Develop Steady Habits That Create Lasting Wealth

Summary

The Ramsey Show - Episode Summary

Podcast: The Ramsey Show
Episode: Develop Steady Habits That Create Lasting Wealth
Air Date: June 22, 2026
Host(s): Jade Warshaw, George Kamel, Dave Ramsey
Main Theme:
This episode focuses on the crucial habits, mindsets, and actionable strategies for developing lasting wealth—no matter your background or any past “money mistakes.” The hosts answer live callers’ questions on cars, debt, insurance, investing, family finances, and more, illustrating each point with real-life financial challenges and emphasizing personal responsibility, strong habits, and clear communication.

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Key Discussion Points & Insights

1. Buying Cars with Cash & Practicing Delayed Gratification

• Caller (Sam, 19): Prospective college student with $20,000 cash wants to buy a car modestly instead of spending all his money or going into debt, despite family pressure.
  • Jade and George praise Sam’s common sense and discipline.
  • Jade: “You understand the power of cash… and delayed gratification. You don’t want to drain your savings.” (02:24)
  • They discuss splitting funds into an emergency fund and a car purchase fund, emphasizing that a good used car under $10K is plenty.
  • George: “Do you need a $20,000 car? Absolutely not. You could find a great Honda Accord… for 12, 15 grand, probably.” (04:31)

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2. Insurance Scams & Term vs. Whole Life

• Caller (Abby): Transitioning from a $75,000 whole life policy to a 200K term policy and encountering pushback from her insurance agent.
  • Hosts explain commissions drive agents to push whole life, which is a poor investment.
  • George: “A little bit of a vested interest to ask them if you should keep it.” (05:54)
  • Strong recommendation to carry only term life, aiming for coverage at 10-12x income.
  • Jade: “The purpose of life insurance is for anybody dependent on your income… to make sure that they’re OK.” (08:26)
  • Dave: (Special segment) “Term life isn’t a baby step. If anyone is dependent on your income, you need to have 10 to 12 times your income in life insurance now.” (09:04)

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3. Dealing with Overwhelming Debt & Building Margin

• Caller (Emily): Recently unemployed, secured a new job at $20/hr, behind on credit cards/personal loans, feeling stuck and with little budget margin.
  • Key steps: prioritize four walls (housing, utilities, groceries, transport), get current first, use EveryDollar budget app.
  • Jade: “When you have that ‘I've had it’ moment… that’s when the rubber meets the road.” (19:23)
  • Advice to focus on income—get side hustles, sell things, reconsider tax withholdings—and career advancement for long-term change.
  • George: “The truth is, yeah, you are going to need a side hustle… but if you can start looking on the career side… that’s really what’s going to break you free.” (17:02)

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4. Navigating Family Conflict Over College Funding

• Caller (John): Estranged from his daughter after refusing to go into debt for her out-of-state college.
  • Hosts unpack the mixed messages that occur when parents focus only on “what they won’t do.”
  • Jade: “I would be leading the conversation with exactly what I’m going to do to help.” (24:09)
  • Key advice: apologize for communication gaps, set clear, positive expectations, and resist being drawn into debt-based solutions.
  • Jade (personal anecdote): “On the flip side… I’m really glad that [my dad] didn’t ensnare both of us.” (29:07)

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5. Mobile Home Trap & Making the Hard Call

• Caller (Timmy): $33,000 upside down on a mobile home (appraised at $65K, owes $98K) and considering options to get out.
  • Hosts urge him to sell immediately, take a loan for the negative equity, and focus on aggressive repayment.
  • Jade: “You’ve got to get out of this mobile home. That did not go well for you.” (35:07)
  • George: “If you take out that loan for the difference and then get very aggressive… that’s the choice you have to make.” (36:25)

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6. Extra Precaution in Retirement with Medical Needs

• Caller (Shelly): Retired, debt-free, husband diagnosed with dementia, wonders if she should build a larger emergency fund or make memories with remaining family.
  • Encouraged to plan medically and for long-term care, but also to live and spend on meaningful experiences.
  • Jade: “You have worked hard and earned the right to take a trip… I would not let that stop you.” (40:23)

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7. Tangled Finances in Marriage

• Caller (T): Married two years, separate accounts, covering spouse’s portion of the rent with debt, lacks transparency.
  • Emphasis on the importance of shared vision and unity in marriage.
  • Jade: “What I hear right now is two people who agreed to live together, but that’s kind of it.” (49:58)
  • Strong advice to stop taking on spouse’s debt obligations, have a loving but direct conversation—possibly seek counseling.

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8. Real Estate 'Opportunity' Red Flags

• Caller (Stella): Advised by a friend to use HELOCs and “magic money” strategies for fast wealth via property investment in another state.
  • Jade and George unpack the hidden risks—stacking debt is dangerous.
  • George: “You’re stacking debt on top of debt… one vacant month, one rate hike… the whole house of cards comes tumbling down.” (59:07)
  • Reinforcement of the Ramsey method: pay off your home first, then pay cash for investment property.

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9. Should I Sell Investments to Pay off My Mortgage?

• Ask Ramsey Question (Isaac): $300K remaining on the house, $400K in mutual funds, and $300K in precious metals. Sell metals to pay down the house?
  • George: “Would I rather have a paid-for house or $300,000 in gold and silver? I would rather have a paid for house.” (67:00)
  • Advice to use precious metals first, pay the tax, and celebrate being mortgage-free.

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10. Overwhelming Student Loan Debt and Whether to Finish a Degree

• Caller (Elizabeth): $189K debt, unsure if she should finish a degree or prioritize paying down debt.
  • Hosts stress: stop borrowing, hit pause on school (unless cash-flowing), aggressively attack existing debt, use Financial Peace University and budgeting tools.
  • Jade: “You can’t solve a problem while simultaneously creating it. If we know debt is the problem, we have to stop borrowing money.” (69:35)

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11. Inheriting Investments While in School

• Caller (Austin): Pharmacy student with $100K in student loans, $290K in inherited investments.
  • Advice: sell brokerage account assets to pay off current loans, cash flow future tuition, avoid future loans.
  • George: “Debt free equals margin, options, flexibility.” (79:41)
  • Jade: “If you can start your young adult life with no debt, you are significantly ahead. It's like a wealth cheat code.” (81:12)

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12. Renting with No Credit Score & Company Resistance

• Caller (Kyra): Denied car rental without a credit card due to “no credit score.”
  • Advice: verify nothing negative on credit, try different rental agencies, advocate for manual underwriting.
  • Jade: “A zero credit score is just as good as a good credit score.” (84:17)

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13. Should I Drain Retirement to Pay Daughter’s College Tuition?

• Caller (Liza): Single mom, funding daughter’s tuition from her Roth IRA.
  • Strong warning: don’t become a burden to your daughter later by sacrificing your only retirement nest egg now.
  • George: “Paychecks are the solution instead of your retirement account.” (92:47)
  • Plan: pause new retirement contributions, cash flow as much as possible, daughter should work and contribute.

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14. Direct Rollovers for Old 401(k)s

• Caller (Rebecca): Unsure how to move a previous employer’s 401(k).
  • Key: do a direct rollover into a traditional IRA, invest the funds—not complicated, can use a Smartvestor Pro for help.
  • George: “You want to do something called a direct rollover, and you want to keep it in kind.” (111:19)

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15. Paid-for Properties and “Cashing Out” Equity

• Caller (Drew): Contemplating taking equity out of a paid-for lake house to buy more rentals, feeling "behind" on investments.
  • Hosts: Don’t leverage (HELOC) paid-for property; the power is your savings rate, not taking on new debt.
  • George: “You’re 38… got 5,600 a month going into investments… you’re going to have 7.4 million at 60 if you keep this up.” (126:11)
  • Stay patient, stick to what works, avoid unnecessary risk.

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Notable Quotes & Moments

• George Kamel (re: insurance agents): “Now you know they’ve no integrity because they’ve already lied to your face and they’re trying to convince you to keep it so they can keep their commissions.” (05:43)
• Jade Warshaw (to debt-burdened caller): “When you have that ‘I've had it’ moment… that’s when the rubber meets the road. The time is going to pass anyway.” (19:23)
• Jade on family conflict: “Lead with exactly what you’re going to do to help… say here’s what I’m saying yes to.” (24:09)
• George on real estate ‘opportunities’: “If you call into the show and you say, ‘Hi, we have an opportunity,’ whatever comes next is about to be the worst decision you’ve ever made.” (61:48)
• Dave Ramsey: “Term life isn’t a baby step. If anyone is dependent on your income, you need to have 10 to 12 times your income in life insurance now.” (09:04)
• Jade (on sacrificing for a child and retirement): “I don’t want you to become a burden to your daughter later on because you sacrificed for her today.” (88:48)
• Jade (on delayed investing): “The time is going to pass anyway, boys and girls.” (105:25)

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Timestamps for Key Segments

• 00:48 — Young entrepreneur asks about buying a car with cash vs. taking on debt.
• 04:54 — The pitfalls of whole life vs. term life insurance for a young mom.
• 10:22 — Overwhelmed caller struggles with debt; hosts walk through creating margin and earning more.
• 21:49 — Family rift: Dad won’t take on debt for daughter’s college; navigating communication/expectations.
• 32:56 — Mobile home debt trap: Strategic choices when upside down on a rapidly depreciating asset.
• 38:24 — Emergency funds in retirement when facing medical issues.
• 44:06 — Spousal financial discord and separate accounts leading to cascading issues.
• 55:08 — Dangerous real estate 'opportunity', hidden risk of stacking HELOCs and debt.
• 65:29 — Listener asks: Should I sell investments to pay off my mortgage?
• 68:18 — Crushed by student loan debt, should a caller go back to school or pay it off aggressively?
• 77:04 — Inheriting investments while in pharmacy school, facing whether to cash flow or keep debt.
• 82:09 — Rental car woes: No credit, no rental.
• 86:27 — Should a single mom drain her Roth IRA to keep daughter in college?
• 110:36 — Rollover of old 401(k) to new Roth 401(k) or IRA?
• 122:09 — Considering tapping home equity for investing; warning against wealth shortcuts with debt.

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Episode Tone & Takeaways

• Tone: Supportive, no-nonsense, but compassionate. Hosts mix personal stories, encouragement, and candid warnings.
• Takeaways:
  • Avoid debt at every stage, especially for cars, college, and investment property.
  • Build wealth through steady habits: budgeting, saving, and responsible investing.
  • Communication, clarity, and planning in family and marriages are crucial.
  • Don’t sacrifice long-term security (retirement) for short-term solutions (children’s tuition, quick ‘opportunities’).
  • There are no shortcuts: “Wealth gained hastily will dwindle, but whoever gathers little by little will increase it.” (Proverbs 13:11, quoted at 60:23)

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For Listeners New to Ramsey’s Approach

This episode is a comprehensive primer on the Ramsey Baby Steps and core philosophies: cash over debt, responsibility, taking the slow-and-steady path, planning for emergencies, investing wisely, and always focusing on your “why.” It addresses real-life challenges across generations and financial situations.

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For additional guidance or budgeting help, visit RamseySolutions.com.

Transcript

[Dave Ramsey]

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

[Jade Warshaw]

Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network in the Fair Ones credit union studio. This is the Ramsey Show. I'm Jade Warshaw. Next to me, GK George Camel. Taking your calls. Really? For the next three hours, it's gonna

[George Kamel]

feel like two hours to going to fly by.

[Jade Warshaw]

Oh.

[George Kamel]

Because literally the amount of show they hear.

[Jade Warshaw]

That's right.

[George Kamel]

Ads and radio breaks.

[Jade Warshaw]

That's right. But for us, it's three hours in the studio and we've got Sam, who is on the line in Cincinnati, Ohio. Hey, Sam. How can we help today?

[Caller]

Hey, can you guys hear me?

[Jade Warshaw]

We can. Can you hear us?

[Caller]

I am 19 years old. Sorry. Yes, I can. 19 years old. I just graduated high school. I'm heading to college about 45 minutes away. I'll be coming home on the weekends because I have a lawn and landscaping business that I like to keep up. And so I have a truck that's not good on gas mileage. So I'm looking to buy a car. Something small, like a Honda Accord. My parents told me to buy something a little nicer and reliable, maybe around $20,000. But that would take me down really low on cash, and so I'd have to take out a loan. I'd rather buy something around $10,000 and just. Just pay it in cash and just get something that just gets the job done.

[Jade Warshaw]

I love that.

[George Kamel]

Have you ever heard the phrase that people vote with their wallets?

[Caller]

No.

[George Kamel]

When it comes to politics, they vote for what's best for them financially. I think your parents should vote with their wallet if they're going to have a say in you taking on a car. Right. So unless they're paid for it. I know they want Sam to have a nice, reliable car, but Sam can only afford an $8,000 car, and he's going to get the best one he can for that money.

[Caller]

Yeah.

[George Kamel]

That's where it ends.

[Caller]

I will say I have around 20,000 now in cash. And up until August, I'll be making anywhere between 1500 to 2200 a week. Wow. And so. And then I have another around 16,000 in tools and equipment. That's all paid off. That was all paid in cash.

[Jade Warshaw]

Wow. Good job. Excellent.

[Caller]

Thank you. So I just. Just. I don't know if that changes the scenario.

[Jade Warshaw]

It doesn't. It doesn't. What that tells me is you're so smart with and you understand the power of cash, and it Sounds like you understand the power of delayed gratification. Right. And that's kind of what this car business is about. It sounds like you don't want to go all the way down to zero in savings, and I actually think that's very wise. And I think you understand. I'm 19. I don't need a $20,000 car. So you understand the difference of needs versus wants. So that's what's gotten you this far. And your parents, God love them, I think that they're, you know, they're not trying to jack you or trying to do anything negative. They're just. They're just. They want you to have a safe car. And they probably, somewhere in their minds don't believe that you can find a $10,000 car that checks all the boxes. And I think that when you do it, they'll go, oh, that is nice. That does work.

[George Kamel]

I'm curious, do they know how well you're doing, how much cash you have?

[Caller]

Yeah, they do. My dad's an accountant, and I like to call him my own accountant. He runs all my numbers and does all that stuff.

[George Kamel]

OK, so how much of that 20k would you call your emergency fund

[Caller]

in terms of expenses? I guess when I go to college, I honestly don't know how much I'm going to spend. It's in a little town called Cedarville, and there's not much to do, so I'm guessing I'm not going to spend any more than, I don't know, $300 a month.

[Dave Ramsey]

Wow.

[George Kamel]

Well, let's say 10,000 is your emergency fund. Okay. And let's say the other 10,000 becomes your car fund. And you can make 1500 a week and bank most of that, right?

[Caller]

Yeah.

[George Kamel]

How many more weeks can you work

[Caller]

now? Until mid August, so I don't know how many weeks?

[George Kamel]

Oh, that gets us like two months. Okay, we'll call it seven weeks.

[Dave Ramsey]

Right.

[Caller]

Okay.

[George Kamel]

And let's go on the low end. You said you can make 1500 bucks a week. On the lower end, yes. Okay, 1500 bucks a week. Seven weeks. That's over 10,000 bucks. So you take your 10,000, you have, call that the car fund, a new 10,000 from your future income. Now, you could buy a $20,000 car in cash. Do you need a $20,000 car? Absolutely not. You could find a great Honda Accord. That's a, you know, 2016 for 12. Fifteen grand, probably.

[Caller]

Sure. Okay. Yeah. Yep. Well. Well, I appreciate you guys.

[Jade Warshaw]

You've got some options. I just, I love to hear a responsible young Lad handling his money with care. Love that. All right, Abby in Birmingham, Alabama is next up. Hey, Abby.

[Caller]

How can George and I helped a question about life insurance. So I'm 27, about to be 28. I've had a $75,000 whole life since I was 22. But I just recently went through Xander from listening to y' all and got a 200,000 term policy, which, you know, you can keep it till you're 80 or whatever. And I went to go cancel my whole life the other day. Talked me out of it because they were like, well, what happens when it gets to the point you can't pay it anymore? Like you're. Because, you know, the bands are like five years. So it goes up like a percent or two every five years now that, well, I'm doing Dave Ramsey and that you're supposed to be self insured by the time that happens. Anyway, they were, you know, Dave Ramsey owned part of Xander. He. He makes money off. Blah, blah, blah.

[George Kamel]

That's hilarious. So now you know they've no integrity because they've already lied to your face and they're trying to convince you to keep it so they can keep their commissions.

[Jade Warshaw]

Yeah.

[George Kamel]

So a little bit of a vested interest to ask them if you should keep it.

[Caller]

Alrighty. Because I was gonna do the surrender or whatever and you should. He was telling me all that. And I mean, what do I. I know it's a scam in the end, but there's also this thing about you can pause it, quit making payments on it, but not really surrender.

[Jade Warshaw]

Okay, so here's.

[Caller]

Here's the issue.

[Jade Warshaw]

No. Because you two products wrapped up in one. Right. Part of what you're paying every single month is being invested and it's being invested at a very poor rate of return. Very, very bad. Somewhere between 1 to 3% is what I would estimate.

[George Kamel]

That cash value is crawling. You could do better in a high yield savings account.

[Jade Warshaw]

Right.

[George Kamel]

Than you could with that cash value.

[Jade Warshaw]

If you pass away, your family doesn't get to keep that cash value. That goes away. That goes back to your insurance agent who sold you this. Right. And so what we're suggesting is let's just pay for insurance. Like, let's just pay a little bit or a lot bit less per month on the term life insurance. Then the extra money that you're not paying in that premium, you could take that and invest that at 10%. Or if you don't want to invest it, you could apply it to your budget. Right. Whatever baby step you're on. So you're saving yourself money by simply buying insurance. And if you believe what we teach about the baby steps, there is a time to pay off debt. There's a time to save money. There's a time to have insurance. There's a time. Right. There's a time to invest. And so that's a great way to think of it is right now is the time to buy insurance. When you're ready to invest, you'll be doing that at 15% and you'll do be doing that earning probably 10 to 11% in the market.

[George Kamel]

What's your current payment you're making for that whole life insurance policy?

[Caller]

I think it's 51 87amonth.

[George Kamel]

So going and say 5251 87, like $51.87?

[Caller]

Yes, sir.

[George Kamel]

Okay. And the death benefit is real small. 75,000. That's not going to get you very far. If something were to happen to you, what is your household income or your personal income?

[Dave Ramsey]

Sorry

[Caller]

about. Probably right. At 30, I'm like a part. I clean houses. Right now I'm actually a nurse, but I had a baby and been doing what I can do to cash flow while my husband's working as well, so.

[George Kamel]

Cool. So we recommend having 10 to 12 times your income. So you're actually a little low on that 200 side for Xander, I would up it to 300. You can also get another policy versus just trying to swap it out if you already have it. But. But surrender that policy. Don't trust them. Run far, far away from any kind of permanent life. You might as well light your money on fire.

[Jade Warshaw]

Yeah. Just remember, the purpose of life insurance is for anybody who's dependent on your income. If something were to happen to you, this is to replace that. It's to make sure that they're okay. And $75,000 is maybe gonna get them a year of life, but you wanna set them up for life, which is why you want 10 to 12 times your income.

[Dave Ramsey]

Let me tell you what I get asked all the time. When should I get term life insurance? How much do I need? Is it affordable? Those are the right questions to be asking. So let's take a quick review. The fact is, term life isn't a baby step. So if anyone is dependent on your income, you need to have 10 to 12 times your income in life insurance now. And most people are surprised by how affordable term life really is, even if you're not in perfect health. Look, I understand the hesitation since most insurance companies make it more of a hassle than it needs to be not at Zander Insurance. They're not an insurance company. They're a broker that works for you. That means they'll shop and compare the top term life companies to find the most competitive options on the coverage for your family. For almost 30 years, I've recommended Zander for straight answers, competitive rates and coverage that actually protects your family. Call 800-356-4282 or go to zander.com for a quick and easy quote. That's zander.com.

[Jade Warshaw]

All right, back to the phone lines where we have Emily in Omaha, Nebraska. Emily, you're on the line. How can we help?

[Caller]

Hi, how are you?

[Jade Warshaw]

Excellent.

[George Kamel]

How are you?

[Caller]

I'm, I'm doing all right, thank you. But honestly, I'm on the show today to just ask as someone who has, I really feel like exhausted almost every option and has done everything to cut spending and all those things to pay down her debts. Like, what are suggestions or recommendations that you have to generate more income to keep aggressively attacking that. Yeah.

[Jade Warshaw]

So tell us where you're at right now. You've cut your budget back. And with everything pulled back to a skeleton, how much margin do you have right now?

[Caller]

Very, very little. So I was, I recently became unemployed. I was working on a minimum wage budget before and after leaving that job, I thankfully got a job today, but I won't start till two weeks and that is going to like pay me 20 an hour. So it's significantly more than what I was working with before. But before it was, I think I only had about $20.

[Jade Warshaw]

Wow.

[Caller]

After, after, after your.

[Jade Warshaw]

So you've been, you've been staying alive like the Bee Gees, like you've been barely making it and now there's like, you know, sun starting to part through the clouds and it's, you know, you've got $20 an hour. This is behind on anything.

[Caller]

Yes, yes, I am.

[Jade Warshaw]

Tell us what you're behind on.

[Caller]

Yeah, I am behind on my credit card debts and a personal loan debt.

[Jade Warshaw]

Okay. What. So you start this job, you'll be working 40 hours a week.

[Caller]

Yes.

[Jade Warshaw]

Okay, excellent. All right, so let's go through the debt so we can get a picture of it and then we can try to help you find kind of where you are today and where you need to go next. So we know you're behind on the credit card, the personal loan. What are the total amounts of those debts?

[Caller]

In total, it minus like my student loan debt, it's about 20, 29,000.

[Jade Warshaw]

Okay, 29,000 minus the student loan debt.

[George Kamel]

If we Added student loans in there. What's the total?

[Caller]

About 50,000. Okay.

[Jade Warshaw]

Okay. So another 20,000 of student loan debt.

[Caller]

Yes.

[Jade Warshaw]

Okay, cool. Alrighty then. Yeah. So you've got this job, you're starting to work. The first thing that you're going to do when you get that first paycheck is let's get current on everything. Let's get current on everything, and let's make sure we've got our four walls working. First thing you're going to do is I pay my rent and then I pay my utilities. I make sure there's gas in the car and I make sure there's groceries. Those are the four things first. And then we're getting current on anything that's behind. So that's the first thing. Write it down in your notebook. And then after that, we can begin to say, okay, what's a normal rhythm going to look like going forward? We've got everything taken care of. We're going to make sure to give you every dollar, which is how you're going to budget your money. Do you have it already?

[Caller]

Every dollar app? Yeah, I do.

[Jade Warshaw]

You do have it. Okay, excellent. Have you opened it? Have you gotten started in it?

[Caller]

Not yet. I recently came across it.

[Jade Warshaw]

Okay, so that's homework number two. Tonight you're gonna open up every dollar and you're gonna do the math and say, okay, If I work $40 a week at this new job, what are my paychecks gonna be? Do you get paid biweekly? If you get paid a month, however you get paid, put it in there. And then we're gonna start to run out all the things I just said. First you're doing those four walls, then you're getting current on everything, and then we're gonna find out how much margin there is and whatever margin you have left that is going at your smallest debt on top of the minimum payment. So your smallest debt is probably one of these credit cards, I'm guessing. How much is it?

[Caller]

Or, sorry, no, it's a bill from the IRS right now. Is the smallest.

[George Kamel]

Did we factor that into the 50k or is that on top of that?

[Caller]

That's. That's factored in.

[Jade Warshaw]

What do you owe them?

[Caller]

$986.31.

[Jade Warshaw]

Okay, cool.

[George Kamel]

So that's the first goal. We put the IRS debt at the very, very top because they can really screw up your life and they basically have unlimited access to your financial world. So we're gonna attack that one first. Luckily, it's the smallest, so it'll be gone real Fast. So I'm curious. You said you had 20 bucks left at the end of the month with your old job. Now with the new one, I'm gonna guess you're gonna be taking home like 2,700 bucks a month after taxes, hopefully. Okay.

[Caller]

Yeah.

[George Kamel]

So now how much margin would you have then? If you kept your expenses this low and made your minimum payments on debt, how much extra could you have?

[Caller]

Potentially? 1.

[Jade Warshaw]

We can help you if you tell us what you were making before.

[Caller]

I was making 14 an hour before.

[George Kamel]

Okay, so you got a. You're getting about a $12,000 raise. So let's call that. You're getting an extra 7, 800 bucks a month.

[Jade Warshaw]

That's big. That's major for you, but it's good. But I don't want us to stop there because how old are you, Emily?

[Caller]

I am 27.

[Jade Warshaw]

Okay, you're 27 years old, which is you're at a major crossroads right now. You felt what it feels like to struggle, but at 27, I don't want you waking up at 37 feeling the same way. Right. I'm making 20 bucks an hour. I'm trying to make ends meet. I'm just l looking for margin. So I want the bigger goal to be. I don't want to feel like this. I don't want to be floundering. I want a plan. And so I'd be looking for what is it that I want to do with my career? What do I see myself doing five years down the line, 10 years down the line, 20 years down the line? And I'd start making a plan for what it looks like to start accomplishing that. Because we can give you quick fixes for how to get margin. Because the truth is, yeah, you are going to need a side hustle on top of this $20 an hour job. You are going to need to pay off this debt. You are going to need to out figure handle that side of things. But if you can start looking on the career side of things, that's really what's going to break you free long

[George Kamel]

term and short term. There's a lot of things you can do to up the income. And Emily, let me encourage you. I was exactly where you were when I was 23. I started at Ramsey. I was 40 grand in debt with my, my consumer debts, credit cards, student loans. And I was making about that. So it was overwhelming to see those numbers. So what I started doing was finding out what stuff do I have around the house I could sell. Is there anything I could flip that I could buy cheap on Facebook and then sell for more. Can I do any of these deliver delivery jobs? Back in the day they didn't even have doordash and Uber eats, so I was doing Uber and Lyft driving people around nights and weekends. And then look at your tax withholdings. If you're getting, you know, a big refund at the end of the year, we can change that. You can. Are you doing any investing right now?

[Caller]

I am actually.

[George Kamel]

Okay. I would pause that down to zero because that's going to free up a couple hundred bucks probably. Right?

[Caller]

Yeah.

[George Kamel]

Perfect. So every single extra dollar we can find is going to get thrown at this debt and you will get back to investing in no time and you will retire a multimillionaire if you follow plan. And then there's also all kinds of things you can do like babysitting, dog sitting, pet walking.

[Jade Warshaw]

I mean just babysitting is where the cash is. That's where the bag resides.

[George Kamel]

I don't know when babysitter started charging like 20 something dollars an hour, but it's gotten insane. As someone who has to pay these

[Jade Warshaw]

people, I have come across and am sorry to say that I have paid as much as $30 an hour for a babysitter. Huh. Now this, this is the type that, you know, cleans up after the kids, puts everything away. We'll fold the laundry, we'll put things, you know, it's not just I just sit there on my phone while you write. Yeah. So I would encourage you to look into some of those service based positions because people will pay because they need

[George Kamel]

it and you can jump on it. There's apps like, you know, in sites like care.com you make an account and people will find you. And if you have, you know, if you look like a sane person with a decent profile picture, they'll go, okay, yes, let's see if, if Emily can handle this in Omaha. And so there's going to be a lot of things you can do. I'm going to send you my book, Breaking Free from Broke. There's a whole chapter called Margin is Breathing Room where I show people, here's all the ways you can spend less, here's all the ways you can make more. That's it. Those are the two levers. And you've already done so much good work in spending less. So now it's how can we make more in the short term and then long term, how do we get that core income up with our full time job? But I have a lot of faith that you will get through this. My guess is less than two years.

[Jade Warshaw]

Yeah, I do, too. But the key thing is this is the crossroads. And for anybody listening, when you have that I've had it moment, which is what Emily essentially has had, which is I'm tired of struggling. I'm tired of just staying alive. I'm tired of just holding on by, you know, my fingernails to get through a day. That's when the rubber meets the road. And you have to decide if you do the things that we teach. The time is going to pass anyway. And to George's point, you are going to wake up on the other side. You'll be out of debt, you'll have savings for the first time ever, and you'll be well on your way to building wealth.

[Dave Ramsey]

When I started, I had great ideas and I knew how to serve people, but I didn't have systems in place yet. At that time, I sold books out of the trunk of my car. It was a lot harder to start a business back then. Shopify makes it easier. Shopify is the business platform powering millions of businesses and about 10% of all E commerce in the United States. If you've got a product or even just an idea, Shopify makes it simple to get moving. You can build a storefront, write product descriptions, and even improve your product photos all in one place. You don't need 10 different systems duct taped together. Shopify handles everything you need to make sales, from payments to marketing and analytics. Plus, that purple shop pay button is one of the best converting checkouts on the planet for fewer abandoned carts. And if you get stuck, Shopify offers 24. 7 support. So if you've been sitting on the sidelines, it's time to turn those ideas into Sign up for your $1 per month trial at shopify.com Ramsey that's shopify.com Ramsey shopify.com Ramsey.

[Jade Warshaw]

Back to the phone lines. We we've got John, who's in Reno, Nevada, forever reminding me of Sister Act. What's going on, John? How can we help?

[Caller]

Yeah, hi, yes, I have a question. Right now my daughter's not speaking to me because, you know, there was comments that I said about me not putting myself in debt for her to go to college. I never said I wouldn't help her. It's just, you know, I don't want to put my family too in danger for putting me in a loan. So then after that, I mean, it's been probably now a year and three months that she hasn't talked to me. And I guess my Question is, I make about 185,000. I have $45,000 in debt. I still want to help her, but I just don't know how to do this or how to even explain it to her. It's just, you know, it just got pretty ugly.

[Jade Warshaw]

Can I ask a question? I feel like, for whatever reason, I'm making an assumption, and I don't want to make it if I'm wrong. Is your wife involved or is this a. Is. Is it just you and her, or is there a wife involved? Tell me. Tell me more about your family situation.

[Caller]

So.

So, yeah, so me. So me and my wife are willing to help out. Right. And the only thing is, just one of the things that we don't try to do is put ourselves in loans.

[Jade Warshaw]

Understood. I just wanted to make sure I understood the family dynamics.

[George Kamel]

So when did this conversation start? I'm curious. Was it because this is like, we know that eventually someone might go to

[Caller]

college, and then the word June 2025.

[George Kamel]

That's when you started the conversation?

[Caller]

Yeah.

[George Kamel]

Okay.

[Jade Warshaw]

And when is college supposed to begin?

[Caller]

Well, she actually graduated this year, and she decided to go out of state in college, too.

[Jade Warshaw]

Okay.

[George Kamel]

And you guys never had this conversation?

[Caller]

We had the conversation a couple years back, but her mom and what? I'm with her mom.

[Jade Warshaw]

That's what I was trying to get.

[Caller]

Yeah, I guess they never give me type of information or anything. You know, like to be able to clear things out. They just like, oh, you need to pay for this. And then in that same conversation, they were like, oh, well, she. Can you at least help for the car? And I was like, what car are we buying? So there was never really any type of information given to me other than just little bits and pieces. And then you just expected me to do it right there and then.

[Jade Warshaw]

Okay, understood. That's the family dynamic I was trying to get to. I had a sense that something. There was a separation or, you know, your wife is not in the house. Here's what I think is happening, and I could be wrong. But just by the way that you're saying your words, it sounds more like you're talking more about what you're not gonna do versus talking about what you are going to do. And I would be leading the conversation with exactly what I'm going to do to help. And I think if you do that, then it'll cause them to hang out there as well and remember that from the conversation. For example, if she says, but, Daddy, I want to go to this school, and I. The only way I'M going to go is gonna, I need a thirty thousand dollar loan. And you say, I'm not taking no thirty thousand dollar loan. Right. That's not gonna work. But if she says, but daddy, I want to go to this college and you say, honey, I'm going to give you $15,000 for college. It's up to you to figure out which school you can go to, where that money will go the furthest. Here are my suggestions. Do you see what I'm saying? That's a very, that's a very different conversation. Now. You've never said no. You've never said no. You've just said, here's what I'm saying yes to. And I think that that would go a long way. Because if what's happening is true, which is they're having a bunch of side conversations and they're, you know, marinating on this and maybe inflating it beyond what you've said, your best protection is to be able to say over and over, I'm giving her the 15,000. I'm giving her the 15,000. I've said I would pay, you know, up to this point for this particular school. So if you're being accused of not caring, show that you care by saying, here's a school that works. It's in my budget. If we all pool our money, we can do it like this. Right? Let's solve the problem versus everybody talking about what we can't do.

[Caller]

Yeah. And that I did try, but their thing is like, no, she needs to go here. That's what she wants to do and that's what she's going to do. And at that point I was like, hey, well, I'm not going to be able to do that, especially out of state. And then you have to pay out of state fees too.

[George Kamel]

So are you not helping at all financially right now?

[Caller]

Yeah, so what I did was just put, you know, I put myself in child support and all that stuff. So I've been paying all that child support and that's pretty much it. And when, whenever she comes to, she came to the house before, you know, she, you know, she had her own room, her own place to be. And I had, you know, told her, like, hey, if you need anything, you know, come to talk to dad.

[George Kamel]

Well, not anything.

[Caller]

Yeah, like, whoa. What I meant like when it came to school.

[Jade Warshaw]

Right.

[Caller]

You know, let me know and we'll talk. But I don't need to be talking to your mom because it's just become such a toxic.

[George Kamel]

Well, that's what I Want to know what is the relationship with mom versus you and how long.

[Jade Warshaw]

And how long has it been like that?

[Caller]

Yeah, so. So it's been 18 years. I never married her, so I have my own family. My.

[Jade Warshaw]

Okay.

[Caller]

Yeah. So, yeah, with my wife. I never married her. So she. I never been with her ever. Ever since my kid was born.

[Jade Warshaw]

So this is just kind of been, for lack of a better word, like baby mama drama for 18 years, back and forth, back and forth. Okay, that makes a lot more sense now. I just want to. Sorry, I want to clarify, just to get down to brass tacks. We understand you're not going into debt. I would not. I would agree with you, and I think George would too. We're not going into debt. I'm not signing a parent. Plus lo not gonna recommend for her to go into debt. How much. How much money do you plan to give her every month or every semester for college? What's the number that you have in

[Caller]

your head that I don't have. But I mean, I could come up with the number.

[Jade Warshaw]

That's what we need.

[George Kamel]

Could that restart this relationship? I think if you going to her and saying, hey, I have really screwed this up and I'm so sorry. There was a lack of clarity. I did not communicate well. I communicated too late, and that's on me. What I do want to do is restart this conversation and create a plan for you to go to college debt free. And here's how much I can do right now based on my financial situation. Would that get her to perk up?

[Caller]

I'm hoping, yeah.

[George Kamel]

Because there's so much deeper here. This is. There's a lot of relational issues. This money thing is just like one baby symptom of years and years of broken relationships. And I think she's now seeing this as, man, this guy hasn't been there for me relationally, and he's not even here for me financially.

[Caller]

Well, yeah, and that's how it seems. Right. And the thing is that we always. I always been there for her. She's stayed with me, like I told you guys, like every weekend and stuff like that. I made sure that I went to the courts, got child support on myself, and then made sure that I had visitation for with her because I knew that we're gonna try to pull her away. So I, like, made myself, you know, available for her.

[Jade Warshaw]

But now I just.

[Caller]

Everything got manipulated.

[Jade Warshaw]

There's two conflicting family dynamics. You've got a family over here who we're a no debt family. And then there's a family on this end for her, that's like, hey, whatever it takes, we're going to do it. And she's caught in the middle of that is what it sounds like. I, I agree with George wholeheartedly. If you come to her because I'm gonna tell you like this, my dad said to me, I'm not. When I, when I said I want to go to this school and I need a loan, he said, I'm not doing student loans. He said to me straight up, he was like, you better get a scholarship, you better be good at sports because I'm not taking out no student loans is what he said. And I was like, okay. You know, and I remember at the time feeling away about it. Cause you know, you're 18, you're 17, you're 16, you're young. But on this side I'm like, oh, thank goodness. I'm really glad that he didn't ensnare both of us. You know, I went on and I was hard headed and took out some loans, but at least it wasn't a parent plus loan and at least I didn't ensnare him in it. So I think on the flip side, like longer down the line, she's going to appreciate that. But if you do what George said and you humble yourself and apologize for not starting this conversation earlier as the adult she is, that's going to do something to her on the inside because parents don't apologize to children enough for the mistakes that they make. And so please, please do that and don't do it in the heat of the, of the, you know, the next conversation. You, you go first, call her up and get, hey, can I take you out to lunch? Can I take you out to dinner? Sit her down and go, I messed up and here's how I, how I did it. And I think that's going to change the whole landscape from us going forward.

[Caller]

Yeah, no, I agree.

[George Kamel]

Cool, cool, cool. Well, it's a great wake up call to all the parents out there. Do not start this conversation as your child is touring schools. Start this conversation at 12, at 14, at 15, so there's no surprises. Your kid knows exactly where you stand. Hey, I will cover four years at an instant state school.

[Jade Warshaw]

That's right.

[George Kamel]

That's what I'm willing to cover.

[Jade Warshaw]

And if you can't, if you don't have the money, that's okay. As long as you have set the expectation. I don't have the money for college, you're going to have to get a job, you're going to have to do work study. You're going to have to go to community college. As long as you set the expectation, that's all we can really ask of you.

[George Kamel]

Here's what nobody warns you about. You're behind on payments. You signed up with some debt settlement company. You're making your monthly payments to them. And then one morning, a process server knocks on your door. Surprise. You just got sued by a creditor. And that company you trusted, Not a law firm. They're not built to represent you if things escalate. And now you're scrambling to figure out what to do next. And that's why I tell people about Guardian Litigation group. Guardian Litigation is not a call center. They're actual attorneys at a law firm. And from day one, you're assigned a real attorney who can represent you if a creditor takes you to court. No scrambling when things go sideways. Just real legal protection built in from the start. And look, the best way out of debt is still the budget, the plan, the baby steps. But if you're already in default and legal threats are coming your way, Guardian has your back. Their attorneys have helped over 55,000 people settle more than $600 million in debt debt. So get real legal [e-mail] Ramsey. That's guardian lit.com Ramsey Attorney advertising results

[Jade Warshaw]

may vary, and no specific outcome is guaranteed. All right, back to the phone lines. We go where we have Timmy, who is in Dallas. Dallas, Texas. Hey, Timmy. How can George and I help you out today?

[Caller]

Hey, good afternoon. Hey, shout out to smart money happy hour. Hey, represent.

Thank you.

[Jade Warshaw]

Keep it going. You're welcome. It's Friday. I know you guys aren't gonna see this till later, but it's Friday, so I feel like I'm on a different level.

[George Kamel]

We're vibing.

[Jade Warshaw]

How can we help, Timmy?

[Caller]

All right, so my wife did call last week about our mobile home. So we owed about 80. We owe 80. 98,000.

[Jade Warshaw]

Okay. I think I remember this.

[Caller]

Finally got an appraisal. It was a paola in Dallas, Texas, but we finally got an appraisal, and the difference is $33,000.

[Jade Warshaw]

That's what it's worth.

[George Kamel]

You're saying it's worth 65.

[Caller]

Okay, 5. Yes.

[Dave Ramsey]

Okay.

[Jade Warshaw]

So you're 33 upside down.

[Caller]

Yes. Yes.

So that's fun. So we're. We're already. We're in baby step three. And so we have right now saved up. I want to say 2000. And so now is now. It's like, which way do I go? Right. I want to sell this Thing like Dave said last time. It's just. I just. I'm financially illiterate. I just. Just don't know what to do.

[Jade Warshaw]

Yeah, I, I would. I. This is going down every single day that you wait. For those who didn't hear that episode. Yeah. Your wife called in. This was something that was really keeping you guys stuck. And we suggested that you sell it right away, get it appraised, sell it right away. So you've got the appraisal. And the way to get from upside down on this is you've got to get a loan for the difference. And as as much fun as that's not going to be, it's better to have $33,000 of debt than to have $98,000 of debt. That's just creating a bigger gap day by day by day. Right. Basically going up. So that's what I would do. I would try to go down to the credit union if you can, try to find something with as low as, you know, lowest interest rate as you can. But the key is we've got to get out of this mobile home. That's going down. Now, tell me about the land, because I don't remember, do you guys own the land or where is it?

[Caller]

Unfortunately, we do just rent out the land. And so each year it just keeps increasing. So right now we're at 950.

[Jade Warshaw]

Got to get out of this.

[Caller]

Yeah, yeah.

[Jade Warshaw]

And just. And find some place to rent for a while and just kind of clear your minds of this. This thing. That did not go well for you.

[Caller]

Yeah.

[George Kamel]

How much money do you guys have right now?

[Caller]

So late in the game?

[George Kamel]

How much money do you guys have right now? To your name?

[Caller]

I would say in savings, checking, just $3,000.

[George Kamel]

Okay. Because I'm wondering, I'm guessing the time it would take you to save up the gas, it would be a year or two from now, right?

[Caller]

Correct. Correct.

[George Kamel]

To save up $33,000. What's your current household income?

[Caller]

Current household income is 80,000.

[George Kamel]

Okay. And what's your monthly expenses? How much does that add up to to cover everything?

[Caller]

2,700.

[George Kamel]

Okay. So there should be some margin at the end of each month right now, right?

[Caller]

Yes.

Yes, there is.

[George Kamel]

Okay. If you guys are taking home 60 and spending 30, you could save up 30 grand in a year. Again, the value is going to go down. So the gap is only going to grow at this rate because the appraisal is only going to come back the same or lower next time you do it.

[Jade Warshaw]

Yeah. I mean, if you can. If you take out that loan for the difference and then you get very aggressive about paying off that 33,000. You know, that's, that's the choice you have to make. I'd hope that you could do that, you know, within the year as well if you got extremely aggressive. So it's, it's your choice. But I, if I were in your shoes today, I think I'd call it and, and get out of there. Have you looked at rent in your area?

[Caller]

Unfortunately, I think rent's pretty high in my area, so it's going to be around 1700. But a two bedroom, just because I got two daughters, if I remember correctly,

[Jade Warshaw]

didn't you tell me that the interest rate on this thing is crazy? So your payment's high on the, your payment?

[Caller]

Super high.95. Yeah.

[George Kamel]

Oh, okay.

[Jade Warshaw]

What are you paying every month for it?

[Caller]

It, the mortgage alone is 1100.

Uh huh.

[Jade Warshaw]

But then the rental and then the,

[Caller]

plus the lot rent. Yeah, 950.

[Jade Warshaw]

So you're. Yeah, this is going to be cheap. It's going to be cheaper for you to rent. I mean you'll have to pay, right? You have, you have the $33,000 loan. So you'll have to put some margin towards that.

[George Kamel]

But I think you're putting two grand towards housing already, right, is what we're saying.

[Caller]

Yep. Okay.

[George Kamel]

And so putting 2000 towards something that helps you build for your future is way better than something that's going down in value like a vehicle. So this is not going to be fun. And I don't know how easy it's going to be to get a loan for the difference on this. But that's your option other than selling stuff aggressively, saving up as much income as you can. But again, that's going, that could be a year from now before you can get out of this.

[Jade Warshaw]

Do your diligent, do your, do your due diligence, see what you can find and as a last resort, yeah, go ahead and cash flow. But when, when we say cash flow, we don't mean like do, do, do. We mean everybody's picking up second and third jobs and we are attacking this like a virus. Like we're going crazy on it. Okay. We want you to get out of this for good. Shelley is in Atlanta, Georgia. Shelly, how can we help today?

[Caller]

Thank you for taking my call. I've been listening for quite a while now and I really appreciate everything you guys do. You two are my favorite.

[Dave Ramsey]

Thank you.

[Caller]

Anyway, my question is, my husband was diagnosed with dementia about a year and a half ago. He's Been doing treatments every two weeks. We have very expensive insurance, but it is covering it. So that's a good thing. He's doing quite well.

[Dave Ramsey]

Good.

[Caller]

He's 77 and he works part time still, believe it or not. Wow. Just one day a week, but it's just something to do, you know? Yeah. My question is, I'm trying to save up, fill up our emergency funds, and we're completely debt free. House is paid off, everything is done. I'm 65 and I still work full time. My question is, do I keep putting money into the emergency fund to get to the recommended 12 months in a situation like this, or that's what I heard on Ramsey, or do I use some of that money to try to bring him to some of his siblings? He has six siblings and they're kind of spread out. Four of them are coming for my son's wedding next week, but there's still two that we haven't seen in a while. Because I feel like, you know, we're getting to that point in time. Right. I feel like I feel guilty that he's not being. He's not seeing them.

[Jade Warshaw]

Is. Are the siblings that he hasn't seen that are not coming for the wedding, are they older? Like, are they. Is it hard for them to get out?

[Caller]

There are all their ages range from like 67 to 80.

[Jade Warshaw]

Okay.

[Caller]

And actually the 80 year old's coming in from New York and. But there's one that's in New Hampshire and he's like in his late 70s

[Jade Warshaw]

as well, when he's not able to travel.

[Caller]

Correct. And then we have one that's in Lake Charles, Louisiana, but he's. He's a little bit younger, but. Yeah, they're just busy.

[Jade Warshaw]

Listen, you have no debt. You've paid off all your debt. You paid off your mortgage as well. Yeah. You do need to save up an emergency fund. But I think that you guys have worked hard and earned the right to, you know, take a trip to New Hampshire to see a family member or whatnot. So I would not let that stop you. What are you earning? You said you're still working full time. What do you make?

[Caller]

I just do a little job. It's about 45. And then with his Social Security and his job between all of it, it's like 77. So. Okay.

[Jade Warshaw]

Okay. What is his Social Security? I want to know monthly what you guys are bringing in.

[Caller]

He is bringing in 27, 47.

[Jade Warshaw]

Okay.

[Caller]

And mine, after everything is taken out, probably is around 3, 26.

Okay.

[Jade Warshaw]

Okay. And there's no nest egg.

[Caller]

300.

[Jade Warshaw]

300,000.

[George Kamel]

I would be looking, of course, for the short term plan, which is, yes, we need an emergency fund. You can go six months or more. You might just have a sinking fund in the budget for medical expenses. And then we need a long term plan because if you're looking at, you know, dementia care, it could be 50 to 100,000 a year.

[Caller]

Right, right.

And that's, that's why, that's what stops me from spending money, like very frugal. We don't do much.

[Jade Warshaw]

And you should be.

[Caller]

But we had thought about getting long term care. Well, of course we never did it. Now we can't because of him. You know, with his diagnosis, you can't get the insurance. Insurance.

[George Kamel]

Yeah, yeah.

[Caller]

So, but, but as far as. So it. On one hand you're saying go ahead and just keep.

[George Kamel]

Yeah, keep funding it and then start a sinking fund and don't feel guilty for spending along the way. You still have to live your life. You still need to see family. And the best thing you can do is make a game plan for what this looks like long term. Become an expert on this health insurance plan. What does it cover, what doesn't it cover? Have the full out of pocket max ready to go. That's all the things you can do in a situation this difficult. And we are, we are rooting for him. Sounds like he's doing good. Let's hope it stays that way.

[Jade Warshaw]

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[Caller]

Hi, guys, how are you doing?

[Jade Warshaw]

Great. How can we help today?

[Caller]

Okay, I'll try to keep it as brief as possible. So my husband and I are currently working to pay off debt and we're trying to follow like the Dave Ramsey plan as far as the baby steps, which we have not started because we're in a difficult situation and kind of need help with a realistic plan with our finances. So we both have loans for paying off. My husband, he bought from a loan company, several, and he is paying those balances. And I've also borrowed to help pay off his part of the rent which was originally supposed to be for my car payment. And because we're focusing on making those payments, our cash flow is extremely tight. So in addition, I'm helping cover a portion of his rent obligations while he's paying off his loan, which has caused me to fall behind.

[George Kamel]

I'm sorry, what's the rent for?

[Jade Warshaw]

Are you living in different places?

[Caller]

No, we live in an apartment. Same apartment complex.

[Jade Warshaw]

And you're married?

[Caller]

Yes.

[Jade Warshaw]

What do you mean when you say his portion of the rent? Does he owe from another?

[Caller]

Yeah, he. No, not from another. We split the rent in half, but

[George Kamel]

he hasn't been making his portion. So you covered it with debt?

[Caller]

Yeah, because I. I come up short because I have my dose that I'm paying too. And if I don't have enough, I had to make the non smart decision.

[Jade Warshaw]

How long have you been married?

[Caller]

Two years. Will be on Monday.

[Jade Warshaw]

Two years. Okay. Happy anniversary. And you said I. You mentioned children. How many total?

[Caller]

No children.

[Jade Warshaw]

Oh, I thought I heard you mention somebody.

[George Kamel]

Okay, so what's the rent?

[Caller]

The rent is about 19, 16.

[George Kamel]

Okay, and what do you guys each make?

[Caller]

I make about 15 every two weeks and he makes about. He gets paid every week, so about 700 every week.

[George Kamel]

Okay, so you're both bringing in about three grand a month? Yeah, about six grand total.

[Caller]

Yeah.

[George Kamel]

Okay, so the rent is about a third of your income, which is a little high, but it's not. Not broken. Why did he get behind on rent?

[Caller]

That's what I've been trying to figure out too. I did ask him. He did mention borrowing from like five different other companies that he's paying back.

Oh, boy.

How? When he gets paid every week and I didn't really Get a clear answer on that part.

[George Kamel]

Well this is t. You know this, this is a huge marriage issue more than it is a financial issue. There is zero transparency, zero accountability, zero acting like a married couple. You just, you get got shacked up with a bad roommate.

[Jade Warshaw]

Have either of you expressed the interest in wanting to kind of combine money so that everything is transparent and it's just one big pool?

[Caller]

Actually I did. That was me.

[Jade Warshaw]

And what did he say?

[Caller]

Kind of hesitant on it. He didn't really like the idea of like even though it's coming, his money is coming in through his account, mine and my account. He didn't want to combine.

[Jade Warshaw]

Did he say why?

[Caller]

No.

[George Kamel]

Is it shame? Is it fear? Is it baggage? I think we need to get to the root of that in order to solve this because I don't see a path forward if you're going to continue to borrow on his behalf because he's behind on rent and he won't tell you why. This is crazy.

[Jade Warshaw]

It's very tangled up. It's a very tangled up situation.

[George Kamel]

Cuz you can't control him, you can't change him. And so if he continues to make bad decisions, it's going to affect you, right?

[Caller]

Yeah.

[George Kamel]

In some way shape or form. And I hope you don't take on any more debt for him. Can you promise me that?

[Caller]

No, I'm paying my back. I just have two more payments left and I'll be done. But it's kind of sucks.

[George Kamel]

What's your total debt? What's his total debt?

[Caller]

I have my car that I'm paying off. I have about 7,000 left, 6,000 left on it. Okay. I just have also my credit card which is about 800 and something left on it and I just have paying off my car parts which is about little over 2,000 left. And then he just has the. I'll say about 10001500 left for his.

[George Kamel]

What's that debt?

[Caller]

It's between those five loan companies.

[George Kamel]

Okay. What are these loan companies?

[Caller]

Some type of apps he found on his phone.

[George Kamel]

Okay. I thought so like these short term. It's basically payday loans but make it digital.

[Jade Warshaw]

Yeah.

[George Kamel]

Which is even worse.

[Jade Warshaw]

Something's going on here. I'm going to break up the money talk just for a minute cuz I want to go back to the marriage talk. I've been married for almost 20 years. It'll be 20 years next year with my husband. And one of the reasons you get married is yes. You want a level of commitment. You want to know like this is my person But a. A bigger part of that is you see the ability to build something bigger than yourselves together over time. And there's a shared vision that's there. And you spend the years of your marriage aligning on that vision and going towards it together. That's one of the joys. That's why you have children. That's why you buy a house. Like those are the. You're just creating this life together that you both visualize and both agree on and both believe in it so much that you work hard to achieve it. And what I hear right now, and this is not meant for shame or indictment or anything like that. It's just. Just you called us and I'm letting you know what I observed because it's still really early and still very, very fixable. What I hear right now is two people who agreed to live together, but that's kind of it. And so you've got goals and he's got goals, and you spend your money like this and he spends his money like that. And I ain't got to tell you what I do. And she don't have to tell me what she did. Right. And it will be impossible to build anything like that. And I think you're starting to butt up against that. You're starting to feel that, which is why you suggested, hey, let's put the money together.

[Caller]

Together.

[Jade Warshaw]

That's thing one. Thing two, I want to mention, because it's just the truth. And it's. Again, it's not to promote fear or shame or anything like that, but when people want to hide, it's generally because they have something to hide. Most people, the part of the purpose of entering marriage is you want to be known. You want somebody to see you and know you and get to accept all the facets of you. And this person is hiding something that they don't want you to see because they're either ashamed of it, they don't think you'll accept it. Do you see what I'm saying? So that's what I'm hearing. I'm not a counselor nor a therapist. I'm just a person who's been in a relationship with the same guy for almost 20 years. So I would really dig into that and I would really do it out of love, not out of I'm angry at you or I'm pointing the finger at you. But, man, I love you and I chose you for a reason. And I just feel like there's something here that's between us. Us. That's between us. It's Causing a rift. And I don't like that. And I would love to get to the point where we know each other and we have nothing to hide. And if we have to see a counselor to make that happen, I'm all in with this. Right. Approach it from love and see what happens. Okay, now we can get to the numbers.

[George Kamel]

Well, the good news is you can attack your debt all you want. You can get rid of it. And you're right. There's not like. It's not like you have $50,000 of debt here. The problem is, unless we address the root problem, you're going to go further into debt. You're going to get evicted eventually. If this continues or like Jade said, you have this conversation, you restart what this marriage looks like. Well, now we have some unity. We have some vision. We have transparency, accountability. Now we can make a plan for $6,000 coming in instead of my 3,000 and his 2,800. And I don't know what he's doing and he's not paying his share of the bills. This is not working. And so tonight you have a new marriage.

[Caller]

Marriage.

[George Kamel]

It's going to be a come to Jesus conversation. Catch him in a good moment. Don't come out attacking him.

[Jade Warshaw]

Yeah, don't do it in the heat of an argument.

[George Kamel]

For sure. You're the problem and I'm doing perfect is, hey, we've been really in miles apart. We are in different galaxies right now. And I love you. I want a different kind of marriage and I want a different financial future.

[Jade Warshaw]

Oh, I love that. Listen, when you sense a red, and this is for anybody, everybody, listen. When you sense a red flag, don't ignore it. Go headstrong into it, 10 toes deep. Get right into it and get to the root of that problem.

[George Kamel]

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[Jade Warshaw]

Well, investing can be confusing and overwhelming. So lucky for you, we created a two night virtual event that you that gives you a simple strategy that you can feel confident in. George, you and Dave paired up on this and I'm really excited. It's going to be a two night Investing Essentials event September 1st through the second. It's the only place that Dave unpacks his playbook for investing and wealth planning. Plus, this year you guys added some new content.

[George Kamel]

Yeah. So we did real estate investing on night two. We're going to shove that into night one and make night two all about wealth planning. Planning, I like that. So we're going to talk about legacy navigating whales, insurance, taxes, how to keep the government's hands off of all the wealth you've built.

[Jade Warshaw]

Great.

[George Kamel]

How to pass it on to your kids without destroying their life. All the things that that will really affect a lot of people who are in that baby step four through seven phase. And Dave, we go super nerdy. So if you've ever been like, man, I wish they'd go deeper. I wish we'd get a little more inside baseball. Yeah, listen, Dave will have some formulas that will have he's like beautiful mind out there. It's like goodwill hunting to see Dave. Dave on the board crunching the number. So check it out. Tickets start at 199 bucks. Get yours today ramsaysolutions.com events or click the link in the show notes. If you're listening on podcast or YouTube.

[Jade Warshaw]

Yeah, Stella is in Rochester, New York. Stella, how can we help you?

[Caller]

Well, I'm actually looking for some advice on house investing. My husband and I have been married for a few years. We're out of debt. We're trying to save up for our down payments and someone close to us who's done really well investing in real estate is giving us some very well meaning advice. But something sounds fishy to me and I can't quite figure out where the problem is.

[Jade Warshaw]

Okay, so you're getting fishy advice. You're on, baby. You've paid off all the debt. Do you have a personal residence or this is strictly for, you know, welfare.

[Caller]

We're renting right now. Okay. We're out of debt. We have our emergency fund and, and we're working on a down payment. So I guess you could say baby step, three and a half.

[Jade Warshaw]

Love that. 3B is what we call it, which is right on. Are you guys investing at all or you're just solely saving up?

[Caller]

We're right on that tipping point between having the six month emergency fund and starting to invest.

[Jade Warshaw]

Love that.

[Caller]

Okay, so tell us about friend is telling us. Oh, you know, this is a way that you could, you know, get in on the ground level and grow really fast and you know, win.

[Jade Warshaw]

And what are, what, what is that? Tell, tell us the details. What are they saying?

[Caller]

So he was looking at a rental property in Florida which was $1.2 million, which we could never afford, but after a hurricane it's now 600,000. So he says he. Or we could buy it, put in 200,000 in renovations and then it would be back to that $1.2 million value. So boom, you just made 600,000. Now you can take out a home equity loan on that debt and then use it to buy another house and do the same thing. So you just made magic money. You don't have to pay income taxes and it's win win. What could possibly go wrong?

[Jade Warshaw]

There's where you lost me. So if you had said, hey, here's a property that needs some work and some improvements and you know, I can get it for cheaper because it needs work and improvements and I'm going to purchase it and do that. I'm all for that. But there's several parts in this. George, I know you heard it too that are just really.

[George Kamel]

It just sounded like a TikTok came to life and they've been watching a whole lot of it and maybe they tried. Maybe it has worked so far. That's not the whole story here. Yeah, and I agree there's something fishy. Are they, are they profiting off of this? I don't understand how you're. It seems like your friends are benefiting if you do this.

[Caller]

It.

[Jade Warshaw]

Well, do they do this?

[Caller]

They do this. They've done well for themselves. But I don't. I'm starting to have wonder wondering if they're actually in the plus or if they just owe more than they're actually worth.

[Jade Warshaw]

And you'll never know. You'll never know. But what I know unless you told us not the truth, which is okay because you don't have to tell us where you are, but my screen says you're in New York, and this property is in Florida. So they're. They're saying, hey, go in other states where you can't even really see the property. You don't even know the market. And let's get involved over there. You gotta pay a property manager, somebody

[Caller]

who cares about us very deeply. They live in another state and they're snowbirds. So this was a property he was looking at, and then he was trying to give us advice on we could

do something, why don't they buy it?

And in my brain, he was talking about it. I don't remember what decision he made.

[George Kamel]

I think you let them have this one. So I appreciate the offer. This is all you guys. We're working on our own financial plan, and we're going to go slow, and we're okay with that.

[Caller]

And by the way, we're in the Rochester area. There's a low, lower, much lower house that we can actually ford. And we do this and, you know, and it's lost its value. We put in some amount, it doubles in value. Where does the. So what goes wrong when he starts stacking those helocs? What. What's the error that happens?

[George Kamel]

You're stacking debt on top of debt on top of debt. So every rung of this ladder that he's describing is borrowed money tied to your home. So one bad contractor bid, one vacant month, one rate hike, one Florida insurance premium, and you're underwater. And the whole house of cards comes tumbling down. And they get real quiet when that part happens. And you don't hear from them. You only hear from them when things are going really well and they're really loud and they want you to get in on this. So this is like an mlm. It's like cryptocurrency. Someone just got a little too excited and they want everyone in on it. So I don't know if they personally benefit or if they're just real excited because it worked for them. They went, wow, free money.

[Caller]

Yeah.

[George Kamel]

But you guys do not need this level of risk in your life. And it violates several of them. Our real estate principles, number one is pay cash for any investment property. Because of the risk that's involved, it's hard. You can. You can do the formula and you can represent the risk. Nobody does that. People who are into real estate investing, generally their risk meter in their brain is broken. Every extra dollar they want to put into a house to reinvest, to get a heloc, to do it again, do it again. And the truth is the. I Love this proverb 13:11 11. Wealth gained hastily will dwindle. Whoever gathers little by little will increase it. So if it feels like your wealth is being built too slow, you're on the right track.

[Jade Warshaw]

Okay, and I think you guys need to clarify, what is your goal? Is your goal today to have a say for a house that's you, you know, yours and yours alone, and it's just your primary residence? Is that your first goal, or is your first goal to be Scrooge McDuck and have a real estate empire? I think just from listening to you, the first goal you've walking the baby steps. So my guess is your first goal here is we just want a house, and we want something to call our own, and we want to do it in a smart way. And if you do that, that will set you up to build wealth like George is describing, and then be able to pay cash for real estate with extra margin. But I would not ever sacrifice the American dream of being able to purchase a home and being able to pay off that home and live in peace for. Or some sort of real estate mogul's idea of how to really just ruin your life with debt and helocs. Yeah.

[George Kamel]

I mean, this is Dave Ramsey's origin story.

[Jade Warshaw]

Absolutely.

[George Kamel]

He built a $4 million real estate portfolio on borrowed money at age 26, and he lost it all when the bank called his notes. And it can happen fast. And so it's a lot of risk that is not represented in these conversations. And for those reasons, I would very politely say, no, thank you. We're going to live our life. We got other financial plans. But thank you for letting us know about this quote. Opportunity.

[Jade Warshaw]

Absolutely.

[George Kamel]

Which. That's my trigger word, Jade. Anytime soon.

[Jade Warshaw]

Opportunity.

[George Kamel]

If you call into the show and you say, hi, we have an opportunity, whatever comes next is about to be the worst decision you've ever made.

[Jade Warshaw]

It's never good. It's never good. It's never good to have an opportunity.

[George Kamel]

No one ever says, hey, we have the opportunity to purchase a house really peacefully with 30% down. It's always, we have an opportunity to do zero down on this home and start with zero equity and been in a really risky financial position.

[Jade Warshaw]

Yeah, it's never good. What we teach, it's very simple to understand. Some might say that it's boring because it doesn't have a lot of hoops to jump through and it's not a lot of bells and whistles.

[George Kamel]

It doesn't make for a great TikTok when we say, hey, save up, pay off Your own house first, then save up and pay cash for any investment. Real estate, property. I'd get zero likes on that video.

[Jade Warshaw]

And while you're at it, don't borrow against your current mortgage because we actually want you to gain that equity. We like, we like the idea of you having equity and yeah, putting your

[George Kamel]

house on the block. Variable interest rates. I mean it's just a credit card attached to your house.

[Jade Warshaw]

Yeah, absolutely.

[George Kamel]

That's what a HELOC is.

[Jade Warshaw]

Absolutely.

[George Kamel]

And people make it sound like it's some wealth hack that everyone knows about and does except for you.

[Jade Warshaw]

Yeah. And then when you ready to sell that piece of property and you're thinking, oh, here's my payday now you've got that HELOC hanging over that. It's like, oh, I forgot about that, that, yep, I still owe 50,000 over there or what have you. So the way that we teach the whole purpose guys is we want your home to be a blessing and not a burden. When we tell you things like the 25% rule, your mortgage should be no more than 25% of your take home pay after taxes. It's so that you feel good and you can actually enjoy your home. You're not house poor. When we tell you not to borrow against Your home on HELOCs or home equity loans, it's so that your wealth that you build is your wealth. And when the time comes for you to upgrade in house, you have all of that at your disposal.

[Dave Ramsey]

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[George Kamel]

to remain active on Boost Mobile unlimited plan.

[Jade Warshaw]

The Ramsey Show Question of The day is brought to you by why Refi? If you've fallen behind on your private student loans and don't know where to turn, why Refi works with borrowers other lenders won't and helps explore low fixed rate refinancing options. Options go to yrefi.com Ramsey that's the letter y r e f dash.com Ramsey Remember, it may not be available in all states.

[George Kamel]

George Today's question comes from Isaac in Indiana. Our primary home is our only debt. With a $300,000 mortgage. I have roughly $400,000 in mutual funds and a little over $300,000 invested in precious metals. Should I sell my medals and put the funds towards my primary mortgage? I know what you're gonna say, but it's a big struggle for me. My initial investment in them was only 150,000 and my gut says to wait until there's enough to pay off the mortgage completely and cover capital gains. But waiting is slowing down our investing more for retirement. Kick me in the pants with your wisdom.

[Jade Warshaw]

Wow.

[Dave Ramsey]

Wow.

[George Kamel]

Well that's the first time I've heard that. I like that line though. Yeah, I might use that gladly. Wow.

[Jade Warshaw]

Gladly. So.

[George Kamel]

So he's got, I don't know if the, it sounds like the mutual funds are non retirement. The $400,000 right on 300,000 in precious metals. I don't know why it's sentimental to him but he said his initial. It's more about the taxes. I think he's scared of the tax hit more than anything else and I

[Jade Warshaw]

think he knows what we'd say about like commodities. I think that's why he's also looking there and not looking at the mutual funds.

[George Kamel]

Yeah, if I, if you're going should I use the mutual funds or the precious metals? I would personally use the precious metals. I don't know what apocalypse is going to help you survive with your bars of gold Scrooge McDuck style. But a paid for house, that's what you're really trading for. Would I rather have a paid for house or would I rather have $300,000 in gold and silver? I would rather have a paid for house personally.

[Jade Warshaw]

Indeed.

[George Kamel]

And so yes, you'll have $150,000. That was the growth. You'll have capital gains tax. At your rate, it may be 15% of that. And so you're talking about really to pay off the house, you're going to have a tax of 22 grand a page pay. Now if you are debt free with an emergency fund and Savings, you could cover that. Or what I would do is just pull from the mutual funds. Pull 22 grand from the mutual funds to cover the taxes when tax time comes due and enjoy your freed up mortgage payment.

[Jade Warshaw]

Small price to pay to, to have a paid for mortgage. I think 22,000.

[George Kamel]

Do the math on this. Take that mortgage payment, the principal and interest, pop it into an investment calculator for the rest of your life and say I invested that. Now we're talking. Talking. There's a million bucks on the other side of paying off this mortgage. I'll take it.

[Jade Warshaw]

I like it. Yeah. Or yeah. Or just thinking about if you didn't pay off the mortgage, what you're paying in interest, all of that time, you're gonna pay well over 22,000.

[George Kamel]

So we can, any way you slice it, we can do the math all day long, but this is more emotional than anything. It's just a big, big chunk of money.

[Jade Warshaw]

It is.

[George Kamel]

And there's something physical that you're letting go of to get rid of these precious.

[Jade Warshaw]

I understand it. Well, that kick in the pants wasn't so bad. Let's go to Elizabeth who's in Nashville, Tennessee, right in our backyard. Hey Elizabeth.

[Caller]

Hey, how are you doing?

[Jade Warshaw]

Doing good. How can George and I help?

[Caller]

I'm reaching out because I just found you guys literally within the last two months and my husband and I are in $189,000 worth of debt and I currently work an AP and wondering if I should continue to get my accounting degree or just get this debt paid off.

[George Kamel]

What kind of Debt is the 189?

[Caller]

It's 150 in student loans. Between my husband and myself, he got his master's degree and then I when I was younger was stupid and went to school twice and dropped out. And then it's $8,000 in a car, 4,500 which with two credit cards and then 3,000 for the vet. Okay.

[George Kamel]

And how much longer do you have if you continued school?

[Caller]

48 credits.

[George Kamel]

That sounds like a lot of credits. So it's a couple years.

[Caller]

Yes.

[Jade Warshaw]

Are you currently taking out student loans to pay or how are you cash flowing?

[Caller]

I was taking out student loans but we just had a two month old and so I stopped school while I was pregnant because it was very difficult.

[Jade Warshaw]

Right.

[George Kamel]

So you haven't restarted school yet?

[Caller]

I haven't restarted. So I'm trying to figure out.

[Jade Warshaw]

I do think you. I think you need to because you're not. If you told me you were paying cash, we'd be having Maybe a slightly different discussion, but if you're calling me saying debt is the problem and I'm currently borrowing while I know it's the problem, you can't solve a problem while simultaneously creating. And if we know debt is the problem, we have to stop borrowing money. That is the first and foremost step that you have to make when you decide, hey, I'm going to get my life right with this money. Got to start borrowing money. That's thing one. Thing two is we'd say, okay, now we got to get on a budget and think. Three is now we're going to start to work this thing through the baby steps, which is the method of teaching that we have to help people break free from debt and build wealth ultimately over time. Are you familiar with the baby step steps?

[Caller]

Yes. We started a Financial Peace University class.

[Jade Warshaw]

Excellent.

[Caller]

And we're trying to, we're trying to get our income up in between. Our child doesn't start daycare for another month. So we're. When one's not with baby, we're driving for Lyft. But then we're putting that on our car and we're trying to make more income but we just, we don't know where to begin.

[George Kamel]

What's your household income now?

[Caller]

It's 120 gross. Our take home right now is 6200.

[George Kamel]

Okay. Are either of you investing right now?

[Caller]

We stopped, actually Both stopped our 401k last night.

[Jade Warshaw]

Very good.

[George Kamel]

Because I'm wondering why you're only taking home 74 out of 12050 grand in taxes. It's crazy.

[Caller]

He's a high school teacher in the metro school district and they are on a 10 month contract. So they were withdrawing money for the summer. Summer, which we stopped that last night too.

[George Kamel]

Okay. So hopefully that take home pay goes

[Jade Warshaw]

up and then he can get up hope and then he can get something for the summer to cover those summer months.

[Caller]

Yes. Aside job here, he's the one staying home with baby to prevent like that additional daycare from kicking in earlier.

[George Kamel]

Got it. And how much are you making personally?

[Caller]

55.

[George Kamel]

And what would you be making if you continued this program?

[Caller]

I could have go up to 100,000.

[George Kamel]

But that's not immediate.

[Caller]

No, it wouldn't be immediate.

[George Kamel]

That's sort of like this is where this could go. So year one, could you be making 65?

[Caller]

Yes.

[George Kamel]

Okay. I'm just, I'm looking at the ROI of this because I'm scared. We're going to fast forward. If you continued this school and you're going to be $250,000 in debt now with a toddler trying to clean this up, making only $10,000 more, which is you getting like 6, 700 bucks extra in your paychecks. So that's my fear. And so the other side of this is if we pause school, we try to get our core income up without going further into debt, we clean this mess up for the next couple of years at least now we can start from a place of peace, a place of strength instead of desperation.

[Jade Warshaw]

Yeah. These student loans, are they. Are you currently making payments or are they in forbearance or deferred?

[Caller]

We're currently making payments on them. We did do the income based one because it was fifteen hundred dollars a month, which we couldn't afford that with baby and everything.

[Jade Warshaw]

Okay.

[Caller]

The payments got lowered, but it stresses me out that the interest is now higher than our payment that we're making.

[Jade Warshaw]

That's right.

[George Kamel]

And make less progress because you just lowered the payment.

[Jade Warshaw]

Yeah. And that's the picture I want to paint just to make sure you guys understand what's at stake here. I would never just say stop going to school without a really good reason. And the really good reason is the longer you wait to attack this $150,000 student loans, I mean, you can look up in 10 years, and instead of it being $150,000, it's closer to $200,000. Right. And so I don't want that to be the case. I want you guys to really do a complete 180 on what you've been doing. You've been focused, obviously, both of you, on your careers. That means school, that means education. You focused on starting a family. Now I want you to focus on, on. We are paying off debt. We are eat, sleeping and breathing debt payments. Right. That's all we're doing. We're working so many extra jobs. We are leaning on friends and family to watch the baby because you've got to go out and hit your shift. Right? That's what's gonna be taking place. And I'm just warning you up front, it's not fun. But the outcome is totally, totally worth, worth it. If you guys can really get on the same page of this and say, okay, here's what we're doing, here's what I can do, here's what you can do, here's what we're cutting back. And I'd start with that vet bill. Minimum payments on everything. And how quickly can you get $3,000 to get the vet out of your life?

[George Kamel]

I like this plan, baby steps, one little movement at a time and eventually you start gaining that moment.

[Jade Warshaw]

Okay, guys, let me ask you something.

[Caller]

What would it take for you to switch your bank? Because if you're still earning next to nothing, your savings, you need to check out Fairwinds Credit Union. And I know what you're thinking. It might sound like a hassle. Moving your direct deposit, updating bills, getting

[Jade Warshaw]

a new debit card feels like a lot. But here's what most people don't realize. Staying where you are could be costing you hundreds of dollars every year, y'. All.

[Caller]

The average savings account pays less than half a percent. So let's say for example, you got $20,000 saved. You might earn around $70 a year.

[Jade Warshaw]

But with a fair winds high yield Savings account earning 3% APY or more, that same money could earn you over $600.

[Caller]

And that's real money that you can

[Jade Warshaw]

use towards the baby steps. So don't let temporary comfort keep you stuck. Check out the smart bundle from Fairwinds Credit Union. You get a high yield savings account,

[Caller]

a no fee checking account and the

[Jade Warshaw]

Ramsey Beweird debit card. Go to Fairwinds.org Ramsey to learn more

[Caller]

and make the switch today.

[Jade Warshaw]

That's Fairwinds.org Ramsey insured by the insur NCUA. Guys. If you're working the baby steps, the best and fastest way to do that is by using EveryDollar. Every dollar is more than just a budgeting app. It's the plan that we teach. Built right in, it's a fabulous tool. You can track your progress, get personalized recommendations and coaching for your situation that will help you find, free up more money, more margin to work the plan even faster. It's like having one of us walking with you every day, showing you the next right step, holding you accountable. Start every dollar for free by downloading it in the App store or Google Play. You remember in Living Color. Mo money. Mo money. Mo money. Do you remember that?

[George Kamel]

How old do you think I am?

[Jade Warshaw]

I'm sorry. Not as old as. Not as old as me apparently. Austin is it. Thank you. Will Rudder. He knows what I'm talking about in the booth. Austin is in Roanoke, Virginia. What's going on?

[Caller]

Austin.

[Jade Warshaw]

Austin.

[Caller]

Hey, Jaden. George. What's up?

[Jade Warshaw]

Doing good. I just aged myself. Help me feel better. Let us solve your problem.

[Caller]

Okay, so here we go. So I'm a 26 year old pharmacy student. I'm going into my third year. I have about $290,000 in a brokerage account and a inherited IRA I've been taking out student loans for the first two years, which has accrued to about $100,000 in debt. I was wondering if I should cash. Cash out my brokerage and cash flow the rest of my schooling.

[Jade Warshaw]

Okay, let me make sure I've got this straight. So the 290, part of it is in a brokerage and part of it is in an inherit. In an inherited IRA.

[Caller]

Yeah, that's right. I got about 158 in a brokerage and the inherited IRA is about 128,000.

[Jade Warshaw]

Okay. And the inherited IRA, how much are you required to pull out every year?

[Caller]

My RMD that I took out last year was about 20,000, but the RMD, I think it's around five grand.

[George Kamel]

Okay, so you took out more?

[Caller]

Yes, for tax reasons. Wow.

[George Kamel]

Well, I would definitely get rid of this debt. You've got the money. What's the brokerage account being used for? What are you investing in that?

[Caller]

It's through an investment group that was recommended by a family friend. So it's just kind of been sitting there and I've just been watching it grow. And I logged into my financial aid provider today and saw that I just crossed $100,000 in debt. And I was like, oh no. Wow.

[George Kamel]

Well, here's the thing. I would think through it's taxes. So the brokerage account and the inherited IRA have very different tax treatments. When you take money out of that inherited ira, it's taxed as ordinary income. So whatever your tax bracket is, let's say that's 22%. While the brokerage account, if you have a long term capital gains, you've held those assets for more than a year. Well now that could be 15%. So you're going to take a much smaller hit by taking the money out of the brokerage account. So that's the part I would look at. My guess is the brokerage account is going to, is going to be your best bet to knock out that 100k. And I would absolutely do it.

[Caller]

Okay. And for the rest of my like tuition, I have two years left. Would you recommend just cash flowing that?

[George Kamel]

Oh, absolutely.

[Jade Warshaw]

I mean, and you've got the $5,000 that's going to come of the inherited IRA whether you like it or not.

[George Kamel]

You got to draw down that IRA so that kind of becomes your cash flow. School money, right?

[Caller]

Yeah, code. I mean tuition is like 40 grand a year and I've been paying, I haven't been taking the full amount of loans. I've been paying for half and loaning the minimal amount that financial aid will

[George Kamel]

let me take out, I would just avoid loans altogether in the future. So pay off the ones you have and then cash flow the rest using the inherited IRA and then even part of the brokerage if you have. Have to. Because coming out of school making good money with no debt, it's going to put you in a very different place financially. You're going to have so many more options with all that margin coming in versus your friends who are in school graduating with 250 grand in debt right now. They have to live over here, they have to work over here. That's what happens. Debt free equals margin, options, flexibility. And I understand you can make the case that, well, if I leave it invested, it could turn into. Into this. You're going to be just fine. At your age, if you start investing with no debt, your investing rate is going to be significantly higher than your peers.

[Jade Warshaw]

Yeah, absolutely. How much school is left?

[Caller]

2. 2 years. So about 80. $80,000 worth of toys and left. Oh, great.

[Jade Warshaw]

And I'd be working hard, too. I'd be working hard to cash flow as much as I can so that you don't have to pull as much off. But I would consider this a college fund and thank whoever.

[Dave Ramsey]

Yeah.

[George Kamel]

Who left this for you?

[Caller]

Well, my grandma left this to me. I'm very blessed.

[George Kamel]

What a legacy. I think she'd be smiling upon you, seeing you graduate debt free. Sharp young man, whole life ahead of him without debt. I mean, because now you can do the same for your grandkids.

[Jade Warshaw]

Exactly.

[George Kamel]

A good man leaves an inheritance to his children's children. The Bible says, I love that. That's future thinking. You stop thinking about yourself as much and go, what am I doing for the next generation? And the ones beyond that.

[Jade Warshaw]

If you can start your young adult life with no, no debt, you are significantly.

[George Kamel]

It's like a wealth cheat code.

[Jade Warshaw]

It's a cheat code. I mean, because you're not going to spend the app. You know, the average person that we find around here who starts working the baby steps because they have debt, it's taken them, you know, one and a half to two years. That's on average. That means there's people who. It takes a lot longer and there's people who takes a little bit less. But to not have to spend the first two to three years of your

[George Kamel]

life cleaning up a mess.

[Jade Warshaw]

Cleaning up a mess and getting on financial footing. But to just be able to accelerate

[George Kamel]

forward, you become a homeowner faster, you're going to build wealth faster. You're going to be able to retire. Retire earlier than all of your peers.

[Jade Warshaw]

Yeah, I like it. If I think about that, I might be crying on the couch about. About how much time it took to right the wrongs.

[George Kamel]

Debt free at 23. What could have been.

[Jade Warshaw]

Oh boy. Is it Kira? Kyra is in Great Falls, Montana. Kyra, Did I get it right?

[Caller]

It's Kyra.

[Jade Warshaw]

Yes.

[Caller]

Second.

[Jade Warshaw]

Second time. Okay, how can I we help you?

[Caller]

Okay, so my question is about renting a car with a debit card. I've traveled for work a couple times a year and I've never had a problem with it up until the last couple months. I went to rent a car and they were like sorry, you don't pass the credit check, we can't rent you this car. Thankfully I had my mom traveling with me so she was able to rent it because she had a credit card. But you know, they basically told me there was no way around it. They were not going to rent me a car because I did not have a credit card.

[Jade Warshaw]

Was it because your return ticket wasn't to the same destination? Because I know that they will put up a stink about that.

[Caller]

No. So I showed them my return flights. I you know, did the $500 deposit or hold on my card, all that stuff and they asked me for my Social Security number. I gave it to them and they came back with little piece of paper that said my credit score was four. So you know, we haven't had credit cards for six. I don't know because we have credit cards for six years. We have a paid for home. Wow.

[Jade Warshaw]

Who was it?

[Caller]

Any vehicle.

[George Kamel]

You want to shout them out?

[Jade Warshaw]

Yeah, shout them out. Who was this wonderful credit card company that did you wrong?

[George Kamel]

The rental car company.

[Jade Warshaw]

Rental car? Yeah.

[Caller]

Yeah, rental car. It was Hurts so good. Happened back in April and then my husband and I actually got pre approved for a mortgage so that we can move and the we told them that they were going to have to do manual underwriting and I told them about my rental car experience and how my credit score was for and all this stuff. And they actually came back to us and they were like well your husband doesn't have a credit score but you have a great one so we can actually approve you for this mortgage because your credit score is so great. I don't know how.

Wow.

[George Kamel]

I would pull your credit report to

[Caller]

get to the bottom later. Yeah, I went to rent a car again about two weeks later, same thing. They wouldn't rent it to me because I didn't pass the credit check.

[Jade Warshaw]

So that's really interesting. I would want to make sure. First off, I do want to clarify that a zero credit score is just as good as a good credit score. But if you have anything that's hanging around open, open that is causing that to reflect as just a low credit score, I would double check. I would hop on and make sure that there's no open accounts. There's nothing anywhere that's keeping that from rolling to indeterminable. And then other than that, I would choose a different rental car company because unfortunately, and, and you'll find this with apartments, you'll find this with mortgage companies. You'll find this across the board. There are some companies that won't do their due diligence to look and really say, okay, does this person have the money to do the thing that they're saying they're going to do? And for that reason, you have to be the one to say, I'm just going to find a company who is going to keep the lights turned on upstairs and understand that I have the money to rent this car, buy this apartment, manually underwrite this house.

[George Kamel]

Yeah. And remember, the person working at that desk may be incompetent. And so that's always a possibility. And you might need to talk to a manager. And if they are the manager, God bless. Yeah. I would go over to the, you know, a different rental counter and go, hey, they wouldn't help me over here. I've got plenty of money. I want to rent a car. I will bring it back.

[Jade Warshaw]

Yeah.

[George Kamel]

And I've had a good experience. I'm trying to think of the ones I've had a good experience with.

[Jade Warshaw]

Use Avis. My husband and I tend to do Avis.

[George Kamel]

Oh, nice. A national and enterprise I've had good experiences with. So I would try those. But you do you do a little research. Call ahead and ask, hey, what's your debit card policy? Be prepared for the credit check. Let them know, hey, I don't have a score. You're going to pull it up and it's going to say, no score. That's fine. What they're looking for is that bad or low score. And for some reason. Reason you had a whopping four.

[Jade Warshaw]

That's why.

[George Kamel]

About as low as I've heard.

[Jade Warshaw]

Welcome back to the Ramsey show here in the Fair Winds Credit Union Union studio. We've got Liza, who's in Austin, Texas on the line next. Hey, Liza, how can George and I help out?

[Caller]

Hi, good afternoon. I love your show and I, I really have been taking notes all These past two, three months on financial matters. But I do have a concern. This is all new to me. I. I just. I grew up with not being financially responsible and how to save money. I am a single mom. Mom. I have one daughter. She is 20 and she is going to school, university. And we have not been. Well, lately. We financially have not been helping us out because we earn, I guess. I guess earn. We don't earn. How do I say? We earn a lot for a family of two. And I've been helping her out, paying her tuition every semester. But I. What I rely on to pay for her tuition balance, or leftover balance to help her pay her semester is taken out of my ira. My Roth ira.

[Dave Ramsey]

Oh.

[Caller]

And I don't like to do that because that's my. Of course, that's my, My retirement.

[Jade Warshaw]

Absolutely.

[Caller]

And.

Yeah. So any helpful tips, please. Where do I start?

[George Kamel]

How much.

[Jade Warshaw]

How much have you pulled out of the Roth so far?

[Caller]

Like every, every year I take about. I take about a thousand. Five times two will be around 3,000 a year.

[George Kamel]

How much is in their total?

[Caller]

Right now? It's 5858 with 70 cents.

[Jade Warshaw]

Okay.

[George Kamel]

Okay. So it's. It's about to be zero if we keep this up.

[Caller]

Yes. Exactly.

[George Kamel]

How old are you?

[Caller]

I am 44.

[George Kamel]

Okay. Well, it's clear that you love your daughter. Can we agree on that?

[Caller]

Yeah.

[George Kamel]

You're doing something genuinely sacrificial to invest in her future. And that, that part is right. Your heart is right there. But the vehicle that you're using to do that, that's the issue here. Because right now, here's the future. Let me paint it for you. You retire broke. Now your daughter has to take care of you financially, sacrificing her future, creating a generational cycle. Right?

[Caller]

Yeah.

[George Kamel]

And you didn't mean for this. You had good intentions. But I don't want you to become a burden to your daughter later on because you sacrificed for her today. So I think there's a different way. We can come up with a game plan to cash flow $3,000 a year. Would you agree?

[Caller]

Yes, sir.

[George Kamel]

We're not talking $30,000 a year. 3,000 is manageable.

[Caller]

Yes. It's about like 6,000 to 7,000 a semester.

[George Kamel]

Okay.

[Caller]

She's about to work here part time in the summer.

[George Kamel]

Good. So how much will she make doing that?

[Caller]

That we don't know yet because she will be working soon. So she's going for animal science. That's her major. And she's been applying to all these, like, vet Clinics and stuff. And so is she wanting to be

[George Kamel]

a vet ve tech? What's her goal?

[Caller]

Like a vet tech? Yes.

[George Kamel]

Okay. Does she know how much vet techs make?

[Caller]

I think she told me once, but I forgot that number.

[George Kamel]

Okay.

[Jade Warshaw]

I thought I heard you say that for a family of two, you guys bring in a really good income. What do you guys bring in together or what do you bring in?

[Caller]

Year is 120.

[Jade Warshaw]

Okay.

[Caller]

Approximately.

[George Kamel]

Okay. And how much longer does she have for school?

[Caller]

Hey, Emma, she has two more years to go.

[George Kamel]

Two more years. So we're talking like $12,000 solves this, correct?

[Caller]

Yes, sir. You got it.

[George Kamel]

Okay, so what if we had a game plan to where she works part time, she covers, let's say half of that amount over the next two years and you cover the other half and you both cash flow it without robbing your future.

[Caller]

Okay, let me write this down. I have my notes and everything. So.

[George Kamel]

Yeah, you said. So you bring home how much a month? Seven.

[Caller]

Seven.

[George Kamel]

Now how much of that can we use to save for the college fund and cash flow this?

[Caller]

Okay. I have consumer debt and I have a car loan.

[George Kamel]

So what's left on the car loan?

[Caller]

It's $9,984.56.

[George Kamel]

Okay.

[Caller]

And the consumer debt is $4,603.05 cents. Okay.

[George Kamel]

And have you stopped going into debt?

[Caller]

Yes.

[George Kamel]

Okay, great.

[Caller]

I'm just paying these off already. These are like past, past debt.

[George Kamel]

They're older debts.

[Caller]

Yeah, they're older. Yes. Yes, sir.

[Jade Warshaw]

So ask. Answer one question for me. So before you were saying that you were taking out $3,000 a year from the Roth IRA to make this happen. Right. So that's essentially all we're looking to find if you were floating all of it except $3,000. That feel fairly easy equation to solve. Unless I'm missing something.

[George Kamel]

Because now we can just budget 250 bucks a month over to a little savings account so that we have three grand by the end of the year. You see the math on that? 3,000 divided by 12. So now we can make a budget. Okay. Hey, we're going to budget to cover our debts, aggressively pay that off. And on the side we put 250 away in a savings account earmarked for her college.

[Caller]

Yes.

[Jade Warshaw]

In addition to what you were already putting aside.

[Caller]

Yes.

[George Kamel]

And then if she can work part time, that lowers the amount you even need to put in.

[Caller]

Yes. Because I, I do cash out my vacations from work, so that's like every quarter. So I use that extra money to pay for the rest of her, her tuition, plus the 1,500 of the IR IRA. I'm sorry, Roth. Sorry.

[Jade Warshaw]

Okay, so we won't cash out the additional a thousand or however much it was from the ira. If you want to keep cashing out your vacation, that seems to be working for you. There's extra cash there. And then the rest is cash flow through the budget, plus your daughter's portion from her job. And I think you've got it covered. I think you're doing a great job.

[George Kamel]

Paychecks are the solution instead of your retirement account. So are you investing anything currently into the Roth IRA every month or anywhere else?

[Caller]

Yeah, it's. What's a month? It's with Edward Jones.

[George Kamel]

And how much is that?

[Caller]

About 400, 480 or 60amonth.

[George Kamel]

Okay, so starting today we're going to pause that. We're going to take back that 480amonth and apply it to our debts.

[Caller]

Oh, okay. Okay. So we can actually go tell our employers, say, hey, I can stop that.

[George Kamel]

Yes. So I have like the stop all contributions. And what this does is it allows you to focus a season so that you can get rid of your consumer debt so that you can cash flow your daughter's college. So that's your deep. Why let that fuel you to get really intense, to not let this debt drag on any longer. It's been hanging out long enough. You got a future ahead of you. Your daughter has a future ahead of her. And so let this be an aggressive season. For the next six months, we're going to knock out the consumer debt, which frees up how much in payments. What's the car payment? What's the consumer debt payment every month?

[Caller]

Okay, the, the car loan is 390, but I pay 500amonth. Actually, I raise it to 525 to pay it faster.

[George Kamel]

Okay, so 390 on the car plus how much on the consumer debt?

[Caller]

It. Well, it varies on the payments monthly, but it's 4,000 right now. 4,603. I make monthly, like I guess their minimum payments because I have some like

[George Kamel]

a couple hundred bucks.

[Caller]

Yes.

[George Kamel]

Okay, so right there, that's going to be 5, 6, 700 bucks freed up. Once you knock out these debts. Now you got some margin. Now instead of ever robbing a retirement again, we are just building and building and building so that you can retire with dignity and not have to rely on your daughter to cover the gap.

[Jade Warshaw]

And the good news is once you do that, if you start investing 15% of your income from let's say age 46, when this is actually done, to age 65. You're going to be right close to a million dollars.

[Dave Ramsey]

You should not feel uncertain about investing and you don't have to. That's why we created Investing Essentials, a two night virtual event where George Camel and I walk you through my playbook for investing and wealth planning. We'll simplify everything from 401ks and mutual funds to passing on wealth so you can invest with confidence. Tickets start at $199. Get yours today at ramseysolutions.com events or click the link in the show notes.

[Caller]

Okay,

[Jade Warshaw]

So 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 of the week. So this week we saw the biggest question was what's the best way to create a debt payoff plan? Well, they're in the right spot, George.

[George Kamel]

I love it. If you've hung out with us for long enough, you've heard us talk about the debt snowball method. The other method that you may have heard about is called debt avalanche. Think about it this way. Avalanche is focused on the highest interest rate. The debt snowball is focused on the smallest balance. You list out all of your debts from smallest balance to largest balance. We ignore the interest rate from now and we're going to pay minimums on all of the debts except that small one. The small one we're going to attack with all the vengeance we can. Everything extra, we're going to just focus on that one debt. Yes, that's it. And once that debt is knocked out, what happens? You freed up a payment that you can roll into the next debt and the next one. And so that creates a snowball effect as you pick up more snow along the way. You get some quick wins, you get some progress, you get momentum. That's what causes people to get out of debt.

[Jade Warshaw]

I love that. And so if that helped you, you can try Ask Ramsey for yourself. Ask Ramsey can help you lay out a debt payoff plan based on your debt balances, your minimum payments and your interest rates. Ask your question [e-mail] or just click the link in the description if you're listening on podcast or YouTube. Gail is in Phoenix, Arizona. Hey Gail, how can we help today?

[Caller]

Hi, how you doing?

[Jade Warshaw]

Doing excellent. What's up in your world?

[Caller]

Well, so I'm just gonna be turning 69. Last 40 years, a serious drug problem. I worked a lot. I worked for a Lawyer, back and forth. So I lived at home, took care of my mom, and she died about two years ago. Thank you. The house I lived in with her, me and my brother were able to sell it for seven times the amount when they bought it.

[Jade Warshaw]

So what you end up taking, we

[Caller]

got 700 and I think it was 750 right around there. The house they bought for like 135, 30 years ago. And, you know, I think because, you know, in an addiction, you don't think about anything but yourself and. Never thought I'd get old, let alone, you know, what I would do with. With my life. But I have a son. I was. I was a single mom. He's 37 now. I don't know how that happened, but. And so we sold the house. And I was able. Okay, I got sober. I got serious with God. I started to walk with God. I mean, serious one. And, you know, once that started, I started walking. All these things. Things were hitting me like a ton of bricks. You're this old, you don't have, you know, you didn't save. Never, never thinking about retirement. So I bought the house. I got it for 325. It was 350. I got them down to 325. I was able to gut the whole house because it was very old, very old. And I bought it. I don't have a mortgage.

Wow.

[Jade Warshaw]

I love that.

[George Kamel]

Way to go.

[Jade Warshaw]

I love that. How can we help you today? Listen. Right on. Amen.

[Caller]

Yep.

[Jade Warshaw]

How can we help you out today?

[Caller]

So what? So this last two years, I've been just saving. I. Like I said, I work full time at a law firm. My salary, My. My salary is about 50,000 a year. Yeah. And so I started taking. I went full retirement age with my retirement. My. To get my retirement savings. I started that. I get full retirement. That's 2303amonth. Okay. So that's the money I coming in. I don't. My HOA is only 80 bucks a month. So all. I have no debt whatsoever. I own a car, you know, so I just have my regular bills.

[Jade Warshaw]

Are you investing? Are you investing 15% every single month?

[Caller]

No. That's the question. I was able to say even after, you know, I did all my. I started saving last month. I should be putting 1000.

[Jade Warshaw]

You should be putting about $625 away every single month into your 401k, if your job has one.

[Caller]

I don't have one.

[George Kamel]

Is there any retirement plan through the employer? Okay.

[Caller]

Nothing.

[George Kamel]

So you have access to a Roth ira at least I don't have a

[Caller]

clue what to do. What I did do the other day or last week was I took 7,000, open the brokerage account.

[Jade Warshaw]

Okay.

[Caller]

To, to buy SpaceX. I was allotted 14 shares. That was it. So I still have 5,000 sitting.

[Jade Warshaw]

Well, let us help you. Let us help you because we only have a little bit of time with you and we appreciate the backstory because that does help. But what George and I would suggest for you to do today, the same way that you went over and opened a brokerage account, you can open a Roth IRA because you have earned income. So we want you to open a Roth ira and then we want you to, to invest. At this point, I wouldn't mind if you picked.

[George Kamel]

Yeah, it's $8,000 a year since you're over 50. And that'll allow you to sock away $8,000 a year tax free because you're using after tax income to fund it and it's not tied to your employer. And that will compound over the next 10, 20 years, God willing, into a nice little nest egg for you. And so between that plus Social Security, the goal is how can I survive? Because right now you don't have much of a nest egg, it sounds like, but you have a paid for.

[Jade Warshaw]

And I would stop buying those single stocks, by the way. Yeah, I don't want you to do that again.

[Caller]

Okay.

[Jade Warshaw]

Don't do that anymore.

[Caller]

So I don't. I'm. I'm going to be 69. So my boss is saying he wants to retire next year. That means I have to. Well, definitely keep working. But what do I do? What's. Where do I get a Roth ira? I don't know.

[George Kamel]

Where did you open the brokerage account?

[Caller]

I opened it with E Trade. So Morgan says, Stanley.

[George Kamel]

Okay. So you can open a Roth IRA through them as well. And in your shoes. What I would do is get a pro in your corner because time is of the essence and we cannot screw this up. So I've got just the person for you. Jump on ramseysolutions.com and click on Smartvestor Pro. These are investment professionals with the heart of a teacher because that's what you need right now. You need the financial literacy so that you know what you're doing versus just hoping. This is like spray and pray. I hope my money's doing well. I hope it grows. They will actually educate you to go. Here's what a mutual fund is versus a single stock. Here's what a Roth IRA is versus a brokerage account. And they can Help create a strategy so that you can retire with dignity instead of just fingers crossed. Hopefully one day I can.

[Jade Warshaw]

And you've done a good job. I mean, the fact that you were able to buy a house in cash is a great thing. You've got a great secure job, you've got a good income going forward, you're going to be just fine. But you've got to do what George said to do next. You can't just guess and hope that everything works out.

[George Kamel]

Yeah, well, there's a level that DIY is, becomes dangerous.

[Jade Warshaw]

Yeah.

[George Kamel]

Because I've done DIY in my own house with like a house project. Doesn't end well. Usually I end up calling a pro to fix all the things I messed up.

[Jade Warshaw]

Yeah. Especially if you don't feel like you have a baseline of knowledge and you don't have a lot of time. She doesn't have time to make any more mistakes.

[George Kamel]

At 22, you can screw some things up and make up for it later.

[Jade Warshaw]

Listen, at 22, if you just parked your money in an index fund, I would probably never stop you. Right. And it's just growing and growing and growing. There are worse things you can, could do. Right. So I, I agree with her. A smartvestor pro. You have to, you need to get the help you need. But I think that Gail was a cautionary tale for a lot of people listening. It's so easy to just go through life, George, and think, I'll, you know, I'll make that change later. I'll save later, I'll save later, you know, and the time, it does catch up with you. And so if you're listening now and you're looking at your finances and you feel that squeeze of living paycheck to paycheck, if you feel you, you know, that, that shame about knowing the debt that you have, you haven't touched the student loans, you're still spending on a credit card. Right. You just, you know, went down and bought yet another car and you have another car payment, it's going to be another three to four years before you pay it off. Don't ignore that. We get those checks in our spirit. We get those red flags. Start today. If you start today, then you will look up in two years, three years, the debt will be gone. I know for Sam and I, it was seven and a half years. How long did it take take you?

[George Kamel]

Two years.

[Jade Warshaw]

Two years. You commit for two years, your debt's

[George Kamel]

gone, and the next 20 is freedom and margin.

[Jade Warshaw]

Yes, freedom and margin. And you can actually live like no one else. George said something so amazing to me on the way into the studio. We go out and shake people's hands. In the breaks, he came back, he said, jade, one of my favorite things that I get to spend money on is a laundry service. I love that.

[George Kamel]

Buying my time back.

[Jade Warshaw]

Buying your time back and all of that is because you sacrificed to win. When it was time, it was crunch time. And when it's time to crunch, get to crunching.

[George Kamel]

Get to crunching. Well, I mean, here's the crazy math on this. At 20 years old, every dollar you invest becomes $73. 65. But you invest that same dollar. At 50 years old, it becomes $3.50. At 65, that hurts. Instead of $73, you got three bucks because you waited 30 years. So do not delay. Get to investing. The best time to plant a tree was 20, 20 years ago. The next best time is today. It's not too late. If you can still fog up a mirror.

[Jade Warshaw]

The time is going to pass anyway, boys and girls.

[George Kamel]

Hey George Camel here. So you're thinking about buying or selling your home? It's exciting, but there's a lot to think about and all those decisions can feel overwhelming. Well, here's the good news. You don't have to tackle the process alone. Ramsey's real estate home base is the place to find all of your free tools and resources for help to get prepared to buy or sell your home with confidence. You'll find calculators, start to Finish guides, a podcast, and even an in depth video course hosted by yours truly. What's not to love? So if you're ready to take the next steps toward your home goals, go to ramseysolutions.com realestate that's Ramsey Solutions. Com dot.com realestate.

[Jade Warshaw]

Well, buying or selling your home is a high stakes game because one bad deal could cost you tens of thousands of dollars. You don't want to overpay for your next house or sell your current home for less than it's worth. That's why Ramsey Trusted connects you with vetted real estate estate agents who have the experience to guide you step by step to make smart decisions, not expensive mistakes. Connecting is really easy. Just compare agent profiles, interview your top choices, and ultimately pick the one that's right for you. Find a local Ramsey Trusted agent who has your best interest at heart for free@ramsey solutions.com agent or click the link in the description if you're listening on YouTube or podcast. Jackson is in Colorado Springs, Colorado. Hey Jackson Maxson, what's up?

[Caller]

Hey Jordan. Jade, how are you doing?

[Jade Warshaw]

Great. How can we help today?

[Caller]

Had a question regarding our baby step three emergency fund. Wife and I just hit three months and we both think we need to get to six months. However, that'll take us about another 14 months to get there. Part of that is a sinking fund for a labor and delivery bill. What would be your thoughts on where we should be at? Three months is about 25,000. Six months is about 42,000.

[Jade Warshaw]

I think that what you're doing is about right. Kind of stopping and saying we need to put this money aside specifically for labor and delivery. We know we're going to need that money. I would exactly do that because chances are you are going to use that. You might hit your deductible. You don't know what the situation is going to be. So I like the idea of that. Hopefully there's some that you can hold back when it's all set said and done and plop it over into the emergency fund and if not, you can just push play, you know, on the extra three months once you're done saving up for labor and delivery.

[Caller]

Perfect.

[Jade Warshaw]

Yeah.

[Caller]

I have another question. There's time.

[Jade Warshaw]

Yeah. What. What are the numbers? Tell us the numbers. What's three months?

[Caller]

Three months is about 25,000.

[Jade Warshaw]

Okay.

[Caller]

Six months is about 42. A little over 42. We are both pretty conservative. Said, let's go to 45.

[Jade Warshaw]

Yeah. And what's labor delivery?

[Caller]

So we just had one about a year ago that was about 7,500. I budgeted 9,000 just to be safe.

[Jade Warshaw]

Okay. So hopefully you'll have another 1500 when it's all said and done to plop over there and get you closer to the 42. 45 you want.

[Caller]

Yeah, hopefully.

[George Kamel]

What was your other question?

[Caller]

Would you. We have a paid for car that's worth 45,000. We've been debating back and forth we should sell it by a $20,000 car and basically end our baby step three with the extra.

[George Kamel]

Oh, I see. Okay.

[Jade Warshaw]

What's your income?

[Caller]

Wife, stay at home? Mom. She makes about $1,000 a month doing remote work. And then I make132.2 after base salary and vehicle allowance.

[George Kamel]

And what's your other car worth for other vehicles?

[Caller]

My truck is worth about 18,000. We're just under the 50% mark.

Okay.

[George Kamel]

Yeah. Nothing's on fire here, but if you're just like, we don't really need this much car. We can get something great and reliable for the family for 20 or 25. You can always use that margin. To then apply to the emergency fund and spare yourself 14 months of sacrifice. So it's like, either way, there's sacrifice. Going from a $45,000 car to a $20,000 car.

[Jade Warshaw]

Feel that.

[George Kamel]

You'll feel that. And saving 14 months of sacrifice with this baby on, all that going on, I think that's well worth it if you guys don't really care about driving the fanciest cars.

[Caller]

Yeah. And I do love my wife being in a basically brand new car that's paid for.

[Jade Warshaw]

Yeah.

[George Kamel]

What kind of car is the. The one that's paid for?

[Caller]

Toyota Tundra Or. I'm sorry, Toyota Forerunner. Mine's a Tundra 4Runner.

[George Kamel]

Okay. So she'll be using the Forerunner last forever.

[Caller]

Yeah.

[George Kamel]

I mean, yeah. Four Runners are great, and they hold their value pretty good, too. So you're in good shape, man. Congratulations. You guys have really thought through this intentionally.

[Caller]

Yeah.

[George Kamel]

A good place to be.

[Jade Warshaw]

Very good. Thanks for the call. All right, we've got Rebecca in Dayton, Ohio. Rebecca, you're on the line.

[Caller]

Hi, Jaden. Hi, Jaden. George. Thanks for taking the call.

[Jade Warshaw]

Yeah, absolutely.

[Caller]

I have a question about my husband's retirement account from a previous employer. He switched jobs about a year ago. He did have a traditional 401k with the previous employer. He now has a Roth 401k at the new employer. And his old account has been going pretty good, and so we've just. He just kind of let it ride. But we've been hearing you say that that's kind of like leaving your stuff at your ex's house. So we're kind of trying to figure out how to go about moving that, but we're so nervous that we would do it wrong, but we should be able to do that ourselves. Is that correct?

[Dave Ramsey]

Yeah.

[George Kamel]

It's not a complicated process. The key is you never want to see the money in your bank account. You want to do something called a direct rollover, and you want to keep it in kind. Meaning if it's a traditional 401k, we want to do a traditional IRA.

[Caller]

Okay.

[George Kamel]

Because if you move it to a Roth IRA, well, now you've got to pay the taxes on that.

[Caller]

Both of the accounts, the old account, that's traditional and the new Roth, they just happen to be with the same cost company. But does he need. You know, he opened a Fidelity account. Does it need to stay with the same company or it doesn't matter?

[George Kamel]

No, it doesn't matter. He could roll it over to Vanguard, so you could just get a direct rollover over to A Vanguard ira, Fidelity ira. It doesn't matter. The key is direct rollover. And what happened with my wife's 401k when she left Ramsey to stay home with our kids, they actually mailed us a check. Now, it wasn't to my name. It was to the Vanguard account. And then I deposited that check into the Vanguard account. So it's not a complicated process, but I understand it's a lot. There's like a lot of zeros on the end, and it can feel intimidating. So if you need help with that, you can always reach out to a Smartvestor Pro. Just jump on a ramseysolutions.com, click Smartvestor Pro. And those are investing pros. That's what I did when I first started at Ramsey. I had an old Apple 401K. They helped me roll it over to an IRA. That was. That took some guesswork out for me, for sure. Okay, and then you want to invest. That's another key. It's just going to sit in the settlement fund in the cash portion. So you want to make sure you actually invest that money once it's in there into good funds.

[Jade Warshaw]

Yeah. And I was going to say you mentioned that you didn't want to move it because you liked the way it was invested. So I would just choose the same funds again and make sure, if you really loved your rate of return, that it's invested the exact same way in the same fund.

[George Kamel]

Just get to as close as possible.

[Caller]

It's been getting about 18%. So we're like, okay, that's good. But now we're thinking we do still need to move it where we can control it.

[George Kamel]

Yeah, well, I mean, it's not magic. The market has been doing really well the last couple years. It was like 26%, 23%, 17%. So that is probably the reason for that. It's not magical funds. You can probably find very similar funds in that ira. But I do like an IRA because you have full control of it. So that that's a nice feature. And you have access to all of the investments in the world versus just what's in your employer's 401k.

[Jade Warshaw]

Absolutely. Well, George, let's see. Let's try to help Connor. I think we can do it real quick. Connor, get your question fast. Connor in Washington. Washington, D.C.

[Caller]

jade. I'll be quick. I got married a month ago, and we experienced an import of love and generosity. I'm sitting or I'm driving a leased car that expires in December. I'd be able to buy it for 19,000. Or I can, you know, forego it, let the dealer take it, and then buy a beater. But I feel like I'm getting a pretty good value value on this. On this car. So the question is, do we take the gifts from the wedding and put them towards this shinier car, or do we just put them directly towards the loans and keep it simple?

[Jade Warshaw]

Gosh. Yeah. How much loans do you have? What do you owe in debt?

[Caller]

We have 72,000 total in student loans.

[Jade Warshaw]

You know, I'm all about having a nice car, but if you can have more cash to go towards this debt, I'm going to take that every single time. The gift was yours to do what you want with. And I would definitely, when I can get out of it, I get out of it and I take some cash and buy a beater.

[George Kamel]

Yeah. The way I think about this is if you did not have this lease and you had $19,000 and you had 72 grand in debt, would you go out and buy a $19,000 car? Probably not. And so I know it's a little painful. You're newlyweds, you're excited. You want to feel like we made it, we're doing well for ourselves. And then you go out and buy a $7,000 car. Now you're going, ah, this kind of stinks. But what happened for me, Jade, is it actually lit a fire under me. Anything that you don't like about that car just becomes more fuel to get out of debt faster.

[Jade Warshaw]

So you're right. I know that's right. Sam and I used to have a. We had an old Jeep. It was a Jeep Liberty. And we decided, like, this is our. We are a one car family. And everything went wrong with that car. But, you know, you're getting out of debt. At one point, the motors went out in the windows, so the windows wouldn't stay up. And to take it to get fixed, it was like $700. And we were like, nope. My husband found like, shoelaces and, like, inside the door, used the shoelaces full.

[George Kamel]

MacGyver.

[Jade Warshaw]

MacGyver. By the time we got out of that car and, and upgraded, like, smoke would come out of the engine. Every time I started it up, it was just. It's a beater.

[George Kamel]

I'm glad you're alive to tell the tale.

[Jade Warshaw]

I live to tell the story.

[George Kamel]

We don't need to go that crazy, Connor. But I would just buy a reasonable used car for far less than 19.

[Jade Warshaw]

We're not telling you to do anything. We haven't done ourselves is the point of the story.

[Caller]

Foreign.

[Dave Ramsey]

Dave Ramsey here. For more than 30 years, I've been talking to folks on the air and I can tell you that most people are broke not because they don't make enough money, but because they don't have a plan. You need to give every dollar you earn a job because when you do that, something changes. You stop guessing, you stop worrying, you stop stressing. Our every dollar budgeting app will show show you how to find extra cash, pay off debt, and finally start winning with money. But most people won't do it. They'll keep living paycheck to paycheck, keep hoping things will change without making a change. It's time to say enough is enough. It's time to take control of your money. It's time to start your every dollar budget for free today. Go download it in the App store or Google Play.

[Jade Warshaw]

Ramsay shows scripture and quote of the day. Ephesians, chapter 2, verse 4 through 5. But because of his great love for us, God who is rich in mercy, made us alive with Christ even when we were dead in transgressions, it is by grace you have have been saved. Thank you. Earl Wilson said this. If you think nobody cares if you're alive, try missing a couple of car payments.

[George Kamel]

That'll do it.

[Jade Warshaw]

They'll come after you. Oh, that's so funny. I love that. All right. It's also kind of sad.

[George Kamel]

There's a sentence to it for sure.

[Jade Warshaw]

Jesse is in Nashville, Tennessee. Hey, Jesse, how can we help?

[Caller]

What's going on, guys? Hope you're all doing good today.

[Jade Warshaw]

Yeah.

[George Kamel]

What can we help you?

[Caller]

Yeah. So my question, yeah, I'm 22 years old, you know, graduated college. I've now kind of been working for a year. And my question is, should I be chasing in my career something that is more financially stable or something that's closer, like tailored to my passions? And what is the balance in that?

[Jade Warshaw]

Why can't it be both? Tell us more.

[Caller]

Yeah, I worked so I worked nine months on foster care and I enjoyed it but it was very much just didn't pay great and it was just emotionally burnt me out and I thought I needed a break. So now I'm trying something in the business realm selling insurance and you know, it's maybe more higher earning and kind of provide more for me. But I'm trying to figure out that's just something I want to do long term and this is what I want to do. You know, it feels like 10, 15, 20 years.

[Jade Warshaw]

That feels like a really Big leap of interest from caring for children's literally orphans to caring to selling insurance. Is there something that you can do that still works heavily with caring for people, mainly children, that maybe doesn't burn you out quite as much and maybe you can make a little bit more money. That's what I'd be thinking because clearly, do you see what I'm saying, there's a huge gap. Gap there.

[Caller]

Yeah.

[Jade Warshaw]

Have you thought about that?

[Caller]

Definitely I haven't. Yeah, that's what I've just been trying to ponder and think on these past past few months as I've started this job in insurance now.

[Jade Warshaw]

Well, our colleague, our former colleague whom we still love, Ken Coleman, wrote a book, find the work you're wired to do. And inside of it there's a career assessment. George and I are going to send that to you because I think that's all your hang up is. I think that you've identified what it is that you're passionate about. We just have to figure out all the different ways and all the different career fields that you can use that passion and that book is going to help you do that. What I wouldn't do today is choose a career simply based on how much money you can make out of it and what you perceive to be stable. I would not do that.

[George Kamel]

Yeah, you'll get to the end of that road with a lot of regret going, now what? I'm burnt out. I paid a soul tax for a day decade. Sure, I made some money, but it was not worth it. So I want to know this, Jesse, where are you at financially today at 22?

[Caller]

Yeah, I mean I've been living at home. My parents paid off all my debt and you know, I'm kind of at a point. I just proposed to my girlfriend. We're about to be married next nine months. So it's kind of, you know, we're not in the negatives. Got a couple thousand dollars in savings, good emergency fund. And now it's just trying to figure out what can I do to as we navigate going into marriage.

[George Kamel]

So that's great. Well, that financial piece gives you so much flexibility. It gives you options to pursue the thing you really want to do instead of, well, I have to go sell insurance because it makes a lot of money because I have a lot of debt to pay off. So staying debt free is actually sort of a hack for doing the career that fuels you. And I'm just, I did a quick Google search and find the work you're wired to do will help you with this. But I'm looking at jobs like licensed clinical social worker making 60 to 90K, child protective services, investigator, supervisor, 50 to 75K, foster care program director, 65 to 100K. So there's a lot of jobs out there that can pay well. And the truth is, at 22 with no experience, expect to not make much.

[Jade Warshaw]

That's right.

[George Kamel]

That's kind of the name of the game. And as you get more experience, by 32, you should be making much more. So you got a lot of time on your hands. So just don't squander it. Start to kind of vibe out. What is the thing I liked about that? How can I pursue that? But the key is, what do you love? What does the world need? What are you good at? And then what can you be paid for? And if you find that sweet spot in the center there, you have struck lightning. It's something most people don't do their entire lives.

[Jade Warshaw]

I like that. I like that. Good question. Thanks for the call. We've got Drew, who's in Springfield, Missouri, up next. Hey, Drew.

[Caller]

Yeah?

[Jade Warshaw]

How can we help?

[Caller]

Me and my wife have a question. We. We were thinking about taking some equity out of property that we have to buy, some rental property.

[Jade Warshaw]

Okay. How many properties do you have total?

[Caller]

We have two. We have our main house. It's paid for. We have a lake house, and it's paid for.

[Jade Warshaw]

Okay, and so which you were going to borrow against one of these to buy the next property?

[Caller]

Yeah, we were. The way we feel about it is it's like having cash in a checking account. It's really not doing much. And I could be wrong. That might be the wrong way of thinking it, but just seems like a lot of equity sitting there, not doing anything. So, yes, we were going to take the equity out of the lake house and try and put it in some rental properties.

[George Kamel]

The lake house was meant for you guys as a toy, right? You're not renting it out?

[Caller]

Yeah, that was just. No, we're not renting it out. It's just a weekend thing.

[George Kamel]

Okay, so here's the way to look at it. It's not an investment, and therefore, it doesn't need to make you money. It's just for you to enjoy. And the reason we tell people to pay cash for things like that is so that you can stomach that. You know, Dave Ramsey's got a lot of properties. He's got a lake house that he loves. He does not look at it and go, man, and a lot of money just sitting in that lake house. I'd like to have that, because what happens is now you're moving backwards. You're taking. Taken on the HELOC or the home equity loan to do this. Now the lake house is on the block. You got a new payment in your life to try to do this again with another rental property. So I. The. I want to know what's the deeper reason behind this, Because I don't think it's that the lake house is just sitting there. It sounds like you guys are wanting to build wealth in a different way.

[Caller]

Well, yeah. And so really, what's driving it is we got started late on investment accounts. We just got started a few years ago, and we're. We're trying to catch up is kind of. What the.

[George Kamel]

How old are you guys?

[Caller]

I'm 38, and she is 39.

All right.

[George Kamel]

What's the lake house worth?

[Caller]

It's roughly 300. We. We put a lot of improvements to it. I mean, we bought it and just have remodeled it from one end to the other, so it's kind of hard to tell. But 300 is a safe number.

[George Kamel]

How often do you use the lake house?

[Caller]

Just about every weekend. Oh, wow.

[George Kamel]

So it's getting a lot of use. So you're not. It's not something you were like, hey, I'd be willing to sell this thing and put the money in investments because we're behind.

[Caller]

No, it's our hobby. It's pretty much our only hobby. We.

[Jade Warshaw]

What's your income? What do you guys bring in every month?

[Caller]

Well, we take home about 145,000 a year. And what's the gross amount of that? I'm not 100% sure on that, but

[George Kamel]

how much could you invest a month right now in order to, quote, catch up? Because you're only 38. You got plenty of time.

[Jade Warshaw]

Absolutely.

[George Kamel]

And you got no debt in your life, it sounds like.

[Caller]

Well, there is a. The boat that's sitting in the. In the boat slip. I owe 6,000 on it. And that's it. On debt, we invest out of that. 145 that we take home, we invest 68,500 of that. Wow.

[Jade Warshaw]

Until. That's great.

[George Kamel]

The stock market.

[Caller]

Yeah, we have an Edward Jones.

[George Kamel]

Okay, and how much do you currently have in investments?

[Caller]

224,000. And that's. That's. We've accumulated that over. This is my second year.

[George Kamel]

Okay, well, let me show you the math on this. You're 38. You got 5,600amonth. Basically, going into these investments, you already have 224,000 you're going to have 7.4 million at 60 if you just keep this up.

[Caller]

Yeah, it's pretty good.

[George Kamel]

So therefore I tell you that to say you don't need to rush this, you don't need to take out a HELOC to go get an investment property that hopefully ROIs, that hopefully, hopefully, you know, actually makes any amount of money because you have debt leveraged against it, which is going to hurt the cash flow. So I would just keep doing what you're doing. The life hack here is your income and your savings rate. Not that you're not doing enough wealth hacks and taking out enough helocs to leverage more properties.

[Jade Warshaw]

That's right. You guys have done really, really well and you've set yourself up for success. There's no reason to really change, change the recipe now, unless you love real

[George Kamel]

estate, than just stack cash or invest and buy real estate and cash. But the stock market is a great passive way, a truly passive way. No headaches, no landlording. The money just grows and grows and grows.

[Jade Warshaw]

That's right. Well, thanks for hanging out with us today, guys. And remember, there's ultimately only one way to financial peace and that's to walk daily with the prince of peace, Christ Jesus.

[Caller]

Sam.