Focused People Build Wealth—Distracted People Stay Broke

Summary

Podcast Summary: The Ramsey Show – "Focused People Build Wealth—Distracted People Stay Broke"

Release Date: May 15, 2025
Host: Ramsey Network
Description: The Ramsey Show empowers individuals to build wealth and take control of their lives, regardless of past financial mistakes. Hosted by Dave Ramsey and his team of experts, the show addresses listeners' top financial, relational, and career-related questions.

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Introduction

In this episode titled "Focused People Build Wealth—Distracted People Stay Broke," hosts Rachel Cruze and George Camel engage with listeners facing various financial and personal challenges. The conversation spans topics from financial control in marriages to building credit, starting small businesses, and guiding younger generations toward financial literacy.

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Caller Segments

1. Sally’s Financial Control Issues in Marriage

Timestamp: 00:47 – 08:20

Situation: Sally, a stay-at-home mom with a substantial inheritance, seeks to manage her funds independently. Her financially successful husband insists on controlling the inheritance, deeming her desire to save as selfish and threatening her financial autonomy.

Advice:

• Rachel Cruze identifies the situation as "financial abuse" (03:22) and emphasizes the importance of Sally establishing her own financial independence.
• George Camel suggests maintaining separate accounts and considers the deeper relationship issues, advising immediate marriage counseling (06:00).

Notable Quotes:

• Rachel Cruze: "This is financial abuse." [03:22]
• George Camel: "This is not a healthy place with your marriage at all." [06:00]

Conclusion: Sally is encouraged to secure her finances independently and seek professional counseling to address the underlying marital dysfunction.

2. Jake’s Concern About Building Credit for Future Mortgage

Timestamp: 10:34 – 30:19

Situation: Jake, a recent high school graduate with no debt, worries about securing a mortgage in the future due to his lack of credit history.

Advice:

• Rachel Cruze explains manual underwriting as an alternative to credit scores, detailing how mortgage companies like Churchill Mort facilitate purchases without traditional credit (12:26).
• George Camel reinforces the importance of building a solid financial foundation before considering homeownership, advising Jake to follow the "baby steps" (13:22).

Notable Quotes:

• Rachel Cruze: "Manual underwriting is simply relying on a real person to look at your financial documentation." [11:42]
• George Camel: "Homeownership is extremely expensive." [24:15]

Conclusion: Jake is encouraged to build his credit through responsible financial behaviors and consider manual underwriting options when he’s ready to purchase a home.

3. Derek’s Relationship Financial Dynamics

Timestamp: 14:27 – 20:06

Situation: Derek is engaged to a woman whose parents support her financially during her education. He fears she may never become financially independent, relying entirely on him or her future husband.

Advice:

• Rachel Cruze and George Camel discuss the importance of having financial independence and warn against being the sole breadwinner (17:25).
• They emphasize assessing her willingness to contribute financially and the potential long-term implications for their relationship (18:15).

Notable Quotes:

• George Camel: "What always that fear is to me is that it starts to bleed into other areas of your life." [17:52]
• Rachel Cruze: "It's about saving responsibly for your future." [19:15]

Conclusion: Derek is advised to set firm financial boundaries and encourage his partner to take steps toward financial independence to ensure a balanced and sustainable relationship.

4. John’s Aspiration to Buy a Home Amid Debt

Timestamp: 22:01 – 30:19

Situation: John, aged 25, plans to buy his first home but carries a truck loan and credit card debt. He seeks guidance on whether to purchase immediately or stabilize his finances first.

Advice:

• Rachel Cruze outlines the necessity of eliminating consumer debt and building an emergency fund before pursuing homeownership (24:03).
• George Camel warns against rushing into homeownership without financial stability, emphasizing the high costs associated with owning a home (24:46).

Notable Quotes:

• Rachel Cruze: "Debt is the villain, and you need to get rid of it." [28:22]
• George Camel: "Homeownership is extremely expensive." [24:15]

Conclusion: John is encouraged to address his debts and build a financial cushion before committing to a mortgage, ensuring a secure and manageable path to homeownership.

5. Mason’s Inquiry About Dave Ramsey’s Stance on Cell Phone Financing

Timestamp: 34:02 – 36:51

Situation: Mason wonders whether Dave Ramsey endorses buying cell phones outright or supports installment plans.

Advice:

• Rachel Cruze and George Camel advocate for purchasing cell phones with cash to avoid debt, describing installment plans as a slippery slope into financial obligations (34:58).

Notable Quotes:

• Rachel Cruze: "Only buy a cell phone in cash. An installment plan is effectively debt." [35:02]

Conclusion: Listeners are encouraged to avoid installment plans for non-essential items to maintain financial freedom and prevent accumulating unnecessary debt.

6. Lauren’s Dilemma: Starting a Small Business vs. Paying Off a Condo

Timestamp: 36:57 – 43:06

Situation: Lauren, managing two jobs and struggling to pay off her condo, considers starting a side business renting photo backdrops and balloon arches to increase her income without sacrificing her current financial stability.

Advice:

• Rachel Cruze and George Camel support the idea of reinvesting savings into a proven business model, provided Lauren maintains her emergency fund and manages her time effectively (40:30).
• They advise careful planning, budgeting, and gradual expansion to ensure sustainability (41:14).

Notable Quotes:

• Rachel Cruze: "Use profits to reinvest in the business and start to grow this thing." [42:37]
• George Camel: "Homeownership is extremely expensive." [24:15]

Conclusion: Lauren is encouraged to cautiously expand her business ventures while maintaining financial safety nets, ensuring her efforts lead to increased income without overwhelming stress.

7. Ray’s Concern About His Teenage Son’s Day Trading Activities

Timestamp: 45:28 – 51:56

Situation: Ray seeks advice on persuading his 17-year-old son to abandon day trading on Cash App, which he believes is a risky and unprofitable venture.

Advice:

• Rachel Cruze highlights the high failure rate of day traders (97% lose money) and suggests allowing the son to experience the consequences of his investments to foster financial maturity (47:52).
• George Camel recommends guiding him toward more stable investment opportunities and understanding the importance of long-term financial planning (50:13).

Notable Quotes:

• Rachel Cruze: "97% of day traders who persisted for more than 300 days lost money." [46:09]
• George Camel: "You can't force this, especially with the older ones that are out of the house." [50:13]

Conclusion: Ray is advised to educate his son about the risks of day trading and encourage more prudent financial behaviors, fostering a balanced approach to investing and wealth-building.

8. Lane’s Challenge with Daughters’ Financial Expectations

Timestamp: 77:52 – 87:13

Situation: Lane, a father of four daughters, struggles to instill financial responsibility in them. While his older daughters are financially dependent, the youngest is still on his support despite having a paid-off car.

Advice:

• Rachel Cruze and George Camel suggest engaging daughters in conversations about their financial goals and educating them through practical tools like budgeting apps and financial literature (82:43).
• They emphasize leading by example, demonstrating responsible financial habits, and fostering open communication about money matters (85:37).

Notable Quotes:

• Rachel Cruze: "It's you saying, hey, I've screwed up, and I tried to give you guys a good life." [84:54]
• George Camel: "You've got to have a conversation with her and just say, I'm so sorry." [83:32]

Conclusion: Lane is encouraged to adopt a more educational and supportive role, guiding his daughters toward financial independence through consistent communication and practical financial education.

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Additional Content and Advertisements

Throughout the episode, the hosts interject with promotional segments for products like the EveryDollar budgeting app, BetterHelp therapy services, and partnerships with Fairwinds Credit Union and Y Refi. Additionally, they offer giveaways and highlight their commitment to financial literacy through various Ramsey Solutions tools.

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Closing Thoughts

"Focused People Build Wealth—Distracted People Stay Broke" emphasizes the importance of financial discipline, independence, and education across different life stages and personal circumstances. By addressing real-life challenges and providing actionable advice, Rachel Cruze and George Camel empower listeners to make informed financial decisions, build wealth steadily, and foster healthy financial relationships.

Notable Closing Quote: Rachel Cruze: "Money is one of the most stressful parts of people's lives. So if you can have a solution and some instruction and guidance around this, that's why we do this show is for people to learn and understand." [87:13]

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Final Note: This episode serves as a comprehensive guide for listeners seeking to navigate complex financial situations, offering both empathy and practical solutions to foster financial well-being and personal growth.

Transcript

[Rachel Cruze]

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

[George Camel]

Live from Ramsey headquarters, it's the Ramsey show, where we help people build wealth, do work that they love, and create amazing relationships. I'm Rachel Cruze hosting this hour with my good friend and co host of Smart Money Happy Hour, George Camel. And we will be answering your questions. So give us a call at 888-255-225 and we'll be answering your questions about your life, your money, relationships, career, anything and everything. Give us a call at first. In Miami, we have Sally on the line. Hi, Sally. Welcome to the show.

[Caller]

Hi. Thanks so much for taking my call. I'll try to be quick with my question. My husband does well financially, but he tends to be a bit controlling with money. He's always taken the inheritance I've received each year and invested it in the stock market. Recently I received about 50k, which will probably be the last bit of inheritance for a while. Since I'm a stay at home mom with no allowance, I'd like to keep this money in a separate savings account in my name only. But he's adamantly against this and wants me to give him the money to invest. He said he'll give me the monthly dividends as an allowance, but I was hoping for more freedom than that.

[George Camel]

Oh, geez, Sally.

[Rachel Cruze]

I don't like the word allowance used when it's not with your own child.

[Caller]

Right?

[Rachel Cruze]

Is this how it's been your whole marriage?

[Caller]

Yeah. And sometimes I get an allowance and sometimes I don't.

[Rachel Cruze]

Based on your behavior. Did you clean up your toys? I don't understand.

[George Camel]

Do you have access to Yalls checking account just to go. Do you have like a debit card to go and spend?

[Caller]

I do. I use the credit card that's both of ours for gas and groceries. But if I need to like get a haircut or something, I use my debit card. And I have money in there that I usually. I get money from my mom sometimes.

[Rachel Cruze]

Why are you getting money from your mom? Because what he's giving you isn't enough to cover the things that you want or need, right?

[George Camel]

This is not okay, Sally. How long have y' all been married?

[Caller]

15 years.

[George Camel]

Okay. Does this feel weird to you?

[Caller]

Now that I say it out loud, it is okay.

[George Camel]

Because. Because it's very weird.

[Rachel Cruze]

This is financial abuse.

[Caller]

Well, it's gotten worse since we had our child. I have a six year old and I'm not able to put him in like swim lessons and stuff. And he does really well, financially, we have about a $5 million net worth. He makes about 400k a month or not a month, 400k a year. Yeah, I don't. But he. I don't know if I can convince him, and he says that I'm selfish to keep the money in a savings account and that I'll lose money to inflation.

[Rachel Cruze]

Have you shown that you're financially irresponsible? Where did all of this come from?

[Caller]

He probably thinks I am, but I'm not. I shop at Ollie's bargain basement. You know, I don't spend a lot of money.

[George Camel]

Okay. I don't. Okay. So when you come to him and you say, I, we need to. Have you. Have you ever asked. Have you guys ever breached the conversation of, hey, we're gonna have a budget and I'm gonna put in exactly what I need to spend that stays within what you make, that we're not going crazy, we're not going deep into debt. We're not doing any of that. We're gonna. We're gonna live within our means and I have full access to our money and that this is what we're going to agree on and that you have a full say in it. Has there ever been any kind of conversation around those lines?

[Caller]

Kind of. I've asked for an allowance before, and he's done it for a couple months, but then, you know, it's. It's just not very much. It's like four to $500 a month.

[George Camel]

Where's the.

[Caller]

Do you.

[George Camel]

Do you have access to see where he's spending money?

[Caller]

Yeah, I mean, I could. Look, he's very frugal. He. He just golfs a lot and. And does, like, small sports gambling. Like a couple dollars here and there.

[Rachel Cruze]

Are you sure it's just a couple of dollars?

[Caller]

I don't know. I mean, he hates to spend money, so.

[George Camel]

Okay, well, there's some. There's some serious dysfunction in this, Sally. And is he. Is he controlling in other areas as well?

[Caller]

Kind of.

[George Camel]

Yeah.

[Caller]

Yeah.

[George Camel]

Is it been. Has he been abusive?

[Caller]

No, not physically.

[George Camel]

No, not physically, but verbally.

[Caller]

Yeah. A bit manipulative and kind of condescending.

[Rachel Cruze]

What are some of the words that he would use when he's kind of like, in a fit when it comes to money? What kind of stuff does he say to you?

[Caller]

He says that I don't understand money. And he just kind of like, yells and clenches his fists and is like. Just says that I don't understand. And if I just put the money in a savings account, I'LL just be like everyone else. And he said if I. Then I'll spend all the money and then he'll. Then he said I'll come back to him and need more money. He thinks that I'm just going to blow through this 50 grand and then come back to him asking for money.

[Rachel Cruze]

So there's a clear. He does not trust you when it comes to finances, and he thinks that you're not smart enough to even understand it.

[Caller]

Right. Which I.

[Rachel Cruze]

There's a lot of gaslighting where he makes you think you're the crazy one.

[George Camel]

Yeah. Yeah. Sally. No. So right now, from what you've given us in this call, I would have my own account and have your own money in. And then that. That's. That's a very reasonable step for you. And then beyond that, Sally, what we see constantly is that money is a window into the relationship. Right? That. That this really isn't a money issue. This is that you have. You have a jerk of a husband who treats you. What sounds horrible, unlike a team. Right. That a healthy marriage would represent that we are in this together. And I trust you, you trust me, and we're going to win and we're going to be excited about this. It is a downplaying and manipulating and. Yeah. Downright abusive, you know what I mean? Of. Of. Of how he's controlling money and all of that. Like, this is not. You're not in a healthy place. Right. With your marriage at all. And so that's what I would start to target. Sally, the money is going to be there for you as a tool if you need it, if you need to get out of this marriage. But what I would be. What I would be pushing him towards is we need to go to marriage counseling asap. Because I can't function like this anymore as. As a. As a human being in this marriage. You know what I mean? Like, it.

[Caller]

It.

[George Camel]

It's horrible. Sally, you're in a really bad situation, and I want you to feel the weight of that. That you're not crazy. You're not crazy.

[Caller]

Thank you. I can't see the forest through the trees. It's been so long. But I appreciate that.

[Rachel Cruze]

Do you have community around you, Sally? Friends, family, people that you can confide in.

[Caller]

Out of state? I do. So I'll be spending time with them this summer, so that will be nice. Just with my son and I. So we'll have some time away for a little bit.

[Rachel Cruze]

This inheritance, this is just yours, right? He has no legal right to this, correct? Okay.

[George Camel]

Yeah.

[Caller]

Except My husband.

[Rachel Cruze]

So I would keep it separate and I would use that to get some counseling. Just for yourself right now. I don't know that he's willing. I hope he is one day.

[George Camel]

And if he's not, Sally, this is a marriage that doesn't survive. I wouldn't want you, I wouldn't want my sister to be in this kind of marriage long term if he's not willing to do any work and to change what he's doing. This is not a good setup for your life, Sally.

[Rachel Cruze]

You're being held financially captive.

[George Camel]

Yeah, you are. That's exactly right. Yeah.

[Rachel Cruze]

And.

[George Camel]

And so normally when we talk about money, we want to combine everything when we're married. But when there is, and we say this all the time, if there's any level of abuse, mistrust, addiction, anything that feels like you need safety, you need to create that for yourself. And, Sally, this is it. And I would again, this is to protect you. That's not the real issue. The real issue is that your marriage is not in a good spot. And you need to figure that out quickly for you and your son's sake.

[Rachel Cruze]

This show is sponsored by Better Help. More and more people are becoming aware of the need for mental and emotional health resources. But over a quarter of those people still say they avoid getting therapy due.

[Caller]

To the fear of judgment.

[Rachel Cruze]

I know because I've been there.

[Caller]

I've sat with hurting people for years.

[Rachel Cruze]

And a lot of folks are scared.

[Caller]

To take that next step.

[Rachel Cruze]

So listen, when people won't get help, it doesn't just affect them. It impacts everybody around them. Their families, their workplaces, the entire community. The world is better when people are healthy and whole.

[Caller]

So if you're thinking about trying therapy.

[Rachel Cruze]

Contact my friends at Better Help. Better help is 100% online therapy, so.

[Caller]

It'S affordable and convenient for your schedule.

[Rachel Cruze]

They have a network of more than 30,000 licensed therapists with a wide range of specialties. And Better help has over 10 years of experience matching people with the therapist.

[Caller]

That'S just right for them. So to get started, just fill out.

[Rachel Cruze]

A short online survey to get matched with a licensed therapist. And if it's not the right fit, you can switch therapists at any time. It's easy and it doesn't cost any extra money.

[Caller]

Listen, good folks, we're all better with help.

[Rachel Cruze]

Visit betterhelp.com jelony to get 10% off your first month. That's Better Help. H e l p.com DeLoney.

[George Camel]

Up next, we have Jake in Grand Rapids. Hi, Jake. Welcome to the Show.

[Caller]

Hi, how are you doing?

[George Camel]

We're doing great. How can we help?

[Caller]

Hi there. Yeah, so I'm fresh out of high school. I don't have any debt.

[Rachel Cruze]

I don't.

[Caller]

I've never taken out any loans. And I'm curious that when I start to go look for a house 10 years down the line or whenever, how. How will I be able to get a mortgage without having any credit?

[Rachel Cruze]

Oh, Jake, you were speaking my language. This is one of my favorite questions because it feels like a magic trick. You know, when people ask this question, they go, I need to build a credit, and I can go through how to rent a car without a credit score, renting an apartment, all the things. But the house is the one that gets people. So that tells me you already know there's a way to do it.

[Caller]

Yeah.

[Rachel Cruze]

So what have you found out in your research so far about how to buy a house without a credit score?

[Caller]

So I. I've heard. I've heard, like, different things, and it doesn't really make sense to me. Like, the someone brought up, like, a manual underwrite, and I. I'm not really sure what that is. I. I don't really understand what they're. What they're talking about.

[Rachel Cruze]

Perfect. So when you think about the credit score, this was invented in the 90s, and all it did was make it easier for lenders to kind of do a vibe check on the people they were lending money to. Right. So Jake has a high score. Great. He's a reliable borrower. We know Jake's probably going to pay back. Well, back before credit scores existed, instead of automated underwriting through, you know, computers and AI and credit scores, there was something called manual underwriting where a real person like me sits down, looks at Jake's tax returns, his pay stubs, his previous payment history on, on his rent and utility bills and insurance, and go, oh, okay, Jake's a reliable person. He's going to pay back the money he borrowed. And so that's all manual underwriting is, is instead of relying on a credit score, it relies on a real person to look at your financial documentation.

[George Camel]

Yeah. Versus like a computer or technology doing it. It's a person. So manual versus not.

[Rachel Cruze]

And a lot of mortgage companies, because they're truthfully just lazy, go. Now we don't do that. So people think, wow, I can't get a mortgage without a credit score. But there's a lot of companies that will do it. And the main one that specializes in this is called Churchill Mort. They've been a partner of the Ramsey show for over three decades now. And those, that's who I went through to get my last mortgage without a credit score. And they made it real easy. You'll have to supply things like, you know, 12 month history of your savings and bank accounts, tax return for verification of income, rental payment history. So if you've rented an apartment or even from your family and you have an on time payment documented every single month, that counts. And then you know, an alternative trade line like a cell phone bill or insurance bill that you paid regularly. So if you have all of that plus you got a solid down payment, you're gonna be in good shape. It's gonna be kind of a nothing burger.

[Caller]

Gotcha.

[George Camel]

All right.

[Caller]

Yeah, that makes a lot of sense.

[Rachel Cruze]

Absolutely.

[George Camel]

So great. And you know, Jake, I'll throw in George. Wanna give away one of your books.

[Rachel Cruze]

Yes.

[George Camel]

To Jake breaking Free from broke because he has a whole chapter or multiple, maybe even a whole chapter on credit scores specifically. But Jake, you're at a great age though, to how to take these principles and actually apply it to your life. Cause you're starting adulthood. I mean like you're, you're in it. And so this book is gonna be probably to help you continue to live debt free. What does it look like to honestly build wealth in a really healthy, solid way? Not in like all these like shortcut ways that I feel like so many.

[Rachel Cruze]

People are talking about avoiding the noise and confusion and traps out there. And Jake, you've done such a great job. I want to applaud you. If you just continue down this path, you're going to have so much money that credit scores will become irrelevant because you don't need to go borrow money for a car loan. Right. You're going to be able to pay cash for a used car.

[Caller]

Yeah.

[Rachel Cruze]

So keep it up, man.

[George Camel]

Yeah, that's right.

[Rachel Cruze]

That's my encouragement to you. You're doing things the right way. Hang on the line and Emily will pick up. We'll get you that book.

[George Camel]

All right. Up next we have Derek in Salt Lake City. Hi, Derek, welcome to the show.

[Caller]

Hi. Thanks for taking my call today.

[George Camel]

Yeah, absolutely.

[Rachel Cruze]

So my question is kind of regarding.

[Caller]

My girlfriend and her desire to work or not to work. Really give you guys a little bit of background. So she's 26, still in college, working on her bachelor's degree. And her parents have a deal with all of their kids that as long as they're in school, they'll pay for.

[Rachel Cruze]

All of their college and all their.

[Caller]

Living expenses until they either graduate or get Married.

[Rachel Cruze]

That's a wild situation.

[George Camel]

Well, she's working on her bachelor's degree and she's 26, so she's been in since she's 18.

[Caller]

So she did take a. An 18 month service mission for her church, but other than that she's been full time school through summer and just.

[George Camel]

Getting a bachelor's still. This isn't like a master's or anything?

[Caller]

Nope, this is just her bachelor's.

[Rachel Cruze]

Is she just stretching it out because she's got mommy and daddy's bank attached. I'm like, sweet, why ever leave school? I'll be in school till I'm dead. That's kind of my fear.

[Caller]

So she does. She has two older brothers in the same situation who are 31 and 29.

[George Camel]

And they're still in school, still working on.

[Rachel Cruze]

Yeah, also still in school.

[Caller]

Never worked.

[Rachel Cruze]

Hey, parents, let this be your memo. Don't do this ever.

[George Camel]

Derek, does she feel like a winner to you?

[Caller]

That's. No, not at this, not at this particular moment.

[George Camel]

I don't know how long this relationship's gonna last because, man.

[Caller]

So that's kind of where I didn't.

[Rachel Cruze]

Know how bad the situation was.

[Caller]

I like didn't know their work history or anything. Just recently found out that none of them have worked.

[Rachel Cruze]

Talk to her about that. And we've been dating a year, so.

[Caller]

We started talking about marriage and finances.

[Rachel Cruze]

And this is when it all started to come up of, okay, what's the.

[Caller]

Plan and what's, what's her plan? And for now it sounds like as soon as she gets married, her either me or future husband is taking care of all expenses while she finishes school.

[Rachel Cruze]

Yeah, I would get some clarity around all of this. Have you shared with her your concern of saying, hey, I'm kind of worried that you're just going to stay in school forever because your life's being funded. Have you kind of been honest with her?

[Caller]

Yeah, I've been honest with her and that's why I reached out to you guys, because we were talking about this and I work full time. I have a very stable job and been doing that for a while, debt.

[Rachel Cruze]

Free, kind of whole nine yards there.

[Caller]

But I asked her to get a.

[Rachel Cruze]

Part time job during the summer next.

[Caller]

Semester to kind of get some financial.

[Rachel Cruze]

Freedom away from her parents. But if you're in her shoes, why would you have.

[George Camel]

Because hopefully you have the character to say I'm an adult and I'm going.

[Rachel Cruze]

To start making that was your test.

[George Camel]

Adult like decisions. And now it's showing that her character isn't there.

[Caller]

Yeah, that was my tester to see if she was willing to put in some effort. Because I want to make things work, but if, if I'm expected to take 100% of the financial burden for the.

[Rachel Cruze]

Next 50 years, I don't.

[Caller]

I don't know if I can.

[George Camel]

Right. And it's not even like a situation, Derek, where, you know, she's working and she's like, hey, but when I become a mom, I want to be full time at home and that. I want my job to be that. Right? I want to transfer home and be a full time mom. But there's no initiative at all in who she is. And what always that fear is to me is that it starts to bleed into other areas of your life. You know what I mean? Of like this procrastination.

[Rachel Cruze]

Just apathy.

[George Camel]

Apathy or laziness or like, I don't know what it is, but I'm like, man, yeah, it's just not a very. It's not a lot of attractive qualities that come out of that. And I'm not saying that she needs to like go be some corporate woman climbing the ladder and working 80 hours a week. It's not even that, but it's just like, yeah, I want the dignity to have my own money. I'm 26. I'm 26. And I've been in school for what, eight years.

[Rachel Cruze]

I don't even know how you drag out a bachelor's degree for eight years. That's honestly impressive. Is she just taking like part time classes or like flunking every time that's.

[Caller]

She's, she's had to retake a lot of classes where she's failed. Says she wants to get into like.

[Rachel Cruze]

A master's PhD program and so she. Yikes, dude. Yeah, Derek, for those reasons, I'm out. I mean, I'm sure she's a wonderful person, but this is not someone I want to continue down the path with personally based on what you told me.

[George Camel]

Because what's so hard, Derek, when you get to this point of a relationship and like, and George knows this, he's been, he's married and so am I. But it's like you have the romantic side, right? You, you fall in love, they're attractive, you know, you have chemistry. Like all that stuff is great, but then what ends up kind of where like the rubber meets the R road is when real life happens. And it's like, I've chosen someone in my life.

[Rachel Cruze]

You want partner in this life?

[George Camel]

Yeah, to walk life with. And life isn't easy. And so there's a level of resilience you want in a partner and little grit. Yeah. And none of that is coming through right now. And I don't want to blame her for her brothers, but the whole family.

[Rachel Cruze]

A lot of dysfunction at the end.

[George Camel]

Of the day that a 31 year old man is still in school. Like that's her brother. And that's who you're marrying into too. Derek, who's hiring this guy?

[Rachel Cruze]

I see on your resume here you've been in School for 13 years and have yet to get a bachelor's degree. Sure you get the job, man. Derek, I'm so sorry.

[George Camel]

Derek, what do you think? What, what do you think?

[Rachel Cruze]

What's your next step?

[Caller]

So that's my next step was to, to allow her some time to get a job. And if she wasn't willing to work, you know, 15, 20 hours a week, it was kind of the end.

[George Camel]

I think, I think that's fair. I. Yeah, I don't think that's unreasonable. And you're not, you know, looking for her to make 100 gr, you know, it's like, oh, well, she's not making 100,000 a year. She's not, you know, it's nothing to do with that. It's just the effort as a human and an adult in the world today.

[Rachel Cruze]

Go hit play on boys to men. End of the road. And grieve this relationship. I hate to admit this, but I don't always eat right. I know I need to eat more fruits and veggies, but sometimes I just have to pound some chips because they taste so good. That's why I love my field of greens. It helps me eat healthy when I don't have much time. And each fruit and vegetable in field of greens was doctor selected for a specific health benefit. Heart, lungs, kidney, metabolism, even healthy weight. And folks, I ain't getting any younger. It's super easy to mix with water. And here is the great part of it. I thought it might taste like grass, but it tastes great. And only field of Greens makes this promise. Your doctor will notice your improved health or your money back. So go to fieldofgreens.com Ramsey for 20% off your first order. That's fieldofgreens.com Ramsey to save 20% on your first order.

[George Camel]

If you're tired of living paycheck to paycheck and just keep wondering, where is all my money going? Our team is hosting a free budgeting training this month. So you will learn step by step on how to make and stick to an every dollar budget and you get to ask all of your budgeting questions. We have a live Q and A with our coaches and this is a great webinar to sign up for. So you can sign up for free at everydollar.com webinar spots are limited so make sure to check that out. All right, let's go to John in Aspen. Hey, John, welcome to the show.

[Caller]

How's it going?

[George Camel]

Good. I feel like I have so many dumb and dumber jokes right now I could start.

[Rachel Cruze]

That's mostly what's happening in Rachel's brain is dumb and dumber quotes.

[George Camel]

I know, but how can we help?

[Caller]

So I have a two part question. I'm gearing up to buy my first home at 25, have very little debt. I have a 300, $330 truck payment and then I owe a little less than 3,000 on credit cards and I have a total of 15,000 available to me. So I'm in a good position. My girlfriend is moving to where I'm at here in October and I'm curious on if I should a wait to rent a little bit, see how we live together and then buy a house and then also how do I know when I found the correct mortgage, you know, or at least home loan lender.

[Rachel Cruze]

Where do we start? Where do we start? What's the truck loan? What's actually left on the loan?

[Caller]

16,000.

[Rachel Cruze]

Okay.

[George Camel]

And you say 30,000 in credit card, what did you say?

[Rachel Cruze]

3,000, right?

[George Camel]

3,000, yeah.

[Rachel Cruze]

Okay. You got 19,000 in consumer debt. Yes. And you have 15,000 in savings.

[Caller]

No, I have 15,000 available for credit, like available credit cards. So by 20% I'm using is my total credit usage.

[Rachel Cruze]

Okay, so you have no money.

[Caller]

No, I have about $2,000 saved up.

[Rachel Cruze]

So you have no money.

[Caller]

Okay.

[Rachel Cruze]

Right. Because you have all this debt. So you know what I mean? Like your liquid savings.

[George Camel]

Yeah. It's a negative net worth with your debt.

[Rachel Cruze]

So that worries me is that you think you're in a great place financially and really we have some work to do. We've seen a lot worse. You can clean this up pretty quick. What do you make a year?

[Caller]

About 52,000 and then at the end of the year we get bonuses. And I do own a LLC, just side business that typically brings in about $1,000 per job.

[Rachel Cruze]

Okay, what do you make from that per year, would you say so just started it up. Haven't even been a full year.

[Caller]

So I would say this year, I mean I'd be lucky if I hit 10,000.

[Rachel Cruze]

Okay. So you probably bring in about 60,000 this year, give or take.

[Caller]

Yeah, I would say, you know, somewhere in that range.

[Rachel Cruze]

Okay. So number one, I would focus on building some financial foundation before you even think about home ownership. And here's what that looks like. Getting completely consumer debt free. So paying off the truck completely, paying off the credit cards completely, not going into any more debt, and then building an emergency fund of three to months of expenses and that, that might take you a year to do all of that.

[Caller]

Yep.

[Rachel Cruze]

And so there's a prerequisite there. Then once we have that foundation, we can begin saving up for the down payment on top of that in a separate savings account.

[George Camel]

Yeah. And the reason why we do that, John, is because what we find is home ownership is extremely expensive. Right. So when you, when the heating and air goes out, you know, you have to take care of the yard. I mean, there's so much that goes into owning a home and it's very expensive. And so when broke people go and buy homes, they become broker is what happens. They get in a really stressful spot. And so putting yourself in a position where you have such this like zero risk, lots of money in the bank. So when things come up, it's like, oh, that broke. We'll just fix it here. Out of this cash that we have, we're not having to go deeper into debt for things that happen. We, we have the ability to be autonomous with our money and that is a very stress free way to live versus the opposite. And the opposite would be what many people do, John. They're in your situation and then they go and get a mortgage and get a home and they're dating someone. They buy a house with the person they're dating and then they look up in three years they have no money. A relationship that's broken off, but this, the other person still is on the deed of the home and like all of it. And it's an absolute mess and they end up calling our show. So I'm glad you called when you did because we want to stop. We want this to be way smoother than what we see a lot of people do. So doing those first two steps, like what George said is key, and then saving up at least a 5% down payment, payment, if not more, that would be great. And then walk him through. George just kind of our formula when it comes to homeownership, because he's asking about his morgue, about the mortgage.

[Rachel Cruze]

What's the best mortgage to get for this? You want to focus on getting A conventional fixed rate mortgage. There's a lot of crappy mortgages out there. Conventional fixed rate is the way to go. And then you've heard of a 30 year mortgage, right?

[Caller]

Yeah.

[Rachel Cruze]

And there's a 15 year mortgage and so that's going to increase the payment, but it gets you out of debt 15 years faster while saving you potentially six figures of interest based on home prices and the interest rates we're seeing out there. And so people go, well, I can't afford that. Well, that might mean you need more of a down payment. You need a bigger down payment. It might be a 10, 20, 30% down payment, which could take longer. And it also might mean we don't need the McMansion when we're a single guy or we just got married. Maybe that's a townhome or it's further out of the city. If you're in Aspen proper, I imagine home prices there are insane.

[George Camel]

Very expensive.

[Caller]

Oh yeah, definitely.

[Rachel Cruze]

So this is going to take a while. And there's no rule, there's no rule of law that says you have to own a home by 26 or else you're a failure. So if this takes you three years to save up the down payment, that's okay. But you want to make this house a blessing instead of a burden. And too many people rush into it because they think, I don't want to waste money on rent. And so they just jump into a house at all costs. So that's one thing to avoid. Stick to a 15 year fixed rate conventional mortgage where the payment is no more than a quarter of your after tax income. So think about your gross income. Subtract the taxes, but then don't put in the, you know, other deductions like health care and 401k. That doesn't count in that 25% just after tax income. Keep that to around a quarter of your income so that you have margin to continue the other baby steps and have money to go on vacation and save up to upgrade things and pay off the mortgage early.

[Caller]

Okay. So pretty much as, you know, keep on working and keep on, you know, just trucking along and save up a good amount so I can actually be comfortable.

[Rachel Cruze]

Exactly. And then just changing the mindset of, well, it's just a little bit of debt. Any single piece of debt in your life is stealing from your future. It's stealing from your paycheck. So I want you to look at debt like the villain and get rid of it. Cut up the cards and stick to using your own money. It changed How I handled money, John, back in the day, when I got out of debt, I cut up that card. I started spending way less. I realized the credit card was causing me to overspend because I was using someone else's money and paying it back later. Okay.

[George Camel]

Yeah.

[Caller]

Thank you very much for the advice. I appreciate it.

[George Camel]

Yep. For sure. John. Thanks so much. Thanks for the call. Yeah. I think that's what's hard, George, is.

[Rachel Cruze]

I feel like the fuddy duddy sometimes. Don't you ever just want to grant someone their dreams and go. Go for it?

[George Camel]

You know what, John And Aspen, you go buy that house right now, add.

[Rachel Cruze]

To cart with that house and go for it. But I care about John. A lot of people, they just want to tell John what he wants to hear.

[George Camel]

For sure. Yeah.

[Rachel Cruze]

And which is, you deserve it. You work hard. That's not a lot of truck payment. You could still afford a mortgage on top of that.

[George Camel]

Yeah.

[Rachel Cruze]

And it's just we get the calls when they thought life was going to work out perfectly and now they're drowning in payments. Or they moved in with the girlfriend, and now the girlfriend is.

[George Camel]

Well, that was something that Ken and I think Jade took earlier this week, maybe. They were telling us that. Yeah. Deed to a house, and they ended up breaking up and he stopped paying.

[Rachel Cruze]

Oh, I was on that one.

[George Camel]

Was that you? Okay.

[Rachel Cruze]

Yep. I remember it very fondly.

[George Camel]

Yes. So, I mean, it's just those situations.

[Rachel Cruze]

And yeah, she moved out, but her name was on the deed and the mortgage, and they're no longer together, and it's getting foreclosed on now because he stopped paying.

[George Camel]

That's it.

[Rachel Cruze]

And we're like, this is.

[George Camel]

Yeah, it's so hard.

[Rachel Cruze]

And she's like, well, we don't communicate. I'm like, well, you're gonna have to start to. Because you guys got into this business transaction together. The most expensive financial decision of your life.

[George Camel]

I know. And what's always so funny is that the advice we give. We joke that we're weird.

[Rachel Cruze]

Yes.

[George Camel]

Because, you know, for John and his situation, like, that is so normal. Just to have a car payment, have some credit cards. I haven't hit the credit card limit. I'm way under. So I'm being responsible. Right in his head, he's like, I'm being responsible.

[Rachel Cruze]

Having access to $15,000 of other people's money is different than having 15,000 and.

[George Camel]

Yeah. And not a big savings. You know, all this. Like, that is. That is normal. And that's why our advice usually on the show is the complete Opposite situation of what people are doing. But. And it does, it gets back to just this common sense approach. But it's the one that works, that we see time and time again. So I'm glad, I'm glad he called.

[Rachel Cruze]

Yes. I don't want John to be average. I don't want him to settle for that. Average sucks in America. The average 401k balance sucks. The average car payment sucks. You can do better and escape average and break free from broke if you're just willing to do some hard things for a short season. He's not far off from being completely debt free with a fully funded emergency fund, 12 months of changing some habits, changing his mindset, he can do this stuff.

[George Camel]

All right, Dave, you have some strong opinions possibly? Yeah, I think so. Okay. Because you really prefer credit you unions over big banks?

[Rachel Cruze]

Well, credit unions for one thing are.

[Caller]

Non profit, which means that the members.

[Rachel Cruze]

The customers own the credit union. So any profits that the credit union.

[Caller]

Makes goes back into customer pricing. So you get better interest rate on savings, cheaper checking and so on, that kind of thing.

[Rachel Cruze]

But what's more important than that though.

[Caller]

Is the fact that the customer is the owner, changes the spirit on the credit union. So I find very few credit unions that aren't very customer centric.

[George Camel]

Well, and I think we have found one that is incredible and that's Fairwinds. They are an incredible credit union that is really out with the heart to help the customer.

[Caller]

They're the right kind of people with.

[Rachel Cruze]

The right kind of values and they've.

[Caller]

Done a really, really good job with.

[Rachel Cruze]

Customer service and the deals that they're offering.

[Caller]

The Ramsey Tribe is incredible.

[George Camel]

Yeah, absolutely. And I love that the things that we teach they so line up with. And you're right, their customer service is unbelievable. Winston and I just signed up and we got an account. Yeah. And I'm not kidding, it took less than five minutes. It was so user friendly. Like the step by step approach was unbelievable. And then the next day my phone rings and it says Fairwinds on my phone. So I answered it and talked to someone there and they said, yeah, they give calls to every new customer. And so again they just really care about your experience and I, I so, so appreciate that. Plus anything that you can do at a traditional branch, you can do with them at Fairwinds, DOT or, or on their app and you'll have free access to over 33,000 ATMs.

[Rachel Cruze]

Hey, you guys know how much I.

[Caller]

Hate banks in general and so for.

[Rachel Cruze]

Me to do this is a big deal. Talk to our friends at Fairwinds and check out the combined checking and savings bundle that they created just for the Ramsey tribe. You guys, it's incredible.

[George Camel]

Yeah, you guys, it's so easy to join Fairwinds no matter where you live. So go to fairwinds.org Ramsey Fairwinds is.

[Rachel Cruze]

Federally insured by NCUA.

[George Camel]

Our question of the day is brought to you by Y Refi. When life happens and those private student loans go into default, why Refi offers real responsibilities, not judgment. Why Refi will help you explore low fixed rate based loans on your unique situation, based on your unique situation. So go to yrefi.com Ramsey that's the letter y r e f y.com Ramsey may not be available in all states.

[Rachel Cruze]

Today's question comes from Mason in Michigan. Is Dave stance to only buy a cell phone in cash or is he okay with putting it on an installment plan with a cell phone provider over two or three years? Couldn't tell you. Dave stance. I could guess Dave's stance, but we can give you George and Rachel's stance at least. I don't want to put words in the guy's mouth. He's not here to defend himself. But the simple answer is yes. Only buy a cell phone in cash. An installment plan is effectively debt because you have to finish paying off the phone before you actually own it. And you're also locked into this contract for two or three years. So if anything happens you want to switch, you want to change phones, well, you're kind of stuck in these handcuffs with that cell phone provider. And so I always recommend, recommend buying a phone in cash. And if you can't afford the brand new iPhone 16 Pro Max with 512 gigabytes, then don't buy it. You can buy a used phone. In fact, I just sold a used phone online.

[George Camel]

Oh, you did?

[Rachel Cruze]

Within a day. And I got great money for it.

[George Camel]

Nice. And you were laughing at some guy's phone in the lobby.

[Rachel Cruze]

It was like an iPhone 6. It was so vintage. It had the one lonely little lens.

[George Camel]

We were taking pictures and I never even noticed that stuff. George is like the Apple guy. And he's like, hey, is that the. Is that the iPhone Model 4.

[Rachel Cruze]

This is from a former Apple store employee I know, as you can tell.

[George Camel]

And the guy in the lobby with the. But the phone, he's doing great. He's thriving, Living a great life.

[Rachel Cruze]

Thriving.

[George Camel]

He's fine. So you can buy a cheaper phone if you need to. All's going to be okay.

[Rachel Cruze]

I feel like these Installment plans also have caused like cell phone inflation because the cell phone companies, like we can charge whatever, they'll just.

[George Camel]

On payments. Yes.

[Rachel Cruze]

So it's part of the problem and it causes you to get into a cycle where it's like a gateway drug to other payments.

[George Camel]

Yeah.

[Rachel Cruze]

You're okay with this payment? Why not buy now, pay later, right. They promise 0% too well.

[George Camel]

And the thing always is when you get stuck in a system where you have to. You're locked in and you cannot get out. That's not fun. Like, that's not. That's not what you want to do. So that's essentially what debt is and essentially when what these kind of plans are.

[Rachel Cruze]

So that's the simplest answer.

[George Camel]

Good question.

[Rachel Cruze]

And I hope he's buying an iPhone. Don't be an Android guy.

[George Camel]

All right. Come on, George.

[Rachel Cruze]

I'm not an elitist.

[George Camel]

Such a judgmental. Do you know I had an Android?

[Rachel Cruze]

Did you?

[George Camel]

Yeah, I had a BlackBerry. This is back on like 2007 or something. But it was a BlackBerry.

[Rachel Cruze]

That doesn't count, does it?

[George Camel]

And then an Android.

[Rachel Cruze]

That's not an Android. No, no.

[George Camel]

I'm giving you my cell phone. I was a Nokia user and then a BlackBerry and then an Android for two years. And I swore I would never get an iPhone. I don't know why I didn't like them. I didn't like the people that had them.

[Rachel Cruze]

There we go. That's the real answer.

[George Camel]

That was in like 2010.

[Rachel Cruze]

And now you've changed. Now you are that person.

[George Camel]

Now I'm that person and I've been that person.

[Rachel Cruze]

I kid. I like to upset the Android people with their green bubbles. I don't need you in the group chat. All right? That's all I'm saying.

[George Camel]

All right, let's go to Lauren in Kansas City. Hi, Lauren. Welcome to the show.

[Caller]

Well, hello, everybody.

[George Camel]

Hello. How can we help?

[Caller]

Okay, so my question is, should I take money out of my savings to start a small business to hopefully, you know, make more money, to save more money? Because at this point I think I'm more on baby step six. I just own a three bedroom condo, technically in Branson, Missouri, and I'm trying to pay that off as quickly as possible, but I'm literally working 80 hours a week to try to get ahead and I'm killing myself.

[George Camel]

Girl.

[Rachel Cruze]

What are you doing for work and what do you make?

[Caller]

Well, I am a property manager at a choice hotel. And, Well, I make 20 an hour, but. So that's not even 40 grand a year. I'm A front desk agent at the Hilton and that's 16 an hour. So I probably make about 30 for a year if I'm lucky after taxes.

[Rachel Cruze]

And you're legitimately working two full time jobs?

[Caller]

Yes. That's like right now I'm at the Choice hotel and then I leave here at 2:30 to work 3 to 11.

[Rachel Cruze]

What does the growth track look like in the hospitality world where you can make 75k?

[George Camel]

Well, you're wanting to start a small business is what.

[Rachel Cruze]

You want to leave this industry completely?

[Caller]

Maybe not completely. I want to do the. If the business got busy enough, I would leave the hotel business. But if not, I just want to add extra income.

[George Camel]

Sure.

[Caller]

More passionate. More passionate about events and entertainment and mainly party planning.

[Rachel Cruze]

So pitch us your small business idea. How much is it going to cost and what it's. What's it going to be?

[Caller]

Okay, so I want to rent out photo backdrops. You know, like the florals, like the pretty stuff people stand in front of to take pictures at like bridal showers, baby showers, weddings, Mother's day. And I do have a couple of connections like with the Hilton and the convention center in town and because there's.

[Rachel Cruze]

A lot of weddings and events.

[George Camel]

Have you done these before, Lauren?

[Caller]

Yeah, I have, but it's just like I have two backdrops that I own personally.

[George Camel]

Okay.

[Caller]

And I've rented them out a handful of times.

[George Camel]

And how expensive, how, how much money can you make by doing that? Like if an event rents out one of your backdrops, how much are you making?

[Caller]

Well, depending on the backdrop, I mean, 100, well, $200 for the most basic one and like up to $400 depending on how fancy the backdrop is. But my issue is only have two and they're not fancy. So if I invested in a more backdrops, it's going to cost me any three grand to five grand just to have a handful of backdrops.

[George Camel]

Okay, and how much do you have in your savings?

[Caller]

30,000. 30.

[George Camel]

Nice. Are you single? Kids?

[Caller]

Yes. No children? No man.

[George Camel]

Yeah. So it's $25,000. A good emergency fund for you. Do you feel comfortable with that? It feels like a while.

[Caller]

Yeah, yeah, for sure. And yeah, because I only owe 54,000 on my condo. So I was trying to just, you know, get up to 60, pay it completely and then, you know, my 5,000 would be my emergency fund. But it was like, should I try to do the side gig or decide project business to make more money quicker without killing myself?

[Rachel Cruze]

How much of this can you do on your own without Hiring other people because you're kind of stuck trading your time. Right. You got to bring the backdrop, set up the backdrop, break down the backdrop. You got to keep it local to where it's drivable.

[Caller]

Right, Exactly. For the most part, I can do it all by myself. Now, in addition to the backdrop, I also do balloon arches. And those can be anywhere from a hundred bucks to. Yeah, 300 bucks, depending on how much time it takes and how many balloons it takes.

[George Camel]

Yeah, well, I mean, I mean, if you had a great backdrop, Lauren, you know, you could charge 600 and you did one of those a week. I don't know how, I don't know how many parties are out there. That's 2400 bucks. Yeah, that's 2400 bucks a month.

[Caller]

It'll be more popular during special events in the holidays like Christmas, New Year's Eve.

[George Camel]

Sure, sure. Because ideally you could get to the place where this replaces the front desk job that you're making 34. And if you could do this instead, you know, maybe still keep the other one, but replace at least one of these so that you're just working a few hours versus till 11 every night, you know, at the front desk. That, that seems worth it to me. And it seems like it's been somewhat proven out, the fact that you're, you.

[Rachel Cruze]

Got connections, you've done this before, you've made money. So I would. Yeah, if you're going to spend cash on this and go with a small investment up front with three to five grand. Yeah, go for it and see where you can take this thing and see how you might end up needing to hire someone out because you're working and can't be at every single event in all places at one time. But maybe you pay them, you know, 15, 20 bucks an hour to go set it up and break it down and you still make profit. And that way you don't have to be everywhere.

[Caller]

Yeah, exactly. And it doesn't take long. I mean, they're heavy and kind of annoying. But it literally takes me like not even 30 minutes to set it up, up and, you know, get it in place. And then 30 minutes to break it down and put it in my car. But also drive a Prius.

[Rachel Cruze]

I was gonna say, I feel like you're gonna need a pretty big car to carry all these backdrops. So what I don't want you to do is go. I had to finance a fifty thousand dollar van to transport the backdrops.

[Caller]

Yeah.

[Rachel Cruze]

So just be smart about it.

[Caller]

I think my car has been paid off for nine years. So I'm gonna let it, you know, die on me.

[George Camel]

Alarm. You've been very smart. Smart. You don't have any consumer debt. You have a lot of savings, you're taking your time, you're working to pay off the condo. I mean, you're doing your, your gut so far is correct, what you've been doing. So yeah, I trust you.

[Rachel Cruze]

And maybe I'd say I'd work on saving up and cash flowing a SUV or van so you can use it for business and increase your income that way too.

[Caller]

Yeah. Because I also wanted to like not just do the backdrop but you know, make it pretty, you know.

[George Camel]

Yeah.

[Caller]

Purchase a few like benches, which I have a couple, but they're like fold up benches. I can fit in the Prius.

[Rachel Cruze]

I love it.

[Caller]

I can't get couches and stuff.

[George Camel]

To the top.

[Rachel Cruze]

And be smart about it. Use profits to reinvest in the business and start to grow this thing and see where it goes. I'm for it.

[George Camel]

People love a balloon arch these days, Lawrence.

[Rachel Cruze]

Ladies love a balloon arch.

[George Camel]

You're in a great business.

[Rachel Cruze]

The men could do without them. You know, one of the first things I discovered working in the financial world is how absolutely devastating it is when the breadwinner of a family dies and there's too little life insurance or none at all. Grieving families are suddenly left behind, scrambling to pay bills and trying to make ends meet. I also discovered that there are a lot of rip offs in the life insurance world like that whole life crap posing as as an investment opportunity. What you need is level term life insurance, usually 10 to 12 times your income, which is the smartest, most affordable way to protect your family. The key is finding an independent broker who represents a ton of companies and works for you, not for the insurance company. This is exactly what my friend Jeff Zander and his team at Zander Insurance are all about. They shop the term life companies to find you the best options and they've been around for over 95 years, so you know they'll be there when you need them. Zander is the real deal and that's why they've handled all my personal insurance for over 25 years. I trust them and you can too. Visit Zander.com for instant online quotes or for a more personal touch. Give them a call at 800-356-4282.

[George Camel]

Live from Ramsey Solutions, it's the Ramsey show where we help people build wealth, do work that they love, and create amazing relationships. I am Rachel Cruze hosting this hour with My good friend and best selling author George Camel. You can also hear us on our other show Smart Money happy hour hours. So make sure to check that one out. And we are taking Your calls at 888-255-225 talking about your money, your life, relationships, career. Just give us a call. And we are here to answer your questions. First up we have Ray in New Jersey. Hi Ray, welcome to the show.

[Caller]

Hi, thank you for having me.

[George Camel]

Yes.

[Caller]

My question for you today is how do I convince my teenage son that day trading isn't really a make money?

[George Camel]

Oh, what got him into day trading? Like an app or something?

[Caller]

Yeah, yeah. So he as a kind of a background, he was talking to me recently about cash app and stocks in there and so he actually has $42 in cash app and he's trying to convince me how this is a great idea to make lots of money and if he had hundreds of dollars that could turn into thousands.

[George Camel]

And just trying to. And how old when you say teenage is it like 13 or 18?

[Caller]

He's 17. 13, 18.

[Rachel Cruze]

Well, he knows everything. What good are you at this point? I'll tell you this much. The best teacher that convinced me was my own stupidity when I was that age. So that might be the key to solving this is you just let him keep doing it until he either becomes a multimillionaire and buys you a house or goes completely broke, which at 17 he didn't have much to begin with and he learns that the stove is hot. Let's not touch stoves anymore. That might be my strategy. Just seeing I cover it in my book Breaking Free from Broke. I have a whole chapter on investment traps and I cover day trading because people see it as a tool to create wealth. And as I looked into day trading, here's what I found. One study found that 97 of day traders who persisted for more than 300 days lost money. So if he hasn't lost money yet, yet, just give it time and he will figure it out. And if he thinks I'm going to be the 3% mom, his risk meter is broken, he doesn't have bills to pay. So why would he be concerned about losing the 50 bucks that he had? You know what I mean? And so I think part of this is just him experiencing a little bit of pain and that's hard to do as a parent. Of course you don't want to see your kid experience pain or do something stupid. But as long as he's not leveraging money and borrowing a bunch of money money. If he's just using his own fun money and this is what he wants to do. You know, it might be a good financial sort of learning to go, all right, I'm learning about how investments work. I'm learning about the risks of day trading. And eventually, hopefully he goes, been there, done that. I'm going to invest in something a little more proven, a little less volatile. That's my take, Rachel.

[George Camel]

Yeah. I mean, there's only so much, I think Ray, at this point, you know, you can tell him all that you can. Right. And then he's either gonna have to choose to listen or not. Because the truth is too, he's about to be 18, so he's going to be off on his own. So for the fact of you trying.

[Rachel Cruze]

To, you can take away his phone and say, I pay the phone bill and you're not going to get on these apps. But I think that's only going to cause him to want to.

[George Camel]

Yeah. And that's not going to like give him the tools in life that he's going to need here in a few months when he goes off on his own. So. So yeah, I think it's, you know, showing him the facts and then running even. Like if you go to ramseysolutions.com and our investment calculator and just say, hey, instead of day trading this money, what if you just put it in a mutual fund at a pretty much a guarantee rate of return of 10, 11% and over, you know, the course of years, you got to just like kind of let it go, but what it'll grow to, you know, so there's ways to build wealth that are pretty guaranteed.

[Rachel Cruze]

But that involves and delayed gratification, which is something no 17 year old has.

[George Camel]

Yeah, I was going to say this kind of, this is exactly what I think. They prey on people that love quick results, high risk. And some people are just wired that way. I mean, they really are. And so it does take a level of maturity and discipline to say, you know, what if I'm going to build wealth, wealth the right way that's going to sustain me long term. It's not these risky type of investments. And so, yeah, I think he may just kind of have to learn that. Ray, I hate to say it right.

[Rachel Cruze]

But you can play some calls from the Ramsey show. We've taken them where people lost 30,000, 150,000, even $300,000 day trading.

[George Camel]

And you know, and with him, I know I'm not a mom of teenagers. My oldest is 10. So you are way on the further train of this Ray than I am as a parent. But it is funny. Even my kids, you know, you see parts of them and their personnel which if directed the right way is wonderful. So like his tenacity and his, the thought that he even wants to like make money doing something. We took a call of someone who's 31 years old and still in school trying to get their bachelor's degree 10 years later and you're like, oh my God, will you please get a job?

[Rachel Cruze]

Like, his curiosity actually bodes well for him.

[George Camel]

Yeah, if it's directed in the right way. The negative way, which I probably would tell him is you need to have a lot of caution around this because this, this is the same type of mentality that gets into gambling. You know, I mean it can get into a lot because you can get in over your head really, really fast thinking, oh, just, just another hundred bucks and I promise I can remake it. Right. It's that, that and then the sun.

[Rachel Cruze]

Cost fallacy of, well, I'm really far down, I need to get back up.

[George Camel]

Yes, yes. So that, that's the negative side of all of this. That I would as a parent probably just say, this is what I see. And this, this can be directed in a really healthy, amazing way. We just need to direct it the right way.

[Rachel Cruze]

Direct it toward, hey, let's open you and get you working and throw some income in there. And that can be a healthy way to channel this energy of him wanting to learn and grow and build wealth without losing his hard earned money.

[George Camel]

You know what I mean? Honestly. Right. Even, even a high yield savings, something that maybe he can get to, you know, a Roth isn't a bad idea by any means, but you can't touch that till you're 59 and a half. But maybe something that he can like see a little bit of growth. I don't know. Yeah, that he can kind of play with. I think is, is great. But again it's, it's a low risk risk. It's not great reward because usually low risk is longer periods of time of patience. So you're not going to get this quick hit of stuff. But I don't know, think about what.

[Rachel Cruze]

Apps are designed to do. They're designed to get you to open them back up. And so that's what Cash app is doing. They're just like Robin Hood and M1 and all these flashy apps. They're getting young people to try to have a little notification that says, hey, come back and make a trade. You can make some serious money. Hey, we'll give you a little discount. We'll give you a free trade. And all of that is enticing young people to make really risky financial decisions under the guise of entertainment.

[George Camel]

Right, right.

[Rachel Cruze]

That's the scariest part. So, Ray, I'm going to send you a copy of my book Breaking Free from Broke to give to him. And if he'd prefer the audiobook, let our team know. We can get that to him and just have him read the investment traps chapter and have a conversation about it. You don't need to be heavy handed here. Just say, hey, would you read this and let me know what you think?

[George Camel]

Yeah.

[Rachel Cruze]

He might say, this guy's an idiot. I know what I'm doing and I've. Listen, he wouldn't be the first one.

[George Camel]

George Camel. That, that George Camel.

[Rachel Cruze]

That's a Tuesday for me.

[George Camel]

He doesn't know what he's talking about.

[Rachel Cruze]

But I'm just not interested in losing money at this stage of my life. And I think you kind of need responsibility in bills to feel that a little more.

[George Camel]

Right? Yes.

[Rachel Cruze]

Versus being under mom and dad's roof. I was spending every dollar I made when I lived with my parents.

[George Camel]

Oh, sure. Yes. Yeah, yeah, yeah.

[Rachel Cruze]

And I wasn't as smart as her son.

[George Camel]

That's right.

[Rachel Cruze]

Totally fine music.

[George Camel]

I know. And I think that's it too. I mean, I even remember me as a kid. Mom and dad, that is one place that they did well. They let us make money. Mistakes with money. I mean. And by that meaning like spending on.

[Rachel Cruze]

Stupid stuff and not going into crippling debt.

[George Camel]

No, gosh, no, no. And they, and they were never like helicopter controlling, controlling parents with that. I mean, they really did. And then, I mean, I was the one that always spent everything. It'd be like the 18th of the month. And I was like, hi, I need some more money for the rest of the month. And they were like, well, that's what your job is for. Go make some money, Rachel. But you just kind of learned. It's like a trial and error, especially your teenage years, you know, And I think that's, that's a gift to give our kids. I do think one of the mistakes with parenting recently is they are such either helicopter parents controlling every move or the snowplow parenting where they smooth it out. Smooth it out so that there's no bumps in the road, you have no hardship, you don't feel any pain. Life is easy and beautiful and that's what I want as a parent for you. And that is damaging too. So it is a hard balance. But Ray, he sounds like he has some good tenacity. So we'll just channel it. Channel it the right way and hopefully be great.

[Rachel Cruze]

That's right. Let's be honest. Shopping for health insurance can be confusing with high costs, complicated terms and customer service that doesn't really serve you. Most folks just pick a plan and.

[Caller]

Hope for the best.

[Rachel Cruze]

See, insurance companies don't work for you. They work for themselves. Meaning they love it when you overpay. So you need a guide on your.

[Caller]

Team to help you make the best choices.

[Rachel Cruze]

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[Caller]

Of people just like like you.

[Rachel Cruze]

They're the only health insurance broker that's.

[Caller]

Ramsey trusted to help you.

[Rachel Cruze]

So stop throwing money away and get the health insurance that's right for you@healthtrust financial.com that's health trust financial.com.

[George Camel]

Hey guys, Rachel Cruz here. All right. I'm about to say what everyone already knows, but budgeting is a good thing to do. Do now actually starting well, that's where people freeze up. And you guys, it doesn't have to be that way. With the EveryDollar budgeting app, getting started is super easy and so is sticking to it. You can set up your first budget in less time than it takes to go through the Chick Fil A drive thru. It's fast. And the best part, with unlimited budget categories, you can customize it to fit your life. Grocery runs, coffee runs, or planning your next family trip, trip, whatever you have going on. Everydollar helps you see exactly what's happening with your money. You'll know what's coming in, what's going out and what's left over for some fun. Because let's be real, you need some fun in your budget. Everydollar keeps budgeting simple and stress free, just the way you want it. So go download the app for free and get started today. Again, go download everydollar today. The growth of the Ramsey show has been incredible over the last really two years on podcast and YouTube and of course those of you listening live on the radio. And so we appreciate that so much because so much of that growth comes from you guys sharing the show with friends with family. So keep that up for us because we want to continue to grow this show so that people learn how to handle their money. You know, money is one of the most stressful parts of people's lives. So if you can have a solution and some instruction and guidance around this, that's why we do this show is for people to learn and understand how much their behavior change causes them to win, but also the head knowledge of what to actually do. And so we want that hope for so many people out there and even more that are than are just listening today. So make sure to share if there's a great clip or an episode that you like, love, make sure to share it with a friend. Also leave a review hit subscribe too, because that helps us as well. So we really appreciate your support, you guys. We, we are here for y' all. So thanks so much for listening and watching. All right, let's go to Quan in Tallahassee, Florida. Hey, welcome to the show.

[Caller]

Hello. Hey, good afternoon. I'm so glad I made it on the line with you guys.

[George Camel]

Oh, I'm so glad you called. How are you? You?

[Caller]

I'm doing well. I'm 44. I am in the process of getting a divorce. I have three boys. Put your seat belt on. I have three boys and. No, it's all good. It's a happy occasion. I need all hands on deck, though. I am in a lot of debt about in total, about $38,000 in consumer debt, 74,000 in student loan debt. We have our marital home that's got a mortgage on it and a $250,000 mortgage remaining. And it's about worth about 405 if we sell it. We have a premarital home, a townhouse house that we had rented. It is got a $104,000, $104,000 mortgage on it and fair market value about 257. And we also have a HELOC on the Merrell home, $24,000. So there are a few curveballs here though. Both mortgages. My name is on both market discs. Our names are on both feet. Another curveball is we just had mold in that townhouse in the rental so vacated and I and the Florida insurance company has refused to pay for the mold. So I am paying for that now. So I had to pay for mold remediation and I'll be doing that until January 2026 monthly. They worked with me. But wow, this is loaded. Yeah, I left my marrow home January 1st and I got an apartment or townhouse a rental 1825amonth with me and my three boys. My husband is refusing to sell the marital home, which would give us money in our pocket.

[Rachel Cruze]

Who's gonna live there?

[Caller]

He has been saying he wants to.

[Rachel Cruze]

Stay there, so he's gonna take over the mortgage. He's gonna refinance it into his name solely.

[Caller]

Yeah, no, we went through all of that. He can't. He does not.

[Rachel Cruze]

Then he can't keep this house.

[Caller]

Yes.

[Rachel Cruze]

So he's saying, no, I'm not going to sell it, and yes, you're going to stay in the mortgage even after we're divorced. That's insane.

[Caller]

It is insane.

[Rachel Cruze]

You're going to need a judge to tell him he can't do that.

[Caller]

Yeah.

[George Camel]

Have you guys gone through the divorce process already?

[Caller]

No.

[George Camel]

Okay.

[Caller]

We're in it. We're about to go to mediation next month.

[George Camel]

Okay.

[Caller]

And so, yes, I told my attorney to. We rushed the sale of that house because another curveball. My first mortgage company or whatever, Wells Fargo servicer, they anyways headed to foreclosure. And so the company that has taken over the mortgage now within the past, like, month or so, they have offered a loan modification agreement. And as long as he pays, what's it, 2416 monthly for the next three months, then they'll be able to draw up a real modification agreement. And he's saying, oh, I can do it. I can do it. I can do it. Well, the problem is his income is inconsistent or sketchy. Is a food truck operator and owner.

[Rachel Cruze]

What's your income?

[Caller]

Mine, I'm netting about 8,100amonth.

[Rachel Cruze]

Great.

[Caller]

Or. Yeah. So it's good, you know, but I just haven't been able to enjoy the fruits of my.

[George Camel]

Right, Right. There's been a lot of stress and. Yep.

[Caller]

In quite a long time.

[George Camel]

Yep. Well, I do wonder, once this goes to court, the divorce, I mean, they're gonna have to split your ass. Assets. And so the house. Yeah. I mean, there's gonna. It's gonna have to come down to either him paying you the remaining.

[Rachel Cruze]

He's gonna buy you out.

[George Camel]

Yeah, he'll buy you out, but I don't think he has the money to do that.

[Rachel Cruze]

Which will then force the sale.

[George Camel]

Force the sale of the home. Yeah. So I do. I do wonder.

[Caller]

Or is he tax compliant? So that's another curveball.

[Rachel Cruze]

What was that? He's not tax compliant.

[Caller]

Right. For the last.

[Rachel Cruze]

That's a nice way to say he hasn't been paying his taxes. Taxes.

[Caller]

Correct.

[Rachel Cruze]

Okay. How much does he owe? An IRS debt.

[Caller]

I'M not really sure when I left.

[Rachel Cruze]

And is this your debt to.

[Caller]

No.

[Rachel Cruze]

So you guys weren't filing jointly?

[Caller]

We were going to, but we, we didn't. We had delayed the taxes. And so now when I left, I did go ahead and do my taxes on my own and I filled. Filed separately.

[Rachel Cruze]

Okay. Okay, man, a lot going on here.

[George Camel]

Yeah.

[Rachel Cruze]

I can tell you what I would do in your shoes, Quan. I would sell both properties at all cost.

[Caller]

I have one more caveat.

[Rachel Cruze]

Okay.

[Caller]

More. Okay, so the tenants are out.

[Rachel Cruze]

Good.

[Caller]

The mold is gone. The room is messed up. The room in the bathroom, they have, you know, it's good. And I have already sent a letter to my apartments. I'm breaking my lease. I'm thinking it's best to move back into that townhouse. So I don't have this 1825amonth rental to pay for. Also, I don't have a functioning car. I rode out my 2004 Honda Accord until it just quit on me. And now I'm renting. Renting a. A vehicle for my aunt for 190amonth. It's doing its job for the moment, but I do need a vehicle.

[George Camel]

Okay. Okay. Well, the four walls, if we look at just the basics for you, is food, shelter, utilities, transportation. So we need these four just to get you some stability. So the home. Yeah. I would probably move back into the condo that you own. So you're, you know, I mean, that's great if you want to.

[Rachel Cruze]

What's the payment on that?

[Caller]

15, 15 80amonth.

[George Camel]

And you're paying what, right now?

[Caller]

Right now I'm 1825 and a rental.

[George Camel]

So it's cheaper.

[Rachel Cruze]

Okay, a little cheaper. But what if you just sold that rental? You could net 135 grand off of that.

[Caller]

Well, his name's on the beast.

[Rachel Cruze]

Okay. But we're going to force the sale of that in the divorce. Course. Because he can't afford that.

[George Camel]

Yeah. So both these properties Con would need to sell.

[Rachel Cruze]

That's going to simplify your life. You're going to net about 270 grand if you sell both of these properties, which will clean up your debt and still give you 130 grand on the other side.

[George Camel]

Split in half. Right. He'll take half of that.

[Rachel Cruze]

Yeah. Whatever the court decides is equitable here because if it's a premarital asset, I don't know how they're going to view the rent. Mental. But if his, his name's on the deed, that will change things. So again, I, I'm not your lawyer. I would work with them to figure out how this is all going to go down. But until then, it's just a lot of speculation and gyration. So to Rachel's point, focus on stability right now. Cover those four walls and try to just liquidate everything you can to get to some stability.

[George Camel]

If you hold on the line, Emily's gonna pick up and we'll get you a financial coach for free on us just to walk through hopefully the early parts of this, you know, divorce settlement to be able to get you in the place that you need to get. So Emily or Kelly are going to pick up and we'll help get you connected to a financial coach. I'm so sorry you're going through this, Quinn. You guys, one of the best gifts that you can leave your family after you're gone isn't stuff. It's peace. When something happens, your loved ones don't want to be digging through drawers or guessing passwords to access your important information. That is why I love Knockbox. That's N o K as in next of K box. Knockbox is a super practical physical system that helps you organize all your important documents like accounts, passwords, assets, medical records, even your will in one safe place. And your Knockbox is divided into user friendly categories to help you get organized so you can give your family clarity, not clutter when they need it Most. Go to knockbox.com ramsey and check it out.

[Caller]

Out.

[Rachel Cruze]

Hey folks, how would winning $5,000 in cash change your life? This month we're giving $5,000 to one grand prize winner and we're giving away a $500 prize every week. In May, it takes less than 15 seconds to enter. No purchase is necessary and you can enter daily. To increase your chances of winning, enter the Ramsey cash giveaway until May 31 at ramseysolutions.com giveaway that's ramseysolutions.com giveaway.

[George Camel]

One of the ups and downs of the financial world, George, in the past recent years has been the housing market.

[Rachel Cruze]

Yep.

[George Camel]

Man. Man, it's been. It's the elephant in the room, I should say. Ups and downs. It's kind of just been up, I.

[Rachel Cruze]

Guess just been like a stagnant semi pond of just like make something happen. Let's see some movement.

[George Camel]

So hard. I know. So an article from USA Today came out and it says, is it finally a buyer's markets? What to know about home prices Outlook?

[Rachel Cruze]

Here we go. Prices surged during the pandemic, up roughly 50% over the last five years. And mortgage rates hit rock bottom. Americans Reconsidered where they wanted to live during that time. Well, all these gains have had consequences. Homeowners are sitting on record levels of home equity, but it's increasingly challenging for buyers, especially the first time home buyers, to break into the market. But now prices, as they say, are falling back to earth and may continue to do so. So this is not a crash, but we're sort of getting back to reality instead of the inflated prices that we've seen. So the Mortgage Bankers association expects prices to rise, rise only 1.3% in 2025. And Fannie Mae economists forecast a 4% price gain. So it's worth noting many analysts have predicted a similar trend in the past, only to see a sharp imbalance between demand and available supply, keeping prices elevated. So I think that's kind of what's been happening is people are now just, they're like, all right, fine, we're ready to list our house. And so the market is, does have more supply than it used to.

[George Camel]

Yes. Yeah.

[Rachel Cruze]

But there's not quite demand meeting it, which would cause prices to fall.

[George Camel]

That's right. Well, realtor.com their data shows that in April there were 959,251 listings that were active. And that is 30% higher than April of last year. So 30% more houses sitting on the market, which again, for buyers out there, that means you actually can negotiate. Because for a while, I know, at least in our area, George, people were bidding to buy a house like they were one of 20 people sitting there being like, we, we all want this house. Who's going to take the highest offer? And now they're.

[Rachel Cruze]

And you just got to sit back and watch all these offers roll in. And now you're like, well, someone maybe want to look at anybody next week.

[George Camel]

Yeah, that's right. Anyone want to make it all.

[Rachel Cruze]

So what's happening is you list the house and then a month in you go, all right, we got to lower the price by $10,000, $20,000 until finally you have a buyer. And so it's it. I, they're saying it's too soon to call this a buyer's market. And experts like Hep caution that the national housing market is in fact increasingly local, which is a great reminder of, well, this happened in my town. Well, your town might be a real hot area where this is happening and some towns may not be experiencing, experiencing this at all. So it's hard to say across the board it's a buyer's market. But realtor.com data.

[George Camel]

Yeah, they're only rising again, 1.3% where in past years it's been 4.3%.

[Rachel Cruze]

So, yeah, realtor.com data showing that more sellers are making price cuts, which is a signal that we're heading towards a buyer's market.

[George Camel]

There you go. Well, if you are looking to buy or sell a home, make sure to check out one of our Ramsey trusted products pros because they can help you when it comes to buying and selling. Because all that's a really big deal and there's a lot of clickbait headlines out there and confusing data. And so what again, we're seeing, though it's interesting, the median home prices went up slightly last month to $430,000. That's the median price of a home.

[Rachel Cruze]

Right in the middle. Smallest to largest in the list in America.

[George Camel]

That's right. So if you want to know more about the housing market trends and to even get connected connected with an agent and some other free tools around real estate, go to ramseysolutions.com markets and we have tons of information there for you because again, buying and selling a home, it's. It's one of the largest purchases or sells that you make in your life. And so making sure that you do that well with a lot of knowledge. So speaking of homes, we're gonna go to Nick in Champaign, Illinois. Hi, Nick. Welcome to the show.

[Caller]

Thank you so much for taking my call.

[George Camel]

Yes, absolutely. How can we help?

[Caller]

So here's my situation and my question. I want to know if I should buy a house in Williamson County, Tennessee. The background is I currently own a home that's worth about $500,000. I owe $90,000 still on it. I have $60,000 in the bank that I could put towards that if I wanted to. My salary is $292,000 a year, and that's all the debt that I have. So I'm currently on baby step number two. Six. Number six. However, I'm wanting to get out of Illinois and move to a better state. And I'm considering Williamson county, where I've had a job offer as a physician. But in my wife and I's research, we found that these houses are extremely expensive, many of them 950,000 to 1.1 million. And I don't know what to do. Would that be a silly idea to take out a mortgage for 450 or $500,000 to move to a better location?

[George Camel]

Well, let's see what the George, you have.

[Rachel Cruze]

I got the calculator pulled up so you've got a $500,000 home, you owe 90 on it. So you could roll all the proceeds into the new home, which would likely be, let's say after fees like 375. Is that fair?

[Caller]

Yes, sir.

[George Camel]

And you also have 60,060.

[Rachel Cruze]

That's 435 down. And let's say the home is 935, is that fair?

[Caller]

Yes, sir.

[Rachel Cruze]

That would give you a $500,000 mortgage on a 15 year fixed rate. With the current interest rate rate, you're looking at about a $5,000 mortgage.

[Caller]

Yeah.

[George Camel]

And how much do you bring? How much do you bring home a month.

[Caller]

After taxes? Right now I bring home $14,000 a month.

[Rachel Cruze]

Would your income go up when you move or it would be the same?

[Caller]

It would stay about the same. I would make less. But with you guys having a better tax situation, it would be about a.

[Rachel Cruze]

Break even or a lack of income tax. That's what's up in Tennessee. Yeah, I mean we are, and for the record, for everyone listening, we are Inc. In Williamson county, the Ramsey Solutions headquarters. So we know this area well and it's about a million dollars is the average home price right now, which is a lot. People think, well, it's Tennessee. I'm sure they just got double wides over there. No, no, no. This is one of the wealthiest counties in the nation and we think we're worth that. So can you make this move? I mean, 14 grand. Let's see, the mortgage I'm, I'm spitting out here is about 4750. And so with our rule of 25% of tax take home now is that after tax, but before other deductions like health care, 401k, all of that, that.

[Caller]

That is after all of that, I, I, after 401k, after insurance, everything, I get $14,000 a month.

[Rachel Cruze]

This will help your numbers. So when we say after tax, a quarter of your take home pay, what we're really saying is just after tax but before other deductions. So put back in your 401k contribution, put back in the health care contribution. That should help your natural numbers. That would essentially make your take home your after tax income probably more like 16,000.

[Caller]

Okay? Yes, sir.

[Rachel Cruze]

So then you take a quarter of that. Well, now we're looking at $4,000 mortgage.

[George Camel]

Yeah.

[Rachel Cruze]

And so, and the 25 rule, it's just a parameter, Nick. It's not like a. Well, I'm at 26%. So Ramsey said no, the idea here is you don't want too much of your income tied up in that mortgage to where you can't accomplish the rest of the baby steps.

[George Camel]

Yeah, but you're right there.

[Rachel Cruze]

I mean, yeah, I would say you're real close to making this happen.

[George Camel]

Yeah, I think you can. Could. And especially if your income does go up over time in the next, you know, year, two years, three years, just a natural raise, then for sure it's going to, it'll give you even more cushion. But yeah, I mean, if you're, you're looking, you're trying to hit around a $4,000 mortgage would be ideal for your situation. What would the mortgage be? Did you say?

[Rachel Cruze]

About 4700 bucks?

[George Camel]

Okay, yes.

[Rachel Cruze]

And that's on a 15 year fixed rate, which is going to put you in a really strong position. And so if I was your financial coach, which I'd say, let's start home shopping, probably in the $900,000 range and continue saving. How urgent or imminent is this move?

[Caller]

Well, it has to be done pretty soon. I've got four kids which were funding their college and I want them to, if we move, I want to do it by school year. So. August. Ish.

[George Camel]

Okay.

[Rachel Cruze]

I love it.

[George Camel]

Yeah, I think you're good, Nick. Yeah. Around a $900,000 house is fine.

[Caller]

So if I just, just, just to clarify, guys, if my mortgage was around $4,000 or so, you guys think that that's financial responsible, still?

[George Camel]

100. 100%.

[Caller]

Okay. Thank you so much. I really appreciate your expertise.

[Rachel Cruze]

Oh, absolutely, Nick. And if you want to reach out to a great real estate pro, you can do [e-mail] for the folks that we trust. And good luck on the home search. I think right now is actually like we just talked about, Nick. It's a good time to buy because you could probably get a deal, quote, unquote, where if the listing is 950, if you offered 920, 20, they'd probably take it right now.

[George Camel]

Right.

[Rachel Cruze]

And so you can actually do some great home shopping. And that real estate pro will help you figure out the right strategy to make that offer.

[George Camel]

And I'm really confident in these numbers, Nick, because we say it a lot around here, but it's just true. Like our formula to buy a home is on the very conservative end on how most people, most people would be comfortable with 35% of their, you know, 30 years. 40. Yeah, 30. 35. 40% of their take home pay go into their mortgage on a 30 year. So this is a 15 year at 25%. So it's pretty conservative. And you're fitting right in those numbers. So, yeah. So you guys will be good and hope you come to Williamson County.

[Rachel Cruze]

Nick party.

[George Camel]

George and I will say hey to you.

[Rachel Cruze]

I love that.

[George Camel]

Come hang out at the Ramsey Solutions.

[Rachel Cruze]

I could use a primary care physician, Nick, if you're offering.

[George Camel]

Oh, that's right.

[Rachel Cruze]

It's perfect.

[George Camel]

Actually, we have some shortage of those. Ken Coleman doesn't have one either, George. So we need one.

[Rachel Cruze]

On the hunt.

[George Camel]

If you're wondering if you're staying on track with the baby steps as we talk about this whole plan here on the show with callers, you could take a quick quiz just to check your progress and receive a personalized plan that's just for you. Just go click the show notes and click the link titled are you on track with the baby steps? You can do a quick quiz just to see where you are. All right, let's go to Lane in Palm Beach, Florida. Hi, LA Lane. Welcome to the show.

[Caller]

Thank you for having me. How are you all doing?

[George Camel]

We are doing great. How can we help?

[Caller]

Okay, complicated question. I've been basically living without a budget for my last, you know, old adult life, and I've had the ability to make it all happen just because I've worked like a crazy man. But the problem that I'm having now is I have four daughters and. And they don't want to work like I do. You know, they want to enjoy their lives. They want to have a little balance, and they want to know where their money is, you know, how it can work for them, what it can do. Okay, how can I help them?

[George Camel]

Okay, Are you. How old are your daughters?

[Caller]

The oldest is 24 and the youngest is 15.

[George Camel]

Okay.

[Rachel Cruze]

Are they coming to you for financial wisdom?

[Caller]

They don't come to me for anything other than financial help.

[Rachel Cruze]

Oh, there we go. It's just bank of Lane is what they're coming to you for.

[George Camel]

Yeah. Those girls, we can be expensive, you know?

[Rachel Cruze]

Yeah. Okay, so they're not asking to be taught. They're just asking for a handout, essentially, which is how I would be if I was a teenager, too.

[George Camel]

Sure.

[Caller]

Correct. So how. How can I trick them and give them a little bit of help? Do I have to watch them fail?

[Rachel Cruze]

No. I mean, there's a lot of things you can do to get them excited about financial literacy. I think the best way is to listen to them. What are their goals? What are their dreams? And then alongside that, hey, what's the reality, what those goals and dreams are going to cost? Well, let's figure out a plan to help Them get there, now they're excited about their own life instead of just dad going. Back in my day, we worked 70 hours a week uphill, both ways. You know, that's kind of what they hear when you're doling out financial advice. So instead, be interested in their life and then find out what they're really after. Why do they want this money? What are their money goals? For the 15 year old, it might be just buying a car. For the 24 year old, it's, hey, I got to get an apartment of my. My own. And so they all have different stages of life they're in and I would try to hone in on that.

[George Camel]

Yeah. What's a 24 year old doing, Lane? Is she working or what is she doing?

[Caller]

They're all, they're all working, which is very good. Luckily they have good discipline like that. But the problem is, is, you know, one moved up north, so I had to basically help her move because she didn't have the $4,000 to move. So I basically, you know, took a week off of work and helped her move. And they've all received a car, except the one. She has not received the car. But unfortunately, I think I kind of spoiled them. You know, I gave them each like a 25 to $30,000 car that was paid out. Right. For them.

[George Camel]

Yeah.

[Rachel Cruze]

Wow.

[Caller]

Yeah, I think I kind of screwed that up and.

[Rachel Cruze]

No, you didn't. I would drop the shame. You're an amazing dad. I think any girl would be lucky to have you as a dad.

[George Camel]

Yeah. And I think it's just you raise great girls. Yeah. Going especially to the older ones. Not as much, maybe the 15 year old, but the 24 year old or so, and just be like, I don't know, have a conversation with her and just say, I'm so sorry. Like, I have realized now that I have not taught you guys anything when it comes to money and personal finance. And I want to be able to help you because knowledge is what's going to take you the furthest in life. And I want to be able to do that. Do you, do you have any ideas or any questions for me on how we can do that? You know, and kind of start that conversation with her. And then even Lane, if you want to give her, we can give you some stuff at the end of this call. You know, some books if you think she would read or listen to like a audiobook or Financial Peace University or Every Dollar, our budgeting app, you know, some tools to kind of start integrating in their lives and maybe As a gift from you to them, especially the older ones, you know, giving them some of that. Because sometimes Tulane, you know, we find with adult kids that having a third party speak into their life with money is easier. So, like, maybe if she lives, listens to the Ramsey show or Smart Money Happy Hour, Rachel's like the cool older.

[Rachel Cruze]

Sister on Smart Money Happy Hour. They go, wow, I want to be like Rachel one day. Well, Rachel budgets, so maybe I should try that out.

[George Camel]

But, you know, having, having.

[Caller]

I have tried that. I have tried that. I've tried that. That technique, okay, worked for one, but the other one, you know, when I purchased her a car, you know, and three years later, she wants a new car. And I'm going like, well, let's think about this. You know, there's. There's better ways, you know, you're buying a depreciating asset. Why don't you think about. About saving when you guys want to purchase a house? Because they've seen me, you know, purchase houses and they've seen me, you know, work to get to that point, and I've even told them I flight. Principal reduction is your friend. You know, compound interest is your enemy. You know, it's like trying not to have the credit cards, but yet I'm the one that rings 10,000amonth on credit cards, even though I pay them. You know, it's like I'm not listening to what you guys are saying either, right?

[George Camel]

So you're not living it out either, Right, Is what you're saying.

[Rachel Cruze]

And you wanted to start budgeting.

[George Camel]

Yeah.

[Rachel Cruze]

Because, I mean, you. You basically said you've out earned your stupidity for your entire adult life, and you've just been able to work really hard and go, well, I'll be able to make all the bills. But you're wanting to be financially responsible not just for your daughters, because we know more is caught than taught, but for your own financial future.

[Caller]

Yes, sir. Yes, sir.

[Rachel Cruze]

What if you guys. How are they? How many are living with you?

[Caller]

Just one. You know, they've all moved out on their own.

[Rachel Cruze]

Okay.

[Caller]

I mean, that's all I could hope.

[Rachel Cruze]

So the youngest one you have the most influence on right now because they're under your roof. The other ones, how often do you see them? Is it a phone call here, a FaceTime there, a holiday?

[Caller]

Two or three were local, but now one moved up to Maryland, so.

[Rachel Cruze]

Okay, it's.

[Caller]

And plus, I don't think that they respect what I did. They just thought that that was my job and I was supposed to do it.

[George Camel]

Yeah, Well, I mean, a job as a parent is to take care of them at the extent that you took care of them was a very nice extent. So you want them to be grateful, to be like, oh, my gosh, I got.

[Rachel Cruze]

You took too good care of them.

[George Camel]

Yeah, that's right. Yeah.

[Rachel Cruze]

And now, like, I need a new car. Mine's bad. Now. It's like an iPhone, you know, it's been three years.

[George Camel]

Yeah. And I think for the older ones, Lane, there's, you know, a lot of having to learn just in the. In the real world. Right. If they're not choosing to make right decisions right now, you can't force that. You can't control that, especially with the older ones that are out of the house. And so, again, I think a conversation is totally doable of just saying, here's what you're saying. You're trying to create better habits in your own life, but it's hard. And, you know, telling them, yeah, I get it. It is hard. Because, you know, Lane, you're even struggling with it. Right. We all do to. To an extent. Like, it. You know, this money stuff, it's not always easy. But I do think for them, they're gonna have to start to learn from their mistakes. You asked that at the very beginning of the call, and now that I know kind of the situation where. Yeah. There may be a case where they do learn, and that's hard. Hard. And you don't. As a parent, you don't want to see your kids suffer or struggle, but sometimes it's one of the best gifts. And if they can do that at 24 versus 44, when you finally let go or something. Right. Like, that's it. That's good. That's good.

[Rachel Cruze]

And that's where you leading with humility is. Is the key here. It's not you saying, hey, I want to teach you guys some things because I've done it.

[George Camel]

All.

[Rachel Cruze]

Right? It's you saying, hey, I've screwed up, and I tried to give you guys a good life. Here's where I went wrong. Wrong. I would love for you guys to avoid those mistakes so that you can leapfrog me and get to this point. Way ahead of me. What if we got a plan to do that? And maybe that's you guys reading a book together, an audiobook, a family zoom call. I don't know what the vibe of your family is. Figure out what works for you. Maybe you incentivize it and say, hey, I'm gonna give you guys a hundred bucks to read Rachel's book, but she's 24. They're grown adults, so this is not like a cutesy thing. You have to be like, a friend now versus the parent.

[George Camel]

That's what I'm saying is I'm like, I think you have the conversation, but then I think the adults have to be adults, too. Right. I mean, there's a lot of people that listen to the show and their parents were horrible with money and never taught them about money, but they've had to figure it out, too. Right.

[Rachel Cruze]

So sometimes that's the best motivation is to do the opposite of what your parents did.

[George Camel]

Yeah.

[Rachel Cruze]

And clearly you're. You're. I mean, you've done really well, Lane. You're not this, like, just basket case of financial ruin where they're like, oh, my gosh, my dad was terrible with money. He was able to buy us cars and help us fund moves in college and all kinds of things. So I don't think that's as bad as you think, but I do think your approach needs to change to a friend versus a chaperone.

[Caller]

Okay. And because I've never budgeted myself, because I get paid, so it's a very odd thing. I work as a, you know, electrical. Electrical contractor. I get paid maybe five times a year, but, you know, they're big jobs, so I never know when the money's coming in, so I have to have basically a year, you know, And.

[Rachel Cruze]

And you need kind of a peaks and valleys fund to where you set aside the money, knowing you need that to cover the next three months, Correct? Yes. And we're going to give to you every dollar premium as our gift so that we can actually walk with you in the budgeting. And I'll also send you my book, Breaking Free from Broke. I have a whole chapter called Budgeting is Freedom where I walk with you through it, give you my best tips. I think those things paired together will help you get on the plan, and maybe your girls will be inspired and go, oh, my gosh, look at dad.

[George Camel]

Look at him. Yeah. And, Lane, just know that budgeting, it takes about three months to get it right. So give yourself some grace. Get through the summer. Try budgeting through the summer. Don't give up if the first budget doesn't work. But hold in the line, Kelly will pick up and we'll get that gift to you.

[Rachel Cruze]

Hey, what are you still doing? You know the rest of the show is happening on the Ramsey network app, right? So you got to jump over there to continue watching. You can download it for free. Just go to your app store, type in Ramsey Network. It's completely free, and I'll drop a link in the show notes to make it easy for you. So if you're watching on the app, you're in luck. But if you're watching anywhere else, this show is over for you. So jump onto the app and let the fun continue. All right, Go on now. Don't it make it weird. Okay, I. I got nowhere to go, so you need to go. Okay, bye. Bye, now. All right, this is. It's getting weird over there, guys. What do we.