Money Magnifies What’s Already Broken In Your Relationships

Summary

Episode Summary: "Money Magnifies What’s Already Broken In Your Relationships"

The Ramsey Show delves into the intricate ways financial challenges can exacerbate existing relationship strains. Hosted by George Camel and Jade Warshaw, this episode features insightful discussions with callers grappling with various financial dilemmas intertwined with personal relationships.

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1. Sarah from Montreal: Managing a Partner's Gambling Addiction

Timestamp: [00:59] – [08:17]

Situation:
Sarah reached out seeking guidance on managing her husband's finances after he confessed to a gambling addiction. Despite his lucrative income of $1.3 million annually, he has accrued $1.1 million in debt over the past decade, encompassing unpaid taxes, a mortgage line of credit, and personal loans.

Key Discussions:

• Financial Control: Sarah had previously kept finances separate due to her husband's reluctance to merge accounts.
• Debt Breakdown:
  • Due taxes for 2024: $64,000
  • Provisional taxes: $550,000
  • Mortgage line of credit: $438,000
  • Personal line of credit: $125,000
• Protective Measures:
  • Removing her husband’s access to bank accounts and limiting his credit to a single Visa card for essentials.
  • Freezing his credit to prevent further borrowing.
• Therapeutic Steps: Both Sarah and her husband are undergoing individual and couples therapy.

Advice Given: George emphasized the importance of "putting as many guardrails as possible" to prevent further financial damage, including freezing credit and reassessing joint financial ties. Jade recommended prioritizing tax payments and adopting a debt snowball approach, focusing on smaller debts first to build momentum.

Notable Quotes:

• Sarah: "I was totally, totally shocked. And I think I'm still under the shock because this has affected me also." [03:45]
• George Camel: "At this point, what level of surprise were you?" [03:28]
• Jade Warshaw: "Do old ones first and then once you clear those, then, yeah, start doing the prep for the next year." [07:03]

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2. Jennifer from Grand Rapids, Michigan: Adjusting Savings for a Child's Schizophrenia Diagnosis

Timestamp: [21:47] – [30:20]

Situation:
Jennifer, a saver in Step Seven of the Ramsey Plan, faces new financial uncertainties after her 21-year-old child was diagnosed with schizophrenia. This diagnosis has led to increased medical expenses and hospitalization costs, prompting her to reconsider her savings strategy.

Key Discussions:

• Medical Expenses: Ongoing treatments and side effects like akathisia are straining her finances.
• Savings Strategy: Jennifer has $20,000 in savings but is unsure how to allocate funds to cover medical costs without jeopardizing her investments.
• Future Planning: Discussions about Social Security Disability Insurance (SSDI) and long-term care planning.

Advice Given: George recommended establishing a "sinking fund" by reallocating a portion of her savings monthly to cover anticipated medical expenses. Jade advised prioritizing her HSA and emergency funds while gradually adjusting her budget to accommodate the new financial demands.

Notable Quotes:

• Jennifer: "How should I shift my savings goal with my child's new diagnosis?" [21:50]
• George Camel: "You never go into debt for this. You never have medical debt. It's one of the leading causes of bankruptcy." [27:15]
• Jade Warshaw: "It gives you plenty of time to continue to apply for his SSDI or whatever is available to him." [26:42]

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3. Clay from Tampa, Florida: Deciding Between Selling or Expanding Family Land

Timestamp: [44:33] – [73:14]

Situation:
Clay, engaged and planning to start a family, grapples with the decision to either sell a family-owned property valued at approximately $900,000 or take out an additional mortgage to expand the existing 12-acre home to accommodate a larger family.

Key Discussions:

• Emotional Attachment: The property has been in Clay's family for five generations, making the decision emotionally charged.
• Financial Implications:
  • Selling the property could yield around $600,000 after taxes, allowing them to purchase a new, larger home outright.
  • Expanding the current home would require taking out another mortgage, increasing financial liabilities.
• Family Dynamics: Selling might disappoint extended family members who have strong ties to the land.

Advice Given: Jade advised evaluating long-term family goals and considering selling to avoid future financial strain, while George suggested assessing the true return on investment (ROI) of expanding versus selling. Both emphasized prioritizing financial stability over sentimental attachments.

Notable Quotes:

• Clay: "Do I want to owe $400,000 on this property to get my house to where it needs to be?" [47:28]
• George Camel: "If it's not going to ROI for you, and at that point it's just an emotional one to not upset family." [47:38]
• Jade Warshaw: "Get that on paper. I think it's very clear." [51:30]

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4. Katie from Billings, Montana: Navigating Investment Opportunities with Significant Savings

Timestamp: [73:14] – [85:18]

Situation:
Katie, 31 years old, has diligently saved $360,000, primarily in CDs and savings accounts. She seeks advice on how to invest her substantial savings amid concerns over stock market volatility.

Key Discussions:

• Current Investments:
  • $232,000 in CDs at 4%
  • $116,000 in savings
  • $9,000 in checking
  • $1,200 in an HSA
• Investment Hesitations: Fear of unpredictable returns and lack of investment knowledge.
• Financial Goals: Desire to grow savings without incurring high risks, ensuring stability while maximizing returns.

Advice Given: George and Jade recommended diversifying investments by maximizing tax-advantaged accounts like Roth IRAs and Roth 403Bs, followed by investing in a diversified brokerage account. They emphasized the importance of long-term investing and considering professional financial advice to tailor investment strategies to her risk tolerance.

Notable Quotes:

• Katie: "I just don't know where to put it." [84:03]
• George Camel: "You don't want to put all of your eggs in one basket." [80:36]
• Jade Warshaw: "If you hold it for a long time, you'll see that annualized rate of return really did pull through for you." [84:00]

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5. Sam from Arkansas: Understanding the Severity of Different Debt Types

Timestamp: [107:05] – [113:03]

Situation:
Sam inquires about the relative severity of different debt types, specifically comparing credit cards and Home Equity Lines of Credit (HELOCs), and whether consolidating debt through a HELOC is advisable.

Key Discussions:

• Debt Hierarchy:
  • Most Severe: Payday loans due to exorbitant interest rates and predatory terms.
  • High Interest: Credit cards, especially unsecured debts.
  • Secured Debts: Car loans, which are tied to depreciating assets.
• Debt Management Pitfalls:
  • Consolidating debt into a HELOC can exacerbate financial strain by leveraging one's home, especially with variable interest rates.
  • Moving debt does not eliminate it but merely shifts the burden, often leading to further debt accumulation.

Advice Given: The hosts strongly advised against using HELOCs to manage other debts, highlighting the increased risk and lack of long-term financial benefit. They emphasized focusing on eliminating debt rather than restructuring it, and avoiding predatory lending practices.

Notable Quotes:

• Sam: "Are some worse than other types of debt?" [106:46]
• George Camel: "If it looks like debt and it smells like debt, it's debt. Just run away." [114:53]
• Jade Warshaw: "Debt is debt. Anytime you owe somebody money, you're slave to the lender." [106:46]

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Conclusion

Throughout this episode, The Ramsey Show underscores the profound impact that financial issues can have on personal relationships. Whether dealing with a partner's addiction, managing sudden medical expenses, navigating family inheritances, making large investment decisions, or understanding the nuances of different debt types, the hosts provide compassionate and practical advice aimed at fostering financial stability and healthier relationships. Key takeaways include the importance of clear financial boundaries, prioritizing debt elimination, and making informed investment choices tailored to individual circumstances.

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Notable Quotes:

• George Camel: "Putting guardrails in front of him... freezing his credit will prevent further borrowing." [05:57]
• Jade Warshaw: "Debt is debt... it's about attacking the behavior that got us there." [107:44]

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This summary encapsulates the pivotal discussions and advice offered during the episode, providing listeners with actionable insights into managing money within the complexities of personal relationships.

Transcript

[Ally]

Brought to you by the EveryDollar app.

[George Camel]

Start budgeting for free today. Live from the Ramsey Network, it's the Ramsey show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Camel, joined by fellow Ramsey personality Jade Warshaw. And we're taking your calls at 888-825-5225. Don't give us a call. It beats sending the DM. This is the way to get the help that you need. We are honored to take your calls. Sarah is going to kick us off in Montreal. All right. What's going on? Sarah, Hi.

[Ally]

Hi, Dave. How are you?

[George Camel]

It's George here. Sorry to disappoint. Is that okay?

[Ally]

That's no problem.

[George Camel]

Okay.

[Jade Warshaw]

It's a common misconception.

[George Camel]

Let me be nice. If she wants to jump off now, I don't, you know. No, we're happy to help, Sarah.

[Ally]

No, I'll stay on. So my question for you guys today is how do I manage my husband's finances? He told me two weeks ago that he has a gambling addiction, and how do I protect myself?

[George Camel]

Wow.

[Jade Warshaw]

Well, good on. Good on him for letting you know that this is going on, and good on him for understanding that this is the best route. So in the past, did he have full control over everything? So is this completely new territory for you?

[Ally]

So it is. We both have separate bank accounts, and we've been together for 11 years. So I've been wanting to, like, merge our finances a bit more together, but he was very reluctant, and now he has lost millions of dollars in the last 10 years.

[George Camel]

Lost millions? As in he had millions and then he lost it.

[Ally]

So he.

[George Camel]

Or is he in debt because of this?

[Ally]

No, so a bit of both. He has an annual revenue of 1.3 million. He's a specialist, so he makes good money. And I calculated he owes about 1.1 million that I have to pay or he has to pay in the next year or so in order to make sure that we don't get into trouble.

[Jade Warshaw]

So he is in debt to. Are they people or are they, like, reputable?

[Ally]

No, no. So it is past due taxes, provisional taxes, a mortgage line of credit, which I thought our house was paid, and he hasn't paid the mortgage line of credit, and he also has the personal line of credit.

[Jade Warshaw]

So how much is tax? Break it down. How much of the 1.1 is taxes? How much is the HELOC and how much is personal loans?

[Ally]

Okay, so the due taxes for 2024 is 64,000.

[Jade Warshaw]

Okay.

[Ally]

Provisional taxes for the upcoming year because we have to pay provisional taxes. So that's $550,000.

[Jade Warshaw]

Okay.

[Ally]

The mortgage line of credit is 438,000, and the personal line of credit is 125.

[Jade Warshaw]

Oh, boy. Oh, boy. And this has been going on over a decade?

[Ally]

Yeah, and he just told me that two weeks ago because he was like, I took over fully his finances, and he had, like, maybe $1,000 left in his bank account, and everything was maxed, so he needed help.

[Jade Warshaw]

At this point, what level of surprise were you? Because, I mean, a decade of. I mean, obviously this guy's got a crazy yearly income, but to look up and say, hey, by the way, I have 1.1 million of debt. Did you suspect that, or was this a complete shock? Tell us about you.

[Ally]

So I've been doing really well for myself and financially. I grown my network quite drastically in the last five years. So we were both. I was so transparent telling him how much money I was putting away, and I thought he was on the same train as I was. So I was, like, totally, totally shocked. And I think I'm still under the shock because this has affected me also. Even though our finances are not together because her plans were to buy a house in Florida, her plans were to do, like, I thought. I thought we were doing really well financially because I was doing really well, and he was telling me he was investing, too.

[Jade Warshaw]

Is he in therapy?

[Ally]

Yes. So we started couples therapy. I'm doing my own therapy. He's doing therapy also for his gambling addiction.

[Jade Warshaw]

Good.

[George Camel]

On the financial side, what. What joint accounts do you guys still have? Is your name on anything that's tied to him right now?

[Ally]

No, it's never been. So he gave me full control of his finances.

[Jade Warshaw]

What does that mean?

[Ally]

He has no more access to his bank accounts. He has a Visa that we decided that we're going to keep open for, like, groceries and gas.

[George Camel]

Is that a credit card or a debit card?

[Ally]

Credit card. Credit card.

[George Camel]

Okay. There's a problem.

[Ally]

I have his debit card. He does not have his debit card because he was gambling online with the debit card. I guess on the site, you can't purchase. You can't purchase with the Visa for gambling.

[George Camel]

So can we get him a new debit card?

[Ally]

We could.

[George Camel]

I think that's the right move here because you still have given him unfettered access to a line of credit with this credit card.

[Ally]

Okay.

[George Camel]

So right now we need to put as many guardrails as possible in front of him, and that also means freezing his credit so that he cannot take out another loan even if he wanted to. Okay, so you can contact the bureaus. I don't know how it works in Canada. In America, we have three credit bureaus. And you can go online and freeze your credit with all three of them. And that way nobody could open a line of credit in his name, including himself. You'd have to jump through some hoops just to unlock that.

[Ally]

Okay.

[Jade Warshaw]

Is he still making this income? You said revenue. I think of that as differently than profit. So is that income or does he have a business and that's his revenue?

[Ally]

So he has, he's incorporated. So this is like his incorporated. So he. Every, every month it's about $100,000, but we have to pay taxes on that.

[Jade Warshaw]

Got you. Okay, got it.

[George Camel]

So it is like a business. He's like a contractor, consultant type guy.

[Ally]

Exactly.

[Jade Warshaw]

And do you have now in place? Clearly there was not a plan in place to pay taxes on what he was earning. Do you have that plan in place now? Do you understand what you need to do? Is he setting aside orderly return? I mean, here it would be quarterly returns. I'm not sure what it is there.

[Ally]

It's the same here. So it is the same here. So I've only took over like two weeks ago. Three weeks ago. So I have like about $90,000 in his account right now. So I, I was thinking about how do I, how do I decide what to pay first? Definitely I want to pay the taxes that are due.

[Jade Warshaw]

Yeah, I would. If you were here in the States, I would always tell you to do taxes first. What's the difference between, Tell me what are you saying? Between taxes and provisional taxes. One's payroll, one's what?

[Ally]

So do taxes would be like he owes that from 2024. Provisional taxes. If you need to pay taxes for next year, because since it's such a high amount, you have to pay one year in advance in order for the government to make sure that you don't get backed up and happen.

[George Camel]

I imagine the backed up taxes are the more important ones.

[Jade Warshaw]

Yeah, do old ones first and then once you clear those, then, yeah, start doing the prep for the next year. And then I would go, yeah, do it in order. Like the debt snowball. Personal loans first, smallest to largest. I imagine they're broken up in little pieces. And then. Yeah, I'm attacking that. HELOC last. How much is your home worth?

[Ally]

Our home is worth 1.1.5. And he has a mortgage. Yeah, he has a mortgage line of credit of 438,000, which I thought was paid because the deal was that when we moved in together, since he had such high revenue, he was purchasing the house. Income, I should say he was purchasing the house. And then I would get, after 10 years, my name would be on it because it would be paid off. But it's not paid off.

[George Camel]

Oh, man, Sarah, there's so much beneath this. All of the lies, the deceit, a decade of this misbehavior. I hope you guys work through it. I hope you clean up the debt. I hope this marriage has hope. Thanks for trusting us for the call. This is the Ramsey Show. As an investor and a person of faith, when your mutual funds and ETFs put your money into the dark side, you might feel a disturbance. Well, good news. Timothy Plan offers investments for people who want to be intentional about where their money goes. As the pioneering force in biblically responsible investing, Timothy Plan entered the investment space to offer clean alternatives to secular funds that invest in stuff you'd never willingly expose your family to. And for more than 30 years, Timothy Plan has offered mutual funds and ETFs that won't contradict your values or sabotage your faith. So if you're serious about investing with a clear conscience, Timothy Plan could be just what you're searching for. Contact your financial advisor today to see if Timothy Plan is right for you or visit timothyplan.com for more information. Investing includes risk, including possible loss of principal. Before investing, carefully consider a fund's investment objective, risks, charges and expenses contained in the Prospectus. [e-mail] Read carefully before investing. Mutual funds distributed by Timothy Partners Limited and ETFs distributed by Foreside Fund Services, LLC. Michael's up next in San Jose. What's going on, Michael?

[Ally]

I'm doing very well. How are you?

[George Camel]

Great. How can we help today?

[Ally]

So my father passed a few months ago.

[George Camel]

And the thing is.

[Ally]

Thank you. And the thing is, he left everything to me. His house, his investments, his business. He didn't give anything to my sisters, who are estranged and with our mother, ever since my parents divorced and my sisters are like. They have asked me to help pay their student loans because my father left them with nothing.

[Jade Warshaw]

How much was it.

[Ally]

Combined? I believe they went to both undergrad and grad. So it's combined. It's about 300,000.

[Jade Warshaw]

No, how much was the. Yes, thank you for telling me that. But how much was the inheritance?

[Ally]

It's. It's a couple million. It's basically his house, his investment and his business.

[Jade Warshaw]

When you say a couple million is that like 2 million or is that like 6 million?

[Ally]

It's in the eight figures.

[George Camel]

Okay, so we're talking 10 million plus.

[Ally]

Yes.

[George Camel]

Okay.

[Ally]

Wow.

[George Camel]

Okay, so he purposefully did not leave any money to your sisters because he had no relationship with them, and that was his call to make.

[Jade Warshaw]

Are. Are they misbehaviors?

[Ally]

No, they basically. He basically cut them off because they sided with our mother during their divorce.

[George Camel]

Okay, so they're team mom. You were team dad. And he goes, hey, I'm gonna leave it all to my son, who' loyal to me.

[Ally]

Yes.

[George Camel]

Okay. And now they're resentful because they feel like they deserve a portion of this money?

[Ally]

It seems like it, yes.

[George Camel]

Okay. I think this is more relational emotional than it is financial. You could write them a check and pay off the loans, but I don't know that you agree with the principle behind it or that that would have been your father's heart.

[Jade Warshaw]

Well, yeah. What do you want to do? What's. What's your heart lean towards?

[Ally]

I don't want to disrespect my father in any way.

[Jade Warshaw]

Okay.

[George Camel]

Do you have a relationship with your sisters, or is it estranged as well?

[Ally]

It's estranged.

[George Camel]

Okay.

[Ally]

So they've only come to me only for very unique cases or like. Or when they were going to college or grad. They came to both my father and I for money. My father. I know. I was there. My father refused to pay for them, and that's why they have the debt to begin with.

[George Camel]

So it's been transactional this entire relationship.

[Jade Warshaw]

But can I ask? Because here where I'm sitting, and you've given us. Thank you for sharing what you've shared so far, what I'm trying to weigh. And, George, I don't. I don't know how you're looking at this either, but I'm trying to weigh if this was a decision that was made out of dysfunction, which is, I'm forcing you to choose sides, and you guys are children, so you're choosing whatever, I don't know, the parent you like the most that day, you know, that sort of thing. And is this your father, you know, having an. Kind of just an immature moment? Right. Or is this really a reason that is. With good reasoning behind it, of, hey, I cut them off because they were misbehaving in this way and they made these poor choices, or is it literally just simply, I don't like your mother anymore and they like her. You're dead to me.

[Ally]

So my mother had an affair. That's why they divorced. My sister sided with my mother because they like the affair partner more. And I sided with my father because he was my father.

[Jade Warshaw]

Got you. Okay, so you can't see how they would stand by someone who would do such a thing. Basically, yes, I understand. Okay.

[George Camel]

I think you're going to be resentful if you give this money. And I'd rather them be resentful towards you than you be resentful towards them.

[Ally]

Okay.

[George Camel]

There's no easy answer here. They're gonna hate you, but it sounds like they didn't like you to begin with. They just used you for transactional moments. And so I don't think this is gonna change anything. If you say that wasn't my father's wishes. I'm sorry.

[Jade Warshaw]

Listen, I got more to. I, I feel more to it than that. How, how, how old were you guys when this happened?

[Ally]

I was 17. My sisters were 15 and 13.

[Jade Warshaw]

That's interesting to me. I. Listen, I don't think there's a wrong or right to this. I really don't. It feels very extreme to me that I'm just, I'm not saying I'm right. I'm just telling you my thoughts. It feels extreme to me that a parent would put children in a situation where they have to choose and because some. Something about the situation made you guys feel like you had to choose. Right. And not really.

[Ally]

I mean, the thing is, I did not know about my parents affair. Apparently my sisters did and they said. And yeah, they said nothing.

[Jade Warshaw]

Which is not on your. That's not on your. The daughters. It's on the parent to not put them in the position to keep that secret. Like kids are kids. Teenagers. They're kids.

[George Camel]

A 15 year old doesn't have the emotional bandwidth to navigate that.

[Jade Warshaw]

Yeah. And probably thinks, oh, I'm going to be disloyal. Like they. Kids don't understand what role to play in that. Now looking back on adults, we can look back and go, maybe I should have done this, maybe I shouldn't. Who knows if they've done the right therapy to work through those things. I just feel that on a surface level to punish the children for a spousal misbehavior because the children didn't react in the way that the adults felt should have happened. I do struggle with that. I'm not saying you're wrong. I'm just telling you called in. So I'm saying I do have a little bit of a struggle. Struggle with that. It's not an error on your part. It feels like an error on the dad for saying, I'll. I'll show you, and kind of putting a lot of that sting and unforgiveness for what mom did on the kids. That's. I'm no. I'm no therapist, so that's just my two cents. This is tough. I'm not gonna lie.

[Ally]

So. Yeah. So my father, he suffered very greatly from the divorce fear, emotionally. I was. I know because I was there.

[Jade Warshaw]

Sure. Yeah. Rightfully so.

[Ally]

Gets into the alcohol. He dipped into alcohol for a while, but he built himself back up, you know, and he showered me with love and attention because I was the only one that he had. And I don't want to in any way disrespect his wishes. I think he had a purpose to. When he wrote his will, and he never changed it. I think he had a purpose to when he refused my sisters for his college. For the college. And that's only a drop in the bucket. There have been numerous instances where I know that my father has tried to reach out, especially when my sisters had.

[Jade Warshaw]

Their kids and they didn't want anything to do with him. So can I ask this question? Did they. Okay, he wrote them off because they followed Mom. Did they then write him off because he wrote them off? Was it. Do you see what I'm saying? Who wrote whom off first?

[Ally]

My sisters, definitely.

[Jade Warshaw]

And what was their reason for writing him off if he was completely an innocent party in all of this? I don't know. That's the part I'm trying to understand. It's one thing for them to be like, we still like mom. Like, we don't want this, you know? And for whatever their reasons were, they continue to have relationship with her. But what would make them completely disassociate from dear old innocent dad who did nothing wrong but love them?

[Ally]

It was basically, from what I understand, the affair partner was very charismatic. He bought them a lot of stuff. And this was back when my father's business wasn't successful.

[Jade Warshaw]

Okay.

[Ally]

I. So so much to say. He. He probably bought their love and affection.

[Jade Warshaw]

Got it. Got it. So it was a materialistic relationship.

[George Camel]

Here. Here's my final take on this. Again, not trying to play armchair therapist, but I think this. You're not ready to forgive your sisters and. And cause reconciliation. And giving them this money feels like you're taking that next step. Is that accurate?

[Ally]

I know that. The thing is that I want the old grudges to die. At the same time, I want to respect my father's wishes. And because my father was a God, fearing man. He was very devout. And I know that forgiveness is in the Bible, but I don't know, like, I'm. You're right. I am not ready to forgive them for the pain that they caused my father, neither my mother, neither my sisters.

[George Camel]

That's it. You just said it out loud.

[Jade Warshaw]

You're not ready to forgive. Don't forgive yet. But I think you should eventually. And my final take is I do think that him cutting them off was a little bit of dysfunction on his part, and I don't think that they necessarily deserved that. It doesn't sound like I wasn't there, but based on what you said, I don't know if I'd want to keep that dysfunction going.

[George Camel]

Yeah. And I want you to be giving out of joy. That's how giving should be done. Not out of. Oh, I just hate to be doing this with a clenched fist. So I'd read that Bible again and see if all that grace and mercy talk might eventually heal some of this relational dysfunction. So sorry.

[Ally]

Foreign.

[George Camel]

Hey, this is Dr. John Deloney for Churchill Mortgage. Good friends. I have bought multiple homes with Churchill Mortgage because they always shoot straight with me. They tell me the truth. So let me shoot straight with you. When you're getting ready to buy a home, the first step is not house hunting. It's making a plan. Don't settle for tapping a button and just talking to a bot. I want to encourage you to sit down with a guide you can trust. My friends at Churchill Mortgage, they actually see you, they actually care about you.

[Ally]

And they'll listen and learn your goals.

[George Camel]

And most importantly, they will tell you the truth. Churchill has loan experts who focus on you and your unique situation. So your journey ends with a home.

[Ally]

That'S a blessing, not a burden.

[George Camel]

Churchill Mortgage can even help you become a certified home buyer so that when the time is right and you find the right house, you're ready to make your move. I know the housing market is tough right now. I know. But you probably have more options than you think.

[Ally]

Churchill would love to help you figure.

[George Camel]

Them out, and they'll do it with honesty and integrity. Learn [e-mail] this is a paid advertisement in MLS. Id 1591 in mlsconsumeraccess.org Equal Housing Lender, 1749 Mallory Lane, Suite 100, Brentwood, Tennessee, 37027. This is the Ramsey Show. Jennifer is up next in Grand Rapids, Michigan. Jennifer, welcome to the show.

[Ally]

Hi. Thank you for taking my call.

[George Camel]

Absolutely.

[Ally]

Okay. I am a saver. I'm Frugal. And I've been saving many years. I am on step seven of Dave's Ramsey's plan. Awesome. No credit card debt. I own my home 25%, 401K, 529, et cetera. Wow.

[George Camel]

Incredible.

[Ally]

Okay. I have been dealt a family blow. I have children. And just recently my beautiful child has been diagnosed with schizophrenia. So my question is, how should I shift my savings goal with my child's new diagnosis? Because everything I've done is for them. And I'm kind of stumped. And I'm actually, you know, not sure what to do.

[Jade Warshaw]

Is this. So the financial side of this, first off, I'm sorry, that's got to be really tough to deal with. What does that mean, care wise? Is it something that there's a lot of appointments, a lot of therapy, and you're hitting your, you know, out of pocket max every year? What does that look like?

[Ally]

This is a recent. This is very, very recent. Has had hospitalizations, but yes, the medical bills are coming in. But he's 21, and obviously at 26, I can't keep him on my health care plan. I'm actually building a case for a possible. What is it, Social Security? I don't know. It's really hard to do, but I don't know how to plan for this. I mean, obviously you plan for your kids to do well emotionally, financially, and this has been a stump. And he's not doing well on medication. He has something called akathisia, which is the side effect that is actually as worse as the problem. He's staying in internal. Internal care.

[Jade Warshaw]

Okay.

[Ally]

So I, you know, he's not stabilized yet, but it doesn't matter. I mean, the bills are going to come and I don't mind paying, you know, the deductibles, but I need to know, what do I do?

[Jade Warshaw]

Oh, boy.

[Ally]

I'm not a millionaire. I'm not. Nothing like that.

[George Camel]

How much money do you have in savings right now?

[Ally]

I don't have. Are you talking 401k?

[George Camel]

No, just like a savings account. How much liquid money could you have access to without tapping retirement?

[Ally]

Well, I've been saving for my kids myself. Probably about 20.

[George Camel]

Okay, so $20,000. And what has the medical care been so far? What's that cost?

[Ally]

Oh.

[George Camel]

Has it been 5,000amonth, 500amonth?

[Ally]

No, right now we have pretty decent health care. It's.

[George Camel]

What kind of health care plan is it, Is it a high deductible health care plan?

[Ally]

No, it's a plan that will be discontinued soon. And it will have to go on my plan. But I probably paid, between ambulance and all that, at least a couple thousand in the last maybe six months.

[George Camel]

Okay, so let's just say for ballpark numbers that this is going to cost $1,000 a month. And every single month out of each paycheck, you put 1,000 bucks away. Could you do that?

[Ally]

No, I don't think so. I mean, I would have to adjust my 25%.

[George Camel]

Yeah. Let's say we had to adjust it down to 15 or 20 right now. Would that give you the wiggle room? I think it would give you some great peace of mind to have this. We call it a sinking fund.

[Ally]

I hope I don't have to do a thousand a month. That's.

[George Camel]

I hope so too.

[Ally]

Healthcare have a maximum deductible?

[George Camel]

Exactly. So what is the out of pocket maximum?

[Ally]

I don't know. It's. It's going to be shifted towards me soon and I have a high deductible plan, but not.

[George Camel]

Then you likely have, will have access to an hsa, a health savings account with that high deductible plan.

[Ally]

I do.

[George Camel]

Good.

[Ally]

I do. And I max it out.

[George Camel]

Wonderful.

[Ally]

When, when he, when he comes to my plan, I'll have to max it out. But my fear is at 26, you.

[George Camel]

Know, well, that's five years down the road. Let's get through tomorrow and then we'll worry about what happens five years from now and figure out what care looks like. You'll have a real clear picture at that point because this is still pretty new. So I would personally just try to focus on what's going on this week, this month, this year, and that'll give you some peace. Instead of going, well, five years from now, what's going to happen? That's going to just create unneeded anxiety.

[Jade Warshaw]

Yeah. And that, it gives you plenty of time, like you said, to continue to apply for his SSDI or whatever is available to him, you know, for income, and then you can start to look down the track and say, okay, what does healthcare look like for someone who can't take care of themselves? They're an adult and they've got these mental challenges. So that gives you some time to kind of sit with some real experts in that insurance space. Because I don't feel like I would be able to tell you exactly what the best move would be for that six years from now.

[Ally]

So you're saying like, for now just shift my contributions and put it more into a savings.

[George Camel]

Yes, I would have a bigger cash cushion. Because we just don't know. What if there's a treatment that costs $20,000 up front and that's what the way you decide to go. I want to make sure that you have money to do all this. You never go into debt for this. You never have medical debt. It's one of the leading causes of bankruptcy. And so having good health insurance, knowing your out of pocket max, maxing out your health savings account if you have one, that's a great use of that HSA because the money goes in tax free, it's growing tax free, and you can withdraw it tax free for those qualified medical expenses. Okay, so those, those are the pieces I would do is figure out the out of pocket max, figure out what that next move is for the insurance, figure out what that looks like to max out your HSA every month or every year and then begin developing a plan. Are you on a, on an every dollar budget right now?

[Ally]

No, no, I, trust me, I, I live frugally, but not to a point.

[George Camel]

The budget at this point, it's my kids, the every dollar budget. I'm going to gift it to you to check out. You've been so frugal. But right now there still feels like there's a lot that's just kind of floating around out there. And this budget will just give you a very clear picture of what your next month looks like. How much money you will have left over to put toward the medical savings goals, how much money you have to give to spend, what are your bills adding up to? That'll just put some actual facts on paper because right now there's a lot of emotion and I found that focusing on the facts helps me kind of get out of that cycle.

[Ally]

I have one more question related to him. I as a parent did the 529 for him. One of my child has used it and he has a decent amount in his 529. And he'll. As far as I know, I don't think he'll ever touch it. It's in my name and his name. I mean, is that like my little emergency thing for this?

[George Camel]

I, I wouldn't use it for the medical costs. There are some new stipulations where you.

[Ally]

Can roll it over thousand.

[George Camel]

Okay, you can roll over up to 35,000. With the new Secure 2.0 act, there are some stipulations about how long the account has, but that could be a good way to use those funds later on down the road if they're not used for college. But I wouldn't contribute more to it right now. But I also wouldn't touch it. I would just use the HSA and any savings that you have.

[Ally]

All right, I will do that.

[George Camel]

Oh, Jennifer, I'm so sorry you're going through this. You're, you're an amazing mother and you've done a great job following the plan. And it's for a time such as this. The reason we follow the Ramsey plan is because we don't know what life's going to throw our way. And you've set yourself up to where you can actually breathe and cover these costs without exacerbating the problem, going into debt and causing financial stress. So I'm really proud of you. Hang on the line. We're going to gift you every dollar premium to walk with you as you attempt to cover all these medical costs that are coming your way. We're wishing them the best.

[Jade Warshaw]

I know, I know. That's so tough. So, so tough.

[George Camel]

Wow. Good reminder for everyone out there. We're a lot of lingo was thrown around health insurance and what's the out of pocket max. But there's so much to know when it comes to insurance and it's not to be nerdy and you don't have to be an insurance nerd. It's because it affects your real life.

[Jade Warshaw]

Yeah. And you said it's, you know, medical debt and all that, number one, cause of bankruptcy, not being prepared for those things. So.

[George Camel]

Yeah. So if you guys want to learn more, you can go to ramseysolutions.com insurance. We've got a great hub there that can help you understand all of this stuff. Not because you need to nerd out, but again, because this helps you live out the Ramsey plan with less stress, less headaches, less. Oh my gosh, I didn't know. We want you to be very aware. Financial literacy is available if you just reach out and grab it. So ramseysolutions.com insurance is the place to go.

[Ally]

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[George Camel]

If you're tired of living paycheck to paycheck, you're wondering where your money's going. Your first step is getting on a budget. And our team is hosting free budgeting trainings this month where you're going to learn steps by step how to make and stick to a budget using EveryDollar. Plus, you can get our your biggest budgeting questions answered in a live Q and A with our team. So don't miss it. Spots are limited. Sign up for [e-mail] webinar Chris is up next in Atlanta. What's going on, Chris?

[Ally]

Hey, sir. How are you?

[Jade Warshaw]

Good.

[George Camel]

What's going on?

[Ally]

Not much, sir. Thank you for taking my call. First of all, just wanted to run something by you. I've got about $20,000 in debt that it's four, about four different accounts that it's interest free for between 36 and 48 months. I've got 36 in my emergency account. And just my wife's not a big fan of, you know, cutting a check just to pay it off. You know, we've got the cash but just wanted to see you know, you guys opinion on whether to keep that and just pay it off so the interest doesn't accrue or you know, or keep making those payments.

[Jade Warshaw]

I mean, you know what we're gonna say, we're gonna tell you to pay it off, you know, instantly. But the problem is not that it's you doing something without the, the onboarding with your wife. Like you guys gotta be on the same page. So I wouldn't suggest you just go do a thing without you both being on the same page.

[Ally]

Right.

[Jade Warshaw]

What's her problem?

[Ally]

I mean I, I've been listening to you guys a lot longer than you know, then she doesn't listen to you guys at all. But you know, I've really got on board with Yalls plan and just again seeing what you guys, you know, had to Think about that.

[Jade Warshaw]

Well, yeah, I mean, like I said, we're gonna tell you to pay it off. My question is, why do you gotta.

[George Camel]

Get her on board?

[Jade Warshaw]

Yeah.

[Ally]

Well, no, I mean, just. Well, I think I can just. I just need to take a plan to her. We, like I said, we have the cash to pay it off.

[George Camel]

And I don't think she needs a plan. I think she needs a good reason.

[Ally]

48 months.

[George Camel]

What. What is. What's beneath all this? I don't think she needs a fancy plan. She needs a good reason to pay this off. And right now she's not really feeling the financial pain. Have you been shouldering a lot of the financial stress in the household and she's unaware, or does she just think she can outsmart this financial system and do it another way?

[Ally]

I don't really think she knows you guys plan, you know, like the money is there. You know, I'm the breadwinner. She just works part time and takes care of our two kids and about $150,000 a year income. And you know, I've got a 401k through my job, maxed out hers and.

[Jade Warshaw]

Mine and that ira.

[Ally]

And I've got a brokerage account.

[Jade Warshaw]

And that's. That's why she doesn't feel it. I think we're. We're ships passing in the night. So what we're saying is there's a plan. We can give you the plan. You've been listening. You've started to kind of figure out what that plan is. But the plan means nothing if you don't have a reason to do it. And you're saying, hey, in my mind, I've kind of figured out a reason to do this. It just for you. Based off what you said, it just kind of feels silly to keep that debt around. So you're. That's a good enough reason for you to pay it off, right? Some people need a little bit of a deeper reason in order to feel the uncomfortability that you're talking about. So they need something to kind of cling to, to go, hey, I'm doing this for my family. Or I'm doing this because Junior's gonna be going off to college and I wanna make sure we have the money to pay for that. Or I'm doing this because I grew up poor and I never wanna feel that feeling again. Kind of cling to like. Like a buoy in the water. So what do you think that that would be for your wife? Because what you painted is kind of like the most dangerous Position in. In America where you make 150,000, you make enough to kind of keep the bills floating in the air without it really hurting too much.

[George Camel]

Not cramping your lifestyle.

[Jade Warshaw]

It's not cramping your lifestyle until something happens. Right. And that's when they call us. When somebody loses a job or when, you know something, it rains, it pours. Right. So she hasn't felt the need to go to, you know, such extremes, and I'm putting extremes in quotes. So you've got to figure out a deeper why that you could get her to get on board with this without a financial crisis happening.

[Ally]

Yeah, yeah, I understand totally what y' all are saying. I think, you know, we have 30, 35, 36,000 in our emergency fund, fully funded in six months, and, you know, got the investments I told you guys about and, you know, putting 20 grand towards it, you know, to pay off these debts. Four different accounts that are interest free. Her argument is that she wants to, you know, just keep paying those payments every month that are interest free before the interest accrues. And I want to just get rid of the debt. And, you know, we have about $15,000 left, you know.

[Jade Warshaw]

Yeah, you'd still have 16,000.

[George Camel]

So she wants to take it right up to the edge and then pay it off in a lump sum.

[Ally]

Yeah, she's just scared about, you know, just stroking that $20,000 check to get all of them paid for.

[George Camel]

And what. What is SC that to her? Have you dug into that?

[Ally]

Just that. You know, just writing that big a check when we can just make.

[Jade Warshaw]

But it's not just that. It's not just that. There's something that's causing her. And that's the deeper question.

[George Camel]

The security gland is flaring up. So now your job is to position this debt as a threat to her security. If you can do that, we win this argument. To go, hey, owing other people money puts us at big risk. Here's all the interest we're going to owe. Here's what could happen if we miss a payment. This is designed to screw us, and we fell for the trap. And truthfully, this is symptom of a bigger problem. We've been floating through life making amazing money, and we haven't been on the same page. This is our chance for a fresh start. Are you with me? That's a different conversation.

[Jade Warshaw]

You can even take it to the next level, because if I'm in your situation, if. If I'm you, Chris, I'm thinking, who's the breadwinner? You are, right you said she works part time, Right. So I'm thinking, oh gosh, if I were to, you know, get hurt or be laid off or lose my job tomorrow. Yeah, we have 36, 000 saved, but we have payments on $20,000 of debt. So we're gonna go through that savings lickety split because not only do we have to do the things that just all our basic budget, but now we have to pay these bills too. I don't like the feeling of that. And I want to be in a safer position because as the man of the house, you know that those are the things that I'd be thinking. So your homework, Chris, I think, is to. To get down beyond the math into a more emotional like granule level, granular level on what you feel about this. That way you can talk to her that way, which will probably cause her to start talking that way. But if for you, it stays surface on, we just gotta pay this off. I mean, I know we got this money in this account and this money in this count, but I mean, it makes sense to pay this off. It's just not enough to get her excited about that. Money's very emotional.

[Ally]

Yes, yes, it's very. Yeah, yeah, very. I've gotten a little less emotional about it with, you know, listen to you guys and just get it and just getting it done.

[Jade Warshaw]

Yeah.

[Ally]

Like I said.

[Jade Warshaw]

And that's your personality type. I love that. That's the personality type that kills it on the baby steps because they go, what is the plan? Ready, hut. You know, and they just bowl through. I'm. Why am I getting sports analogies? They're like going through the end zone on it. Right. And other people are like, oh my gosh, you want me to change my lifestyle? But this is what I'm using used to. And I feel great when I see that money in the account. And I feel good like that because when I was a kid, I always felt unsecure about money. So when I see that number. Right. So you got to get on her on her emotional level and show her.

[George Camel]

Hey, look, we're going to get rid of these payments and we're going to restock the emergency fund in this amount of time.

[Jade Warshaw]

Yeah. Give her some facts.

[George Camel]

So by the time that debt was going to be paid, if you took it to the edge, you could have been right back where you are. Except now you got no payments.

[Ally]

No payments yet. Because anything other than that, I just have my mortgage.

[Jade Warshaw]

Exactly.

[George Camel]

And question, is she working part time because she wants to or because she has to?

[Ally]

She Wants to. She does hair and, you know, she's. She had a career. She got laid off during COVID and, you know, but kept a good clientele.

[George Camel]

So that could be a reason for that security gland flaring up.

[Jade Warshaw]

Huh? And listen, put a little sugar on top. Like, I'm the type, tell me what I'm gonna get in the end.

[George Camel]

Like, if we say dangle the carrot.

[Jade Warshaw]

Yeah. If we say, hey, trust me, let's. Let's pay this debt off. We'll stack back up the three to six months and then like. Like, yeah, let's go on a cruise. Like, let's do something to celebrate this wonderful thing we did to get our, you know, family on good financial footing. Like, put a little something on it so that it feels like a reward. Not just a financial reward in having paid off the debt, but a reward in that, hey, we now see, you know, the. The fruit of our labor here, and we get to celebrate that in a big way. So make sure it's not just all work and no play is not fun is what I'm saying.

[Ally]

Yeah. I mean, so basically. But taking it back to her, you know, obviously there's no way, you know, you guys eyes that, you know, I keep this debt, even though it's interest free every month for another 36 months.

[Jade Warshaw]

Because it's not just about the interest. It's still risk. Because remember the picture I painted Chris? It. If you lose your job, it doesn't matter that it's interest free. It's still $20,000 that you owe and have to make a payment on.

[George Camel]

It's not about where you're at today. It's what could be. And she knows that very well after getting laid off during COVID So key underneath all of this is get to the emotion underneath and then cast a vision instead of focusing on the transaction. That's not going to get anyone excited. But if you can start casting a vision about where you guys want to be and the fact you leading first, saying, man, I have not done a great job leading our family when it comes to this area. I want to do better. And here's what that looks like.

[Jade Warshaw]

Will you go with me? That's great, George.

[George Camel]

Now this is romantic. Now you're taking her somewhere.

[Jade Warshaw]

What's up, guys? It's Jade. And let me tell you, when my husband and I had $280,000 of student loan debt, we were not sitting around waiting on the government to bail us out. We did the hard work to pay it off ourselves. So if you're still holding out hope that forgiveness is coming. That's like you waiting for your landlord to start paying your rent. It ain't gonna happen. If you really want those student loans gone, you need a plan. And for some of you, refinancing might be part of the plan. So I recommend Laurel Road. With Laurel Road, you can get an initial rate quote in less than five minutes. And if you have a more complex situation, you can set up 30 minutes to talk to a real actual human being to find out if refinancing is right for you. Ramsey's advice is clear. Get out of debt as fast as possible and a lower rate or a shorter term can make that possible. Laurel Road has low competitive rates and they even offer interest rate discounts. So stop waiting on the maybes and the somedays and start taking action today. Go to LaurelRoad.com Ramsey to get a free rate quote or schedule a free 30 minute consultation. That's LaurelRoad.com Ramsey.

[George Camel]

From the Ramsey Network, it's the Ramsey show where we help people build wealth, do work that they love, and create amazing relationships. I'm George Camel here with Jade Warshaw and we're taking your calls at Triple Hill, 825-5225. Clay has decided to join us from Tampa, Florida. What's going on, Clay?

[Ally]

Hey, guys, thanks for taking my call. I appreciate it.

[George Camel]

Sure.

[Ally]

So I've got a financial, I'm going to call it an opportunity. And I think that the financial advantages are incredible. But there's an emotional aspect to this that I'd love for you guys to weigh in on and kind of give your advice on. So I'll try to be as brief as I can. So I'm 27 years old. I just got engaged this last weekend. So soon to be married next year. So soon to be married next year. And obviously we want to start a family, you know, sooner rather than later. That's in the, that's in the short term plan. I was gifted my property. It was deeded over to me by my grandfather. So I live in a home on 12 acres. Very blessed to have that. So when I moved in, the home, it's old, it was in 1953, even with just me living there before I even met my girlfriend and needed work. So I had to take out a mortgage. You know, I cast out the equity. So I do have a mortgage and basically I remodel gutted the entire home. New electric, new plumbing, new septic, new. Well, I mean everything. So I go to 30 on the property. That's not a Problem with my income that the money's not an issue. Here's my question. With my family coming in and, you know, and then putting them first. Now, the house is still too small, where if we're going to have the size family we want, I would have to take out another mortgage to kind of add on and get it to where it needs to be to, you know, suit a family. But I could also sell the property in the market right now in Florida. And the home and 12 acres, I think is worth around 900,000.

[Jade Warshaw]

Holy smokes.

[Ally]

So I could walk off. I could walk off with, you know, 600 and, you know, $73,000. And then after taxes, I can go buy a home that's big enough and new in cash, which obviously, I think is a great decision for my family. Here's the. Here's the caveat in that. This has been in my family for five generations. My family, we all live on the same property. I've got my own 12 acres. My sister and her family live right next to me on their 10 acres. It was also gifted to them. My parents live on three, and my grandparents live on three. And then we have, like, a small cattle operation that runs all across all of our properties. It's more of a hobby. We don't do it to make a lot of money. So by selling, obviously, I'd be the first guy in five generations to do that. And, you know, it is. It is family land. So I'm sure that there would be definitely be some disappointment.

[Jade Warshaw]

Can you sell it to your family? Do you have to sell it to Joe Blow? Or can you just sell it to one of your existing family members? Would they be interested?

[Ally]

Yeah, unfortunately, I can't. So there's a lot going on there. There's. So there's. There's. There's more going on. I mean, without diving into it. There's a divorce happening. So there's a bunch of stuff that's kind of led up to this now. And basically, in my mind, so I may have an opportunity to sell it to my neighbor. And if I can do that, I think he would allow. Because he's. Because he has friends with the family, he'd allow the cattle and everything to kind of stay there. That would be the best case. But, you know, that's also not a guarantee that it can happen. So really, in my head, I'm just weighing, do I want to owe $400,000 on this property to get my house to where I need it to be? Or you mean sell it?

[George Camel]

We know it's not worth investing into this property. It's not going to ROI for you. So it's a bad financial decision and at that point it's just an emotional one to not upset family.

[Ally]

Right?

[Jade Warshaw]

Is it? I feel like you're very far in the future as it, it pertains to what the house will need. How many bedrooms does the house have now?

[Ally]

Well, so technically it's a 3 one, but really it's a 2 one. I mean I, I'd have to put a door on the other one.

[Jade Warshaw]

Okay.

[Ally]

It's a three bed, one bath.

[Jade Warshaw]

You'd be okay with your first kid in there and you'd be okay with the second kid. Because when I was a kid, we grew up and we shared bedrooms at least, you know.

[Ally]

Right.

[George Camel]

And you still need to get married and then have the baby. That's another nine months at least. Unless you found a hack for that. And so, you know, we've got a few years to at least make this decision.

[Jade Warshaw]

And if you said the 230 mortgage is not a problem, I mean, you didn't tell us what your income is.

[Ally]

So. I mean, some of it's bonus based. My base is 90, but I can make 75% of that on a bonus. So high end. I make 155.

[Jade Warshaw]

Great. And no other debt.

[Ally]

I just owe 30,000 on a truck. That's it.

[Jade Warshaw]

So my goal, if I were in your shoes, if you were like, hey man, I want to keep this land. It's five generations deep. The house is not perfect, but I could see a path to get it there. My goal would be how quickly can I pay off this $230,000 mortgage so that in three years when we have two kids that are kind of like starting to bust at the seams, we can be saving up for an addition and do another. Add another room to this house. That's what I'd be saying if I wanted to keep the property. Now you did say, hey, I could sell it and walk away with maybe 600 grand and I'd say that's great. But, but Florida markets are wild, so you might want to double check on what you can get that's much bigger than what you have now for 600,000. Because it's different out there.

[Ally]

Yeah, I mean, so we have looked.

[Jade Warshaw]

Into that a little bit.

[Ally]

I mean, they're doing a lot of new builds. I mean, obviously you guys know everyone's moving to Florida, so there's a lot of new construction neighborhoods.

[Jade Warshaw]

Well, yeah, there are, but here's the Thing a lot of people are moving out too. It's not like, it's not like it was a couple of years ago. They're actually seeing houses sit on the market longer in Florida, especially south Florida. But you guys I guess are north.

[Ally]

Sure.

[Jade Warshaw]

But yeah, it's, it's, it's a little different in south Florida and in the state of Florida right now. But anyway.

[Ally]

Yeah, I mean the only other things that are kind of weighing into this is that so, you know, obviously I work a full time job. My brother in law who married my sister doesn't come from a cattle family, so you know, he doesn't know a lot about it. And then you got my dad who's got a full time job. So my granddad who's 80, is kind of running everything. You know, we get hurricanes that come through, you got fences down, it's a lot of upkeep on. It's over. It's almost 30 acres. So you know, that's kind of weighing into the decision too. Like eventually someone's gonna have to do that and we're all, we're all so busy, you know. I'm not saying I don't want to do it. I was raised with, you know, work ethic and I understand all that, but.

[George Camel]

That does, I mean you're like devoting your life to this at that point.

[Ally]

Well, that's. So that's a, that's kind of the conundrum, you know, is do I want to be doing that and you know, 20 years, 30 years and, and free you.

[George Camel]

It's okay to decide not what you want to do. It's okay to decide. I want to go live in the city. What if you decide you, you know, you and your spouse get a job across the country and you decide to move? Would your family still be mad?

[Ally]

Oh, probably.

[George Camel]

But I mean, there we go.

[Ally]

We want to stay local. I think we want to stay local for sure. But it's just like this places, I don't know, like the opportunity it's presenting with the money and me living debt free and getting in a nice new house for, especially for homeowners insurance purposes. I mean my home's a 53. Even though it was remodeled, property insurance still looks at it like it's a 1953. Property insurance is expensive here. So you know, I'd be solving a lot of problems. I mean I could and pay off the truck, buy a brand new house.

[George Camel]

How much money do you have right now in cash?

[Ally]

Well, after post engagement ring, I've got 10,000 in savings right now. And then I got about 100k in a 401k.

[Jade Warshaw]

Listen, Clay, I think you're. I think you're. I like that you're thinking ahead. I think having some foresight is really smart. I almost think you're looking too far ahead. I almost think you have to go, okay, let me look at five years from now.

[George Camel]

What's the right next step?

[Jade Warshaw]

Yeah, five years from now I do see myself married. I see myself with a child or two. And where would I like to see myself living in that five year span? And then, oh yeah, maybe I'd like to hold onto that property a little longer. Then you look at, okay, and then in the next 10 years from that, just what do I think? And you kind of sounded like, hey, I don't want to be doing this forever. Is this a 10 or 15 year play or is this, you know, and really kind of like draw a timeline out that you think you'd be ready to exit this lifestyle? It might not be today or. And just because you don't want to be doing it 30 years from now doesn't mean you want it stop doing it five years from now. Do you see what I'm saying? So yeah, get that on paper. I think it'll help you to get it on paper. You have a lot of great ideas.

[George Camel]

This reminds me of the old quote, the best laid plans of mice and men often go awry. Because I'm a future thinker like him going, this is gonna happen than this and life never happens that way. So hold everything loosely. Just take the right next step and don't get starry eyed with quote, opportunities that cause you to go into debt and get this truck paid off.

[Jade Warshaw]

Clay, what are you doing?

[George Camel]

You make 155 grand trim, pay off the truck in the next few months, get it done and then focus on that mortgage. Ever look at your phone bill and feel like you're trying to decode a top secret message? $17.42 for advanced signal optimization. What even is that? Well, luckily Boost Mobile keeps it simple. Just $25 a month for unlimited talk, text and data with no contracts, absolutely zero nonsense and a price that's guaranteed forever. Plus Boost backs it up with a 30 day money back guarantee so you can try it without feeling trapped. Go to boostmobile.com Ramsey to make the switch today. That's boostmobile.com Ramsey restrictions apply. See boostmobile.com Ramsey for details. Oh, Jade, we got some big news that producer James dropped on the desk here yesterday. Security researchers at cyber News identified a massive cache of 16 billion unique login credentials, usernames and passwords spread across 30 distinct data sets, some holding up to 3.5 billion records each.

[Jade Warshaw]

Hide your kids, hide your wife.

[George Camel]

That's a lot of lingo to say. Terrible data breach just happened. And unlike many big leaks that resurface old info, nearly all of this data is fresh. Like the Krispy Kreme doughnuts going down the roller. Likely pulled directly from infected users via Info Stealer malware.

[Jade Warshaw]

What? Wait, say what?

[George Camel]

Info Stealer malware. That's called Info Stealer. Infected users, at least they're very clear with what this is. If you're going to name something Info Stealer, I know exactly what that does.

[Jade Warshaw]

This is. Yes, this is deep.

[George Camel]

The exposed credentials cover a vast range of platforms, from Apple, Facebook, Google, Instagram, Microsoft, Netflix, PayPal, Telegram, GitHub, gaming, developer tools, even government accounts. So what that means is.

[Jade Warshaw]

I'm in there. Yeah, you're in there.

[George Camel]

Pretty much all of our information is probably out there. So what does that mean for you? What can you do about it? Number one, be sure to change your passwords. I know, I'm. I look like the target demo for a guy who would tell you to change your passwords, but email, banking, social, all of this stuff can put you at risk if you don't do that. And then secondly, turn on two Factor Authentication, where you can. I know it's annoying to turn it on. I have to wait for the text message and get the code, but that stuff is what actually protects you. And the other thing you can do to protect yourself is check out Xander Insurance's ID theft. They have plans that actually fix the mess if your identity is stolen. I unfortunately had to go through this jade back in 2013 or 14, and Zander ID theft came in the clutch to help me clean up the mess. And their elite bundle includes a password manager two Factor authentication. And they can protect your entire family. And if you want to learn more about how to protect yourself online, we've got a blog that will do just that. Go to ramseysolutions.com, to learn more and navigate this wild digital journey we find ourselves on.

[Jade Warshaw]

I'm starting to run out of password ideas.

[George Camel]

You know what the new ones are? You do a unique phrase that only you would know.

[Jade Warshaw]

Yes, I know, George.

[George Camel]

You know, so, like, what's a jade catchphrase that nobody would guess?

[Jade Warshaw]

Yeah, I know.

[George Camel]

Don't say it out loud.

[Jade Warshaw]

It was hard enough to have a word with a symbol with a dash Wait, it has to be a capital letter. It has to be at least 12. Has to have a symbol. I'm like, oh, my gosh. Now they want me to remember a whole phrase.

[George Camel]

Yeah. So if you're that person that just keeps adding more exclamation points, that's me. It's time for a change.

[Jade Warshaw]

That's me, George.

[George Camel]

Do better, Jade. Stay safe out there.

[Jade Warshaw]

I'm like, what's my birthday?

[George Camel]

Was it three exclamations or four? I don't remember. Oh, boy, oh, boy.

[Jade Warshaw]

Yeah.

[George Camel]

God bless. And we're young. We're here.

[Jade Warshaw]

That's why I'm saying I'm only in. I'm in my. On my fourth level, and I'm already stumped.

[George Camel]

Just wait till you're, you know, boomer level. I know it's gonna be bad. All right, Lindsey's up next in Buffalo. Lindsey, how can we help today?

[Ally]

Hi, Jade. Hi, George. Thank you guys for taking my call.

[George Camel]

Sure.

[Ally]

So today my question is, my husband's current job is not enough to pay our monthly bills, and I'm not in a position where I can get a job right now due to health issues. And we. Our finances are a hot mess, and we just. We have no idea what direction to go right now, what to do.

[Jade Warshaw]

What's he making?

[Ally]

So he's kind of, in a way, got two jobs. He just got a local job to be home with us, but it's only bringing in 750 a week, and it's the best that he could find. He doesn't have any certifications or anything.

[George Camel]

But what's he doing?

[Ally]

He works in a garage.

[George Camel]

What kind?

[Ally]

Like, just working on vehicles, maintenance, things like that.

[George Camel]

Okay, so he has mechanic type skills.

[Ally]

Yeah. Yep. I'm sorry.

[George Camel]

Okay, that's good. And he's making 3k a month from that?

[Ally]

Yeah.

[George Camel]

And how much are your expenses every month?

[Ally]

3,100.

[George Camel]

Okay, so you're 100 bucks short just to survive.

[Ally]

Yeah.

[George Camel]

Okay. And how much debt do you have?

[Ally]

That's actually. That doesn't even include gas and groceries.

[George Camel]

Oh, well, that's what I meant by expenses. What are your total expenses? To run the household between food, utilities, your housing, transportation, and insurance, and then minimum debt payments. What does that add up to then?

[Ally]

That would be about four grand.

[George Camel]

Okay.

[Jade Warshaw]

Okay. And you do have a budget that you're using to understand that?

[Ally]

I have everything written down. It's been really hard to nail in a budget because him, he was working over the road, and our intentions were to swallow the truck and trailer and the Truck wound up breaking down, and we had to get it fixed. And now we're. We're still in agreement with it. But to. To answer your question, George, we have 64,000 in back, but there's, like, other little bills piling up and coming in.

[George Camel]

And what can be sold out of the 64,000 or any of them assets that you could get rid of?

[Ally]

The only thing that we could sell is the truck and the trailer. But he could use that to make money. Like, if he went back over the.

[George Camel]

Road, he could, but he's not.

[Jade Warshaw]

Yeah. What's stopping him from doing that if it makes more money today?

[Ally]

So he's actually currently driving right now. As I mentioned, he's kind of got both jobs going on. So I had a major surgery last year, and I've been in and out of the hospital multiple times. And he came off the road to be home with me and the kids, and we were just hoping that somehow it would work out. And we've just been going backwards the last six months. So he's still been signed on with that company, but he's currently working with the truck as we speed. But it's been hard because I'm not in a position where I can work to bring in supplemental income. I've tried doing things at home.

[George Camel]

So you need him home right now?

[Ally]

I do, but he's on the road right now.

[George Camel]

Is that because he can make more money on the road? What does he make doing that?

[Jade Warshaw]

Yeah, what does he make on the road?

[Ally]

That's the other part of this, too, because it is so inconsistent.

[Jade Warshaw]

What's a good day? Like, what's a good month?

[Ally]

It depends. The further he drives, the more he brings in. Last year, I think he brought in, like, 110, but it was before all of the expenses, like fuel and everything.

[Jade Warshaw]

So here's what you guys need to do. You need to sit down and look at last year and say, okay, here's what we brought in. But after all the fuel and expenses and actual money we were getting to keep, here's what it was, right? And then let's say you find out, okay, this is $50,000. Then you look and say, okay, is there anything else that. I mean, you said he's not doing that full time anymore, Right. So then you have to look and see, is that $50,000 better than what you're doing now, or is it worse than what you're doing now? And then you have to decide, is it worth keeping this truck and trailer, or is there something else he can do? To make that amount of money. So you've got to get real numbers and make those comparisons to really see otherwise, you're just guessing.

[Ally]

So we've done that. We've sat down and really figured out the difference between the two.

[Jade Warshaw]

What'd you find?

[Ally]

So he brought home 40 last year after all the expenses and everything. And that was with the business paying for the truck. But with him being home, we still have the truck in the trailer payments, and the business no longer pays for those. So it's kind of.

[Jade Warshaw]

And how long. How long until you're recovered? And he, you know, would be able to go back out and do that job full time again and the business would then pay for the truck?

[Ally]

That's. It's hard to say. The issues that I've had are complications from a surgery, and it's just like, ongoing after another. Yeah, yeah.

[George Camel]

What is the truck and trailer payment every month?

[Ally]

So the truck is 478 and the trailer is 162. And then insurance and fuel. As long as he hauls at least one load a month, it is covered. Like, he can fill his truck and it'll last him a month with his regular job.

[George Camel]

But what's left on the loans for the truck and trailer? What do those add up to as part of the 64?

[Ally]

The trailer is 7900. The truck is 19,000.

[George Camel]

Okay. I'm just wondering if we push pause on the truck and trailer deal if he can't be on the road anyways because it's hard on you. If he at least sells those, we clean up that debt, which saves you 700 or more every single month if you include the insurance, which could give you guys enough breathing room. And then let's find a job locally that can pay better. If he's got mechanic skills, he should be making more than 750 a week.

[Jade Warshaw]

Yeah, the 40,000 wasn't enough to keep that trailer and trucking business in my mind.

[George Camel]

Juice ain't worth the squeeze, as they say. So I wish you guys the best. I hope you continue to heal and recover from this with no complications, and hopefully you guys can see a way out real soon.

[Ally]

Statistics show that half of Americans don't have enough life insurance or they don't have any at all. I don't understand this, John.

[George Camel]

Why don't people want to take care of their family?

[Ally]

They think they're going to die or something. Well, I used to be one of those guys.

[Jade Warshaw]

I didn't even think about it.

[George Camel]

And one of my buddies said, hey, the only reason to not have life insurance is if you hate your wife and kids. And I immediately went and got term life insurance.

[Ally]

That's a gut punch. And. Oh, you're telling me.

[George Camel]

And for decades, Dave, I've sat across people who've lost a spouse, they've lost somebody important to them.

[Ally]

Me, too.

[George Camel]

They don't know what to do next.

[Ally]

Me, too. I mean, you're gonna have a crisis here and you know, you got two options. While you're sitting and talking to a.

[George Camel]

Young widow, she's concerned about how she's.

[Ally]

Gonna invest all this money properly and not mess this up, or she's concerned how she's gonna eat tomorrow.

[George Camel]

That's exactly.

[Ally]

These are the two options. And take care of your dadgum family.

[George Camel]

Term life insurance can replace income, pay off debts, cover funeral expenses. So your family can actually have the opportunity to just be sad.

[Ally]

Yeah.

[George Camel]

To just miss you.

[Ally]

That's exactly what it's supposed to be. It's saying I love you to your family. Term life insurance, Jeff Zander and the team at Xander Insurance makes it easy and affordable.

[George Camel]

I've used them personally for 25 years.

[Ally]

They're the only people I trust. Go to Zander.com or call 800-356-4282.

[George Camel]

When you're tackling debt or building wealth, you can often forget about one important step to reaching those goals, which is insurance. Having the right coverage as opposed to too little too much can impact how long it takes to get there. And skimping on insurance might seem like I'm going to save a buck. But when life happens, it's easy to fall back into debt without a safety net. You got to transfer that risk over to the insurance company when you can't handle it. And the right insurance will act as a shield around your loved ones and your wallet if disaster strikes. In some cases, it can even save you money if you're paying too much or for bogus insurance types like cell phone insurance. So how do you know if you have the right coverage? Just take our Coverage Checkup. It's a free online resource that creates a personalized insurance action plan that is unique to you and your situation. It makes an overly confusing topic easy to understand with clear next steps. So go check it out. Out ramseysolutions.com checkup and take the coverage checkup or click the link in the description. If you're listening on YouTube or podcast, Noah is up next in Rochester, New York. Noah, welcome to the Ramsey Show.

[Ally]

Hi, George and Jade. Thank you for taking my call.

[George Camel]

Sure. How can we Help.

[Ally]

So I'm calling today because my mom is asking my wife and I to contribute toward a family vacation home purchase. Okay. It's in a location we've been spending time in my whole life growing up. And it's always been kind of a dream of in our family to get something permanent there to make new memories in. I think it's something we've always thought we really enjoy. We're in baby step seven. My wife and I could afford to help, but we're really worried about being a minority owner in a property we wouldn't control and have no real control over who is living or renting this property when we're not spending time there. And also about future, hopefully far, far down the road, inheritance issues between my siblings and myself. Is this a situation we should want to get ourselves involved in or should we tell mom if this is something she wants, she has to be on her own.

[George Camel]

I mean, that was some biblical level wisdom. Noah, I appreciate that your namesake is really coming through today. You are spot on. Think through all these future problems.

[Jade Warshaw]

Yeah, I mean, think of it. Let me ask you this, this. If you were to structure this thing perfectly, what would it be in a way that you would do it? You tell me. Does it even exist?

[Ally]

Either we would. I think my wife is nervous, maybe more so than I, that just future problems arise interpersonally between me and my siblings or between my mom and us as, as, as she would get older. I think ideally we'd, we'd want to be in the majority owner or full ownership.

[Jade Warshaw]

There you go.

[Ally]

Something we can afford at the moment.

[George Camel]

So how much money does she have? Did she buy it outright?

[Ally]

Is a very attractive alternative.

[Jade Warshaw]

So it sounds like when I rephrase the question and said, you tell me what the perfect scenario is, it sounds like there isn't one. The perfect scenario would be you owning it outright. Right. And then you said, I can't afford to do that. So I think that you understand what this is. And I think in a, in a, you know, perfect picture in your mind, it would be nice to have a family vacation house. It would be nice to go to this place that you guys are always went to when you were kids. But I mean, you laid out all the reasons that that's really not a practical or good realistic solution. And the only realistic solution would be somebody just owns it outright and lets everybody else use it it.

[Ally]

Right. I think that's what I knew. But maybe need someone to hear someone else say out loud.

[Jade Warshaw]

Yeah, I mean, it sounds like you really Love your family and you love your mom. And you and your wife have said, like, this could cause, like, relational issues. It could cause inheritance issues. It could cause a lot.

[George Camel]

And is this a vacation property or an investment property? It sounds like you're trying to mix the two items.

[Ally]

It's currently being rented out as an Airbnb. That's not something I had ever really considered before, but my mom is talking about continuing that and then also using it as for family vacations.

[Jade Warshaw]

You already have it, so.

[Ally]

You already have it. It's.

[George Camel]

No, it's for sale.

[Ally]

It's for sale? Yes.

[George Camel]

Is this exact home really special? Have you guys stayed there a lot? I'm confused. Or is just the general area we have interesting.

[Ally]

We stayed in the particular house and in the location many other places.

[Jade Warshaw]

What's the. What's the cost? How much is it?

[Ally]

300,000.

[Jade Warshaw]

And you're in baby step seven. How much do you make?

[Ally]

My wife and I combined about 250,000.

[Jade Warshaw]

So, I mean, I just. I. With the income that you have with where you are, financially, I'd be more interested in saving up to buy my own vacation home in three years, and it's mine, and I can rent it to my family or let my family stay there, or I can go there as much as I want and there's no weird strings attached to it. Maybe it's not that particular one, but it's something like that.

[Ally]

Yes, that's good option. This one just already has a lot of good memories associated with. We stayed there before.

[Jade Warshaw]

Yeah.

[George Camel]

Why not just rent it out when you guys want to go visit with.

[Ally]

Out of our hands.

[George Camel]

What's wrong with the current plan that you've been doing of just visiting there whenever you feel like it?

[Ally]

That's. That's another great point. We thought about. We would be looking to contribute 50 to $75,000, and that buys a whole lot of vacation rentals as far as staying somewhere a few weeks a year.

[Jade Warshaw]

Yeah.

[George Camel]

That's like 30 years of vacations there. I think that's. That's always the. The rub to me with buying these investment properties. And the other piece is you got random people partying there on the weekends.

[Jade Warshaw]

Destroying all your stuff that I would not rent it. I could not do that. I'd be like, it's mine.

[George Camel]

I would try to separate investment property from a actual, you know, vacation home. That's yours. And I'll tell you, right. If Dave was on the line, he'd say the same thing. Dave doesn't. Dave's got a Lot of investment properties. He ain't staying there. No one's staying at Dave's lake house except for Dave. And so there's something to think about there. And if. If mom can't afford it, then she just needs to rent it when she wants and we'll still have all the memories. But I would not go through with this. I think everything you're saying is spot on here. You're noticing all the red flags right in the nick of time. And so I think you politely decline and say, this isn't a priority for us financially. We can't afford to do this. If you choose to do it, it good on you, but we're not going to be a part of it.

[Ally]

Okay. I think. I think that's what we were leaning toward, and glad you agree. So thank you.

[George Camel]

I think I smell a disappointed mom in your future. Is that right?

[Ally]

I'm gonna. It's gonna be hard to. It's hard to break it to her.

[George Camel]

You just crushed her dreams, Noah. This is all she's ever wanted.

[Jade Warshaw]

Nothing stops you guys from still continuing to go there and have a good time. I mean, that's what you've been doing, and that's worked for everybody.

[Ally]

Yes. We will still be going to that area regardless of whether we own something or not.

[George Camel]

And maybe one day you find a.

[Ally]

Spot, something comes up in the future.

[Jade Warshaw]

Yeah.

[George Camel]

And you and only do this with cash if you ever choose to do it.

[Jade Warshaw]

That's right. That's right.

[George Camel]

And I would. I would not partner with anyone to do it. I would just let you guys be the sole owners, and mom can stay when she likes. That's what I would do. Katie's up next in Billings, Montana. What's going on? Katie? Katie. Hey. Are you with us?

[Ally]

Oh. Can you hear me?

[Jade Warshaw]

Yes, sure can.

[George Camel]

We're tight on time. Get right to the question. That's okay.

[Ally]

Okay. Wonderful. Yes. So I am 31 years old. I am not currently in debt, thank the Lord. I have just recently invested in a Roth ira. I have term life insurance. I maxed out my hsa, do all the things, but. And then my husband and I have about $360,000 sitting in the bank. So that is mostly. We do have CDs at 4% and everything else is in savings or checking. And I know nothing about investment opportunities. It just seems like the stock market is kind of in a volatile state, and I'm nervous about what to do as to grow. Does that make sense?

[George Camel]

It does. And I want to answer your question with some depth here. So would you be willing to hang on the line and we'll get back to you right after this break?

[Ally]

Yes, absolutely.

[George Camel]

I love it. This is a good problem to have Jade. She's got a whole lot of money and just needs to put it in a specific direction that's going to grow for her. And I want to dig into this stock market market volatility. I think a lot of people are feeling that right now. We're going to talk about it. Stick around. We'll be right there. We all know the importance of eating.

[Ally]

Fruits and vegetables, but let's face it, life gets busy and sometimes we eat stuff we shouldn't. That's where Field of Greens comes in. It's a superfood powder made from real organic fruits and vegetables. Mix one scoop with water and you're good to go. Field of Greens is packed with nutrients.

[George Camel]

Designed to support your overall health.

[Ally]

Health boost your immune system and increase your energy levels. And your doctor will notice your improved health or Field of Greens will give you your Money back. Visit fieldofgreens.com Ramsey to save 20% and get free shipping. That's fieldofgreens.com Ramsey.

[George Camel]

All right, we're going back to Katie in Billings, Montana. She's 31. She's got a Roth IRA. She has term life insurance. She has a health savings account, and she has $360,000 in the bank. She's investing in some CDs, and she wants to know what is the deal with this investing stuff? How do I get into it? Is that an accurate summary, Kate? Katie?

[Ally]

I believe so, yes.

[George Camel]

Okay, so you said you had money in CDs?

[Ally]

Yes.

[George Camel]

How much are we talking?

[Ally]

232,000.

[George Camel]

Oh, is that on top of the 360 you have in the bank?

[Ally]

No, sir. Nope.

[Jade Warshaw]

That's including.

[Ally]

Yes, those are CDs within our bank.

[George Camel]

Where's the other 130?

[Ally]

We have $116,000 in savings, 9,000 in checking, and then about 1200 in HSA.

[George Camel]

Wow.

[Jade Warshaw]

The 9,000 in checking. Is that like your month to month budgeting money or that's just extra money?

[Ally]

Oh, my goodness. I just need to move that over to savings. Certainly. I'm. We're very good. My family is very good at living frugally. But where we need to grow is we just don't know what to do next. Okay.

[George Camel]

Are you enjoying your life?

[Ally]

Yes, absolutely.

[George Camel]

You're not scared? You're not just saving every penny and living like a miser? You guys are enjoying, like, are you debt free?

[Ally]

We're Debt free. Yes.

[George Camel]

Good. House and everything or do you have a mortgage?

[Ally]

House and everything.

[George Camel]

No mortgage at 31 years old.

[Jade Warshaw]

Wow, great.

[Ally]

Yeah. Yes, it's wonderful.

[Jade Warshaw]

What's the income situation?

[Ally]

I am a public school teacher and so I make about $55,000 a year. And then my husband is a farmer, rancher, and so that income changes year to year. So we do have some liquid assets on top of that. And my husband is very much. Let's invest in cows, in things that we can talk about.

[George Camel]

What's. What. He understands. He's like stock market. Why would I do that?

[Ally]

And I'm kind of, I'm afraid of it too, because I, I'm completely comfortable working for the man and knowing what I'm going to get as far as month to month paycheck in the stock market is scary. It took me forever to get a Roth IRA just because I thought it was a scary.

[Jade Warshaw]

Tell us what's scary about it. We want to know more about that. Because you're not the only one probably that feels that way.

[Ally]

Yeah. You don't know for sure what the return is going to be on your investment. Right. And I guess you don't know that either way with cattle or sheep or whatever you have. But it's a little more concrete than you can see it, the world of the stock market. I don't understand.

[George Camel]

So does your husband want to understand? Is he also wanting to go, hey, we should probably do this?

[Ally]

He follows it and he's. I feel like he's way more educated. I know that he's way more educated than I am. And he's brought up the idea of a financial advisor and maybe hiring one of those. And I thought, gosh, do we need to spend the money on hiring a financial advisor if we're not in debt? I don't know. I don't know much about that.

[Jade Warshaw]

Katie, when you think about investing, the scary part that you were saying you don't know what your return on investment is. When you think of that, do you think of it as something that you invest in and then, you know, a couple years later you, you get your money out or do you look at it as something that's kind of just kind of like you've done with these CDs or these savings where you just put the money in and you let it stay there for a long, long, long time until. Until you, you need it?

[Ally]

Yeah, I mean, I would be completely comfortable with putting it in there and letting it stay for a long time. I just don't know where to put it.

[Jade Warshaw]

Well, the good news is that's what we're going to tell you.

[Ally]

Even with the Roth, I just let, I let my job say where that money was going to go.

[George Camel]

Do you have a Roth 403B?

[Ally]

I don't know yet.

[George Camel]

Okay. I'm guessing if you work for, you know, if you said you're a schoolteacher, you likely have access to a retirement account through your employer and it's likely a four or three.

[Ally]

I do? Yep.

[George Camel]

Okay. So you guys are in baby step seven, which means the whole 15% in baby step four. That's out the window. Now you can increase your investing as much as you want. And I would encourage you guys to max out all of your tax advantaged retirement accounts first. So things like a Roth ira, you both can open one of those and max it out. That's $7,000 each. That's $14,000 right there invested.

[Ally]

Okay.

[George Camel]

And then you can max out your, your Roth 403B. That's another great option to max out. And even beyond retirement, you guys could invest in a brokerage account and a taxable brokerage account, which just means it's not inside of a retirement account. It doesn't have the tax advantages, but you're just investing in the open market and it's just kind of liquid. You could cash it out at any time without penalties.

[Ally]

Okay, so those are a few options. What is your opinion on. Oh, I'm sorry, there's a little bit of a lag. What is your opinion on a, on hiring a financial advisor to help guide us through that?

[George Camel]

I think it's a great idea. I think your husband thinks or you may have thought, well, financial advisors, people who are in deep debt who need to help getting out, that's more of a financial coach. A financial advisor is helping people build wealth.

[Jade Warshaw]

Wealth.

[George Camel]

That is their A1 goal. And if you want help finding one, you can jump on a ramseysolutions.com and click on Smartvestor Pro and they can walk you through the entire process of. Here's what you should be investing in here. You know, they can address your kind of risk tolerance that you're talking about. Hey, I'm worried about the market. They can walk you through. And the, the truth is that the trajectory of the stock market is very comforting to me. It's up and to the right. But if you zoom in on any given day, if you know, know the president burps and the stock market takes a dip, it is scary to look at.

[Ally]

Right, right.

[George Camel]

But then you See, over a six month, one year, five year period of time, you can see that it's going to come back stronger than ever. Every, every few years, we're going to see more record highs. And so if you want more on that, I'm going to send you a copy of two books that I think will help you understand all of this. One is Dave's book, Baby Steps Millionaire. That will really give you.

[Ally]

I heard that in a commercial.

[George Camel]

Okay, perfect. Okay, I'll send that one to you. And I'll also send you my book, Breaking Free from Broke. I have a whole chapter called wealth is Patience and another chapter on investment traps. You and your husband read those chapters and it's going to give you a great primer on exactly what you need to know and nothing else. No jargon, no complicated financial information. Just here's the clear path, here's when to invest, here's what to invest in, here's how to do it right. Here's how to become multi millionaires and build wealth. And the key principle for you and your husband is that you don't want to put all of your eggs in one basket. So I love that he's a very talented farmer and rancher. That's a great skill to have. He knows it well. He's going to continue to do well there. But it's also wise to have money elsewhere that's growing for you.

[Ally]

Yes. Okay. Okay. That's really helpful. Thank you so much.

[George Camel]

Absolutely. And then one thing to think about, risk. This is interesting, Jay. Trade. There is just as much risk in letting your money sit under the mattress at home as there is having in the stock market, if not more, having it under a mattress.

[Jade Warshaw]

And not to mention, I mean, you're just missing out. You're losing, you're losing money in many ways because there's an opportunity cost there that people fail to consider. Yeah, you know, I, what she said is so true. You know, I do think a lot of people get weirded out by the stock market because they are looking at it short term, whether it's day to day or week by week. And I just always encourage people to think about the long term. Right. We always talk about you should be averaging 10 to 12%, and that really is an annualized rate of return. Instead of just looking at the year, it's looking at a picture of many years over time. I don't.

[George Camel]

Where are they getting 10? I'm not seeing that in my account. I'm like, listen, it's an average over time, over time.

[Jade Warshaw]

And that's why I asked her. I said, you know, are you looking at this as a. You know, I keep it in for a month and then I pull it out and see what happens.

[George Camel]

If it goes down, I get spooked and rip it out.

[Jade Warshaw]

Right. It's like, no, you set it and forget it. And you're gonna look up in 20 or 30 years, depending how old you are, or 15 years. Years, and you're going to say, wow, yeah, that annualized rate of return thing really did pull through for me. And that's how this works. It's not, it's not a slot machine. Right. It's not a, a gamble or a bet that you just put the money in and you're just hoping you hit big.

[George Camel]

And that's why we don't recommend single stocks.

[Jade Warshaw]

That's right.

[George Camel]

We only recommend mutual funds when it comes to investing in the market. And that just means a giant group of stocks. So 90 to 200 or more stocks sitting in this one basket. And even then we diversify across those. We want some that are focused on aggressive growth, some that are more stable. That's growth and income.

[Jade Warshaw]

That's right.

[George Camel]

And then you get the middle ground, which is growth. And so if you just do that and international as well, because, right. We saw this recently, this year the US market took a huge dip in international climb.

[Jade Warshaw]

That's right. That's right.

[George Camel]

And so that's been Dave's whole thing is, hey, I know it's been underperforming the US Stock market, but we do this to hedge our bets against something happening with the US Stock market. So a lot of nerdery to say if you just invest over a long period of time, you're gonna be okay.

[Jade Warshaw]

That's right.

[George Camel]

And our millionaire study proved that out. Eight out of 10 said, hey, the key vehicle to me becoming a millionaire was just investing in my company retirement plan. Yeah. So Emily as a teacher is spot on.

[Jade Warshaw]

That's right.

[George Camel]

That was the number three. Number three profession out of 10,000. And it's because teachers go, yeah, I'll follow a proven plan. I follow my syllabus, the curriculums. I can follow Dave Ramsey stuff too. So great question, Emily. Hang on the line. We'll send you you those two books. For the rest of you, check out our investing guide. Go to ramseysolutions.com guide completely free. They give you all the tools and info you need from the Ramsey Network. This is the Ramsey show where we help people build wealth, do work that they love and create amazing relationships. I'm George Campbell, joined by Jade Warshaw. And we're taking your calls at 888-825-5225. Beth is going to kick us off this hour in South Bend, Indiana. What's going on, Beth?

[Ally]

Hey, thank you for taking my call.

[George Camel]

Sure. How can we help?

[Ally]

Hey, my question. Well, my question for you. My family's kind of living through a crisis right now.

[Jade Warshaw]

Oh, no.

[Ally]

Well, trying to hold it together. So last summer, my son was supposed to get married, and the week before he was supposed to get married, he found out his fiance was cheating on him with a married man twice her age with grown kids.

[Jade Warshaw]

Oh, yikes.

[Ally]

And. And my son is a huge fan of Dave Ramsey and he is fantastic with his money. Well, so she lived with him beforehand, which we were, you know, in favor of. She moved out for about a week and then came back in and has continued to live in his home.

[George Camel]

And they're still in a relationship?

[Ally]

They're still in a relationship. They've gotten. They've gotten very involved in our church. They're going to individual counseling and. But my husband and I, we just. We don't feel on board with this. I spoke to her a couple weeks after this happened, and I told her it was a co worker at her work. I told her she needed to get a different job, which she did. I told her she needed to move out of his home, which, like I said, she did for one week. Anyway, what I'm concerned about, my husband and I and the rest of my family, we're just so hurt by this. And like I said, we don't agree with it. I started some counseling of my own today.

[George Camel]

Good.

[Ally]

But in the next couple years, we're going to be inheriting some property and things that are worth some money that have been in our families for generations. And my concern is now, how do I protect family assets when I don't agree with what my husband or my husband. My son's possible choices, his life choice with his partner. And I know this is a way down the line things can change, but it seems to be moving in that direction.

[George Camel]

How old is he? How old are you?

[Ally]

I'm 54. He's 27.

[Jade Warshaw]

So can I just. You said a lot. I just want to make sure I get the gist of it. The son. Son's. Your son's girlfriend at the time. Cheated.

[Ally]

Yes.

[Jade Warshaw]

Fiance, but. Okay, fiance and she cheated. They have since. Sounds like worked through it or are working through it. He still wants to marry her or did they pull back the engagement.

[Ally]

They're not engaged anymore, but they're. They're back in a relationship and cohabitating, living together.

[Jade Warshaw]

Okay, so no longer engaged. But you don't you. You think he should have just cut her loose and that should have been that on that.

[Ally]

I mean, I wish he would have ultimately, but. Because I just. I don't know how we rebuild trust after this has happened.

[Jade Warshaw]

And now you've got this land coming. How much is this land in this property worth?

[Ally]

Well, I mean, the. One of the properties, it's over a million dollars.

[Jade Warshaw]

Okay.

[Ally]

And that's just one generation.

[George Camel]

And when you say trust, are you saying his ability to make, you know, wise decisions, his judgment? Because this has nothing to do with money.

[Ally]

Right. He is good with his money, but I'm just worried. I don't trust the relationship. And I'm just worried about losing, you know, eventually, like, if it. I'm worried about the estate moving forward after I'm gone. And these. This property.

[Jade Warshaw]

Does he misbehave with money?

[Ally]

No.

[Jade Warshaw]

Okay.

[George Camel]

I'm just trying to parse out.

[Jade Warshaw]

Is.

[George Camel]

Is this like a punishment to him to say, well, because I don't like this relationship, I'm not gonna put you in the estate. Is that kind of part of it? Because it doesn't sound like they're connected closely.

[Ally]

Yeah, I just, you know, I. I just worry because I just. I don't trust this relationship. And I. Like I said, I just. I worry about it not making it, and then my. And what to do with. I don't know. I just.

[Jade Warshaw]

I mean, I guess I think you're jumping forward quite a bit. You haven't inherited the land yet. You said it's coming. So that hasn't even happened yet until.

[George Camel]

You and your husband pass?

[Ally]

No, will be. It's within the next couple years.

[George Camel]

But I'm saying the. The inheritance is not to your son. It's to you.

[Ally]

No. Yes. Correct.

[George Camel]

And then you would have it and whoever else is involved. Who else is involved with the inheritance?

[Ally]

I have a daughter.

[George Camel]

So your daughter's getting part of this inheritance.

[Ally]

She will eventually know I'm jump.

[Jade Warshaw]

I think it's. But it's after you pass. So you're jumping. You haven't received it yet.

[George Camel]

We have decades before this decision is finalized. But you can do what you want with the estate now. And when. Once you get it, let's say you set up and say, hey, when. If I pass, it goes all to my daughter. Daughter. And you can change that later on down the road and say, you know, What? The relationship has changed. I feel differently. So this is not a one and done.

[Ally]

Yeah. And that's what I was kind of thinking. Like, whatever I do now, I mean, eventually, I just. I. I can't help but kind of think ahead. And I know I shouldn't. I just need to take baby steps through this.

[Jade Warshaw]

Well, let me also ask you this. So I asked you the question. Has your son misbehaved with money? You said no.

[George Camel]

No.

[Jade Warshaw]

So is your concern that. Tell me where your beef is. Is it? If I pass away and my son gets this money, now this hussy is gonna get her hands on it as well? Like, is this what you're thinking? It's not really your son. It's her?

[Ally]

I mean, yeah, that. That's. I would say that's pretty accurate. Yeah.

[Jade Warshaw]

Okay. That and fair enough. Like, I. I'm a mom, so let me tell you, if this happened with my son.

[George Camel]

Have you shared any of this with your son, your concerns?

[Ally]

Oh, yes. Yep.

[George Camel]

What does he say? Is he defensive?

[Ally]

Yes, he gets defensive.

[George Camel]

Okay. So is he sort of choosing this woman over the relationship with you at this point where he's like, hey, I'm. I'm with her. You can do what you want.

[Ally]

Yeah, it's. It's starting to head that way.

[George Camel]

Okay.

[Jade Warshaw]

Okay. Well, what happens to. I. I don't. I don't know. I. I sympathize with you. I think George and I both do. What happens if they, you know, make amends and they get married and they ride off into the sunset and they live happily ever after? And this indiscretion was something that happened really, earlier in their. Early in the relationship is water under the bridge, and they go on to be happy, healthy adults with kids and family. What happens then? Let's play out both sides of the scenario.

[Ally]

You. Yeah. And I would. I would maybe feel differently then. You know, I know time will tell, but I just. I probably. I'm just thinking too far down the line, and there's a chance that they may not end up together, but it just seems like the direction it's going, and it's just. I guess it just kind of blows my mind.

[Jade Warshaw]

Listen, I'm with you. I don't know that this is. You're cut off from the estate situation. He didn't make the mistake necessarily. She did. And I suppose it's his choice if he'd like to forgive her for that. But they're not even married yet, and you don't even have this money yet, and you haven't passed away yet. I just feel like we're very, very ahead of ourselves. Call back in three years when you get the inheritance and we can talk about it. Yes, by then she might be long gone.

[George Camel]

I just don't want you tortured about a thing that is not going to happen for a long time. It's living rent free in your head, Beth, and you just deserve to be free of that in the present, right now. And we'll see what happens in the future. But it's out of your control. And that's a hard thing. Becoming a parent, realizing I don't control a 27 year old grown man's decisions. And then you're in control of what happens with this inheritance. It's up to you. If you don't want to give it to him, that's also your prerogative. This is the Ramsey Show.

[Jade Warshaw]

Hey, guys. I love summer, but do you ever notice how fast money can get out of hand this time of year? You know how it is is you want to make all these great memories. It's so easy to just put your brain in beach mode and swipe that credit card. But then you end the summer saying, where the heck did all this debt come from? Look, I want you to have some fun. I just want you to plan for it with a budget. The EveryDollar budget app is the easiest way to make a plan for your money. And I'm telling you right now, when you do that, you'll see that a budget doesn't confine your money. It defines it. It, it puts you in control of where your money's going so you can enjoy your summer without overspending or going into credit card debt. So go download everydollar for free in the App Store or Google Play. Right now.

[George Camel]

Buying or selling your home is a big deal. And between clickbait headlines and confusing data, it's tough to know what's actually going on in the housing market. So we're here to make the latest trends easy to understand. Median home prices went up slightly last month month to about $440,000. And we just hit 1 million homes for sale, which is the most we've seen since 2019. So a lot of supply out there, but even then in some areas, it's still not enough to meet buyer demand. The average 15 year fixed rate rose to 5.95% last month, still under 6%. And if you're financially ready, a small rate increase shouldn't hold you back from buying a home you love. Don't go chasing rates if you're ready to jump into this. So learn more about the housing market trends. Get free tools to help you buy or sell with [e-mail] Market or click the link in the show notes. If you're on YouTube or podcast, Kelly's up next in St. Louis. What's going on, Kelly?

[Ally]

Hi. Thank you for taking my call.

[George Camel]

Sure.

[Ally]

I have a family issue.

[George Camel]

Okay.

[Ally]

I need advice on what's fair and right. My father built the house in the 60s with acreage, said each of his three daughters could build on it, and two of them did. I did not. They're very emotionally invested in the homes because they've been there for many years. My parents have passed, and we've got this inheritance, and we're trying to decide what to do because now I'm ready to sell my third. They want to stay there, and so.

[George Camel]

They have to buy.

[Ally]

And, well, they're wanting a family member to buy me out, and that's okay with me. I'm willing to. To take less money for a family member to stay there. But then they're also wanting to subdivide and, you know, only have the family buy an acre.

[Jade Warshaw]

And how much.

[George Camel]

How much is legally yours?

[Ally]

One third.

[George Camel]

And how many acres is that?

[Ally]

There's about nine acres, and there was 14 initially, and then two of the sisters built and different things happened where there's nine remaining.

[George Camel]

Okay, so you have three of those nine?

[Ally]

No, I have a third of all nine. And there was actually 14. So what they built on was. Was deeded off already.

[George Camel]

Okay, so is yours deeded off? Like, how does. How does this work? If you went to sell it today, is it already. Is there a separate parcel there for you?

[Ally]

No, that's the crazy thing. It was just divided by three, and it worked for a while, but at this point that we're looking at selling it, we can't agree on how to do that. And I don't want to have permanent damage done to the family. You know, my family is more important to me than making the money, but I also want to be treated fairly, and we're willing to sell it to another family member. But it just gets so complicated. Do we.

[George Camel]

I think we need to agree on exactly where this land is physically. You know, have the actual boundary lines drawn up of what is yours, and that's what you're able to sell. And I don't know that it's up to them of who gets to buy it. That's a nice to have, isn't it?

[Ally]

So should we put it up for sale.

[George Camel]

You're saying you want to sell it, right?

[Ally]

Yeah, but like, they're talking about keeping portions of it. It.

[Jade Warshaw]

Why?

[George Camel]

But they would have to buy that from. And if they can't afford to buy you out, then they can't afford to buy you out and it's. It's yours to do with what you want.

[Ally]

Okay.

[George Camel]

I don't think they have any legal. You know what I mean? I don't think they have any legal grounds to say, no, you can't sell this. And so you probably need to get a real estate attorney. You know, we're just two knuckleheads on a radio show, But I. I would get in touch with a real estate attorney not because you're trying to be cruel, but because you actually want to be kind and do this the right way, not and have it be less messy.

[Ally]

Okay. That is really what I was thinking. You would probably say. I was. It's really the only solution because. But I could work with him. It's just.

[George Camel]

What does that mean with them?

[Ally]

Well, like let them split part of it off to go with a house and sell the house and then split part of it off and sell that portion to them. So get everything resurveyed, basically.

[George Camel]

Exactly, exactly.

[Jade Warshaw]

That's what. That's what George was saying, because I was going to ask what's on the land and if you don't know who's entitled to what. One piece of. One piece of land could have property on it. One p. Or, you know, could have a house on it. One piece of property could have something else on it. What's on the land?

[Ally]

It has two barns and it has one house, and it's all divided by three.

[Jade Warshaw]

Okay. Even the house.

[Ally]

Right.

[Jade Warshaw]

Wow. Okay.

[Ally]

And the house is. Is going to be available for someone to move into it. So it needs to be sold. And so we're just saying different. We all three see what should be done differently.

[Jade Warshaw]

So. So of the three of you, you're the only one who wants to sell?

[Ally]

Well, there's one that wants to keep, and there's one that wants to sell, which is me, and then there's one that is wanting parts of it.

[Jade Warshaw]

Okay.

[Ally]

Wow. Yeah, I know.

[George Camel]

I would start with the surveyor maybe.

[Ally]

Huh?

[George Camel]

I would at least map out this property and figure out how we can. Can split it into equal value parts, and then we can decide from there. But right now there's so much gray area, so many feelings involved. Let's get some facts on paper of exactly what part of the land is yours. Then we can decide what to do with that portion of the land. If we're going to split it up further, if we're going to sell it as a whole, who is it going to go to? All of that will come later.

[Ally]

Okay.

[George Camel]

But I think we know we need to come to an agreement here, and there might not be full agreement, and you might just have to do what you feel is best for you.

[Ally]

You. I think that's where we're at, and.

[George Camel]

That could damage the relationship. So just know there's feelings involved. This is what happens with inheritance. That split a bunch of ways, and you might not be on the, you know, on the favorable side in their eyes.

[Ally]

And that's what I was calling in for, is to see if there's a way to avoid the emotional aspect of it.

[George Camel]

Well, they've already brought that into it. I think it's too late to avoid emotions. They're already feeling like. Like, I can't believe she would ditch this. This was given to our family. They already feel a certain way about it. You know what I mean?

[Jade Warshaw]

Yeah. I don't think you can avoid that.

[Ally]

Okay, well, the best thing you can.

[Jade Warshaw]

Do is figure out how you want to navigate that and you can decide. I'm going to just be kind. And, you know, if. If they unleash on me, like, you can make those decisions ahead of time to say, no matter what, I. I realize they're going to feel hurt. I know they might lash out at me, and I'm just going to, you know, know, swallow it and swallow my pride and just say, I know that this hurts, and I'm not going to let it. Like, you can decide what you're going to do on that, on the end of it. But, yeah, they might. They might lash out a little bit.

[George Camel]

Oh, Kelly, I'm so sorry, but you got your homework. I would be contacting a real estate attorney and a, you know, licensed land surveyor to take the next steps to figure all this out. This is all part of it. When you inherit physical land, man, that's a tough one. I don't know what I would do in that. I mean, I would want to do the kind thing, but I also would probably. If I wanted to get rid of the land, I'm gonna go. Tough cookies.

[Jade Warshaw]

Yeah.

[George Camel]

The buyers is the next owner, whether it's the next door neighbor or sibling or a stranger you and I talked about.

[Jade Warshaw]

This land is a tough thing because it's got to be something that you feel good about keeping and managing. And it's almost like it can feel like a great inheritance depending on the personality type or to another person, it could feel like such a burden that they have to. To figure out all the time or be a part of that they don't really want to be a part of.

[George Camel]

Yeah. I don't know. It feels very American. I don't know. It's because we have a lot of land, you know, but like Europe, there's not a lot to go around. But in America, it feels so precious, you know, they're not making more of it. That's what they always say with land. So I get it. But also to. To act like you're a terrible person for wanting to sell some dirt.

[Jade Warshaw]

Yeah.

[George Camel]

I think is also outrageous.

[Jade Warshaw]

Yeah. On the one hand, I get it, though. You know, if I. Let's pretend I left my wedding ring to my daughter, which I will. Will. And she left it to her daughter and her daughter, and by the time we look up, it's five generations, and then someone sells it, it's like, you know, how could you. So I can get it. I. I can. I can dig it.

[George Camel]

I just feel like it. It feels wild for you to force sentiment to someone else.

[Jade Warshaw]

Yeah.

[George Camel]

Like, just because I care about it. You should, too. And the same goes for land.

[Jade Warshaw]

Yeah.

[George Camel]

You know what I mean?

[Jade Warshaw]

You're not wrong.

[George Camel]

Just dirt. I know it's been in the family for generations, and there's some. There's something special about that. And you breaking that, it means you're a terrible. I just don't subscribe to that level.

[Jade Warshaw]

I'm with you, George. If I had land, I'd probably sell it, too.

[George Camel]

Just live your life, you know, we're all gonna go back into the land from once we came from dust to dust. So just don't hold it all loosely. Guys, Foreign. Hey, guys. George here. Listen, if you're determined to get out of debt and build wealth, then don't leave out an important step, having the right insurance. Don't make the mistake of thinking you can get by with minimal coverage or worse, none at all. Because when Murphy comes knocking, and he will come knocking, you'll start backsliding further into debt if you don't have the money to pay for it. So take our insurance coverage checkup and get a personalized action plan that tells you exactly what you need and what you don't. Go to ramseysolutions.com checkup to get started. That's ramseysolutions.com checkup. Our question of the day is brought to you by Y Refi. Why Refi works with borrowers who have defaulted private student loans even when other lenders have said no. With a lower payment and a low fixed rate, you could have a clear path forward. So visit yrefi.comramsey to learn more. That's the letter Y, r, e, f, y.com Ramsey may not be available in all states.

[Jade Warshaw]

Okay, today's question comes from Sam in Arkansas. He says, when it comes to types of debt, are some worse than other types of types? For instance, are credit cards worse than a heloc? I have a high credit card debt, so I thought about taking out a HELOC to pay them off, but I wasn't sure if this would make me worse off than I already am. So let's talk about. There's a couple of different levels to this question. First off, debt is debt. Right. Anytime you owe somebody money, you're slave to the lender. So for the purposes of this, this, just think of it that way, like, I want to avoid debt. And if you're looking for a solution from your debt, in this case, you're looking for a solution from your credit card debt. Yeah. Moving it over. That's not a solution. You could possibly save a little bit on interest, but don't think of that as the solution. The solution is you got to pay it off. Because if you just move it to a heloc, you've just moved it. It's not gone. You've just rolled it into an asset and you still have to pay it.

[George Camel]

So while putting your home at risk.

[Jade Warshaw]

Right.

[George Camel]

And moving to likely a variable interest rate on these HELOCs.

[Jade Warshaw]

Exactly. That's very true, George.

[George Camel]

It's a terrible solution for a lot of reasons. Yeah, but. And it doesn't attack the behavior that got us there. And we know personal finance is 80% behavior, 20% head knowledge, so you could mathematically go, well, this is a better debt to get into, and you're going to be a rat in the maze.

[Jade Warshaw]

Yeah. And we do find that a lot of times when folks consolidate debt, whether it's into a HELOC or another type of personal loan, it's kind of like, oh, great, they feel like they've solved it and then they keep piling up debt because they went from paying, I don't know, seven different bills to one bill bill, and somehow that made them feel like they had less debt. And so now that frees me up to just go into more debt. Right. So it's not, you know, there's, there's moments in time here on the show where you might hear us say something like, you know, a guy's upside down in a car payment. And we'd say, yeah, you know, get a loan for the difference. Or we'd, we'd convince them to do something that would get them out of a higher amount of debt to get into a lower amount of debt. Right. But in that case, case that's only really the only time you'd hear a say to move something. And it's really just in the car payment situation to get you from a $50,000 car payment to a, you know.

[George Camel]

Yeah. And sometimes refinancing, you know, like a mortgage or student loans. But even then we're not saying go take out other debt, pay off this debt.

[Jade Warshaw]

That's right.

[George Camel]

Simply to get better terms, not extend the timeline. But just for fun.

[Jade Warshaw]

Yes.

[George Camel]

He asks, are there some types of debt that are worse than others?

[Jade Warshaw]

Let's talk about that.

[George Camel]

Would you do a ranking for us, Jade, of what you think? This is just Jade's personal opinion.

[Jade Warshaw]

Jade's personal opinion. Okay, number one, if we have a spectrum here, I think the worst is payday loans. Would you agree?

[George Camel]

Yes. Because in my head you can go, well, highest interest rate, hardest to get rid of. And in my mind I go most predatory.

[Jade Warshaw]

But it's all of the above.

[George Camel]

I feel payday loans, the effective interest rate can be like 3 or 400%.

[Jade Warshaw]

All the above. Yeah. Terrible.

[George Camel]

People in this, in a terrible cycle of debt, even if it's just a few hundred bucks, it's not the amount with payday loans that makes them the worst. It's the predatory nature in the insane fine print terms that people don't understand.

[Jade Warshaw]

Which is also very similar to like a buy now, pay later. I find that to be predatory. It just preys on low income, middle income. I can't have what I want. Find me a way to get what I want. Buy now, pay later is so terrible. It's, it's like on the habit side of what you're saying, probably habit forming is, is the worst thing. I mean, it really does speak to the fact that you can buy now, pay later. Later. A stake is ridiculous. You know, you can buy now, pay later, anything.

[George Camel]

It's bad.

[Jade Warshaw]

So I'd say that probably after that, again, predatory. High interest rates. I'm going to go with credit cards, be third on my list and very easy of access.

[George Camel]

I mean, these credit card companies will give anybody a giant line of credit to go, yeah, go max it out at 10 grand at 29 interest. See what we care and A lot of these jade are, they're secured debts and there's unsecured debts. And that's an important distinction. Unsecured debts like credit cards are not attached to an asset.

[Jade Warshaw]

That's right.

[George Camel]

A car loan is a secured debt debt because your car is attached to it.

[Jade Warshaw]

That's right.

[George Camel]

So something went down. They could repo the car.

[Jade Warshaw]

There's something on the other end of it.

[George Camel]

But unsecured debt is going to have way higher interest rates. And so those to me, are some of the worst ones out there.

[Jade Warshaw]

Well, that leads me to my fourth on my list. I'm going to go with the car payment. I think a, it's an, it's an asset, but it's going down in value. So it stops being an asset the moment you buy it, basically because the value starts to deplete. And then, I mean, George, I've said it, you've said it, Dave said it.

[George Camel]

It.

[Jade Warshaw]

The car payment is what keeps you average. It's what keeps you broke. It's what keeps you from the middle class.

[George Camel]

The car payment, I think is one of the worst types of debt because it's been so normalized.

[Jade Warshaw]

Yeah. And most people have won their entire working career, their entire life. So you just swap one for another for another. And you know, at today's cost, you're, you're just, it's 500 to $700 a month that you're never going to invest. And so it's just keeping you from building wealth after that. I'd probably go to. It's a toss up between maybe the 401k loan or the student loan loan, but I think I'm gonna go student loan next. Specifically parent plus loans.

[George Camel]

Yeah. Those are brutal. Because there's a relational element there that we take those calls. And it's, it's not about the money as much. It is a broken relationship and a lack of communication and the parents on the hook at a crazy high interest rate. Now they can't retire.

[Jade Warshaw]

Yes.

[George Camel]

They want Junior to pay the bill, but Junior never agreed to pay the bill. It's just a nightmare.

[Jade Warshaw]

Yeah, it's, it's tough. We get those calls all the time. And then, then, then there's the 401k loan, which you go, I've worked so hard to put this money aside and now it's my money. But I don't get to just have it. I have to borrow it at an.

[George Camel]

Interest rate, unplug the growth, pay interest back to myself.

[Jade Warshaw]

Yes.

[George Camel]

And penalties.

[Jade Warshaw]

And penalties. It's just probably One of the most painful types of debt that you could take out. So I'd say that up higher on the list, I'd probably go with medical debt. Usually that's the Harmony homeless. I'm just trying to live. I was trying to take care of my child.

[George Camel]

Yeah, people are choosing to go into medical debt right now. They didn't sometimes didn't prepare, they didn't have the right insurance. That's right, but. And it's easier to settle than other types of debt.

[Jade Warshaw]

Yes. It's not ill intentioned. Right. It's like I wasn't trying to live this lifestyle or do this thing like life just happens.

[George Camel]

And we haven't even mentioned helocs, home equity loans, all of that. Goodness gracious, Jade, the list goes on and on.

[Jade Warshaw]

Where would you throw those? In the.

[George Camel]

That's definitely a middle class trap. As far as worst, I wouldn't trade places with people with a helock. It's not a fun life.

[Jade Warshaw]

They.

[George Camel]

They've. They're way over leveraged and they think, well, I got my home as a piggy bank. Why not take a bunch of cash out?

[Jade Warshaw]

Well, they're stealing from themselves.

[George Camel]

Fund a renovation or a pool or to pay off other debt, like our friend here is asking Sam. And it also puts your home at risk. You miss that HELOC payment, guess what? They can take your house.

[Jade Warshaw]

Well, it's just when you really think about it, I'm like, okay, I buy a house, I gain equity in it over time. That's my money. And if I were to sell my house, I'd get my money. But if I borrow it now, I have to bar again. I'm borrowing my own money because now I have to get my money, but I have to pay interest on it. It just makes me be like, well, why don't I just wait until I'm ready to sell this house and then I can just have my money.

[George Camel]

There's even a newer one. Jay, that's very frightening. I've seen this pitched online. People have sent this to me. What happens is these companies will say, hey, here's a loan for $100,000. You don't need to pay us back until your home sells. And how much do you owe us? Well, it'll be a percentage of the home sale. And so you could be giving away 30, 40% of your home sale to this company for the pleasure of this loan.

[Jade Warshaw]

That feels like it should be illegal.

[George Camel]

And even there's another company that will give you a credit card tied to your home equity.

[Jade Warshaw]

I'VE seen that. I've seen that.

[George Camel]

They're just making easier and easier. And their marketing is so good. They spend millions and millions of dollars a year to market these products to people on social media. And they know their target demo and people fall for it thinking it was going to be easy money. They don't read the fine print. And so if it looks like debt and it smells like debt, it's debt. Just run away.

[Jade Warshaw]

Just run away.

[George Camel]

Gosh.

[Jade Warshaw]

Yeah. No matter how you slice it, if it's stealing your income, if it's causing you to make a payment every month, it's not good.

[George Camel]

I feel like ranking dead is like ranking gas station bathrooms. It's like, this is not a fun thing to do. Although I'll give a shout out to BUC EE's. Their bathroom is. I mean, you could eat off the floors at Buc EE's, I think.

[Jade Warshaw]

No, don't try it.

[George Camel]

I wouldn't. But I'm just saying I feel like they're taking care of business over there.

[Jade Warshaw]

You know what? Where I think always surprisingly has bad bathrooms. Like the bookstore, like Barnes and Noble. Or like, you go in there and you're like, what's happened here? Here.

[George Camel]

There's a theory here. This is not for the Ramsey show, but let me tell you, there's a theory that when you enter Barnes and Nobles, it causes you to have a bowel movement. There's science behind it. I don't know.

[Jade Warshaw]

Is it because you went in with coffee? You. You like. I'm gonna get a coffee. I'm gonna have a book.

[George Camel]

Is the smell of books? I don't know.

[Jade Warshaw]

Just listen. Don't bring your book in there with you because somebody's gonna have to buy that later.

[George Camel]

We need answers and we also need to rank gas station bathrooms. I'll work on that for my next YouTube video. Dave will love that one.

[Jade Warshaw]

Foreign.

[Ally]

Buying and selling a home is a big deal, and you want an.

[George Camel]

Expert in your corner fighting for you.

[Ally]

To get the right deal at the right price. That's why we only recommend Ramsey trusted real estate agents.

[George Camel]

They're handpicked pros who know their stuff, listen to your needs, and have your.

[Ally]

Back from the first call all the.

[George Camel]

Way to closing day. To find a Ramsey trusted agent near.

[Ally]

You, visit ramseysolutions.com ramseysolutions.com agent.

[George Camel]

Welcome back to the Ramsey show. I'm George Camel here with Jade Warshaw. The phone number to call is 888-825-5225. Let's see if I can Find the our scripture and quote of the day. Here it is, Philippians 1:9. And this is my prayer that your love may overflow more and more with knowledge and full insight. Isaac Asimov said, those people who think they know everything are a great annoyance to those of us us who do.

[Jade Warshaw]

Hello.

[George Camel]

That's brilliant. I'm not smart enough to feel that way, but once I know everything, I'll let you know. Jay?

[Jade Warshaw]

Yeah. Yes. When you hit that moment, I feel.

[George Camel]

Like the older I get, the less I know. Oh, you know, there's just so much to know when you're a little kid. You think and teenager.

[Jade Warshaw]

Yes.

[George Camel]

Think you know it all.

[Jade Warshaw]

Yeah, that's true.

[George Camel]

I know how to Google it. That's about it. I'm resourceful in that way. All right, Ally is in Raleigh up next. What's going on? All right.

[Ally]

Hi guys. So I recently found out that my boyfriend of a decade is in $80,000 of secret credit card debt. I knew he had 40 grand in student loans that he was slowly paying off. And he recently asked me to co sign on a hundred thousand dollar HELOC on his home that he owns. My name is not on it, but I do live there. I've only lived there about last two years. Years.

[George Camel]

Oh my God.

[Ally]

He can pay off that credit card debt because he has maxed out every card and is pretty much at the end of his rope.

[George Camel]

How did you find out about this?

[Ally]

He hit the end of the rope.

[Jade Warshaw]

Oh man.

[George Camel]

What is his addiction?

[Ally]

Cars. He runs his own classic car restoration shop and I thought he was making more money than he was. Apparently he wasn't. He was leveraging most of it on credit cards. He is excellent at what he does, but he is not good at the business side of things. He sees a car he wants, he gets it. He cycles through like three or four sports cars a year.

[Jade Warshaw]

Interesting.

[Ally]

Yeah, he sees. He sees a build, he buys it, he builds it, he gets bored with it, he sells it. Repeat, repeat, repeat.

[Jade Warshaw]

So you definitely told him you're not signing co. Signing the hundred. The hundred thousand dollar heloc. Great.

[Ally]

Because if he takes one of those sports cars and wraps around a telephone pole, I'm stuck with his debt for the rest of my life.

[Jade Warshaw]

Yeah, that's one way to put it for context.

[Ally]

I did not live with him for the majority of our relationship. I was on baby step six. I got in a nearly fatal car accident and my health insurance sued me personally to take back the half a million they spent on me. I lost my car, my house, my Job, my life savings. The only thing I was left with was my kids college savings because they legally could not touch that. And I moved in with him. He took care of me. After the accident. It took me like two years to learn to walk, get out of a wheelchair, come out of a walker and get a job again. We lived on my life savings. That's where they all went. And then the health insurance took everything else. So I did consider the HELOC for a second because I felt like I owed him. But I cannot. I'm. I am debt free.

[Jade Warshaw]

Yeah. Yes. No, I. Let me, let me affirm that in you. You don't. If someone takes care of you, it's out of the goodness of their heart and it's an act of generosity. And I am a firm believer that if somebody does something out of an act of generosity, they're not looking to be paid back back. And it's. Even if they were, this is not apples to apples, okay? I'm sure that if something happened.

[Ally]

Yeah.

[George Camel]

We don't enable financial misbehavior because of that.

[Jade Warshaw]

That being said, I'm trying to say this delicately. I don't know if there is a way to put it delicately.

[Ally]

You don't have to be delicate.

[Jade Warshaw]

What's it matter to you? You're not married. You've kept your financial life separated. He does this, you do this. You know, he has his house, so what's it to you?

[Ally]

I live in his house. I've lived in his house for the last two years because the health insurance company sued me and took mine.

[Jade Warshaw]

Right.

[Ally]

I was 40 grand. No, 47 and a half away from paying off my own house.

[Jade Warshaw]

Gotcha.

[George Camel]

Are you working full time?

[Ally]

I am working full time, but my earning capacity is greatly reduced because I had final injuries. I have a TBI and I cannot work at the same capacity that I used to. To.

[George Camel]

So what do you.

[Ally]

I went from working, I make about $35,000 a year, dropping from the 70 I used to make.

[George Camel]

Okay.

[Jade Warshaw]

Right. But again, he has $80,000 in debt. Are you worried that he's going to lose his house? And if he loses his house, you lose your house.

[Ally]

He has 80 just in credit card debt, 40 in student loans.

[Jade Warshaw]

Got you.

[George Camel]

Are you sure this is all of the debt?

[Ally]

Yes. We sat down and I made him show me. We pulled everything. We pulled a credit report. I said I have to see everything because I'm currently paying all of our bills.

[Jade Warshaw]

Why are you paying the bills?

[Ally]

Because he has nothing to pay them with. That was the end of the rope.

[Jade Warshaw]

Okay. So here. Okay. Again. Because again, I asked the question. How can I put this? There's no real lines around this relationship. So it's very hard for me to say, here's how you get involved financially and someone with. That you're not married to and a. Has really lied for the course of a decade. And the hard part is you're feeling like this person took care of me. There's two, there's two really emotional lines here that are hard for you. They took care of you when you needed it and you're kind of. If this goes south, you kind of feel like you're up a creek without a paddle because this is where you're living.

[Ally]

Oh, I'm. I'm completely up a creek without a paddle because with. I don't have any, Any family members that I can rely on. I don't have any. I don't have any friends anymore. A lot of them, unfortunately, turned out to be fair weather friends. And that came out during my accident.

[Jade Warshaw]

I'm sorry, but.

[Ally]

And I do not.

[Jade Warshaw]

I'm sorry, but do not make the.

[Ally]

Minimum to get a house where I currently.

[Jade Warshaw]

Yes, but you can't. If this is a dysfunctional relationship, you can't allow yourself to stay in a dysfunctional relationship for the financial benefit. Benefit. And now that there's not one. Right. I would rather you.

[Ally]

There's definitely not one.

[Jade Warshaw]

You feel like you're against a corner and I, I can see that and I can hear that. But I want to encourage you to look and say you might. There might be other windows that allow you to get out of this.

[George Camel]

If you made more money, would you leave this relationship today?

[Ally]

Knowing what I did about hiding 80 grand in debt? Yes.

[Jade Warshaw]

Yes.

[George Camel]

Okay, so if that's the case, then why don't we go rent somewhere, Find a roommate or two if we have to.

[Jade Warshaw]

Yeah.

[George Camel]

And get to some stable ground where you're not attached to this anchor that's going to continually drag you down because you're paying his bills and you're broke.

[Jade Warshaw]

Yeah. You can't afford that.

[Ally]

Yeah.

[George Camel]

So you're not really gaining as much as you think. I'd rather you go pay a thousand bucks in rent and have two or three roommates.

[Ally]

The mortgage is 1100.

[Jade Warshaw]

Yeah.

[Ally]

I've currently been doing that, looking around, you know, trying to find somewhere that's affordable most places. You know, know I have an excellent credit score. I have an 18 credit score.

[George Camel]

But that's not the issue. You could go rent anywhere right now, then I would.

[Ally]

Is the three times the monthly rent and the average rent in my area is $2,500.

[Jade Warshaw]

Okay. But George is also saying is there a way that we can get a roommate situation?

[Ally]

Yeah, I've been looking.

[Jade Warshaw]

Okay. Keep, keep, keep the hunt for.

[Ally]

It's a lot of hunting. Yeah.

[George Camel]

There's Facebook groups, there's all kinds of resources. You know, there's a bun gals out there who would love a great roommate like Ally who can pay her fair share and more. And I think that's your situation to get out of this. Not staying in it because of desperation. He's made it clear, I mean it's been a decade of this. He hasn't committed to you. There's been no ring, no engagement, just secret. And so I don't know that this is. The ship's going to turn around magically the next year. It sounds like he has chosen his obsession over you.

[Jade Warshaw]

Yeah, yeah, yeah. Tell us a little bit more about your work situation again.

[Ally]

So I was an emergency room nurse. I worked like 70 hours a week.

[Jade Warshaw]

But what you're doing now.

[Ally]

And I now work doing maintenance surveying for my county.

[Jade Warshaw]

Okay. And the, your health is what's keeping you from doing more hours.

[Ally]

I work full time 40 hours a week. It's the physical aspect of it.

[Jade Warshaw]

So then let's, let's hook you up. Let's hook you up with some other prospects. We're going to make sure you have proximity principle. We're going to have you get, find the work you're wired to do because I think there's probably other jobs out there that are less physical that you can make more money doing for 40 hours a week. And so maybe getting you.

[George Camel]

Are there more administrative roles in a medical setting that you can, could do?

[Ally]

I looked at it, but because of the tbi sometimes I have issues with short term memory. I have to write everything down. I have vertigo attacks and sometimes anything. That's a lot of like.

[Jade Warshaw]

But you're working 40 hours a week now, which means there are things that you can do for 40 hours a week. Yeah, yeah. So I just want to do something that maybe is not as taxing on you physically but still gets you the hours and still gets you the money. We'll hook you up with the things that you need.

[George Camel]

Hang on the line, Ally.

[Ally]

Hey, you guys. I was shocked to learn that 88% of you out there are sharing the Ramsey show. I mean that is so incredible. Thank you so much. And I want to tell you that we're making it even easier to share so this June we have pulled together the brand new Ramsey101 YouTube playlist. A quick start collection of how to get started walking the Ramsey Plan. Now this playlist is perfect for that one person in your life who needs help winning with money and just doesn't know where to start. So here's what's inside, what the baby.

[Jade Warshaw]

Steps are and why they actually work.

[Ally]

How the debt snowball helps you pay off debt fast and how to build wealth and invest for the future and so much more. So here's what you need to do. Click the link at the top of the show notes. It'll take you straight to the YouTube playlist. Copy it, text it, send it in a group chat. Just say hey, I thought this might help.

[Jade Warshaw]

Because one playlist shared at the right time. Time could be the turning point. One share, one playlist, one step could.

[Ally]

Change everything for that one person in your life. So click the link, share the Ramsey show and let's help someone out there start winning with money.