More Debt Is Never the Way out of a Tough Situation

Summary

Podcast Summary: The Ramsey Show – "More Debt Is Never the Way out of a Tough Situation"

Release Date: June 26, 2025
Host: Ramsey Network (George Campbell and Jade Warshaw)

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Introduction

In this episode of The Ramsey Show, host George Campbell and co-host Jade Warshaw tackle the pervasive issue of debt, exploring why accumulating more debt is never a viable solution to financial hardships. Through real-life listener calls, they provide actionable advice, emphasizing the importance of budgeting, strategic debt repayment, and maintaining financial discipline.

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Listener Call Summaries

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1. Courtney from Oklahoma City: Struggling with Home Repairs and Debt

Timestamp: [00:39] – [07:00]

Situation:
Courtney and her husband live in a home compromised by extensive mold and structural damage due to improper ventilation during a previous renovation. The necessary remediation costs between $6,000 and $8,000, excluding demolition and rebuilding. With limited savings (around $3,000 to $12,000) and an annual household income of approximately $75,000, the couple is uncertain whether to take out a loan or explore other financing options. Additionally, their finances are managed separately due to past issues, complicating joint financial strategies.

Advice Provided:

• Budgeting Importance: The hosts emphasized the couple's lack of a structured budget, which obscures their ability to identify and allocate funds for necessary repairs. Jade Warshaw stated, “[03:24]... I could almost guarantee I could find you a thousand bucks if I look at your bank statements and helped you create a budget.”

• Debt Snowball Method: Courtney challenged the couple on their budgeting practices, highlighting the necessity of a comprehensive budget to manage and pay off debts effectively.

• Joint Financial Planning: The importance of unified financial management was underscored, suggesting that separating finances may hinder their ability to tackle debt collectively.

Notable Quote:

Courtney: “[03:53]... I think that you need a budget and he needs a budget.”

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2. Samantha from Indianapolis: Overcoming Credit Card Debt Amid Life Changes

Timestamp: [10:52] – [20:00]

Situation:
Samantha faced significant financial strain after losing her job and the passing of her grandmother, resulting in accumulated credit card debt totaling approximately $8,000. Utilizing a life insurance policy, she managed to pay off most of this debt but remains concerned about an outstanding $2,300 balance. Currently unemployed and relying on her partner for support, Samantha is apprehensive about re-entering the workforce with existing debts.

Advice Provided:

• Negotiating Debt Settlements: Jade encouraged Samantha to negotiate with creditors for a possible settlement, suggesting, “[15:02]... You can come up with $500 bucks in the next 60 days.”

• Increase Income Streams: The hosts recommended exploring additional income avenues, such as side gigs like Instacart, to accelerate debt repayment.

• Mental Resilience and Action: Emphasizing the importance of proactive steps, Jade Warshaw remarked, “[16:06]... Some momentum behind it and going, all right... there is a path forward.”

Notable Quote:

Jade Warshaw: “[07:00]... more debt is only going to make your situation more difficult.”

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3. Josh from Louisville, Kentucky: Leveraging a Lump Sum to Pay Off Debt

Timestamp: [21:59] – [31:11]

Situation:
Josh received an $80,000 lump sum from an insurance payout due to a car accident. He is grappling with $170,000 in total debt, including a mortgage, student loans, a car loan, and solar panel debt. Josh is contemplating using the lump sum to pay off his largest non-mortgage debts but is unsure whether to follow the traditional debt snowball method or prioritize debts differently.

Advice Provided:

• Debt Snowball Strategy: Jade advised Josh to list all debts from smallest to largest and apply the lump sum accordingly, reinforcing the behavioral aspects of debt repayment.

• Budgeting and Financial Behavior: Courtney highlighted the importance of consistent budgeting to maintain progress, stating, “[29:12]... this plan is all about behavior.”

Notable Quote:

Jade Warshaw: “[29:55]... and behavior that got you here. So I would encourage you to follow the plan as is stated, and I think you will see great success.”

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4. Michelle from Dallas: Balancing a Family Business and Financial Stability

Timestamp: [33:26] – [41:54]

Situation:
Michelle manages a family-run upholstery shop, experiencing burnout and financial uncertainty despite being eight months booked. With no employees and a heavy emotional investment in the business, Michelle is torn between continuing the venture and closing it to alleviate financial strain.

Advice Provided:

• Delegation and Hiring: The hosts suggested hiring additional help or delegating business operations to reduce burnout and improve financial management.

• Business Evaluation: Courtney and Jade discussed assessing whether the business is financially viable, considering the emotional attachment and market conditions.

• Building a Support System: Emphasizing the need for professional guidance, Jade recommended resources like Dave Ramsey's books to navigate business and financial challenges.

Notable Quote:

Courtney: “[35:34]... if you want to keep this business, you're going to have to learn how to delegate.”

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5. Robert and Angela from California: Success Story Celebrating Debt Freedom

Timestamp: [106:47] – [112:52]

Situation:
Robert and Angela achieved debt freedom by paying off $25,000 in debt over 28 months while earning a combined income of $66,000. Their journey included eliminating credit card debts and a car loan, despite setbacks like driving an unreliable vehicle.

Advice Provided:

• Persistence and Teamwork: Their success highlighted the effectiveness of collaborative budgeting and relentless dedication to debt repayment.

• Celebrating Milestones: The hosts celebrated their achievement, reinforcing the motivational aspect of the debt-free journey.

Notable Quote:

Courtney: “[112:15]... You're going to have a hard time. They're going to force you to sell all of your assets before they let you consider it.”

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6. Mike from Houston: Navigating Debt Avoidance and Financial Anxiety

Timestamp: [69:38] – [90:36]

Situation:
Mike is contemplating filing for bankruptcy amidst $175,000 in debt, including a $125,000 HELOC for home repairs. With a high mortgage-to-income ratio and rising expenses in the expensive San Francisco Bay Area, Mike seeks guidance on whether to continue paying off debt or consider drastic measures like bankruptcy.

Advice Provided:

• Avoiding Bankruptcy: The hosts strongly advised against bankruptcy, emphasizing alternative strategies such as selling the home to eliminate debt and rebuilding financial stability.

• Strategic Downsizing and Budgeting: Courtney and Jade recommended downsizing living arrangements and enhancing income streams to manage and eliminate debt efficiently.

• Financial Planning and Support: Emphasizing the necessity of a solid financial plan, the hosts guided Mike to assess his budgeting and consider relocating to a more affordable area.

Notable Quotes:

Jade Warshaw: “[89:22]... You're terrified of having less than 12 grand in the bank, but you're on the verge of bankruptcy with a quarter million dollars in debt.”

Courtney: “[90:10]... I would sell before bankruptcy and you make it 142,000. I think you're gonna have a hard time.”

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Conclusion and Key Takeaways

Throughout this episode, The Ramsey Show underscored the detrimental effects of accruing more debt as a solution to financial problems. Instead, the hosts advocated for:

• Comprehensive Budgeting: Essential for understanding income, expenses, and identifying discretionary funds for debt repayment.

• Debt Snowball Method: A behavioral approach to systematically eliminate debts from smallest to largest, fostering momentum through quick wins.

• Strategic Financial Decisions: Encouraging listeners to make informed choices about debt management, business operations, and major financial moves like selling a home.

• Emotional and Practical Support: Acknowledging the emotional toll of debt and offering practical advice to alleviate financial stress through disciplined planning and support systems.

Notable Overall Quote:

Jade Warshaw: “[84:52]... Amy was ready. She was ready. She had the enthusiasm we need.”

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Final Thoughts

This episode serves as a powerful reminder that while financial struggles can be overwhelming, adopting a structured, disciplined approach to budgeting and debt repayment can lead to financial freedom. The Ramsey Show provides both inspiration and practical tools to help listeners navigate their financial challenges effectively.

Transcript

[George Campbell]

Foreign.

[Jade Warshaw]

To you by the everydollar app. 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 Campbell joined by Jade Warshaw. We're taking Your calls at 888-825-5225. You call in, we'll help you take except for your life and your money. Courtney's going to kick us off in Oklahoma City. What's going on, Courtney?

[George Campbell]

Hi. I just have a question about home repairs and basically the. The route we should go on if we are trying to debt, but we do currently live in a home that is proving to be not actually livable.

[Jade Warshaw]

Are we talking like black mold or is it like I don't like the kitchen?

[George Campbell]

No, we're talking about extensive mold. When we got testing done, the it didn't come back as anything majorly toxic, but obviously it's just not currently ideal situation to live in.

[Courtney]

So that's interesting to me. So you got it tested and they said it's not overly toxic. Does that just mean they can remediate it, move on and no one's concerned.

[George Campbell]

They can remediate it. But the problem is the space that was added onto the house before we moved in was improperly ventilated. We actually didn't know this, but they built on top of a crawl space and then they just sort of tapered it off. And so there's a portion of the house that's not actually a true crawl space, but there was no moisture barrier. So now the support beams under that part of the house have completely rotted away with the mold and our floor caved in. So that part of the house is not habitable.

[Courtney]

Got you. Got you. So how much does it cost to fix it? Fix all of that?

[George Campbell]

The remediation alone would be between 6 and $8,000. But that does not include demo and to rebuild it. And we actually don't know if that includes mold that has traveled up into the sheetrock or if. If it's strictly underneath the floor.

[Courtney]

Got you. Okay, so now hit us with the. Hit us with the hammer of why you can't afford this and why this is a well.

[George Campbell]

We potentially could be looking at thousands and thousands of dol. And we're. We're just wondering what can we. What route should we go? Do we take out a loan to try and get this fixed? Do we? Everything that we searched, it keeps pulling up heloc and we're just we're uncertain about that. So we just don't know what route to take here. Insurance is not going to cover it, by the way.

[Courtney]

Do you have any money anywhere? Like, do you have any money saved anywhere?

[George Campbell]

We have a little bit in 401k. We have a little bit in savings, but not much.

[Courtney]

What's in the savings?

[George Campbell]

It would be just around a couple of thousand. It's not much at all.

[Courtney]

3,000 or like $12,000.

[George Campbell]

Somewhere around there.

[Courtney]

Okay.

[George Campbell]

Yeah, somewhere around there.

[Courtney]

Okay. Well, you're halfway there for the remediation. That's the good news.

[George Campbell]

True.

[Jade Warshaw]

And we know it doesn't have to happen tomorrow. So could this happen over the course of the next 90 days? And you guys cash flow, it could just save up 1000 or 2000 bucks a month out of your paychecks.

[George Campbell]

Absolutely not.

[Jade Warshaw]

What do you guys take home every month?

[George Campbell]

I'm not sure of the exact number that we take home, but yearly, between the two of us, we probably only make about 75,000.

[Courtney]

Okay, so here's where I want to challenge you, because I asked you a question and George asked you a question, and you didn't know the answer to what I would say are pretty basic numbers, Courtney, which is how much do you have in savings and how much do you make every month? Which that lets me know you don't have much of a budget.

[George Campbell]

We don't.

[Courtney]

Okay.

[George Campbell]

Which also there is a little bit of backstory there. We have had some issues in the past, and for that reason, we did keep our finances separate. So I'm tallying numbers here, and this is something that we are working towards. That's a. That's a separate issue.

[Courtney]

Okay.

[George Campbell]

We are working towards that goal, but these are roughly around the numbers that we would be working with.

[Courtney]

So you're separating the money, but it's not you having all the control over the money or him having all the control over the money. You're managing your own. Is that what I hear?

[George Campbell]

Correct.

[Courtney]

Okay. That being said, it doesn't change the fact I still think that you need a budget and he needs a budget.

[George Campbell]

Definitely.

[Courtney]

And I think when you do that. Because right now you really can't answer George's question. You don't know if there's extra margin you could pull together.

[Jade Warshaw]

There is not $1,000. I can almost guarantee I could find you a thousand bucks if I look at your bank statements and helped you create a budget. So I want to encourage you that it is possible to do this, making 75,000 a year.

[George Campbell]

So what do we do about the. The literal floor being, you know, we cannot use that part of the house.

[Courtney]

I mean, what are you doing today?

[George Campbell]

Yeah, I'm sorry. I could. I could only hear it with both of you.

[Jade Warshaw]

I'm just wondering, you. You haven't been able to use it. What was it used for previously, if anything?

[George Campbell]

That was our bedroom.

[Jade Warshaw]

So where are you guys living right now or sleeping?

[George Campbell]

Well, I am currently in the living.

[Jade Warshaw]

Room, like, on a couch. Is there an air mattress in there? What's the situation?

[George Campbell]

We tried to move our bed into the living room, and it just. It wasn't working out, so we tried to move it into a back part of the house, and ultimately the couch was a better option.

[Jade Warshaw]

Are there kids involved?

[George Campbell]

Yes.

[Jade Warshaw]

Okay. How many kids?

[George Campbell]

One.

[Jade Warshaw]

Okay. And their bedroom's intact?

[George Campbell]

Yes.

[Jade Warshaw]

But mom and dad are hanging out in the living room?

[George Campbell]

Yes.

[Courtney]

That's.

[Jade Warshaw]

That's an adventure. That's a story you'll be able to tell one day to your kids.

[Courtney]

It's a camping trip.

[George Campbell]

It's a really adventure.

[Jade Warshaw]

Could you survive this for another six months?

[George Campbell]

We've been living like this for five years.

[Jade Warshaw]

Well, I'm sorry. Five years?

[George Campbell]

Yes.

[Courtney]

Wait a second.

[Jade Warshaw]

So you've. This issue has been happening for five years, and we're just now doing something about it?

[George Campbell]

No, this has been. Like I said, there's been some other issues in other areas that, you know, don't deserve any time on the air. But now that we have worked through some of those issues and we are trying to get on top of finances, we just truly don't know where to go. And we've only recently started. My husband recently started the Dave Ramsey plan, and so we're on the right track. But it's been really hard to try and convince him that taking out some sort of. Some sort of loan or something somewhere to get this fixed is a good idea, because right now he's really wrapped up in the idea of knocking out all debt, knocking out everything, but ultimately.

[Jade Warshaw]

So you want to take out the loan and he doesn't?

[George Campbell]

Yes.

[Courtney]

Well, here's the thing. Here's what I'm hearing. There's discomfort going on. You've. You've experienced something in your relationship. You don't have to mention it on. On air, but whatever that is, that has been very uncomfortable. And now you've had this thing pop up in your home. The mo. And the issue with the, I don't know, joist. Is that what they're called? I don't know, the wooden beam? And. And that's Uncomfortable. And you're trying to get the money, and that's separate. So that's uncomfortable. There's a lot of uncomfortability going on. And now you called this show and we're asking you to do something else that is potentially quite uncomfortable for a longer period of time. And I think you're probably just experiencing a fatigue in that area of. Can I just please have a simple solve, guys? Can you just make it easy for me? And unfortunately, debt can look like the simpler. You know, it can look like the solution, it can look like the easy button. But you've just told us you've been through some things, and if you turn around and add this debt to the equation, yes, maybe you get the thing fixed tomorrow. But now you've got this huge amount of debt hanging around your neck that you guys have to get on the same page on financially what you're not in order to pay off. And I can tell you it's probably going to be easier for you guys to lock arms and pay for something in cash than it is going to be for you guys to lock arms and pay off this debt because your money's separate. So he pony up the cash, you pony up the cash, and you guys get this thing paid for in cash.

[Jade Warshaw]

I'm on Team Husband. Helocs are only going to give you permission to do the stupidest things, like take this mold situation and go, you know what? Full kitchen reno. They're giving us $100,000. Don't do this, Courtney. It's going to be hard, but more debt is only going to make your situation more difficult. This is the Ramsey show. Okay, Rachel, the Internet officially knows too much about all of us.

[Courtney]

So much, George.

[George Campbell]

I mean, our names, our addresses, even our relatives names. And what's crazy is even if you opt out, data broker websites can still get your info.

[Jade Warshaw]

Don't like that. And just a year ago, get this, the average person had about 300 pieces of personal data floating around online. Now it's over 600. It is doubled in a year.

[George Campbell]

Guys, that is so concerning. Because that info then can be used in phishing, scams, impersonation, and even harassment. That's why George and I both use and love Delete Me.

[Jade Warshaw]

Yes, Delete Me scrubs your personal info from hundreds of these data broker sites, not just once, but all year long. And there's real privacy at experts behind the scenes doing this, not bots. So this is digital hygiene. We all need.

[George Campbell]

We all need it. And then they will send you a detailed report showing exactly where they found your data and what they removed. And you can even request custom removals if you have something specific you want.

[Courtney]

Them to look out for.

[Jade Warshaw]

Exactly. And this is not being paranoid. This is staying protected. And so far, Delete Me has removed my info from 240listings and saved me 94 hours of time it would have taken me to do it.

[George Campbell]

I love it. And you guys, in a world where strangers can google your grandma and get enough info to scam her in just two clicks, Delete Me gives you peace of mind.

[Jade Warshaw]

Yes. So go to joindeleteme.com Ramsey for 20% off. And that discount brings their annual plans down to about nine bucks a month. So go check it out. Joindeleteme.com Ramsey Samantha's up next in Indianapolis. What's going on? Samantha, welcome to the show.

[George Campbell]

Hi. Thank you for having me.

[Jade Warshaw]

Sure. What's going on?

[George Campbell]

So late last year, I just had a series of unfortunate events. I had lost my grandma, who was very close to because she raised me. And then a month after that, I got laid off from my job is my role. And while I had that job, it was data entry job. I was making about $22 an hour. So, you know, I was very well off during my time there. And I was living off credit cards because I thought that I could afford it at the time because I was making so much. So basically I had about close to $8,000 in credit card debt. And just between grieving the loss of my job and then the loss of my grandma was really close to, I just wasn't keeping up with it. I just kind of shut down mentally. I let it lapse. I wasn't communicating with them to try to make payment arrangements or so fast forward to now. We're at the point where everything is about to go to collections. My mom actually got a life insurance policy from my grandma. I was on the policy, but she was. And she gifted me some money out of her part of the policy. And I'm using it to pretty much pay off as much of the credit card as I can.

[Jade Warshaw]

How much was the. Was the life insurance policy or the portion you got?

[George Campbell]

So my mom only gave me about 8,000.

[Courtney]

Okay. And how much is now the inflated collections, credit card debt.

[George Campbell]

So I have actually been working, making phone calls all this week to get all of them paid off. So they're all good. I have $1,800 left out of the money, and I have one credit card left that's about to go to collections. That's $2,300 it's still with the company's non collections yet and I'm trying to get to them to negotiate and just settle for the 1800 so I can just be done with it and be debt free. And I'm unemployed now also. I'm just trying to get rid of all of this debt before I go back into the workforce because I don't want to have that stress right away, if that makes sense when I go back to work of having to like.

[Courtney]

Well, how are you going to live? What are you living on? What portion of money are you living on?

[George Campbell]

So I have, I'm living with my partner. He's been nice enough to kind of take on my part of the bill, so he's fully supporting me right now.

[Courtney]

Okay. I don't love that.

[Jade Warshaw]

Is this all the debt you have left to your Name is the 1800 or the 2300?

[George Campbell]

Yes.

[Jade Warshaw]

Okay.

[Courtney]

There's part of this. Okay. You got the life insurance money. If you had called us a couple of days before you paid off this debt, part of me would have said, hey, you're between jobs, you're in a bit of a storm mode. Let's hold this and let's get really, really proactive about finding any job just so you have some money coming in and then you could turn around and pay these bills. But it bothers me that you have no income whatsoever coming in and you're kind of at somebody else's kind of, you're at their mercy. And I love that you're paying off debt. But I also, you got to get some money coming in and I don't want you thinking, okay, I paid off my debt, I can sit over here and like, this guy's gonna help me out, like, what's your plan for getting real money in the door?

[George Campbell]

So I actually do have a job lined up. I'm starting a part time retail job. It's just because it is part time, that's all I could just find at the moment. It's just not enough to like tackle on the debt with that, if that makes sense. So I was just trying to pay it off. Like by the time I start working, I could just focus on, you know, like paying my actual bills and things and not paying, putting it all towards debt.

[Jade Warshaw]

When you say lined up, have you accepted the offer and you're starting, you have a start date?

[George Campbell]

Yes, I start next week.

[Courtney]

Okay. And you're getting another job to go with that part time job? Have you started that process?

[George Campbell]

No, I'm sorry, that's just, I'm just, I just have the part time job. I haven't started that one yet.

[Courtney]

Okay. So that's what I want. That's what I want for you. And then once you do that. Yeah. Pay off this last step. But you've got to have a living wage, otherwise another. You're just going to start another fire. Does that make sense? You got to get, you got to have that in, in line. So yeah, go back to. You're saying they won't settle for the 1800 when it's time.

[George Campbell]

Correct. So they're not saying, they're saying that the account is not negotiable at all. And I have to pay that full 2300.

[Jade Warshaw]

When is it going to collections. How soon?

[George Campbell]

They wouldn't give me an exact date even. But I got an email saying that it will, is going to go in 60 days or less.

[Courtney]

Okay.

[Jade Warshaw]

So you can come up with 500 bucks in the next 60 days. Right. Even with a part time retail job, you'll make over $500 net in 60 days. It's two months.

[George Campbell]

Yeah, I could possibly, I could probably do that. You're right.

[Jade Warshaw]

No, not probably. Samantha, I need you to have a little confidence here and go. I'm paying this debt off next month. I mean I. You can sign up for Instacart tonight and go make 500 bucks in a week.

[Courtney]

I get that you don't want to pay the money like I can. I can sympathize with not wanting to. But you did rack up this money. It's not in collections yet. Let's. Let's pay what we owe and make it. Get it right side up.

[Jade Warshaw]

But I think there's something deeper here because you haven't worked in a long time. How long has it been?

[George Campbell]

It's been since before Christmas.

[Courtney]

And how old are you?

[George Campbell]

I'm 27.

[Courtney]

27. So my guess is what is it? I'm getting into Ken Coleman land. But if you could snap your fingers today and be in a career field, what would it be?

[George Campbell]

So I was doing data entry. It was a work from home job. And I'm just trying to get back into that field because that was really what I love doing.

[Courtney]

And what's kept you from getting back into that field? Is it qualifications? Is it finding the openings?

[George Campbell]

Basically just finding the openings. The company that I worked for, they pretty much eliminated my role and sent it overseas. And that's what pretty much all of the companies that are relevant to my field are doing. And I even went, you know, branched out a little bit to Just do it from home. In general, because I'm unable to drive, so I have to have work from home.

[Jade Warshaw]

You're unable to do that due to medical issues?

[George Campbell]

Yeah, I have epilepsy and I get seizures, so I'm not able to get a driver license.

[Courtney]

Okay, good to know. Okay, so you've got some limitation there. I just want to make sure you're getting on a path that you're excited about because talking to you, it doesn't. I don't sense the excitement. I don't have that sense of urgency behind what it is that your next steps are going to be career wise. Before you get off the line, we're going to give you a couple of resources. I, I want you to have find the work you're wired to do. There's a career assessment in there and I think it'll give you some ideas on what, not only how you're wired, but what that translates to as far as different careers are concerned. If we give it to you, do you promise you'll do it?

[George Campbell]

Yeah, absolutely.

[Courtney]

Okay, great, great. We'll give you that. We'll give you paycheck to purpose. We'll give you proximity principle. I think that you just need to get fired up in the area of career. I don't want you leeching off some D. Fair enough.

[George Campbell]

Yes.

[Courtney]

Yeah, you're more than that. You got, you've got skills, you've got talents, you've got a lot to offer and I want you to tap into that and I want you to believe that.

[Jade Warshaw]

How old are you, Samantha?

[George Campbell]

I'm 27.

[Jade Warshaw]

Okay. I think we're just rooting for Samantha more than Samantha's rooting for herself. And I think you need to get some mojo back. You've been through a lot. You've had a lot of grief, the job loss, grandma who raised you. But the best path out of grief is not to stay put and just sit and wallow in it at home. You've. You've done that. You've done that long enough. It hasn't gotten you anywhere. So the way I found my way out is through action activity, getting some momentum behind it and going, all right, you know what? There is a path forward. I'm not stuck here. And I think that's what's going to take for you. And I think there's a life beyond just another part time job, another data entry role. And that's what these resources from Ken will give you is a deeper purpose that really lights a fire under you to go do something that you're passionate about and make good money doing it. And then you'll never touch a credit card again. Have you canceled all of your cards?

[George Campbell]

Yeah, so all the ones that I have paid off, I just send settlements. And the agreement is like, once they get that settlement that they're going to be closed.

[Jade Warshaw]

Good, good, good. And then never open one again. These companies are not your friend.

[George Campbell]

I'm tired of them.

[Jade Warshaw]

It's not a security blanket. This is going to only hurt your future if you rely on credit card companies for anything. Even if you, quote, pay it off perfectly. You can do that with your own money and not have to be at their. I don't know. They're under their thumb.

[Courtney]

Under their thumb.

[Jade Warshaw]

That's what I'm looking forward. A big old credit card thumb. No, thank you.

[Courtney]

Listen, Samantha's gonna make good choices. I believe in her. The fact that she took the inheritance or took the life insurance and true. And made a good. What she felt was a good choice in the moment. Yeah, that was. That's a good sign. All, all signs are on the up and up for Samantha. She's just gotta grab life. Gotta grab it by the horns. Yes.

[Jade Warshaw]

We're really great today. We're finishing each other's sentences. Golly. All right, we'll get there, Jade. We'll get there. This is the Ramsey Show.

[George Campbell]

Sticking to a budget is hard enough. And inflation, George, it isn't helping us.

[Jade Warshaw]

Yep. In fact, 54% of Americans say it's a challenge to save on groceries without sacrificing quality. But Aldi makes it easy.

[George Campbell]

Aldi's private label. It is delicious food with incredible prices that you can stay within your budget.

[Jade Warshaw]

Yeah. And Aldi has the lowest prices of any. Any national grocery store, which is really impressive. And with all the money you saved, you're going to be making more progress toward your financial goals.

[Courtney]

Yes.

[George Campbell]

Which is what we want for you guys. So stop overpaying and start shopping at Aldi. Find a store near you today at Aldi Us. That's a l D. I dot us.

[Jade Warshaw]

If you're tired of living paycheck to paycheck and 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 step by step how to make and stick to a budget using EveryDollar. Plus, you can get your biggest budgeting questions answered in a live Q and A. So jump on it. Spots are limited. You can sign up for free at everydollar.com webinar James is up next in Buffalo, New York. James, welcome to the Ramsey Show. You with us, James?

[George Campbell]

Yes.

[Jade Warshaw]

Okay, good. What's up?

[George Campbell]

So I am looking for some advice here. I've got a per. I've got a startup business in E commerce, but don't really have any marketing money. So in turn, I'm not converting anything. I'm not able to work a regular job because of my current living situation.

[Jade Warshaw]

Which is what the single father of three.

[George Campbell]

And I don't really have any family to help. And so that's really why I'm trying to start something online and make some good money from that. I'm looking for like about 5,000 for marketing. Don't know if.

[Jade Warshaw]

Are you breaking up on us, James? Speak directly into your phone.

[George Campbell]

A couple of cousins that I would be able to get it from, but I don't know if that's a good idea. You know, I hear that maybe getting personal loans from family members really isn't the best way to go. So I just wanted your input on that.

[Jade Warshaw]

You're right in that it is one of the worst ways to go. Unless you hate your cousins, then it's probably, you know, it's a net neutral at that point because they know they're not getting this money back from old James. He's not going to turn five grand to twenty grand overnight with the startup business.

[George Campbell]

Right?

[Courtney]

Yeah. I mean, you have to think about it from both ends. I mean, obviously that loaning money from family is not a great idea anyway. But now you're doing it into the unknown, into a business you've never run before. And what if you lose the money? What if you don't get the return on investment that you think you're going to get on the 5k? What happens then?

[George Campbell]

Yeah, exactly. And I mean, again, my situation.

[Jade Warshaw]

Can I tell you, James, as a ex marketing guy, good marketing will just make a bad product fail faster. And so the question is, what are you actually selling and why don't people want it?

[George Campbell]

I think it's, it's like.

[Jade Warshaw]

Sorry, you're breaking up.

[Courtney]

Sorry.

[Jade Warshaw]

James, what are you selling? What's the business?

[George Campbell]

I also have a mattress company that I'm working more on. It's called these Mattress.

[Courtney]

Ooh.

[Jade Warshaw]

What's special about your mattress that I can't get from the 400,000 mattress sites that are out there with amazing marketing and slick sales and crazy deals, Right?

[George Campbell]

Well, it's just a luxury mattress. Not a luxury price. It's an affordable luxury latex mattress.

[Courtney]

It just sounds like, let me say this, I'm not trying to kill your dream, but I, I am gonna say this. I feel like what you said makes sense. You are a single dad. You've got to come up with creative ways to make money. I love the way you're thinking in that way. You don't have any cash though. You're looking for 5k and to start a mattress company, I think you're gonna need to save up a lot more money to do this and do this right. Can we start smaller? Can we start with a smaller product that's easy for you to create or manufacture or sell? Maybe it's a service based thing and you do that online first and get some chops before we start into something so major. Unless that's your background. Unless that's his background. And we. And we don't know about it, but.

[Jade Warshaw]

Well, here's my guess, and I've seen these videos on TikTok. I'm guessing this is where James got it from. You can get into wholesale mattress business where you get the mattresses directly from the companies making them, the manufacturer. And then you increase the price and sell it and white label it with whatever name you want. I've seen the guys with the wear, they got the little storage units with the mattresses in there and they're like, you can make $10,000 a day. Have you been past a mattress firm in the past five years?

[Courtney]

They're still the same guy spinning the sign on the corner.

[Jade Warshaw]

I assume it's a front for drugs at this point. I don't. It's a Breaking Bad situation at any mattress store in the country right now. It's not a hot commodity. And so that's my guess. And I just saw this post from Alex from Rosie that I thought was brilliant. He said, why do you think you're gonna make money in your sleep if you can't make it while you're awake? And I was like, whoa, he just dropped one right there. That is a mic drop situation from Hermozi. And he's right. The people who are attracted to these passive income streams, they're not making active income. You gotta start with that. Then we can figure out a way how to make money in our sleep. But right now, James, what I would encourage you to do is just find a work from home job. If it's difficult for you to go to an office. There's plenty of jobs out there. You sound like a smart guy. I would be looking for a job that I can do remotely with consistent pay that doesn't involve going into debt. Because I'm telling you right now, I don't want you calling back saying, I owe three cousins 20 grand, my mattress business failed. What do I do? And I'm not trying to dog your idea.

[Courtney]

No.

[Jade Warshaw]

I just know that's in the cards.

[Courtney]

Mr. Wonderful says, Take it out back and shoot it.

[Jade Warshaw]

Is that what he says?

[Courtney]

That's what he says. And that's what I say. That's what I'm gonna have to say to this.

[Jade Warshaw]

I've had a lot of like, ideas that I thought were really cool too.

[Courtney]

Oh, yeah?

[Jade Warshaw]

I'm glad I didn't pursue them.

[Courtney]

You know, can I tell you one of the worst hair brained schemes that I was ever a part of? So multi level level marketing is what it was. But it was back in like, let's see, I was married in 07, so this would have been an 08. My friend came to me, she's like, you gotta come to this presentation with me.

[Jade Warshaw]

Oh, no.

[Courtney]

They're selling phones that you can call people over the Internet. So. And I was like.

[Jade Warshaw]

Instead of like a cell tower and.

[Courtney]

You had to like invest money to buy the phones and so think about that now. It's so still, like, it's so silly. Yeah. To be able to call someone over the Internet.

[Jade Warshaw]

And I was like, all right, Voiceover ip. Jay. It's the future.

[Courtney]

It was voice. Exactly. Voiceover ip. And I went home and I was like, sam, we have to invest in this. It's voiceover ip. He looked at me, he was like, like, we're not doing that. Thank God.

[Jade Warshaw]

If you ever use the words investment or opportunity, that is a great clue that you should be running far away. If you used it or someone else used it on you, that's a clue you're about to get screwed.

[Courtney]

But it's the desperate. My point is I. We knew that we were in debt at that point. We were so desperate. And I could just sense with this guy, he's looking for something to grasp.

[Jade Warshaw]

On, needs income fast goes well, I could set up a website and sell some mattresses.

[Courtney]

Yeah. You see the post? You see the TikTok? Your friend calls you and says, this is the newest thing. It's called the Internet. And you can call, make calls over.

[Jade Warshaw]

It, watch their bag on my face. When James calls back and he's like, hey, I'm a billionaire with my mattress company.

[Courtney]

I started on listen, I hope it happens. I'm never no ill will. I hope he. I hope he does.

[Jade Warshaw]

I'm wishing him the Best. All right, let's take a quick one here from Josh in Louisville, Kentucky. What's going on, Josh?

[George Campbell]

Oh, not a whole lot. How y' all doing?

[Jade Warshaw]

Great. What's your question?

[George Campbell]

I've got a lump sum of money coming in, and I wonder if it would be all right to jump in the snowball to pay one.

[Jade Warshaw]

Okay, so our debt snowball method would say smallest to largest balance. You're saying, hey, if a big lump sum coming in, can I hit the largest debt first? So what's the lump sum you're getting?

[George Campbell]

It's about 80,000.

[Jade Warshaw]

And what's your largest debt?

[George Campbell]

192.

[Jade Warshaw]

What kind of debt is it?

[George Campbell]

That's my house, but that's not the one I'm wanting to pay off.

[Jade Warshaw]

Okay.

[George Campbell]

I'm wanting to pay the one off below it, which is because they're kind of a headache to deal with.

[Jade Warshaw]

What is it?

[George Campbell]

Student loans.

[Jade Warshaw]

Student loans. Is it one giant loan or a bunch of little ones?

[George Campbell]

It's several little ones, but it'll pay them all off that amount.

[Courtney]

So if you put them in order from smallest to largest, including those little loans, how does it. What comes before it at that point?

[George Campbell]

I've got a car loan before that and solar panel after that. And then it would be the student loan.

[Jade Warshaw]

What's your total debt outside of the mortgage?

[George Campbell]

About 170.

[Jade Warshaw]

170. And you'll knock out about half with this lump sum. Where the lump sum come from?

[George Campbell]

We had a small accident and insurance paid us out that sum.

[Courtney]

Okay, so what's the smallest student loan? If you broke it into the smallest chunks, what's the smallest one?

[George Campbell]

I really don't know.

[Courtney]

Okay.

[George Campbell]

I don't know. I just know that's a group.

[Courtney]

I have a feeling that. I mean, you compared it to solar panels, so I have a feeling there might be some student loans in there that end up being the smallest ones. But you're gonna have to go online and look and see, right?

[George Campbell]

Correct.

[Courtney]

So that's the case.

[Jade Warshaw]

I would list out. Go ahead and list out all your debts tonight. Smallest, largest balance. See how it all lays out. And then if you'd apply that 80k, you'll see exactly how many payments you'll free up, which you can then apply to the next biggest Deb. And the thing I want to encourage you, Josh, is this plan is all about behavior. And getting this lump sum from the accident isn't going to change the behavior that got you here. So I would encourage you to follow the plan as is stated, and I Think you will see great success. Thanks for the call.

[George Campbell]

Foreign.

[Jade Warshaw]

Is at risk of identity theft. I don't care if you're a hermit living off the grid listening to the show on a battery powered radio. All of your data collected by every company you've ever done business with lives online. Your bank, your doctor's office, retailers, the apps on your phone, the gas station where you have loyalty rewards, they all store your info online, making them ripe for a cyber attack or data breach. That's why I've been telling people for almost 25 years they need an ID theft protection plan. And the only one I've ever recommended is from Zander Insurance. They monitor your personal and financial info, even your home title, and take over the work if you become a victim. It's the most thorough and affordable plan out there. I even have it for my family.

[Courtney]

And our entire team.

[Jade Warshaw]

Visit Zander.com or call 800-356-4288 too. We know that you guys have been trying to help people in your life get started on the Ramsey plan. So we built something for you. It's the Ramsey 101 playlist so that you can help them. It's a free, easy to share playlist that covers all the basics for someone who's trying to get started with Ramsey. But you're like, try the website, read a book. Just send them this playlist. It'll have everything they need. Like what are the baby steps? How to pay off debt with the debt snowball, how to build an emergency fund, and so much more. So here's how to share. Click the link at the top of the show notes to open the Ramsey101 playlist on YouTube. Then you can hit the share button and text it DM it, send it in the group chat and say, hey, hey. Really enjoyed this. Thought you guys might too. Thought this might help. If you're listening on radio, we've got the playlist featured at the top of our Ramsey Show YouTube channel. You can get it there. It's one share and one step that could help change someone's life. Michelle is in Dallas. Up next, what's going on? Michelle, hi.

[George Campbell]

Thanks for taking my call.

[Jade Warshaw]

Sure.

[George Campbell]

I'm in a tricky spot financially. There's something I've been managing for about 10 years that started as a family business over 40 years ago, but over time it's turned more into a hobby and the emotional connection is really strong. But the financial side has really gotten foggy and I honestly don't even know how much I make from it right now. From month to month. And I'm trying to decide if I should keep pushing forward or close it. I want to know what the smartest move is based on where I'm at. I'm trying to budget more intentionally. And I'm also applying for steady jobs like the post office to build a stronger foundation. I guess my question is how do I start untangling the emotional from the financial? And how do I know if this is something I should keep trying to grow or might go? Peace.

[Courtney]

Yeah.

[Jade Warshaw]

You're really sorry, Michelle, with this. And clearly this is. It's been a long time of struggle. There's a lot behind those tears that you've. You've tried. I can tell you've tried your darndest to keep this business and dream alive and probably for the sake of your family.

[George Campbell]

Yeah, well, yes, because it's. You know, my mom and dad started it, and I took over 10 years ago, and I have done it all on my dollar. I have gotten no loans. I'm not in debt with the business.

[Jade Warshaw]

Good.

[Courtney]

What's the nature of the business? What do you guys do?

[George Campbell]

It's an upholstery shop.

[Courtney]

Okay.

[George Campbell]

And I'm the only one that's working now. You know, my. I have no employees, and so it's really started to turn into a hobby. And I'm burnt out. When I come to work, I pull up to the shop and I'm just sitting in my car going, I have to go in. And it's not. And it's. It's busy. I'm eight months booked out. So that makes it even harder. If I close, how do I close what?

[Courtney]

You know, so you're eight months booked out. Help me understand that part. You're eight months booked out, but it's not making any money. What does that mean? Are the prices too low? Is in the. The costs are too high. Have you figured out what that is?

[George Campbell]

I think a lot of it is I think I can get something done. You know, it's just me. So I think, oh, I can get this done.

[Courtney]

And you, you're the one that reupholsters the furniture. You do it.

[George Campbell]

Yes.

[Courtney]

So I just wonder, Michelle, or I wonder if you're the person who does the work and you need someone else to run the business side of it.

[George Campbell]

That's the problem is that financially, I don't see how I can do that when I'm struggling to just barely keep the lights on and keep my house. I'm. It's me at my house all by myself.

[Courtney]

Right. But you have, you're booked out eight months and I just, I'm not trying to change your mind. I just wonder if a lot of.

[Jade Warshaw]

That, it's not for a lack of clients that we would be closing this. It's because you're just emotionally overwhelmed. Do you want to keep doing this? Do you enjoy upholstering?

[George Campbell]

I do, but I'm so burnt out and I kind of closed my books and just working. I don't see a future as far as I can't work fast enough to make enough money. And I'm 56 years old, I have zero retirement. And I try to do, I've been to Financial Peace University twice and I've tried to do the every dollar budget every month. I try to do it, but I never know how much I'm actually making.

[Jade Warshaw]

Do you have a CPA that you work with or an account?

[George Campbell]

I do, but she's never, she's, she does it on the side and so basically I do the Quickbooks and then she cleans it up and does what, she does her magic.

[Jade Warshaw]

So there's no real advice happening here. She's just like hitting a button going, okay, done.

[Courtney]

I, I think at this point it's probably spilled milk, probably is time for you to close doors and go do something else. But I mean I would definitely be remiss if I didn't say it sounds like there probably is a year. It sounds like you need another person who knows how to do upholstery to help you and it needs, it sounds like you need another person who runs the day to day business side of things. And you might find, I don't know, but based on what you said, you might find that you do have the money to pay another part time upholsterer and you do have the time to pay another one person, you know, a small salary to help you run the business. If you're done, you're done. And there's nothing wrong with being done at the same time.

[George Campbell]

In my heart I do love what I do. I love it. When I'm done with the piece, I'm like, oh look, I did this. And I've called another upholstery shop that's, you know, in another town like five hours away. And I know that they had bought their shop in pretty recent and was asking questions and you know, it's hard to find somebody to do upholstery and shops around me are closing regular. I mean shops are closing all the time.

[Courtney]

Yeah, because people, people aren't getting things reupholstered they're going on Amazon and buying a new one.

[Jade Warshaw]

Just go to Wayfair.

[Courtney]

Get it cheap.

[Jade Warshaw]

Yeah, but there's a market for it. I mean, you start getting networked with interior designers and people working on new builds, and they want custom pieces or they love the vintage stuff, and there's clearly a market for it. Otherwise, you wouldn't have eight months of business. And so I don't want you to give up because of that. But I also want to free you that if you do close this business, you're not a failure, you're not a bad person, you're not a bad daughter.

[George Campbell]

I feel like that's what I need because it's. I mean, the whole family is touched by it because of the fact that it's been in the family so long.

[Jade Warshaw]

Well, if they cared about it so much, why are they not involved?

[George Campbell]

Well, my mom can't anymore, and my poor little dad, he has been up here, and I said him home all the time. I'm like, you've got to go home. You need to enjoy your retirement, because you can't just be up here, you know, trying to make me survive.

[Courtney]

Michelle, I think you're a really. I think you're really sweet. I think you have, like, a servant's heart. I truly do. My guess, though, I bet no one is saying those things to you. I think you're just internalizing. Internalizing that. Your mom and dad didn't say that you're a failure if you close this business, did they?

[George Campbell]

No. No. Matter of fact, you know, I'm. My talk. My dad, and he was like, would be. It'd be good if you got the job at the post office and you had a retirement.

[Courtney]

Yes, yes, yes.

[Jade Warshaw]

There's nothing wrong with trying something different, trying something new. And guess what? You can always continue upholstering on the side.

[Courtney]

And I think you should in a way that's really healthy for you.

[George Campbell]

What I needed to hear.

[Jade Warshaw]

And just take on the projects you want to take on and charge what you're worth. Michelle, clearly you're not. Clearly, you don't think you're worth much if this business isn't making money while you have eight months of work backed up and it's a solopreneurship. And so I would encourage you to charge more. Explain to the client what's going on. Hey, it's either I close business or I raise my prices. We've kept our prices this way for a decade now, and inflation's hit us hard, too. And, you know, this is all me, all my time. And I think people need to respect that. And again, if you chose not to ever upholster anything again, no one's gonna shame you for that.

[George Campbell]

I appreciate that.

[Jade Warshaw]

I'm gonna send you a copy of Dave Ramsey's newest book. It's called Build a business you love and it walks you through. You do. Have you read it?

[George Campbell]

I have it. I am in the middle of it, actually.

[Jade Warshaw]

Okay, here's the good news. You're in the treadmill phase. You are just trying to keep up and you need. If you want to keep this going and you want to grow it and you want to get the overwhelm off of you, you're going to have to learn how to delegate. You're going to have to learn to hire the right people to get involved in the business to help you. And there's people who love sales. That's what they're good at. There's people who love accounting. It's what they're good at. And there's Michelle, and she's the only one who can upholster like Michelle does.

[Courtney]

Also, read the book Necessary ending Things by Henry Cloud.

[Jade Warshaw]

That's a great one. That's a solid one. Oh, Michelle, we're rooting for you. I feel for you. This. There's a lot underneath this business, and I hope it stays afloat because there's not a lot of people in the trades. And it sounds like you love what you do, and I hope you continue doing it. Hey, George Camel here. Listen, we need to talk specifically about Mama Bear legal forms. Allow me to paint you a picture. You plan a vacation, you make a budget, you book the Airbnb, you build a spreadsheet of activities because you're that person. You fire up the Maps app and boom, trip of a lifetime. So here's the question. If you plan that carefully for a one week getaway, why are you just winging it when it comes to your will? Not having a will in place is like dropping your family off at a foreign airport with no map, no translator, and no clue what happens next. So when you pass away, sure, your family will be grieving, but they're also overwhelmed, stuck in court, and letting the government decide what happens to everything you worked so hard for. All because you didn't leave clear instructions. So the good news is you can fix this in 20 minutes with mama Bear legal forms. I use them for my own will. And it was fast, simple, and gave me and my family peace of mind. There's no stuffy lawyer's office no drama. Just a few clicks and your family's protected. Listen, a will is too important to ignore. It's how you love your people. Well, even after you've yeeed your last haw, as we say in the south. So go to mamabearlegalforms.com and handle this tonight. Use the promo code Ramsey and you'll save 20%. That's mamabearlegalforms.com promo code Ramsey. From the Ramsey Network, this is the Ramsey show where we help people build wealth, wealth do work that they love and create amazing relationships. I'm Ramsey personality George Campbell, joined by my co host Jade Warshaw. We're taking Your calls at 888-825-5225. Robert is in Kansas City. Up next, what's going on, Robert?

[George Campbell]

Hey, thanks for taking my call. My parents are in their 80s and they've been dealing with some health problems last few years. So they made me the executor of their estate a few years ago, and they put me on their bank accounts and just kind of, you know, we're asking for help. And we helped them sell their house and moved them closer and helped them find a new place to live. I got a niece who keeps asking to borrow money, and my mom continues to loan to her with no repayments. And yet every month my mom is like, oh, I think next month she's going to start repaying. And so my question is, what is my responsibility to my parents as someone that they've asked to kind of help and oversee? Where does my role. Do I say something to my niece? What would you guys recommend?

[Courtney]

How old is the niece?

[George Campbell]

She's 40.

[Courtney]

And how much money is she asking for? What does this look like?

[George Campbell]

So it was like 5,000 and then another 2,000 and then 2,500. Do about $10,000. And, you know, my niece called me last, earlier this month and was kind of, you know, talking about life and how things aren't great and, and she made an offhanded comment about how there's a lot of cousin drama. And I'm just picturing, you know, her cousins, her sisters, her siblings, her cousins, like, probably resenting what is going on because my mom tends to talk a lot. And so I think everybody probably knows that she's borrowing money. And I think my sense is there's.

[Jade Warshaw]

Probably some resentment building up there. Has anyone else asked for money from your mom?

[George Campbell]

Yeah, through the years, yes. Other pretty much all the nieces and nephews have at different times, but they've all Paid it back. There was a stepbrother many, many years ago who asked for, who didn't pay it back, and it. That did not go well. That kind of still comes up in conversation, you know, 30 years later. So.

[Jade Warshaw]

So your mom has been soured by these situations before. Is she a people pleaser? Why does she continue to do this, knowing that she's likely never going to see this money?

[George Campbell]

Yeah, I think she is a people pleaser. I think she genuinely cares about her grandkids and. But, you know, I think she struggles with saying no. And I think especially she. She started this a long time ago, and I think she's struggling to cut it off today. She made the comment about three or years ago, I'm not loaning my. To anyone anymore. And yet she'll continue to do it.

[Courtney]

Well, she. She put you on the hook to help her.

[Jade Warshaw]

Yeah. What is the, I guess the boundaries of your help? Because you're the executor of the estate and you said you have access to their bank accounts, but they haven't put you in charge of all of their finances, it sounds like.

[George Campbell]

Yeah, no, I am not. Like, I, I'm not their representative. I don't write their checks for them. I'll do any of those things. So that's, that's kind of why I'm asking the question.

[Jade Warshaw]

Yeah, they're legally grown adults who can make as many terrible decisions as they want. Want.

[George Campbell]

Correct.

[Jade Warshaw]

Now, if and when they pass, that's when you'll be in charge to make sure their wishes are, you know, executed. But other than that, I don't know that you can stop her if that's what she wants to do.

[Courtney]

Yeah, all you can do other than.

[Jade Warshaw]

Try to talk to her and can convince her that this is not going to benefit her and it's actually going to harm the entire family.

[George Campbell]

So you would not recommend me saying something to my niece about, hey, you know, grandma's mentioned that some story paying this loan.

[Courtney]

I wouldn't say it from grandma's perspective. I'd say it from your perspective. I wouldn't say, hey, Grandma's doing, because you don't want to speak for Grandma. But you can go to your niece and say, I'd go to the niece and to Grandma. I'd go to Grandma and say, listen, this is not good for you. I know I'm not in charge, but I'm observing this and I, you know, you've asked for my help and I don't want to overstep, but I think this is a Behavior that you need to stop and you really don't have the money to give and she's not going to pay it back. You can have that conversation. Then you can go over to the niece and say, hey, you know, I've been helping grandma and grandpa out with them with their money and I'm seeing this trend and they don't have this money to give you. They're being nice, but they're making a mistake and you've got to stop asking. I'm asking you nicely. You're grown, you can do what you want to do. But I'm just letting you know what I see going on and leave it at that and see what happens.

[George Campbell]

Right.

[Jade Warshaw]

Do they have a lot of money? What is their net worth?

[George Campbell]

They're not worth. They're in a paid off house and they've got like $250,000. You know, that's their retirement.

[Courtney]

They don't have the money.

[Jade Warshaw]

Yeah. That's not like outrageous generosity money where we can just fund misbehavior from 40 year olds.

[George Campbell]

Right.

[Jade Warshaw]

So if your mom wants to be nice and be generous, she can gift money on occasion. But clearly this has become entitlement and it's only going to spread across the family, as your niece says. Well, yeah, they gave me five grand. You should go ask grandma. Bank of grandma's loaning out money, interest free marriage. And so I think this is gonna. Your mom has to come to the realization that this is harming her and her financial future and the family. And I want her to be the person to stop this, not you as the evil middleman cutting off the flow of money because that's just gonna cause more family drama.

[George Campbell]

Right, that makes sense.

[Jade Warshaw]

So that's what I would encourage you to do. I. It's a tough situation. It's very touchy. You're gonna have to be very tactful with all of this and convincing an 80 something year old to do anything, anything is difficult. So I wish you the best of luck.

[George Campbell]

Thank you so much. I appreciate it.

[Jade Warshaw]

Yeah, absolutely. Gotta love a little family drama. Yeah, that happens.

[Courtney]

$5,000 is not a little bit of money.

[George Campbell]

Sheesh.

[Jade Warshaw]

No. And yeah, she's clearly, if you're borrowing and then saying, yeah, I'll pay you back and then asking for more money.

[Courtney]

Before you've paid the last.

[Jade Warshaw]

Not a good sign. Okay. All right, let's get to Victoria and Charlotte, North Carolina, what's going on? Victoria?

[George Campbell]

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

[Jade Warshaw]

Sure. What's happening?

[George Campbell]

So long Story short, my question is, should my husband and I sell our home to pay off our debt?

[Courtney]

Give us the lowdown?

[Jade Warshaw]

Why? Why do you feel like you need to do something that drastic?

[George Campbell]

Well, we. We both believe that we've outgrown our home. We just had our third and last baby a year ago, so we have three children. So we knew a larger home in the future was, you know, what we had planned. But. So right now we have $201,000 left on our loan. The value of our home is 310 and we have $87,000 in debt. We're on baby step two, so we have the thousand dollars saved. And then if I'm being totally honest, this is just bad debt. You know, BB before days before we. We are on the Ramsey plan and everything, so.

[Jade Warshaw]

So your plan would be to rent?

[George Campbell]

Yes, we would like to rent. And for me it's more of just not having that debt anymore. Our income, I believe.

[Courtney]

What's your income? What is it?

[George Campbell]

So my husband makes 65 at his full time job and then he is a Navy reservist. He does make an income from that, but that income just pays off our medical and our dental insurance.

[Courtney]

That's great. And what about you?

[George Campbell]

I just do little odds and ends. I am a travel agent. I work, I stay at home with the kids. That's my priority. But I do do travel agent work, you know, on the side.

[Courtney]

What's that translate to every month?

[George Campbell]

About 1250 on average.

[Courtney]

Okay.

[Jade Warshaw]

So can you guys actually rent a home that's around 25% of your take home pay that can fit you all?

[George Campbell]

We, we can't. We have been looking. We're not ready to like fully commit to it. We just really needed an unbiased opinion on is this a good idea?

[Courtney]

I don't know that I would. I think that you're wanting to get out of this debt fast. I didn't really hear anything super compelling that would make me sell my house. Other than the fact that you don't like the house and you want to move to a different house, but you guys are. This would be starting from scratch and.

[Jade Warshaw]

It doesn't change the behavior that got you into the debt. It's a cool shortcut to go, hey, we're out of debt. I love that. It's an awesome thing, but I'm scared you'll be right back to where you were and also unable to find a home you can rent.

[Courtney]

I think I vote no. I vote no.

[Jade Warshaw]

I would pause on this and see if we can get Our income up, get our expenses down and knock this out fast. Before I went and sold the home.

[Courtney]

Hey, what's up, guys? It's Jade. And listen, if you're waiting on the government to cancel your student loans, I hate to say it, but that's like expecting your broke cousin Boo Boo to pay you back the 40 bucks you loaned him. It ain't happening. Now, when it comes to student loans, no one else is going to pay them off for you. So? So if you want the loans gone, you've got to take control. Now. That might mean cutting back. It might mean throwing every extra dollar at your debt. And for some of you, it might mean refinancing to get a better interest rate. And that's where Laurel Road comes in. 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 schedule 30 minutes to talk to an actual human being. Look, guys, refinancing may not be for everybody. And Ramsey's advice is clear. We want you to pay off your debt as fast as possible. So if you can get a lower rate or a shorter term that helps you do that, go for it. Laurel Road has low rates, plus ways to save even more money, like an autopay discount. Don't sit around hoping for a miracle. Change your life and change your mindset. Go get it done. Go to LaurelRoad.com Ramsey to check your rate today. That's LaurelRoad.com Ramsey.

[Jade Warshaw]

Mindy's up next in Salt Lake City. What's going on, Mindy? How can we help?

[George Campbell]

Hi. So. So I'll just get to my question. I'm planning on making a big change in our family. Where I'm going to go back to school.

[Jade Warshaw]

Cool.

[George Campbell]

But with this change, it requires a lot of. We live in a very high priced area and everything. And with this particular program, I need to have. Sorry, it's very expensive and the program itself doesn't let me work. And so we are thinking. Thinking of changing from a townhome into a live in trailer to try to cut expenses so that we don't need to take as much under US loan lines so I can finish this program.

[Jade Warshaw]

So you're still going to go into debt for it, just not as much?

[George Campbell]

That's the idea, yes.

[Courtney]

What's the program? What is it for?

[George Campbell]

It's a profusionist program. It's the people who run the heart and lung machines.

[Courtney]

Heart and lung machines?

[George Campbell]

Cardiac cases. Yeah, in cardiac cases.

[Courtney]

Okay.

[Jade Warshaw]

What does the program cost in total?

[George Campbell]

The One that I really want to go to is about 72K in Salt Lake.

[Jade Warshaw]

Wow. What do you make doing this at the end of the. At the end of the rainbow?

[George Campbell]

So it does depend on where you live. I've seen it in my. In my area here, it's about 172,000, just as a baseline, and it goes up from there.

[Courtney]

And how long does the program take? Take?

[George Campbell]

It's two years. It's a master's program.

[Courtney]

Okay.

[Jade Warshaw]

And what will your income be if yours goes away?

[George Campbell]

So my income right now is 104k and my husband's is 43k. So it'll be 43k.

[Courtney]

That's tight.

[Jade Warshaw]

That's. Oh, my gosh.

[George Campbell]

Yeah, I don't know that are necessary.

[Jade Warshaw]

Could we pause and save up in cash flow? I mean, making. If you guys are making $140, 47k, how quickly could you stack up cash?

[George Campbell]

And that's the problem is that even the. I was traveling, doing travel, nursing, just locally, and I was making significantly more. But the problem is, is that this area is so expensive even. Even if we just decided to downsize where we live just to a different. That was a little bit cheaper. It's only like maybe 300, $400 cheaper a month.

[Courtney]

So. And when you see yourself, okay, when you do yourself, see yourself doing this heart and lung machine operation, are you doing it in Salt Lake City, or are you taking the first job that you can find out of this program?

[George Campbell]

I mean, that depends, because there we've also talked about California, where we're now talking about 200, 230K.

[Courtney]

I'm asking, I'm asking because what I'm trying to find out, if it's just so expensive in Salt Lake City, what's keeping you there? Is it family? Or is this something that you could potentially say, hey, our goal is to get out of an expensive area and kind of like force rank. These goals are our goals. To get out of an expensive area are our goals that I have to make this career shift. Where is it that we ultimately want to live? And I feel like that could help inform some of the answers and also the order in which you do this. Does that make sense?

[George Campbell]

Yes. And I. I would say that our goal, our family is in this area, but like, we've lived here for the past, like five to seven years, and it has just increasingly gotten more and more expensive to the point where my job is, we can't save up money like this. And it's ridiculous.

[Courtney]

So what's your. What do you pay now for your home? What? Do you pay now for your living?

[George Campbell]

We don't even. We tried to buy a home and we couldn't because of how expensive it was. They would have. It would have been like 3,700amonth.

[Courtney]

Yeah. So you're renting now?

[George Campbell]

Yeah. And it's 2200 right now.

[Courtney]

So what I'm. What I'm getting at here is I'm just wondering if the first move is a move out of the area to a less expensive area because you can nurse from anywhere. And I'm wondering if that's the first move so that you can get a salary that you can actually live on and start to save some money. And then once you can get your hands around that margin, now we can actually start to see, save up a decent amount way more quickly than we could in Salt Lake City. Now this dream of saving up some money to pay for this master's program actually makes sense. And, heck, maybe your husband will make a little bit more money too.

[George Campbell]

That's a good point. Yeah.

[Jade Warshaw]

What's he doing for work?

[George Campbell]

I'm an operating room nurse right now. And they do make. We do make really good money traveling. The problem is traveling is not. Not consistent.

[Jade Warshaw]

What is he doing?

[George Campbell]

Why? I looked into this program. It's not consistent.

[Jade Warshaw]

What is. What is he doing making 43k?

[George Campbell]

He's a manager at a storage facility.

[Jade Warshaw]

Okay. What does the track look like for him to move up or get a different job that can make more to support the bills while you're in school?

[George Campbell]

I mean, right now he just. He just got a dollar raise there. It's one of those facilities that doesn't want to push too many people up if they can help it, they want.

[Jade Warshaw]

If he has management skills, then he can be a manager anywhere. So what are the jobs out there that will pay $80,000 to be a manager? And now we're able to float the family bills without losing our appreciating asset. To go into a depreciating asset, which is the trailer that you'll likely be underwater on and go into debris debt for on top of still going into student loan debt. You see how this problem is just going to put you in a deep hole they'll have to really climb back out of on the other side. There's nothing. What's the urgency? Like, if you waited, let's say 18 months and you saved up cash for this program, what would be the harm in that.

[George Campbell]

Right now? I guess the urgency is like, we have family and we Have. So we would have to move out of this area. Area. We'd have to find a plan to move out of this area to another place and to try to find a job elsewhere. We'd have to re. Establish ourselves somewhere else. Whereas right now I'm already in process and have almost everything all together. And I will be applying within the next two months to five different programs. Not just in Salt Lake, all over the country.

[Jade Warshaw]

So you would be gone. That would be in person?

[George Campbell]

Yes.

[Jade Warshaw]

Like the whole family would move with you where?

[George Campbell]

They would. They would move with me.

[Jade Warshaw]

Wow. Well, then I would be applying to the ones that are more affordable if you can go anywhere.

[Courtney]

That's what I'm saying. I think the bigger part of this is you've just got to get out of Salt Lake first. I feel like that'd be my first move is I'm getting out of here. That way both of you have jobs that you can do from anywhere. So why not do it from someplace less expensive then to George's point? Now you can be more urgent about saving up this money and doing this program. And then wherever you've been living, if you get a job elsewhere, you can go wherever the job. Wherever the job takes you.

[George Campbell]

The one thing I do have to consider is I have to be within a hospital. And you would think like operating rooms, they're everywhere. Not all the time. Not the ones that pay really well. So you have to be within 30 minutes of a hospital to be able to take call and everything. And sometimes that means it's more expensive, unfortunately.

[Courtney]

Yeah, I get it. We'll do some research on that and see. See what's available to you. Because you, you're the person basically who called in and said we're up against a wall in Salt Lake City. So I'm just trying to look around and see if I can get you in a better location.

[Jade Warshaw]

And just on a quick search, Mindy, I found ones that are 28 grand total for these programs.

[George Campbell]

Yeah, there's only 13. There's 13 schools in the entire U for this profusion program. And some of them, some of them don't give you masters. If you don't get a master's, you can't teach it. Eventually. Those ones, I think you might be looking at the ones down in Texas.

[Jade Warshaw]

I'm seeing one in Iowa and upstate New York and I'm not privy to all the certifications needed. And if you want to teach in the future, I just wouldn't get glued to one school that's the most expensive school and go. It has to be this one. It's the one I really want to go to to. That's how we start making bad decisions when we go tunnel vision. Especially when we don't have the money.

[Courtney]

Or maybe it's something you can add to. Maybe you do the profusion one where you're not a teacher and then maybe it's something you can add on the credentials to be able to teach it later. I don't know. I'm. I truly don't know. I'm just asking and suggesting.

[George Campbell]

Yeah. And I have looked at. I've looked at some of them. I just don't have all the requirements, you know with take longer and more money to get some of the requirements that some of these schools need. The ones that I have looked at. Utah isn't the cheapest but it's definitely not the most expensive. I've eliminated a whole group of them just because of their expense.

[Courtney]

Got you. Okay, we'll keep drilling down. I think George and I gave us. Gave you some good things to think about.

[Jade Warshaw]

I just feel like we should pause and not right now. We're getting star eyed and it's an exciting thing to do. But I would pause and get yourself in a good financial situation and just cash flow this and not drop your income by 70% and live in a trailer. That wouldn't be my solution. 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.

[George Campbell]

Home, the first step is not house hunting.

[Jade Warshaw]

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 and they'll.

[George Campbell]

Listen and learn your goals.

[Jade Warshaw]

And most importantly, importantly, they will tell you the truth.

[George Campbell]

Churchill has loan experts who focus on.

[Jade Warshaw]

You and your unique situation. So your journey ends with a home.

[George Campbell]

That'S a blessing, not a burden.

[Jade Warshaw]

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.

[George Campbell]

Churchill would love to help you figure.

[Jade Warshaw]

This out them out and they'll do it with honesty and integrity. Learn [e-mail] this is a paid advertisement in MLS ID 1591 in MLS consumeraccess.org equal housing lender, 1749 Mallory Lane, Suite 100, Brentwood, Tennessee, 37027.

[George Campbell]

Foreign.

[Jade Warshaw]

Welcome back to the Ramsey Show. I'm George Campbell, joined by Jade Warshaw. The Ramsey show question of the day is brought to you by why Refi? Let's be real. Defaulted private student loans don't go away on their own. But why Refi will help you explore a low fixed rate loan based on your unique circumstances. So go to yrefi.comramsey to learn more. That's the letter Y, r, e, f y.com Ramsey may not be available in all states.

[Courtney]

Okay. Today's question comes from Travis in Mississippi. He says, my fiance and I have been together for five years and we plan to get married this summer. But before we got engaged, I asked her to handle to get a handle on her debt. She paid off her credit cards and told me that she was making payments on her student loans. I felt better about the situation and so I proposed. Proposed. But I recently found out that she was only paying $20 a month toward her student loan debt. I also found out that other miscellaneous bills are barely being paid. If the bill is $20, she will only pay a few bucks at a time, saying she doesn't have enough to pay it in full while she constantly orders things from Amazon. Oh, my goodness. It is becoming clear that getting on the same page doesn't seem possible. Cool. I love her, but I don't know how we get past this. Oh, man, this is for Maury Povich. This is like, for. This is. Well, the big problem here, aside from the money, I think the bigger problem is she kind of lied about it. Right. She gave you a sense that things were going better than they were and that she was making more progress than she actually was. At least from your side of things. That's the way it sounds. So there's the one side of it is, hey, you were not being honest with me. Me. That feels weird.

[Jade Warshaw]

Y.

[Courtney]

Right. Going into a marriage, financial infidelity here and then. Yeah. Then you have the part of, hey, this girl can't manage her money. What's going on? Being together for five years, man, I wish this guy was on the phone because my guess is you've probably been seeing other things that reflect similar behavior. Possibly.

[Jade Warshaw]

He's probably looked past a lot of them. This because, you know, love is love. But he's asking us, how do I get past this? I don't know that you can the reason you're asking us this question is because you can't get past this.

[Courtney]

Yeah. This really happened.

[Jade Warshaw]

So there's, there's two factors here. Trust and respect. You have lost both for her in over this period of time as she's laid all this out, lied to you, you've witnessed behavior. And so I think this would require some counseling. I would sit down and go, what's the root of this? And is it something that she can, can get over? Or is this just who she is and she's made it clear and you need to believe her? At that point, I would say let's not move forward. Let's pause on the wedding. Let's not move forward with the engagement. And that could be it. I mean, there's. You're not married yet, so if you're. Don't. Don't feel good about it, don't do it.

[Courtney]

Yeah. I want to know what those conversations are like. You know, some people, they're so. They have such a scarcity mentality. Right. That when the bill is due, I'm just going to pay the bare minimum because I want to make sure I have money over here because that makes me feel safe. Like she might have some interesting existing safety mechanisms within her.

[Jade Warshaw]

It could be financial literacy. You just may not know. Hey, I was on this, you know, payment based program for my student loans and they just said 20 bucks is what you owe and that's what I paid. And I thought, I'm making progress. So. Yeah, I don't want to, you know, read too much into it and go, well, she's terrible.

[Courtney]

Yeah.

[Jade Warshaw]

But I also don't want to gloss over it.

[Courtney]

Yeah.

[Jade Warshaw]

And go, well, you'll probably be fine. Just go ahead and get married. The problems will likely continue if not get one worse.

[Courtney]

Yeah.

[Jade Warshaw]

And so you need to deal with it now. More like yesterday.

[Courtney]

I would say, be curious when you're talking about her, why is it that you're only paying 20 and. And get a sense of, is it an internal thing for her or is it truly a cash flow thing? Does she just not have the money? Is she. Is she truly broke? And. And, and then see if she's willing to do mar. Premarital counseling. Have you done that? If you haven't, you need to.

[Jade Warshaw]

Yeah. Yeah. This feels like it's beyond just personality differences of he's the nerd and she's the free spirit, special defender. There's something deeper here, and I wouldn't continue on with this until we got to the root of it.

[Courtney]

Yeah. Give Us a call, Travis. I like talking about these.

[Jade Warshaw]

Talk through it. All right, let's go to the phones. Mike is in Houston up next. What's going on, Mike?

[George Campbell]

Hey, guys. Thank you for taking my call.

[Jade Warshaw]

Sure.

[George Campbell]

So, long story short, I got. I'm four years together with my girlfriend. We have. I've got basically $20,000 in debt left. So I was wondering, should I pause so I can go ahead and cash flow proposal and later, a wedding or otherwise? I'd be waiting about 10 more months till I finished my baby steps. And ideally, I would want to be.

[Jade Warshaw]

Debt free, but I want to know what you're doing. What's going on? We going to Disney World? What are we thinking?

[George Campbell]

No, no, I was just thinking I.

[Jade Warshaw]

Really wanted to put some money.

[George Campbell]

Put some money aside so I can.

[Jade Warshaw]

Afford a ring, and then the wedding.

[George Campbell]

Obviously, will be after that.

[Courtney]

How much are you looking to spend on a ring?

[George Campbell]

Probably a month.

[Jade Warshaw]

A month's income.

[George Campbell]

So It'll be about 42 to 44.

[Courtney]

Okay. And then you're probably going to be engaged for what, a year?

[George Campbell]

I would say that's safe.

[Courtney]

Okay.

[George Campbell]

A year to 18 months.

[Courtney]

Okay. What's. What's okay? You said you make 4200amonth. I mean, I would not delay a proposal for debt, but I would want to make sure that you guys are on the same page and that she understands your financial situation, you understand hers. So you're not just kind of blindly jumping into this? I would go that far.

[Jade Warshaw]

How much money do you have in savings right now?

[George Campbell]

Savings? I have 3,500.

[Jade Warshaw]

Okay. And how much extra can you add each month to that pile if you pause your. If you just did minimum payments on your debt.

[George Campbell]

If I did minimum payments, it would be about $2,000. $2,000 every month.

[Jade Warshaw]

Okay, so how about this? Why don't we split the difference? You make minimum payments for one month, you stack up another two grand. Now you have 5,500. And we set the budget at 4,500 bucks max for this ring, all in.

[George Campbell]

Okay.

[Jade Warshaw]

And then get the ring, and then push play on the debt snowball, and you guys can figure out cash flowing the wedding later on down the road. Who knows? Maybe family chips in. Maybe you guys go 50, 50. Either way, you'll have plenty of time to get out of debt in cash flow, a reasonable wedding.

[George Campbell]

So not even worry about the wedding later on. Just go ahead and just get the ring. Do that and knock that out.

[Jade Warshaw]

Yeah. I wouldn't delay proposing, if you're ready to marry this woman, Go ahead and put a ring on it, let her know you're serious. Otherwise, ten months from now she goes, it's been five years dating Mike Banner. Get off the ladder, dude. I got a life to live. So I think four years is plenty of time. I'd go ahead and do it and honestly, you could probably find an even cheaper ring. You don't. Nobody said you have to spend four grand except the jewelry companies.

[Courtney]

I'm saying it, Jade's saying it.

[Jade Warshaw]

Jade wants to bling.

[Courtney]

It is a month salary. That's fair.

[Jade Warshaw]

Sure that's fair. That's the most I would go. I don't.

[Courtney]

She's been waiting five years.

[Jade Warshaw]

Well, some, some ladies like no three months salary, minimum.

[Courtney]

Oh gosh, that might have been me too.

[Jade Warshaw]

I don't know. Maybe I'm old school. Maybe that's the frugal Middle Eastern in me, I think spending that much. And when you're. Are you a young guy, Mike? How old are you?

[George Campbell]

I'm 20. I'm 27 today actually.

[Courtney]

Okay, I like your one month plan. Yeah.

[Jade Warshaw]

Happy birthday as a birthday gift to yourself, go get a ring. In fact, I would get one this month. With the money you have, like spend 2500, see what you can get out there. And I assume she's going to want to say in this ring or do you feel like you know what she wants?

[George Campbell]

Oh, she, she, she basically picked it out.

[Jade Warshaw]

And how much is it? The one that she picked out?

[George Campbell]

I'm getting price. It's like a custom ring. So it's, I'm still like weird on prices. I think around 35 to 42. It just depends.

[Courtney]

Okay.

[George Campbell]

That's what it is because we're, we're looking at custom things. We're looking at just like custom things as opposed to going like the retail stores. And I'm just trying to find the best spot for that. I haven't picked a place out just yet. Yet.

[Courtney]

But I love it.

[Jade Warshaw]

All right, maybe Etsy, you know, you don't have to go crazy. Don't get upsold at a jewelry store. That's all I'm saying.

[Courtney]

What's the diamond? That's not, it's like a man made diamond.

[Jade Warshaw]

Moissanite.

[Courtney]

Moissanite, yeah.

[Jade Warshaw]

That's a great option too. You can't tell the difference, but you know in your heart she'll know the difference. But here's the key. Find a woman who doesn't care who goes. It's, it's, it's a beautiful ring. Who cares what kind of diamond it is. I got no one to impress.

[Courtney]

There you go.

[Jade Warshaw]

That's. That's it. But good luck, Mike. That's an exciting time.

[Courtney]

That is exciting.

[Jade Warshaw]

I feel like we did a good deed today.

[Courtney]

We did.

[Jade Warshaw]

We. We caused love to take the next step.

[Courtney]

We did.

[Jade Warshaw]

We did nothing else.

[Courtney]

Well, on the question of the day, we put the kibosh on love, and then we were able to circle back around.

[Jade Warshaw]

Yeah, this is the opposite side. He's got some debt, and he's like, hey, should I wait? And we're saying, no, continue. So love. Love is expensive. We don't talk about that enough.

[Courtney]

Yeah, yeah, we don't.

[Jade Warshaw]

And now proposals have to be their own thing. You know what I mean? You gotta, like, rent a balance.

[Courtney]

You have a nice ring. I'm still okay with, like, traditional on one knee. Doesn't have to be a band playing in the background or, you know, confetti. Just a nice ring.

[Jade Warshaw]

I have not seen a correlation to the. The level of, you know, pomp and circumstance, to the actual quality and longevity of the marriage.

[Courtney]

That's. There's no. There's no.

[Jade Warshaw]

There's.

[Courtney]

Yeah, one does. Is not indicative of the other.

[Jade Warshaw]

But, hey, make it thoughtful, make it sweet, make her feel loved and seen. You can't go wrong there, Mike. I hope she says yes.

[George Campbell]

Foreign.

[Jade Warshaw]

Welcome back to the Ramsey Show. You know, investing may seem complicated or confusing, but it doesn't have to be. Whether you're a complete beginner or you're looking for next level investing strategy strategies, The Ramsey Investing Hub has free tools and information that can help you invest with confidence. So go check it out. Ramseysolutions.com investing or click the link in the description. If you're listening on YouTube or podcast, Amy is up next in Tampa. What's happening, Amy? How can we help?

[George Campbell]

Hey, George and Jade. I'm hoping you can help me. I am $28,000 in student loan debt debt. $25,000 in credit card debt. I am 61 years old, and I have nothing saved. And it hit me like a ton of bricks. And I'm in full freakout mode.

[Courtney]

No.

[George Campbell]

Gosh, I don't know what to do.

[Jade Warshaw]

Oh, I'm so sorry, Amy. So what caused the. The freakout mode? Because for, you know, about four decades, you weren't freaked out. So what caused this turn?

[George Campbell]

My best friend died a year ago, and come to find out, she had. She had had a major stroke. And for some reason, that made me think, oh, my gosh, what if something like that were to happen to me? And I have nothing saved. I mean, wow.

[Jade Warshaw]

Are you single?

[George Campbell]

Nothing. I have, yeah, I'm single.

[Jade Warshaw]

And how long have you had these student loans?

[George Campbell]

I went for my master's in nursing about three years ago and quit halfway because it was a ludicrous idea. So I've been paying more than the minimum since then, but I still owe 28,000 in student loan debt.

[Jade Warshaw]

Do you have a mortgage?

[George Campbell]

No, I own no property except my 14 year old Toyota Camry.

[Jade Warshaw]

Okay, so you're renting right now in.

[Courtney]

Tampa and what are you earning?

[George Campbell]

Yeah, I'm RN, I work at home and I'm making gross 78k a year. My take home is about 4700amonth.

[Courtney]

And how much are you paying on rent?

[George Campbell]

Well, it's funny you should say that, Jade. You're so smart. I moved from an apartment that was 1900amonth down to another one that was 1400amonth.

[Courtney]

Okay, good.

[George Campbell]

It includes cable, it includes Internet, all of that.

[Jade Warshaw]

Good.

[George Campbell]

So I have about $600 a month extra. But what I'm wondering is, shouldn't I take, because I'm 61, shouldn't I take some of the that and invest it in a 403 IRA or a 401K just to get something going while I use the other half of it to pay off the debt?

[Courtney]

I see why you would think that. I mean, I think everybody wants that nest egg. But here's the thing. You could take that 60 and invest it, but you're still going to have this debt. And we still have the issue of, you know, the biggest line item on your budget is variable because you're a renter. So those are the two things that give me the most pause about your situation. If I were you go in being able to enter into retirement with zero debt and at least knowing that, okay, I'm still healthy, if I can bring in some money, that's great. I hate for anybody to depend on Social Security, but you'll have a little there. But think about what that would feel like if you still had this debt hanging around your neck. Now if you called us at, I don't know, if you were at 81, this might be a little bit of a different call. But you're 61 years old. You still have plenty of time to earn income, pay off this debt and get yourself in a better financial footing. Do you agree? You're 61. You got time, girl.

[George Campbell]

Yeah.

[Jade Warshaw]

So here, here's. Let me tell you the current plan you're on Amy, and you tell me how you feel about it? You said you have 600 bucks you can throw at the debt. Is that on top of the minimum payments?

[George Campbell]

Yes.

[Jade Warshaw]

Okay, what's the minimum payments on the debt?

[George Campbell]

Well, I have nine credit cards, so the total for the minimum payments is $1492.

[Jade Warshaw]

And that's on the student loans as well. That's everything?

[George Campbell]

No, the student loans are. The minimum payment is 297. So the total for that is 1751.

[Jade Warshaw]

Okay. And then you said you have an.

[George Campbell]

Extra 600 monthly bills. Right.

[Jade Warshaw]

Okay. So you can put about 2300 towards the debt a month. That includes the minimums plus the.

[George Campbell]

Including the monthly bills.

[Jade Warshaw]

Yes, but I'm saying total towards debt. You have your minimum payments, plus you said you have 600 bucks extra to do something with, right?

[George Campbell]

Correct. Oh, yeah, yeah.

[Jade Warshaw]

Okay, so get this. If you follow that through 2300 bucks a month, you have 53 grand in debt. You'll be done in about two years at this rate if you throw every single dime.

[Courtney]

And that's assuming that you have money. Yes.

[Jade Warshaw]

So here's the thing. Now we go. Okay, two years, that's a long time. I want to get investing. So now we go. Cool. How can we speed this up? Are you able to work any overtime or can you pick up any other gigs as an rn?

[George Campbell]

I have an autoimmune disorder that keeps me from being on my feet. And the company I work for, which is a insurance company, won't let me work for a competitor, so. But I'm wondering, I thought about getting like a side gig as customer service route.

[Courtney]

Yes.

[George Campbell]

I work for 10 hour days.

[Courtney]

Yes.

[George Campbell]

So I have three days a week that I don't have to work.

[Jade Warshaw]

Let me just show the math on it. If you could do a side gig that pays 600 bucks a month, 150 bucks a week, that's reasonable, right?

[George Campbell]

Right.

[Jade Warshaw]

That would speed up your debt payoff down to 18 months. Do you see how I'm getting excited for Amy now? That means 18 months from now, we can begin building our emergency fund so that six months later, two years total, you're back to investing 15% of your income, which you've never done that in your life.

[Courtney]

So let's do the math on that.

[Jade Warshaw]

We love to hear that. So now you're six. Let's paint the picture. You're now 63 years old and you're investing 15% of your $78,000 income. Right. That's if you don't get a raise.

[George Campbell]

Well, yeah, that's true.

[Jade Warshaw]

That's about 12 grand a year? About a thousand. So Jade's gonna punch the numbers in from age 63 to 73. Let's say you invest $1,000 a month and you see a rate of return on average of about 10%. That's what we've seen in the US stock market if you're investing in good mutual funds. So Jade's gonna tell us how much you have. That's at 73. So you're gonna have to work a little longer than the average person. Person. But for a late start, let's see what your nest egg becomes. You're going to have about a quarter million dollars in that one account.

[George Campbell]

Oh, my gosh.

[Courtney]

I told you. It's too late.

[Jade Warshaw]

So that's. I mean, that's more than most people have in their retirement accounts, sadly. So, Amy, even for a late start, you can make a whole lot of progress.

[George Campbell]

Guys, I can't thank you enough. I am. I am pumped. I mean, I am ready. Ready to throw money at this debt.

[Jade Warshaw]

Yeah, you just needed a few cheerleaders. You need some people in your corner, Amy, you have anyone cheering you on in your personal life who can keep you accountable, keep you excited?

[George Campbell]

My. My son. My son can do that.

[Jade Warshaw]

How old is he?

[George Campbell]

He is 35, love.

[Jade Warshaw]

That's about my age. Is he financially responsible?

[George Campbell]

Not at all. We have a history of financial. No financial literacy in my family.

[Jade Warshaw]

How about this? What if we make it a competition?

[George Campbell]

Well, exactly. Oh, that's a good idea.

[Jade Warshaw]

You're gonna let a 61 year old beat you? Come on, step it up.

[George Campbell]

That is a great idea. And I think if he sees me do it, he'll. He'll get pumped up as well. I don't know. If people get this excited on your.

[Courtney]

Show, they need to.

[Jade Warshaw]

You know, Amy, it doesn't happen as often as you think, but what it does, it gives us great joy.

[George Campbell]

Oh, my gosh.

[Courtney]

I want to give you a gift. I want to give you a gift. I want to make sure you and your son have a copy of Total Money Makeover. Because I think that the more you dig into this, Amy, you're going to get more and more excited. You're going to see what's possible, and that's just going to let your fire to go even faster. So we'll make sure you have that one. Make sure you have the new every dollar so that you can do your budget in, in style.

[Jade Warshaw]

I love that. And will you call us back when you're debt free so we can celebrate with you?

[George Campbell]

I promise I Promise.

[Courtney]

Thank you so much, guys.

[Jade Warshaw]

I'll be marking the date 18 months from now. I'm going to. There she is.

[Courtney]

Yes.

[Jade Warshaw]

She's not even 63 yet and she paid off her debt. Let that be a reminder to all of you that if you can still fog up a mirror, there is hope yet. So don't give up. I know you spent 40 years making poor decisions. Not investing, hanging around with debt. But it's never too late to get out. You can still retire with dignity. You can still live a life of peace with less stress. It's available to you, but you gotta be willing. Amy was ready.

[Courtney]

She was ready. She had the enthusiasm we need.

[Jade Warshaw]

When the student was ready, the teacher appeared. And we're happy to be cheerleading her on. So here's a plot twist no one warns you about. You budget for the big trip and you thought of everything. But then boom, you're at the airport trying to buy a phone charger that costs more than the checked bag fee. Welcome to summer, the season of surprise spending and overpriced everything. But don't let it catch you slipping like some dollar store flip flops. All right? Stay on top of your budget. Budget with the EveryDollar app. It's the easiest way to make a plan for your money and give everydollar a job. Basically, it's you telling your money what to do instead of wondering where it went. Like, how did I spend $40 on pistachio popsicles? Yeah, the plot twist is real, but with EveryDollar, you'll stay a step ahead. So go download the EveryDollar app for free in the App Store or Google Play. 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 best selling author Jade Warshaw and we're taking your calls at triple eight eight two five. Going to kick this hour off with Ava in Los Angeles. What's going on, Ava? How can we help?

[George Campbell]

Yes, hi, I'm trying to see if it's worth me possibly filing bankruptcy or just really grind it out and just keep paying debt.

[Courtney]

Give us the 41 1.

[George Campbell]

So I make 142,000 a year. I'm a single parent. My credit cards are about $100,000. I took out a home equity line of 125 to build a guest house in my backyard. My mortgage is about 4,800.

[Courtney]

Okay.

[George Campbell]

I try to keep my savings between 9,000 and 12,000 because I'm terrified of going Below that number. So I know Now I'm at 10 and I get paid in a couple days.

[Jade Warshaw]

What's your average paycheck.

[George Campbell]

With? 142 a year, it's about 12,000amonth. 11 something.

[Jade Warshaw]

Oh, that's your take home pay is 142?

[George Campbell]

Oh no, that's my salary. So take home. After pension and insurance, I NET probably about 9,000.

[Courtney]

Okay.

[Jade Warshaw]

And your mortgage is a lot? Almost half of that.

[Courtney]

Over half of that, yeah.

[Jade Warshaw]

What's going on there? Cuz that doesn't include the HELOC payment.

[George Campbell]

That does not include the heloc.

[Courtney]

Boy. It doesn't. Oh gosh.

[Jade Warshaw]

So what got you into this very expensive home as a single parent?

[George Campbell]

My at the time my debt to income ratio was higher because I had a lot of student loans. But since then a lot were forgiven. Thanks to the former president, I still have about 15,000 left in student loans that did not qualify for anything. So I only put about 3,000 or, sorry, 3% down on the house at the time.

[Jade Warshaw]

Okay, and you're in California, Homes are expensive in the LA area. How many kids do you have that are living in the house?

[George Campbell]

House one. Okay, so because, because it was 3%, I have to get a PMI insurance and in order for me to get rid of that, I refinanced. So my interest rate went up from I think I was 3% at the time. It went up to about 4, 9 currently.

[Courtney]

Okay. Oh gosh.

[Jade Warshaw]

All right.

[Courtney]

How old's your child?

[George Campbell]

11.

[Courtney]

Okay.

[Jade Warshaw]

Okay, so this is what's getting me. You're terrified of having less than 12 grand in the bank account, but you're on the verge of bankruptcy with a quarter million dollars in debt.

[Courtney]

Mm.

[Jade Warshaw]

Yeah, if I had to play which one's more terrifying? I'm going with the latter on that one.

[George Campbell]

I mean the way my credit card payments are set up is like I'm never paying every credit card at the right at the wrong time and I pay more than the minimum. I am able to now set up the guest house to generate income as like, you know, a short term rental, which is going to be great.

[Jade Warshaw]

What was the purpose of the guest house?

[George Campbell]

To generate money.

[Courtney]

And so now you're able to rent it. Have you found when will that happen?

[George Campbell]

Probably in the next couple weeks once I get everything set up and final permits and things like that through the state.

[Courtney]

Oh perfect. That could take a while.

[George Campbell]

Yeah.

[Jade Warshaw]

And how are you vetting this tenant who will be renting it?

[George Campbell]

I'm hoping the apps or the websites help that Part because I'm also terrified of squatters, which is a huge issue.

[Jade Warshaw]

That's what I was going to say. There's a lot of risk here to spend 125 grand to hope to make a little bit of money because what's the HELOC payment? That's 1100 and that's got a fixed rate on it.

[George Campbell]

That's a fixed rate? Yes.

[Jade Warshaw]

Okay. And what could you charge rent for this place in the LA market?

[George Campbell]

Probably 2500. I mean it's brand, it'll be brand new. So that would be really competitive to get that, that amount. And if I do short term rentals, probably equal that if I, you know, do higher on the week.

[Jade Warshaw]

This is like in your backyard.

[Courtney]

Yeah. How do you feel about short term rental with a kid in the house?

[George Campbell]

It's a detached garage. So I mean I thought about all these things. Getting a part time job, which is really difficult with my work schedule.

[Jade Warshaw]

But you make great money. I don't think income was the problem here.

[George Campbell]

Right. A lot of it is. When I got the house, it sort of was a fixer upper. So the first year I spent like 8 grand getting new plumbing and then I needed to get an air, the air conditioning, that was eight grand. And then there was other issues with plumbing so it all just really added up.

[Courtney]

And so what do you owe on the house total?

[George Campbell]

Since I did the refinance, I owe about 650.

[Courtney]

And what's the house worth if it were to sell today?

[George Campbell]

Minimum 985 or over 1 million.

[Courtney]

Here's my thing.

[George Campbell]

This peak 1.3 during the pandemic.

[Courtney]

What I'm worried about is your mortgage right now is over 50% of your take home pay. It's a lot. That's my biggest problem with this. I also wonder about, I mean this is your life. But I wonder about the short term rental thing. With a kid around, it feels risky. Let me just put it like that. I'd be wondering if there's a situation where you can get in a better living situation for cheaper that's not eating up all of your margin every every month.

[George Campbell]

Like a renting an apartment.

[Courtney]

Yeah.

[Jade Warshaw]

Maybe downsizing way before I would even consider bankruptcy.

[George Campbell]

See, I'm scared if I get out of my house, I'll never have a chance to buy another house.

[Courtney]

And that's not true. That's, that's, that's you living in fear. You're, you're literally trading one crazy fear for another. And you're living out a crazy fear right now. And you're like, I'm fine with this. Because you're thinking, in the future you'll never be able to have anything again. You'll never be able to do this again. And I'm like, no, let's set yourself up to where you can, and you can do it the right way without all the stress and the burden that you have today. How old are you?

[George Campbell]

Early forties.

[Courtney]

Early forties. You've got time. I feel like that's like my theme today. You've got plenty of time. Let's play this out a little bit. Let's say you sell this house for a million bucks, right? And let's say you walk away with, I don't know, 350 out of that, what would, what would you do immediately? Well, we secure an apartment for you and your 11 year old. You'd pay off the credit card debt. All right, now you're at 250. You'd clear the HELOC, I guess, when you pay that off. So we'll drop that down. And now you've got $15,000 of student loans to clear. Now that still leaves you with a decent amount of money. I never even touched your 10,000 of savings. Savings. That sounds like a way that you.

[Jade Warshaw]

Could start to build six figures sitting in the bank.

[Courtney]

Yeah.

[Jade Warshaw]

And then you begin to rebuild the down payment, which you're going to do, easily making 142,000 with no debt.

[George Campbell]

Yes. I even thought if, even if I get a, a different place, could I, I could rent the house and the guest house and still I would not.

[Jade Warshaw]

Go rent and keep your mortgage and keep the HELOC and keep the debts. You need to let go of, of this dream. Think about this. If you cleared a thousand bucks a month from this rental of net profit, it would still take you 10 years to ROI after you spent 125 grand to make it happen.

[Courtney]

And we're getting you free and clear plus six figures in the bank to restart. Think about it.

[Jade Warshaw]

I would sell before bankruptcy and you make it 142,000. I think you're gonna have a hard time. They're going to force you to sell all of your assets before they let you consider it. Bankruptcy is going to cost you thousands. It's going to destroy your credit for the next seven years, likely. So this is just not a shortcut that you need to be exploring when you make great money and you got a way out. Hey, what's up? Dr. John Deloney here.

[George Campbell]

The new dates have dropped for the.

[Jade Warshaw]

Money and marriage getaway over Valentine's day weekend in 2023. 6. This is your chance to hit pause on everything in your life and reconnect with your spouse. Over a long weekend in Nashville, Tennessee, me and my friend Rachel Cruz will be digging into topics like sex, money, communication and more. This weekend is happening on February 12th through the 14th and early bird. Prices start at $749 per couple, but the prices will be going up soon. Get your tickets [e-mail] events. Buying or Selling your home is a big deal, and you want an expert in your corner fighting for you to find the best deal for the right price. And the Ramsey Trusted program is the only way to find a top agent you can trust who will help make your home a blessing, not a burden. It's super easy. You can compare agent profiles, interview them, and choose the right one to work with. You can find a local Ramsey trusted real estate pro for [e-mail] agent or click the link in the description. If you're listening on YouTube or podcast, Jennifer is up next in Springfield, Illinois. What's going on? Jennifer?

[George Campbell]

Hi. Thanks for taking my call.

[Jade Warshaw]

Absolutely.

[George Campbell]

So my daughter, at 17 years old, bought an old camper and her and her dad gutted it and turned it into a food truck. She just turned 18 and. Hello.

[Jade Warshaw]

Hey.

[Courtney]

Oh, yeah.

[George Campbell]

Oh, sorry. She just turned 18 and it's in her first full season, is doing great. My question is she does not want to go to college or, you know, pursue business. And her dad and I are just having a difficult time with that decision. And do we just encourage her to keep going with this? I mean, she's an entrepreneur. Obviously she's doing good, but she's got.

[Jade Warshaw]

The best education out there. It's called real life experience. There's people with business degrees that want to start a food truck and don't know how.

[Courtney]

Well, give us the definition of great and successful. What is she doing? How was she earning? What's it look like?

[George Campbell]

So this is, this is her first season. So she does different, like, events and like, she'll be stationed in a town one day a week anyway. She makes about $1,000 a day. But that's, she still has to take her costs out of that. So maybe comes home with 8, 6, $800 an event per event.

[Courtney]

And how many events does she do a month?

[George Campbell]

So far we're at, I mean, she's just getting started, but maybe she's done six so far this month.

[Courtney]

Okay.

[George Campbell]

And some in May. Of course, we're in Illinois. It's cold. So you shut down in the winter. But. And she works hard. Other jobs, she takes other jobs. So she's a hard worker. It's just to not get educated. Is that, is that wise to be like go for it?

[Courtney]

I mean for $3,600, I think it's not worth it. Listen, I think that it's great that she's doing this. I think it's great she's doing. Doing this experience. But the way the call started, I thought that she was like rolling in the dough on this thing. But really it's just likened to a really great part time job or a really great, you know, full time job that's at her terms. It's not all year round. So is there a way that you can encourage her to maybe get an education that's working towards this? And maybe she does this in the summer months when she's out of school and she continues, she opens back up the food truck, that sort of of thing.

[George Campbell]

Yeah, we're definitely encouraging her to do that. We're like, you could pay your college completely with this job, you know, and.

[Jade Warshaw]

That'S if there's something she wants to pursue that requires a degree. So I'm not a fan of just go to college so that we can say you went to college to get a piece of paper. We have millions of people who did that and now feel like they were lied to and they're stuck paying the price with no job on the other side. And so I think your daughter is proving. Proving what a lot of the gen zers are is that there's a non traditional path that might be upsetting to the parents because it's harder to brag about. But I would be happy to brag that my 18 year old has a successful business. And let's ride this out. Let's say she does it for a year and goes, you know what? This isn't for me. The winters were slow. Doesn't make as much as I wanted. It's a lot of work. I got to be there in person. I don't want to delegate this. It was a fun experiment. That's a. That's okay too. But I don't think there's any rush to go. You have to go to college today.

[Courtney]

Well, was there something she wanted to pursue and then got starry eyed with this food truck?

[George Campbell]

Nope, she's just always been. She started during COVID She started making masks, made $5,000 doing that and then went on to another big. She's just that way. And you know I think the problem is she just. It's just scary to send her out into the world like, go, you know, I didn't know. We are kind of from the generation where you do need a degree. And that's not the case anymore, I realize.

[Courtney]

But listen, I think I'm with George then, you know, if it wasn't. If it wasn't like she was on this track and then she had this success and it. You feel like it threw her off track. It doesn't sound like that. It sounds like she's been this way and have had an entrepreneurial spirit from a young age. And so in that case, yeah, why not let it ride?

[Jade Warshaw]

And my guess is she might be a serial entrepreneur where she jumps from one thing, one thing to another, and eventually she'll land on something that really takes off. It might be in the food world, it might be something else. But what we do know is that she knows how to make money at a very young age without a piece of paper. And so I would let her follow that passion, let her follow that thread. And then if she's 25 and decides, all right, I'm done with that. I really want to pursue. Pursue teaching or nursing schools will always be happy to take her money at any age.

[George Campbell]

That's great. Thank you.

[Jade Warshaw]

She's doing all this debt free.

[George Campbell]

Yes, she is. She.

[Courtney]

And she.

[George Campbell]

The money that she makes to update her equipment. And so she's not like, she's not got a lot in savings yet because she needed better equipment, but just starting and trying to do it all with cheap stuff and then upgrade as she needed to.

[Jade Warshaw]

I cannot think of a better education than having her figure out how to cash flow. All of this, how the P. L works, the profits, the revenues, the expenses. This is the real life application of what they're teaching in college. If she were to go get a business degree and you got to tell.

[Courtney]

Us what's her specialty? Like, what can I get if I show up at this food truck?

[George Campbell]

She makes everything from scratch. Her. It's called nourish. It's supposed. And she does little scriptures. She puts them on her stickers that go out and she makes like sandwiches, Amazing. Drinks, sparklers. She. She makes smoothie bowls.

[Courtney]

Wow.

[George Campbell]

Try to healthy, not, you know, fried.

[Courtney]

Not like car food. That's great. That's so good.

[Jade Warshaw]

And worst case, she can go work for someone else if she wants to. It sounds like she loves the food world and there's a lot of room there for opportunity for people like her.

[George Campbell]

All right, well, that's Good. I'll pass that on.

[Jade Warshaw]

I feel great about it.

[George Campbell]

At least, you know, she doesn't have to go.

[Jade Warshaw]

Yeah. And whatever she does, if she's doing it, if she's doing it out of her own volition and doing it with. With cash, let it ride.

[Courtney]

Yeah. It's great.

[Jade Warshaw]

I'm the least worried about her. You raised a really incredible woman.

[George Campbell]

Thank you.

[Jade Warshaw]

Congratulations so much.

[George Campbell]

Well, I feel better.

[Jade Warshaw]

Yeah. I love it. And what a cool bonding experience with your dad. Like, what a cool story to get with your dad and start this business. Especially at 18. I'm scared to see where she's gonna end up at 25. We'll all be working for her one day.

[Courtney]

That's so, so cool. I love that for her.

[Jade Warshaw]

That's a. And Nashville has this a lot where. I love the idea of starting with a food truck versus buying a brick and mortar restaurant. Hope. Because the food world has one of the highest turnover failure rates out of any industry.

[Courtney]

Restaurants. Yes.

[Jade Warshaw]

And so it is one of the scariest, riskiest things you can do. So starting with cash, starting small with a food truck. Those are my favorite stories. And a lot of Nashville restaurants started as a food truck. It took off. They used all of the cash to start the brick and mortar business. Then they can expand to another location if they want. And growing slow is the best way to grow.

[Courtney]

Moving at the speed of cash.

[Jade Warshaw]

Just like that. I love it. Should we take a social question?

[Courtney]

Social question. I love those.

[Jade Warshaw]

Do we have them? I think I have. I've got them here somewhere. There we go. All right.

[Courtney]

All right.

[Jade Warshaw]

I'll let you hit me with a surprise.

[Courtney]

Let's see. I did a couple of these yesterday. Let's go with this one. It says, I love working to support my family, but is the love of earning money as evil as the love of money?

[Jade Warshaw]

What? What?

[Courtney]

It's. It's. This is very.

[Jade Warshaw]

That's very in the clouds.

[Courtney]

Yes.

[Jade Warshaw]

I feel like I need Aristotle and Socrates. Socrates here to duke this one out. So they saying, is it bad to enjoy earning money?

[Courtney]

I think he's confusing with if I'm. If I love earning money to support my family, do I have. Is it evil? Is it like the love of money?

[Jade Warshaw]

Well, let's play it out on the opposite side. If you don't earn money and you can't support your family, I would say that would be the evil.

[Courtney]

Yeah. To just not provide. When you've brought these humans into the world and you brought a wife on.

[Jade Warshaw]

Board, so are you. I think the motive Is important. Are you doing this out of greed? Are you not even being with your family and you're doing all this under the. Well I'm supporting them so they should appreciate it. Even though I'm working 80 hours a week because I want to cuz I'm addicted to work. So I think we have to separate. Are you addicted to work? Are you you wanting the greed that comes with making more and more and more and you can't be content or is it truly just hey, I want to support my family. I want to make good money doing it. I want to give them a great life. I see no problems there.

[Courtney]

Yeah. I think it's a question of is it self selfless or selfish? If that's the gain and if. Yeah, the goal post is constantly, constantly moving for you to get this thing. Yeah.

[Jade Warshaw]

But yeah, it's an important distinction. It's not that much money is evil. It's the love of money.

[Courtney]

Yeah. Yes.

[Jade Warshaw]

And that's where things like greed and pride come into play or that scarcity. I gotta make more, I gotta make more. It's never enough. That's when I would hit pause sing. I was gonna do the harmony but I won't. I'll spare you guys listening foreign.

[George Campbell]

But.

[Jade Warshaw]

Your money's never going to return the favor if all you do is hope for the best.

[George Campbell]

If you're ready to learn how to.

[Jade Warshaw]

Make your money work for you, check.

[George Campbell]

Out the SmartVestor program.

[Jade Warshaw]

SmartVestor can help you find advisors who specialize in retirement planning, charitable giving, advanced investing strategies and more.

[George Campbell]

Whatever your goals, your pro will take.

[Jade Warshaw]

The time to explain your options so you never have to invest in anything you don't understand. Head to ramseysolutions.com smartvestor to get connected. Ramsey Solutions is a paid non client promoter of participating pros. Learn [e-mail] SmartVestor welcome back to the Ramsey Show. We always love a good debt free scream. And on the debt free stage in the lobby of Ramsey Solutions we've got Robert and Angela. Welcome guys.

[George Campbell]

Hi.

[Jade Warshaw]

Congratulations, you made it.

[Courtney]

Thank you.

[Jade Warshaw]

We're marking the moment today. How much debt did you pay off?

[Courtney]

20, $25,000.

[Jade Warshaw]

How long did it take?

[Courtney]

28 months.

[Jade Warshaw]

Awesome. And what was the range of income during that time?

[Courtney]

It was steady at 66,000. Good job.

[Jade Warshaw]

And where are you guys from?

[Courtney]

Ceres, California.

[Jade Warshaw]

Wow. Quite the journey to celebrate with us. We love that. What kind of Debt was the 25?

[Courtney]

It was a few credit cards including one that actually we owed more on than our car. And a car that then died a year later with a blown head gasket.

[Jade Warshaw]

Oof. Okay, so how long have you guys been married?

[Courtney]

Eight years.

[Jade Warshaw]

Eight years. And you started this journey 28 months ago. So you're a few years into this thing. What caused you guys to go, we gotta do better. We gotta do something drastic?

[Courtney]

So I lost my baby sister in August of 2022. Cancer. Thank you. And while I was mourning her, when we went to see her, we had to put the entire trip on a credit card. Credit card. And it was almost like insult to injury. But I didn't know what to change to get better. And then one day, I was perusing Facebook, and a friend of mine made a post about how different his life was from two years before because he had paid off all of his debt and mentioned the total money makeover. So I ordered the book on Amazon. I had to make myself read it. I would set timers. Only got to, like, baby step three. And then I sat him down and I said, look, we need to make a change. I'm really concerned that something's going to.

[Jade Warshaw]

Happen to you before I.

[Courtney]

We can get this debt paid off, and I can't do this by myself. He's like, all right, let's go? Yeah. Robert, how'd you feel about that? Shocked.

[Jade Warshaw]

Were you just kind of like, all right, if she says it, we're doing it? Like, are you that kind of guy who was like, if you've got more energy than I do toward it, I'm just gonna go with it?

[Courtney]

I'll just put all my faith into her.

[Jade Warshaw]

Wow, that's a good man.

[Courtney]

All right, so he's on board. You're on board. You get after it. What did that look like for you? I mean, was a big part of it budgeting or what did that look like? Yeah. So we were doing, like, he likes to say, 2086 things with our money all at once, and none of it was working. So it was more about getting organized, getting on a budget. And then I was also only working part time, so I went full time at work, started picking up extra shifts as well, and it was game on.

[Jade Warshaw]

Wow. And what, like, going part time to full time? What was causing you to go part time originally?

[Courtney]

I had never done that kind of work before. I'm a housekeeper in a hotel. I'd never done that kind of work before and wanted to kind of get.

[Jade Warshaw]

Used to it, but at the same.

[Courtney]

Time, I was like, now we need to make this change. And so it was really only one day a Week difference. I went from four days to five, but then I started picking up a sixth day every so often as well.

[Jade Warshaw]

So was it kind of addictive once you got on the plan to go, like, what else can we do? How much harder can we go? How much faster can we go? Absolutely. Wow, that's something. And where are you guys at now? What's. What's the next thing you're doing?

[Courtney]

There's a professional goal that I have that I want to chase after after we're finished with baby step three. But then we want to buy a house. Yes. I love that.

[Jade Warshaw]

California. That's going to cost you a pretty penny no matter where you are. And that's the next goal. You got the baby step three under underway. Is that done?

[Courtney]

It is underway. Nowhere. About a third of the way through it.

[Jade Warshaw]

Awesome. That one can be a slog after paying off debt, which is so exciting. Baby step three is like. This is like watching paint dry, just stacking the cash. But I'm so proud of you guys. And total money makeover you. You would say was the thing that got you on the plan.

[Courtney]

Yes. And then I started listening to the.

[Jade Warshaw]

Show, and you just gave Robert the spark notes. He didn't even have to read the book. You were like, here's what we're doing. Yep.

[Courtney]

I took notes. I sat him down. I said, here's what this is. I think we need to do this. And he's like, let's go. He said, if you said it, I believe it. I'm doing it.

[Jade Warshaw]

What was the hardest sacrifice you had to make?

[Courtney]

The car. When the car died, we had bought a beater.

[Jade Warshaw]

And so driving that beater around was.

[Courtney]

Like, oh, boy, we're still driving it. We just got it in September. It's a 2000, 2009 Chevy Aveo. Oh, yeah, That's a beater.

[Jade Warshaw]

That's what's up. So is the plan to upgrade that now that you guys are debt free?

[Courtney]

Not now. Later.

[Jade Warshaw]

Once you're out of baby step three. That was a trick question.

[Courtney]

You answered correctly. Angela, you got. This is a woman with a plan. This is a woman on a mission.

[Jade Warshaw]

Don't cross Angela. Yeah. You feel invincible now? Did you guys have cheerleaders in your corner, or was this kind of a secret thing just between the two of you?

[Courtney]

My friends all think I'm weird.

[Jade Warshaw]

Was that before the debt free journey, or is that now after two?

[Courtney]

Both.

[Jade Warshaw]

Okay. Nothing changes.

[Courtney]

Nobody in California knows who Dave Ramsey is.

[Jade Warshaw]

You're spreading the word now.

[Courtney]

You get the shirt and everything. Yeah.

[Jade Warshaw]

That's amazing. Well, how does it feel now that you guys are completely debt free? How do you explain the emotion to someone amazing?

[Courtney]

Like a load I didn't know I was carrying has been lifted.

[Jade Warshaw]

Wow. And how about you, Robert? Is your life any different?

[Courtney]

Not really.

[Jade Warshaw]

She's just. You're like. Well, she's happier now, so that's. That's nice.

[Courtney]

Yes.

[Jade Warshaw]

Robert seems like the most even keel guy. Like we. We could be in an apocalypse and Robert would be like, ah, everything's fine.

[Courtney]

He's happy wife, happy wife.

[Jade Warshaw]

He's like that meme. I love it. Well, hey, we got a parting gift for you. We got two every dollar, premium subscriptions, good for a year. You can pass that along to someone who said you're weird. You can use them for yourself. Do what you will with it. We are so proud of you guys.

[George Campbell]

Thank you.

[Jade Warshaw]

Okay, you ready to do this?

[Courtney]

Yep.

[Jade Warshaw]

Came all the way here. Might as well.

[Courtney]

Let's do it. Let's do it right.

[Jade Warshaw]

We got Robert and Angela from California. 25,000 paid off. Lot of credit cards, bunch of car loans, driving the beater car, going full time, doing whatever it takes. In 28 months, making $66,000. Count it down. Let's hear a debt free scream.

[Courtney]

Three, two, one. We're debt free. All right.

[Jade Warshaw]

Another one bites the dust. Look at that.

[Courtney]

All right, man, even people in California.

[Jade Warshaw]

They'Re getting hip wood. I mean, the taxes are killing you. Might as well free up some of your money.

[Courtney]

I know that's right.

[Jade Warshaw]

That's real talk. I love it.

[Courtney]

Just another story of someone else getting the job done. Yeah, I like it.

[Jade Warshaw]

28 months. Think about that. That's not a long time. No, it's going to fly by. So do you want to be dead?

[Courtney]

The time's going to pass anyway.

[Jade Warshaw]

Or do you want to be where you are today?

[Courtney]

That's right.

[Jade Warshaw]

You get to choose shoes. I love it. Let's get back to the phones. Andrea is up next in Miami, Florida. What's going on, Andrea?

[George Campbell]

Hey. So I am just, I guess, disagreeing with my husband right now. He is active duty military, and he's wanting to buy a house and sell each time we move. And I just don't think that's a smart financial decision.

[Courtney]

Well, you are right, my friend.

[Jade Warshaw]

So he's. He wants to be a real estate mogul.

[George Campbell]

Well, so we initially what started this is I had $160,000. We needed a qualified expense to get it out of the investment account that it was in. We put it into this house down here in Miami. And I'm just worried about all the fees that come with buying and selling and just maybe we're not going to be able to sell.

[Jade Warshaw]

Yeah, we never recommend being a long distance landlord. And especially for military folks, if you know you're not going to be planted there for, you know, five plus years, it is not wise to buy a home, especially in those areas because there's a lot of movement. And so those areas are not the hottest real estate markets for that reason. And so I would very, I would very much caution him against this whole plan. I don't know if he played a lot of Pokemon growing up, but he's trying to catch them all. That's not what you want to do in real estate.

[Courtney]

It's two different mindsets. The mindset that you go in to a property that you're purchasing that's going to be your primary residence is very different than the mindset that you would go in looking for a rental. Rental, looking for the area, you know what I'm saying? So this two birds with one stone thing is a really bad idea.

[Jade Warshaw]

And all it's going to do is you're going to collect a bunch of mortgages and then hope to make a spread on the rent, which there's going.

[George Campbell]

To be a lot of supply. I think so much. Right. Wanting to rent. He wants to buy and then sell. And I think what a lot of other military members do, they use their VA 0% down and then essentially they're getting that basic allowance for housing, housing and they're pocketing it instead of giving it into rent. And so then everybody thinks that they're saving that money or they're pocketing that money by putting it into a mortgage versus into a rental.

[Jade Warshaw]

So I think they're hacking the system by doing these, this VA loan trick.

[George Campbell]

Well, having 0% equity, his mindset is.

[Jade Warshaw]

There'S a lot of risk with these VO VA loans. Putting nothing down, having no equity, hoping that the market shifts in your favor within two or three years. There's just way too much risk. And I don't want you guys calling back five years from now going, we created a nightmare. We have five properties all over the country. What do we do? We can't handle this. And then you got to offload them, you know, for way less than you paid, potentially in short sales because you need to get out.

[Courtney]

How, how long is your average stay before you move?

[George Campbell]

Well, this one will sell, sell our house. So we bought the first one down here in February and that'll be a little after two years.

[Courtney]

Yeah, yeah, I, I would. I like the rental plan or, you know, something to where at least if you are buying, you're making the plan. We're not keeping these houses. We're offloading them when we move because the, the goal is not, what do we say? It's not Pokemon. You don't have to catch them all.

[Jade Warshaw]

Yeah, exactly. I would not be. This is not a game of Monopoly and so I would caution him against it. I don't know that I can convince him, but I think Andrea can. A lot of risk here. Our scripture of the day, Proverbs 16:11 a just balance and scales are the Lord's. All the weights in the bag are his work. Margaret Thatcher said, pennies do not come from heaven. They have to be earned. Earned here on earth.

[Courtney]

Good job.

[Jade Warshaw]

Chew on that one, Jake.

[Courtney]

Yeah, she did.

[Jade Warshaw]

We'll get it later tonight.

[Courtney]

I got it today. I got it now.

[Jade Warshaw]

It'll take. Michael is in San Francisco. Up next. What's going on, Michael?

[George Campbell]

Yeah. Hey, thanks for taking my call. So I've been, I am, I have been debt free for over 10 years, but I live in California and my expenses are going up. I recently had to take on some debt for some home repairs that we've been putting off for, for a long time. I've also got more expenses coming on the home repair front and some kids on their way to college. I am based in the San Francisco Bay area. My, my business is. I have, I'm self employed. My business is dependent upon the tech industry and there's a lot of uncertainty in that industry. Now my projections for dropped by, I don't know, 30, 40, 40%.

[Courtney]

Oh boy.

[George Campbell]

This year alone. And I'm not sure if I should stay in California or if I should be looking for someplace with a lower cost of living.

[Courtney]

Tell us a little bit about what you're in debt on the home repair and what that's going to look like finishing the repair. And tell us a little bit about what your income is from this tech business.

[George Campbell]

Sure. So I anticipate the repairs are going to be a minimum of 30 grand. And we don't have that cash. My. And you asked. Sorry. The revenue of the business.

[Courtney]

Yeah. What's your, what's your income? What do you take home?

[George Campbell]

Yeah. So last year it was just over 200. This year it'll be, you know, maybe 120. 130.

[Courtney]

Oh, wow.

[George Campbell]

If I don't, if I don't recover, you know, the lost business.

[Courtney]

What was your best Year last year.

[George Campbell]

I've been self employed for about five years. The first two I invested some savings. So I had some savings invested up that kind of floated us through third year. Broke even last year, kind of started to break out and I was on my, on my way to a good year. But you know, there's been a squeeze on budgets in the, in the valley and my clients are feeling that and that's kind of having a repercussion back on me.

[Courtney]

Yeah, there's part of this where, you know what's keeping you in California? It's so expensive for you, you're making good money. But I feel like you can make 120,000 in a lot of parts of the country and slowly build it back up to 200 depending on your know how or if you set up a business elsewhere. What do you think is keeping you there?

[George Campbell]

So I'm originally from California. I have deep family roots here. My family was, you know, my, my kids are born and raised here, traveled a lot. I have, you know, I've lived in the south, lived, lived overseas. And you know, in addition to the family roots, I think it's just, it's either, it's either habit or, you know, just kind of a personal preference.

[Jade Warshaw]

And you're married?

[George Campbell]

Happily married for 18 years.

[Jade Warshaw]

Okay. And is your wife working?

[George Campbell]

She works part time, she brings in another 20.

[Jade Warshaw]

Okay. What would it look like for her to work full time? If the kids are going off to college, Would she be willing and able?

[George Campbell]

Yes, and you know, we're looking at that. The difference is her, you know, her potential income is a fraction of mine. And when we look at the opportunity ahead while that. And the answer is yes, absolutely. She's putting in more hours, she's taking on more hours and as the kids move out of the house, that'll be easier for her to do. But my potential for income exceeds the 200. In the past I've made even more than that. Obviously not self employed because now I've got my, I've got my own expenses, my own health insurance. But our thought process generally leads towards what can I do to increase our income.

[Jade Warshaw]

Yeah. What kind of debt are you in right now?

[George Campbell]

None, except for. So the roof repair had to go on a HELOC, so we just refreshed our HELOC 10 year HELOC. You know, that's at 8.3.

[Jade Warshaw]

And what's the balance on that?

[George Campbell]

About, about 18 to 20.

[Jade Warshaw]

Okay. Because my concern is you had your best year ever last year and it still wasn't Enough to cash flow the repairs. Yeah, which tells me that it's not an income problem. And so I would. Obviously you live in one of the top three most expensive areas in the country. And so I'm not trying to say that this is a major part of it, but is there also lifestyle spending other things where it's just kind of that lifestyle creep, you make more, you spend more and now it's hard to backtrack?

[George Campbell]

Yeah, I'm fully aware of that risk. I mean generally we operate extremely frugally. So we have been in debt in the past, none of us likes it and we worked really hard to get out of it. The cash flow issue for last year really had to do with. So I've been working with a tax preparer who was not experienced in handling my type of business and self employed and escorts. So I got hit, you know, I had 20 grand in the bank, but then I got hit with a big tax bill which again leads me back to California taxes, California real estate expenses. So that may be a path out because we can re budget and squeeze our expenses down. You know, I've fixed the tax issue, but still, you know, we were just about break even. And with the loss of income, which again I'm investing in my business, I'm looking to go upmarket. You know, I primarily work with smaller companies in the Valley. I'm going mid market. You know, artificial intelligence is a threat.

[Courtney]

And that's kind of what I wanted to ask is, is there feasibly a way to bring this number back up that's dropped by 40% or is it that AI is kind of stealing your model and you need to find new cheese?

[George Campbell]

So I think so. It's a little bit both, I think, I think over the next two years, I mean. So the short answer is I believe I can absolutely get back to 200 and beyond. Okay. But it is going to require me changing, it's going to require a new pipeline, it's going to require me targeting a new market, it's going to require me to developing new services, all of which I have a high degree of confidence that I can do.

[Courtney]

Okay, that's good.

[George Campbell]

It takes time.

[Jade Warshaw]

Could you also go work for a company and keep this business on the side?

[George Campbell]

It's very alluring and I love that idea. And the short answer is yes. Except layoffs.

[Jade Warshaw]

It's mostly layoffs.

[George Campbell]

And there's a ton of. I mean I have more experience than most. I've been independent for a while, which makes me, you know, more attractive. But you Know, there's, there's not a.

[Jade Warshaw]

Lot of, well I have not seen.

[George Campbell]

A lot of hiring to date. That said, you know, last couple weeks I've seen a lot of people get placed. It's just, it's just getting, you know, getting, it's a little bit of a trade off of, you know, do I spend my time, my free hours, you know that I'm not billing. Do I spend it on looking for an ex client which has a potential for a real upside.

[Courtney]

Right.

[George Campbell]

Or do I spend that on a job which is going to, it's a little tough for me to take a full time job and, and keep my side business and I'm reluctant to do that because I've spent so many, you know, so much time and effort building.

[Jade Warshaw]

I just don't want to see you continue using this, you know, HELOC to go into debt to cover the repairs if things get tight.

[Courtney]

It feels like your wife stepping in, into a full time role like you said she, it's going to be a fraction of what you're earning but it could close that gap a little bit. So like to your point you can track down more leads and secure more clients clients to kind of grow this percentage a little bit for you. I would at least start with that action and see how that gets you guys. And then the second act, well really the first action is let's look at the budget, let's crunch our, our lifestyle way down. Then wife's going back to work full time and, and see if those two actions don't clear up enough margin for you to cash flow the rest of this project. Is it just the roof? Is that what you're doing? You have to replace the, the whole roof?

[George Campbell]

Yeah. And, and I mean desperate need of a paint job. I mean you can see the wood. So we need to, and we're, you know, we're kind of in the sun so we need to, we need to do that. That's going to be another maybe six to eight.

[Courtney]

Okay. So let's force rank these things of what's most important and then yeah, we're going through the list and cash flowing them. Obviously the things that are must haves are the ones that go first and then other things, they might be smaller projects that you can break into chunks and kind of quell that amount a little bit.

[Jade Warshaw]

But I would clear that heloc get this emergency fund in place and cash flow the rest as you can and that's going to take keeping that income up and your wife working full time. Best of luck, Michael. This is the Ramsey Show.

[George Campbell]

Foreign 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 steps are and why they actually work. 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 page playlist. Copy it, text it, send it in a group chat. Just say, hey, I thought this might help. Because one playlist shared at the right time could be the turning point. One share, one playlist, one step could 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.