He's Behind On His Bills and Wanting to File For Bankruptcy

Summary

The Ramsey Show — Episode Summary

Episode Title: He's Behind On His Bills and Wanting to File For Bankruptcy
Date: November 13, 2025
Host(s): George Campbell & Jade Warshaw

Episode Overview

This episode of The Ramsey Show focuses on callers wrestling with overwhelming debt, financial decision-making under pressure, and the often overlooked emotional challenges that come with money struggles. George Campbell and Jade Warshaw guide listeners through step-by-step action plans, aiming to instill both hope and practical next steps for building a financially secure future. Across a variety of scenarios—from possible bankruptcy to marital money disagreements to windfall investment questions—the hosts emphasize budgeting, emotional awareness, and teamwork.

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Key Topics & Call Highlights

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1. Should I File for Bankruptcy? (00:38–09:10)

Caller: John from Indianapolis

Discussion

• John and his wife have $30,000 in debt (mainly personal loans, child support-related expenses, a car loan), with a combined monthly income of $5,500.
• Breakdown: About half the debt is an $18,000 car loan on a car worth only $10,000, putting them underwater.
• Child support is $746/month, and their mortgage is $1,175.
• John hasn’t been able to make all his debt payments and feels overwhelmed, considering bankruptcy.

Ramsey’s Advice

• Jade:

  “The 30,000, when I hear that, I go, oh, we can do that, George.” (01:39)

  • Normalize the panic, point out that their debt is not insurmountable.
  • Encourage a digital budget (EveryDollar app).
• George:

  “Bankruptcy is going to implode your financial world for the next seven to 10 years... We didn’t change the behavior that got John into this mess.” (05:56)

  • Strongly discourage bankruptcy, advocate for the debt snowball method.
• Walk John through how, with intentional budgeting, he could free up $1,500/month and be debt free in less than two years.

Notable Quotes

• George:

  “This is a solvable math problem.” (01:53)

• Jade:

  “If you don’t give that margin an assignment, it just poof—it just goes away.” (05:23)

• Jade:

  “The time is going to pass anyway and you can look up in two years and... be completely debt free or... in the exact same situation.” (08:00)

Highlights

• Practical budgeting advice.
• A free subscription to the EveryDollar app is gifted to John for immediate action.

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2. Single Mom, Teacher, and Deeply House Poor (10:33–19:03)

Caller: Carly from South Carolina

Scenario

• Single mom of five, monthly income $3,800.
• Mortgage is $2,100/month (over 50% of income), car payment is $550, daycare $700, and no child support.
• Relocated for cheaper cost of living, but still struggling; uses credit cards for groceries, gas, and necessities.

Key Advice

• Jade:

  “Math doesn’t have emotions. That’s the math—50% for housing is almost impossible.” (12:57)

  • Urges Carly to confront the harsh reality: her housing cost is unsustainable.
  • Explore relocating, increasing income, moving closer to family for support, and sacrificing comfort for long-term security.
• George:

  “This is a season...It’s going to be longer than you want it to be, but it is a season.” (19:00)

  • Encourages perspective: it’s temporary and getting the car paid off will ease the burden.

Memorable Points

• Carly’s 17-year-old is about to start working—suggested to have older kids contribute or at least minimize household costs.
• Immediate research homework: check teacher salaries elsewhere, research cheaper rents, consider family support networks, brainstorm additional income sources.

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3. Financial Manipulation Allegations in Marriage (22:01–31:29)

Caller: Tim from Detroit

Dilemma

• Tim manages almost all the finances; his wife has limited access to accounts, limited involvement, and recently friends accused him (via his wife) of being “financially manipulative.”
• He’s not intentionally controlling, but admits they've drifted into this arrangement.

Guidance

• Jade:

  “I don’t think this is an indictment on you based on what you’re saying... it just ended up this way.” (25:35)

  • Emphasizes this is a mutual dynamic—Tim needs to ensure wife feels included and valued, but wife must show initiative too.
  • Suggests an honest emotional conversation about financial shame, transparency, and shared goals.
• George:

  “If we played the Newlywed Game...I want [your wife] to have the same answers as you.” (29:14)

  • Stresses importance of both partners knowing the family’s financial position.

Standout Quote

• Jade:

  “The emotional part of money is the part that nobody talks about and a lot of times it holds people back.” (31:29)

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4. Should We Liquidate a 529 to Pay Off Debt? (34:23–41:45)

Caller: Michael from South Carolina

Details

• Michael went from $90k to $65k in debt in 10 months using Ramsey’s system.
• Owns two cars with significant loan balances.
• Has $11,500 combined in 529 college funds; asks whether he should cash out, pay penalty, and use the funds to pay debt.

Hosts' Response

• George:

  “I would not crack open my child’s piggy bank to essentially make my truck payment.” (41:06)

  • Strongly advises against withdrawing from 529 as it incurs penalties, triggers taxes, and destroys future growth.
• Jade:

  “It’s too much of your world to have this much tied up in vehicles that are going down in value.” (41:45)

  • Recommends selling expensive vehicles, working extra hours, and staying the course with the debt snowball.

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5. Is a $700k House Feasible for Us? (44:37–51:17)

Caller: Joseph from Pittsburgh

Situation

• Not yet married, but Joseph and his girlfriend (soon-to-be fiancée) are considering building a $700,000 home with parental financial contributions.
• Household income is about $10,000/month (unstable, with some commission) but they would be “house poor” if they did this immediately.

Advice

• Jade:

  “You’re setting yourself up in a situation where everything must go as planned...and even if it does, you’re still house poor for several years.” (48:07)

• George:

  “There’s something else going on here where you’re wanting to rush the process and leapfrog into a lifestyle you just can’t afford yet.” (51:00)

  • Urges patience: get engaged, married, rent for a while, save more, and ensure housing costs do not exceed 25% of take-home pay.

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6. Should I Let the Military Pay My Student Loans? (54:25–63:23)

Caller: Gabby from Missouri

Scenario

• Gabby has $100,000 in total debt ($25k in student loans) and is eligible to re-sign a 3-year Army contract that would pay $2,000/month toward her student loans, but only starting in 2027.
• Household income ~$182k, working multiple jobs.

Takeaways

• Jade/George:
  • Run the numbers: the “free money” might not be worth five additional years in debt. An intense payoff approach will likely have her debt-free sooner, even without the program.
  • Permission to go “stork mode” (pause debt payoff, stockpile cash) due to pregnancy.
• George:

  “That stress can take a toll on you and the baby... it’s okay to pause for a moment when you want to be intentional and make sure you’re also protecting your family.” (63:23)

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7. Should We Move for Better Quality of Life? (65:26–74:08)

Caller: Aaron from Charlotte

Scenario

• Debt-free, $174k income, considering moving from rural SC back to Raleigh for career/lifestyle reasons; torn between being near his wife’s or his own family.

Host Input

• George:

  “If your quality of life increases, that’s a win...make it an adventure.” (70:35)

  • If they move, rent first rather than buy to avoid financial missteps and get clarity.
• Jade:

  “It’s not a financial problem, I can tell you that. Your wife just has to be on board.” (72:21)

  • Urges a deep, honest conversation with his spouse about their goals and priorities.

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8. How Should We Invest a $1M Windfall? (75:51–84:01)

Caller: Dan from D.C.

Circumstances

• Family paid off consumer debt, owe $260k on house at 3% interest, have $1 million from a business deal.

Ramsey Plan

• George:

  “I would pay off the mortgage today...then front-load the 529, max your tax-advantaged retirement options, enjoy some, give some, and invest the rest.” (80:04)

• Suggest working with a trusted advisor for tax and investment strategy, not just to pick funds.

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9. Hidden Cash & Trust Issues in a 31-year Marriage (85:56–94:20)

Caller: Janine from Newark, NJ

Background

• Janine’s husband has handled all finances for three decades, is secretive with cash and inconsistent with tithing.
• She feels excluded, distrustful, and questions if she wants to spend the rest of her life in this dynamic.

Counsel

• George:

  “This marriage has not been a marriage for a long time...it’s been a transactional partnership.” (91:17)

  • Recommends immediate marriage counseling, increased transparency, and a united budgeting process.
• Jade:

  “You need to go solo [to therapy], until he’s on board.” (92:58)

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10. How to Generate Income after Unexpected Widowhood (116:58–125:30)

Caller: Sheila from Cincinnati

Facts

• Husband died unexpectedly. She has $150k life insurance, debt free, household expenses are $1,000/month, pension of $2,000/mo starting soon.
• Seeks best plan for investing insurance to produce income.

Guidance

• George:

  “If you just park that $150,000 in a high yield savings account, you’d make about five or six thousand dollars a year.” (119:35)

• Recommends a meeting with a SmartVestor Pro and may consider light part-time work for sovereignty and fulfillment.
• Jade:

  “You gotta create a new picture for what the future looks like... not just to survive, but to enjoy life.” (121:05)

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Notable Quotes & Timestamps

• “This is a solvable math problem.” — George Campbell (01:53)
• “Math doesn’t have emotions.” — Jade Warshaw (12:57)
• “You’re not the only person to try to get out of this emotionally instead of mathematically.” — Jade Warshaw (39:48)
• “Do it for the peace of mind... so you can now invest what was your mortgage payment.” — George Campbell, on paying off a mortgage with a windfall (80:04)
• “This marriage has not been a marriage for a long time... it’s been a transactional partnership.” — George Campbell (91:17)
• “That stress can take a toll on you and the baby... it’s okay to pause for a moment.” — George Campbell (63:23)
• “If you don’t give that margin an assignment, it just poof—it just goes away.” — Jade Warshaw (05:23)

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Emotional & Behavioral Finance Insights

• Repeatedly, the hosts underscore how emotions and habits sabotage financial progress—spending for comfort, financial shame, power struggles in relationships, and the stress of survival.
• Budgeting isn’t just about numbers—it’s a plan for emotional peace and family teamwork.
• Tough love and empathy are shown to callers who need to make drastic changes (like selling a home or car, or facing a marriage truth).

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Action Steps Emphasized

• Build a clear, zero-based budget with EveryDollar.
• Prioritize debt payoff (debt snowball method).
• Avoid “get out of jail free” financial gimmicks—bankruptcy, 50-year mortgages, raiding a child’s college fund.
• Work as a team with your spouse and communicate openly.
• Seek professional advice where warranted (SmartVestor Pros, financial planners).

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Final Thoughts

This packed episode is a comprehensive tour of America’s most pressing money problems—debt overwhelm, housing, family financial conflict, and both the mechanics and psychology of escaping financial quicksand. Jade and George blend hard math, relatable stories, and calls for self-honesty, making the Ramsey Plan clear: Live on a budget. Attack debt. Communicate openly. Take responsibility. And handle your emotions—or they’ll handle you.

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For tools mentioned, callers were often referred to the EveryDollar budget app, SmartVestor Pros, and Jade Warshaw’s new book dealing with the emotional side of money.

Transcript

[Jade Warshaw]

Foreign.

[George Campbell]

To you by the EveryDollar app. Start budgeting for free today. Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey network and the Fairwinds Credit union studio, this is the Ramsey Show. I'm George Camel joined by Ramsey personality Jade Warshaw. And it's open phones at 888, 825, 225. John is going to kick us off in Indianapolis. What's going on, John?

[Caller]

Hey, how you doing? My name is John.

[George Campbell]

We got that part.

[Caller]

I want, I'm sorry, I want to know, should I file bankruptcy? And if not, how do I get out of debt?

[George Campbell]

Wow.

[Jade Warshaw]

John, tell us, tell us what's got you feeling like bankruptcy is your only option? Tell me, tell us your debt. Tell us your income.

[Caller]

So the debt beware that me and my wife is in is $30,000. My income is close to 3,500amonth. My wife's income is close to $2,000 a month. She just now started back working.

[Jade Warshaw]

Okay, good.

[George Campbell]

So you're bringing in 5,500amonth. That's your take home pay?

[Caller]

Yes.

[George Campbell]

Okay, good.

[Jade Warshaw]

So is it, is it possible if you said she's just started back working, is it because she just had a baby?

[Caller]

Yes, of course.

[Jade Warshaw]

Okay, so I'm feeling like you might have been in a really, really tight season because she wasn't working and bringing in the money and now she's back to working. So has there been a little bit more breathing room since she's been back working?

[Caller]

Yes, it has. It really has.

[Jade Warshaw]

Okay, that's good. So the good news is, you know, I was expecting you to say we have, you know, $290,000 of debt or 490, you know, but the 30,000, when I hear that, I go, oh, we can do that, George.

[George Campbell]

This is a solvable math problem.

[Jade Warshaw]

Yeah.

[George Campbell]

What kind of Debt is the 30? Break it down for us.

[Caller]

All right, so most of it is personal loans being brought up or been gotten the time that she wasn't working. And also because I have two other children, I'm on child support.

[Jade Warshaw]

Okay.

[Caller]

So the time when I have them, it was tough. I didn't want my, my kid that I have with my wife looking nice and, you know, being able to do nice things. And with them not being able to, of course. So there's more personal, is more personal loans. My child support went up within a year, so I'm paying the 746amonth. I was like, I took out another loan to Pay a lawyer. So I would be able to get the visitation rights.

[Jade Warshaw]

How much did that cost?

[Caller]

$4,500.

[Jade Warshaw]

Okay, so 4, $500 on visitation is all the 30,000 personal loans and credit cards?

[Caller]

Yeah. Yes. No cars, no student loans, one vehicle. $18,000.

[Jade Warshaw]

Well, that's a big part of it. That's half.

[George Campbell]

Is that on top of the 30 or is that part of it?

[Caller]

Part of it.

[George Campbell]

Okay, so 30 in total. What's the car worth?

[Caller]

The car is worth about 10,000.

[George Campbell]

So you're 8,000 underwater on it?

[Caller]

Yes.

[Jade Warshaw]

Is that when, when was the last time you checked that? Was that private sale? Was that what the dealer will give you? Did you only go to one dealer? Tell us about your due diligence on that.

[Caller]

So I checked that last night when, when I'm. I was looking at a credit karma.

[Jade Warshaw]

Okay. So what I want you to do, your homework is let's go on Kelley Blue Book and let's see what it would do if it was a private sale, because chances are you're going to get more for it than that for private sale. And I would be interested in knowing a little bit more about that to make the next decision. What I want to know from you, John, is you guys have a fine income. 5,500. Yeah. 746 goes to child support. That's fine. How much are you paying for rent or, or mortgage if you, if you own your home?

[Caller]

So my mortgage is 1175.

[Jade Warshaw]

Okay. That's not bad. Is there another big expense that we should know about that's eating your lunch?

[Caller]

No, that's. That, that's mainly it. You know, besides utilities and, and, yeah, gas in my truck.

[George Campbell]

What's the total of all of your debt payments? Just make minimum payments. What does that add up to for the month, for the car? The person alone.

[Caller]

So, and that's the thing. I haven't even been able to make a payment yet. Or, you know, I have. I just haven't done it. So maybe.

[Jade Warshaw]

Do you know what I think, John? I think that you would really benefit from a budget, a digital budget that you can put your income in at the top the 5,500. And then in the budget, you will list out everything that you spend money on and the, the, the every dollar, which is what I'm going to give you. The best budget out there. It's going to keep a running tabulation of how much money you can spend. So you'll put in, I, I make 5,500 me and my W. Find and then you'll List everything out. Okay, here's what we spend on groceries, here's what we spend on rent, here's what we spend on gas, utilities, everything for the month. And then after all of those things that are necessity for you to spend money on, then at the end, you're going to see, okay, how much is left now with what's left? You've got a couple of choices, John. You can say, okay with the two. With the $2,300 that's left, we can either squander that on doordash and takeout and Target and Amazon prime, or. Or we can take that extra money and we can use it to start knocking down this 30,000. But what happens is if you don't give that, that margin, that extra money, an assignment, it just poof, it just goes away. Right, George?

[George Campbell]

Exactly. So if you can learn to live off, you know, let's say $4,000 out of the 5,500. If I said, hey, come hell or high water, you guys got to figure this out, could you make that work?

[Caller]

Yes, yes, we can.

[George Campbell]

Because guess what that means. You got 1500 left over, which means you're debt free in less than two years. Wow, bankruptcy. At this point, it feels like my back is against the wall. And this is a great shortcut get out of jail free card. But the truth is, bankruptcy is going to, number one, implode your financial world for the next seven to 10 years on your record, which is gonna hurt your ability to do pretty much anything. And then on top of that, we didn't change the behavior that got John into this mess. And so the best way to get out of this is to avoid bankruptcy and just do the debt snowball method. And this is real clear. Just pay smallest balance first and ignore the interest rates. So what's your smallest balance debt right now?

[Caller]

$400.

[George Campbell]

Perfect. So next paycheck, you could knock that out. If you paid that off before you did anything else, you could knock out 400 bucks, right?

[Caller]

Yes, I can.

[George Campbell]

So then you free up the payment that you were making on that $400. Right. So we roll that into the next debt. So what's the next smallest balance?

[Caller]

The next smallest balance, I think, is 748.

[George Campbell]

You could probably knock that one out too, with the next paycheck.

[Jade Warshaw]

Yep, in one month.

[George Campbell]

So one month you've already cleared two debts. Do you see the progress and momentum that the debt snowball gives you?

[Caller]

Yes, yes, I do.

[Jade Warshaw]

So that's the math part of it, which works every single time. If you do it But I'm gonna tell you the emotional side. What's gonna happen to you later this month when that check comes and you've paid the things like the rent and the utilities, you've gone and gotten groceries, you've put gas in the car, you're gonna see that money sitting there and you're gonna see Olive Garden and you're gonna wanna go out to Olive Garden and there's gonna be a movie that came out and you're gonna wanna go see the movie and the.

[George Campbell]

You've got them and you want to impress them, you want to show them your love.

[Jade Warshaw]

The boys want to have drinks. The boys want to go have drinks. That's what's going to happen. And then you're going to go to yourself, you're going to say, well, I work hard for this money. Shouldn't I get to spend it the way I want to spend it? Can't I start this next week? Can't I start it next month? Well, my wife, right. And it's going to. All the excuses and all the emotions are going to start setting in. Am I wrong?

[Caller]

No, you're definitely right.

[Jade Warshaw]

Right. So now that we've shed light on it, now that we've told you this is coming, you'll be, your awareness will be heightened and you'll say, man, it's happening. That thing that George and Jay told me about is happening. I have a choice to make. I am at a crossroads critical, John, because the time is going to pass anyway and you can look up in two years and like George said, you can be completely debt free or you can let your emotions control you and you can look up two years and you can be calling us back in the exact same situation.

[George Campbell]

You're going to knock this out real fast, John. My guess, 18 months. If you and your wife get on that budget and hang on the line, Christian's going to pick up, we're going to gift you every doll, make it super easy, download the app, get on the same page, list income and expenses and then make a plan to create as much margin as possible to get out of debt as quickly as possible. This show is sponsored by BetterHelp. Alright, this time of year can be tough. So I want you to make sure you check on your friends and your loved ones and even reconnect with people you haven't talked to in a while. I recently called one of my childhood friends and we had an amazing catch up conversation. We laughed hard and we talked about the struggles we've been having. It was fantastic. And Just like it can take a little courage to send that message or grab coffee with someone you haven't seen in a while. Reaching out for therapy can also feel hard, but it can be worth it. And if you're thinking about therapy, I recommend BetterHelp. With over 30,000 therapists, they've served over 5 million people globally and they have an average rating of 4.9 out of 5 stars. It's totally online, so it's easy to fit into your schedule. To get started, you just answer a few simple questions and BetterHelp will connect you with a licensed therapist. If it's not the right fit, you can switch therapists at any time for no extra cost. This month, don't wait to reach out. Visit betterhelp.com Ramsey to get 10% off your first month. That's BetterHelp. H E L p.com Ramsey Harley is in South South Carolina. Up next. Welcome to the Ramsey Show, Carly.

[Caller]

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

[George Campbell]

Doing great. Good. How can we help?

[Caller]

So my, so my question is how can I pay off my credit card debt so that I can create a savings, but after I get paid and I pay all of my bills, I literally have nothing left over?

[Jade Warshaw]

Well, that's a, that's a math problem. That's an income problem, Carly, which I'll, I'm going to be honest with you because I, we've been doing this show for a long time. I'd rather you have an income problem where you can just go out and work more, create some margin. And now we solve the problem versus you having to cut everything out of your budget because you've already done that. That's the good news. You've already cut everything down, haven't you?

[Caller]

Yes.

[George Campbell]

So what do you make and what are you spending?

[Caller]

Okay, so I'm a teacher and I only bring home $3,800 a month.

[George Campbell]

All right. What's your rent?

[Caller]

My mortgage is $2,100 a month. I have a 550 car payment and daycare is about 700amonth. And I do want to say I am a single mom of five. So I'm doing this on my own. So it's really hard to save when you, when I have five kids. And then. So goodness gracious, I paid everything, like my, my utility, cell phone bill, car insurance. I have nothing left over.

[Jade Warshaw]

No, you don't.

[George Campbell]

I've been having to use and there's no child part.

[Caller]

No, he is not involved at all.

[George Campbell]

I mean, legally, I feel like he should Be.

[Caller]

I agree. I don't know where he is. And when we were together, we known each other since high school. And when we were together, he was on again, off again with jobs. I've always been the sole provider.

[Jade Warshaw]

So even if a judge was going to make him pay, nobody can find him to make him pay. Is that what you're telling me?

[Caller]

Correct.

[Jade Warshaw]

Yeah. Okay. So I'm going to point out two major problems and I'm just warning you right now, this is going to be a lot. Number one thing is with your $3,800, your rent is more than 50% of your take home. And it is extremely. It's almost impossible, Carly, to make that happen, especially when you have a high other another high bill, something like insurance or a high car payment. So that right there must change. The second thing is.

[Caller]

Well, I'm sorry, I just bought this home in January.

[Jade Warshaw]

I understand. That's why I said this is going to be very, very tough because no one home is security. Right. Home equals security. No one wants to be told that their home is too expensive. No one wants to be told that they might possibly have to sell. Right. That's the worst thing I could have said to you emotionally. I understand that, but I'm just. Right now, I'm telling you the math. Math doesn't have emotions. That's the math. 50% over 50%, almost impossible. Unless you see a world where your income is going to double. Because that's the next problem is your income is quite. It's on the low side for a single mom with five kids. And I'm not. I'm just telling you the facts. So we've got to solve for these very tough problems. Does that make sense?

[Caller]

Yes.

[George Campbell]

When did you get the car?

[Caller]

Well, my car I've had since 2019, but it's. And I had to refinance one time, so it's going to actually be paid off in June.

[George Campbell]

Okay, well, just based on your current payment.

[Jade Warshaw]

Yeah. What do you owe?

[Caller]

A little bit over 4,000.

[Jade Warshaw]

Okay. So it's almost done. All right. So just based off you making the payments, you should be done in June, July. I like that, but it doesn't. That's going to give you some breathing room. But at this point, the only way you're making it to June, July is if you're putting it on credit cards, which is what you said. So how can we bring in some more money? Tell us, is there any margin of time? Is there anything you could do that is work from home? That is something you can do on the Internet when the kids are asleep. Is there any margin of time?

[George Campbell]

There's school, tutoring, something.

[Caller]

I have looked into all that, and with it just being me, we have no family here. I have to pick up my kids at a certain time. And I'm telling you, by the time I get home after dealing with high schoolers all day, I'm exhausted, lost it. And then I have to come home and be mom.

[Jade Warshaw]

Okay. Yeah.

[Caller]

And I have looked online to do, like, online tutoring and things like that. But, like, by the time I get my own kids situated, like, it's too late to do anything else.

[Jade Warshaw]

Where's your family? Like, your extended family?

[Caller]

Three states away.

[Jade Warshaw]

Okay. What caused you to come to South Carolina?

[Caller]

Because the cost of living was cheaper.

[Jade Warshaw]

Okay. And your family where.

[George Campbell]

Where?

[Jade Warshaw]

You said three states away. Where are they?

[Caller]

Virginia.

[Jade Warshaw]

Okay. Okay, got it. I want to know about. Here's what I'm talking about. You're in a place, it sounds like you're a little isolated, where there's not folks you can reach out to that might be able to help you be able to free up a little margin to be able to work more. That's one thought that I'm having. Other thought is, like I said, this house is too expensive. Is there a place where we can move and teach and maybe make more as a teacher and be able to have a lesser rent? These are the. The problems that we have to solve because I think you and I can both agree we can't keep going as it is. Right?

[Caller]

Right.

[George Campbell]

How much do you have to change?

[Caller]

I'm sorry, what'd you say?

[Jade Warshaw]

What?

[George Campbell]

What's your total debt right now?

[Caller]

$7,000 on a credit card with the interest rate of 23%.

[George Campbell]

Plus the 4,000 on the car?

[Jade Warshaw]

Yes.

[George Campbell]

So we're at 11,000 total?

[Caller]

Yes.

[George Campbell]

Okay. That's all the debt. Okay. Well, the good news is, as far as debt goes, that's one of the lower numbers we've heard on the show. But the problem right now is you're underwater every month and there's no hope that the income's going to go up or the expenses are going to go down, at least until the car is paid off. So have you stopped going into debt? Are you able to float the bills right now and just get by, or are you going swiping that credit card every month?

[Caller]

I'm able to pay my bills with my income. What I'm putting on the card is groceries, gas, and, like, toiletries, household items, stuff like that.

[Jade Warshaw]

Yeah. You're not going out doing the most, having fun on credit cards. You're just surviving.

[Caller]

Correct.

[Jade Warshaw]

And that, that, that's the part. Yeah. So yeah, when June, July comes and you're able to get the 550 back, that is going to help. Right? Because how much every single month are you putting on credit? Do you know the exact number?

[Caller]

Oh my gosh. Groceries alone is like at least about $800 a month. And then if I'm having to get gas because I drive an SUV, that could be like 3:20amonth and then like toiletries and things like that. Maybe another two.

[Jade Warshaw]

Yeah. So 1300amonth burn rate, it's too much. Because if you keep doing that until June, July, you're gonna look up and instead of having. Yeah. So I'm saying that I don't want to scare you. I'm not trying to, I'm trying to give you hope to see, hey, if we can shake this loose, you can get to a better situation. But it can't stay like this. We gotta look at housing that's less expensive. We've gotta look, start looking tonight. My homework for you tonight is let's look at teacher salary in other states. Let's look at the ways to increase your teacher salary. Let's look at those sorts of things and start getting some ideas of how you can make a little bit more money there on the side. Then I want you to look at. Okay, where, where are some people? Where is my family? Let me look at cost of rent over there. Let me see what it would take to get a three bedroom apartment or what would it look like to have a two bedroom apartment for a season and have three kids in the room and two kids in the living room on a pull out couch. Like there is going to be level of sacrifice here that you're not gonna like. And I'm just keeping it 100 with you. Fair enough.

[Caller]

Yeah. Yes.

[Jade Warshaw]

And I'm saying it because I love you. No part of this, no part of what it's going to take in this next season is going to be fun. What is going to be fun is when you finally get out of debt. When you can finally sleep at night because the bills are paid, the groceries are bought, the gas is bought and none of it was on a credit card. That's gonna feel, it's gonna feel so good it'll make all the sacrifices worth it.

[Caller]

Right.

[George Campbell]

What's the age range of the kids?

[Caller]

They are 17, 11, 9, 5 and 2.

[George Campbell]

Okay. What's the 17 year old doing?

[Caller]

She's in school, she's a junior in high school.

[George Campbell]

Is she working part time?

[Caller]

She's actually about to start next week. She got a job at Burger King, actually.

[George Campbell]

Okay, good. This might be a hard conversation as, you know, she enters adulthood and, you know, let her know what's going on because if she can help out during this time, even covering her own stuff, and say, hey, I got to cover the young kids. If you can cover your own bills, that's going to really help mom out as she tries to climb out of this hole and get out of debt. That's going to be a tough conversation. But as the kids get older, hopefully they're out of daycare. This is a season. It's going to be longer than you want it to be, but it's a season. If you can get rid of that car payment, you and daycare is off the books. And maybe we move to renting long term or we get the income up, then we can breathe. So we got a lot of variables to solve here. We're rooting for you. Let me ask you something. Do you believe in helping people and doing the right thing, even when no one's watching? Then you need to hear this. Churchill Mortgage is hiring loan officers, but they're not looking for just anyone. They only want people who believe in serving families the right way. I've been recommending Churchill for over 30 years because they don't trap customers in debt. They don't use slick sales tricks or take shady shortcuts. Churchill offers smart, real world mortgage solutions that align with Ramsey principles to help families win. And when you join the Churchill team, you'll get true mentorship and real opportunities to grow your career without compromising what matters most or mortgaging your soul. So if you want your work to actually matter, this might be your next calling. To get started, go to ChurchillMortgage.com and click the Join the Team button. That's ChurchillMortgage.com because when your work and your values align, you don't just make a living, you make a difference. This is a paid advertisement and MLS ID 1591 in mlsconsumeraccess.org/al housing lender.

[Jade Warshaw]

Yeah.

[George Campbell]

Welcome back to the Ramsey Show. I'm George Camel here with Jade Warshaw. If you're enjoying the show or any other Ramsey show, hit the like button, hit the subscribe button, hit the share button. Wherever you're watching or listening, it means the world to us and it helps spread the word and get this into more ears and hopefully help change some people's lives. Tim is in Detroit. Up next. What's going on, Tim?

[Caller]

Hey, guys. Thanks for having me on.

[George Campbell]

Absolutely. What's your question?

[Caller]

So I've recently run into, I guess, a tough conversation with my wife. She got together with some friends and kind of talking about our financial situation. I pretty much run the show. I don't rein her in too much or anything, but I've been accused now of being kind of financially manipulative or controlling. And I'm hoping for maybe a diagnosis from you guys or some advice on how to navigate this.

[Jade Warshaw]

Well, I love that you're bringing this up and saying, I want help. I think that alone lets me know that there's a lot of hope here. If what's being said is true, I will say, based on the first words that you said, I kind of run the show. That does make me. Me think, okay, one person is carrying way more of this load than they should. Now, I will say it's one thing if you have said, honey, I got this, I'll do it. Matter of fact, I don't really need your involvement. And it's been like that. And it's another story if she's kind of been, like, fine with you doing it. She's been fine with you handling it. She has not shown an interest in it. It takes two to tango on that part. Right. So tell me how it's been and be honest. Has it been more of the latter or more of the first scenario?

[Caller]

We're a very good team. Finance in general tends to make her a little bit nervous. So this kind of happened out of necessity. We both came into our marriage with basically nothing. A little bit of debt on both sides, worked our way out of it. We're basically on baby step six. And the system that's kind of evolved is she has one debit card, access to one account, and just kind of does her daily spending on that. I'm paying all the bills and making sure money goes into all the IRAs, paying the mortgage.

[Jade Warshaw]

Does she have the passwords to all the other stuff?

[Caller]

She has passwords to maybe about half of it. She doesn't have passwords to, like, the retirement stuff only because she has really no input. I give her kind of a, you know, a check in maybe every six months or so.

[Jade Warshaw]

But if she. If she asked for it. If she asked for it and said, tim, can you send me the passwords to everything? Would you have a problem with giving them to her?

[Caller]

No, absolutely not.

[George Campbell]

Okay.

[Caller]

In the past, she. She ran her own IRAs and stuff, and I would you know, have to remind her to kind of, hey, go in, reinvest her dividends and stuff like that.

[George Campbell]

So where do you think this is coming from with her comfortable handing off.

[Caller]

But now, you know, it's been kind of called into question.

[George Campbell]

Has she come to you with this before she spilled the tea with her. Her friends?

[Caller]

No, this. All. This all kind of happened organically, the system that we have. And now that she's revealed it to her friend group, they've said, hey, that's messed up.

[George Campbell]

They. So they were like, hey, red flags. And then your wife came to you and said, hey, I was talking to my friends and they're seeing some red flags with the way you're managing our money.

[Caller]

Yeah, she should have. Yeah, she should have more input, more say.

[Jade Warshaw]

And she should.

[Caller]

I would like to. Yeah, I would like to say, too, I don't restrict her spending in any way. She has the same sort of freedoms that I do.

[Jade Warshaw]

Yeah.

[Caller]

Similar spending patterns.

[Jade Warshaw]

I don't think this is an indictment on you.

[Caller]

Packages.

[Jade Warshaw]

Yeah, I don't think it's. I don't. I don't think this is an indictment on you based on what you're saying. I think, like you said, this kind of has happened organically. I think out of necessity, like you said, you kind of took the wheel on things and it just ended up this way. I think her friends may have heard her say something without full context, and maybe they were like, oh, girl, you gotta change this. Right? Whatever. What I. What I'm hearing is what happens, I think, in a lot of relationships where one spouse money's not really their bag, they don't really care a whole lot about it, so they're fine with letting the other spouse do it. The problem with that is what we're seeing now, which is something happens and there feels like a bit of a loss of control. Suddenly they're feeling like maybe I don't know what's going on, and I should know what's going on. The truth is it's on both of you guys how this has happened. And I. I really think it's probably pretty simple to get it back on track. I think it's you telling her what you just told me, which is, you know what, honey? This has happened, and it's just as much on me. I should have pulled you in more, and I should have made sure and let you know that it's really important for me for you to be an equal part in this. And for that part, I'm sorry. Going forward, I do. I think Both of us should have a handle on what's going on. I am happy to show all the passwords. I'm happy to log into everything. I want full transparency, but I also need from you going forward to demonstrate interest in this so that it can be both of us on this. What do you think she'd say to that?

[Caller]

It's. I think she'd probably like to hear that. You know, like I said, the finances have caused her a lot of anxiety in the past. We ended up here, I think, even.

[Jade Warshaw]

Wait, go back. Why? Why anxiety?

[Caller]

When we got together and when we got married, I had a tiny bit of debt, but, you know, a couple of bucks, she was in more debt than I was. And again, you know, kind of caused a little bit of shame, and we dug her out of that and everything. And I think maybe to date, she still kind of holds some of that. And what we've done really well. And it's been, you know, she, she works, I work, and it's all, it's all been okay. But I'm not sure really what she would do with that information or if she would even go in and check it. I mean, yeah, I would never deny her any of those things.

[Jade Warshaw]

So if I were you, I mean, we're talking numbers. We started talking numbers, but it does sound like it's an emotional conversation to me, and I'd start there. That's where I would start with the conversation. I'd say, hey, I've really been thinking about what you said. And numbers, account information aside, rest assured, we can share all that. I just want to understand how, how the, how long have you guys been married? I want to, you know, how has the last 15 years made you feel? I'm thinking about when we came in this relationship with debt. It felt were carrying some shame. I, I, I want to know about that. I want to talk about that, like, start from that place, because then you're going to understand why she says everything else that she says going forward and vice versa.

[Caller]

Yeah, I, I appreciate that. I can, I can do that, you.

[Jade Warshaw]

Know, because she might be thinking if she's still carrying that shame. I mean, the thing you got to understand with financial shame is she, it's not just, just something I did. It's an identity that I now am. I'm the one who was bad with money. I'm the one who slowed us down. I'm the one who wrecked everything. Right.

[George Campbell]

I deserve a vote in this marriage when it comes to money.

[Jade Warshaw]

Yes.

[George Campbell]

And that turns into when you just heard gabbing with the gals. Oh my gosh, he's so controlling. He doesn't let you have a say. And now she's going to have an existential crisis. And so I think this is, this is between you two. I don't like that it's even gotten this far where it's turned into like a gossip mill and her friends are involved. This is just a marriage issue where we go. He. We have not been on the same page communicating. We've done well in spite of all of that. We're doing good financially and I need to bring you into it and I need you to care so that this doesn't turn into you saying, well, I never, I never knew. You never told me. And so again, to Jade's point, she needs to be interested and curious and you need to be forthcoming. And then we need to be aligned. If we played the Newlywed Game and I said, hey, what's Yalls net worth? What's your next financial goal? How much are you investing? What kinds of things are you invested in? I want her to have the same answers as you.

[Caller]

Yeah. Yeah. And that's, that's probably the difference because she, I don't think could really answer any of those questions, you know, and.

[George Campbell]

Right. It's probably because, like, it feels overwhelming. She feels shame. She's not the type of person who understands all of this stuff. And so what you can do really well is put the cookies on the bottom shelf and just help her understand what you're doing in a non patronizing way and say, we're a team. We're building this thing together. And I want to make sure you know where we're going so that you're not upset when we get there.

[Caller]

Understood? Yeah.

[Jade Warshaw]

I think you guys will get on the same page. I. I love that this happened for you. I think this is going to be a catalyst for a much more open, a much more trusting, much more transparent relationship, not just with money, but the two of you as people. You want to know what? I'm going to send you my book. What no one tells you about money. It's not going to come until later because it's still on pre order. But we're going to write your name down. We're going to send it to you and your wife so you can read it. Because the emotional part of money is the part that nobody talks about. And a lot of times it holds people back. Like we've seen Tim with you and your wife, but no longer. I'm gonna help you fix it.

[Caller]

Hey, y' all you know, I'm all.

[George Campbell]

About keeping your budget in check, especially during the holidays. And that's why I always start my grocery shopping during the holidays at Aldi. From fresh produce to holiday favorites and charcuterie boards for parties, Aldi has it all.

[Jade Warshaw]

And at prices that will help your family save big.

[George Campbell]

Up to $4,000 a year for a family of four. So do what I do for my family. Shop at Aldi first to save on grocer without sacrificing quality or holiday joy. Find a store near you@aldi us that's a L D. I dot us savings. Based on regional analysis of Aldi versus select competitors. Prices may vary by location, product availability and the market. Well, Jade, a lot of the calls so far this hour are less about the math and the money and more about the emotions behind it.

[Jade Warshaw]

Absolutely.

[George Campbell]

I'm scared because I can't make ends meet and I'm continually going to debt. I have shame because of my past financial mistakes and now I don't trust myself to even be involved when it comes to money in my marriage. And I love what you talk about in your new book, what no one tells you about money because you're finally telling us the emotional fight is real and you got to be aware of it.

[Jade Warshaw]

That's right. I mean, we've all been guilty of it. We're looking for. We know there's a problem and looking for the fix and there is a solve. Right. There's a proven plan. We know the baby steps work if you work it. But we forget to talk about the person in the mirror who has the ability to steer the whole thing off course. Right. And it's because our emotions. I mean, just in the last 45 minutes, George, we had to tell somebody to sell their house. We've had to tell people to have difficult relationship with conversations with their spouse. That is not easy. That is. That has nothing to do with dollars and cents. That has to do with how are you feeling. That has to do with giving up a piece of you that you've worked so hard for. That has to do with dealing with past mistakes. That is all emotional. Has nothing to do with the debt snowball. You see what I'm saying? And so you need both. And so that's why I wrote this book. Because, I mean, I.

[George Campbell]

You've been there.

[Jade Warshaw]

I know how it feels like, George, to, you know, stand in the mirror and you're just crying because your life is not what you thought it would be at this point.

[George Campbell]

And you wish someone told you so here's Jade telling you so go get the book. It's on pre order right now for $24.99. You get over 100 bucks in free bonuses like the enhanced audiobook, early access to the ebook, instant access to a Jade video, your financial checkup and a book exclusive three week online book club with a live Q and A with Jade. So go check it out. Ramseysolutions.com store if you're watching on YouTube or podcast, just click the link in the description. Michael is in Columbia, South Carolina. Up next. Welcome to the show Michael. How can we help?

[Caller]

Hi guys. Thanks for taking my call. First off, I want to say I started taking FPU in January of this year and it has completely changed the way I look at my finances. Has really helped me crush a lot of my debt. So the class is highly worth it.

[George Campbell]

Love to hear that.

[Caller]

Yeah. In January when I put all my debts down on paper, total of 10 credit cards and two vehicle payments, two vehicle notes, I was around $90,000 in debt. I've brought that down to 65 five in the past 10 months.

[Jade Warshaw]

Good.

[Caller]

I cut up seven of the 10 credit cards. There's three that are still open that have a balance on them and then the two vehicles are the majority of that balance.

[Jade Warshaw]

Okay.

[Caller]

So my question is anytime I've got an extra income, I've put it towards the debt snowball. I'm trying to get out of baby step two as fast as possible. I have a unique situation and I have my stepson is 19, our child is 9. Back in 2019 I had a little bit of extra income. I put it into a 529 account for both of them, about 4,000 each. That has gone up. When my 19 year old graduated high school in 2024, he went to a local community college totaling about $3,000 for both semesters, which is very affordable. After the semester ended last year he came to us, said I'm not interested in college, I don't want to go. So I was told the people that would manage the 529 account, I can just roll his amount into my son, my younger son's amount. My question is between their two 529 accounts, about $11,500. I have roughly eight to nine years before my youngest even will go to college. I know I get penalized for taking money out of the 529 account if I'm not using it for school.

[Jade Warshaw]

That's right.

[Caller]

Is it worth it taking that money out now, getting penalized and putting it towards my debts and then, you know, building it back up for my younger son after I'm debt free. Or is it better to keep it in those accounts for the time being until he goes to school eight, nine years from now? If he goes to school eight or nine years from now.

[Jade Warshaw]

I have some thoughts in my head about it. Can you tell me more about these cars, though, before I tell you my thoughts?

[Caller]

Yeah, I'm sure it's not the Dave Ramsey way, but these were purchased. We moved to South Carolina three years ago, and we drove hoopties for a long time. So in 2022, right after we moved, I did end up buying my wife a more reliable vehicle. I bought her a 2022 that had 2022 Hyundai. That has about 15,000 left on it.

[Jade Warshaw]

15,000. What's it worth if you sold it? Just curious.

[Caller]

That I don't have upside my head. I do not know.

[Jade Warshaw]

Do you think you're upside down?

[Caller]

No, no. Honestly, I.1 one of the things when I took FPU, the reason I took it was that I was like, I make good money. My wife makes okay money. So, like, how do we just never have money? And when I looked at stuff, I was like, oh, we're paying for this. We're paying for this. So I feel like the last 10 months, we've really turned our life around financially, where I handle the finances solely. Not that I don't keep my wife involved. It was just when we got together, she's like, I'm not into finances.

[Jade Warshaw]

Did you hear the last call?

[Caller]

I did, and I was actually laughing during it because it's the exact same thing my wife. I tell my wife all of our financial stuff, but she just is not. She doesn't want to pay the bills. She lets me handle that. And that was even before we got married. When we got engaged, she's like, I'm gonna have you handle the finances.

[Jade Warshaw]

Interesting. We'll talk more about that later. Tell us about car number two.

[Caller]

Car number two is a vehicle that I bought for myself. It was a 2024 that I bought in 2024, a Toyota truck. The vehicle I had before it, I drove. Literally, until I want to hear about.

[George Campbell]

The ex girlfriend, this car. Because why did you get a brand new truck?

[Jade Warshaw]

You're qualifying it before you tell us. And we don't care. We don't care.

[George Campbell]

I don't care if the engine blew up on the last one. And so you went to the dealership and you guys, they sucked you in.

[Jade Warshaw]

We want you to be debt free and we're not going to let you excuse yourself out of it. We want you to hit your goals. So tell us about car. Car number two. This 20, 24 truck.

[Caller]

Yeah. Car number two. I planned on at the time. This. Before FPU, I planned on buying a used vehicle. When I went to the dealership, the used vehicle, this was not that much more expensive than the used vehicle at the time.

[Jade Warshaw]

Tell us the amount, please.

[Caller]

Oh, it was. It was 54. Goodness out the door.

[Jade Warshaw]

Okay, what do you owe now?

[George Campbell]

What?

[Caller]

I. I have 30 on it.

[Jade Warshaw]

Okay. So you've been paying it down.

[Caller]

Yeah. And I know you're talking about emotional spending. I did get a nice bonus that year, like a very large bonus. So that was like, I'm gonna spoil myself with a new vehicle instead of.

[George Campbell]

Paying off the other debt. You were like, you know what? Let's still go into debt.

[Caller]

This is. But, yeah, this is pre fpu. Before I knew all this stuff.

[George Campbell]

Sure. But common sense would say, let's maybe try to get out of the hole before we dig a new one.

[Jade Warshaw]

It would. And I'm taking my glasses off because yet again, George, this is all. Is all emotional, all your caveats, all of the things that you were trying to qualify. It's emotional, and I get that. I want you to hear me all day, you were tired. You were tired. You were frustrated. You wanted to feel like your income was being spent on the things that you enjoy. Right. Am I wrong?

[Caller]

You were tired of driving hoopt.

[Jade Warshaw]

You're tired of driving hoopties. You're a man. You want your wife to feel like she's, you know, that you love her and you want to spoil her a little bit. I see it. I hear it, I have felt it. I understand. And you called in trying to figure out how to get out of debt faster. True.

[George Campbell]

Yeah.

[Caller]

Yeah. So the plan, the, you know, the debt snowball is working for me, but I'm. Any extra money I'm having come in, I'm trying to throw at that. I just want to get that debt down as fast as possible.

[Jade Warshaw]

What's your income?

[Caller]

After tax, I make about 72 a year.

[Jade Warshaw]

That's with your wife?

[Caller]

No, no, my wife makes. Probably about. Hers is kind of up in the air because when we moved, she doesn't work full time, so she kind of has the luxury of what's a normal.

[George Campbell]

Can she work full time?

[Caller]

She.

Yes, she's actually. In the past two, three months, she has started working more hours.

[George Campbell]

Because right now we don't have the luxury of working part time.

[Caller]

Correct.

[George Campbell]

We both need to be working full time.

[Caller]

Plus, so between the two of us, pre tax, we're probably closer to 120 a year.

[Jade Warshaw]

Year. Okay. And so what, like 7,000amonth? 7,500amonth?

[Caller]

Yeah, just around. Yeah, I'd say that's the. The sweet spot right there.

[Jade Warshaw]

Oh, go ahead, George.

[Caller]

I want.

[George Campbell]

I just want to make sure we answer your question. I would not crack open my child's piggy bank to essentially make my truck payment.

[Jade Warshaw]

No.

[George Campbell]

And so I would be selling that truck. And the truth is, you're going to pay income tax on that college money. You're going to pay a 10% penalty. So that 11,000 quickly turns into seven grand. And you're unplugging the growth, which that's going to double, triple by the time your kid's in college. And that's if you do nothing to it. So I don't want to unplug the growth. I don't want to pay all these taxes and penalties while this money's growing tax free. And for that reason, I would sacrifice for my own life before hurting the kid's future. So that's what I personally would do, is sell the truck, work extra. I would not touch the 529.

[Jade Warshaw]

Yeah, I agree. And for other reasons, too. It's too much of your world to have this much tied up in vehicles that are going down in value.

[George Campbell]

Yeah, that is very true. You got some nice cars in that driveway. I'd rather see you guys building wealth instead of driving a truck that's going down in value every day. I've been doing this show for over 30 years, and some of the saddest calls I have taken are from situations that are completely preventable.

[Jade Warshaw]

Yeah.

[Caller]

And what's so hard is I feel.

[George Campbell]

Like one of those, especially the ones.

[Jade Warshaw]

That I'm like, oh, it's terrible. People that call in and their spouse has passed away suddenly and they don't have life insurance.

[Caller]

We actually took a question of a.

[George Campbell]

Lady and she had three kids pregnant.

[Jade Warshaw]

And husband didn't have life insurance. And I'm like, I can't even imagine.

[George Campbell]

Or even if it was opposite, Right.

[Caller]

If a mom passed away, there's a.

[George Campbell]

Dad with kids and trying to figure.

[Caller]

Out, how am I going to afford childcare? How do I outsource some stuff that.

[George Campbell]

Maybe she was doing?

[Jade Warshaw]

And it just takes the grief and.

[George Campbell]

The sadness of something like a sudden death to a whole new level.

[Jade Warshaw]

Like when you have to think through, how am I going to pay. Pay my bills?

[George Campbell]

How about next week?

[Jade Warshaw]

Yeah.

[George Campbell]

In the middle of all that grief, like it's just, it is, it's terrible.

[Jade Warshaw]

And so life insurance is the one.

[George Campbell]

Thing, especially as a mom with three little kids that I'm like so big on for people to get because it's inexpensive.

[Caller]

Zander is the place that Winston and.

[Jade Warshaw]

I actually get all of our life insurance.

[George Campbell]

And we keep re upping it because.

[Jade Warshaw]

I'm like, I just want it there.

[George Campbell]

Like there's something about that safety of.

[Jade Warshaw]

Knowing that you have money if something.

[George Campbell]

Suddenly happens and it doesn't cost much because Zander shops among a gazillion different companies. It doesn't cost much. You just have to admit that someday you're not going to be here. You got to say it out loud and you got to say, I'm going to say I love you to my family by taking care of them and taking the time to put this stuff in place. The cost of stinking pizza there really is. So that is one thing to do.

[Caller]

To say I love you to your family.

[George Campbell]

So we've used Zander for all of our family's needs for insurance for many years, including of course, term life insurance. To get a free quote, go to 800-356-4282. That's 800-356-4282. Or go to Zander. Welcome back to the Ramsey show and the Fairwinds Credit Union studio. I'm George Camel, joined by best selling author Jade Warshaw. Open phones at 888-825-5225. Joseph is in Pittsburgh. Up next. What's going on? Joseph? Yes, what's happening?

[Caller]

What's going on? How are you?

[George Campbell]

Good. What's your question? Today.

[Caller]

My girlfriend going to be fiance is going and I are going to be building a house costing around $700,000 and we want to know if we're way over our heads or if this is actually feasible.

[George Campbell]

Numbers aside, you're in way over your heads. There's not even a ring on the finger. And you're gonna sign up for a mortgage and put your names on a deed together?

[Caller]

No, by the time that the deed is there, there would be a ring on the finger.

[George Campbell]

So this is gonna be a new build and you're just hoping that all the plans work out perfectly.

[Caller]

Yes, we do have the ability to live with either of our parents. We rent free. Obviously that's not ideal, but we're going to have to do that while this is being built.

[George Campbell]

Why do we have to do any of this? Let me lay out a different Path for you. Tell me why it doesn't work for you guys. Why not get engaged, get married, rent together, save up on your own and then purchase a house or build when you're financially ready?

[Jade Warshaw]

Yeah. What's the rush?

[Caller]

So we would like to start a family early around 2028, 2027. And our initial thoughts are renting is putting money into a place that doesn't build us wealth. So we might as well put it towards a house that's going to be building us wealth. And if we have to live with our parents for a year or two, we're perfectly fine with that because we do have stable jobs that we're able to.

[George Campbell]

How much money do you guys have right now?

[Caller]

Right now we have about $60,000 in savings and then a little bit more in checking.

[Jade Warshaw]

How much do you plan on putting down on this $700,000 house?

[Caller]

We are looking to put down around between 100 and 130,000 down the house. And then her parents are extremely wealthy and they were planning on matching whatever.

[Jade Warshaw]

Whatever you put. So 260. Yeah.

[Caller]

Yes.

[Jade Warshaw]

Okay.

[George Campbell]

And why do you need a $700,000 home?

[Caller]

As newlyweds in Pittsburgh, we are looking to have kids. So it's in the suburbs and we're going to be building so that we don't have as many maintenance house issues. Simply put, we're trying to set ourselves up for the future where we don't have to move, we don't have to do all these other things. We're just, just on that path of get a house and live there.

[Jade Warshaw]

What's your incomes?

[Caller]

Not a custom build. Our income. We are both around 32 to 35,000. A month.

[George Campbell]

A month?

[Caller]

Yes. And that is not including commission.

[George Campbell]

So you both are not.

[Caller]

A thousand. 3,200.

[George Campbell]

Good gracious. So it's like, well, yeah, you guys are making a million dollars. Okay, so you're making like 70 grand. And you're. How are you going to afford a $5,000 a month mortgage?

[Jade Warshaw]

Yeah, that's what I'm doing because I just. We both did the math. That's funny.

[Caller]

Also. So we also. She has commission that she is an insurance agent, so she has commission coming back for her. I also own my own company that brings in two to 3,000 as well. On top of that, a month.

[Jade Warshaw]

So you're at 10,000amonth.

[Caller]

About that. Yeah.

[George Campbell]

So we're already setting ourselves up where half of our take home pay goes toward the mortgage.

[Jade Warshaw]

Yeah, you're still at half. Before you were even worse. But even with the 10,000 what I'm seeing on here, 4,500 for, for the mortgage. If you put down 260 on a $700,000 house, your house poor.

[Caller]

Right, right.

[Jade Warshaw]

And you're fine with that? That.

[Caller]

No, we're not fine with that at all. We're obviously going to be expanding our, our income. We're trying to see if this is feasible now because we do have career projections going forward that it won't be anywhere close to that as well as. So my business and her commission are.

[Jade Warshaw]

Double everything you're saying. Joseph, I'm, I'm with you. I love dreams like I love a good dream. I love to plan, I love goals. But you're setting yourself up in a situation where everything must go as planned for this to work out. And even if it does go as planned, you're still setting yourself up for several years of a situation where Your house is 50%. Where your house poor for several years. So even if everything is perfect, you're still setting that up, which is not good. I truly, truly would love for you to slow down a little bit on this and say okay, let's do all of this but let's just do it in the right order and at the right time. Let's get married then. If you want to live with your parents, that's your prerogative. I wouldn't do it. But if you want to live with the parents to save more money faster, like that's yalls choice. If you want to do that and then save up. Make sure when you do buy a house when it's time that it's the right percentage of your take home. Make it to where you're not house poor. You have this amazing deal where your in laws are going to Mac that amount. That's awesome. Milk it for all it's worth and make sure you get to a point where you can get this thing to 25%. Okay. Then you're in a situation. I'm fine with you guys doing this thing, believing that this is going to be the only house you ever buy for the next 20 years. If you want to believe that that's okay. But let's. Can we just do it right? Can we pump the brakes just a little so it's all done in the right time?

[George Campbell]

Yeah.

[Caller]

Is this a thing where to increase our incomes first or a savings and emergency fund kind of deal?

[Jade Warshaw]

I think it's both. And you said that there's a, there's a path where both of you guys earn more and it's it's as you do that you're saving up more too, right? Because I'm also looking at this on a 15 year fixed. My guess is that you were looking at it on a 30 year. Am I right?

[Caller]

I. I have both in front of me. But yes, I was looking at a 30 year fix.

[Jade Warshaw]

And again, all that. You're doing that because you're trying to go fast.

[George Campbell]

I want to go fast.

[Jade Warshaw]

Why? You have your whole life together. I get it. I know, I get it.

[Caller]

So I. We are both 21. Who.

[George Campbell]

Who told you it's too late? Who told you you have to rush into this or else and you got to do this by this time and we're gonna make this much. I just think we're. There's something else going on here where you're wanting to rush the process and leapfrog into a lifestyle that you just can't afford to yet.

[Caller]

No, we've been dating for about four years and going to be graduating this upcoming May from college. I'm working around 50 to 60 hours a week. She's working 30, going to be 40 this upcoming semester. It was just one of those things where we were looking at it. Yes, we were dreaming big and we saw that we could afford it and we would still have extra income coming out.

[George Campbell]

It's already artificially propped up with the in laws money. And so I would go with what you guys can afford and if you can get a $400,000 three bedroom, I would do that and have a small mortgage that you can knock out quickly and you can upgrade over time because the truth is you're going to hate your house five years from now for whatever reason and you're going to move. It's okay to move six years from now as your life changes, but we don't need to plan for, well, one day we're going to have five kids, so we might as well get the five bedroom now and just get ahead of it. It we don't even have a ring on the finger. So I would just do things in order. And I love how excited you are. You're a planner, you're futuristic. I have a lot of that in me. But I know I fall flat on my face when I make too many plans and one domino doesn't work out. What if she stays home once you guys have kids and you go, oh my gosh. Well, we projected that her income would be a hundred thousand by now. This totally screws up our plan. So I would move real slow and realize you don't need the lifestyle that her parents have today, at 21 years old, it's okay for it to take a while. That's actually healthy. Hey, guys. You know those too good to pass up holiday promos? Well, they can be great. But with every spin of the digital wheel, the newsletter, sign up the coupon code, you're giving away your data. You think that info just stays with the store? I doubt it. It goes into the corners of cyberspace where data brokers grab it, repackage it, and sell it to spammers, scammers, and generally bad people. The FTC just reported consumers lost over $12.5 billion to fraud last year. And that's not just a number. That's your money, your time, and your privacy. And that's why I recommend Deleteme. Your digital cleanup crew. The delete me privacy pros dig through hundreds of these data broker sites. They scrub your info and they keep it gone. Which means fewer weird robocalls, fewer spam texts. And it's the gift that keeps on giving because it's an annual subscription. And Ramsey listeners can get 20% off those annual plans at JoinDeleteMe.com Ramsey with code Ramsey at checkout. Do it today. That's JoinDeleteMe.com Ramsey code Ramsey. Gabby's in Springfield, Missouri. Up next. Welcome to the show Gabby. How can we help?

[Caller]

Hi, guys. I'm grateful to be talking with you. I listen to the show all the time. I also want to shout out my husband and my anniversary is today, so shout out to him. Love you, honey. The heart of my question. Thank you. The heart of my question is in working the debt snowball. Should I skip to the next biggest debt with the intention for the military to pay off my student loans?

[George Campbell]

How much of a guarantee is this and how long of a journey is it going to be?

[Caller]

Great question. So we are currently in baby step two and working off our debt. We've paid off about 20,000 of our 100,000 so far over the past several months. And we have about 25,000 in student loans. That's the next step in tackling the debt snowball. I serve in the Army National Guard, but I'm a nurse on the civilian side. And my next army contract begins in May of 2027. When signing a new contract, I basically have two options. Either a $10,000 lump sum that's heavily taxed so it equivalates to about 7,500, or for the government to pay towards my student loans up to 2,000amonth. So in theory, they would Pay towards all of it over the course of a three year contract.

[Jade Warshaw]

So $2,000 a month for the entire time?

[Caller]

Yes.

[Jade Warshaw]

Start, but it doesn't even Contract, but it doesn't even start until 2027, correct? Yeah.

[Caller]

With the last contract that I signed, not all of the options were presented to me. So I took the $10,000 lump sum and it equivalated to about 7,500 and we put that towards debt, but we got stupid again, so we accrued more debt. So I don't know approximately how much of that, you know, actually made a dent towards it. But.

[Jade Warshaw]

But if you do it this way, you're not done until 2030, correct?

[Caller]

Yeah, that's the thing. So if we continue to pay the minimums on student loans, we would still be paying about 6,500 in the time that it would take to get to May of 2027 until my contract renews. But you know, mathematically they would be paying off 25,000 in student loans for the sacrifice of, you know, paying the minimums in 6,500.

[Jade Warshaw]

So you have to ask yourself, is the 15,000? Because let me just make sure it's a lump sum of 10 or it's pay this off. It'll take until 2030. So you have to ask yourself, is the, the $15,000 difference, is it worth the next five to six years of your life? Right.

[Caller]

Yeah. And that's kind of why I'm conflicted and asking you, because if it's, you know, them paying towards it and that's, you know, basically free money, if this.

[George Campbell]

Wasn'T on the table, would you still sign this contract or is part of it just like. Well, there's a good benefit.

[Caller]

Yeah, I mean it's a, it's an amazing benefit. But yeah, I would still sign the contract for the fact that the reason we have awesome insurance through the military. My husband's a type 1 diabetic and civilian side insurance is crazy expensive for him.

[George Campbell]

So what's your household income?

[Caller]

Yeah.

So together we make about 182,000. I bring in about 4,800amonth. My husband brings in about 4,000amonth. But I have, I'm working three jobs right now, including my military job, my civilian job, and then I also pick up shifts at the hospital since I'm in our civilian side. Wow, you guys have kids picking up extra shifts? We do and we have one on the way. That's another piece of the puzzle.

[George Campbell]

Well, that's why I'm going like, are you going to be able to keep this up for three years.

[Caller]

So my civilian job is very flexible with the timing. So I like. I'm staying at home with my daughter today. We just have the one, and she's two, but we do have one on the way. And I'm just, like, the kind of person that just, like, grinds and grinds and works and so, yes, realistically, I probably won't be able to pick up many shifts at the hospital the later I get into my pregnancy. But, yeah, ideally, like, after the baby comes and we get all settled and I'll be able to pick up like, one shift a week, maybe two.

[Jade Warshaw]

How long do you plan on it taking? So you said there was. Let me go back. There was $90,000 of debt. You've already paid off 20, right?

[Caller]

Or 100?

[Jade Warshaw]

Did you start with 100?

[Caller]

It was more like 120 to start off with. So as it currently stands, we have about 100,000.

[Jade Warshaw]

So you have 100,000 to go.

[George Campbell]

What else is there other than the 25 in student loans?

[Caller]

Sure. Let me break it down. So we've got about 20,000 in consumer debt. That's like credit cards and things. My husband's. We owe about 11,000. We replaced our H Vac system earlier this year when it went out, which cost a pretty penny. That one's about 11,000. My car is where we got silly and we got a new car. Whenever my last car got totaled. We still owe about 32,000 on it. I already kelly blue booked it, and it was appraising for 25 to 29,000. So.

[Jade Warshaw]

29,000.

[Caller]

Private sale.

[Jade Warshaw]

Okay.

[Caller]

Yeah.

[Jade Warshaw]

Is anything else? Or that. That was it.

[Caller]

And then the 25,000 in student loans, so it all equates to about 100,000 right now.

[Jade Warshaw]

What's your projection for paying off this other 75? Like, how long do you guys see this taking you?

[Caller]

Yeah, Right now, with our budget, we can. With me picking up extra shifts and getting an extra 2k a month, we have about 3.33,000 to 3,500 in margin a month, maybe a little bit extra that we can throw at debt. So, like, this month alone, we paid off three of our smaller debts, which is like a big ego boost, I guess, to keep on going. So hopefully we can pay off all of our debt in the next 18 months. And I can't remember if the way I calculated it included the 25,000 in student loans or not.

[Jade Warshaw]

Is that what you got, George?

[George Campbell]

I doubt it, because 75 grand, 3,500amonth, that's 21 months.

[Caller]

Months.

[George Campbell]

That's without the student loans.

[Caller]

Okay.

[George Campbell]

So.

[Caller]

And I think that that was just me being like let me get super aggressive and pick up an extra shift. Yeah, a week or so.

[George Campbell]

So I just know as a, as a dad of a newborn, it's just life is going to have to slow down a little bit. And so I don't know that you can keep at the same pace in this season. And for those reasons I feel like you guys could just get aggressive right now and start to really tackle this. I mean you could delay the student loans and do the contract May of 27. I don't think that like it's going to be on fire. Higher. But you guys have such an amazing income that this whole thing could be done in two years.

[Jade Warshaw]

I kind of like that idea of what George is saying.

[George Campbell]

Even on your own. I don't, I just, it's not that big of a, it's not like they're paying off $150,000 of student loan debt.

[Jade Warshaw]

It's a fifteen thousand dollar swing if you look at it.

[George Campbell]

Yeah. And you guys make 180 grand. So in the grand scheme of life you could do that in three months on your own dime and be done with it.

[Jade Warshaw]

Because if you still, still, if you decide to sign the contract in 20, 2020, boy, 2027, there's still the 10k that they could offer as a lump sum and when that comes, you can do with it what the baby, whatever baby step you're on or whatever life calls for that moment. So it's not like it's not an all or nothing thing per se. There's still money on the table that you can have in 2027 if it feels right to sign that contract. But I like the freedom of, in the openness of just being able to take control of your situation and be done with it when you're ready to be done.

[Caller]

Yeah, yeah, I, I, I, I would agree that's what my father in law is swaying towards. But you know, the, the military personnel that I trust their advice, they're swaying in my direction which is like just continue to pay the minimums and let the military pay for your.

[Jade Warshaw]

Yeah, and I get it. It's free money like in essence. But when you factor in your time and your emotion and your choice in the matter, there's that also is, has a cost in this equation and we want to not leave that out.

[George Campbell]

Do you guys have savings right now?

[Caller]

We are really following the Ramsey plan so we diminished our savings down to the 1000. But my husband, you know, with me being pregnant, he's, he's getting a little bit more cautious. So we're kind of doing Ramsay ish as a compromise.

[George Campbell]

Well, we'll tell you. Let me give you permission to be Ramsey ish and go just stork mode is what we call it. So it's okay to pause the debt snowball right now and just stack up cats because we just don't know what's going to happen until baby and mom are home safe. So when is baby due?

[Caller]

That's true. June of 26.

[George Campbell]

Okay. Awesome. Yeah. I mean, there could be a great scenario where you guys just stack up a bunch of cash and then you're good. The insurance paid most of it and now we hit play on the baby steps and we have a big pile of cash to throw at these debts.

[Caller]

That's true.

[George Campbell]

So I think that would give you some peace of mind during an already pretty stressful time where you're working multiple jobs, jobs, pregnant, trying to handle all this, a hundred thousand dollars of debt, it's okay for it to not be at, you know, breakneck pace.

[Caller]

Okay. Yeah. Thank you. I just needed that extra reassurance that everyone tells me to slow down, but I'm just like in that mentality of life is on fire. We need to go while we're young.

[George Campbell]

Well, it serves you well when it comes to the debt free journey.

[Jade Warshaw]

That's right.

[George Campbell]

But you know that stress can take a toll on on you and the baby. So I'm just looking out for your health as well during this time. The baby steps, it's a great framework, but life is going to happen. It's okay to hit pause for a moment when you want to be intentional and make sure that you're also protecting your family. So thank you for the call. Thank you for your service, especially coming on the heels of Veterans Day. So this is the Rams. Times are tight and one of the easiest ways to save more money right now is to stop overpaying for your phone plan. Boost mobile gives you one low monthly price, just $25 a month for unlimited talk, text and data. And that price never go up with Boost. There are no contracts and they're so sure you'll love it. They've got a 30 day money back guarantee. So take the easy win and switch [e-mail] Ramsey that's boostmobile.com Ramsey restrictions apply. See boostmobile.com Ramsey for details. Are you staying on track with the baby steps? You can take a quick quiz to check your progress and Receive a personalized plan made just for you. Simply head to the show notes and click on the link titled are you on track with the baby steps? And complete the quiz. Aaron is in Charlotte, North Carolina. What's going on, Aaron? Aaron?

[Caller]

Hey, George. Hey. My wife and I are kind of batting around the idea of moving back to Raleigh, North Carolina, from a small town in South Carolina just about two hours south, and just kind of curious how we balance the desire. So, you know, we got married in October of 21, moved down here in May of 22, and, you know, wanted to be closer to my wife's family with us being newlyweds and wanting to have kids and we've had some issues with infertility, but, you know, just kind of curious. I really have been the one that, you know, wants to push to go back to that area. I've been just feeling a bit stir crazy. And we're in baby step seven. Our income's about 173,000. So just kind of curious what your thoughts are on. On balancing those desires between my wife wanting to be close to her family versus, you know, wanting to be in person for work and just a little bit more to do and getting back into our old gyms and routines and things of that nature.

[George Campbell]

So it's not a financial conundrum, it's a quality of life for you guys?

[Caller]

Yeah, quality of life. And it sort of feels like a financial piece because, you know, going from no mortgage to, you know, maybe renting for a year until our house sells and buying a more expensive house in that area, you know, so it becomes a little bit of a concern. You know, we've been debt free fully with the house and everything since last September, so it's a little bit of both.

[George Campbell]

So what's the house worth?

[Caller]

Right around 360 to 370.

[George Campbell]

Okay. And what would the house cost in the new area.

[Caller]

In Raleigh? Maybe 450. On the low end up to 600.

[George Campbell]

Okay. You guys have any money saved or something?

[Caller]

450 to 500? Yeah, around 30,000. Okay.

[George Campbell]

And then what's the urgency around this? Is this. We want to make this happen in two months or two years.

[Caller]

Yeah. So we've been talking about it. I actually, the new job that I took is based out of that area, but they let me stay remote because we had some uncertainty about wanting to move.

[George Campbell]

That's convenient.

[Caller]

You know, we were actually supposed to move back in May, but they let me stay remote.

[George Campbell]

So are you stir crazy meaning I want to be in an office and that. Would that solve this if we got you an office?

[Caller]

That's what I'm feeling. Yeah. Just being around the house all day.

[George Campbell]

Because we can solve that. You can go get an office in your area now.

[Jade Warshaw]

Yeah. That's less about Raleigh and more about just finding you a job where you can be around people. Yeah.

[Caller]

So I was in person. There's pretty much one main employer in this area. I'd have to drive an hour and a half to Charlotte or an hour to Florence. So there's just not really any opportunities. We're in a pretty rural area and I was working whenever we came down here with a local employer. Left after about two and a half years. There's just poor management and they were doing a lot of fraud and just wasn't comfortable with it. So I started looking for a new opportunity.

[Jade Warshaw]

Aaron, help me understand. I just want to make sure. Sure your wife wants to move or your wife is not sure.

[Caller]

Unsure. So she's does want to be close to family if we are able to have kids. You know, she likes the idea of being able to be near her family here. Is your family in Raleigh, Miss the gym? My family is in that area.

[Jade Warshaw]

Okay. So it's not just the gym and creature comforts. Your family is there. So there's family in each spot. Okay.

[Caller]

Yeah. Not as much of a concern for me being near the family. You know, we're pretty independent.

[Jade Warshaw]

Does she like your family? Like are they. Are you guys really great relationship with her with your family?

[Caller]

Yeah, I think so. I think it's. I don't think she would be as comfortable like if we had kids with my mom and dad. You know, just their house can be a little bit chaotic versus her home is where her family is a. A little bit more put together in that sense.

[George Campbell]

Okay.

[Caller]

I think that's a fear from her side for sure.

[Jade Warshaw]

I. Yeah, I. I go back to what we said before. I'm not sure that Raleigh is. I'm trying to kind of prioritize what you're saying. It sounds like. I feel like I heard you say being in office or you know, being around people is. Was the number one thing then for you? It sounded like the number one thing. Did you say like being able to go back to our gift gym is. Did I hear you say that?

[Caller]

Yeah, just like lifestyle more to do actually having like a gym to go to and more things to live in a society. Like I said, restaurant, restaurants, remote area.

[Jade Warshaw]

Okay. So yeah. Is it. Yeah.

[Caller]

She used to always love going to home goods and stuff like that. You know, so we kind of miss. We both miss that piece for sure.

[Jade Warshaw]

Got it, got it, got it. I mean, for me, the house thing, I think if you guys really want to do this, it's just a matter of saying, okay, okay, we make a good salary. Now can we save up a good portion of this to where if we do take out a mortgage, it's really, really small, and then we're committed to knocking it out pretty quickly. I don't think there's anything wrong with this.

[George Campbell]

It's, it's. You know, if you call Dave, you'd say, well, it's ideal. If you did 100% cash, that'd be awesome. But it's not. We're not going to yell at you for taking out a 15 year, knocking it out early. You're going to do that regardless. So I know it feels like you're moving backwards, but if your quality of life increases, that's a win. So my take is I would do it. Make it an adventure. And you can always undo it if it's just terrible in Raleigh and this was not what you thought it was. I do think it's wise to rent. I know it feels like you're throwing away money, but if you just rent for even six months to a year and get your bearings, figure out what area you want to live in, figure out what area has the right schools and how close to family you want to be, all of that is going to play into it.

[Jade Warshaw]

Yeah. And don't buy, don't buy anything until this old one sells. Please, Please. That's.

[George Campbell]

Yeah. You don't want two mortgages on your hands. You won't have a mortgage on this.

[Caller]

One until it's sold.

[George Campbell]

And you can still time that. I mean, it's, it's very much possible and you can make it contingent, but you're going to be, it's going to be easier. If you already have your home sold and now you have all that cash sitting there, it's gonna, you're gonna be able to be more nimble and have more negotiating power because those sellers love when someone doesn't have a contingency on home sale.

[Caller]

Yeah. Yeah. My biggest thing was just kind of the weight of, of, you know, those different values, like my wife with being close to her family versus, you know, some of those lifestyle choices. Like I said, it wasn't as big of a concern being near my family.

[Jade Warshaw]

She's got to be on board.

[Caller]

Feel like I could move to Tennessee or Georgia, you know, but it's not.

[Jade Warshaw]

A financial Thing on our end, your wife's just got to be on board with it. I think that's more of. I think that's the biggest question I hear is, is she 100? With you on man one, we just. We gotta get out of here. We gotta go to Raleigh. She might be saying things like, oh, I wish there was a HomeGoods, or, I wish there was things, but does she actually want to move? Sit down tonight, like, you guys go on a date this weekend or do something where you're really laying this thing out. Make sure you're on the same page about it. It's not a financial problem, I can tell you that. It's just.

[George Campbell]

And you guys aren't pregnant yet, and there's hope that you could be in the next few months. What's the timeline there?

[Caller]

Yeah, we've been battling infertility for the last two years, so it's still a work in progress there.

[George Campbell]

Yeah, I mean, that's its own journey. And so the. The question is, do we want to, you know, keep this up for a few more years before we make a big decision to move? Because, you know, if you guys get pregnant, I hope you do well, now we have at least some concrete next steps. There's. There's something happening that sort of starts this, the catalyst. And in the meantime, if you want to get out of the house, get out of the house and go find somewhere to work. Maybe even lease a spot that's cheap, somewhere you can rent out a little office to get away. That might be a nice stop gap for now until you guys make that next decision. But good luck, man. There's a lot going on. I don't think there's any bad moves here. The only bad way is if you drag her through this and she's kicking and screaming and you're, like, we said, this is going to be awesome. So that's the tough part, is the relational aspect of just getting aligned on, hey, we said we're doing this now. We got to make peace with that decision decision. And it is a big one. But again, it's nothing. Nothing's fatal here. So I wish you the best of luck.

[Jade Warshaw]

Quality of life, George, is a big, you know, we can't forget about that all the time. We're asking people to sacrifice to win, and there's a time and place for that. You know, you. You might have a season where you work a job. You don't really like to get the paycheck so you can pay off the debt. Right. But the overarching Picture the biggest piece of life. Yeah, you should be doing work that you enjoy. You should be in a community and in an environment that, that you, that you enjoy if family is close to you. Yeah, like, we want that for you. Quality of life matters.

[George Campbell]

And that's why the baby steps matter even more in these cases. Because if you have financial peace, you got options. But if you're in crippling debt and you don't have the income to support it, you're out of options. And so I love that they're doing this the right way. Baby step seven, no mortgage. And they're going, yeah, we could do it either way. Financially. It's the emotional part we got to wrestle with. And that part can be even more difficult sometimes. So best of luck to you guys. Open enrollment period for health insurance has just begun. I know you're all celebrating at home and if OEP sounds like Alphabet soup to you, we're going to break it down. Health insurance's open enrollment period is from November 1st through January 15th. Whether you're self employed and need help navigating the market or you're unhappy with the health insurance your employer provides, Health Trust Financial can walk you through your options. Not only is Health Trust Financial Ramsey trusted, but there's never any charge to speak with them and they're committed to finding the plan that's right for you. So feel confident in your health coverage choices by going to ramseysolutions.com health-colonial coverage or just use the link in the description if you're listening on YouTube or podcast. Dan is in D.C. up next. What's going on, Dan?

[Caller]

Hey, guys. How are you?

[Jade Warshaw]

You?

[George Campbell]

Great. How can we help today?

[Caller]

Awesome. So a couple things. I'll give you the quick synopsis of it. Looking to find the best way to invest a million dollars.

[George Campbell]

This hypothetical or real?

[Caller]

It's real. It's actually crazy. So what happened was my wife, she's a, she works for a big box retailer. She makes about 200. I own my own business. I make about 75. We own a home. We bought it at about 365,000. We owe 260 on it right now, but the interest rate is 3%. And we have a son who's 13. We've got a 529 for him. There's about 30,000 in it right now. My wife's got a 401K that has about 315,000 in it. She puts in a 7% of her pay and the company matches 5%. There's, there's stock Options as well with her. And what happened was my business that I own, we came into a very lucrative deal. We considered it's probably going to be a one time shot unless something else happens again, but we're considering a one time shot. It was a $2 million gross business and we netted just over a million dollars from that.

[Jade Warshaw]

So.

[George Campbell]

Wow. From the deal, is it a full buyout?

[Caller]

It was not a buyout. No. I still own the company. We just, we just got a very really awesome opportunity. We took it and it worked out really well. Okay, so, so basically right, we had, we had 130,000 in debt when we started Ramsey's baby steps about five years ago. And that was just from calling student loan credit card debt. So that is paid off. Super happy with that. Our house again, we owe 260. It's only 3% loan on it right now. But my thought is we don't need the million dollars. We're in a different situation. Right. My wife makes really good money. We make money, we're fine. Do we put this in different investments? Should I throw 100,000 into my kids 520 and just let it sit there? So that way that is covered. Should I utilize like a personal advisor? We went to a couple different, like banks or folks just in general, you know, they want fairly decent amount of money to manage our money. So personal advisors, they want around 1.2%. Robo advisors online, they're much cheaper. I just got done a conversation with Vanguard and they want 0.3% and they give because of the amount of money that we have available to invest, they'll give us a real person. So that's already kind of the winner on it in my mind. And we're looking to hopefully retire faster now. So we're both 40 and it would be great if we could retire say 55, maybe a little bit earlier if the investment strategies are right.

[George Campbell]

Yeah. But there are a lot of good things on the table here. So you're saying you're going to net a million million net income lands in a savings account. What do you do today?

[Caller]

Yep, it's there in the, it's there in the money market.

[Jade Warshaw]

Okay.

[George Campbell]

I can tell you, you're really good at numbers. You know your stuff, which is very impressive and that bodes well for you. I would, here's what I would do personally. I would pay off the mortgage today. And I know you're gonna say, well, it's 3%, it's 3. Why would I pay off a 3% mortgage? I would do it for the peace of mind, for the risk factor and for the fact that you can now invest what was your mortgage payment. And that's going to really free you guys up to retire earlier when you have no mortgage left. And then you're still going to have a ton of money left over. So I would put maybe 40 or 50k into that 529 and front load it.

[Jade Warshaw]

I would do that.

[George Campbell]

You don't want to overfund it because if you put 100k in there and that money doubles in the next seven years as your kid heads off to college, there could be, you know, 250,000 that might be reasonable for what college cost seven years from now. So if you wanted to just front load it and then never put another dime in, you'll probably have 200 plus thousand dollars in there by the time college rolls around. I would also enjoy some of it. So I would do something fun, plan a trip. You guys have no other consumer debt, right? You already paid all that off?

[Caller]

We have no other debt, no, just the house.

[George Campbell]

Great.

[Jade Warshaw]

Wow, that's great.

[George Campbell]

So you've got some spending goals. Let's do something fun and enjoy the fruits of our life labor. Let's have some giving goals. Let's give generously and do something that blows our mind that we thought we would never be able to do. And then let's have some saving and investing goals. And part of that is getting rid of the mortgage to then free up money to build wealth because now that really increases your net worth. So there's a few things you could do. I think all of it's good. If you feel comfortable handling the investment side on your own or through Vanguard, that's fine. You can park market in an index fund for now. That's probably what I would do.

[Jade Warshaw]

And you know, it can start simple. You know, if you're happy with what you're invested in in your 401ks, that's a great place to start. Like those same funds or similar funds, that's a great place to start. Especially if they're well diversified and you know, you're split between growth and income and aggressive growth and international and all of that. I feel like that's a great place to start.

[George Campbell]

And yeah, I would also max out all of your tax advantaged retirement options first. And so her 401k k, maybe she goes in and ratches it up that contribution through the end of the year to max it out if she hasn't already. I don't think she has. Based on 7% of her 200,000 salary. So you could do that. To start, you could do some backdoor Roth IRAs. If you guys don't qualify for Roth IRAs because of your income. And you can max out an HSA if you have access to a health savings account. So there's a lot of things you can do that are tax advantage and for that reason, that would be the reason I work with a financial advisor advisor. Not because of. Well, this one charges this fee, this one charges this fee. You want someone who's actually going to look at your whole financial picture and give you estate planning tax strategy. Optimal money moves more than just choosing a fund and taking a commission for it. Okay, so I would sit down with your wife tonight and just kind of have a little dream date and go, here's all the things we could do. Let's prioritize from this million dollars. What's the first thing we're going to do do? Pay off the mortgage. What's the next thing we're going to do? Fund the front. Front load the 529. Next thing we're going to do, max out the 401ks and backdoor Roths and whatever other options we have. Then whatever's left. I would just park in an index fund for now or even a high yield savings account until you know what you want to do next.

[Caller]

Okay.

[George Campbell]

All right.

[Caller]

Well, I appreciate it. Yeah, that's. We were looking at maxing out the IRAs, maxing out like an HSA and, and trying to do that. I don't. I have a small 401k that I started the business about five years ago that we took some money out of just to, just to start it. And so luckily she makes enough that I can play with this business and it worked out.

[Jade Warshaw]

That's so awesome.

[George Campbell]

Way to go. I'm super pumped for you guys. That's fantastic. And the good news is this, this extra money that's laying around in the index fund that can kind of become a bridge account for you guys to make it for from, you know, 55 years old to 59 and a half to where you can access retirement without penalty. So it's a great strategy if you want to be work optional. My guess is a guy like you is probably going to be like a serial entrepreneur and just jump back into another new exciting thing. Yeah, he's or consulting. And so this, this is really a best case scenario. Yeah, I love getting a call like this. It's a great problem to have.

[Jade Warshaw]

It's a fun money.

[George Campbell]

What Do I do with a million? Because usually if someone says, says that it's a 23 year old who's a hypothetical.

[Jade Warshaw]

Yeah.

[George Campbell]

How do I get a million?

[Jade Warshaw]

Yeah.

[George Campbell]

What do I do with a million? I'm like, well, how much do you have? I got 4,000. Okay, well, call us back when you have the money. But I can tell you what I would do with it.

[Jade Warshaw]

Yeah. This is the real deal. Very, very good. Exciting.

[George Campbell]

And that's, that's a tough one. Jade with a 3% mortgage. Because I hear a lot of these people are hanging on to these low interest mortgages going, well, I can make more in a savings account, so why would I?

[Jade Warshaw]

Yeah.

[George Campbell]

And it's so much more than just a math problem. It's so much more than arbitrage and spread and leverage. It is risk. It's peace of mind. And talk to people who paid off their mortgage. I haven't talked to.

[Jade Warshaw]

They don't go back.

[George Campbell]

Dang it. I regret that I lost my 3% mortgage because you know what my interest rate is on my mortgage? Zero. It doesn't exist. So I'll take that over 3% any day. And they're going to build wealth just fine without the spread. So congratulations guys. Do you want to keep more money in your pocket and not Uncle Sam's then listen up. There are tax deductions and credits you could maximize before the end of the year by connecting with an experienced tax professional like a Ramsey trusted tax pro. They know the tax code inside and out so you don't have to and they can help you file when tax season rolls around. Get a trusted tax pro by going to ramseysolutions.com taxpro ramseysolutions.com taxpro welcome back to the Ramsey show in the Fairwinds Credit Union studio. I'm George Campbell flying solo this hour taking Your calls at 888-825-5225. You call up, I'll try to help you take the right next step for your life and your money. Jeanine is with us in Newark, New Jersey. What's going on?

[Caller]

Janine, Hi.

So there's some discrepancies between how my husband and I think about finances. We've been married, it'll be 31 years now, week. And just today I, we were looking at some cash and we were going to pay to have some work done. Anyway, he left me a note saying he left thirteen hundred dollars. He doesn't have any more. He'd have to go to the bank. And I know for A fact that there was 2,200 in an envelope. And so I know he lied. And I also had a discussion earlier with him about tithing. And the fact that that has not been something that is consistent with him because he is in control of finances. And he said that he would. He can't talk about the past, but he can just do better in the future. But I've heard that before because I've had this conversation about the tithing before. So how am I supposed to trust him with, you know, the past history in tithing and the fact that, you know, I believe he lied about the. The cash that was in the house.

[George Campbell]

I think we can agree on that. There was. Did you confront him and say there was 2200? Why is there 13? Where'd the $900 go?

[Caller]

No, he did say he left some do for. For some spending money, and he had set the money in a. In a safe. But I have the code to the safe because he's, you know, for your protection, if you need to get in here.

[George Campbell]

Sure. To you. And was there $900 in there?

[Caller]

Well, I looked the other day, and it was the 2200. And then I looked again today after I received that text about the 1300. And I looked and I didn't. I didn't count it, but I. There was more. It was more than just some spending money. And so he.

[George Campbell]

You think he's clearly lying to you and do you think there is something going on here? An addiction, an affair that. That reason why he's withholding this information?

[Caller]

No, I just think it's a. I just think it's a controlling. I think it's a controlling thing. I don't understand it.

[George Campbell]

You can be controlling because you're trying to hide the vice or addiction. Yeah, he doesn't want you to see.

[Caller]

I don't think there is. I just don't understand. Yeah, I just don't understand the deceit.

[George Campbell]

And if you bring it up with him, he just gets defensive and says, well, I'll just try to do better because that's not good.

[Caller]

That was regarding the tithing. And so he controls the accounts. I have access to the them, and that's why I was able to.

[George Campbell]

So what do you mean by control?

[Caller]

He takes care of all the bills. He pays all of the bills. He always has. When we first got married, he had money saved. I did not. Because I was a spender. I had no debt, but I had no savings.

[George Campbell]

So you relegated it to him to handle it.

[Caller]

Yeah. And he pretty much, you Know, based on the fact that he's a saver, kind of took over. Took over the.

[George Campbell]

How much money do you guys have saved?

[Caller]

So right now. So this is. I know this won't be agreed upon, but we have a joint savings. There's like 35 in that 35,000 or 100,000. But we also inherited some money a few years back. And so between the money that we inherited, his tax deferred, my tax Deferred. There's like 1.3 mil in there.

[George Campbell]

Okay.

[Caller]

And so I've even wanted to pay off the mortgage. There's only about 60 or 70,000 left on the mortgage.

[George Campbell]

And how old are you, Tim?

[Caller]

I'm 59. He's mid-60s.

[George Campbell]

Okay. How long has your marriage over these 31 years lacked communication and trust?

[Caller]

Almost to them.

[George Campbell]

Okay. That's what I was getting at. This has been going on a long time, which makes you an accomplice to the crime because you've been sitting back allowing it to happen to you.

[Caller]

Right.

[George Campbell]

And so there needs to be come to Jesus meeting and some marriage counseling to go. We're not on the same page. We haven't been on the same page.

[Jade Warshaw]

Page.

[George Campbell]

We have money. In spite of our lack of alignment, lack of values, lack of just transparency when it comes to money. You can say I have access to the accounts, but we are not on the same page. And I want to know exactly where this money's going and what else is going on here in order to rebuild trust. And if he can't straight up tell you, if he starts to get nervous and defensive, that's a sign that this marriage has not been a marriage for a long time. Time. Oh, it's been a transactional partnership.

[Caller]

Yes.

[George Campbell]

And that's the. That's going to be the sad truth that you have to face, is that we sort of played House as two people who live together, but we are miles apart.

[Caller]

Yep. Yeah, It's. It's just been. That has been difficult. I've asked. There's no budget to speak of. As long as the bills get paid, you know, the credit card gets paid every month. Then, you know, we're. We're doing good.

[George Campbell]

And the rest of the money disappears into where he ever. Wherever he wants it to go.

[Caller]

Yeah. But it's not really disappearing. It was, you know, private school tuition, college. So I.

[George Campbell]

Kids are out of the house now.

[Caller]

They're all in. They're all in their 20s, but three out of the four remainder in the house.

[George Campbell]

Okay. I think we need. We need to have a Come to Jesus to go, hey, we're, we're in the last quarter here of this marriage. I want to make this great. It hasn't been great. And I want to know if you're on the same team. I think if you come at it attacking, he's just going to get defensive again. But if you come at it and say, listen, I haven't done a great job being involved and that part's on me, but you have not done a great job communicating where our money's going. And it's left me wondering, wondering, is there something else going on? Why can't you be honest with me about where this cash is? Why is it all just smoke and mirrors and defense? And if he can't get there, you definitely need marriage counseling. Yesterday. I don't know that he's willing to go. Do you think he will do that?

[Caller]

That's been a struggle over the years, me always asking and it's never helped. So why, why try it again?

[George Campbell]

You need to go solo then until he's on board. Would you go by yourself?

[Caller]

I'm currently.

[George Campbell]

Okay. And what's come of that?

[Caller]

We're just getting into some of the stuff. So, you know, I think I'm at a realization of really, you know, been unhappy for 20 years or more and do I want to finish the last 20 of my life continuing to be unhappy? So that's my. That's kind of what's been rolling around in my head for the last few days and especially after today.

[George Campbell]

Yeah, well, the. It's going to take time and consistency and honesty and transparency, which means we're doing a budget every month. All our accounts are combined. There's no just loose cash, you know, fluttering away every month. I don't know that he's willing to do that. And at that point, you're gonna have to make a hard call. Do I want to continue down this route of misery and lack of trust, or do I need to just create the my own last chapter of my life? I can't make that decision for you, but I hope that you guys come to a conclusion and you don't let this drag on for another 20 or 30 years. I'm so sorry, Janine.

[Jade Warshaw]

Foreign.

[George Campbell]

Hey, guys, Dave Ramsey here. Winning at money is 80% behavior and 20% head knowledge. What to do isn't the problem. Doing it is. In her brand new book, what no one tells you about money, Jade Warshaw dives deep into the reasons you've been stuck. This book exposes the real emotional fitness. Fight with money. And shows you how to win that battle. Pre order now for $24.99. And you'll get over $100 of free bonus items. Get your copy [e-mail] store. The Ramsey Show Question of the Day is brought to you by why Refi? When your private student loans are in default, it's easy to feel ashamed or stuck. But why refi won't judge you. They'll help you rebuild, refinance and regain control. Visit yrefi.com Ramsey that's the letter y r e f y.com Ramsey not available in all states. Today's question comes from Erica in Oregon. We've been listening to the show for about six months. We're in our early 50s and are debt free. Our net worth is 1.5 million, including our paid off home. Our income is $275,000 a year. Our HSA and retirement investments are maxed out for the year. But then there's our quote tin can. We have about $260,000 in savings accounts and CDs. We both grew up in homes with parents who didn't talk about finances. Is that too much of a safety net? How much is too much? Great question here. So the real question is how much should you have in savings before you go? We should probably move this elsewhere. Elsewhere. Now I do like that it's not literally in a tin can because we've gotten that call before where it's just cash buried in the backyard, which is at physical risk and it's at risk of just being eaten away by inflation. So if you think about money, let's think about an ice cube, right? If you put an ice cube in the microwave, it's going to melt fast. That's kind of like just keeping a lot of cash on hand because it's not even keeping up with the rate of inflation.

[Jade Warshaw]

Now.

[George Campbell]

Now let's call it room temperature. You have ice out at room temp if it's, you know, sitting on the counter and that's really your CDs, your savings accounts, it's keeping up. It's slowly melting, but you're at least keeping up. And so what I would rather you do is keep that in the deep freezer, which is investing your money into the market beyond what you're going to need for an emergency fund. So you guys make 275 a year. I would sit down and look at your actual expenses for the year in your early 50s and go, all right, we actually spent spend a hundred thousand a year. So six months of that would be $50,000. Now if you want to go a little bit higher, maybe you guys plan on retiring early and you want to have a few years in case there's a down market or you need to pull from that cash or you have some big upcoming expenses, you can keep that in savings as well. But I think beyond a hundred thousand, we're getting into like paranoid apocalyptic territory. And the truth is your money is safe if it's in a bank account that is FDIC insured or NCUA insured. If it's with a credit union union, your money is safe. It's not going anywhere. If everybody's money disappeared, we're definitely going to be in apocalyptic state. And that's just not realistic. And even your money in the stock market, if you think your money's going to go to zero in the stock market, in an index fund or mutual fund with hundreds of companies, what you're really saying is I think the top 500 companies in America are all going to go to zero, go completely bankrupt. And that's, that's why I have this money in cash. And again in that scenario we have an apocalyptic situation that's beyond money. We're going to be fighting for food and ammo at that point. So how much is too much? Anything beyond six months, unless you have a real strong case, a real strong goal for why you need more than that or why you have a separate savings account, I would rather you park it in the market making on average 10 to 12% versus 3 or 4%. So Eric, I hope that helps. Congratulations, you guys have done really well. Well, no debt, making 275, you're going to make up for a lot of lost time and retire multi millionaires. So I don't, I think this is a nothing burger. But I appreciate the question. Trey is in Atlanta up next. What's going on? Trey, you with us? Trey?

[Caller]

Hey, how you doing?

[George Campbell]

Great. Love your energy. Coming in hot. What's going on?

[Caller]

So I got my first job a year ago and I over the a year and a half ago and I was save $47,000 and I, my only debt is my student loan debt which is $10,000 at a 4% interest rate. Now my goal is next year to be married and I want to purchase a multi unit home to kind of house hack the other side. But I've read Dave Ramsey's book and he talks about, you know, obviously getting out of debt and spoke with multiple financial advisors and they say hey, since it's only $10,000, that's 4% rate. Don't worry about it. Just keep your cash so you could get that home. And I wanted to hear your take on that.

[George Campbell]

Well, here's the thing. Financial advisors are incentivized to keep you invested. Would you agree?

[Caller]

Yeah, I would agree with that.

[George Campbell]

So if they're managing your 47 and then you take it down to 37 to pay off your debt, they make less money.

[Caller]

They weren't my managers. I'm sorry, they were one off conversations I've had with them. Seek out advice with. They weren't working with me. By no means.

[George Campbell]

Yeah, same principle applies financial advisors in general. Now the good ones and the ones that I recommend you work with are the ones that are going to look at your picture holistically and we tell, you know, the people that we recommend, we're like, hey, we're doing the Ramsey plan here, so we're not going to hang on to a whole bunch of debt in order to invest. That's insane. That's like borrowing money in order to invest, which you wouldn't do. And the, the truth of the matter is you got the money to pay it, so why not just pay it off, be free of the payment and you're completely debt free at that point.

[Caller]

Yeah, I'll be completely debt free at that point.

[George Campbell]

And then that 37, is that your emergency fund? Plus some.

[Caller]

That be my entire income.

[George Campbell]

Your entire income?

[Caller]

Yeah. No, I'm all my. Yeah, emergency funding, like all my savings. Sorry.

[George Campbell]

Got it. Okay. So I would keep three to six months of expenses saved, which is how much for you is that? 20 grand? Grand. 15 grand? 30 grand.

[Caller]

My rent, my rent is like 800 bucks a month. So probably my living in prison, about like 2 grand, about 1500 bucks a month. So it'll be somewhere like 7 to $8,000.

[George Campbell]

Okay. I would go minimum 10. I would leave 15 in there. And if you want to invest some of the rest, that's great. But I, I'm a little nervous about your house hacking idea because I'm scared. You fell for like a tick tock that they were like, it's so great, man. They pay the mortgage for you. Especially when you, when you got a lady in the mix. You like this lady? You're going to propose to her?

[Caller]

Yeah, yeah, we're going to get, I'm going to propose and probably have a courthouse wed next year.

[George Campbell]

Okay. I would let her be a part of this decision because I don't want her stuck being a landlord. And you got, you know, The. The renter downstairs. That's going to make an awkward predicament for a newlywed. And so I'm not a huge fan of the house hacking idea. I would rather see you guys have a primary home that you guys live in. And if you want to do investment properties later on with cash, you can do. Do that. But I would just go pump the brakes and go a little slower here and just follow through with the baby steps, which is let's have a thousand bucks saved. You have that. Let's knock out all of our consumer debt. You're about to do that today. Let's get our emergency fund in place. You're about to do that today because you already have it. Now we can move on to building wealth and building for the future instead of paying for the past.

[Caller]

Okay.

[George Campbell]

Do you have a ring already?

[Caller]

No. I know. I want to do some engagement counseling first.

[George Campbell]

Engagement counseling? Like premarital counseling?

[Caller]

Yeah. Premarital. Yeah.

[George Campbell]

Okay, so this thing's headed toward engagement, but we're not quite there yet.

[Caller]

Yeah. No, sir.

[George Campbell]

Okay, well, I would earmark some of that money for a ring, a wedding. I know you want to do the courthouse thing, but let's just say she wants a little celebration. You have the money to do that?

[Caller]

Gotcha. So would you say my first step should be. Be getting paying the student loan debt off first?

[George Campbell]

Yeah. Today.

[Caller]

All right.

[George Campbell]

Have you ever been debt free in your adult life?

[Caller]

No, this be my first time. I'm 26, dude.

[George Campbell]

Imagine not having to think about making a debt payment.

[Caller]

Yeah, it will be nice. And that's the peace of mind is what I've been wanting. But after talking to those advisors, they were, you know, so I was like, dang.

[George Campbell]

Well, because here's what they're saying, man. You could make more in the market. You should just do that and leave the loan sitting there. It's fine. You'll get to it. And the. The truth is, when you are looking at it through that lens, what you're really saying is, I am willing to borrow $10,000 in student loan debt in order to invest in the market.

[Caller]

Gotcha.

[George Campbell]

So when you look at it that way, you go, no. Who would do that? That's insane. And so regardless of the interest rate, I'm telling you to pay it off.

[Caller]

Gotcha. Regardless. Okay. All right. I'm gonna get on that.

[George Campbell]

If you regret it, you can go get more debt later. But I hope you don't, Trey, because you got a bright future ahead of you. You. There is a lady on the line. She wants to marry you. Hopefully your future's too bright to stay in debt or go further into debt.

[Caller]

Yes, sir. Thank you so much.

[George Campbell]

Absolutely. And I'm going to gift you something, Trey. It's called Financial Peace University. I think it's some of the best premarital counseling out there when it comes to finances. Because if you guys get aligned with your values, your goals, the principles, you both agree, hey, the kind of people we want to be is the people who don't owe people money. That's really gonna set you guys up for success. We want to have money in the bank, not owe people money. Build wealth for the future. And that's honestly one of the big reasons people get divorced, is money fights and money problems. And you're about to avoid that. And it's. I think it's the most attractive thing a man can be is debt free with money in the bank, you know, because even if you got a 5 in the face, if you got 10k in the bank, it goes a long way, my man. Ask me how I know this is the right Ramsey shop. What's up, guys? George Camel here. What if I told you that you had thousands of extra dollars hiding in your budget right now? Listen, I know how crazy that sounds. You're thinking, dude, I'm broke. My money's tighter than the middle seat on a spirit flight. But believe it or not, you've got more margin than you think. And our Every Dollar budget app helps you find it. In fact, the Average person finds $3,015 on average in just the first 15 minutes. That's like giving yourself a huge raise without an awkward conversation with your boss. Now, look, this isn't magic. You're not hitting the lottery. This is just your money that we're helping you reclaim and reorganize. And everydollar shows you how to make the most of it so you can make faster progress on your goals. So don't miss out on thousands of dollars of margin. Go start everydollar for free by downloading the app in the App Store or Google Play Play right now. All right, I've got about 4,000 messages about the 50 year mortgage that was announced via Truth Social from President Trump. So I thought I. I guess we need to talk about. Let's talk about the 50 year elephant in the room, shall we? So over the weekend, here's the actual truth of what happened. President Trump shared a photo that's now making headlines, and it showed FDR, the president who helped create the 30 year mortgage after World War II. Next to Trump, and it said Great Presidents as the headline. And his modern version was the 50 year mortgage under Trump's face. And the idea reportedly came from a meeting at Mar a Lago, where Bill Pulte, who's now the head of the Federal Housing Finance Agency, presented the proposal on a poster board. So he made a little arts and crafts. He shows it to the president. He liked it enough to post it on Truth Social. And now the FHFA says they're, quote, working on it. That's all it takes, guys. You bring him a poster board with a nice picture, he goes, let's do that. That sounds fun. And what am I having for dessert at Mar a Lago? So the stated goal here is to make housing more affordable. In quotes. That's not what this does. The 50 year mortgage does not make homes cheaper. In fact, it makes the housing crisis in 2000 a dumpster fire. And let's walk through the reasons why. This is number one, the math doesn't work here. Let's look at the numbers that have been thrown out there. We're going to take a $450,000 home as the example. A 30 year mortgage at 6.25%, about 2,700amonth. Total interest paid over those 30 years, $547,000. Not great, remember, on a $450,000 home. But now let's look at a 50 year more mortgage. And to keep it apples to apples, I'll even give you the same exact interest rate at 6.25, which is not going to happen because this is a much riskier loan. So banks are going to charge more for it. But let's just say it's the same interest rate. Well, your payment now becomes 24.50amonth. So you're saving 300 bucks at best with this loan. Total interest. This is the kicker. Over a million dollars in interest alone on a $450,000 house. Do you understand how insane that is? Now, in reality, lenders would charge that higher rate on a 50 year because it's riskier. At least 1% more, which means the savings aren't even going to be there in your monthly payment. And the interest is going to be even more than that million. So that 7.25%, let's keep it there. That's 2,600 bucks versus 2,700 bucks. So whoop dee doo, you saved a hundred bucks a month, all to pay $1.18 million in interest for that home. That is insane. That is not affordability. It's a financial illusion that's going to keep people broke until they die. Because we know the average first time home buyer is now 40 years old. So let's walk this out. You're going to die statistically before you pay off your mortgage. So I guess generational wealth is going to turn into generational debt. That's what you're doing. If you take this on reason number two, you are not building equity. You're just renting from the bank instead of your landlord. So here's what really happens under the hood. You see mortgages are front loaded with interest. So when you look at your amortization schedule, that's the nerdy sheet that shows you how much is going to principal versus interest. At first, every single dollar, almost every dollar is going to the bank, not toward your house. So let's share some examples here. On a 15 year mortgage, you start paying more principal than interest around year eight. That's when you sort of tip the scales on. A 30 year takes about 12 years. On a 50 year mortgage it takes almost 40 years before you're paying more of your payment to the principal than to interest. Which means the average homeowner keeps their home for about 11 years and they're moving on. By 11 years in, you've paid that 450,000 mortgage down to about $380,000. Do you not see how insane that is? You have built almost no equity in almost a decade by taking on this kind of loan. So that's problem number two. Number problem number three, it makes the housing crisis worse, not better. You see, stretching debt doesn't make homes more affordable. It's just going to make home prices go up. And we see this with the car market, right? We're introducing seven year car loans. Well what happens? Everyone just goes cool, we'll just keep raising the prices. College tuition, we saw something very similar happen because they realized people would just take on a bunch of debt and the government was going to back it. That's what's going to happen with these mortgages. So when buyers can afford a slightly higher price payment, builders and sellers are going to respond by raising prices. Because now we have more demand. It's a classic supply and demand curve here. So that's problem number three. Problem number four, it's going to add massive risk for homeowners. Here's why. Borrowers would pay roughly 400 to 500 grand more in interest on that medium priced home if it's stretched out from 30 to 50 years. And when it takes three to four decades just to pay down half of your principal. Even a small decline in housing value values could wipe out all of your equity. That is frightening. And that's not including just closing costs and realtor fees. That would eat into what you would have built up in equity. That's frightening. So this is a debt treadmill where you never catch up. If you move to the next home a decade later, you're just going to make a lateral move. You've built almost no equity. Number five, it is a legal and financial nightmare. To make this work, regulators would have to rewrite rules and convince investors to buy these ultra long loans. And I don't know if you know how banks and investors work. They want money like sooner rather than later. So what they're going to do to compensate is higher rates, more baked in fees because it's already a fragile system as it is. So this is a financial time bomb. Which brings us to problem number six. This doesn't benefit the American people at all. It only benefits banks, builders and Wall Street. Here's why. Let's be clear about who wins here. Bank. Banks get 20 extra years of guaranteed interest, which means if they actually play this out, they're going to get double what they would have in that 30 year mortgage. Then you've got builders. Builders get to sell higher priced homes because monthly payments look more affordable. And then you've got investors who get 50 years of cash flow from your paycheck on Wall Street. So the only loser in this setup is you, the homeowner. And there's been a lot of people, a lot of backlash toward this, even from the Republican Party. Marjorie Taylor Greene even said that it rewards the banks, mortgage lenders and homebuyers, builders, while people pay far more in interest over time and die before they ever pay off their home. This is coming from a staunch Republican. So this is a system designed to keep you in debt for life. Now the proponents of this, and this is what I've seen on social media when I posted about it, when everyone posts about it, well, people will just refinance. Well, people will just pay extra. And so it's no big deal. Listen, I don't know if you've met humans, but we are emotional creatures. And the stats show that a very, very small percentage of people, about 7% percent or 9% systematically actually pay extra on their mortgage. So left to their own devices, humans are just going to do the bare minimum. They're going to just make the minimum payment. And by the way, people who are going to take on a 50 year mortgage probably are going to do it with very little down and very little margin in their budget. This is a desperate move that's targeted at broke people. So if you do it the Ramsey way, you're going to go for a 15 year which means you're going to pay pay a fraction of that interest likely about little over six figures. 160 grand in interest instead of a million in interest. Oh and by the way, you're debt free in 15 years. So even if you took on that home at 40, you're debt free by 55 instead of 90 years old. Maybe making your last payment from the old folks home if you're lucky, if the Lord willing and the creek don't rise. And this is what I love. The old French word mortgage literally means, means death pledge. And America has finally we've taken this on and we're saying, you know what, make it a death pledge literally please. Because for 50 years I'm deciding I'm going to be a slave to the lender. Proverbs says that Proverbs 22:7 the borrower to slave to the lender. The rich rule over the poor. So is this the fix for housing? No. Do I believe that there could be a better economic climate and economy that could be more beneficial to the American people? Absolutely, absolutely. We could build more homes to increase supply. We can try to stop corporations and hedge funds from buying up all the single family homes. We could maybe let homeowners transfer their low mortgage interest rate when they move which would unlock some inventory because right now people are sitting with golden handcuffs. We could even raise the capital gains exclusion so that long term owners can sell without losing equity to taxes. That would be a cool solution. But here's the thing. I have very little faith in any policy policy taking place that's going to make it easier for the American people to buy a home. In fact as we've seen, it's only going to become harder. So what's my take on this? Don't wait on a policy to fix your life to allow you to become a homeowner. Bet on yourself instead of the government, instead of on a housing market. That's a moving goalpost. So what's the real way you get out of debt? You build up an emergency fund and you get a down payment saved up. And that might go slow, it might be be 40 years old before you can take on that home. But when you do it the Ramsey way and it's no more than a quarter of your take home pay, you're not going to be an alert. You're not going to be paying off that mortgage until you're in the old folks home. You're going to be debt free owning that home outright instead of it owning you. Which is exactly what this 50 year loan is designed to do. And by the way, what did Trump think about it? He said it's not that big of a deal. You don't pay our bills. Mr. President. It is a big deal to lock someone in a death pledge for the rest of their life. So to that I say no thank you Mr. President. I will hard pass on a 50 year loan. Our scripture of the day, 1st Peter 3:15. But in your hearts revere Christ as Lord. Always be prepared to give an answer to everyone who asks you to give the reason for the hope that you have. But do this with gentleness and respect. Theodore Roosevelt said there is only one quality worse than hardness of heart and that is softness of head. That'll preach. That's a timeless one right there. Well guys, The All New EveryDollar is here. You've heard us mention it on the show as we help people try to find that margin to pay off debt. And now it's way more than just a world class budgeting app. There's a ton of advanced features to help you make faster progress with your money. The average person finds thousands in margin in just the first 15 minutes of using it. So start EveryDollar for free. 20 today. You can get it in the app store or Google Play. Sheila is in Cincinnati. Up next. What's going on, Sheila?

[Caller]

Hi. I was going to find out some information, suggestions about investing a little bit of money for some income.

[George Campbell]

Okay.

[Caller]

So my husband and I followed the Dave Ramsey plan and for years and we were in a good situation and looking forward to retirement. Tracking a couple three years down the road and he unexpectedly passed away in July.

[George Campbell]

Oh my goodness. I'm so sorry.

[Caller]

So I'm trying to figure out out suddenly all income stopped. His disability stopped. His Social Security stopped. I won't see that again for another four years.

Wow.

So 150,000 insurance policy, life insurance policy. And I'm trying to figure out what's the best thing to do with that to generate a little bit of income. Income to make up for the loss of income.

[George Campbell]

Yeah. What was he making?

[Caller]

It varied from year to year but this year he was. Well, last year he didn't work at all this year. Last year he was on track to probably break 100,000.

[George Campbell]

Okay, what are your monthly expenses right now? Let's Just talk about the right next thing to do, which is cover your four walls, your fifth food, your utilities, your housing and transportation. So what does all that cost you?

[Caller]

800. We're debt free. We don't have any car payment or house payment or anything, so.

[George Campbell]

Amazing.

[Caller]

800 just pays the bills and buys the food.

[George Campbell]

That puts food on the table, keeps the lights on. Does that pay insurance bills as well?

[Caller]

Yeah, things. Life insurance and property taxes.

[George Campbell]

Okay, so let's call it a thousand bucks.

[Caller]

I'm sorry, Car insurance, health insurance.

[George Campbell]

Okay, but a thousand bucks all in. Gets your expenses covered for the month.

[Caller]

Yeah.

[George Campbell]

So we're really looking at. We need 12 grand a year right now just to survive.

[Caller]

Yeah, maybe.

[George Campbell]

Okay, well, I'll share some math with you and we can try to solve this problem together.

[Jade Warshaw]

Together.

[George Campbell]

So if you just park that $150,000 in a high yield savings account, you would make about five or six thousand dollars a year.

[Caller]

The bank right now told me to put it in a money market, so that's just where it is right now.

[George Campbell]

That's probably a similar rate. I would check on the rate, but right now you should be at about 3 and a half, 4% on these savings account rates, especially high yield money market. So check the rate there. That's a good starting point. But you might need to invest this money money if you want to make it last for a long time.

[Caller]

Right.

[George Campbell]

Because as you start to understand. Yeah. As you start to withdraw the money, it's going to deplete it. And so what is the, the next income point that you're going to hit is that Social Security, in four years.

[Caller]

There will be a pension that will start a little bit.

[George Campbell]

Okay, what's that amount?

[Caller]

Should start sometime this month. Should be about 2000.

[George Campbell]

Amazing. So this month you will have 2000 doll coming in.

[Caller]

Right.

[George Campbell]

Great.

[Caller]

That leaves me, from what we had calculated before he was going to retire and what we look to think that we would need like 4,000amonth to live on after retirement.

[George Campbell]

Okay.

[Caller]

That's what he was working towards.

[George Campbell]

So 4000 was the goal for both of you to have a comfortable retirement.

[Jade Warshaw]

Right.

[George Campbell]

Okay.

[Caller]

Now I'm about 2,000 short on that.

[George Campbell]

Yes. But that was for both of you. And in this, you know, kind of cushy retirement dream.

[Caller]

Right.

[George Campbell]

So we'll need to sort of have a new picture of what the future looks like for Sheila in this, this chapter, as you are still grieving. I mean, it's only been a few months, so I can't imagine the fog that you're in right now. But as that fog starts to clear and as you figure out the right next steps, you're gonna have to figure out what those expenses really look like for you to not just survive, but also to enjoy life. Life, because you're, you're still young, you got a lot of life ahead of you. How old are you?

[Caller]

56.

[George Campbell]

Okay, and then when will Social Security kick in?

[Caller]

When I'm 60, which would be four years. And that's taking a cut. It doesn't fully come in till I'm 67.

[George Campbell]

Sure. Yeah. And you can delay that a little bit. Maybe you split the difference and take it at 62. You know, take it when you need it, but if you don't need it, you can let it ride a little bit longer. And then the other piece of this, this 150,000, you could invest it. And if you invest it, on average, you could see anywhere from 9, 10, 11, even 12% return on average over a long period of time over the next 20 or 30 years.

[Caller]

That's what I need to know is where and how does one invest money to be able to pull off of it for a living?

[George Campbell]

Well, you want to focus on are mutual funds and index funds. These are basically giant groups of stocks and companies. So instead of putting all of your eggs in one bag basket, it's in a basket that has 200 different companies that are all weighted. And so that's what I would recommend. And if you want help with that, I would connect with a Smartvestor Pro. You can do that at ramseysolutions.com click on Smartvestor Pro and they'll guide you through this process. Because we always tell people only invest in things you understand and you stay in the driver's seat when it comes to your investments. So you're not going to relinquish control. You're going to stay in control and actually learn. Okay, here's what my money's doing, here's where it's going, here's what the return is. And if you do that, this 150 grand could give you about 10 or 15 grand a year. So it's not going to be like a life changing amount of money, but it could help float the gap that you're looking for. It could give you an extra, let's say thousand bucks a month on average on top of your two from the pension. Now, now we're working with $3,000 and our expenses are one, could you live a decent life in retirement off of that?

[Caller]

I don't know.

[Jade Warshaw]

Are you.

[George Campbell]

Are you working full time currently?

[Caller]

No.

[George Campbell]

Are you able to work.

[Caller]

Maybe down the road?

[George Campbell]

Okay. As you enter the new year, I would also look at what opportunities you have to do some meaningful work. Number one, because it will give you some purpose in this next season and allow you to continue this legacy. And number two, because truthfully, the money just isn't there. We need to create some income to fund the gap right now to invest, to put aside. Do you have anything in savings outside of the 150?

[Caller]

Yeah, that's what I've been living off of the past three months.

[George Campbell]

How much is in there now.

[Caller]

Outside.

Of the money market? About 6,7000 now.

[George Campbell]

Okay. So that's quickly getting depleted, and I would love for you to keep that as an emergency fund to cover you when life inevitably happens. Now, obviously, you've been in a state of grief, and so I have no shame, no guilt for you using this money to fund your life right now as you navigate this process. But I would love for you to keep that emergency fund set aside for those emergencies down the line. Line. And that means maybe we get to work, we invest this money, we get that pension coming in, and then we get on a budget. Have you created a budget on your own before?

[Caller]

Yes, I'm following the budget.

[George Campbell]

Okay. Do you have every dollar?

[Caller]

Yeah.

[George Campbell]

Great. I'm going to cover it for the next year for you. So hang on the line and Christian will pick up. We'll make sure to gift that to you because it'll connect to your bank account and make it really easy to track your transactions. Plus a lot of other cool features to help you create margin. And you might see that, hey, this gave me four ideas I can do to create an extra $300 of margin. And in your world, that could be life changing. Okay, are you getting any counseling to help you heal and move through this?

[Caller]

A little bit?

[George Campbell]

Do you have anybody in your. In your corner community around you?

[Caller]

Yes, we do.

[George Campbell]

Okay, good. Well, Sheila, I'm so sorry. This is not the picture anybody has as they head into their retirement phase. I'm so sorry for your loss, but I hope the numbers encourage you that you can not only survive, but I hope that soon you can thrive in this next chapter. That puts this hour of the Ramsey show in the books. Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of peace. Peace. Christ Jesus.