“My Financial Advisor Told Us To Take Out A HELOC For A Tax Write-Off”

Summary

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The Ramsey Show – Detailed Summary

Episode Date: November 21, 2025
Episode Title: “My Financial Advisor Told Us To Take Out A HELOC For A Tax Write-Off”
Hosts: Ken Coleman & Rachel Cruze (Ramsey Network)

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OVERVIEW

This episode of The Ramsey Show features Ken Coleman and Rachel Cruze offering practical, values-driven financial advice to callers facing a range of money dilemmas. The major theme: Don’t let outside “experts” convince you to take on unnecessary debt or make complex financial maneuvers that contradict your core values and peace of mind. The hosts champion the Ramsey approach—cash-flowing expenses, avoiding debt, and keeping financial decisions simple and value-aligned. The show covers case studies from soon-to-be retirees, struggling young families, entrepreneurs, parents, and more, delivering relatable coaching on debt, investments, career moves, and teaching children responsibility.

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MAJOR CALLS & KEY DISCUSSION POINTS

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1. Retiree HELOC Dilemma: Should You Borrow for a Home Addition?

Caller: Dan from Grand Rapids
Segment: [00:42]–[07:36]

Dan’s Situation:

• About to retire, wife’s last workday is tomorrow.
• Wants to add onto their home ($100k–$120k project).
• Financial advisor pushes a HELOC/home equity loan, citing:
  1. Lower interest vs. investment returns
  2. Tax write-off benefits
  3. Lowering tax bracket/tax bill by not withdrawing from 401k
• Dan’s plan: Pay cash from savings/403b (retirement funds). Feeling uneasy about going into debt after 40 years of hard work getting OUT of debt.

Ramsey Team’s Advice:

• Rachel: Values matter more than “math games.” “Some financial advisors are so stupid. They don’t even think about your values and what you want out of life. And clearly living a debt-free life has a price tag for you…”
• Ken: “We hate his suggestion. We hate it.” Emphasizes emotional relief over marginal, hypothetical tax savings.
• Consensus: Pay cash for the addition, do not get a HELOC.

Quote:

“Your body, your heart, your head…if I can put this addition on and I’m paying cash for my grandkids to be there…that’s worth more than any chart your advisor can draw.”
—Ken Coleman [06:31]

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2. Teaching Kids Responsibility: When Children Break Expensive Stuff

Caller: Julia from Baltimore
Segment: [10:19]–[19:47]

Julia’s Situation:

• 10-year-old son broke a $400 window (disobeying repeated warnings), plus a thousand-dollar glass table (pushed on it despite repeated warnings).
• Unsure how much to make him pay back.

Ramsey Team’s Advice:

• Ken: Advocates for real consequences—kids should pay for all of the window break if it resulted from disobedience; partial pay for the table.
• Rachel: More grace-oriented, especially if not intentional (“not all disobedience is the same as being destructive on purpose”). Still, some financial consequence is needed.

Quote:

“I love the idea of making him go do real work, by the way. Not like chores around the house that you pay for. No, he’s got to go get a lawnmower out or whatever...”
—Ken Coleman [14:46]

Memorable Moment:

• Rachel’s mixed feelings as a mother of young boys; Ken’s nostalgic stories about his own childhood mishaps (“All little boys’ brains are on fire…”).

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3. Overwhelmed Young Family: Escaping the Debt Spiral

Caller: Valentina from NYC
Segment: [21:57]–[31:10]

Situation:

• Family grew from 2 to 7 in 5 years.
• Income: $240k pre-tax, $162k after-tax
• Huge debts: $98k credit cards, $28k personal loan, $132k student loans, $43k 401k loan. Mortgage for their home + a second property at $4.5k and $1.2k/mo respectively.
• Negative cash flow every month.

Ramsey Team’s Advice:

• Must sell second property and drastically cut expenses (even “good” expenses like private school, family remittances).
• Immediate budget intervention needed (offered a Ramsey coach + free EveryDollar access).
• Rachel: “There has to be some changes, some significant changes. If there’s not, you guys will keep in the cycle of where you’ve been…”

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4. School Loan for Ministry Degree?

Caller: Antwan from Austin
Segment: [32:41]–[39:51]

Situation:

• 18, wants to go to a ministry/theology school ($2,000/semester, online), but parents are pushing for a local, cheaper school he doesn’t feel called to.
• They’ll stop helping if he chooses ministry.

Ramsey Team’s Advice:

• If called to ministry, find a way to cash-flow the cheap tuition, don’t take out even small debt.
• Honor parents, but don’t let their fear dictate your calling.
• Ken: “Honor your parents, but you don’t have to do what they say. Now. There’s a tension there…”

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5. Should We Use a 529 For Our Own Career Emergencies?

Caller: Trent from Tulsa
Segment: [39:51]–[42:18]

Situation:

• Only debt left is smallish mortgage (done next year). Want to super-fund a 529 partly in case they need to pivot careers.

Advice:

• Fine to fund 529 for daughter’s education.
• Do not over-fund for adult “just in case” use; upskilling in tech/etc. is usually handled outside of traditional school.
• Rachel: “I would just cash flow your wives [sic], set your daughter up for the 529…”

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6. Late Starter: Can I Ever Own a Home or Retire?

Caller: Antoinette from Fort Worth
Segment: [44:25]–[52:27]

Situation:

• 61, truck driver, no retirement, about $8k in debt, no down payment, large car loan (recent purchase, unclear on balances).
• Wonders if it’s “stupid” to attempt first-time homeownership.

Ramsey Team’s Advice:

• Homeownership must wait.
• Main focus: know numbers exactly, sell the expensive minivan—even if it means buying a $2,000 “beater.”
• Get out of debt and start investing for retirement—small steps, every dollar matters.

Quote:

“The excuse that ‘I am bad with numbers’ can’t be an excuse anymore, OK? You are an adult, you are smart, and capable, and we have to get this under control.”
—Rachel Cruze [48:51]

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7. Sudden Windfall: Selling Part of the Family Business

Caller: Nicole from Greenville, SC
Segment: [57:56]–[64:08]

Situation:

• Husband is selling just under 50% of a business for $6M.
• Overwhelmed, wants to avoid “lottery mentality,” make wise decisions for their family, and avoid spoiling children.

Advice:

• Slow down, get tax advice, and don’t make any big changes immediately (except prepping for taxes).
• Pay any remaining debt, plan for giving and long-term investing, but keep family routines and expectations stable for kids.
• Rachel: “Money magnifies who you are...The way you guys have dealt with money before, this $6M—it’s going to be amplified.”

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8. Other Notable Calls

• Career switching, business debt, how to pay off student loans, and adult children’s work arrangements—all addressed with Ramsey’s signature blend of practical math and tough love.
• Notable Baby Steps Millionaire Interview (“Stephen from Minnesota,” 72, net worth $4.7M): Humility, hard work, and communication with spouse were his keys—despite a long, winding path and “a 2.0 GPA and 17.5 years for a degree.”

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NOTABLE QUOTES & MEMORABLE MOMENTS

• “We hate his suggestion. We hate it.” – Ken Coleman on the HELOC advice [04:53]
• “Sometimes financial advisors are so stupid…” – Rachel Cruze [04:08]
• “Trust your gut, Dan. There’s a whole bunch of science on this, that trusting the gut is not this mysterious thing…” – Ken Coleman [08:16]
• “You’re not going to learn the lesson unless you feel a little something…” – Rachel Cruze on kids breaking windows [19:21]
• “If you cash out this IRA, nothing in your life has to change. You’re just plugging in money and fixing your problems. And you’re unplugging something that actually is going to go up in value.” – Rachel Cruze [121:41]

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TIMESTAMPS FOR KEY SEGMENTS

• [00:42] – Retiree HELOC Dilemma (Dan)
• [10:19] – Kids Breaking Expensive Stuff (Julia)
• [21:57] – Drowning in Debt Young Family (Valentina)
• [32:41] – School Loan for Ministry Degree? (Antwan)
• [39:51] – 529 for Career Emergencies? (Trent)
• [44:25] – 61 and Starting Over (Antoinette)
• [57:56] – $6 Million Business Windfall (Nicole)
• [106:23] – Baby Steps Millionaire Interview (Stephen)

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TONE & STYLE

• Supportive, Direct & No-Nonsense: Both hosts offer warm encouragement but firmly push back against excuses, fuzzy thinking, and “easy button” debt schemes.
• Humorous & Relatable: Frequent jokes about family life, their own childhood trouble, and the unpredictability of parenting and adulthood.
• Action-Oriented: Practical steps always prioritized; every caller leaves with a clear “what to do next” plan.

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STRUCTURE & FLOW

The show alternates between calls about complex financial decisions (retirement, debt, business growth) and everyday family or career situations—demonstrating Ramsey methods apply at any income or life stage. Notable is the repeated distillation of every big financial question down to simplicity: “Know your numbers. Trust your gut. Stick to your values. Don’t go into debt.”

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RECOMMENDATIONS TO LISTENERS (RAMSEY-STYLE)

• If it feels wrong, it probably is—don’t let “experts” talk you out of your financial peace.
• Don’t overcomplicate your financial plan. The simple answer (“pay cash,” “budget tightly,” “work more, spend less for a season”) is almost always the right answer.
• Model financial values to your children—let them feel the consequences of their choices.
• Massive life transition (windfalls, retirement, career change): pause, breathe, get wise counsel, and don’t let urgency lead to regret.
• You’re never too old—or too young—to start making wise choices. Get clear, and get after it.

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FINAL TAKEAWAY

Whether you’re facing a massive windfall, a mountain of debt, or just the everyday mess of life and money, you win not by chasing every trick or hack, but by focusing on what you can control—your habits, your values, and the next right step.

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For tools, budgeting apps, and a free consultation with a Ramsey-endorsed coach, visit www.ramseysolutions.com.

Transcript

[Sponsor/Announcer]

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

[Ken Coleman]

Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit Union studio, this is the Ramsey Show. I'm Ken Coleman. Rachel Cruz joins me, and we're here for you. 888, 8255-225882-55225 is the number to jump in, and we would love to coach you up today. We start off with Dan in Grand Rapids. Dan, how can we help you today?

[Caller]

Ron, my wife and I are preparing to retire. Matter of fact, her last day of work is tomorrow, beginning of February. So 40 years of effort towards this.

[Ken Coleman]

Dan, how are you? Dan, I gotta ask you this. This is. I mean, we. We men have to unite because we don't do this well. And we got Rachel here to help us on this before we dive in. When she finishes the day tomorrow and she wraps it up and comes home. Do you got something planned?

[Caller]

You know, we don't. Came on pretty quick. We both had this date in February picked, and then her department dissolved, and they said you can either take a bio or you can transfer to another department. So this all happened for her in the last three weeks.

[Ken Coleman]

Okay, but she's excited about this?

[Caller]

Oh, absolutely, yes.

[Ken Coleman]

Dan, listen, I don't want to spend too much time on this. Rachel's here to back me up. This is where you got to step up. I mean, this is. You got to do something special. She comes home, maybe a little surprise. If she hates surprises, plan a little something.

[Rachel Cruz]

At least a little retirement celebration.

[Ken Coleman]

40 years, babe. You're wrapping it up. We got to celebrate her is my point. I don't want to. And I'm glad I said this, Dan, because you might have blown it had I not brought this up.

[Caller]

You're very. I appreciate that she works from home, but I will bring stuff home and make it monumental.

[Ken Coleman]

She servo. Okay. Rachel, what does he do in that situ. I feel like this is your category.

[Rachel Cruz]

Champagne. Pop the bottle right outside the door.

[Caller]

Neither.

Neither one of us drink.

[Ken Coleman]

But I'm just striking out. We're striking out.

[Rachel Cruz]

The grape juice. Sparkling grape juice. Okay.

[Ken Coleman]

No, just do something. All right, so we. We've now helped you there. That's the help you didn't know you needed now. Yeah, keep going.

[Caller]

Plus, your marriage. We got by. So we. We are. We've worked very hard to get where we're at, and we're very comfortable with what we're planning for retirement. We're very comfortable advisor but I have one concern that he's got me a plan that he's got for me. And we are going to put an addition on our house next spring. So we're planning to spend about 100 to 120,000 to do that. Now my plan was just kind of take that off the top of our 401k and our savings and make that do the addition. What he's suggesting, and he gave me, I guess good reasons is he suggesting that I take out like a HELOC or a home equity loan to do this project? And he said we'll chunk it away pretty quick. But he said there's reasons for that. First of all, I'll be paying a lower interest rate than he can make me. That's arguable. The second thing he said was it is definitely be a tax write off. And the third thing was the fact that it'll save me 20 plus thousand dollars next year in taxes because of the tax bracket that he's aligning us with. And it just, it's very hard for me to think about going into debt immediately as I retire.

[Rachel Cruz]

Well, yeah, 100% because is he, what, where is he planning on having you guys pay off the HELOC when he said you can throw a bunch of like a bunch of money at it? Is he thinking just a little bit every year so that you don't mess up the taxes and all of it?

[Caller]

Yeah, he's saying we'll chunk it away. And I don't know how relevant chunking away is if it's a year or five years. But he said we'll just make a monthly payment on it and again that it'll give us a tax advantage, it'll save us taxes and all this, which all kind of makes sense but dang it, you know, just got myself 40 years of work to get out of debt and retire. And then just thinking about going back into debt just kind of scares me.

[Rachel Cruz]

Well, some financial advisors are so stupid. They don't even think about your values and what you want out of life. And clearly living a debt free life has a price tag for you. You know, you can't put a price on it but you know, it's a value of yours that he's not putting into any consideration. And so as he goes around. But so Michael. Yeah, so no, I would not do this. I would 100% just cash flow it. And if the cash flow comes out of, I don't know if it's the 401k. If you guys have money elsewhere, but you have the ability to cash flow. Right, Dan?

[Caller]

Yeah. We got a set amount that we're going into retirement with that we're comfortable with. And it's going to last us long beyond our retirement.

[Rachel Cruz]

Yep.

[Caller]

And just thinking of taking that 100 or 120 right off the top of that and doing the addition was my plan. And so he.

[Ken Coleman]

Well, let's. Let's just put your plan.

[Caller]

Offered a suggestion. Yeah, I'm sorry.

[Ken Coleman]

Yeah. I want to put your plan to the test, not his suggestion. We hate his suggestion. We hate it. So let's put your plan to the test. Let's assume that you didn't get this advice at all. Okay.

[Caller]

Yes.

[Ken Coleman]

And you just went ahead and pulled the trigger on your plan. How do you feel emotionally about your plan? Any stress?

[Caller]

No, I don't think so. We have kind of intentionally, we have this 403B that we've been carrying for a long time. And I've been very aggressive with it. And I took it from 20,000 to. It's about 170 right now. So my thought was that is just some playmate money we've been actually not planning on. That we've accumulated that would do this project for us.

[Ken Coleman]

The addition.

[Caller]

Well, we raised seven kids in our house, and it was fine with nine people. But now what we find is with adult children.

[Rachel Cruz]

Yeah.

[Caller]

Instead of nine people every day, we have 29 people, you know, 10 times a year. So we want to double our kitchen in our living room.

[Ken Coleman]

How much.

[Rachel Cruz]

How much do you guys have in retirement total?

[Caller]

Just about 2 million.

[Rachel Cruz]

Okay. Golly. See? And he's going through all these hoops and stuff about this and that and that you guys have $2 million. Do you know what I mean? And you want to take 100,000 of it. And if you go and burn that amount in the middle of the room, you're not gonna have any emotion towards it. Cause it's such a small percentage of your net worth. So that's where the peace of mind of your value system overrides his snaking and maneuvering through where it's gonna be. Not even that much money at the end of the day. Do you know what I'm saying?

[Ken Coleman]

I agree. I mean, Dan, you answ your own question. I asked it that way. Just simply for you to hear yourself say, his plan gives me a little bit of heartburn. Enough that the pepcid AC is not working. And you called us today, right?

[Caller]

It did. Yeah.

[Ken Coleman]

Right.

[Caller]

I think I Knew where you were going to take me, but I just kind of wanted to hear it.

[Ken Coleman]

Yeah, and I appreciate that, and we're happy to be here for you, but you, sir, are the ultimate arbiter on this. Your body, your heart, your head. And man, you're just like, man, if I can put this edition on and I'm paying cash for my grandkids to be there.

[Rachel Cruz]

Yeah. And I would run the numbers too, because I am curious because helocs, like the. The rates go up and down. Like it really is very dependent upon what's going on.

[Ken Coleman]

Don't run the rates at all. I don't want you to be tempted.

[Rachel Cruz]

No, no, it's not a temptation, but it's that versus what? You know what I mean? Like that versus the taxes that you're going to pay on a hunt like. Like. What I'm saying is I think it ends up being closer to a wash than what you realize. I think that the guy. I think he's like nitpicking every little thing I agree to say. I'm making this number up. I haven't done the calculations, but to save 10 grand, whatever the thing is, and. And that's pennies to you guys. So I'm like, the peace of mind is worth that. So much more.

[Ken Coleman]

Yeah. Just listening to you describe everything he told you versus your plan. Yours is simple. Boom, we're done. We're done.

[Caller]

And do you all have money you.

Said kind of makes sense.

Do you?

[Rachel Cruz]

Yeah. Do you have money elsewhere, Dan? Where to his point? Do you have money sitting in a high yield savings or something where you witness or have to pay taxes if you use that cash?

[Caller]

We have about a $40,000 savings account and 401k. I have a lump sum pension and a 403.

[Rachel Cruz]

Okay, gotcha, gotcha. Nope. That's great. Yeah. No, I would not go borrow on my house and do an addition when I freaking have the money for it.

[Ken Coleman]

Yeah.

[Rachel Cruz]

That's the bottom line.

[Ken Coleman]

Trust your gut, Dan. There's a whole bunch of science on this, that trusting the gut is not this mysterious thing. It's actually the brain sending physical signals to the body. And we feel it in our body. That's a real thing. Has the same validity as the logic. Listen to your heart, listen to your body. You were right. Thanks for calling. Tell the financial advisor thanks. No, thanks. Hey, guys. You know those too good to pass up holiday promos? Well, they can be great. But with every spin of the digital wheel, the newsletter signup, the coupon code, you're giving away your data, you think that info just stays with the store? I doubt it. It goes into the corners of cyberspace where data brokers grab it, repackage it, and sell it to spammers, scammers, and generally bad people. The FTC just reported consumers lost over $12.5 billion to fraud last year. And that's not just a number. That's your money and your privacy. And that's why I recommend Deleteme, your digital cleanup crew. The Deleteme privacy pros dig through hundreds of these data broker sites. They scrub your info and they keep it gone. Which means fewer weird robocalls, fewer spam texts. And it's the gift that keeps on giving because it's an annual subscription. And Ramsey listeners can get 20% off those annual plans at JoinDeleteMe.com Ramsey with code Ramsey at checkout. Do it today. That's JoinDeleteMe.com Ramsey code Ramsey. All right, we're going to Baltimore where Julia is waiting. Julia, how can we help today?

[Caller]

Hi, thank you so much for taking my call. I'm curious how much I have my children pay when they break things. Recently my 10 year old broke a 400 window and a glass table. That is thousands of dollars to replace.

[Ken Coleman]

Well, what happened? The 10 year old is. Is this a boy or a girl? Boy.

[Caller]

It's a boy.

[Rachel Cruz]

I was like, I can answer that.

[Ken Coleman]

Take it easy on the boys.

[Rachel Cruz]

What was he doing? Was he just being a boy and. Yeah, like jumping.

[Caller]

With the window. He was throwing the baseball and we had told him not to do this, but he thought it was only that we were telling him that the glass door, like the storm door was going to break. He didn't realize the little door next to the door could break too.

[Ken Coleman]

Wait a second.

[Caller]

He was upset about himself, about that.

[Ken Coleman]

Did he throw the ball directly at it or was he playing with a friend or a sibling and somebody missed.

[Caller]

Could have been someone missed it because. Yeah, they usually throw the ball toward the door and they keep the batter right in front of the door. And they know not to and that.

[Ken Coleman]

But they've been told not to many, many, many times. Okay, all right. This is great. I'm gathering information here. I haven't ruled yet. Now, the second. The glass table, what happened with that one?

[Caller]

Okay, so the glass table, you know, you could stand up like on your own using your own body strength, or you could push off of the table and push up. So that's what he did, I guess. And somebody else was pushing up at the same time. And it shattered, and the whole side of the table, like, snapped. So we actually are just using a fragment of what used to be the table.

[Ken Coleman]

Is that safe, given that it's a glass table?

[Caller]

Yes. We turned the jagged edge towards the wall and we put tape on it. And no one sits over there, Julia.

[Ken Coleman]

I gotta tell you, I am. No, no one's ever gonna, you know, confuse me with an OSHA inspector, but I'd probably get the glass table out of the living room. Okay. Very easy ruling for me. He felt bad on both instances, correct?

[Caller]

Yes.

[Ken Coleman]

Okay. And how long has it been since the. These two instances?

[Caller]

The window was over the summer and the wind and the glass table was within the last month or two.

[Ken Coleman]

Well, I would have. I feel. I mean. Okay, so I got to change my ruling. But I think you should have acted a little quicker. But, yeah, I think you should sit him down and go, hey, I told you a thousand times not to play baseball in front of the door. You did it. And by the way, this is why I told you it's not mom trying to cramp your baseball style. I'm sure that's your favorite spot. Totally get it. But I knew this was a possibility and happened. So I know you feel bad, but you know what? You didn't really learn the lesson. And so that cost us X amount of dollars. And then the glass table, probably. You didn't warn him. Go ahead.

[Caller]

You wouldn't have him pay for any of that window.

I would talk to him.

[Ken Coleman]

I would 100 have him pay for it, but I would sit down. I would have done it, like, within the first 48 hours.

[Caller]

I told him he needs to pay 100 of the four.

[Ken Coleman]

Well, then you've already told him. So Ken's advice doesn't count anymore. I mean, you're not going to wonder.

[Rachel Cruz]

If you need to follow through moving.

[Caller]

Forward because he's not going to stop breaking stuff. I'm curious. Now that I'm a Dave Ramsey, I'd like to know what to do.

[Ken Coleman]

Well, what the deal is, is that. Is that I think he learns his lesson. So if you told. I missed that somehow that you said you're going to pay a hundred dollars. I love that. I probably would have made him pay for the whole thing on the baseball.

[Rachel Cruz]

Not 10 years old, y'.

[Ken Coleman]

All. You get a ruling. I'm having my ruling.

[Rachel Cruz]

Okay.

[Ken Coleman]

My ruling is.

[Rachel Cruz]

I'm writing mine.

[Ken Coleman]

You told him 1,000 times and he still did it. I'd make him pay for the full 400 now on the glass table. I Wouldn't make him pay the thousand dollars because there was no. Hey, don't. The way you described what happened, I don't even. I don't even know if it makes any sense. I'd have a little bit more grace on that, but I'd still have him pay something. But not $1,000. But, yeah, he's got to start to respect your stuff, so. Sure. I love the idea of making him go do real work, by the way. Not like chores around the house that you pay for. No, he's got to go get a lawnmower out or whatever. I started cutting lawns at 11. Don't anybody freak. Don't at me. But he needs to do real work for somebody and get some money back. I love this, actually, because you're not mad at him or yelling at him, and you're going, look, Sparky, there's consequences. And I love that you wouldn't make him pay anything.

[Rachel Cruz]

I think it was not intentional. There was no ill will, because I think there's some kids.

[Ken Coleman]

There was disobedience.

[Rachel Cruz]

Yeah, but it's not intentional. He was not saying, I want to go break that. Like, there are some kids that I think are destructive and they're doing things on purpose to rile at their parents and then. You know what I mean, that there's an ill spirit to it and that. Correction. I would much, yes, I would have them pay. But he. Julia, I don't know why. I just. I'm like. There's a part of me. I'm like, you're. You're. You have a boy. Like Charles is already throw. I mean, and he's 5. But I'm like, I already see things. And we do tell him, hey, don't do that. But if he. He breaks the thing, the big light fixture we have because he's all into this foam basketball thing, and he's trying to. I don't know. Part of me. If it breaks, I'm like, Which. Granted, he's five. I don't think I would. I don't know if I would make him pay for it.

[Ken Coleman]

Again. I don't have any judgment.

[Rachel Cruz]

I don't know.

[Ken Coleman]

For those of us let's. I'll tell you a real story. The crowd.

[Rachel Cruz]

I mean, Ken, you have two boys. Yeah. And you haven't gotten there yet. As a parent with a boy, I see glimpses of it, but I kind of like it, too. I know this is terrible.

[Ken Coleman]

Julia, you're confusing me. You said you were okay with her making him pay $100 on the door? No.

[Rachel Cruz]

No, I didn't. If he was being. If he was being destructive on purpose, that. There are some kids that are very destructive on purpose to rally their parents.

[Ken Coleman]

I just want to be clear. You don't think he was being disobedient? Yes or no? He was disobeying his mom.

[Rachel Cruz]

Disobedience and intentional destruction are two different things to me. Both are punishable because his disobedience was not. It was more around a sport that then affected the window. It wasn't the window itself.

[Ken Coleman]

I'd love if you were my mom. Do you got to tell you no consequences here? Because my heart was good.

[Rachel Cruz]

Also no.

[Ken Coleman]

He disobeyed his mom. Julia, did he disobey you in your mind?

[Rachel Cruz]

Julia's still pissed you didn't let her.

[Ken Coleman]

You didn't let her finish.

[Rachel Cruz]

Y' all are both pissed.

[Ken Coleman]

I'm not pissed. I'm as happy as I can be. It's not my kid, not my problem. I'm just weighing in on it. Julia, did he disobey you?

[Caller]

Yes.

[Ken Coleman]

He knew he was disobeying you based on how many times you told him, don't stand here and play baseball. Yes or no?

[Caller]

Yes.

Okay.

[Ken Coleman]

You're a good mom. You're a good.

[Rachel Cruz]

Did he disobey you at all with the table? Was there any warnings around the table, or was that just a pure accident?

[Caller]

Yes. I tell them not to push on the table.

[Rachel Cruz]

Oh.

[Caller]

All the time. Don't lean on it. Don't put your elbows on it.

[Ken Coleman]

Then he's got to pay.

[Caller]

I said it's glass.

[Ken Coleman]

He's got to pay. That too. He's got to pay a big portion of that one. He's got to learn his lesson.

[Caller]

He might need it. He might need to take a HELOC out.

[Rachel Cruz]

Get some of the glass guy's retirement. Yeah.

[Ken Coleman]

I mean, I'll say this. The kid is in debt to you because he broke your glass table.

[Rachel Cruz]

I know.

[Ken Coleman]

And I gotta say, I'm gonna circle back to this one. I must be getting older. I don't like the shard of glass turned towards the wall with the tape on it. I'm gonna bring that one back up. I feel like I'll sleep better at night telling you I get the table out of there. But, yeah, he needs to have.

[Caller]

I do have bulk trash scheduled for pickup, so we are getting it out, right?

[Rachel Cruz]

There you go.

[Ken Coleman]

I just care about. Because this kid's gonna run around the corner and God forbid he runs into the jagged edge.

[Rachel Cruz]

I know. And I just like that he's like.

[Ken Coleman]

Playing, you know, I do too.

[Rachel Cruz]

But he also needs a great iPad and he's.

[Ken Coleman]

He needs a lesson. Listen. Because what happens when he breaks something that's way more expensive?

[Rachel Cruz]

How many kids do you have, Julia?

[Caller]

Three. I have a daughter and then two boys.

[Rachel Cruz]

And then the two boys.

[Ken Coleman]

How old are they?

[Rachel Cruz]

The double boy thing, that really gets that, you know, the patience gets lower maybe.

[Ken Coleman]

How old is it? Is it a 10 year old? Your oldest?

[Caller]

He's my youngest.

[Ken Coleman]

Oh.

[Caller]

And he is the most destructive. My 12 year old just broke a glass part with picture frames because he threw a ball in the house, even though he knows not to.

[Ken Coleman]

And I did.

[Caller]

And my daughter, who's 16.

[Ken Coleman]

Go ahead.

[Caller]

My daughter, who's 16, is really not destructive at all.

[Ken Coleman]

Well, no, because she's a female.

[Rachel Cruz]

They color. That's what little girls do.

[Ken Coleman]

All little boys brains are on fire.

[Rachel Cruz]

I know.

[Ken Coleman]

You know, and. And that's just part of being a boy. And by the way, I did all of those things you described. Except for the glass table. We were too. We. We couldn't afford a glass table.

[Rachel Cruz]

Didn't have a glass table.

[Ken Coleman]

But I will say that I think you're a good mom. And yeah, I think this is a great way to teach a lesson without, you know, that's enough punishment just to kind of go, here's the concept.

[Rachel Cruz]

He needs to feel a little something.

[Ken Coleman]

Yeah.

[Rachel Cruz]

An effect of what his actions are. So I get that. I know. I'm just. I don't know.

[Caller]

Thank you.

[Ken Coleman]

Thanks for calling. You are such a softie.

[Rachel Cruz]

I think maybe honestly. Cause I have two girls. And you see that and you know, they're doing the girl thing and dancing and singing the High School Musical. And then you got little Charles with a little ball. Part of me is like, you play with that.

[Ken Coleman]

And Charles is a cutie. But let Charles. Let Charles shatter a really important window.

[Rachel Cruz]

I know.

[Ken Coleman]

After you've told him not to. And let's see how loving you handle that.

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Attorney advertising Guardian Litigation Group LLP not available in Minnesota and Oregon. Results vary and no specific outcome is guaranteed. Debt settlement may negatively affect credit and not all creditors will negotiate or settle. Savings vary and may be taxable. Please review our website terms for more information. All right, next up, we are going to go to a video call and we've got Valentina who is joining us from New York City. Valentina, good afternoon. How are you?

[Caller]

Good afternoon. I'm doing well. How are you?

[Ken Coleman]

Well, we're doing well. What's going on with you today? How can we help?

[Caller]

A lot is going on. So my husband and I went from a family of two to seven and under five years.

[Ken Coleman]

How'd that happen?

[Caller]

Well, we have a five year old, we have a three year old. We have a one year old and a four month old. I'm actually wrapping up with my maternity leave.

[Ken Coleman]

Oh, my gosh, babies, you look fabulous given how little sleep you must get. I mean, I'm exhausted listening to that.

[Caller]

Yes, exactly. But it's unfortunate that we're drowning in debt. We are drowning. And it all again escalated within the last five years. And my question is, how can we navigate this terrible mess that we're in with all the debt that we have accumulated? And obviously we have a large family, so we have four kids. And then my mom lives with us, thankfully. But we are at a negative every month and we don't know how to go about this.

[Ken Coleman]

Okay, let's run through some numbers real quick. Okay. And then Rachel will dive in and we'll start pulling up a plan here for you. Okay. So let's start with your combined income.

[Caller]

Before taxes is 240,000. And after taxes, 162.

[Ken Coleman]

Okay. And give us the debt. Go smallest to largest. And let's, let's keep the mortgage out of it at first. Okay. Let's just see what that list looks like.

[Caller]

Okay. So I will try my best. So the smallest debt is. So we have a credit card debt. We have personal loan. So credit card debt altogether is 90. Actually doesn't have the smallest, but combined between My husband and I. Okay. So the personal loan is 28,000.

[Ken Coleman]

Okay.

[Caller]

Credit card debt is 98,000.

[Ken Coleman]

How many cards equal that? 98.

[Caller]

So my husband has five and I do have five as well. So that's a total of 10 credit cards.

[Ken Coleman]

10 credit cards. 10.

[Rachel Cruz]

Are they all average? Ish. Around that, that like nine?

[Caller]

I'm being conservative. I think it's above that.

[Sponsor/Announcer]

Okay.

[Caller]

I'm just rounding to the nearest. Yes, but it's. That's conservative. Okay, so credit card. I'm telling you, we've been relying on credit cards.

[Rachel Cruz]

Yeah, yeah.

[Caller]

And my student loan is 132.

[Ken Coleman]

Okay.

[Caller]

And I think that's. That's it.

[Ken Coleman]

Okay.

[Caller]

Oh, no, no, no. I'm sorry. 401k. We borrowed. So it's a total of 40, 43,000.

[Ken Coleman]

So 43,000 in the 401k loan?

[Caller]

Yes.

[Sponsor/Announcer]

Okay.

[Ken Coleman]

All right.

[Rachel Cruz]

How much, how much is going out to payments each month? Are you paying minimum payments on everything?

[Caller]

We're paying minimum payments, yes. And it's. I would say about 3,000 or so.

[Ken Coleman]

Okay, so all of that.

[Rachel Cruz]

Are any of the credit cards in default, not yet gone to collections at all? No. You've been trying to keep them afloat.

[Caller]

Everything is current.

[Ken Coleman]

And do I understand that with all of this stuff, plus whatever's going on in your life, you guys aren't. There's no money. You don't have enough money left over and that's why you've been using credit cards.

[Caller]

Exactly, because my husband has been having to cash out all of whatever stocks he had and all of that. So anything extra we had, any savings, anything like that has been going into stuff that he had prior to us getting married. All of that has been going on towards that. So what happened is that with maternity leave, my income significantly decreases. I have two full time jobs and that goes down to basically 25% of what I make. And then we had major repairs to do to the house and things have broken our cars because we drive all cars. So a lot of things, we started off well, but then the debt just kept accumulating and property taxes went up twice the first year that we bought the house. So things just kept coming up and it was just a snowball from there.

[Rachel Cruz]

How much is your mortgage?

[Caller]

So we have to. My husband had a property prior to getting married and we have our property together after getting married. So our home is about 4,500 and the other property is about 1,200.

[Rachel Cruz]

Okay. What is the other property? Where is that?

[Caller]

So it's close by to where we live. But that's where my husband used to live. It's a double unit. He was actually. It's.

[Rachel Cruz]

What are y' all doing with it?

[Caller]

What are we doing with it? So thank you for saying that because we are currently trying to sell it.

[Rachel Cruz]

Good.

[Caller]

So that we can pay some of the debt. And I'm scared to death because I feel like that's not gonna be enough. And we do have a little bit of income coming from there as well.

[Rachel Cruz]

Okay.

[Caller]

So right now that property is being sold. Right now there is 116,000 owed and we're selling it for 380,000. Oh, wow.

[Rachel Cruz]

Yeah.

[Ken Coleman]

That'll make a huge chunk. Nothing to be afraid of there. Yeah, it may not. It's not going to get it all, but that's Right.

[Caller]

Right.

[Ken Coleman]

So let me ask you this. How much are you over every month? In other words, bills versus what we got? How. How much are we in the red on an average month?

[Caller]

On an average month? A couple of thousands, I would say.

[Ken Coleman]

Are you on a budget?

[Caller]

We try to. We were not. Not in a consistent budget.

[Rachel Cruz]

Yeah. Because you guys are bringing in. It's what, around 12,000amonth, would you say hits your account?

[Caller]

Yes. Yeah.

[Rachel Cruz]

And then the two big things, the debt payments, which is 3,000, and then you have your mortgage, which is 4. And so my question is. Yeah. Where. Where's the rest of it going?

[Caller]

Oh, let me tell you.

[Rachel Cruz]

Yeah.

[Caller]

Food, schooling, daycare, insurances, utilities, transportation. We do have a couple of medical bills. And then we support. Is very minimal, but we do support our families back home and that helps them a little bit. But if we add all that up, honestly, we're always on the red and we're trying to minimize as much as we can.

[Rachel Cruz]

How much are you. How much are you paying for the families?

[Caller]

It's like a couple Hundred dollars. Three to $400 a month.

[Rachel Cruz]

Three to 400.

[Caller]

Okay.

[Rachel Cruz]

And how much is the kids school?

[Caller]

It's about 1, 300amonth.

[Rachel Cruz]

Okay.

[Caller]

Okay.

[Rachel Cruz]

Yeah.

[Ken Coleman]

Is that daycare?

[Caller]

Daycare. About 800amonth.

[Ken Coleman]

Well, what's the 1300? Is that private school?

[Caller]

Yes, and we are grateful to get financial aid, but that's sort of the balance.

[Ken Coleman]

How old. How. How old are the children that are in private school?

[Caller]

5 and 3.

[Ken Coleman]

May I. May I. I push on something and Rachel, kind of walk you through what to do here, but I'll just quickly say, I think you have to have a conversation about the two kids, 5 and 3, being in private school to the tune of 1300amonth. Private school is still going 1300 a year. Oh, a year.

[Caller]

A year.

[Ken Coleman]

I didn't catch that.

[Caller]

Significantly less than.

[Ken Coleman]

Okay, never mind. I thought it was 1300amonth.

[Rachel Cruz]

So it's just like a few hundred. I mean. Yeah. It's not a ton.

[Ken Coleman]

All right.

[Caller]

Oh, I'm sorry. I'm sorry. 1300amonth. That's correct. I'm so sorry. It's 1300amonth. So you're right.

[Ken Coleman]

I don't want. I don't want to bog down on. I want to give it to Rachel here. But I'm going to challenge you that private school will always be there, and they really don't need it that much. As much as you need $1300 a month back in this thing called a budget, which you aren't doing, but we just found $1300 that you desperately need. Rachel, I'll hand that one to you. That's just my opinion.

[Rachel Cruz]

Yeah. And you know, there's going to be seasons, and there has to be some changes, some significant changes. Right. Because if there's not, you guys will keep in the cycle of where you've been. And so I think that is the hard reality is that you want to be able to do everything, but you mathematically can't. Right. You guys keep running into that. I mean, you can't keep doing everything. And so you're either gonna get behind on bills, you're gonna get behind on a mortgage, you're gonna get behind on things. And I'm scared you're gonna get behind on the wrong. The wrong items. And so I think you guys are gonna have to have a really, really hard conversation. And it's not forever. Not forever, but for the next two to three years, our lifestyle has to change. And you guys really are at the point where even four or five hundred dollars makes a significant difference. And so to be able to say, okay, what are the things that if we. That are not necessity? Food, shelter, utilities, transportation. That's it. We have to be paying for daycare. There's no other option.

[Sponsor/Announcer]

School.

[Rachel Cruz]

There's another option. To your point, it doesn't have to be private school. Like, what are the things that we don't have to have to literally survive.

[Ken Coleman]

Yeah.

[Rachel Cruz]

And I'm curious what that number is. And that's gonna hurt. That's gonna hurt when you see that number. And to think, oh, my gosh, if we eliminate these things that we want to do that are good things, two things, but we can't afford it just.

[Ken Coleman]

For the sake of time. Two things I want to Give her. I want to give her a session with one of our coaches. And free every dollar for a year. Let's get those things in play. And you can dig out of this.

[Rachel Cruz]

Yes.

[Ken Coleman]

Foreign.

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[Ken Coleman]

See boostmobile.com Ramsey for details. All right, let's go to Antwan in Austin, Texas. Antwan, how can we help today?

[Caller]

So I just wanted to question, like, if it's worth getting a loan for school. So this is like the scenario that I'm gonna go ahead and tell you right now. So my parents want me to go to this local school that's a lot cheaper. The financial aid, they pay me around a thousand to go to the school because of the financial aid. And then the school that I want to go to, it's a ministry school. And it's been what I want to do. And I feel like that I'm called to do. And it's ministry itself. And that school, I do have to pay around 2,000 a semester.

[Rachel Cruz]

Okay, well, 2,000 a semester is not bad. I mean, that's over like five months. You could go and make that in a month. Doing a side hustle. Yeah, yeah, you could cash, cash flow it.

[Caller]

And they were, they were talking to me and they're just like, really, like bribing me with basically a good amount of stuff just to stay with that school because they think that that school is so good. And I just, I don't really see the hype in it. And it doesn't teach what I'm wanting to actually learn. Sure, they think that. I guess in a sense they're different believers as I am, and they don't think that getting a ministry degree is like a real thing. Like, they don't think that it's like a legit thing to do as a career.

[Rachel Cruz]

Right. Okay. So, yeah, it is a legit thing for sure. I do think it is going. Usually it is on the lower end of a salary perspective. So they may be looking and thinking, Antoine, go get a business degree and maybe go into ministry, you know, part time and volunteer and Go create a, you know, a life financially that's bigger. And then I hear you saying, no, this is kind of. This is what I want to do. I'd rather go down this route, which again, is not a bad route. I would not, I would, I would caution you to not just say, okay, well, if I'm going to do this ministry and it's $2,000 a semester, I'm going to have to borrow money and all the things. But if you cash flow it through and get the degree you want, the ministry degree, I mean, I guess is this specific school, is it like a very specific type of ministry or, or.

[Caller]

It'S like theology, Christian ministries.

[Rachel Cruz]

Okay.

[Caller]

It's a, it's, in a sense, it's a lot better for me to do because it's one of the cheapest schools out there because it's online. So I'd be at the comfort of my own home. This local school that I'm currently going to, I'm currently going to right now.

[Ken Coleman]

Okay.

[Caller]

It's just I'm not learning what I would actually learn in ministry itself because there's not a ministry class that they have here.

[Rachel Cruz]

Sure are. So you're wanting to be a past, like you're wanting to get into a position. Yeah. That you have to have a. Yeah.

[Ken Coleman]

You know, I think this is so clear cut. This is very simple. Do you feel called to this or not? Yes or no?

[Caller]

Yes.

[Ken Coleman]

And if you don't do this, do you think that you will sense a holy. And I'm, I'm using that word on purpose, a holy. Distressed that you will regret that spiritually.

[Caller]

In a sense, I don't believe so. Like, I feel like it's like you're. When you're called to something like that, that you don't, you don't burn out.

[Ken Coleman]

That's what I'm getting at. I'm saying if you don't. You misunderstood me. If you don't do this, if you don't answer the call, do you believe that you'll suffer? Disrespectful, meaning, I've lost you altogether. Let me put it another way. Do you feel called? You said yes. And I think that if you don't do this that your soul won't be whole. That's what I think. And I also. Yeah, you're with me now. And I also think.

[Caller]

Yeah, I'm with you now.

[Ken Coleman]

There you go. And I also think that you'll resent your parents if you don't do this and if you bow to their wishes and Their pressure.

[Rachel Cruz]

Yeah. And Antoine. Yeah. And I don't have a problem with it because it's a very reasonable situation. Now, we do get calls from people that want to go be missionaries, and they want to go get a $60,000 a year degree from a private Christian college. And you're like, that makes absolutely no sense. But $2,000 a semester, you're like, yeah, you again. You can do that. Waiting tables in a month.

[Sponsor/Announcer]

Yeah.

[Rachel Cruz]

So you could. You don't have to go into debt for it.

[Ken Coleman]

No, not at all. And you shouldn't. Or ask them for help up, especially given this situation.

[Caller]

Yeah, well, they said they. Well, they weren't gonna help me at all if I go to this school. Kind of sucks because, I mean. But I mean, at the same time, like, they. In a sense, they think the main reason as well, is that they think that I'm not gonna, like, stick through it. And I've, like, in a sense, when it came to church, like, I'm trying to get, like, more involved and more involved, and that's what I've been doing. Like, I've been going to school and just trying to be, like, as most involved as I possibly can. And. Well, in a sense, I proved them wrong with several things. They think, like when I. When I went to go get, like, baptized, they thought, okay, no, like, I don't think you should do it, like, right then and there, like, this is barely a new thing. And in a sense, they made me wait until I was 18, which wasn't that long. It took about like half a year.

[Rachel Cruz]

Yeah, they're just. Yeah, they're cautious. They're cautious. And maybe in their background, spiritually, they got burned places, you know what I mean? And so they're just like, whoa. So just, you know, so that's. That's fine.

[Ken Coleman]

Honor your parents, but you don't have to do what they say. Now. There's a. There's a. There's a tension there for some people, but.

[Rachel Cruz]

How old are you?

[Caller]

I'm 18.

[Rachel Cruz]

18. Okay.

[Ken Coleman]

All right.

[Rachel Cruz]

So how long's the school? Sorry, Ken.

[Caller]

Yeah?

[Rachel Cruz]

How long's the school?

[Caller]

It's. It's four years. It's four years.

Okay.

[Rachel Cruz]

Yeah. So I would. I would make a plan to cash flow it. Talk to us. And again, this is not a school or a degree that's going to put you in a really narrow place. No, theologically. Right.

[Caller]

No, you can use it gets you anywhere.

[Rachel Cruz]

Okay, perfect. I think that's another thing I would have a red flag because there are some of these you know, where it's a very specific niche within Christianity even, and you can't really use it a lot of places. So I think the broad sense is helpful. I think it's great.

[Ken Coleman]

Yeah, yeah. I want to finish this point because I do hear your heart, and your parents are very influential, as they should be. And you're 18 years of age, and parents do things like this all the time. I'm not immune to it. Rachel's not immune to it. Where a parent's fear turns into what they think is practical advice. And it's not practical advice. It's them projecting their fear. I think that's what's going on. So, Antoine, you got to honor them, that I think they want the best for you. And I just think they're human beings who have fear. And I just wanted to make that point because I think it's important when you go through this and we're giving you advice to go, yeah, go do this. Go cash flow. Don't worry about what mom and dad say on this, because you believe you're called to this. And this is just part of growing up. So it's tough. I just wanted to acknowledge the tension.

[Rachel Cruz]

That's good. Yes.

[Ken Coleman]

Because I think we have a large audience are going, what do you say? And I'm not saying it's going to be easy, but I do think the choice is simple, and I would rather disappoint them early so I don't resent them later. So tough stuff there. Let's go to Trent in Tulsa, Oklahoma. Trent, how can we help?

[Caller]

Hello. My wife and I are both 35 years old, and the only outstanding debt we have is our mortgage, which is going to be paid off next year.

[Rachel Cruz]

Nice.

[Caller]

After we pay off our mortgage, we were thinking to build up a 529 with a couple hundred thousand in it for our daughter and. Or a career emergency. So the idea is that my wife and I's career field feels a bit unstable right now. So if we ever get laid off, we want to be able to use that 529 to send me, my wife, back to school to build new skills. And if we never use it, then we want it to go to our daughter when she starts college. Is this a viable plan? And if so, what risk do you see?

[Ken Coleman]

I would say it's a viable plan for your. For your daughter. We espouse that. What careers are you in that you guys feel like you're really on thin ice.

[Caller]

So my wife is in tech. She's like a data analyst. And I would Be an untenured professor year.

[Ken Coleman]

Yeah. Yours is a little bit more sketchy than hers I think. You know, she can upskill in the tech space without going back to school. So I'm just going to push back against the thought that this 529 is either for our daughter or for my wife or for me. If we need to get more skills down the line. And I think in your particular careers to pivot, I don't think another degree is the answer. I really don't. Could be, but I'll give you of a couple quick litmus test on that. Is a degree the only way to do what you want to do or is it the best way to do what you want to do? If that's the case, then you could use it. But don't just make that assumption, especially for her in the technology space where upskilling now is not going to require any kind of degree. There's going to be boot camps, there's going to be classes, courses. Google just announced a whole nother array, Rachel, of, of, of a six month program where you're going to see more and more big companies over the next few years start to train the people that they want you as a professor.

[Rachel Cruz]

Who knows? Yeah. Now I would say, I would say for 529s, it's an investment. So you're wanting to sit there for at least five years and you guys are probably gonna want to go back sooner than that. So I would just cash flow your wives, set your daughter up for the 529. And then if you guys needed it for you guys, I would just cash flow.

[Ken Coleman]

Dave, we got a lot of calls on this show where life happens. One day someone's healthy, they're working, providing for their family, and then a curveball hits.

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[Ken Coleman]

Yeah. And that's why you've always said that having term life insurance from Zander is essential because it protects your family if the worst happens.

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[Ken Coleman]

Yeah, it's important to understand the difference between them. Life insurance steps in when you die. Disability insurance steps in while you're alive, but can't work. So it replaces a large part of your income so the bills still get paid while you get back on your feet.

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[Ken Coleman]

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[Ken Coleman]

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[Ken Coleman]

Welcome back to the Ramsey show coming to you from the Fair Winds Credit Union studio alongside Rachel Cruz. I'm Ken Coleman. So excited to be with you today. And we want to coach you up 8888255 225. Antoinette is joining us now in Fort Worth, Texas. Antoinette, how can we help?

[Caller]

Well, I'm going to be 62 next month and I don't have anything saved for retirement and I want to become a first time homeowner. And I don't know if that's stupid and ridiculous or if it's possible.

[Ken Coleman]

Well, I don't think it's stupid or ridiculous. Let's focus on the possible part. Give us a picture of your financial situation given that you have zero retirement or very little retirement. Retirement.

[Caller]

I have no retirement and I have no money for a down payment. So I would have to go USDA or set by something with a zero down. And so that would make my payments even higher.

[Ken Coleman]

No, you don't have to do that. You don't have to do that. Do you have any debt?

[Caller]

Yes, I have some but not an unmanageable and I'm getting it paid off really quick.

[Rachel Cruz]

Okay, how much debt do you have?

[Caller]

I think credit karma said I had about $8,000 or something like that. I'll just paid off $600 worth of two of my accounts in the last month.

[Rachel Cruz]

So is the 8,000 credit cards or personal loans, what is it?

[Caller]

Let's see, I paid off the personal loan and so one of them is my car and the rest of our.

Credit cards I've got I think four credit cards.

[Rachel Cruz]

How much is in your car? Do you owe on your car?

[Caller]

Oh, gosh, I can't remember. I'm really bad with money. I mean, numbers. And so I just know that I just got it two months, and I had to trade in my other car because it was a 2019. It was convertible, and it didn't convert anymore. And mechanically it was down, but everything else on it was falling apart, so I had to get rid of it. And I was upside down on it because last year it was worth $17,000, and then this year it was worth $5,000. And so I was real upside down on it. And so I owe more on the. I had to get a minivan because I'm so popular, I can't have a little convertible. So I owe more on my minivan than really I should. So.

[Rachel Cruz]

Okay. And as you roll over the negative equity on the. On the convertible.

[Caller]

Yes.

[Ken Coleman]

Into the minivan.

[Rachel Cruz]

Okay, so how much do you owe on the minivan?

[Caller]

I don't know.

[Rachel Cruz]

You don't know? Antoinette, you signed a loan. You don't. You don't know how much the total is.

[Caller]

That's right.

[Rachel Cruz]

All right, all right, all right.

[Ken Coleman]

And she had to go to credit karma on the other thing. So one of our problems, Antoine, is you don't have a firm grasp of your numbers.

[Rachel Cruz]

Yeah, she already said she's bad with them, but it's not.

[Caller]

I can't remember numbers.

[Ken Coleman]

Oh, but it's not about that. It's about. Do you have a file over in your house somewhere where we got the car information?

[Caller]

Yes, but I'm a truck driver, so my house is, like, 2,000 miles away.

[Ken Coleman]

Why do you need a minivan if you were driving a truck all the time?

[Caller]

I go home sometimes.

[Ken Coleman]

And you're popular. So you and the ladies are hopping in the minivan. Okay. All right. I'm trying to catch up here.

[Rachel Cruz]

Okay.

[Ken Coleman]

Because I'm trying to figure out, honestly, if we can sell the minivan.

[Rachel Cruz]

What year's the minivan? What year?

[Caller]

Well, I had to go for a. Let's see here. A 20, 23, I think, bank.

[Rachel Cruz]

Okay.

[Ken Coleman]

Yeah.

[Rachel Cruz]

And with the negative, I mean, this could be 30, $40,000. I mean, so. Okay, so, Antoinette, I want to paint you a picture. Yesterday on the show, we had a truck driver, Christopher. He paid off all of his debt, and he has hundred. I mean, tens of thousands of dollars. I mean, he's just absolutely killing it. And he's a truck driver. He was telling us he had a Subaru, brand new. Ended up selling it. Had some, you know, had to take out a small loan because it had gone down and he was upside down a little bit, bought an $8,000 Lexus. The Lexus gets hit. He gets a check from the insurance company for 9,000. He ends up buying a $2,000 car, takes the rest of that and throws it at the debt. Right? So there's a way to do this. And even someone in your industry, we literally just talked to him. He did his debt free scream yesterday. Here's the thing, okay? So the excuse that I am bad with numbers can't be an excuse anymore, okay? You are an adult, you are smart, you are capable, and we have to get this under control. So the first thing I need you to do when we hang up is I need you to call the dealership or the credit, wherever you got the loan for the van. I want you to pull up the credit karma again and know exactly, exactly which credit cards are out there and know exactly what you owe on them in companies. I want you to write a list down and then take your phone and take a picture of it. So you have it documented. Even if you're out and about, you have it documented. And then the plan is going to be homeownership is going to be down the line. Okay, for you. But I think the goal here is to get yourself out of debt. And Antoinette, I would. You're more than likely going to have to sell the minivan, okay? And you're going to get a beater $2,000 car. Because I want you to be out of this debt so that you can start saving for retirement. I don't want you driving, you know, have to be a truck driver for the rest of your life. I want you to be able to have a great retirement. And that's not going to be possible with the habits that you've been in. Not only just financially actually, but the way you're going about it and your attitude about it. You've got to make the turn and it's going to be difficult and hard, but you need to get as much facts in front of you as possible because you don't know what you don't know.

[Ken Coleman]

Are you an independent contractor? In other words, work for yourself. Or do you. Or do you work for a company?

[Caller]

I'm a company driver. I'm not kidding about having a bad memory. And I update all of my bills every other month. I have a piece of paper that tells me, I keep it on a book. I look at every one of them. I see how much interest they're charging me. I see how much my balance is. And then I touch, I tally up my total debt. I also look at credit karma a few times a week. I just have a bad memory. And if had I known that you were going to be asking me these questions, I would have had this stuff.

[Rachel Cruz]

Antoinette, you called a money show, my friend. You know what I mean? And so we were trying to help. We really are. And so my. My encouragement to you is that when there. When there is something, a big, big missing piece.

[Ken Coleman]

Piece.

[Rachel Cruz]

And the car loan, is that for me right now that I need to. I need you to know what it is because I may need you to make a really quick decision to sell it because you know how much the payment is each month?

[Caller]

Yes. The payment is $995.

[Rachel Cruz]

Okay. Almost a thousand dollars. How much money do you get paid once a month? Per month? What are you making?

[Caller]

Probably about 75.

[Rachel Cruz]

Okay.

[Ken Coleman]

And let me do a quick follow up, Antoinette, because I didn't hear you. That's my fault. Did you say you're independent? And the reason I'm asking this. Did you say no?

[Rachel Cruz]

She works for a company.

[Ken Coleman]

Okay. Do they have a 401k or some type of retirement program that you can be contributing to?

[Caller]

Yes, but I thought. Because what. What's the point of that at my age?

[Ken Coleman]

Because you have nothing. So we can run these numbers, but I mean for the baby steps, as we teach them, is $1,000 in savings just for basic emergencies. B step two is to pay off your debts, smallest to largest. That's why Rachel leaned in there. We want to get the debt out of your life because we just learned that that could save us 900 bucks a month.

[Rachel Cruz]

That could be thousand dollars that could be going towards retirement.

[Caller]

And.

And so why would I want a $2,000 beater card? So it's going to break down all the time.

[Rachel Cruz]

Well, $22,000 beater card doesn't always break down all the time. You can ask Christopher. Yesterday, he literally had a picture of his. And it runs great. It's.

[Ken Coleman]

And I'm talking to a person who's super popular. Your own words. Have the ladies pick you up when.

[Caller]

You'Re not in theater car. I want to get all of my family together and take them places.

[Rachel Cruz]

I hear your heart in it.

[Ken Coleman]

I want a Lamborghini.

[Caller]

I don't mean to argue.

[Ken Coleman]

I want to dunk a basketball, but just some things are not going to happen because I'm 5 foot 8 and can't jump. You know, if I want to retire with dignity, I've got to start saving money. And I can't save money If I'm in debt.

[Rachel Cruz]

Hey, Antoine. I want you to keep listening to the Ramsey show for real. I want you to listen every single day for the next six months. Make that be your goal. Just as you're driving. Listen to this show because I want this knowledge to soak in and this way of thinking in the way of life when it comes to money.

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[Ken Coleman]

I gotta say I, even though she got a little upset at us, I love Antoinette. I love of her spirit. And I think, you know, what I want to touch on real quick, Rachel is I got her frustration. I felt it. And that's what it's like when you wake up like she did one day. 61, no retirement, no house. And it feels as though she's at the base of a mountain that's impossible to climb. However, we know and as you pointed out in talking to a truck driver just recently on this show, it is possible. But the frustration is real. And I guess the thing is is that it's like, hey, this is gonn. There's going to be some trade offs.

[Rachel Cruz]

Yes.

[Ken Coleman]

And they're going to be painful.

[Rachel Cruz]

Yeah, it's, it's about choices. We have to make choices. And you know, you talk, we talk to people that are on baby steps four, five and six. They've gotten out of debt in their emergency fund and they had to make a choice to work extra. They have to make a choice to cut expenses in order to put extra money to pay off debt. They had to make choices, really hard choices. But the outcome of what they were doing was worth it. And so I think that is it. There has to be this level of reality, of disparity, say the outcome that I want. And in her case, whether it's a home, whether it's retirement, these sacrifices that I have to make in order to get what I want are worth it. And you know, Ken, I think there are some people in life, they're not worth it for them, you know, and, and, you know, they live their life the way they want to live their life. But, but it is about choices. We have to make choices. Everyone does. You know, we don't have an infinite amount of get to do whatever we want all the time.

[Ken Coleman]

Yeah.

[Rachel Cruz]

And that is, that's difficult.

[Ken Coleman]

So true. Hey, folks, in a few weeks, we're going to be doing our annual special giving edition of the Ramsey Show. What do we do? If you're not aware of this, it's really fun. We ask you all, and we're asking you now to share stories with us about how you have given generously or maybe you've been the benefactor of somebody really giving generously and whether that's maybe a surprise tip or maybe a bought Thanksgiving dinner for somebody, this is just about celebrating generosity. And we get so many great stories every year. Whether again, you've been on the receiving end of an unbelievable gift or you've been blessed by giving to others, that's what we're looking for. And we'd like to hear those stories so we could feature them on the show. Go to ramseysolutions.com/ramseysolutions.com ask and put giving in the subject line and share your story. We do this every year at Christmas time, and it's really, really special. And that's coming up on December 18th. So those of you who are reg listeners or love the special type shows, mark your calendar because we're going to celebrate living like no one else. You can give like no one else. Speaking of giving, Rachel, this is where Santa Dave, I think he's out of control and I may have to have a meeting with him. The Black Friday deals which we're already offering, do you realize this now, how great they are? But now everybody's doing Black Friday deals before Black Friday?

[Rachel Cruz]

Yeah, 100%.

[Ken Coleman]

And I'm irritated about it.

[Rachel Cruz]

And we're on the train, people.

[Ken Coleman]

And they're on.

[Rachel Cruz]

We're on the train.

[Ken Coleman]

And I'm not happy about it. All right? But, but it is what it is. You should be happy. You know why? $12 for bestselling hardcovers, $12. Question for humans, 6.99 for audiobooks and ebooks. $15 for our assessments and more. I mean, I mean, Dave, you're getting the farm away.

[Rachel Cruz]

Just deals on deals on deals.

[Ken Coleman]

I'm not going to win that battle, folks. But you win. Ramseysolutions.com store ramseysolutions.com store that's where you get all the great deals. All right, let's go to Greenville, South Carolina. Nicole is waiting. Nicole, how can we. We help.

[Caller]

Yes, I am very nervous about a change that's coming to us and how to raise my children through this. My husband is just selling a partial of his business, a little less than 50%, and he's getting a large sum of money just before the end of the year, which, which leads to another question of how do we do we have to scramble to figure out exactly where to place this before the end of the year comes.

[Rachel Cruz]

Okay. What, what is a substantial amount of money? What does that mean?

[Caller]

Six million.

[Rachel Cruz]

Okay.

[Ken Coleman]

Hello.

[Rachel Cruz]

That's great, Nicole.

[Ken Coleman]

You said. You sound like someone gave you a bill for 6 million. Where's.

[Caller]

Well, I know because I'm kind of. I don't want to act like I got the lottery for 6 million.

[Ken Coleman]

No, no. But my goodness, I hope I. Maybe you get yourself a light blue box, you know, with some jewelry. Come on, Nicole, let's go get a little. Get a little something from Nicole. I wanted to get that out of the way. All right. That's the best advice you're going to hear on this call, Nicole. But I'm seriously. Hey, congratulations. You and your husband. Yeah, this is a pretty cool deal, and I just don't want to fly by that.

[Caller]

Yes.

[Ken Coleman]

Now you got the perfect person today to. No, I'm serious. She's very, very gracious and very humble. But. But I think you are really perfect to talk about. She doesn't want this to change their life, the kids life and all this. I think you have tremendous insight on. On a couple things, so get to that. But first, talk about the end of the year scramble.

[Rachel Cruz]

I don't think you guys, you guys will have to pay taxes on it. Yes.

[Caller]

And I understand, you know, that's going to happen, and I know we want to give part of that as well.

[Rachel Cruz]

Sure.

[Caller]

But I'm like, you know, there. My husband's went and talked to someone and he's like, well, well, you know, my, he's. He plans to go back within the next couple of weeks, you know, once he gets, I guess, more of the contract in hand. It's like, you know, obviously, he's like, well, I'M not gonna get, you know, that. That investor pro. Or he's like, well, you know, oh, okay. They're like, you know, here's your free service, but I'm there. I'm not going to tell you everything you need to know. Right.

[Rachel Cruz]

Who's saying that?

[Caller]

Well, someone that my husband had found to get advice from a business tax pro on advice like this, I guess.

[Rachel Cruz]

Okay. Okay.

[Caller]

I wasn't necessarily one of, like, a Dave Ransom.

[Rachel Cruz]

No, it doesn't sound like it.

[Caller]

Yeah, well, and I'm. I mean, they. I have spoken to one of those before in the past.

[Rachel Cruz]

Yes.

[Caller]

Okay. But then this all went down, and I'm like, well, I can't really make these changes right now and getting my husband involved because he's having to deal with this mess. And I mean, not this, but like, he's had, you know, he's got a lot of this on his shoulders. And.

[Rachel Cruz]

Okay, so what I would do. I wouldn't do anything. I wouldn't do anything. I think there's a lot of heightened emotion. There's a lot of fog. It's a lot of decision making. Don't do anything. Okay. Just know in the back of your mind, you're gonna have to pay taxes on this. So just. That's the only thing I want you to think about. So, Nicole, that's the only thing I want you to think about. Okay? So just breathe. Okay. So nothing big has to change. I would interview and find a great tax pro in your corner to make sure that everything is buttoned up. I would do that. And we have some wonderful people, you know, that are affiliated with Ramsey. If you go to ramseysolutions.com, you can, you know, interview one of them or find your own. I don't care. But nothing sketchy. Nothing weird. Don't tell. I mean, whatever that language was, I was weird.

[Caller]

But that's different than an investment.

[Rachel Cruz]

Now, a financial planner will be able to talk to you about taxes as well, but I would want to make sure that you have a great CPA that's saying, hey, hey, here's exactly what you need to do and file because we don't want to mess this up. Then I would go sit down with a smartvestor pro and to say, hey, here is this amount of money. And before that, though, I would want you and your husband to sit down and say, okay, what are the things that we want out of this? Meaning the generosity portion. Let's talk through that. What does that look like? How do we want to do that? What are Some things, because you probably don't want to get. Give, you know, 10% all to one thing. It'd probably be good to get a couple of things and just to say, well, you know, as a family, how can we give out of this? I want you to look at. Do you guys have a mortgage or any debt?

[Caller]

We, we have like 175 on our house.

[Rachel Cruz]

Okay.

[Caller]

And then really all the. All the other debt is like vehicles with the business. We purchased the business property, you know, about seven years ago. I mean, but I would.

[Rachel Cruz]

I would be sure. So I would write a check, pay everything off. And then I do want you to remember that money magnifies who you are. And so the way you guys have dealt with money before, this 6 million, it's going to be amplified. And do you like how you guys have handled money? You've dabbled in the debt stuff, all of it. And my fear is that the 6 million kind of creates this. Oh, gosh, well, we could get into this real estate, then. We could. We could do this. And it's gonna be taken up really quick if you guys aren't careful. So I would. I would make it a value statement of no debt. We're going to get completely out of debt, and then we're going to look at our retirement and say, okay, what do we need to put away for it to have, you know, a wonderful. Which is going to be fabulous retirement. And then what percentage are we going to spend? So to your point, Ken, I would not change anything with the kids. I think they need to be working, doing chores. They need to believe nothing has changed. There's no benefit to knowing that you guys changed. You maybe go on a nicer vacation and that's all they know. But I wouldn't change much with the kids. Go ahead and fund their college. Like, use this money well and have fun with it. You guys, jewelry, earmarks, get you some jewelry, upgrade the cards, do some stuff that, yeah, you guys enjoy. But remember, you give it, you save it, you spend it, regardless of the amount. That's the three things you want to do.

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[Ken Coleman]

Foreign. Is sponsored by our friends at Y Refi. Hey, if you've tried everything to fix your defaulted private student loans and nothing's worked, why refi can help? They build custom fixed rate plans based on what you can actually afford. Learn [e-mail] Ramsey that's the letter y r e f y.com Ramsey it's not available in all states.

[Rachel Cruz]

Today's question comes from Kelsey. In Texas, we are debt free except for our mortgage. And my husband's income is not enough to help get our home paid off. He is a musician and he dabbles in real estate. The musician world that he loves does not bring in any substantial income. And I earn $35,000 a year. This year he estimates that he will earn a total of $32,000 a year. How should I communicate with him about the lack of income? I understand this is his passion, life and a part of who he is. But we are really struggling.

[Ken Coleman]

Okay, Kelsey, this is hard. So I want to acknowledge that you're his wife and you're going to come to him and you're rightfully going to say, hey, 85k which I bring home, plus your 32, which you're estimating is just not enough for where we could be, where we should be, where we need to be. And let's lay that out out. Let's make a numbers case. Say, hey, we need more money. And here's how I've come up with this number. I'm not pulling it from the sky and I'm making this up to answer the question. But if you determined, yeah. That we needed an additional 75,000 to knock out debt, catch up on investments, all these things, then we present that number. And this is all of this is non emotional. This is just, hey, I'm digging in the numbers. I know you Love music, and I don't want you to give it up. This is how we lead. Rachel, do not want you to give up music. However, dabbling in real estate, can we go from dabbling to all in and keep the music going at night? Keep the music, find a gig here and there. Don't give up on the music. But the music is not the focus. It is an outlet. It's creative, keeps his soul alive. It's a good thing.

[Rachel Cruz]

Yeah.

[Ken Coleman]

But for this season, we got to go all in on something. And since we're dabbling in real estate, if one goes from dabbling to really focusing, you can win. And I would have them go talk to my friends at the Buffini and Company. Brian Buffini is the number one real estate trainer in the world, and I do everything Brian tells you to do, and you'll crush it. So this is a tough conversation, but we have to lead with. With real numbers, vision. You don't have to give up your dream and your creative outlet. But I need your help, and we have got to lock arms and go at this. Now. That's the male perspective.

[Rachel Cruz]

Yeah.

[Ken Coleman]

What would you change? What would you add to the messaging there?

[Rachel Cruz]

So I think if I'm in the situation as the wife, I'm looking to say, okay, we have these goals out there that ultimately lead to a life that I'm longing for. I want the house paid off. I don't want to have to worry about about that. I want to know that we're gonna be taken care of in retirement. You know, there are these benchmarks that I would feel safe and good to know that we are at least on track of hitting. And the fact that we're nowhere near it makes me fearful, and I don't like that. And so that's me. But us as a team, I want us heading towards the benchmarks together. And if I feel like I have to be dragging you the whole way, that's not a fun marriage. You know what I mean? Like, that's not fun. And. And so there's something along the lines of starting with what is going on inside of, you know, inside of you, Kelsey. And then also the fact the team aspect of marriage more and more. Ken, I don't know if it's because we've just hosted this show and we get so many relation, relationship calls, but there is a game changer in the health of your marriage and the peace of your marriage when you are a team on these kind of things. And money is one of the big. One of the big components right that they say in laws, raising kids, sex, religion, money, like it is. And when you are aligned on these things again, you're going to be different in them. I'm a spender, you're a saver. You may be more chill, not as goal or like we're all going to still be ourselves in it, but we at least are heading in the same direction. When you're fighting against those directions constantly, that's exhausting, you know, and so I think the team aspect more and more for me, for marriages I think is as big. So let alone just the. Just the career path. It's more I want us to be on the same page of where we're going financially and how do we get there. And that may mean sacrifices on one side or the other, but at least we're heading in that direction.

[Ken Coleman]

That's right. And you don't have to give up the fun, creative dream or outlet. You just keep it where it's supposed to be for this time.

[Rachel Cruz]

Yes, yes.

[Ken Coleman]

Which, this is just a side thing that we mess around only when we have time. That's the key on those deals. We're not giving it up. All right, let's go to Armando in Los Angeles. Armando, how can we help today?

[Caller]

Hi, thank you for having me on the call. I just wanted to say I love your guys show.

[Ken Coleman]

Thank you.

[Caller]

I want to preface this with saying this is a conversation me and my mom have been having for a bit now and we're kind of trying to decide and we figured, you know, you guys are probably the best people to ask. So I'm trying to decide basically between whether staying at my full time job where I'm a manager at a gym, I make about $4,000 a month after tax with the bonuses, or going to my passion, which is starting my window cleaning business that's currently producing about $3,000 a month. And I only do that on the weekends. I'm at a point where I personally feel like I could start generating more doing the. If I had more than a weekend to, you know, during the week to produce more.

[Ken Coleman]

Well, let me jump in. Let's jump in right there. Are you already getting calls and leads, in other words, people going, hey, Armando, I'd love for you to come clean my window. And you're having to push them out a few weekends just because of time. Is that already happening?

[Caller]

Yeah, I've had that a few times already. We're actually, and that's without even. We're just getting the website and everything set up this month. I've Only had the business for about 10 months.

[Ken Coleman]

Where are you getting your leads?

[Caller]

Where a lot of them are referrals.

[Ken Coleman]

And door to door, bro, first of all, let me just say you will not lose. I love that you're in answer is referrals, that means you're doing a good job for people. And door to door, that means you hustle and you're not afraid to know, Armando, that right there is the success formula for entrepreneurs. So I love that. Do you have any personal debt?

[Caller]

I have no debt. I am debt free.

[Ken Coleman]

All right, and then we call savings in a business retained earnings in your business account. And I'm assuming you have one. Yeah. Yes or no?

[Caller]

I do not.

[Ken Coleman]

So you're just taking the money you're making from the window cleaning and running it through your personal finances.

[Caller]

I just put it in a savings account.

[Ken Coleman]

Oh, okay.

[Caller]

Yeah. Interest in a big account currently saved up because I paid off a bunch of debt recently. So I now have 8,500 saved up.

[Ken Coleman]

Okay, so you have 8,500. Now is that in the savings account? That's just the window cleaning business or is that a combination savings, Combination savings, spending money to.

[Caller]

To kind of go and play around with? I always keep in my checkings about a thousand.

[Ken Coleman]

That's great. But here's the deal. So you know, we teach, you know, we teach a. A three to six month emergency fund after we pay off debt. Do you have a. What's your. So your three to six months expenses is what. What's three months?

[Caller]

Yeah, I only. Three months really is only about. I believe it's 4000. My expenses right now are only 1200amonth. I am very blessed. Very blessed. And I have to pay rent, so.

[Ken Coleman]

I want to move quickly, but I want to get Rachel in real quick. What would you think is a good amount on the emergency fund? Just personally?

[Rachel Cruz]

Yeah. I mean where you're at right now, I mean, maybe 5,000.

[Caller]

Five.

[Rachel Cruz]

Yeah, I was going to say not that much. It may change if your living situation changes, but for now that.

[Ken Coleman]

So, Armando, I'm going to recommend that you get a separate savings account for the window cleaning business. And for this example, I'm going to call it window cleaning. Armando's window cleaning. Okay. You need a separate bank account for that because I. My advice to everybody in this question, which is when do I know that it's okay to leave my full time job to go into my side hustle? And I want to see 6 to 12 months. I'm pretty conservative. I'd like to see 6 to 12 months of your salary, salary saved in window cleaning bank account. All right, so that's just me. And the reason is, is because when you leave that full time job, I don't want you thinking about the next six to 12 months of a payday. You got low, low cost of living now anyway, that's my advice. And when you get that number saved up, whatever that number is, and let's just say it's 25,000 and you, you've got a pipeline stacked up, then I would say see you later. To my full time job. I'd like to see you have six to 12 months expenses in the window cleaning company saved and then make the move.

[Rachel Cruz]

Rachel, I congrats though. Armando, that's awesome.

[Ken Coleman]

Thoughts on that. Real quick, final word. I think that's safe.

[Rachel Cruz]

I think it's awesome and I think you'll get there faster than what you expect and you're going to kill it in the window cleaning world. Great job.

[Ken Coleman]

Thanks for the call, Sam. Rachel, The All New EveryDollar is here and folks, it is truly way more than just our world class budgeting app. I've been talking about this on the show. I got a meeting with the team and I said show me all the, just take me in the thing, give me a tour. And it's amazing. It's literally like a digital version of us on the show. For those who call in the first 15 minutes of answering the questions that the team provides you in this app, app, they're going to help you find thousands of dollars immediately in savings. We're seeing this in an average of people who use it. You can start every dollar for free by going to the app store, Google Play, tons of advanced features, not just budgeting now that's amazing, but the fact that you've got a digital coach, mentor, accountability, partner, whatever you want to call it, all those facets are in there. Fantastic. So you got to go check it out and give it a whirl. It's, it's free. And I'm going to tell you, you're going to love it. Donna is up next in West Virginia. Donna, how can we help?

[Caller]

Hi, Ken and Rachel. I love all the personalities, but Ken, I'm really glad you're there today. I love the way you spin a tail. You really make me chuckle. And I love your story from a few weeks ago about the welfare chicken. I grew up on a farm and can relate to that.

[Ken Coleman]

Thank you. Yes, thank you.

[Caller]

The welfare chicken didn't get in trouble for telling them to sell the chicken.

[Rachel Cruz]

I Think I was on there with.

[Ken Coleman]

You during not get in trouble. And I had forgotten about that, Donna. So thank you. That's really fun. Thank you. Your sweet lady. By the way, I have to ask, where in West Virginia are you?

[Caller]

Oh, geez, Romney. Okay, that town.

[Ken Coleman]

I think I've heard of it. Do you know Point Pleasant by any chance?

[Caller]

That's way far away. We're in the panhandle between Winchester, Virginia.

Oh, yeah.

Cumberland, Maryland.

[Ken Coleman]

Yes, yes, yes, yes. Okay. I was born in that little teeny town of Point Pleasant, West Virginia.

[Caller]

Point Pleasant, where it is. I've been there.

[Ken Coleman]

Well, I'm going to tell you, not.

[Caller]

Many people the state. Yeah, that's right across the state.

[Ken Coleman]

All right, Donna, my sister from another Mr. Here in West Virginia, how can we help today?

[Caller]

Well, I'm. I'm 69 and my husband is almost 71. And we started our careers in the 70s. And at that time people were saying, oh, you're so lucky. You have a pension. You'll have Social Security. You don't have to worry about retirement. So we didn't. And we're doing fine now with our pension and, and our Social Security, but we haven't saved a lot of money. And we had to put my mother in a nursing home last year, an extended care nursing home. And it really scared me and shocked me at the cost per month for that stay. And what my question is today, and I've been having friends tell me, you know, you need to sign your house over to your kids to save it from being taken and all of this. And I know Dave says that you shouldn't do it, do that. I have heard him, I haven't heard him talk a lot about that, but I have heard him say that. And I was just wondering what the pros and cons are to that. And if there, if there's no pros, what can we do? Or is there something we can do to save our house?

[Ken Coleman]

Well, let's go back a step. What are we. What are we fear? What are we afraid that's going to happen that would even allow us to consider that advice? What are you afraid that gonna happen?

[Caller]

Oh, for the. Signing your house over.

[Ken Coleman]

Yeah.

[Caller]

Oh, well, there's, I guess a lot of things. I mean, I've been listening to the Stove Stewart show long enough that I know if you have kids, if anything happens to your kids, then. And that can. If they're in an accident or anything like that.

[Ken Coleman]

Yeah, but you're talking about you. But you're talking about your house.

[Caller]

About my house. Yes. And your house that my husband and I own.

[Rachel Cruz]

Sure. And you're worried you're gonna lose who or why?

[Caller]

Oh, medic, Medicare. I mean if you can't pay, if you go in a nursing home, Medicaid going to look at sessions, they're going.

[Rachel Cruz]

To be looking at your.

[Ken Coleman]

Okay, now we're caught up. Sorry. We weren't 100% sure.

[Rachel Cruz]

And the reason we do we say that is because a little bit it feels like you're hiding assets when you just sign it over.

[Caller]

Wonder. I mean I don't.

[Rachel Cruz]

I know. So yeah. Not a great, not a great thing because you're basically lying to the government that you don't have an asset asset when you really do. So. Okay. Do you have long term care insurance, Donna?

[Caller]

We do, but I got it. It's been probably before I realized the cost. My father in law went into just an assistant living and his was about $3,500 $4,000 a month. So when we got our long term care it was very expensive anyway because I have some health issues so high.

[Rachel Cruz]

Sure.

[Caller]

And ours is only 3,000amonth.

[Rachel Cruz]

Okay.

[Caller]

Then my mom's came up and it was 14,500amonth. And I'm like, I just, I was just in shock that it was expensive.

[Rachel Cruz]

Well, okay, so a couple of things to think about that we don't know yet because how old are you guys?

[Caller]

I'm 69. My husband's 71.

[Rachel Cruz]

So a lot of different things. Number one, you don't know if you guys are going to need a nursing home anyways. Number two, if you did get to a point of a nursing home home, you know, there are things you can do. You can sell the house and use that to fund if you need to. There's also. What are you guys doing with your pension and all of that? What do you have coming in per month?

[Caller]

You mean what we have. We have. It's like $9,942.

[Rachel Cruz]

Okay.

[Caller]

So I mean it's, it's decent. And we did just start two years ago. We have started putting some away. We both bought. I bought us my husband. I'm still working a little bit.

[Rachel Cruz]

Okay.

[Caller]

And I've made enough money to be able to max out both Roth for me and a spousal Roth for my husband. I did that when we got, we got one of your pros.

[Rachel Cruz]

Good, great.

[Caller]

And he, he said to get what we got him in April and he said oh, hurry up and get a Roth before April 15th for the tax.

[Rachel Cruz]

That's right.

[Caller]

So we did that and then when we finally sat down with him, we had enough money saved to do another one for 20, 25.

[Ken Coleman]

So what do you have? What do you guys have total?

[Caller]

We have 32,000 in Roth right now. And then we were playing around just during the years and we have about 50 that our financial advisor is rolling about 50,000 that he's rolling over into IRAs now that we're still in with the companies that we retired.

[Ken Coleman]

So just below 100,000. And then what is your house worth?

[Caller]

About 400,000.

[Rachel Cruz]

Okay. Yeah. So it would be one of these things if you guys did get into that situation, whether it's the insurance, some savings, you know, whatever you can put together to get into a nursing home. And I'll be honest on it, this sounds, it sounds horrible. But there is a stat that once you enter into a nurse nursing home for on average it's, there's not that long of a stay usually. Sometimes it is, sometimes it's not either. So it is kind of one of the last steps that family members will take if they're not able to care for, you know, their family member. And, and so that would be kind of that, that last step, if you will. So if I was in your shoes, I may ask about upping the long term care. I'm just curious what other options are out there for, for you guys. I would be looking at that because that's going to be very helpful type of insurance for you all if the time comes that you need in house care, nursing home, all of it. And you guys also are sitting on a great asset. And you know what I mean, if something were to happen to either you or your husband, and you did get to a point that you guys didn't have the money to cash flow it, and yet there was a nursing home that you knew we he. They needed to be in, you know, him or yourself. There's always the possibility of selling the house, you know, and figuring out what to do there.

[Ken Coleman]

So Don, I'm going to give you something. Rachel made a great point. I looked it up. The average length of stay in a nursing home is 485 days. Now of course this varies, but averages do play out. So you're looking at about, you know, a year and three, four months. So, you know, it's horrible to. But that's the reality and we're talking about that. So, you know, between the pension and everything. Rachel, you make a very good point. It's not like you got to fund this crazy amount for five years, you know, so I think you guys are doing everything you can. What? How much longer do you think you're gonna work?

[Caller]

As long as I can.

I love it.

Okay.

[Ken Coleman]

Do you work full time?

[Caller]

No, no. I do occasionally. I'm a teacher and sometimes I'll take a long term sub job and sometimes. Right now I'm just doing day to day. And I'll bet the kids love when.

[Ken Coleman]

Donna shows up to be the sub. You seem like a really nice sub.

[Caller]

So y. I hope they do. They always say they do, but, you know.

[Sponsor/Announcer]

Yeah.

[Ken Coleman]

Well, that's good. And what about your husband? Is he officially done working or still working?

[Caller]

Yes, no, he's officially done. He's a golfer.

[Rachel Cruz]

He's.

[Caller]

He's fallen into the golf.

[Rachel Cruz]

I love it.

[Ken Coleman]

Good for him.

[Rachel Cruz]

Well, at least there's a little bit of a foreshadowing of watching your mom and how expensive it has been for or your mom or your dad that you guys can start planning that if that time comes how we'd be able to cash flow that. So. Thanks for the call, Donna.

[Ken Coleman]

Do we know if people can search welfare chickens on Spotify or YouTube and find that rant? Do we know? We don't.

[Rachel Cruz]

Sure. You could try.

[Ken Coleman]

Well, they can't. Oh, you all missed it. It was really great. Donna said. Welcome back to the Ramsey show in the Fair Winds Credit Union studio alongside Rachel Cruz. I'm Ken Coleman. Thanks for being with us. We're here for you. 888-255-2225 is the phone number. Let's go to Caitlin who joins us in Charlotte, North Carolina. Caitlin, how can we help?

[Caller]

Hi, good afternoon. I'm a recent college graduate from West Virginia University. Start paying student loan debt come January and I want to know what is the best and effective way to go about that.

[Ken Coleman]

How much student loans do you have?

[Caller]

They will be around $26,000.

[Ken Coleman]

And is it multiple loans?

[Caller]

Yes.

[Ken Coleman]

Okay, so what's the smallest amount?

[Caller]

The smallest amount, I believe is about. About $5,000.

[Ken Coleman]

Okay. All right, so what we. Is that the only debt you have?

[Caller]

Yes, that's the only debt I have.

All right.

[Ken Coleman]

Rachel Walker, through the dirty steps.

[Rachel Cruz]

Are you working?

[Sponsor/Announcer]

Yes, ma'.

[Caller]

Am.

I work a full time job.

[Rachel Cruz]

Great. How much do you make a month? How much do you bring in?

[Caller]

About a month? Maybe. Maybe 15 to $1800. A month.

[Rachel Cruz]

A month. Okay. Would you. Are you doing.

[Caller]

I work at a boutique.

[Rachel Cruz]

A boutique. Okay.

[Ken Coleman]

What kind of boutique?

[Caller]

A women's boutique. Just a locally owned.

[Ken Coleman]

Like a spa?

[Rachel Cruz]

No, like a clothing store.

[Caller]

Women's clothing.

[Ken Coleman]

Oh, sorry. Little Slow on that.

[Rachel Cruz]

Didn't know.

[Ken Coleman]

Well, there's lots of different boutiques. There's, like, boutique hotels, boutique spas. Sorry.

[Rachel Cruz]

Fair.

[Ken Coleman]

Okay, none of this matters. Why do you. I have a question on your income.

[Rachel Cruz]

Yeah.

[Ken Coleman]

That is for a college grad. That is way below what your expectations were, I'm guessing. Yes or no?

[Caller]

Yes. So I've had this job for about two years. I worked this job throughout college, and that is the job I'm still currently at.

[Ken Coleman]

Okay. What'd you get your degree in?

[Caller]

Business and marketing.

[Ken Coleman]

So what do you want to do? And I'm not going to put you under pressure here on a show live, but give me a general idea. It doesn't have to be a company and a title, but describe the work that you went to school, school for, that you would love to have. If I could just wave my pencil in the air and give it to you.

[Caller]

Well, the work I would be interested in is going into law school.

[Ken Coleman]

Okay. So we went for business and marketing. And we're like, this is not what I want to do, but I'm just going to finish it. And somewhere along the way, we discovered I want to be a lawyer in a specific type of lawyer.

[Caller]

Law.

[Ken Coleman]

Corporate law. Okay, so a tie into the business and marketing.

[Caller]

Yes.

[Ken Coleman]

Okay. What's law school gonna cost you?

[Caller]

Law school is probably gonna cost me around probably $100,000.

[Ken Coleman]

And where are you going?

[Caller]

I have not yet made my decision, but I'll be taking the LSAT soon.

[Ken Coleman]

Okay, great. I want to make a quick commercial, and I'll hand it to Rachel and. But you got to get your two things. Number one, you need to get your income up right.

[Rachel Cruz]

You should be making double.

[Ken Coleman]

I don't even care what you're doing.

[Rachel Cruz]

Yeah.

[Ken Coleman]

At this point, you need a target of 40 to $50,000. Let's just put it out there. I don't want to limit you to that, but you just need to get out there and find something, because more cash the better. Now. And Rachel, tell you what to do with that cash, but I just want to make a point on the lsat. Years ago, I interviewed a law school expert on this, and this is a fact, by the way, there are certain schools you're going to have to do your homework on on this. But you can figure it out easily that based on your LSAT score, Rachel, if you get a high enough LSAT score, they will give you a full ride. And the reason is these aren't the prolific ones. Let me just go ahead and tell you, this isn't Harvard, it's not the big time schools. These are the schools who nobody wants to go to their law school. So therefore they're trying to get people into their law school because they want lawyers out there and they will give full rides. So these are going to be smaller schools, not as well known, but they have legit law schools. And let me just make my, my pitch on this. Nobody cares where you got your law degree from. And so the, the trade off is, Caitlin, you have to pay for the lsat and if you need to take the LSAT five times, take it. If we're aiming for, and we feel like the tutors will tell you we can get you to this score, which gets you a free ride. So that's my commercial.

[Rachel Cruz]

Yeah, it's worth investing, you know, five, six hundred, six grands or like, like honestly when you, when you think about it, totally. With tutors and everything.

[Ken Coleman]

And I don't know what the current LSAC cost is.

[Rachel Cruz]

$100,000 degree for free.

[Ken Coleman]

Yeah. So that's what you need more money for.

[Rachel Cruz]

Yes.

[Ken Coleman]

Plus we got to pay off these loans. So Rachel, tell her how we pay off these loans.

[Rachel Cruz]

And that needs to be your way to law school. Caitlin, I really want you to see that because you're going to be $126,000 in debt if you don't. So we want to really work hard to avoid all those student loans. Yeah. So it's getting your income up, Caitlin. So I mean, I really hate to say it, but I mean, I would probably be looking for another job. I think great thing to get you through college, but now that you're a college grad, you know, you made that investment for a reason. And so now we need to go roi it and we need to go, you know, get a job like ken said, making 40, 50,000 a year. And, and I would limit all my expenses. I would live on nothing. And I would make it a goal to get this paid off in 18 months, 16 months, 14 months, you know, and so I mean, I really think you can if you do you have rents, are you living at home? What's your living status?

[Caller]

I live at home with my family.

[Rachel Cruz]

Okay. So no rent. So I would take full advantage and make a really, really aggressive goal of getting this paid off and then at the same time be looking at the LSAT stuff and make that also a part time job. So I don't know if it's a, I don't know right now if it's a full time job that you go and find. You Know, a receptionist. I mean, anything, like just go and answer phones. I mean, do something. Or if you do the boutique during the day and you wait tables at night and you're doing a two day, you know, two job a day kind of thing to double this income. But this income needs to be doubled. Caitlin, you're a college grad, and I think that you have, you have things to offer. And again, it's kind of back to this college degree conversation that you got your degree for a reason to go and create a career. And so taking that knowledge and going and doing, doing that and upping this income is going to be, Is going to be your number one goal.

[Ken Coleman]

Because, Caitlin, here's the deal. You are young enough and this debt is small enough that you can pay this off in a year, but you got to make more income to where you're putting two grand a month away. So like Rachel said, what must be true for me to be able to sock two grand, $2,500 a month away at the $26,000 loan, knock that, that out and get it out of the way before the interest starts hurting you. Okay? Because I know people that are, that have your amount of loan debt and they're paying it for 15, 20 years because they're never catching up because of the interest payment. So you want to get this out of your life. And I just, I'm telling you, if you trust me and you do your research, you can go to law school for free or for a very reduced amount that you can cash flow. And most people don't know that. And please do that because you're going to just be so much more at peace. So there's your homework assignment. Pretty straightforward, but you gotta hustle.

[Rachel Cruz]

Yep.

[Ken Coleman]

So thanks for the call. You know, Rachel, that is, I love when we get that call. And I, and I'll be honest, I've not interviewed people in other lanes, but I, I would almost bet you there's other professional lanes like that, that where certain schools are going, you know, like med schools are going. We want to get people in here. And the sticker price on Vanderbilt, which is in the shadow of our campus here, versus a small school.

[Rachel Cruz]

Totally. Yes. And it's an ego play to go to if someone's like, hey, where are you going? To law school. And it's a Harvard Law or you're going to one that no one's ever heard of. You got to have some humility to it, but you're doing it in a wise way. You know what I mean? And so there's something.

[Ken Coleman]

So it just rarely comes up. Your clients aren't going to go, hey, I've heard rumors that you got your law degree from Greenbrier State.

[Rachel Cruz]

When you think about vet school, law school, med school, I bet George Camel, when he had took his dogs into the vet, he didn't say let me see your degree before he said save my dogs. That was all last week. So that poor guy, Tanya.

[Ken Coleman]

That poor guy and his dogs. It's like a soap opera around here, folks. We don't have time to cover it.

[Rachel Cruz]

We'll hum cover it George, if he hosts here in the next week.

[Sponsor/Announcer]

It's one of the best times of the year, but it's also the time of year when people let their money get totally out of control. Everywhere you look, it's just buy, buy, buy. So you start swiping the credit card and suddenly it's January and you got a mess on your hands. Don't let that happen. Tell your money where to go instead of wondering where it went with our budgeting app Every Dollar. Every Dollar not only helps you stay on budget and in control of your spending this holiday season, it also helps you find extra margin in your budget, thousands of dollars of it. And every day will coach you to build better money habits and attack your goals faster than ever. So while most people will be starting in January with a taste of regret in their mouth, you'll already be winning. Start Every Dollar for free by downloading the app today.

[Ken Coleman]

Buying or selling your home is a big deal, folks. And with all the clickbait headlines and all of the social media traps and all of the little hacks and all the things, it can be confusing and a lot of conflicting data. And so we're here, as always, to give you the real real and tell you about the latest trends. So let's just take a quick snapshot. Median home price prices have continued to hold steady around 424,000 in October. About one in five houses saw a price cut, which means buyers might have more room this winter to negotiate to get a better price. Mortgage rates dipped slightly to 5.49% in October, giving some buyers breathing room. But rates are unpredictable. The best time to buy is when you're financially ready, not when they drop. So if you'd like to learn more about the housing market trends and get free tools to help you buy or sell with, click confidence, go to ramseysolutions.com market. That's ramseysolutions.com market. Or if you're on YouTube or podcast, click the Link in the show notes. Nick is up in Detroit, Michigan. Nick, how can we help?

[Caller]

Hey. Hello, guys. Thanks. Grateful for the time, by the way. Appreciate it.

[Ken Coleman]

Sure.

[Caller]

Yeah. So I own a business I've owned about 10 years now. I've grown it from, you know, GROSSING maybe like 80k a year to now we're about 1, 1.5 million a year.

[Ken Coleman]

Congrats. What kind of business?

[Caller]

Oh, appreciate it. Well, we are mortuary transport, so we. We move the deceased.

[Ken Coleman]

Oh, is that right?

[Caller]

Yeah. I'm sure you guys get that a lot.

[Ken Coleman]

Well, no, and that. And, and so I just think this is interesting. So 10 seconds on this. Is that we're not talking about the hearse. We're talking about to the. To the funeral home. From the hospital or from people's home.

[Caller]

Precisely.

[Ken Coleman]

Yeah.

[Caller]

Actually, it's. It's. It's everything. The hearse is included, so.

[Ken Coleman]

Oh, you do that as well.

[Rachel Cruz]

You do.

[Caller]

The funeral gets rented.

[Ken Coleman]

Yep, got it. Okay, fantastic.

[Caller]

So storage, all of it.

[Ken Coleman]

Oh, wow. Okay, great. So keep going.

[Caller]

Yeah. So the issue is, like, growth is awesome. It went well. I was always on top of it. But it maybe was a little too quick. And I know they would hate me for it, maybe all you guys would, But I have loans, a lot of them. And so it's about 580,000. And so the main question is my goal is to try and pay that off as quick as possible. But people that I, you know, admire, and they're very intelligent people, don't think that I have the funds, like, readily available for emergencies to do that and that I shouldn't do that.

[Ken Coleman]

Well, just give us your picture. So. So we know you have $580,000 in loans just for the business, Correct?

[Caller]

Correct.

[Ken Coleman]

And what is the monthly payment to service that debt?

[Caller]

So it's about 18,000.

[Ken Coleman]

18,000Amonth. Okay. And then give me a picture. Well, you. Are you planning. You expect to do 1.5 million this year? 24.

[Sponsor/Announcer]

25.

[Caller]

I am.

Yep. We were doing 2.2. So this. We got kind of hit kind of hard. It came down, but yeah, that's definitely sticking around.

[Ken Coleman]

Okay, so 1.5 top line. That's your gross.

[Caller]

Yep.

[Ken Coleman]

Okay. What kind of retained earnings do you have? Do you have any savings in the business?

[Caller]

Yeah, so, yeah, some of the stats are probably helpful. Is that, like, it varies from about maybe 1, 110,000 to about 150,000amonth, and the profits can range from negative 10,000 to about positive 20, 30,000. That's a snapshot from this year. Within like, pretty average.

[Ken Coleman]

How many months? Okay, but how many out of the 12 months were you in the negative?

[Caller]

Once at negative 2000 and once negative, 5000.

[Ken Coleman]

Okay.

[Caller]

And that includes paying it off.

[Ken Coleman]

Gotcha. And your best month is 30,000 profit, actual net profit.

[Rachel Cruz]

And how much are you bringing home?

[Caller]

I pay myself like 40,000. I'm just trying to build something.

[Rachel Cruz]

Okay.

[Caller]

Okay.

Yeah. I don't spend money in my personal life or do much, but like a really cool way though, you know?

[Rachel Cruz]

Sure, yeah. How much. How many people do you have working for you?

[Caller]

I got 25 employees.

[Rachel Cruz]

Okay. Because I'm just trying to think where you can be lean on the expenses side because that's the way you're going to be getting, obviously.

[Ken Coleman]

What's the debt? Vehicles.

[Caller]

There's about maybe 200 vehicles. I had to take 200 out for taxes that weren't paid. So that was a big hit. So I'm just paying back payroll taxes.

[Ken Coleman]

All right. Did we learn our lesson on that?

[Caller]

We did. I hired a new cpa. Not that, you know, I should be. I should be looking at it too. It's my fault.

[Ken Coleman]

Right, right. That's okay. Not judging, but just want to make sure that it was on it. Yeah, we've now adjusted for that, and we're never going to have that surprise again. So that's. That's good news. Yep. Well, I think your friends are wrong if they're saying they shouldn't pay it off.

[Caller]

But yeah, I only have 50k in reserve. And so their concern was like, if you have a couple bad months in a row, then you'd be done. And it's not an unwarranted concern, but, you know, five years to two years, it just seems really appealing to keep. To be debt free. Like, instead of five years, I think.

[Ken Coleman]

You can do it. But again, it's the same advice we give other people, Rachel. We don't tell them to just go. I mean, it's a baby step process. Right. We say smallest to largest when we're talking to personal debt. And so in your case, you're just chipping away at it. And so you've got to come up with a business budget, too, that goes all right, I'm going to have some variable numbers here. It's just the nature of the business, so it's really locking in. Rachel, start to correct me when I get wrong here, but you're looking every month at the books. And when the books are cleared that month we know, okay, this month we cleared $5,000 net. That's after paying you and everybody else. Okay, well then that's going to change how much we're going to put towards the debt. But then we got a big month of 30,000. We could put more. And so it's just being really disciplined and looking each month to do what you can and as you grow, knock this thing out.

[Rachel Cruz]

Yeah. Is it seasonal, Nick, at all for you, the ups and downs?

[Caller]

Not really, no. It's pretty, pretty steady. Maybe winter is a little busier, but not enough to be like, you know, work.

[Ken Coleman]

Can I ask really dumb question.

[Caller]

Sure.

[Ken Coleman]

I understand it's about people dying, but aside from that, what causes it to drop from 2 point, whatever million you said, forgive me for forgetting, to 1.5 in my case?

[Caller]

It was a client.

[Ken Coleman]

Aha. A client that was. I don't know how to say it.

[Caller]

Because we, you know, we work for, you know, all the funeral homes or, you know, we were the counties, the medical examiners, colleges, life.

[Ken Coleman]

So a client dropped off.

[Caller]

Correct.

[Ken Coleman]

Okay.

[Caller]

Yeah, big one.

[Ken Coleman]

So are you in this, in the process of replacing them?

[Caller]

I mean, that's. That's the goal. I mean, I'm sure every business has its challenges, but in this industry, it's just super slow to change. If you have a director of a funeral home, they use a service for 30 years. Right. Unless there's a reason to change. Yeah, you gotta be there.

[Ken Coleman]

Yeah.

[Caller]

Be ready.

[Ken Coleman]

Yeah. It's so relaxed.

[Caller]

I get credit. Creative other ways.

[Ken Coleman]

Okay. All right. I was just curious about that. So, I mean, this is a. Rachel, thoughts on that? I mean, this is just a.

[Rachel Cruz]

And I was just trying to run some clips.

[Ken Coleman]

Yeah.

[Caller]

Do you think like 50, 000 in the bank as far as like maybe like that just being the reserve amount. Is that comfortable? You would think with 50, 000 payroll.

[Rachel Cruz]

A month, I would probably do three months reserve.

[Ken Coleman]

Three months?

[Rachel Cruz]

Yeah, I would do three months.

[Caller]

150, 000. I mean, so for me to say, well, that much, that might be a year or two. Right, so that's correct.

[Sponsor/Announcer]

Right.

[Rachel Cruz]

So I would probably lower that. Yeah. Because always think too if you guys. Because if you're being aggressive on the debt and you have two bad months and you only have one left, you could pause the aggression on the debt, stockpile some money, pause that for about three months to pile up some money and then press play back on getting out of debt. But yeah, I mean, I would have a goal to try to do all of this. And gosh, I mean, if you stayed focused, I can be focused. What? Yeah, I mean, give Yourself, two years, I don't know of what you can.

[Ken Coleman]

Do to be very business. What would you, if you have a bang up year, like just phenomenal growth or just a great year, $2 million a year.

[Caller]

Yeah. At this point any growth is majorly profit, you know, so majority profit assets, I'm at that line. Right.

[Ken Coleman]

All right, so after you get the three months of retained earnings in there to be able to cover payroll, every nickel of operation, what do you think you could put away in a year? Towards debt.

[Caller]

Towards debt.

Yeah.

I mean, I don't think two years is out of the question. I think that that could be done. I mean if, if I'm paying 18,000 right now in that debt and I have some months where I'm making 10 or 20. Yeah, of course I could, you know, be doing 30.

[Ken Coleman]

I think you're gonna feel, listen, that's the plan. You're going to love not having any debt on this business. Can you imagine, can you imagine just for a second not having $18,000 a month going out to service that debt?

[Caller]

Yeah. That's why I feel like, you know, sometimes I'm like, oh man, my business is not doing well. But I'm like, no, it's, it's healthy. It just needs to come through. It just needs to make it through this moment.

[Rachel Cruz]

Yeah, yeah, I would make, I would probably make a two year goal and just say, you know what I mean? If, and especially if you lowered what you have, that's going to throw a big chunk at it, which is really great. And get the IRS debt paid off first the 200 that you had, the IRS, and then everything else. Yeah. Start chipping away at it. But I think if you stay focused and diligent, Nick, honestly, I think you're going to see a lot of progress and, and throwing that extra at it. Yeah, I think it's great. You know, business is business. I don't know, we need, I guess we need Nick's business.

[Ken Coleman]

Everybody's dying. It's horrible. I'm trying not to make any jokes. It's a very serious topic. But it's just like I wanted to know what was affected his business. He's like, well, it's a little busier in the winter. I'm like.

[Rachel Cruz]

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[Ken Coleman]

All right, it's time for a fun, fun call here with Stephen, who is a Baby Steps Millionaires in Minnesota. Let's bring him on here. Stephen, how are you today?

[Caller]

I'm just fine and dandy.

[Ken Coleman]

I'll bet you are, sir. As a Baby Steps millionaire, you don't have a whole lot of gripes, do you?

[Caller]

Not too much.

[Ken Coleman]

All right, I could.

[Caller]

I could gripe and whine, but nobody's going to listen to me anyway.

[Ken Coleman]

You know what, Stephen? I apprec that because for a second I thought you were going to give me a few and I thought, oh, I opened up a can of worms here. But, hey, we are so excited to talk to you. Tell us how old you are, Stephen.

[Caller]

I'm 72.

[Ken Coleman]

72. Okay. And what is your net worth?

[Caller]

Net worth is around 4.7 million.

[Ken Coleman]

4.7 million.

[Rachel Cruz]

What is that made up of?

[Caller]

Multiple things. Land. I'm a farmer. Retired farmer, I call it.

[Rachel Cruz]

Unemployed, but no retired.

[Caller]

Land.

[Rachel Cruz]

Retired.

[Caller]

I've invested in some apartment complexes, IRAs.

[Rachel Cruz]

Stocks.

[Sponsor/Announcer]

Yeah.

[Rachel Cruz]

That's awesome. What was the. From an income perspective, Stephen, what was the lowest you've ever made? Made in your life?

[Caller]

The lowest I've ever made. Probably lost about 20 or $30,000.

[Rachel Cruz]

Oh, a negative. Okay, that's good. A negative.

[Caller]

That's one of the problems with farming is it doesn't always. It's not always profitable.

[Rachel Cruz]

Sure.

[Caller]

You can have a real bad year.

[Rachel Cruz]

Yeah. What was the best year you ever had?

[Caller]

The best year I've ever had probably between 2, 2, 250,000.

[Ken Coleman]

Great.

[Rachel Cruz]

Well done.

[Caller]

It all depends on crop yields and market prices.

[Ken Coleman]

And what was your. What was your specialty? Was it crops?

[Caller]

It raised corn and soybeans and I also raised hogs. Later on, started out with a cow herd.

[Ken Coleman]

Nice. Very nice. You did a little bit of everything. All right, now, question we love to ask our babysit millionaires is, did you inherit any of the 4.7 million?

[Caller]

Yes, I did. I inherited probably about 800,000 in land from my dad when he passed away.

[Ken Coleman]

Okay.

[Caller]

Which was about. I'm thinking about 18 years ago.

[Rachel Cruz]

Okay. But you made 4 million on your own. It's very impressive.

[Caller]

Yeah, between me and my wife. Yeah.

[Rachel Cruz]

Yes, yes. Yeah, yeah. As a family.

[Ken Coleman]

Can't forget her.

[Rachel Cruz]

That's awesome.

[Ken Coleman]

Now, was she active? Was she active in the business, the farming business?

[Caller]

She was actually a registered nurse.

[Ken Coleman]

Oh, okay. Gotcha.

[Caller]

And put it bluntly, she probably worked to support my farming habit.

[Ken Coleman]

That's a good lady. That's awesome. Okay. Do you have. Have a degree?

[Caller]

Yes, I do. I have a degree in animal science.

[Ken Coleman]

Nice. And what was your GPA?

[Caller]

2.004.

Yeah.

[Ken Coleman]

Hey, that's my kind of guy right there. I'm not even sure I sniffed 2.0, Rachel in college.

[Rachel Cruz]

Squeaked out.

[Ken Coleman]

It's probably in that range.

[Caller]

Yes, well, my. My college years, I had an elbow problem that went from the table to my mouth. It got into. I've. I've always claimed that I've only been drunk once in my life. It just lasted five and a half years.

[Ken Coleman]

Yeah. You like the beer, did you, Stephen?

[Caller]

A little too much?

[Rachel Cruz]

Well, that excited he enjoyed his college.

[Ken Coleman]

He did. And you know what? He got through 2.0 and now he's lived to tell about it. I appreciate the honesty.

[Rachel Cruz]

The honesty's good.

[Ken Coleman]

You're a hero all across America, I'm sure. Fantastic stuff. All right.

[Caller]

The other thing is, it did take me 17 and a half years to get that degree.

[Ken Coleman]

That's right. Oh, really?

[Caller]

Taking classes here and there all over the place and having kids just stuck it out.

[Rachel Cruz]

Yeah.

[Ken Coleman]

You know, I've never heard of the 17 and a half year plan. That's really fun.

[Caller]

Not. Not much of a plan.

[Ken Coleman]

No, not at all. But you've done well. Okay. So do you drive brand new cars?

[Caller]

No, not very often. I did buy my wife the last car I bought. I actually bought her a new one.

Good.

[Rachel Cruz]

What kind of car?

[Caller]

It's a Kia Sorento.

[Ken Coleman]

Oh, great. The Kias. And did you pay cash?

[Caller]

Yes, we've been paying cash for our vehicles for a long time. One of the things that we have done is my dad was very good about teaching me some different things about finance that line up with the financial Peace program. One of the things that he taught me was that if you borrow money, it's easy to borrow money, but it's a bugger to pay. Pay it back.

[Ken Coleman]

Well said.

[Caller]

And. But even in, in spite of that, he also said, don't use your own money, use somebody else's.

[Rachel Cruz]

Well, that doesn't make sense.

[Caller]

No, it doesn't.

[Ken Coleman]

I was gonna say, not sure that aligns with the show, but you just wanted to tell us what he said anyway, which is great. All right, so is there any advice you would give to. To your 25 year old self or 25 year olds that, that are maybe drinking a little too Hard in college right now, and they want to win financially. What would you tell them?

[Caller]

Just keep working. My wife and I both, it's. I mean, you guys always preach the best way to get out of debt and get wealth is to work hard and increase your income. Even though my wife is a registered nurse, I mean, she worked multiple jobs. She's got a. Her own little sewing business where she. She designs. Digitizes designs, which she actually sells over the net, Internet all over the world. And then she sews them out for people, too. And she played organ at the church. She actually taught college.

[Rachel Cruz]

My gosh.

[Caller]

Two different colleges for. Taught nursing programs at two different colleges for a while.

[Ken Coleman]

Wow.

[Rachel Cruz]

Well, round lady.

[Caller]

Yeah, I kind of out kicked my coverage with her.

[Rachel Cruz]

How long have you guys been married?

[Caller]

Well, you'd have to ask her. She's listening in, but she'll tell you 51. But I say 50 good years.

[Rachel Cruz]

Okay.

[Ken Coleman]

I feel like there's a couple days.

[Caller]

Here, a couple days there where it wasn't so good. It was usually my fault.

[Ken Coleman]

Now. Okay, now I'm catching up. I'm gonna use that one myself, Stephen, if you don't mind. That's good. So she would say, I like that 50, though.

[Rachel Cruz]

Congratulations.

[Caller]

Yeah.

[Rachel Cruz]

That's amazing. That's amazing.

[Ken Coleman]

That's awesome.

[Caller]

Yeah, actually, we've been. We were high school sweethearts, so I've been hanging around with that woman for almost 55 years. 56 years.

[Ken Coleman]

Bless her.

[Rachel Cruz]

Okay. What marriage advice do you have, Stephen? Being married 50 years, what would you say to someone that's newlywed?

[Ken Coleman]

Love this.

[Caller]

Maintain communication, keep talking to each other. That's the important thing. And I mean, that's one of the biggest things in our finances, too, is that we're always talking to each other, just constantly letting each other know where we're at, what we need, what we want. Can we do this? Can we. Do not do that. And be willing to be honest and sometimes say, no, we can't do that.

[Ken Coleman]

Yep.

[Rachel Cruz]

Yep. And be on the same page with it.

[Caller]

Yep.

[Ken Coleman]

Love that.

[Rachel Cruz]

That's great, Steven.

[Ken Coleman]

Stephen, thank you so much for sharing your baby steps millionaire story. It's always fun, Rachel, to walk through the journey of these folks. You know, whether they be 41, 51, 61, 71. Whether they.

[Rachel Cruz]

You know, he had some good one liners in there, Ken. And so did you. May I quote you, Ken?

[Ken Coleman]

Yes.

[Rachel Cruz]

When we asked what kind of car. His wife. He bought his wife a Kia Sorenta. And you said, oh, the Kias, they're a family.

[Ken Coleman]

You know, I hear Good things about the Kias. I've never owned one.

[Rachel Cruz]

It literally sounds like a family. I don't know why. Chuckle made Kelly laugh too. Yeah, all the Kias.

[Ken Coleman]

Well, you know, it's a relatively new car brand in the US I don't know much about it. Quick poll in the audience.

[Rachel Cruz]

Oh, the Toyotas.

[Ken Coleman]

Thumbs up on the Kias or thumbs down in the audience.

[Rachel Cruz]

Oh, we're getting mixed reviews.

[Ken Coleman]

Wow. No, no, no mix. It's like 90% thumbs down.

[Rachel Cruz]

Steven, you may not have picked a great car for the wife. I don't know.

[Ken Coleman]

I gotta go get consumer Reports.

[Rachel Cruz]

This will be the Hondas or the.

[Ken Coleman]

We know Hondas and Toyotas have lasted a long time.

[Rachel Cruz]

Oh, the Kia.

[Ken Coleman]

All the kiss.

[Sponsor/Announcer]

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[Ken Coleman]

Foreign. Nine twenty three. This is what the Lord says. Let not the wise boast of their wisdom or the strong boast of their strength or the rich boast of their riches. Our quote today from Thomas Soule. We all enter the world knowing nothing. But by the time we're teenagers, we know it all. Sometimes it's decades later before we know enough to. To realize how little we know.

[Rachel Cruz]

Ooh, that's good, boy.

[Ken Coleman]

I'm living that right now.

[Rachel Cruz]

I agree with that.

[Ken Coleman]

I got a 16, 17 and 20. And you'd think I was a village idiot. Like I'm surprised dad knows how to get to work and get back home. Is it raining? Is dad out there standing in the.

[Sponsor/Announcer]

Middle of the rain? Dad.

[Rachel Cruz]

Come on, dad. They just think you are just stupid. Is that it?

[Ken Coleman]

It's coming. It's coming. I know you got three because they.

[Rachel Cruz]

They think we are just right now.

[Ken Coleman]

You're. You're heavy.

[Rachel Cruz]

I meant I.

[Ken Coleman]

You are the sun, the moon, the stars.

[Rachel Cruz]

Yes, yes. And it turns middle school.

[Ken Coleman]

It starts to turn and then full blown teenager.

[Sponsor/Announcer]

You.

[Ken Coleman]

You've lost your mind. You just think it's a miracle. Mom can dress herself.

[Rachel Cruz]

It's unbelievable.

[Ken Coleman]

It's that kind of. It's just part of it.

[Rachel Cruz]

Oh, my God.

[Ken Coleman]

Keeps you humble.

[Rachel Cruz]

And then you realize, oh, they do know something, right? And then you realize in your own life.

[Caller]

Wow.

[Rachel Cruz]

I may not Know, as much as I thought, maybe the world is bigger than what I was even thinking. You know?

[Ken Coleman]

That's right.

[Rachel Cruz]

You start thinking.

[Ken Coleman]

Yeah.

[Rachel Cruz]

Oh, man.

[Ken Coleman]

So go to work every day and give advice on the radio when you feel like an idio all the time at home, I get. I'm in a state of confusion all the time. Anyway, it's part of it. Folks, welcome to parenting teenagers.

[Rachel Cruz]

Whatever. Your kids love you. We had dinner, we had lunch. There love with.

[Ken Coleman]

They can love an idiot.

[Rachel Cruz]

I know. We had lunch with some of our team and Ty.

[Ken Coleman]

We did.

[Rachel Cruz]

We were in Chicago.

[Ken Coleman]

Yes.

[Rachel Cruz]

He, like, loves you, kid. It's great.

[Ken Coleman]

But, you know, they still think you're stupid. Gary is up next in Austin, Texas. Gary, how can we help?

[Caller]

Hey, Ken, Rachel, thanks for taking my call. My wife and I, we've been married. We got our. We had our 20 year anniversary back in January and we realized.

[Rachel Cruz]

Congratulations.

[Caller]

Oh, thank you. We should be further along financially than we are. I think we're doing okay, but we could be doing way better. And basically my debt right now, we have $12,000 we owe on one car and we owe $7,000 on our three teenagers orthodontic bills.

[Ken Coleman]

Oh, yeah, boy, I've got post traumatic on that. Dude. That's brutal. Brutal.

[Sponsor/Announcer]

Yeah.

[Caller]

So other than that, we have no other debt. I do have a beneficiary IRA that I got back in 2010 when my grandpa passed away.

[Rachel Cruz]

Okay.

[Caller]

It had 24,000 at the time. I've taken the minimum distribution out every year and now it's about 70 grand. Of course, every day with the market right now, it's kind of fluctuating.

[Rachel Cruz]

Sure.

[Caller]

But my question. And plus my teenagers, we have two cars at home, and we're looking to potentially get a third car because they want to go out and work. But it's hard because I have four kids. Well, I also have a four year old, by the way. So we have. It's a crazy dynamic, but my teenagers want to go work, but it's hard because we have to shift the car around because we only have the two. And it becomes. Because both my boys now can drive.

[Ken Coleman]

How old are they?

[Caller]

So we want to have a little maybe 5 to $8,000 in cash to buy a car. So basically my question is, if I took out, say 20 or 25,000 from that beneficiary IRA, I know I'd have tax implications, but would it be worth it to pay off my orthodontist in my car? So we have two cars owned outright in cash, and then we could potentially buy a third car in cash, and then that way I can move on to the baby steps from there.

[Rachel Cruz]

No, I really wouldn't. I don't think I would unplug that ira. I mean, I just feel like that that's invested. I think there's a part of that that. Yeah, you would pay taxes on it for. For sure. But there's a part of me that wonders, okay, how much money do you guys make?

[Ken Coleman]

About.

[Caller]

It fluctuates of overtime, but somewhere around 180 a year.

[Rachel Cruz]

180 a year. Okay. Yeah. Why don't we live on 90 and do all of this? Yeah, I mean, live on 90 for a year.

[Ken Coleman]

7,000 in dental, 12,000 in a car. Yes.

[Caller]

Correct.

[Ken Coleman]

That's it. That's the only debt? Yes. And who's. Whose car is the 12,000 on?

[Caller]

It's my wife. Well, it's. Both cars are ours. Our teenagers primarily use the one car in my life, and I use the other. I have a work vehicle that I can take that I use most of my day for work, but when I'm. I can't use it when I'm out.

[Rachel Cruz]

Yeah, Gary, Just cash flow. This. I mean, part of the baby steps is a level of changing sacrifice. You know, if you cash out this ira, nothing in your life has to. To change. You're just plugging in money and fixing your problems, and you're unplugging something that actually is going to be able to go up in value so quickly over time and. Because how much is in the IRA that.

[Caller]

That particular one is. 70,000.

[Rachel Cruz]

70. Yeah. I don't think I would do it.

[Caller]

I would.

[Rachel Cruz]

I would lower. I would lower lifestyle, Gary. I would live. I would have you guys be on a really, really tight budget for one year and get all this knocked out.

[Caller]

So we've been doing the every dollar app since our anniversary last January, and we have been making progress at it. I guess my thoughts are. I really want to get to some. I'm 43 years old, and I do have two Roth IRA. Two Roth IRAs now, but they're just not as much. I started when I was 18, and I'm just disappointed that it's only worth. Mine is only worth a hundred thousand, and my wife's is like 60,000. My gosh. I thought by this point in my life I'd have more because I've been able to contribute as much, or I should say I haven't contributed as much. So basically my thought is, if I just took this out, deal with the tax and Then I could start really hitting that 15%, you know, amount to my retirement and kind of loading it earlier.

[Ken Coleman]

I understand your reasoning. I understand your reasoning, but I'm with Rachel on this and I would tell you to channel the thought, the emotion you just gave us, which is, gosh, I, I only have 160 and I wish I had more. And you don't want to touch that because that's, that's, that's working for you. And so I would, I would take that angst, that frustration, and I'd figure out how to make more money. I'd figured how to sell some stuff. I'd figure out a way for the two high schoolers to get to their jobs in other ways or whatever, whatever, whatever. And I would knock these debts out. 19,000 on your income, I know, is very, very doable. You know, we're talking about, and you don't have to answer this on the air, but this is the homework assignment. What would need to change or what would you all need to do? I'm talking about you and your wife collectively as a team. What you need to do to be able to put $2,000 a month towards the 19,000. And I, I just think if you frame it that way, you might be surprised about how doable that is. And now we're doing this in of a lot less than a year. Okay, and now you're building the emergency fund.

[Rachel Cruz]

Do you guys have savings at all anywhere else?

[Caller]

A little. I mean, I save. We have a school account. Our kids are, have been homeschooled. And so we have. It's actually more expensive than. It's not crazy expensive, but it's, you know, $3,000 a semester probably. We pay for them. So we have a money for that that's really allocated for that.

[Rachel Cruz]

Sure, sure. But anything else and savings?

[Caller]

Just $1,000. We recently brought it down to thousand to help pay. Pay down the car.

[Rachel Cruz]

Okay, gotcha, gotcha.

[Ken Coleman]

Here's the crazy thing real quick. Let's just run through this super fast. The $12,000 car. What's it worth if you were to sell it? Private sale.

[Caller]

Probably mid-20s.

[Ken Coleman]

All right, since we're being uncomfortable and we're telling you to be uncomfortable. Rachel's right. Let me tell you what I would do. Now. I'm extreme on this. Rachel, you tell me if you think this is too extreme on this one. But I'd say sell the car and knock that debt out. What's that? What's that monthly payment.

[Caller]

The minimum is like just under 400.

[Ken Coleman]

All right. So we just. So here's what happens. If it's worth 22 and you owe 12, if I'm doing the math right, you're gonna have somewhere in the eight to ten thousand dollar range off the sale of that. You go get an eight to ten thousand dollar car and it is what it is. We're in a season right now of rebuilding and you're jump starting the rest of your life. Life. So we're going to make a sacrifice. What we just did there is we paid for the car. The secondary, we're paying for another car, cash. And we just freed up $400 a month. That's what I would do. Is that too extreme?

[Rachel Cruz]

No, not necessarily.

[Ken Coleman]

I know there's only 12 left and I know that's why. But you know.

[Rachel Cruz]

Yeah, I mean you could, you guys can make some moves, Gary, to Ken's point, to get this cleaned up. I mean you really could.

[Ken Coleman]

Now you only got seven grand left.

[Rachel Cruz]

Yeah.

[Ken Coleman]

And $400 extra to put towards that.

[Caller]

Right.

[Ken Coleman]

I mean if I wanted to get it out of the way quickly, that's what I would do. And not take the easy button and pay taxes and I don't want to mess with my investments Right now at 43 years of age, I don't want to touch that. I need that to be growing.

[Rachel Cruz]

When my other thing is, I'm like, it's $180,000 income. You know, I'm like, I think you guys could really do this in a year. I really do. So I think there's something about the discipline which you guys are. Have you started, you know, the thousand dollars and you're throwing the rest of the debt? It's amazing, but I just don't think, I wouldn't touch, I wouldn't touch IRAs. I really wouldn't.

[Ken Coleman]

Yeah, I agree with you. All right, folks, remember, there's ultimately only one way to financial peace and that's to walk daily with the Prince of peace, Christ Jesus. Happy.