If You Live Fake Rich, You Will Become Real Broke!

Summary

Podcast Summary: "If You Live Fake Rich, You Will Become Real Broke!" - The Ramsey Show

Release Date: January 31, 2025

In this compelling episode of The Ramsey Show, hosts Rachel Cruz and George Camel delve deep into the financial pitfalls of living beyond one’s means. Through engaging conversations with callers, they highlight the dangers of maintaining a façade of wealth and offer actionable advice to regain financial stability. The episode underscores the show's core belief: you can build wealth and take control of your life, regardless of past financial missteps.

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Caller Stories and Expert Advice

Alex from Cleveland, Ohio

Alex, a 23-year-old, grapples with substantial debt totaling approximately $90,000, primarily stemming from a hefty car loan of $47,000 with monthly payments of $1,200. After losing both his jobs—one as a payroll manager for an IT company and another as an assistant manager in retail—his income plummeted from $150,000 to $60,000 annually.

Key Challenges:

• Over-leveraged Car Loan: The car, valued at only $25,000, leaves Alex "underwater" with a significant negative equity.
• High-Interest Rates: A 25% interest rate exacerbates his debt burden.
• Limited Income: Current earnings barely cover essential expenses, leaving little room for debt repayment.

Advice Provided: Rachel and George discourage bankruptcy as a first resort, suggesting instead to explore selling the car to reduce debt and encouraging Alex to seek additional income streams. They emphasize the importance of adjusting his lifestyle and prioritizing debt repayment through methods like the debt snowball.

Notable Quote:

George Camel (02:33): “Instead of a voluntary repo, could you sell it and come up with the amount you’re underwater on?”

---

Tammy from Milwaukee

Tammy, 34, recently navigated a tough divorce and has faced financial strain after purchasing a second home debt-free. However, unforeseen expenses during repairs turned her mortgage into half of her income.

Key Challenges:

• High Mortgage Burden: Paying $2,000 monthly on a $4,000 take-home income.
• Accumulated Debt: $37,000 in student loans and additional credit card debt.
• Lack of Emergency Fund: Limited savings to buffer unexpected costs.

Advice Provided: The hosts recommend selling her home to eliminate the excessive mortgage burden. This move would allow Tammy to pay off existing debts and stabilize her financial situation, enabling her to rent a more manageable property and rebuild her savings.

Notable Quote:

George Camel (17:13): “It’s not quitting on homeownership. It’s just getting your head above water.”

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The Hidden Costs of Flaunting Wealth

A significant portion of the episode is dedicated to the discussion of faking a rich lifestyle and its long-term repercussions. Rachel and George identify several behaviors that indicate someone is living beyond their means, often driven by a desire to impress others or conform to societal expectations.

Key Indicators:

1. Flashy Designer Logos: Over-branding can mask financial instability.
2. Expensive Wine Orders: Choosing high-end wines despite budget constraints.
3. Talking About Money Excessively: Boasting about investments or debt can signal financial imbalance.
4. Flaunting Wealth on Social Media: Posting luxurious experiences without financial backing.
5. Leasing Luxury Cars: High monthly payments on vehicles that drain finances.
6. Over-Accessorizing: Excessive spending on watches, nails, and other accessories.

Notable Quote:

George Camel (27:43): “If you live fake rich, you'll become real broke. Eventually you will be calling the show and life was great and now something happened and you're in a real pickle because of your financial decisions.”

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Lee from San Antonio: Navigating Financial Turmoil After Loss

Lee shares a heart-wrenching story of coping with his sister-in-law’s unexpected passing, which left his brother-in-law struggling financially due to the loss of her income and the absence of adequate life insurance.

Key Challenges:

• Sudden Loss of Income: Reduction from combined incomes of approximately $160,000 to much less.
• Existing Debts: $9,000 tax bill due to unreported 401(k) withdrawal and $35,000 in valued stocks.
• Emotional Strain: Managing finances amidst deep grief.

Advice Provided: Rachel and George advise Lee to sell the appreciated stocks to secure funds for debt repayment and emergency savings. They also emphasize the importance of separating finances to prevent further complications and recommend consulting a tax professional to handle the capital gains implications.

Notable Quote:

Rachel Cruz (35:06): “But to George's point, making sure that you’re a whole person and how you can do that best, you know, is your decision for sure.”

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Mike from Asheville: Overwhelmed by Debt Post-Remodel

Mike recounts how a $100,000 remodel during COVID led to significant credit card debt, exacerbated by a sudden job loss that reduced his income from $195,000 to $65,000 annually.

Key Challenges:

• Excessive Debt: $210,000 in non-mortgage debt, including credit cards and car loans.
• High Monthly Obligations: Around $6,200 monthly debt payments.
• Job Loss: Critical reduction in household income.

Advice Provided: The hosts urge Mike to eliminate credit card debt immediately by cutting up cards and selling vehicles to reduce liabilities. They also recommend diversifying income through side jobs and undertaking a complete overhaul of his financial habits, focusing on necessary changes to align spending with his new financial reality.

Notable Quote:

George Camel (58:38): “Today we start Mike's handyman business.”

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Morgan from Kansas City: Financial Strain After Tragedy

Morgan seeks guidance on supporting her brother-in-law, who is facing financial difficulties after her sister-in-law’s untimely passing. With limited savings and significant debts, the family struggles to maintain their household.

Key Challenges:

• High Monthly Mortgage: $1,400 on a $170,000 home.
• Lack of Savings: Minimal financial cushion to handle the sudden loss.
• Emotional and Financial Stress: Balancing grief with financial responsibilities.

Advice Provided: Rachel and George recommend that Morgan and her brother-in-law focus on establishing a clear financial picture by pulling credit reports and identifying actionable steps. They emphasize the importance of prioritizing essential expenses, securing life insurance, and avoiding major financial decisions until the family stabilizes.

Notable Quote:

Morgan (81:53): “May I address your listeners for just one minute, please? [...] if you want them to just grieve your loss instead of also lead you on a scavenger hunt.”

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Strategies to Avoid Becoming Broke While Appearing Wealthy

Throughout the episode, Rachel and George emphasize the importance of living within one’s means and the perils of maintaining a facade of wealth. They advocate for:

• Creating and Sticking to a Budget: Utilizing tools like EveryDollar to track and manage expenses.
• Prioritizing Debt Repayment: Following steps to eliminate high-interest debts first.
• Building an Emergency Fund: Ensuring that unexpected expenses don’t derail financial stability.
• Focusing on Real Wealth: Valuing assets like a paid-off car over superficial status symbols.

Notable Quotes:

Rachel Cruz (27:18): “Do things with your family, give to others, give others great experiences in life.”

George Camel (28:23): “Normalize the 10-year-old used minivan. That's practical. Amen.”

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Key Takeaways

1. Avoid Financial Faking: Living beyond your means to appear wealthy can lead to substantial debt and financial instability.
2. Prioritize Debt Reduction: Focus on eliminating high-interest debts and avoid taking on new liabilities.
3. Increase Income Streams: Seek additional sources of income to support debt repayment and rebuild savings.
4. Adjust Lifestyle Accordingly: Embrace a lifestyle that aligns with your financial reality to foster long-term stability.
5. Seek Professional Advice: Consult financial experts and use budgeting tools to maintain control over your finances.

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This episode of The Ramsey Show serves as a poignant reminder that authentic financial management is crucial for long-term wealth and peace of mind. By addressing real-life struggles and providing practical solutions, Rachel Cruz and George Camel empower listeners to take decisive actions against the temptations of living a "fake rich" life.

Transcript

[Rachel Cruz]

Foreign solutions. This is the Ramsey show where we help people build wealth, do work they love, and create amazing relationships. I am Rachel Cruz, hosting this hour with my good friend and fellow co host of the Smart Money Happy hour, George Camel.

[George Camel]

Different vibe on this show, but still fun.

[Rachel Cruz]

It's still fun. Yeah. We don't have a cocktail on the show, but we are answering your questions, America. So give us a call at 432-55225 and we'll help you out. And it's anything from your career, your money, your life, relationships, anything and everything. We're going to start off this hour with Alex in Cleveland, Ohio. Hi, Alex. Welcome to the show.

[Alex]

Hi.

[Caller]

Thanks. How you guys doing today?

[Rachel Cruz]

We're doing great. How can we help?

[Caller]

So I am 23 years old. I roughly have about 90,000 in debt. 47 of that is a car loan. My payment per month is $1,200.

[Rachel Cruz]

Okay.

[Caller]

When I bought the car, I was making roughly 150 per year. Lost both those jobs, and now I make about 60 per year. And just wondering, should I voluntarily surrender my car? I really can't afford it anymore. Between rent and cost of living, I have 47 on the car, about 37 in student loans, and 6,000 on credit cards. I did complete baby step number one, working on number two. My mom also mentioned that she thinks I should file for bankruptcy. I'm not sure if that's the best solution, but I just wanted to get your guys thought on that.

[Rachel Cruz]

No, on the bankruptcy side, I'll just. I'll just say that. Yeah, first and foremost, we're not there.

[George Camel]

We're not even close. So there's some, some good news for you. I think mom wants you to get a clean slate and she's kind of wanting you to just shortcut this and, and be free from the pain. But there's better options here. And so let's talk about the car. Instead of a voluntary repo, could you sell it and come up with the mount you're underwater on?

[Caller]

The car's only worth about 25.

[George Camel]

Did you roll negative equity?

[Caller]

I might be able to, but no.

[Rachel Cruz]

Did you from a previous car?

[George Camel]

How do you owe 50 grand and the car's worth less than half of that.

[Caller]

The percent interest on it is 25%. Oh. When I bought the car, it was during COVID I needed a new car, didn't have much credit, and they would only approve me for a brand new car. I could not get approved for a used card.

[George Camel]

And you said, Sure, 25% sounds good. That's reasonable. Let's go. I need this $50,000 car.

[Rachel Cruz]

And when you're making 150, this is the problem. You feel like, okay, well, I can afford the payments, and if I can afford the payment, everything's fine. And. And that's the backwards way of. Of going into when it comes to buying a car. But that's what a lot of people do. I can afford the payment. So regardless of how much interest it is, I can afford it. And then life happens as you've experienced. Okay. Job wise, Alex, what have you. What were you doing before? You said you had two jobs that you lost. What were those?

[Caller]

I was a payroll manager for a IT company, and then I was an assistant manager for every retail store.

[Rachel Cruz]

Okay. And what happened to those jobs?

[Caller]

The retail store ended up closing down, and I wasn't able to get relocated, and the IT firm also shut down.

[Rachel Cruz]

Oh, okay. So both companies closed. What are you doing now?

[Caller]

I work in IT still on, like, the administrative side.

[Rachel Cruz]

Okay. Okay. Single family, Kids? Single. Okay.

[George Camel]

Where are you living?

[Caller]

Cleveland.

[George Camel]

Okay. Are you living alone? Renting.

[Caller]

Rent with a roommate. 1300 Split between the two of us.

[Rachel Cruz]

Okay, that's good. Okay. So, yeah, I mean, the. Getting the car out, the 25,000 that it's worth. Where did you pull that number from? From a dealership or from, like, Kelley Blue Book?

[Caller]

Kelley Blue Book and a couple other, like, just, like, browsing, seeing, like, what? Similar.

[George Camel]

But it's not trade in value. That's private party value.

[Alex]

Yes. Private party.

[George Camel]

Oh, man.

[Rachel Cruz]

Yep.

[George Camel]

Because the problem is you need to come up with the difference. Even if you do a voluntary repossession, they're gonna sell it at auction for way less than it's even worth, and you're still gonna owe the difference.

[Rachel Cruz]

Yeah.

[George Camel]

So it doesn't really. It doesn't solve all of your problems to even do the voluntary repo. That's why we're trying to find another solution where you come up with the difference. I'd rather you be 25 grand in debt driving a beater than 47 grand in debt.

[Caller]

Yeah, and that's. That's kind of my thought process, too. Trust me, I know this was probably the worst financial decision I've ever made, but, yeah, I rather drive a hooptie at this point than, you know, drive.

[Rachel Cruz]

Are you able to keep current with your other bills, Alex, right now, making 60?

[Alex]

Yes, you are.

[Rachel Cruz]

So this credit card debt is not ongoing to keep lights on and everything?

[Caller]

No, I'm slowly paying that off, thankfully.

[Rachel Cruz]

I mean, honestly, Alex, if I were in your shoes, I mean, I would figure out a way. I mean it's about 18k for the difference of the car and you're probably not going to be able to get a loan for the difference.

[George Camel]

Well, you said you, you owe 47 on the car.

[Rachel Cruz]

43. Oh, 47. Oh, I wrote 43.

[Caller]

Yeah.

[George Camel]

Okay, so you're 22,000, 22 under. So that, I mean, ideally we'd say, hey, go to your local credit union, get a loan for the difference, maybe 25 grand and spend three of that on a beater car. But I don't know that they'd even grant you that loan at this point.

[Rachel Cruz]

Have you tried?

[Caller]

No, I haven't tried. I kind of wanted to search all my options beforehand.

[Rachel Cruz]

Sure.

[George Camel]

That's the least harmful of the options is to go to a credit union and see if you can get the difference in a loan and maybe a little bit more in order to get a beater car. Get rid of this payment and then you'll be climbing your way out of this and then hopefully in the meantime we can get your income back up to six figures because clearly you're skilled enough and you're willing to do the work.

[Rachel Cruz]

Yeah, for sure. Yeah. If you can get that 60 up for a full time job and find something 75 or 80. Right. In like a perfect world. And, and then the side hustle is what I mean, that's what I would be doing, Alex. And I'm like, if you can make God, I mean you'd have to make 3,000 extra a month. I mean, I'm trying to do the math of how to do this within a year to get to even save the amount for the difference. Right. So best bets, you can take a loan for the difference. And like George said earlier, a local credit union is going to be your best bet versus a bank. They're the ones that are probably actually going to sit down with you and run more numbers and look. But. So that would be my first option. And then if not, that's probably what I would do. I would probably try to get out of this car before anything else. Even before the.

[George Camel]

It solves half your problems.

[Rachel Cruz]

Yep.

[Alex]

Yeah.

[George Camel]

If you can get out of that and then now the second half, at least that's bearable and you can climb out of that pretty quickly. Even making what you make, it's, it's a solvable problem. But I do think income's the biggest part. And then your lifestyle is gonna have to get cut down to nothing for probably the next 18 months.

[Caller]

Yeah.

[George Camel]

And so this is no eating out. This is. Hey, the roommate wants. Sorry, I can't hang out. I'm working three jobs. It's not going to be a fun journey. But the good news is you're young enough that you have a lot of time to make up for this. And so all hope is not lost. You don't need to go file for bankruptcy, George.

[Rachel Cruz]

Would you, if you were him, would you save the 25,000 first, get the car out and then do the debt snowball, or would you really?

[George Camel]

I know, I just don't know how quickly he's going to save up 25.

[Rachel Cruz]

That is because I do wonder, Alex too, if you got. If you paid off the six credit cards and did just the traditional debt snowball, how much payments monthly will be freed up because those are paid off? So even just working down the debt snowball, but knowing you have a freaking 1200 car payment till you get to it to pay off is not fun. But in the meantime, I almost would just work the debt snowball till you get there. But yeah, thanks for the call, Alex. Good luck to you. We learned from our mistakes, George. We learned from our mistakes.

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[Rachel Cruz]

Foreignsey show if you have jobs like us out into the. Into the Internet. One of the things that, you know, it's just kind of a known thing, you just don't read the comments. You just kind of let people feel what they're feeling and you just move on about your life. But George, on the other hand, reads all the comments.

[George Camel]

I live for the comments.

[Rachel Cruz]

George is always in the comments.

[George Camel]

I gotta find my joy somewhere. And the comment section is so entertaining to me.

[Rachel Cruz]

And we keep getting a consistent comment here.

[George Camel]

It is a lot. Where's Dave, question mark? Question mark? Question mark One question mark would suffice.

[Rachel Cruz]

Yes.

[George Camel]

So can you clear the air?

[Rachel Cruz]

Yes. Dave is okay. Dave is fine. Dave is living like no one else. He's in Cabo Wabo mode, Dave. And they, they are. I. I mean, you know, I don't know, George. He's left us to run the ship. The grandparents are. They're gone. You know, the, the kids are asking where they are and, you know, I.

[George Camel]

Didn'T think about that. Your children are like, where's grandpa?

[Rachel Cruz]

They're just up, which. Good for them. Good for them. So if all of you want to know, he is totally fine.

[George Camel]

He's alive. This is not a Weekend at Bernie situation.

[Rachel Cruz]

Actually doing great. And yeah, George, we, we have to fill the show. The, the shoes.

[George Camel]

He's thriving, let me just tell you.

[Rachel Cruz]

Yeah. So, no, he will be back. We promise.

[George Camel]

He is better than he deserves right now. Yeah, he's tan and happy.

[Rachel Cruz]

He's great. That golf swings really looking good. All right, we're next. We're gonna go to Tammy in Milwaukee. Hey, Tammy, welcome to the show.

[Tammy]

Hi, guys. Thanks for taking my call.

[Rachel Cruz]

Absolutely.

[Tammy]

I am 34 and I have had a couple of houses. I went through a nasty divorce a couple of years ago, bought a house, sold it, and bought this one. And this is where I'm in a little bit of trouble. I bought this house debt free, so I had a paid off car. I did put 20% down, so I thought it was in good shape.

[Rachel Cruz]

Yeah.

[Tammy]

Until one thing after another kind of broke and I was fixing things. And now that I've been watching you guys for the last six months, I know that I should not have taken this large of a mortgage because it's about half of my income.

[George Camel]

Of your take home pay.

[Tammy]

Yes.

[George Camel]

Oh, so what do you make and what's the mortgage?

[Tammy]

Sure. So I have a few jobs now, so my first income is about 4,000amonth. That's my primary job. And I see that keep going up. And I'm trying to get promotions and doing well. And then I also bartend on the side, so that helps. And then I'm about to start doing taxes on the side, so coming up here, I'll hopefully.

[Rachel Cruz]

Okay. How much do you make bartending a month?

[Tammy]

Would you say about 400, 500? I try to be conservative with that number.

[Rachel Cruz]

A month. Okay.

[Tammy]

Yeah.

[Rachel Cruz]

Okay, perfect.

[George Camel]

And what's your mortgage payment every month?

[Tammy]

2,000.

[George Camel]

All right, got it.

[Rachel Cruz]

Okay. So how, how can we best help you today?

[Tammy]

I'm wondering if I should sell my house because it is a lot.

[Rachel Cruz]

Yeah.

[Tammy]

Or if I just keep hustling. Because what it, what it did was it put me into debt. I was also paying for school and I made the mistake of putting that on My credit card.

[George Camel]

Um, how much other debt do you have?

[Tammy]

37,000.

[Rachel Cruz]

Okay.

[George Camel]

Is that all credit card?

[Tammy]

Um, one is a personal loan and the rest is credit card.

[Rachel Cruz]

Okay. Um, I mean. Yes, Tammy, the only reason I would say and kind of get to that answer pretty quickly with the house is that you would have to basically double your income for this to make sense. And you, you are saying that you see your income going up. But what I would want is the side hustle income not be part of the equation for your mortgage. Because I want to get you to a point in your financial journey that you're not having to make have a side hustle to keep your mortgage. Right.

[George Camel]

It's not sustainable.

[Rachel Cruz]

Yeah. You want just like. Yeah. Your regular income to be able to support your main four walls and, and more. So tell me, how long have you been in the house?

[Tammy]

I just hit two years last summer, so I'm good on the capital gain side.

[Rachel Cruz]

Yeah. O. How, how much do you owe on it? What could you sell it for?

[Tammy]

I owe 275 and I think I could probably get 4 10. 4 10? Yeah.

[Rachel Cruz]

Oh, wow. It went up a lot in two years.

[Tammy]

It did. I live in a crazy area.

[Rachel Cruz]

Okay.

[Tammy]

I'm more in the suburbs, but it definitely did and I put a lot down and I think that might have been another.

[Rachel Cruz]

Yeah, that's true. That's fair. Yeah. Yeah, that's fair.

[George Camel]

If you sold it after fees, you would net probably 110,000 or so, maybe 120 if you're lucky.

[Tammy]

Yeah. I kind of assumed it'd be around that hundred because of realtor fee.

[George Camel]

And then you could then pay off your 37,000 in debt, leaving you with another 60 plus to then begin a new down payment fund while you rent.

[Rachel Cruz]

Did you have kids, Tammy, when you divorced or is. Or no kids?

[Tammy]

No.

[Rachel Cruz]

Okay. So it's just you. Okay.

[Tammy]

Just me and a dog.

[Rachel Cruz]

Okay. No, that's great. So, yeah. I mean, honestly, Tammy, you know, our goal when. At least when I'm giving this advice and George would. Would be the same, is it's ultimately leading you to have a level of control over your money that ultimately then gives you peace. That's what we want. Right. I mean, if you build wealth and do all of this, that's later in the baby steps and that is so doable for people. But the biggest component here is peace. And Tammy, I don't feel like you have a lot of peace when half your income is going to just the mortgage and you have $37,000 of other debt that you're having to pay and you're having to keep up the house. I mean, there's just not. It doesn't sound like a lot of peace. Would that be true?

[Tammy]

Yeah. I mean, I've paid off like 5,000 in the last six months ever since following your baby step.

[Rachel Cruz]

Oh, great.

[Tammy]

Which is great. But I don't know if it's enough.

[Rachel Cruz]

Right, right.

[Tammy]

And I don't want to work 80 hours a week.

[Rachel Cruz]

Yes, totally. Totally.

[George Camel]

Pace, it's going to take you another 40 months to get rid of the debt you took on on top of covering your mortgage, which is already consuming a lot of your take home pay. So I can feel the stress of all of that.

[Rachel Cruz]

Yes.

[George Camel]

Making things worse.

[Rachel Cruz]

Yeah. So I think like a good goal to shoot for Tammy is I probably would. I would sell the house. I would use some of that money to pay off your debt. I would use some of it for an emergency fund, and then I would quickly get back into a house or into real estate in general, because I don't. I think you can put yourself in a position where you're not a renter forever. Um, but it may even look like a townhome or a condo or something. Right. It may not be even a single family home. Or if it is, it's smaller and it's way more doable because I do think, you know, prices with homes, they continue to go up. So I don't want people on the sideline for too long. But a move like this, I think will open up so much margin for you and you'll be able to have kind of a clear head to go and purchase something again. Because I do think you'll be in a position soon to buy something.

[George Camel]

Yeah. It's not quitting on homeownership. It's just getting your head above water to do it with a little more peace on the next go around. Because this just feels like, I mean, I. You can give it six months and see if you can get your income way up. Like Rachel said before, you sell. It's not like an on fire sell today, but it just feels like if there's no end in sight, where this is going to get easier and you're going to continue to go into debt, then I think the writing's on the wall that it's wise to sell.

[Tammy]

Yeah. And then I'll follow your. Your plan of 25% of my income. That would be nice.

[Rachel Cruz]

That's right. That's right.

[George Camel]

It's not a fundamental. You got to do 20. It's just that when it's 50%, life is hard. When it's 25%, you always have.

[Rachel Cruz]

I mean, if it was $1,000 right now, right. Compared to your income, that changes. I mean, that's $1,000 freed up right there. And if you, you know, work hard and bartend and maybe do double what you're doing, that's $2,000 coming in, extra a month to pay off this other debt. Right. It just kind of ends up working so much more in your favor in that way.

[George Camel]

Is there a growth plan for you to make five, six, seven grand a month in your current role?

[Tammy]

That's complicated. Our company is going through a lot of changes, so I'm not sure.

[George Camel]

Is it time to look for another company?

[Tammy]

I have started looking. I'm a loyalist, so we'll see. But maybe it is time. Maybe I need to dig into that further.

[Rachel Cruz]

I mean, for your skill sets, would you say you could roi better out in, in somewhere else and you're staying because you love this company or do you think, no, like I'm worth this amount even if I transferred to another company?

[Tammy]

No, I just graduated, so I think I could leverage that.

[Rachel Cruz]

Okay. Yeah, for sure. Yeah. Tammy, it feels like there's some big moves coming up in the future, which is all positive though. That's it. I'm like, it's, it's freeing you up more and more, giving you more peace and control and, and I think it's going to be an incredible thing. I really do.

[George Camel]

Yeah. Renting is not always some money. If it's going to buy you peace.

[Rachel Cruz]

That's right. For a period of time for sure. And then you can save up and. Yeah. For a down payment on your next property and you just keep that ball rolling. Thanks for the call, Tammy. This is the Ramsey show.

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[Rachel Cruz]

Well, one way to take control of your money and honestly get the most out of your paycheck is by creating and sticking to a monthly budget. And every dollar is the best budgeting app to do that because you're able to build out your budget, track your expenses, save for what matters most, plan your spending, all of it. And it's a really easy to use app that fits in your busy lifestyle. It's right there on your phone and if you're married, your spouse can have the same account. So you guys, as you make changes, it shows up on both and you just get this pulse of where your money's going and gives you that level of control and to hit the goals that you that you want. So you can download every dollar for free in the App Store or Google Play or click the link in the Show Notes or the link down below if you're listening on YouTube or podcast. All right, George, we had a Smart Money happy hour episode. You know, we have some that just, you can tell, have hit a nerve with the world in a good way. And we did one recently on things that scream. I'm pretending to be upper class because living a higher lifestyle than maybe what you can afford afford keeps you broke. I mean, when you are living beyond your means and trying to in a way kind of keep up with what everyone else is doing will constantly lead you back to this idea of spending money that you don't need to spend. And sometimes you're spending money you don't even have to keep up this lifestyle.

[George Camel]

And you talk about comparisons a lot. So this segment hopefully will help you fight those comparisons and FOMO you feel amongst your friends. So here's some signs, some things that your friends may be doing, people out there on Instagram that may show they're faking their upper class status. Number one, flashy designer logos. This is a big one. Most luxury items like a cashmere sweater never have logos all over them. We've talked about stealth wealth. Yes, Smart money happy.

[Rachel Cruz]

It's a new trend. It's called quiet luxury. Stealth wealth. People that are actually really wealthy, you won't really know it. They don't really have all the flashy stuff that you just look at and you know exactly, oh, that hat, that jacket, those shoes like, you know exactly where everything's from. A lot kind of go under the radar.

[George Camel]

If you know, you know.

[Rachel Cruz]

If you know, you know. Yeah, yeah.

[George Camel]

Secret society.

[Rachel Cruz]

Yeah, it's kind of that. That's, like the new vibe, which is great. I think that's great. So, yeah, that's number one. Number two is ordering expensive wine when everyone knows that you're on a beer budget.

[George Camel]

Ooh, hey, some of these beers now are crazy expensive. But, yes, the. The wine does. That one feels like a ripoff to me personally. You know, this. My stance.

[Rachel Cruz]

I do know I will not order.

[George Camel]

Wine at a restaurant, but if someone else buys a bottle, hey, I'm happy to share.

[Rachel Cruz]

Oh, sure you are.

[George Camel]

I'll chip in.

[Rachel Cruz]

Take a glass from someone.

[George Camel]

Glasses of wine and cocktails can go for $20 a pop versus a beer. Or even better, just a water. What happened to just drinking water with a meal? Why do we gotta add more calories to the mix?

[Rachel Cruz]

And more money.

[George Camel]

And more money.

[Rachel Cruz]

See, that's not fun, though. I do like an appetizer.

[George Camel]

I'll just have a water. Rachel's like, I'll have three appetizers. Let's try a bunch of.

[Rachel Cruz]

I do. I love going out, Rachel.

[George Camel]

I do a little.

[Rachel Cruz]

I do. Number three is talking about money too much. So it's like, oh, I'm leveraging this debt for the rental property, for all this real estate. This is. I think those are, like, some of the funniest Instagram reels that come up on my feed sometimes where people are like, I'm $6.2 million in debt, and we are loving it. And it's like, showing all their VRBOs that they've bought in debt and all this stuff, and you're just like, oh, no, no.

[George Camel]

It's exhausting. And then you've got the crypto bros who are very loud right now, because crypto is worth $14 billion, you know, for the moment. And so all these people talking loudly about money is usually a red flag to me.

[Rachel Cruz]

Yeah.

[George Camel]

Maybe they don't actually have a lot.

[Rachel Cruz]

Yep. Next is flaunting wealth on social media. Oh, so this is an interesting one, because I do think you can, like, use vacations for an example. You could see somebody at the same destination on social media, but the way they present themselves again, kind of back to that self wealth of like, oh, yeah, we're just like, maybe I'm showing you some of the stuff, but it's more of what we're doing. Or like, you know, the kids and the poor. I don't know, whatever. And then there's those that are like, oh, no, I'm gonna take you around the suite that we.

[George Camel]

Oh, yeah.

[Rachel Cruz]

Rented for the week, you know, or, you know, we're gonna. It feels. It just feels. Feels like I want to show you this amazing life that I live. And that's.

[George Camel]

And then the kicker, they're like, and by the way, it was totally free with their credit card points. Sign up for my course if you want to. I'm like, oh, my gosh, get out of here.

[Rachel Cruz]

It's true. It's true.

[George Camel]

Get out of town. Here's another one. Leasing luxury cars.

[Rachel Cruz]

Oh, yes.

[George Camel]

If you're a dude and you've ever posed in front of any vehicle, it's a hard no for me. You. Your dad didn't hug you enough. And I'm sorry. That's just the truth. But this is a status symbol that's usually draining their wallet. We just took a call earlier.

[Rachel Cruz]

It is.

[George Camel]

Guy's got a $1,200 car payment.

[Rachel Cruz]

Yeah. He may look like he's driving great when you see him, but behind the scenes, not doing so well and leasing cars. You know, the number one city. I read this somewhere, so don't. I don't want everyone in Dallas city. Did that have leased cars. Dallas, Dallas, Texas.

[George Camel]

That makes sense.

[Rachel Cruz]

Number one, a lot of young bros.

[George Camel]

Who are doing well for themselves, I.

[Rachel Cruz]

Guess got those Beamer, you know, you're always leasing, like, a Beamer Mercedes. It's always like a. I want.

[George Camel]

Where are the guys who are leasing, like, the Honda Civic, you know? Does that exist?

[Rachel Cruz]

No, I don't think. I don't think they make money off that, George. Okay, and then number six, over accessorizing, flashy nails, expensive watches, loud hair, or loud, loud hair slash makeup is what's on there. Meaning just. I don't know, just a lot.

[George Camel]

Yeah. No, and this. You know, obviously, the watches leans more the dudes, but the women, the flashy nails, the loud hair and makeup. We could tone it down, you know.

[Rachel Cruz]

I know, but here's my thing with this limit. I know. Here's my thing with this, though, is, I mean, I do that. I get my nails done like.

[George Camel]

Well, you follow a lot of, like, the influencer moms, and some of them are very sweet and authentic and being themselves. And then some fall into the category of this is a lot. Yeah, you're trying to portray a certain life.

[Rachel Cruz]

I would agree with that.

[George Camel]

Like, they wake up and they have full makeup.

[Rachel Cruz]

Who's believing this isn't real. This isn't real. So, yeah, so all of these things, you know, can again scream, I'm pretending to be upper class. So here's the thing, you guys, not to be faking upper class. How do we get there and be wise? Because again, none of these things in of themselves, I wouldn't say right. If you like, order wine at dinner, if you do have a nice designer person, none of these things in and of themselves are bad. But when it becomes your whole Persona and it's the only thing you're shooting for in life and again, that you will put yourself in a financial position, that's not wise in order to achieve these things. Like, that's where the caution flight, the caution lights come on.

[George Camel]

And if you're doing it with debt, it is a facade, it is a house of cards. You're artificially propping this up. So here's my. You can tweet this if you're listening out there, whatever it is called or whatever platform you're on, whatever free speech platform you choose. Here it is. Rachel, you ready for this? If you live fake rich, you'll become real broke. Eventually you will be calling the show and life was great and now something happened and you're going, I'm in a real pickle because of my financial decisions.

[Rachel Cruz]

Yes.

[George Camel]

And so we just don't want that for you.

[Rachel Cruz]

Yep. Let it be real. And yeah, doing things again, doing a budget, living within your means, saving up for an emergency fund, getting out of debt so you free up payments so that you can actually use your money to give, to invest, to buy a house that's actually, you know, reasonable for your income. You know, you're doing all these things and again, they're not, it's not going to be like this flashy, beautiful, wonderful lifestyle 24 7. It's not going to look like that, but there's going to be this steadiness and this like firmness of a foundation under you. And it's not all just like shaky and built on other people's money.

[George Camel]

That's right. Normalize the 10 year old used minivan.

[Rachel Cruz]

That's practical. Amen.

[George Camel]

A paid for car. That's the real flex.

[Rachel Cruz]

Okay, so let, yeah, so the minivan. And everyone knows I love my minivan.

[George Camel]

We know your feelings about minivans.

[Rachel Cruz]

Yes, I do love, I love my minivan. I think it's great. It is wonderful. But I will say the plastic on the side of the seats have popped off. So two now are. So when you get in my van, there's like wires and have Your kids.

[George Camel]

Been vandalizing this vehicle. I feel like that's a personal problem. I don't think that's on Honda. You know what I mean? We can't blame the good people at Honda.

[Rachel Cruz]

I know, but I'm like, oh, my gosh.

[George Camel]

This, like, yeah, I'm blaming Chuck Cruz. He's been working out too much. Just ripping pieces of this van apart.

[Rachel Cruz]

Oh, but it's paid for.

[George Camel]

That's what matters. That's what's less stressful. You know what? I hit my garage the other day. Big old scrape on my car. You know what I said? Yeah, it's 12 years old. It's fine. Who am I trying to impress? Rachel Cruz? She's not impressed.

[Rachel Cruz]

What am I trying to do here?

[George Camel]

So, yeah, there's a big old scrape in my car.

[Rachel Cruz]

So good.

[George Camel]

I hit my garage.

[Rachel Cruz]

All right, if you are watching on YouTube, comment below, because we want to know some of your, you know, things that you see out and you're like, huh? Are these people trying to. Trying to be upper class and they're.

[George Camel]

Not, you know, or share your stories.

[Rachel Cruz]

The lifestyle fitness that's out there, and I would say a good bit of it's probably on social media. Can we be honest with that?

[George Camel]

It helps to just get off of there. I realize I stopped caring what other people think when I'm not looking for reasons to be angry and upset and jealous and envious. Just get off and live your life, George.

[Rachel Cruz]

If we could all be as wise and as disciplined as you.

[George Camel]

I'm the most humble guy you know.

[Rachel Cruz]

It's all of it. But you can check out our Smart Money Happy Hour episode as well on YouTube and podcasts, where we dive into this conversation even more. This is the Ramsey Show.

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[Dave Ramsey]

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[Dave Ramsey]

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[Rachel Cruz]

The employee benefit Research Institute recently did a study asking people really have a million or asking how many people really have a million dollars safe for retirement? And according to the research, only 3.25. I'm sorry, 3.2% of Americans have a million dollars or more in their tax advantaged accounts, like a 401k or an individual retirement account, an IRA. 58% of Americans have less than $10,000 saved in their retirement. So as a Ramsey show listener, the question is, are you staying on track with the baby steps to reach your financial goal? If you want to know that, make sure to take our quick quiz to check your progress and receive a personalized plan that's just for you. So you can head to the show notes and click the link titled are you on track with the baby steps? And complete the quiz for free. All right, let's go to the phones and let's talk to Lee in San Antonio. Hi, Lee. Welcome to the show.

[Lee]

Hi, how are y'all today?

[Rachel Cruz]

We're doing great. How can we help?

[Lee]

So I have a question. I just got turned onto your show about a month ago and I've become an addict. And I kind of learned about the baby step several years ago from a friend of mine and it really burned a hole in me. So just this week I paid off my vehicle, I paid off my personal loan, except for my house.

[Rachel Cruz]

Oh my gosh.

[George Camel]

Did you have all this money sitting around and you just weren't willing to part with it?

[Lee]

Yeah, kind of paid off all the credit card, student loan. I take a lot of extra gigs as a contract nurse and stuff. So during that.

[George Camel]

Awesome. That's a big step. You're really. You drank the Kool Aid. Way to go.

[Lee]

I did. So my question, I am married. We've been married for 30 years. My husband is terrible with money. He has almost put us in the poor house three times. So about when I got turned on to this a couple years ago, I've separated our finances completely because you know, you give him a debit card, he has money. If he had checks, he had money. So we have never agreed on money. He doesn't make as much as I do, but he is definitely not hurting. As far as his credit sucks, he can't go anywhere. Sorry for the word.

[Rachel Cruz]

You're good.

[George Camel]

Anyway.

[Lee]

So he, he. I just found out that he did put all his stuff into like one of those credit consumer people, but he didn't talk to me about it. So when I was out on. I've always done our income tax. When I was out on the COVID run, he did one income tax return and he forgot to tell me he had spent or took money out of his 401k. So anyway, that's a $9,000 bill. I told him he has to pay it because that was his mistake. He didn't say anything about it, he didn't report it, and now he gets to pay it. So going back a couple weeks, I was listening on one to RAM to your show and I heard. I know, I heard y'all talk about the bitcoin and also it. Whatever. But I do remember him mentioning something and I haven't been able to find the show about if you had stock, like SQL stock. So when I worked in the hospital, I used to buy stock from them and it wasn't much, but when I checked on it the other day, it's worth 35 grand. My question is, do I want to sell it and then pay some of that irs? Because I'm in Texas, so everything's community property here. I owe half if he defuncts. Or do I take that money and do a Roth IRA for last year and then put the rest into my six month emergency fund? Or should I just leave it and let it go still?

[Rachel Cruz]

Okay, so you have the $35,000. The tax bill is how much in your husband's name?

[Lee]

Nine grand.

[Rachel Cruz]

Nine grand.

[Lee]

Both our names. But it was his mistake because he took the money out of his 401k.

[George Camel]

And the taxes and penalties and all that.

[Rachel Cruz]

Yeah.

[George Camel]

What did he use that money?

[Lee]

I was gone.

[George Camel]

So you have no idea what you spent it on? Does he have an addiction?

[Lee]

Frivolous. He likes to cook. He likes to buy junk.

[George Camel]

People don't rob their 401k to buy junk.

[Lee]

Well, I cut them off for myself, like I said, if I. He buys junk, believe me. He likes clothes. He likes junk. He does.

[George Camel]

Okay, so what's the total debt? Is it just the 9,000 or is there more where this came from?

[Lee]

Well, his. That I know of that I'm on is the 9,000. I don't. He did not tell me how much he has put into the.

[Rachel Cruz]

Yeah.

[Lee]

Into the. That thing that was his credit cards, whatever. He is not on mine. He is not. The house is in my name. My car was in my name. Everything's in my name.

[Rachel Cruz]

Okay. I am so from that practical standpoint, Lee, I would probably pay it off because it's. It's in your name. I mean, it's. Yeah. For you guys. Which sucks that it's his mistake. And I say sucks that it's his mistake because of the way you guys have been living.

[Lee]

Yeah.

[Rachel Cruz]

But I. So I would do that. I would. Do you have money saved or you ON BABY STEP 1?

[Lee]

Because my net worth. No, my network. I already have. I have my. I have my thousand dollars in a separate account. I have paid all my accounts off, and I. My. My net worth with all my IRAs and investments, because I put money in investments when I was doing the COVID thing also, and paying off loans. And also my net worth, according to my Quicken account or whatever that is or my. Whatever was on my computer because I'm not a really good money savvy person, is about 670,000.

[George Camel]

Way to go. That's great.

[Lee]

My house only owns. I only owe 172 on my house right now.

[George Camel]

Okay.

[Rachel Cruz]

Okay.

[George Camel]

You've been doing the solo. Essentially, you're just like, whatever you do, you. I'm gonna manage my money and not go into debt. And.

[Lee]

Yeah.

[George Camel]

My goals. And.

[Lee]

Yes.

[George Camel]

You're not dragging me down.

[Rachel Cruz]

So the question to. If you sell and the stock is in what again?

[Lee]

It's in a hospital stock in a big corporate hospital.

[Rachel Cruz]

Okay. Yeah.

[Lee]

When I bought it years ago, it was only like, you know, from payroll deduction. And I've just kind of like, left it on the back burner.

[Rachel Cruz]

Sure.

[George Camel]

Yeah.

[Lee]

And it's grown. It was like 25. 50. 50 bucks when I bought it, and now it's worth like 300. I mean, $35,000. That's what I found out.

[Rachel Cruz]

That's amazing.

[George Camel]

So you'll probably. What's your. You. Do you file single or married filing jointly at this point?

[Lee]

Oh, we still do married filing jointly just because it's cheaper that way.

[George Camel]

And what was your income last year?

[Lee]

Last year was 94, but this year I got above and 97.

[George Camel]

Okay. So it'll likely fall into like, a 15% capital gains tax on those stocks since you've owned them for longer than a year. It's Going to be long term capital gains tax and It'll likely be 15%. I would talk to your tax pro about what that number actually would turn into because you'll need to have that, you know, be able to pay the taxes on that come tax time. But I would definitely sell these stocks, pay off that 9,000, and then fully fund your emergency fund and then be.

[Rachel Cruz]

Putting the rest in your, in your Roth 401k or I'm sorry, your Roth IRA that you were saying and just be putting.

[Lee]

I just found out this, because I just found out yesterday when I called my HR benefits and stuff. We do have Roth IRAs available here at my job. I mean, a Roth 400K, I have just 401K. I'm sorry.

[George Camel]

Yes, right, okay.

[Rachel Cruz]

Yes. So that and your Roth IRA are going to be your friends. Because the great thing is when you take the money out, like versus this stock where you're having to pay capital gains, you wouldn't pay anything and you could just cash it out and it would be all 35,000 of yours.

[George Camel]

The only difference is you won't get the tax deduction come tax time because it's on the Roth side.

[Rachel Cruz]

Yeah, that's right. But that's worth it because of how much, how much you're going to be making in interest over time. So I would do that and then, and then, Lee, I mean, that's what.

[Lee]

I put it into this year's. I like go ahead and put it in. Like if I sell it, I get it before I file my income taxes. Put that into the seven, like 7,000 into my IRA for last year's and then I could worry about the taxes on the long term capital gains for this year.

[George Camel]

Yeah, I mean, that's, that's one way to do it for tax time. You can fund last year's, you know, Roth IRA and HSA and all that stuff. So that would be, that'd be a good thing to do. Just make sure you have your fully funded emergency fund set up before that.

[Rachel Cruz]

Yeah.

[George Camel]

And if you have enough, you can fund the rest in that ira. Yeah, but the bigger glaring issue here is this marriage. I know, it's like the elephant in the room.

[Rachel Cruz]

How long have you guys been married?

[Lee]

30 years.

[Rachel Cruz]

Okay.

[Lee]

So I did talk, I did talk to an attorney and basically he was like, it's cheaper to keep them because.

[George Camel]

You know you're gonna have to split your assets.

[Lee]

Yes.

[George Camel]

I also want to think about your, the quality of your life and not just about the dollar signs, but I'm just I just feel for you. I mean, has it been 30 years of this?

[Rachel Cruz]

I mean, the way he handles money and the way he approaches money is the same as how he approaches life, correct?

[Lee]

Yes. I mean, he's very. I mean, he's not a. I don't even know how to say it. He's an oxymoron on his whole world. I mean, he's so. The kids need him for something. He's there. He's never been not there. Yeah, he did have an infidelity issue years ago. I don't think that's a problem. It hasn't been a problem anymore, but.

[Rachel Cruz]

Okay, well, I would, I would say this, Lee too, just for the, the wholeness of who you are as a person. What George is saying is, you know, making sure that you, that you're a whole person and how you can do that best, you know, is your decision for sure. But. But I would keep my money separate at this point because he's not proven otherwise and I don't trust him. So I hope that helps. Lee. And good luck to you. Well done on all the progress. Thanks to all the guys in the booth and Kelly lady in there. Oh yeah, Taylor, we have some ladies in the booth and you, George. It's a great co host. This is the Ramsey Show.

[George Camel]

Hey guys, this is Jade Warshaw. Listen, I get it. The student loan situation is bananas. But it's time to make progress, not excuses. So if your payment and interest rate have you treading water, refinancing could be the solution for you. Look, if I were in your shoes, I would contact Laurel Road today and get a free 30 minute consultation. You'll work with a student loan expert and you'll go over your refinancing options. Hey, for refinancing to make sense, you've got to check certain boxes like making a good income. And bottom line, Ramsey's advice is that you only refinance if you can get a lower rate or a shorter term. Remember, the point is to pay off debt faster. Maybe you just need to keep rocking the debt snowball. But if refinancing does make sense for you, Laurel Road offers low competitive rates and interest rate discounts are available for stuff like autopay. Listen, you can't mess around with student loans. If you want them gone, you gotta go hard. So go to LaurelRoad.com Ramsey to find out more and schedule your free 30 minute consultation. That's LaurelRoad.com Ramsey. Laurel Road is a brand of Key Bank National Association.

[Rachel Cruz]

Live from Ramsey Solutions, it's the Ramsey show where we help people build wealth, do work that they love, and create amazing relationships. I am Rachel Cruz, hosting this hour with my good friend, best selling author and co host of our other podcast, Smart Money Happy Hour. And George Camel. That's you?

[George Camel]

That's me.

[Rachel Cruz]

I didn't introduce you. I just gave you all the titles.

[George Camel]

I appreciate that. I'll take the accolades. You don't need to mention my name.

[Rachel Cruz]

And we are answering your questions this hour at 888-825-5225. And to start us off, we have Dustin in Palm Springs, California. Very nice area. Hey, Dustin. Welcome to the show. Hey.

[Alex]

Thank you. So my wife and I were in our mid-30s and we are so close to baby step seven. We can feel it. But we have one small hurdle that we got to jump over to get there and differing opinions kind of on how to resolve it and hoping to get some advice and maybe you guys can break a tie for us.

[Rachel Cruz]

Perfect. Can't wait. What is it? What's going on?

[Alex]

All right, so we've knocked out all of our debt. Using the baby steps, we paid off about $350,000 worth over about two and a half years.

[Rachel Cruz]

Wow, $350,000 you guys paid off.

[Alex]

Yeah, well. Well, not all paid off. We sold stuff. I mean, we had everything under the sun.

[Lee]

Wow.

[Rachel Cruz]

Well done.

[Alex]

Automobiles and campers and I don't even. So. So all we have left now is our primary home. And we do have a vacation home. And what we want to do is sell our primary home and move into the vacation home, which we like better anyways. And basically the net proceeds from selling our main house will pay off our vacation home, which will become our primary residence.

[Rachel Cruz]

Wow. Great.

[Alex]

Problem. Yeah. So we're ready to go. The problem is I bought the vacation home prior to our marriage and I unfortunately bought it from a friend. He's carrying the note, and when I kind of brought up to him, you know, excited that, hey, I'm going to have a big, big check for you, he kind of pushed back and, you know, he's kind of saying he wants to spread his capital gains tax over the 10 year note that we'd agreed upon at the 4% interest rate and kind of just, you know, park his money in that investment. So my question is, how do I, how do I do this? I don't want to burn a friendship. My wife wants me to just slap a check on his desk, but she doesn't have to play golf with him on Saturday morning. So I'm not really sure how to approach this conversation without, you know, so he basically. Friendship.

[Rachel Cruz]

Yeah. So he basically kept the mortgage in his name and you just pay him the mortgage payment and he pays for it?

[Alex]

No, we did it all legit. We went through a title and escrow company and we drafted up a purchase agreement and basically it's, it's just a loan from him. Basically. You know, I did a 20 down payment with him and I do pay him, you know, basically as the bank, but I am on the title, the deed, all that stuff.

[Rachel Cruz]

Okay, okay. So you're. So it is your home, correct? I mean, yeah, it's your home and he's just the bank is what that is seller financing?

[Alex]

Yes, correct. And I wish I didn't do this because now I'm in this situation, but yeah, basically when I brought up to him that, you know, you know, I owe him about 500,000 and you know, I have the ability will, once we sell this primary home to pay him off. But he just doesn't sound very excited about it. He wants to just go, per the terms of our agreement, pay it off over 10 years so he can, you know, expense that capital gains over the 10 years rather than he actually talk.

[George Camel]

To a tax pro to see if this loan or payment counts as income.

[Alex]

Well, he said that was for. Yeah, so. Well it does because he has to pay tax on the interest portion of it, I think. And then you know, on the principal, he's, you know, it's capital gains rate, I believe, because it was paid off, you know, for him. Yes. So to answer your question, yes, he said he talked to a CPA and basically if I pay it off, he will have to pay capital gains on the proceeds. Yeah.

[George Camel]

Is there anything in the contract that you signed with him that would prohibit you from just paying it off?

[Alex]

And that's the issue there's not it. I've read over it a hundred times and it's like legally and, and all that. I can, you know, go pay it off.

[Rachel Cruz]

Yeah. So boo hoo friends, here's your 500,000. I mean, did you have to pay taxes on.

[George Camel]

Did he not make money off of this? Did he not benefit from this whole thing?

[Alex]

No. Yeah, he's going to make a lot of money off of it. You know, he bought it 25 years ago, so he's going to make quite a bit. I guess my worry is that I'm either going to upset my wife or my friend. Right. Because it's like she or your life.

[Rachel Cruz]

Dust or your life you guys have freaking paid off $350,000 in debt. Like you guys are on a plan together for your life and you did this side deal with a friend and your life has changed and your priorities and your goals have changed and so sorry, friend. It's not like you're putting your friend in debt.

[George Camel]

Boo hoo.

[Rachel Cruz]

He gets $500,000 and he's gonna have to pay some taxes on it.

[George Camel]

You can wipe his tears with a hundred dollar bills.

[Rachel Cruz]

Like, sorry, dude. Right. And I'm being very insensitive. If I were you, I would feel much worse because it is a good friend. I just, I don't have a lot.

[George Camel]

Of empathy for this.

[Rachel Cruz]

I, I mean, yeah, Dustin, like the writing's on the wall. You have to do what's best for you and your family. It'd be very unwise to make an unwise financial decision for you and your family because of the feelings of a friend.

[Alex]

And so I guess that's, that's going to be a hard conversation I need to have with him and say, Listen.

[Rachel Cruz]

This is 100 and I think you can give him some time and say, hey, I'm not doing this tomorrow. You know, our goal is to do this in 12 months or whatever the goal is for you guys when you sell your primary home. All of that, like if you can kind of map out a timeline, give him some time and space and just say, hey, yeah, this isn't happening tomorrow, but it will be happening in the next year. And I looked over the agreement that we signed and I'm sorry, I know it's not ideal in your situation, but like, this is, this is our values and our priorities with our families to be completely debt free. And yeah, this is what we're deciding to do. And again, Destiny, you're not like completely screwing the guy. Like, it's, you know, what you mean.

[George Camel]

Okay, I'm not paying you the debt back. Yeah, sorry.

[Alex]

Yeah, he's a little older and that was part of it too is he's like, well, you know, and he gave me a great interest rate at 4%. He's like, well, you know, I can kind of guarantee to make my 4% of that money where any. Like I say he's a little older. In reality, he can just go park that in a high yield and make that.

[George Camel]

That was kind of the point I.

[Alex]

Was trying to bring up to him. And he, he just, he'll. I, he just didn't seem jazzed about it. And it put me in a weird situation where I'm like, Man, I don't want to, like, burn a friendship with a guy that I, you know, I've had a long friendship with, but at the same time, I'm not matching up with the guy.

[Rachel Cruz]

And I'll be honest, too. If you're a friend, I'm, like, trying to put myself in his position. Right. If I ever was in that deal and I had a young guy come to me and be like, you know, oh, my gosh, we're able to get out of this deal because we have the cash. We have the money. We're so excited. We're gonna be debt free. Like, you would hope that it doesn't burn a friendship that in fact be happy for you. He celebrates with you, and you know what I mean? Which I know, like, this way of thinking is different. To celebrate being thankful and be thankful.

[George Camel]

A friend paid me back, which is very rare in today's world. And the other thing, Dustin, is that when he loaned you this money, the relationship already changed. It turned into a business partnership transaction, and it moved away from friendship. And so this is what happens with friendship. So the truth is, if you pay it off and he decides to not be your friend, was he really your friend?

[Rachel Cruz]

Yes, George.

[George Camel]

You know what I mean?

[Rachel Cruz]

Sure.

[George Camel]

There's a piece of it, though.

[Rachel Cruz]

I know what you're saying. I know what you're saying.

[George Camel]

I would never friendship over them.

[Rachel Cruz]

Like, yeah, yeah, that's it.

[George Camel]

So that's what I'm saying.

[Rachel Cruz]

If. If he really, Dustin, is not your friend anymore after this, then like, to George's point, then he's looking to make money off of you. You don't mean, like, it feels weird if he, if he is going to cut ties with you as a friend because of this move? That's weird.

[Alex]

Yeah, that would be weird. I don't think that would happen. It's just, I guess I'm, you know, I. I hate to even say this. I guess I'm kind of just being a sissy about having the conversation because of the vibe I got when I brought it up, you know, a couple times over. And I even told, you know, my thought was just, let's just park our money that we make from the primary home in the. In a high yield and just pay him off. And then I kind of, you know, we're quote, unquote, we feel debt free. Ish. Because the money's there, but you're not. My wife says, you know, she's so excited because we did so good on the first, you know, six steps. Call it that. She's ready to just finish quote unquote finish the journey and be done.

[Rachel Cruz]

Yes. My listen to your wife does her.

[George Camel]

Vote counts 1,000 times more than any of my friends.

[Rachel Cruz]

And I love my and you have a little bit of that people pleaser in you, Dustin. I hear it and so yeah, this is, this is grown up stuff and be a man. Suck it up and talk to him. And again if he is weird after this because of this whole thing like that's a, that's a weird guy. Anyway I'm gonna add this to so bizarre.

[George Camel]

One more reason to not borrow money from friends.

[Rachel Cruz]

That's the new book and family.

[George Camel]

Yes, all of it.

[Rachel Cruz]

This is the Ramsay Show.

[Dave Ramsey]

This show is sponsored by Better Help. Hey everyone, listen. We all have stories. The family and cultural stories that we were born into. The stories of the things that have happened to us. Both the good stuff and the challenging stuff. And we have those stories that we constantly tell ourselves. And none of us can go back and change any of our old stories. But the world is waiting to see what each of us is going to write next. As we enter 2025, I encourage you to examine your old stories and be intentional about the new stories that you're going to write. And I'm not talking about making goals that are going to be long gone by February. I'm talking about writing new stories that will change your life and the lives of those you love for the better forever. If you're like me, therapy can be a great place to explore the old stories and heal from them and begin writing new ones. If you're thinking about starting therapy, I want you to consider my friends at Better Help. BetterHelp is 100% online therapy and you can talk with your therapist when it works for your schedule. You just fill out a short online survey to get matched with a licensed therapist and you can switch at any time for no extra cost. So start writing a new story this month with better help. Visit betterhelp.com DeLoney to get 10% off your first month. That's BetterHelp. H-E-L-P.com/ DeLoney.

[George Camel]

I still remember 10 years ago, 23 years old. I was frustrated, anxious and flat broke. I had followed all the ways that toxic money culture had led me down from well meaning parents and misguided guidance counselors and it left me with a pile of debt. But I'm telling you, it doesn't have to stay that way. Over a decade I went from broke to millionaire. And I break it all down in my new Book Breaking free from broken. I'm going to show you just how toxic this money system is and how you can break free from credit scores and credit cards and student loans and auto loans and investing traps and finally live a life that you're not exhausted by. A life with more margin, more options, and more peace. If you want to check out the book, go to ramseysolutions.com store to get your copy of Breaking Free from broke. That's ramseysolutions.com store.

[Rachel Cruz]

Welcome back to the Ramsey show. Up next, we have Ethan. Oh, we have Mike. Sorry, Mike in Asheville, North Carolina. Hi, Mike. Welcome to the show.

[Mike]

Hey, how are you all doing? I got a good one for you.

[Rachel Cruz]

Okay, perfect.

[Mike]

So we Covid hit. We had. We did a big remodel. It was about 100,000 that we've invested to create home offices. As a result, we kind of credit carded everything and we've been living paycheck to paycheck for a while. And I just lost my job this week. We were trying to do a refinance and that fell through. And so long story short, we went from about 195k in income to about 65. And looking for advice. And we cannot sell the house because it's under remodel. We're not allowed to sell it for at least a year. And the remodel is not quite finished.

[George Camel]

Oh, boy. Okay.

[Rachel Cruz]

Is that more than just getting the two home offices during COVID y'all done more remodeling?

[Mike]

Yeah, it was extensive. We kind of expanded the second floor and just with the goal of ultimately selling. But it's obviously when I lost my job, it was kind of a deal where it kind of put the brakes on everything even more, you know, after living paycheck to paycheck. And so we're obviously doing it the wrong way. So looking for advice on how to.

[Rachel Cruz]

Get out of this.

[George Camel]

How much more debt do you have? What's the total amount? And break it down for us.

[Mike]

Okay. So the mortgage is 202. And we have things like cars and credit cards and a lot of that is just due to the remodel, but it's a 210,000 and other non mortgage debt.

[George Camel]

Oh, my goodness. Well, we can sell the cars. What do the cars have to do with the remodel?

[Mike]

They don't. Yeah. So the cars were paying. One of them is 394, the other one is 380amonth.

[Rachel Cruz]

How much are they? Are they. How much do you owe on the cars? How much debts on them?

[Mike]

Approx.

[Rachel Cruz]

Yeah.

[Mike]

Approximately 28 in total.

[Rachel Cruz]

Okay, break them down. What's the. Each one each?

[Mike]

Well, so one of them is about 13, 5, the other one's 15.

[George Camel]

Okay, I'm confused. You said you had 210 in other debt and only 28 of that is cars. You're saying the rest of that is credit card debt?

[Mike]

Well, unfortunately, we had like a foundation loan, a bunch of its credit card of a student loan, about 20,000. And I think. Yes. The rest of it is either small loans like through Home Depot or credit cards. Correct.

[George Camel]

And what were you doing for work where you guys were making about 200k?

[Mike]

Software developer.

[George Camel]

Okay, and what are you doing now?

[Mike]

I am looking forward, but I'm going to work on some certifications. I took a job that wasn't ideal for obviously my career and skill set, and so that's something I'm going to be working on is some probably Azure certifications.

[George Camel]

Are they going to cost money?

[Mike]

A little. The test, the actual certification Exam is only $165.

[George Camel]

But then you need to. Is there some kind of online education you need to get that will cost money or can you just do the certification test?

[Mike]

I can. There are some sample tests and some certification videos that are very helpful, but it's minimal. Minimal charges, if any.

[George Camel]

And how quickly do you think you could get a job making six figures as a software developer?

[Mike]

Well, I've applied for a bunch of jobs already, but it's a matter of finding the right fit. I would like to focus on the skill set to some extent, but probably in two weeks I would be able to pass that certification.

[George Camel]

Okay. If I was in your shoes, Mike. Right. Fit is a. Would be a luxury and a privilege. Right now. I'm going. Who is willing to pay me $100,000 to write some code? And I'm going to do that so I can survive. Because right now I don't see a way out of this. With your monthly payments and your income, you guys are going to continually go into debt.

[Rachel Cruz]

Is your wife working, Mike?

[Mike]

Yes.

[Rachel Cruz]

Okay. Is she making the 65?

[Mike]

Yes.

[Rachel Cruz]

Okay, so if you made a hundred, then you guys could get back up to 165.

[Mike]

Yeah, I was at. I was at 130, but yes.

[Rachel Cruz]

Okay. Yeah. So I mean, ideally replacing that completely like what you're saying. And then. Yeah, I mean, and then from there, Mike, it's just a complete overhaul and mindset shift and change on how you guys have been viewing money the way you. And you said it at the beginning of the call. So I'm not telling you anything you don't know, but the way you've been doing it, it has to be the complete opposite. So this is cutting up credit cards. This is. I mean, if any of your cars have equity in them, I would just sell them and get a $5,000 car. I mean, I would do the complete opposite of everything I've been doing up until this point, because that's where you're actually going to start to see some progress. And I really feel like, Mike, you guys need some quick wins in here. Yes. You. The income is number one. But I would be. I would be cutting up credit cards tonight. I mean, no more. No more. Like, you guys are not in a place to even have them around because so much of this is credit card debts. And I know it was all in, you know, because of the remodel. But the. But the. But the whole mindset. Yeah. Of going in when you don't have the money, it just. That that can't be it anymore. And then, you know, walking through the debt snowball of paying off and breaking all these out, too. So when you say, yes, some of these are credit cards, breaking each specific credit card out. So you guys may have a long list of debts, but as you start knocking these out, that's where that momentum starts.

[George Camel]

Are you guys able to stay current on payments right now?

[Mike]

Well, we had a small severance, but it was only $5,000. And so our current just. Our debt load is like a little over $6,200 for the month. And so the money we've got in hand will last a month.

[George Camel]

Yeah. I mean, you guys are. You're on the edge of running out and going back into more debt. And so can you do three side jobs this week?

[Rachel Cruz]

Yes.

[George Camel]

Doesn't have to be software. It could be instacart shipped, Uber handyman. Whatever skills you have, go do it to bring in something while you look for that.

[Mike]

I had one job where I picked up some work to do some light remodeling for a lady, and that was $530.

[George Camel]

So you're pretty handy.

[Mike]

I've collected about half of that.

[Rachel Cruz]

Yeah.

[Mike]

I mean, I'm doing the remodel myself, so. Yeah.

[George Camel]

Okay. Well, today we start Mike's handyman business. And you're going to charge 50, 60, 70 bucks an hour and put it on your neighborhood Facebook group and hand out some flyers and go, I'm doing good work, and I show up on time and get referrals, word of mouth, and get this business going and do as much of it as you can until you get that next software developer job.

[Mike]

Okay.

[George Camel]

That's what I would be doing if I had your skill set.

[Rachel Cruz]

Yeah. And I think what's hard, Mike, is there's a level of like deep humility that you're gonna have to have in this process because between now and getting your new job, making anything and doing work that maybe you never thought you would be doing is, is what's necessary right now. Right. Because I don't want you guys like what George was saying to get behind. So bringing in a thousand, two thousand, three thousand a month on numerous things that you're pairing together and you're working late. I mean, do you guys have kids at home?

[Mike]

Yes, two.

[Rachel Cruz]

How old are they?

[Mike]

Yeah, so 14 and 17.

[Rachel Cruz]

Okay.

[George Camel]

Do they know about any of this? I'm sorry, do they know about your financial situation at all?

[Mike]

To some extent, yes. High level.

[George Camel]

Okay. It might be good to sit down with them and have a hard conversation and say, listen, the next year or two it's going to look different for our family. We used to go do stuff and eat out and do all these sports and right now we got to really tighten up and get, get out of this financial mess. Here's what that's going to look like.

[Rachel Cruz]

Yeah. And even if your wife can work overtime, Mike too, I mean I would be doing that. I mean again, income is going to be your best bet. And then cutting lifestyle with George is saying, and it's going to be. Yeah, I mean, I mean if you guys, if you get back up to that 195, I would be living like I made 80 because the 65,000 is covering the bills basically per month. Right. I mean, I mean living on, seriously on nothing. And that's, you could, you could really turn this around if you could throw, which sounds wild, wild numbers here, but if you could throw a hundred grand a year out of that non mortgage debt. Yeah. I mean seriously, I mean there's, there's some changes. You can, yeah, selling the cars, getting rid of what you can, selling stuff to my. Go around your house, sell all the crap. You guys, you know that you have doing what you can. But if you hold on the line, Taylor's gonna pick up and we're gonna give you financial Peace University. It's our nine lesson course. And you and your wife sit down together and even your kids and watch this. You guys binge that this weekend because yep, life's gonna look different in the household. And that's exciting, Mike, because that means you're going to be winning.

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[George Camel]

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[Rachel Cruz]

Today's question of the day is brought to you by WireFi. Now, we don't recommend refinancing on everything, but for distressed private student loans, there's Y Refi. And we trust Y Refi because they help you with a low fixed rate interest rate that you really couldn't get anywhere else. And it's going to help you stick to your budget and get out of debt. So learn [e-mail] Ramsey that's the letter y r e f y.com Ramsey may not be available in all states.

[George Camel]

Today's question comes from Matthew in Idaho. My wife and I are millionaires. After years of working through the baby steps, in the beginning, it was exciting. The baby steps happen fast and our children learn to have Christmas on a budget. But once we got to the point where we had an emergency fund, the house was paid off, and we were building wealth, everything just started to seem very routine and boring. How do we keep the excitement going in our financial lives? If there was ever a Rachel Cruz question, this would be it. You were made for this question, George. You are so good about keeping your financial life excited. Yeah. Because you're the spender. You're like, I've got some ideas.

[Rachel Cruz]

Yeah.

[George Camel]

And they're, they're like, he's like me. He's like, well, I like a financial goal. We saved the thing. We invested the thing but now, what goals? Now you have to actually figure out, like, who you are.

[Rachel Cruz]

I'm kidding.

[George Camel]

Find hobbies.

[Rachel Cruz]

That's right. Okay, so I always go back to this because it's so spot on, and I agree with it a hundred percent, and it's science. But Arthur Brooks talks about what you can do with money. Five things and four bring happiness, and one does not. So this is what I would say to him, to Matthew. You can give, which brings happiness. You can save, which actually brings happiness because it shows progress. You can buy experiences with people you love, and that brings happiness. You can buy your time back and then use your time well spent, right? So if you have someone mow your lawn, have them mow the lawn, but you get time back, but go work out or, like, go do something productive. And then number five, you can spend money on stuff, but that does not. That does not produce joy. And then, Ramsey, we always talk about, you can give, save, and spend, right? So kind of using that framework, if I were you, Mike, I mean, if there isn't a big goal out there. And I would say Winston and I, we've kind of gotten to this place. Our house was a massive goal that was in 2019. And then we made it a goal for a pool, and we actually were finished.

[Lee]

We're done now.

[Rachel Cruz]

I know. So that. Well, we took. I mean, it took us probably five years to save for that. And so now we're at this point when we were planning our 20, 25 of like, okay, we don't really have a big financial goal in place. And I would say that for a time period, I think that's okay because we shifted the excitement and, like, hey, what's the next thing to some of those things Arthur Brooks talks about? So, like, plan a fun trip with your family. Like, have some experiences with them. Give someone a trip, right? If you have the money. Like, are there people in your life that you could bless them of? Like, oh, gosh, this couple really helped us walk through some hard times, and we want to give them a weekend away, right? And, like. Like, what are things you can do? And then the giving aspect, which Winston, I even changed some of our giving goals this year. And we are. We, like, have a percentage now in our every dollar budget that is above our tithe, above everything else we do. And it's spontaneous giving, and we're gonna force ourselves every month to do it and to say, yeah, like, where can we give spontaneously to someone throughout the month? If we hear a story, if we experience someone, you know, at a Restaurant, a waiter or waitress, like, give an insane tip, like, what are ways we can do that? And that fueled my excitement, George. Like, when we planned all this out a few weeks ago, as we were kind of talking through the year, it was like, okay, we don't have a big goal, quote unquote. We're saving for there' maybe step eight. Yeah, yeah, but. But we're being more creative with our giving, which does make it more exciting. We are going to travel some this year, so we put that in the budget. So. Yeah. So, like, leaning in on these things that actually will bring you joy. And I'll probably, you know, buy some shirts from Abercrombie. You know, it's just what I do. But overall, like, where do we put our time and our energy and our money? Put it in the stuff that's going to bring you joy and excitement. And for me, that's, that's giving and experiences. But that's probably just my personality.

[George Camel]

No, you. You nailed it. I think there's usually a flat tire situation when you're really good at saving and investing, and then the giving side usually is a little lackluster and you have a hard time just spending for fun because it feels frivolous after everything.

[Rachel Cruz]

You speaking out of your experience, George.

[George Camel]

This is George, this is me. I'm working on my flat tire. Rachel. Trying to spend more, enjoy life a little more. But I relate to Matthew's situation because the baby steps are so great, because it gives you a very exact process. If you do this thing, you'll hit this goal and then you get to baby step seven. And it's a choose your own adventure of live and give like no one else.

[Rachel Cruz]

Yes. Yeah.

[George Camel]

And so that's where he has to figure that out for himself. And maybe that is. We need to find some hobbies. Maybe I'm going to try golfing or I want to get back into this thing that I used to love as a child and I really need to pick back up piano lessons.

[Rachel Cruz]

Yes.

[George Camel]

Whatever thing is for you and your family and go, hey, this is something we never thought we would do. Or back in the day we were like, nope, we can't do that.

[Rachel Cruz]

Yeah.

[George Camel]

What can you say yes to now? That was a no five years ago.

[Rachel Cruz]

Yes. That's good. That's really good. Make that list. Yeah. Of what are things that we. Yeah. We can do.

[George Camel]

And you got. You and Winston just did your annual dream date recently.

[Rachel Cruz]

Yes, that's what I was talking about. Yeah. And we had the. We had, we had every dollar for Our monthly budget up, and then we had Excel. And Winston has all these crazy formulas of like, implementing taxes and he has all this, like, he does it all. And I'm.

[George Camel]

I gotta get that spreadsheet from Winston. I know some new formulas in my life.

[Rachel Cruz]

Yeah. And that's the interesting thing is people really do. You know, on the show we talk about, you know, for a lot of listeners and for those of you that are new to the baby steps, a lot of people are starting out ON BABY STEP 1. They're just trying to get that thousand dollars and pay off debt, right? But this, this long journey of money, I always want you guys to hear from us on this show that the goal of building wealth and being in a really secure place in baby step seven, where you don't even have a house payment, your house is paid for, retirement's being funded, like all of that. It's not just to continue, just to get more and more and more and more and more and more and more. Right? It. There is an outflow that needs to happen. You need to do things with your family, give to others, give others great experiences in life. Like, there is something about using money as a tool. It's not something to hoard and to keep, but you're doing this to leave a mark on the world. I mean, there's something beautiful about that that I think is really innate and how we're created. And so leaning into some of that because I do think there can be this mindset maybe early on, you know, maybe baby steps like 4, 5, 6, where there's like, my goal is just to like, get money, get money, get money, get money. Which, right. You're, you're funding retirement, you're wanting stability. But there's been listeners here that have been with us for 8, 9, 10 plus years that are baby steps millionaires. And they're like, yeah, and they're on the other side. And the ones we talked to that have this joy about them, this countenance about them that we meet, it's because they've been able to do some cool stuff. And every now and then they'll drop their story to us, you know, of things they get to do. But I don't know, there's something about this whole idea of building wealth. It's not just to build wealth. It is what you do with that wealth that brings you a level of joy and happiness and how we're created.

[George Camel]

Beautifully said, Rachel. Gosh. No notes, no notes, no notes.

[Rachel Cruz]

So, Matthew, spend some money, go on a great trip and, and Be a generous giver. Go find things that bring you joy with giving, because that's. That's the best. All right, George, there are some social questions that we get all the time.

[George Camel]

I love a social question.

[Rachel Cruz]

Yeah. When it comes to. I do too. I don't. I don't see them on there. Do you have your.

[George Camel]

They did not give. We are missing our social question. Okay, I got one.

[Rachel Cruz]

You got one.

[George Camel]

All right, here we go. You ready for this one?

[Rachel Cruz]

Yeah, shoot.

[George Camel]

Zach from TikTok asks, How much is enough or normal to spend on an engagement ring? I want Rachel's opinion on this so badly. I don't think I've ever talked to.

[Rachel Cruz]

You about this Isn't like the jewelry people out there. Don't they say three months and we say one?

[George Camel]

Generally, we'd say one month salary is like a top.

[Rachel Cruz]

Sorry, one month salary. That's what I meant.

[George Camel]

Yeah, but three months out there, I think like Zales and I think they.

[Rachel Cruz]

Usually say a three.

[George Camel]

Every kiss begins with K. Came up with, like, it should be 17 months of your salary. That feels.

[Rachel Cruz]

I think it was. I think it was the diamond company, like the people that did the diamonds, you know, decades ago, De Beers or whatever. That's it. I was like. I don't want to mispronounce it, but I think they came up with the three month salary rule. And we'd say pull that back a little bit. A month. I think a month is great. But let's. Yeah, the weddings, engagements, rings. It is expensive. George, I'm. I'm glad that I'm out of.

[George Camel]

Out of that season.

[Rachel Cruz]

Because nowadays, like, what people are spending. To be in weddings, to go to all the stuff. I mean.

[George Camel]

Well, and then the comparisons. Can I just be honest? It's the women on women comparisons of. Oh, let me see the ring. Oh, that's. That's cute. You know what I mean? Like, the guys don't care. No man has ever cared. No, it's just like, we don't want the woman to be upset. Are they gonna know it's from the lab and not a blood dime?

[Rachel Cruz]

Oh, yeah. What do you think about.

[George Camel]

Yeah, I could. To give a rat's toot about where the. Like, if that's what you're basing this marriage on, what was it? Did they work hard for the diamond or did a laboratory don't care get a moissanite? It's about the beauty of the ring and does it match her personality and.

[Rachel Cruz]

Does it make sense financially? Because that is an industry that you can Spend so much on my wife's.

[George Camel]

Ring was not that expensive.

[Rachel Cruz]

There you go.

[George Camel]

It's not a blood diamond. I'm not even sure it's a real diamond, Rachel.

[Rachel Cruz]

Even like you say, it was just.

[George Camel]

A beautiful, beautiful ring. That's what they call them. I don't know what else to call them. Lab grown versus nature found real. Right?

[Rachel Cruz]

I mean, it's like a. An actual producer.

[George Camel]

Kelly is. She's showing her ring. Going real. That's the. That's the word you're looking for.

[Rachel Cruz]

This is the Ramsay show.

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[Rachel Cruz]

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[George Camel]

I got my appointment. Do you have your appointment?

[Rachel Cruz]

There you go. You know, that's the free spirit. And Rachel Winston, really, I'm sure it's coming. I get usually the email of the like, like invite and all the things.

[George Camel]

Oh, that's nice that he at least invites you. You're on the calendar. Invite in there. Yes, I do the same, but for Whitney.

[Rachel Cruz]

Oh, see, there you go. There you go. It's great. But you can go to ramseysolutions.com text bro to get someone in your corner today. All right, next up, we have Morgan in Kansas City. Hey, Morgan. Welcome to the show.

[Morgan]

Hi, Rachel. Hi, George. Thank you for taking my call.

[Rachel Cruz]

Absolutely. How can we help?

[Morgan]

Well, I'd like some guidance today on how to navigate my brother in law with tragedy. Excuse me if I get emotional. On January 14, my sister in law passed away unexpectedly.

[Rachel Cruz]

Oh, my gosh. Morgan. That was just, what, two weeks ago?

[Morgan]

Two weeks ago. She's 38 and they have three children. And it's been pretty tough.

[Rachel Cruz]

I'm so sorry.

[Morgan]

Oh, thank you.

[Rachel Cruz]

That's heartbreaking. So what, how are they. How are they doing?

[Morgan]

As good as they can do for right now. They have three children, 15, 5 and 2. The 15 year old is from a previous relationship. So I think financially her father is able to provide a lot. But to be honest, they weren't prepared. I mean, nobody is, but he's kind of in a financial mess.

[Rachel Cruz]

Okay.

[Morgan]

So I have a few numbers. I don't have all the details because it's still very fresh.

[Rachel Cruz]

Okay.

[Morgan]

But I've gathered a few things. To my knowledge, they don't have very. I don't think they have any savings.

[Rachel Cruz]

Okay.

[Morgan]

Bought their house two years ago for 170,000. I believe their mortgage is fourteen hundred dollars a month.

[Rachel Cruz]

Okay.

[Morgan]

I think he makes. They both worked for a trucking company. I think he's in like the 70 to 80 range.

[Rachel Cruz]

Okay.

[Morgan]

And I believe she was about 60 to 70. So he's losing half of her income.

[Rachel Cruz]

Yeah.

[Morgan]

And also she was getting seventeen hundred dollars a month in veteran benefits. And I. They did not pay for the survivor.

[George Camel]

No survivor benefit. So she, they had.

[Rachel Cruz]

Did she have any life insurance on her?

[Morgan]

I think she had a small policy through her work. Maybe 20,000. No. Will they have 15,000 in credit card debt? Two cars. One has a small loan. I believe it's her car.

[Rachel Cruz]

Okay.

[Morgan]

And she may have a small 401k.

[Rachel Cruz]

She may.

[Morgan]

My question is she might. I'm not sure.

[Rachel Cruz]

Is that him wondering if he does if, or is it you just saying she might?

[Morgan]

Me wondering because my wife and I have been following the Dave steps for years. So we're on 4, 5 and 6. So my brain automatically went to. Right up the baby steps. I was just trying to gather everything I have.

[Rachel Cruz]

Yeah.

[Morgan]

So that is kind of a high level overview. So I don't know. You should take her life insurance and just try to walk up the baby steps. I don't know if. Credit cards that are only in her name. If I should tell him to stop paying because autopsy results are pending. And so we may not get the death certificate for about two months. So I don't know if he can do much of anything until we get a death certificate.

[Rachel Cruz]

Yeah. Oh, Morgan, I'm so sorry. So in these kind of situations, when there's something so unexpected and so tragic, we. We usually advise the families not to do anything major for probably about 12 months because there is.

[Morgan]

And that's why I haven't asked these questions yet. This is just kind of what I gathered because this is. I mean, this is so heavy. It's just pure grief.

[Rachel Cruz]

Right, right. One, he's, and he doesn't, I mean, he can't even probably, you know, put together a thought. And so for you just to kind of be a side support, right. And at least be able to gather and do, you know, some level of work for him is such a gift. Morgan, I mean, I mean, honestly, you're, you're, you're giving them such a gift by even kind of navigating this part of their lives. Because everything. Yeah, I mean, I just, I can't even imagine. So I, you know, I wouldn't do anything again, big from a decision standpoint unless they get to a point where there is something big. Right. If they get six months into this and he can't pay the mortgage and they're, you know, you know, there's, you know, foreclosures pending or like something like really big. Right. Then we have to make some big decisions. But whatever I think he can do to the degree of staying somewhat afloat for a year, maybe some small things and we can maybe talk to you about those here on this call. But, but overall, I wouldn't make any, any big, big decisions. So I think because again, the emotion, you just can't see straight.

[Morgan]

You know, she handled all the finances. So he's trying to just open bills. What accounts do we have? I mean, he's starting from scratch, so it's, it's just tough all around. So that is kind of where he's starting. Like he said, you know, I'm going to Verizon today to get my name.

[Rachel Cruz]

On all the accounts.

[George Camel]

He's on a scavenger hunt while graving.

[Rachel Cruz]

I mean, that's, that's the hardest. Yeah, that's the hardest part is that life continues on right in the middle of all this and you're like, I have to be a grown up and.

[George Camel]

Like, kids still need food.

[Rachel Cruz]

Do this. Yeah. I mean, oh, oh, so terrible. Okay, so, yes, I think you know your gut on starting to kind of just like put the baby steps in place. That plan, I think is, is a good one. Again, I would, I would take, you know, find the life insurance. I would get as much concrete information as you can because that's going to help you guys navigate this. But for him, I mean, he, to get him to live on 70k and be comfortable there probably will mean offloading some of this debt so that he, that they, so that they don't have all this, you know, these payments. And I would have, you know, him look through every account Possible to see if there's any savings. And, and I, and I would probably start working on, you know, paying off maybe the. These smaller debts. If they do have credit cards.

[George Camel]

Sell her car.

[Rachel Cruz]

Yeah.

[George Camel]

And get rid of that loan in the meantime. That's a short term thing. That could relieve some pressure here. And then with the credit card debt.

[Morgan]

Only in her name.

[Mike]

Yeah.

[George Camel]

If they're only in her name, he may not be liable for them. Just depends on how things are set up. And will the estate pay it out of her assets and there's his name on that. And so that's. I can't tell you for sure.

[Morgan]

They can. I mean, technically they can come after those things they're not going to go.

[George Camel]

After like the mortgage or her retirement accounts. But if she has any other assets that can be used to pay this down, they will use that. But I would not be in a rush to pay off this credit card debt and I would not let the creditors pressure him and lie to him and say, no, you need to pay this today. Do send a copy of the death certificate to the credit card companies. Once you get those, get a bunch of copies, probably 10 copies minimum to send to all the creditors involved.

[Rachel Cruz]

So these credit cards are in just some, some of them are just in her name, Is that what you're saying, Morgan?

[Morgan]

I think they might be okay. I think a handful might be.

[Rachel Cruz]

And I would pull her credit report and his just to verify and make sure that. Yeah, that that information, you had a.

[George Camel]

Lay of the land and you can do that for free. You can have them go to this website. Annual. Annual. CreditReport.com I believe is the site. And you can pull. And don't ever pay to get this pulled.

[Morgan]

Perfect.

[George Camel]

Yep, there it is. AnnualCreditReport.com youm can pull from all three bureaus and get a real picture of. Here's the reality of where we're at. And now we know the next steps and he's lucky to have you to help and clean up the pieces. And if we can help in any other way, let us know. But this is just one of those reminders to everyone else listening. Get a will in place today. It's not going to cause you to die any sooner, but it will cause your family to just grieve your loss instead of also lead you on a scavenger hunt. And guess.

[Rachel Cruz]

Yeah.

[George Camel]

And have the government decide what happens to your stuff.

[Morgan]

May I address your listeners for just one minute, please? Excuse me for getting emotional. Get this done, guys. Because instead of just being able to grieve, Take three months off work, six months off work, take the children on a trip. He's in a financial mess. So on top of grief, there's headache, frustration and stress. Please, this stuff happens every day. I know. Excuse me. None of us think it's going to happen to us until it does. So if anything, just get enough life insurance to cover these things while you clean up the babysit.

[George Camel]

Well said, Morgan.

[Rachel Cruz]

I know.

[George Camel]

Thank you so much for it's. It's not easy to go on radio like this and share.

[Rachel Cruz]

Yeah. I'm so sorry.

[George Camel]

Everyone listening, including us. We're thinking of them and praying for them.

[Rachel Cruz]

Yeah.

[George Camel]

And wishing them the best.

[Rachel Cruz]

And just to continue on what Morgan's saying, we believe in this so much, you guys. To get your wills done. Xander, insurance for life insurance, get 10 to 12 times your annual income. If you're a stay at home mom, you need half a million at least on you get life insurance today. Morgan, we're praying for you guys. George, thanks for the hour. Thanks to everyone in the booth that's making it happen. Thank you, America. We'll be back.

[Dave Ramsey]

The right questions are the key to unlock personal and professional potential. That means if you're not where you want to be, you are not asking the right questions. I'm Ken Coleman and this is what my new show Front Row Seat is all about. Over my career, I've had the distinct privilege to interview successful people from all walks of life and to coach over 10,000 professionals who wanted more. What sets successful people apart is a never ending desire to learn and grow. Each week I'll be joined by industry leaders and world class experts to have a conversation about how to get better, move up and lead well in work and life. But the best part of this show is you get to be a part of the conversation. Live in studio will have a group of professionals just like you who have the power to ask questions and steer the discussion in real time. It's an opportunity to get real answers to real questions like how to make the right decisions, have hard conversations, live a balanced life and discover your next steps to growth. Join us every Tuesday for conversations that are guaranteed to surprise, challenge and inspire you. Check out Front row Seat wherever you get your podcasts.