Show you what $860 would be if you invested it from the your when your child turns 2 to 18?

[Caller]

Sure.

[George Campbell]

You ready to blow your mind? $400,000.

[Caller]

Yeah. It's gonna be a lot.

[George Campbell]

Hope you like the car.

[Caller]

Yes, yes.

[George Campbell]

So you're asking us how do I save my kids college? It's getting rid of your debt so that you free up that money because right now do you have $860 extra to, to invest?

[Caller]

I mean, not for paying car loans.

[Jade Warshaw]

Exactly. And the thing is for most Americans, I mean, we're not trying to single you out. Most Americans. This is the, this is the cycle. It is a revolving door. I drive this car for a while, it gets old, something happens, I trade it in for another car and I have another car payment. Drive that for a while, something happens, I trade it and I have. And they have a car payment for their entire life.

[George Campbell]

Think about it. How can you save up for a car when you've got the car payment taking up what you would have saved? So eventually you have to break the cycle and drive the crappy car while saving up for a car, you know, that you really want the upgrade car that you do in cash. So I mean, you got 40 grand in vehicles making 90, that's. That is up. So you may want to consider selling one if you are not bringing in. Are you working right now while doing the PhD or is that full time?

[Caller]

So my PhD gives me a stipend, so I'm paid through school as well. So that's half of our income. And then my husband makes the other half.

[George Campbell]

Okay, so now the question is, how do we up both of your incomes? When is your PhD done and what will you be making?

[Caller]

So I have two more years left and it depends on what I go into. I'm not entirely sure. It's estimated to be just north of 100,000. But it really depends on like where you work, what company and what city that you're in. And I, I don't, I can't really make those decisions quite yet. Sure.

[George Campbell]

And what about him? What's he doing?

[Caller]

So he's a medical technician. HE3D prints surgical implants.

[George Campbell]

Okay.

[Jade Warshaw]

So I'd be the way I'd put it in our brains if I sat down tonight and was talking with my husband about this very thing. I'd say if we can't, if we can't commit to getting these cars paid off in 18 months or less, I think that we should consider selling one of Them that, that would be my kind of thing to bring to the, the table. And that way you're saying, hey, we, we know that there's a level of urgency here, but we're also allowing space for us to keep these vehicles if we really want to work hard to keep them.

[George Campbell]

But what I wouldn't do is try to do all of this at once. Try to invest, try to pay off the debt. We need some focus, intensity now to just pay off all of your consumer debt. Build up a fully funded emergency fund of three to six months of expenses. Be investing 15% of your household income into your retirement retirement accounts. And then money left over gets invested for the kids college.

[Caller]

Okay.

[George Campbell]

And you're probably going, wait, money left over. That's what happens when you're debt free. And you guys will be making north of six figures. So I'm not as worried about Junior. I'm more worried about the present you.

[Jade Warshaw]

Right.

[George Campbell]

Because even if you start investing at when he's 4 years old to 18. Yeah. You'll have to invest a little more to make up for some lost time and compound growth. But I mean Even let's say four years old to 18, if you invest 500 bucks a month, he'll have 181 grand. That's at a 10% return over those 14 years. And that's assuming he gets no scholarships and he just got to pay that. And then on top of that, think about how much more money you guys will be making 14 years from now, 15 years from now, and so you'll be able to cash flow. He might get scholarships and grants. He can work part time. So there's a lot of things that he can do to avoid student debt. But all of this is predicated on you guys creating a financial foundation for yourself, yourselves.

[Jade Warshaw]

Yeah. So the moral of the story, not just for you, Cara, but for anybody listening, the way that we love our family, well, whether it's our kids or thinking about the future is we have to have our personal financial life in order. How many calls do we get, George? Where it's my parents didn't do what they were supposed to do. So now I'm 40 years old and I'm having to pay for kids college plus their care and do all this. If you can decide today. You know what? I want to break that cycle. I want my kids to be set up. It starts with you.

[George Campbell]

It's not in the DNA. You can break the cycle. And so it is possible. And the account to invest IN is a 529 plan for education or you can do an education savings account. Those are both great options to invest and you're going to get some tax free education. Welcome back to the Ramsey show in the Fairwinds Credit Union studio. I'm George Campbell joined by Jade Warshaw. Free call at 888-255-225. Ken is in Tallahassee. Up next. What's going on? Ken, welcome to the show.

[Caller]

Hey, thanks for taking my call.

[George Campbell]

Absolutely. What's your question?

[Caller]

So I'm looking for some guidance. My wife and I, we had left our jobs about two years ago and we both opened two businesses, both of which have done pret well over the past few years. We've really aggressively attacked all of our debt except our mortgage and one investment property.

[George Campbell]

Good.

[Caller]

Now we're at the point where we're trying to determine if we should go ahead and pay off the investment property that we purchase, which has an interest rate of 5.99. We owe about $223,000 on it. Or should we start aggressively contributing ToWards retirement accounts? 401k, whatever we can do to set ourselves up for retirement.

[Jade Warshaw]

Okay. Are you currently investing 15% into retirement every month?

[Caller]

We have not started anything for retirement whatsoever.

[George Campbell]

Okay.

[Jade Warshaw]

Do you have the three to six months of expenses saved?

[Caller]

We have 82,000 saved right now. Yes.

[Jade Warshaw]

Okay.

[Caller]

And that savings account.

[Jade Warshaw]

Okay. And how many months of savings. Savings is that?

[Caller]

How many months? Well, we make about 360,000 a year combined. That.

[Jade Warshaw]

Okay. And is that, is that a side. That's personal money, like for your personal life. That's not your business savings accounts and retained earnings, right?

[Caller]

No, that's, that's our, that's our personal money. Yes. That's where we netted.

[Jade Warshaw]

Okay. So I would just walk this through the baby steps, which is. It sounds like you've kind of already done. And just to recap for anybody listening, baby step one, you're getting $1,000 saved. Baby step two, it sounds like you've done, you pay off all of your debt except the mortgage. And then baby step three, you save up three to six months of expenses. You've done that. Then baby step four is you're investing 15% of your gross income every single month. And once you're doing that, it's kind of like that's the set it and forget it. I know that that portion of retirement is going to be taken care of. Now I can look up and do things like if you want to put a little aside for kids, college, if you want to pay extra mortgage payments Right. Some of the things that you're talking about. So as long as you doing the 15%, I would invest in paying off some of this real estate. However, I would be looking at what's the best way for your primary mortgage to be debt free? Quickest.

[George Campbell]

What's left on that?

[Caller]

And that's my biggest question, because our mortgage payment on our homesteads, $2,200 a month. Our interest rate is super low. So my question there would be, do we pay aggressively towards the investment property, which has a 5.9.

[George Campbell]

What's the balance of your current mortgage between the two?

[Jade Warshaw]

Yeah. What's the balance of the homestead?

[Caller]

About 323,000.

[Jade Warshaw]

So since that's where your bodies lay down to sleep every night, that's what, that's the equation I want to solve for, is how can we make that debt free first, because, and my, my, my thought for that is, no matter what the situation, whenever people have an emergency, a hard time, whether somebody's laid off, whether there's a diagnostic diagnosis, the number one people thing that people want, the number one thing people care about is I want to keep my house. I don't want anything to come between me and keeping my house. Right. So that's why that's the first.

[George Campbell]

If you get in a pinch, you could sell the investment property.

[Jade Warshaw]

Yes.

[George Campbell]

I don't want you have to sell your home to do that because of the mortgage payment. So I'm, I'm not concerned about interest rates. Can you guys make so much money that it's negligible? What I would do is start investing that 15% today because that is what, $54,000, 4,500amonth. And so even though you're starting from zero, I'll give you the math here on our investment calculator. You can jump on our website and use it. We'll drop a link in the description for this. But from 38 to 65, you guys invest 4, 500amonth. You never make more than 360 at 10 return, on average, you'll have 7.4 million.

[Caller]

Okay, so when you, when you say invest, are you referring to like a brokerage and index funds and all that,

[George Campbell]

or this is in any type of investment account that utilizes common compound growth. And so this could be retirement. I would do retirement accounts. So the way we look at it is there's a kind of a water flow approach. If you have an employer match, we're going to go there first, then we're going to take all the Roth accounts we can get. Now with your income being so high, you may want to utilize traditional since

[Jade Warshaw]

you own your businesses. Yeah.

[George Campbell]

So you could do solo 401ks. Are there employees in the business or is it just you guys?

[Caller]

My business is a solo. I'm the only owner and then my wife and I's business, me and her other employee.

[George Campbell]

Okay.

[Jade Warshaw]

I would for yours. It's easier to set up for hers. I would probably work with somebody to make sure you're structuring it the right way. But yeah, that's. I would start that immediately. That's your, that's your project for next week. And then.

[George Campbell]

Yeah, right now you just haven't been. Because you just don't know. And you guys are super smart.

[Caller]

Exactly.

[George Campbell]

Very successful. And it's pretty easy to know. And there's pro guidance that I would suggest. You can jump on Ramsey Solutions.com click on Smartvis Investor Pro. They'll dig into your situation and help you decide. Hey, for your situation, for your wife, she should do a SEP IRA for her business and you should do a solo 401k for example. And that'll allow you. You can actually put in way more into a solo 401k because you're do. You're the employee and the employer.

[Jade Warshaw]

That's right.

[George Campbell]

So you can contribute on both sides and really make some headway to start investing. And I would just work on extra mortgage payments outside of that. Do you guys have kids?

[Caller]

We have three total. Two are grown. The youngest is 11.

[George Campbell]

Okay. So I'd be putting some money away for college. I mean, hopefully you guys will be able to cash flow the rest. But a 529 plan would be a great place to sock away extra money and just kind of set a goal for that. Again, the SmartVestor Pro can help you set that goal from 11 to 18. We want to have six figures in this account by then. You might be able to kind of super fund it just in the next year and then set it and forget it. So there's a lot of strategies you can do here, but the main thing thing is let's start putting money aside for the future with compound growth and let's start knocking out your primary mortgage. And then eventually my guess is if you follow our plan within five years, all of your debt will be paid off.

[Caller]

So don't even worry about the investment property.

[Jade Warshaw]

Well, I wanted to ask about that. I mean, how married are you to it? Because my mind immediately goes to what's this thing worth?

[Caller]

Because if I can pull it pays for itself.

[Jade Warshaw]

I understand that But I would run that out and go, okay, it might pay for itself. How much profit are we really earning off of it it and what's it worth? Because if we sold this thing and if we could walk away with a significant amount of chunk of change that we could turn around and pay off the homestead very quickly, that would be very enticing to me because now you freed up the 2200amonth that you're paying for the homestead. Well, how quickly could you. Is that money that you want to turn around and invest and get probably higher rate of return or would you want to sink it back into real estate that maybe you're just breaking even in on month to month?

[Caller]

No, we have, we have some equity. I just don't think it's, it's a ton. So.

[George Campbell]

Okay, what are you actually making off of this thing per year after all of your expenses?

[Caller]

It's about 600amonth after expenses, man.

[George Campbell]

That's not much compared to your whole income.

[Jade Warshaw]

I know.

[Caller]

No.

[George Campbell]

What's it worth more of a, more

[Caller]

of an investment to have later on, you know? I guess.

[George Campbell]

So are you guys going to live there one day?

[Caller]

No. No. I guess something that we would just have on the side and sell later on.

[George Campbell]

I mean, it's less than 2 of your household income. So you got to ask yourself, is it more than 2% of the headaches in my life? Maybe.

[Jade Warshaw]

What do you, what's it worth if you did sell it? I'm just curious, would you. What would it bring?

[Caller]

275, maybe.

[Jade Warshaw]

Okay, so not a whole lot.

[Caller]

280. No.

[Jade Warshaw]

Yeah. You know, it would be something. I'd continue to watch it and if it starts going up in value and it's, it becomes enticing to you and it does make sense to maybe offload the. That in order to free up the homestead. I would definitely do that deal when it's time.

[George Campbell]

Thanks for the call, ken. Again, that's ramseysolutions.com click on SmartVestor Pro and they'll help you craft a plan for all of this. Cuz you guys make so much money, let's put it to good use.

[Sponsor/Advertisement Voice]

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[George Campbell]

Bree is in Santa Barbara. Up next, what's going on, Bri?

[Caller]

Hi there. Thanks for taking my call.

[George Campbell]

Absolutely. How can Jade and I help?

[Caller]

Hi, I'm calling because I am a 32 year old single mom and I work as a teacher and I live in a pretty expensive area of California and I'm feeling really good actually about where I'm at financially, especially considering I had many years of being very low income and I guess I'm kind of at a point where I'm not really sure what I'm saving for. I put away money every month towards savings and I have been since I started my first day as a teacher every year increasing the amount that I put and I just have about $60,000 saved up.

[Sponsor/Advertisement Voice]

Wow.

[Caller]

You know, continuing to save every month. And I also, I'm really careful with my budget and how I spend my money and I guess I kind of am not really sure why I'm doing it. And I guess I want to understand what amount of money should I be putting towards saving versus allowing myself to live a little bit of a more enjoyable life financially on the day to day.

[Jade Warshaw]

I love this question because I think that anybody who's really had to scrap to get to where they are you do you get in the mindset of, of like, I just, it's like a robot. I take the money, I put it over here and I don't even question.

[George Campbell]

And then it feels like you've done something bad if you don't do that.

[Jade Warshaw]

Right.

[George Campbell]

Spend it, you feel guilty. So let's try to free you from that today. So you don't have any consumer debt?

[Caller]

No, I, other than my mortgage, my home.

[George Campbell]

So good, you got a mortgage and you've got 60k. That's just all of your savings that include your emergency fund that's all wrapped up in there?

[Caller]

Yeah, yeah. I mean I've got about like 6,000 in the bank, I guess, but okay.

[George Campbell]

That's kind of your checking account money.

[Jade Warshaw]

Have you started investing yet?

[Caller]

What's that?

[Jade Warshaw]

Have you started investing?

[Caller]

Oh yeah, that's in an investment account.

[George Campbell]

Oh, okay. So it's, it's not as liquid. It's not sitting in a high yield savings or anything. So how much do you have in a high yield savings account or in a savings account?

[Caller]

That's nothing. In a high yield savings account. It's all in like a brokerage account.

[George Campbell]

Oh, that scares me a little bit. Because if you had an emergency, you'd have to just sell that off. No matter what's going on on the market.

[Caller]

I would, but I also, like, I have, I have other sources. Like I could talk to my parents. I could talk to family members if I needed to.

[Jade Warshaw]

Let's fix that. Let's fix that. I think I heard you say that you're a teacher, right?

[Caller]

I am.

[Jade Warshaw]

How come you're not investing through your work into a 401k? Because usually there's an automatic.

[Caller]

Yeah, no, there's, there's nothing I, that I'm aware of, at least through my job that I can invest.

[George Campbell]

Is this a normal school system? I've just never heard of a school system that doesn't have a retirement plan.

[Jade Warshaw]

Double check that for me.

[Caller]

Retirement plan, it's separate though. So I don't even know what's in my retirement plan because I don't consider that savings. I consider that just my retirement.

[Jade Warshaw]

Okay, so let's, let's, let's help you with that so that what you have, that retirement plan is, is awesome. And that's the number one way people build wealth is through their employer sponsored retirement account. Okay, so if you have a 403B, which it sounds like you do, my guess is there's a percentage of your income that's automatically going into that as a teacher. Am I wrong?

[Caller]

No, you're correct. I don't know if it's called a 403B. It's. But it is like a teacher retirement account.

[Jade Warshaw]

Perfect.

[Caller]

In California, I think it's a little different.

[Jade Warshaw]

How do you know how much goes into that? That every month?

[Caller]

About 600amonth. But it also increases every year as I earn more.

[Jade Warshaw]

Okay, so the goal that we want to get to is for you to be investing a total of 15% of your gross income. So the math that you can do tonight is to say, okay, that 600. What percentage of my gross income is that? So let's say it's 10%. And then you go, okay, I need to add X amount of dollars in order to get this to 15. That's thing one. Once you're doing that, it's like, oh, okay, I can set that and forget it. I know that if I continue to do this, when the day of my retirement comes, I'm going to be set. And a way to really feel good about that is to go on the Ramsey investment calculator and just plug in your numbers and say, okay, today I'm 32. If I keep doing this until age 62, the $600 or however much you increase it towards. Here's what I'll retire with. That's going to make you feel amazing and then it's going to free you up to be able to spend money in other ways when the time time comes. What's really on fire for me today is the fact that you don't have liquid money in a HS in a High Yield Savings account and that needs to probably happen immediately. So I probably told you that a little bit out of order, but I wanted you to understand that you did have employer sponsored retirement at your disposal.

[Caller]

Yeah. And with the High Yield Savings Account, how much do you recommend putting in that?

[Jade Warshaw]

Three to six months of expenses. You're a single mom and so I feel better. If you had six months, as close to six months as possible and you

[George Campbell]

have that now in that brokerage account. So I would just sell off that much and be aware if there's any capital gain, taxes on that. But take that out, put it in a high yield savings account and then keep it liquid. I know it's not making as much as you could be in the market, but it's not to be invested. It is insurance against you having to go into debt ever again. So you'll feel a whole lot better having that liquid at the ready. And then beyond that, if you want to put a little money away for the kids college, how old are they?

[Caller]

My son is 12. I do put money towards his college fund every month. I think like 12,000 or so saved up at this point. I don't aggressively put money into it. So that's in addition to the 60,000 I have in investment.

[George Campbell]

So you may want to make a goal to put a little more in there and you can use an investment calculator, figure out, hey, here's how much an in state public school would be in this area. If they choose to get, go there and try your best to get there. You don't have to cash flow the whole thing. That's not your obligation. But it'll help them avoid student loan debt which is a huge crisis in America today. So that's one goal for your money is to put more towards college. You can always put more toward the mortgage. And then of course budget mortgage is

[Caller]

such a low interest rate though. Like I was able to buy about five years ago and so my interest is 2.63. And so it feels like if I had the option between investing I would just get a lot more return for my money if I was to put it in an investment account rather than pay the mortgage off early.

[Jade Warshaw]

That's true. But you have to think about where you'd want to be when the day comes and you can no longer work because if you continue to let your 403B through your teaching continue to grow and accumulate, like I said, do that homework tonight because it's going to change your mindset because the time is going to come when you can't work anymore and you're going to look up and you're going to go, man, I don't want to be paying my mortgage mortgage out of my retirement every single month. It'd be so great to maybe have a slightly smaller nest egg which it probably, you know, it will be negligible and also have a paid off mortgage. Does that make sense? Okay, so that's why we teach it that way. But we never asked you how much do you make every year?

[Caller]

About 75,000.

[Jade Warshaw]

Okay.

[Caller]

And I, I put away about 700 per month and into investment accounts and then the rest I use for expenses. I, I mean I live like a decent life, you know, it's not like I'm penny pinching at every corner. But I also, you know, there's extras that I choose not to do because it wouldn't, you know, stay within my budget.

[George Campbell]

What do you want to do? If I snap my fingers, I want

[Caller]

to hire somebody to deep clean my house once a month.

[George Campbell]

Love it.

[Caller]

Because like I just won't do it and I want it done.

[George Campbell]

What does that cost you in California?

[Caller]

It probably be a couple hundred box.

[George Campbell]

Okay. Say 250. So you can in, you know, set up an every dollar budget, use the app and just put line item House cleaning, 250.

[Caller]

Okay, that's it.

[George Campbell]

And you guys, you don't feel guilty?

[Caller]

I do all these calculations and I make sure I got my 15. Like you think it's okay to lose?

[Jade Warshaw]

Yes.

[George Campbell]

I wouldn't be investing in the brokerage account at this point. That is sort of like a baby step. Seven houses paid off. I've run out of other investments, investment options. You're going to be fine. You're so young, doing so well that I would be more focused on making sure. I'm investing 15 into retirement, making sure my kids college is covered, making sure the mortgage gets paid off and then allow some spending money for Bri. You've earned it. You're working your tail off.

[Jade Warshaw]

You probably need to be closer to around, you know, 900, $930 investing every month. I think you said you were at 6 or 7, so bump that up to the right amount, like I said, somewhere between $900 and930. $30. And then from there on, if you're doing all those things that George talked about, you're, you're in your baby step. You're letting, you're doing those things correctly. 100%. The whole purpose of doing this is so that you can enjoy your money and so that you can spend it is live like no one else. So later you can live like no one else. And for you, it's simple things like having a house cleaner. So as long as it fits in the budget. And it's not causing you to have to pull from investments. It's not causing you to have to free forsake your kids college fund. It's not causing you to have to, you know, have, have no money ever to put extra on your mortgage. Right.

[George Campbell]

Then it's fine, it's good and it's worth your sanity.

[Caller]

Thank you.

[George Campbell]

You're crushing it.

[Caller]

Thank you so much, you guys.

[George Campbell]

Thank you for the call. You're a hero. That's very impressive what you're doing. 32, single mom. Yeah. Debt free in California nonetheless.

[Jade Warshaw]

Right. And I love that she wrote out the storm of stories. Starting out low income and really pushing and pushing to get to where she is now. That is so gratifying. I'm so proud of her.

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Today.

[George Campbell]

Our question of the day is brought to you by. Why refi if private student loan default knocked you off track, this is how you reset. Why refi works with borrowers. Other lenders won't helping you refinance defaulted private student loans with a low Fixed rate so you can get back on the plan and move forward. Visit yrefi.com Ramsey that's the letter Y, R E F y.com Ramsey may not be available in all states.

[Jade Warshaw]

All righty. Today's question comes from Ian in Wisconsin. He says, is it okay to use buy now, pay later plans as long as you have the cash available to buy the item. To buy the item outright. I'm making a large purchase and have cash to pay for it to today. But I want to paid it on payments to soften the bloat. I love this guy. I want to put it on payments to soften the blow to my bank account. I've already got the payments worked out into my every dollar budget. So I don't see why this isn't a legitimate reason for using the method. Okay, this is wild, but I, I want to kind of validate what you're thinking. I think all of us feel the pain, pain of seeing a nice cushy number in our bank account. And then we decide we want to do a major purchase like a car or a golf cart or whatever. And the feeling of seeing, I don't know, a balance of $40,000 go down to $5,000 is like, oh, it's like shot to the heart. Okay, yes, validating that. However, the whole purpose of managing your money well is to be able to pay cash in actual money for the things that you, you want. So don't discount your hard work and all that you've done to set yourself up to be able to do this by then turning around and saying, ah, I'm just going to put myself in a financial risk in order to get this. You have the cash and buy now, pay later. George is so dangerous because it really does mess with your psyche because you think, oh, well, this is really not that much. And it goes little by little by little. And then it opens up the door to, oh, this is kind of nice.

[George Campbell]

I it's the old put it on my tab. And you go, well, it's only four bucks here, five bucks bucks there, ten bucks here. And then it becomes a habit where you go, well, if I needed to, I could pay it all off today. And then you lose your job.

[Jade Warshaw]

Well, then you try it with something else. You go, oh, that kind of felt nice. Now I'm going to get this guitar.

[George Campbell]

Now I'm doing appliance. And now you're no better than the guy doing, you know, 0% financing on a freaking couch. Yeah, at Ashley Furniture. So it's worse and worse and this is just it's broke people mentality. And the truth is, if it softens the blow to your bank account, that means you probably just shouldn't buy it. If it, like, hurts your soul a little bit to part with that much money, yeah, that's your brain and body telling you, hey, this is a lot of money. Are we sure we want to do this? And what buy now, pay later? Really? Does it just desensitize? Desensitizes your brain to go, ah, it's fine, but it's like a little devil on your shoulder going, put it on four payments, guy.

[Jade Warshaw]

You got it.

[George Campbell]

You deserve it. You worked hard. I think you worked too hard to be this broke. Playing broke people games.

[Jade Warshaw]

Yeah, that. That is so good, George. Predatory mentality.

[George Campbell]

And these are such predatory companies, they're praying that you can't make the payment so they can ding you with fear fees and interest. They're no better than the credit card companies out there. And their marketing touts it like, we are the best alternative to credit cards. We're here to be your savior.

[Jade Warshaw]

You know what I think is going on here? This just hit me. This is what I think. I think that he probably has a lump sum of money saved, and it's probably earmarked for something else, but he has this big purchase that he wants to make, and he's like, well, I could do it on buy now, pay later, because the truth is, if something happened, I could pay for it. But if the ear. If the money wasn't earmarked for that, then that's probably why it isn't feel good. I'm just throwing that out there. I don't know if I'm right, but that's the sense that I'm getting.

[George Campbell]

Yeah. The bottom line is you can't build for the future while paying for the past. So if you got anything behind you in the rear view mirror, what are you doing? You're just wasting brain calories thinking about the payments. You. There's enough things to worry about in this life. Debt is not one of them. And that's all it is. It's a micro debt is what you're signing up for. And if you read the fine print, they'll tell you. All right, Ian, thanks for the question. That was a fun, fun rant. Rant over. J.R. is in Atlanta. Up next, what's on Going. What's going on, Junior?

[Caller]

Hey, George and Jade. I was just calling because me and my wife just built a house and we moved in Christmas time, and we love the house. We don't like the lifestyle that the payment is going to make us live.

[George Campbell]

Oh, no.

[Caller]

Well, our priorities changed from the time we started the process to now. Like, my wife works, she runs her own business, and I got moved into the house and I just realized I want my wife to be able to stay at home with our kids

based

on our current payment. I, on my own job, could not pay for the payment without her continuing to work. So I'm wondering what we should do next to kind of mitigate that risk or. I mean, we are willing to live with the consequences that we have made for ourselves.

[Jade Warshaw]

You can't.

[Caller]

How like an option.

[Jade Warshaw]

How can you? Because if she's staying home and you can't cover it on your income, you can't stay in that house.

[Caller]

Well, sorry. She would obviously have to continue to work and we're okay with her continuing to work if we have to. But if we have an option to do something else, I would love an outside opinion.

[Jade Warshaw]

Okay, I'll pitch that question back to you. So you tell me, tell me what your mortgage is. Every single month.

[Caller]

With the escrow, it's around $2,500 a month.

[Jade Warshaw]

2,500. Okay. And if you, if your wife stopped working, what percentage of your take home would that mortgage become?

[Caller]

About 50%.

[Jade Warshaw]

Okay. So. And then you've told me, hey, also, not only would it be 50%, but I just wouldn't even be able to cover the payment at all. So you tell me what the option is.

[Caller]

I think either we're going to have to let her continue to work and pay down the house and possibly refinance, or I get a better paying job or we move. I think those are really the only three options.

I just.

None of them are great.

[Jade Warshaw]

Yes. Okay. I just wanted you to say it so that I wasn't the bad guy.

[Caller]

Right.

[Jade Warshaw]

And the truth is, you finding more work, that. That's the thing that maybe allows you to kind of have the best of both worlds here. How likely is that to happen?

[Caller]

With my current career, it's probably not very likely. I'm working on getting a CPA's license, so when I finish that, I probably could make it more realistic to cover all of our bills and the mortgage, but in my current career field, it's pretty unlikely.

[Jade Warshaw]

What's the timeline on the cpa? CPA deal?

[Caller]

Probably about a year. I can sit for my first exams this summer.

[George Campbell]

And will you be making six figures right out the gate?

[Caller]

Where I live, CPAs are starting between 70 and 80.

[George Campbell]

Okay. So that still won't get us there. I mean that. Well, we need like a take home pay more like, you know, nine, ten grand to make this make sense for you guys to carry this mortgage payment for them next decade.

[Caller]

Right.

[George Campbell]

So then the other option is if we can't get the income up, then we might need to move once your wife decides to stay home.

[Caller]

Right.

[George Campbell]

So I don't think anything's like on fire, but if, you know. Do you guys have kids now?

[Caller]

Yes, we have. We have two very small children.

[George Campbell]

Okay, is there more on the way or is this it?

[Caller]

We would love to have some more, but we've kind of pushed pause on that until we can get our financial in order.

[Jade Warshaw]

Okay.

[George Campbell]

What's the house worth?

[Caller]

We had it. A real estate agent come and look. It was worth about 475.

[George Campbell]

And you owe how much?

[Caller]

A little over 300.

[George Campbell]

Okay, so you do have some good equity in there. There's some good news in this picture.

[Jade Warshaw]

There's also the idea of her working part time. Maybe it's not an all or nothing thing, but it's. I pick up these extra hours, you become the cpa. Do you see what I'm saying? Maybe it's the combination and we kind of of go, hey, there's a year horizon on this. For the next year, you, you work. And it's not ideal, but then once I can get into my CPA role, you can back down to part time and that should close the gap and then I can continue to grow my income and you can fully step away. There might be kind of like a, a very gradual transition that you can do.

[Caller]

Okay, that makes good sense. That, that, yeah, that very. That could be a good idea.

[George Campbell]

Do you guys have outside the mortgage?

[Caller]

We owe about 8,000 to the IRS, but other than that we are debt free.

[George Campbell]

Okay, and what's your wife making the business

[Caller]

after taxes? She's probably doing between 130 and 150.

Whoa.

[George Campbell]

So she's the breadwinner here?

[Caller]

Yes.

[George Campbell]

Okay. But she's the one who wants to stay home. That's her dream.

[Caller]

I would love for her to stay home. I think she could. She wants to be home more, but I think think she would be okay with working part time. I would love for her to have the option to not work at all.

[Jade Warshaw]

It sounds like part time is the move then, because she said her wish seems to be like, I don't want to be totally out, but I do want to be home more. That feels like the ticket because what you don't want is to tell somebody who wants to work a little bit that they can't work because then they're going to feel trapped. It's the same. It can go either way. You also don't want to tell somebody who wants to stay home, hey, you

[Caller]

to go to work.

[Jade Warshaw]

Cuz then they're going to feel trapped there. So I think that you guys still have some conversations to have around this and you have time.

[George Campbell]

I would just set a timeline of like, hey, let's revisit this six months, a year from now and see where we're at. Is it feasible for you to go part time? Can you just stop working altogether? Based on what I'm making as a CPA now, and I hope, I really hope you guys get the dream of first staying home and you get to keep the house. That's obviously best case scenario, but it's going to be take some sacrifice on both of your parts. Hey guys, George Camel here. Do you ever feel like insurance companies only care about your money and not what you actually. Well, there's a better way. When you go to Ramsey's Insurance Resource Hub, you'll start feeling confident that you're getting the right coverage that's truly best for you. You'll find helpful info on everything from life insurance, health insurance, identity theft protection and more. And when you're ready to get the coverage you need, you can connect with a Ramsey trusted insurance pro who will only get you what you need at the best price. Go to ramseysolutions.com insurance ramseysolutions.com insurance. All right, Jade, it's time for our scripture of the day. You know it, Sing it with me. I this one comes from Ecclesiastes 7:12. The protection of wisdom is like the protection of money. And the advantage of knowledge is that wisdom preserves the life of him who has it. Wow.

[Jade Warshaw]

I might need to read that again.

[George Campbell]

Okay. Wow.

[Jade Warshaw]

I'll do it on my own time.

[George Campbell]

Yeah, that'll take me a while to chew on. All Solomon there is long in the tooth. A Latimer said a budget is a mathematical confirmation of your suspicions. I love that so much. Great. I wish I had one of those names, you know what I mean? Like a. A Latimer. G.K. chesterton.

[Jade Warshaw]

I. I call you G.K. yeah, I

[George Campbell]

think G.K. but then you got to have a nice long cool name.

[Jade Warshaw]

What's your middle name?

[George Campbell]

It's Peter. It's not that exciting. Yeah, exactly. GP Camel. That's.

[Caller]

It was hard to say.

[Jade Warshaw]

It doesn't roll off the tongue.

[George Campbell]

No one's reading that guy's novel, G.P.

[Caller]

camel.

[George Campbell]

I'll work on it. I'll workshop it. All right. Michelle is in Springfield, Illinois. What's going on, Michelle?

[Caller]

Hey, guys.

[George Campbell]

Hey.

[Caller]

I am calling to find out about retirement. How to when the time comes. How does that work when you withdraw? You guys say 10%. If you can live off of 10%, how do you do that? Is it you withdraw like the 10% and then hold back taxes or do you withdraw like 90% and leave the taxes in there? Pull it out when it's time. Time to pay.

[Jade Warshaw]

Oh boy. So let's roll back.

[George Campbell]

Let's back it up. Terry, let's go here to your age. What's your current age?

[Caller]

56.

[George Campbell]

Okay. And you're talking about like 59 and a half plus is when you're going to be pulling from retirement. Okay. What kind of retirement accounts do you have right now? Just my 401k is a traditional or Roth 401k.

[Caller]

Traditional because I, when we got a Roth one, I felt it was too late to change it over.

[George Campbell]

Okay, so the only retirement account you have is the traditional 401k?

[Caller]

Yeah. Other than the kids is 529 a grandkids 529.

[George Campbell]

Okay.

[Jade Warshaw]

How much is in there?

[Caller]

In which one?

[Jade Warshaw]

The 401k?

[Caller]

The traditional 253.

[Jade Warshaw]

Okay. And you're wanting to. So let me, let me roll back to what you first said, which is you guys say, you know, if you have 10% that you're earning, you can live off the interest. That really is a rule of thumb to kind of be thinking about, do I have enough to retire? It's not precise, it's not prescriptive to

[George Campbell]

say you should withdraw 10% every month.

[Jade Warshaw]

No, it's just a way to think, hey, how do I kind of know that I'm in the realm that I might be ready and might have enough? So I want to be clear on that. It's. And I want to know if you're working with a smartvestor pro at all or are you just doing this all yourself?

[Caller]

I am newly. I actually go and do my one year check at the end of April.

[Jade Warshaw]

Okay. What I would do is I would, at the next meeting, I would say, how much do you think that I need to and that I'm able to pull from this 401k to maintain my current lifestyle. And what I would do is I would come to that appointment with my current budget and I would say, here's what I'm spending every day single Single month. And here's what I receive, you know, or will receive from Social Security and have all those numbers. And then start projecting, what would it look like for me to pull X amount of dollars, how much taxes would that be for me every year? And just ask how, how, how we're going to do that and what that's going to look like so that you can begin to understand it and see if you agree or not with that strategy.

[Caller]

Okay.

[George Campbell]

And they can project this all out to show. Show you, hey, if you withdrew, let's say, $60,000 total per year in retirement based on what you have in the nest egg, here's likely where you'd end up. Here's when the money might run out, or here's how much you might have left over. And they can run all kinds of projections to give you a big picture, because the truth is, we don't know what the future holds. We just know what history has shown us, which is that the stock market, on average, produced about 10, 11%. So based on that, you got to take into account inflation, and you got to take into account your actual expense expenses versus what your nest eg is. So how much are you investing per month right now?

[Caller]

15% of.

[George Campbell]

What's the total number?

[Caller]

It's like, what's your income? 981amonth, I think.

[George Campbell]

Okay. And do you have an employer match?

[Caller]

Yes.

[George Campbell]

Okay, so how much extra is that on top of the 981?

[Caller]

It's 3%.

[George Campbell]

Um, let's call it another 100, 200 bucks.

[Caller]

I'm so sorry.

[George Campbell]

That's okay. I'm just guesstimating for you. And you said you had 250,000 in retirement?

[Caller]

Yeah. Yeah.

[George Campbell]

Okay, so if you can Keep contributing that 1100 in there from 56 to, let's say, 65, is that your game plan?

[Caller]

Yes. Or more.

[George Campbell]

Okay, let's put it 67. That puts you at a million bucks in that nest egg, and that's with a 10% return. So then the question becomes, all right, from 67, let's say you live a good long life to 97. We got 30 years to utilize this million bucks plus Social Security. And so they can then help you map out a plan for withdrawal. Obviously, you don't need to do that right now. We don't know what the future holds. But I would just keep. I'd rather have too much than not enough. You know what I mean?

[Caller]

Sure.

[Jade Warshaw]

Keep bumping it up as much as you can.

[George Campbell]

So hopefully you get your income up over time. You get the house paid off. Then we increase and start maxing out these accounts and you'll have well over a million plus Social Security. That should give you a nice comfortable life. So thank you for the call. It's a great question.

[Jade Warshaw]

It's a good way to think about it.

[George Campbell]

You're on the path to become a baby steps millionaire. Eliana is in Chicago. What's going on with you?

[Caller]

Yes, hi. So I have, I have $11,000 in stock. I have 4,000 cash. I also have a 2006 Chevy and I have like four options to use the money. An 8 and $8,000 credit card debt with no interest until September.

[George Campbell]

Okay.

[Caller]

So my question is where to spend it. I have four options. One, my home is a 1940 so I don't have AC. I have window which cost me a lot of money during the summer. I have the old fashioned heat that cost me a lot of gas. My estimate to install a AC with heating plum was $10,000. The quote.

[Jade Warshaw]

Okay.

[Caller]

And then my kids were invited by their grandparents to our homeland which cost around $10,000. And they're going to pay for tickets but I have to be with them so that would set me back at least $4,000. Just cost and tickets.

[Jade Warshaw]

Okay. So you could do.

[George Campbell]

Okay.

[Caller]

I also, I think I need a new car and I got a really nice deal but the car is going to cost me 16,000 that I don't have. So I'm thinking of not paying the whole credit card and it's the car car because it's estimated for 24,000 and

[George Campbell]

it's not a deal if you can't afford it though.

[Jade Warshaw]

What, what's the deal?

[Caller]

And I can't even afford the insurance for the car too.

[George Campbell]

And you can't do that so that's not an option.

[Jade Warshaw]

What's the deal with your current car? You said you had a car. Is it, do you own anything on it? Is it worth something? Tell us about the current car.

[Caller]

Last. Yeah, last year I returned my Jeep Wrangler because. And it was leased to own and it would, it had a lot of recalls and I couldn't pay the maintenance. A thousand a year, I couldn't pay that. So I got a 2006 Chevy and it's fine but because it's approaching 200,000 miles and my work is to go with therapist house to house, I'm afraid it's going to break down and I'll need a new car.

[Jade Warshaw]

Has it broken down?

[Caller]

No.

[Jade Warshaw]

Okay.

[Caller]

I maintain it.

[George Campbell]

So we're justifying a new car. Purchase based on the fact that once a car goes over 200,000 miles, they apparently die no matter what, or it's

[Caller]

going to start breaking down and I don't want to buy a car out of me.

[George Campbell]

Well, let's deal with our current problems versus the future ones that could and might happen. The current problem is we got 8,000 in credit card debt that we can pay off today by selling off the stocks, right?

[Caller]

Yes.

[George Campbell]

So you got 15k total liquid. Paying off the credit card brings us down to 7,000, right?

[Caller]

Yes.

[George Campbell]

And now the question is, what's the priority? You having AC as we enter the summer or going on a trip that you could go on at another time?

[Caller]

I could go on another time, but it's going to cost me an extra $10,000 and I don't even care for the trip. But my.

[Jade Warshaw]

Is it because the kids won't be covered?

[Caller]

Covered?

[George Campbell]

I would just tell them, hey, I can't afford to go on the trip because I have to go with them. I have to cover my share. I'm in a pickle here. I don't have ac, my car is on the fritz, I got credit card debt, and that's it. And so you prioritize the things that matter to your family right now the most, which is getting out of debt. Let's get the ac, let's get an emergency fund so that we get out of this cycle. That is the only path I would recommend out right now. A trip is a luxury that you don't have. Thank you for the call. All right, 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.