Rock Bottom Doesn’t Have to Define Your Financial Future

Summary

The Ramsey Show

Episode: Rock Bottom Doesn’t Have to Define Your Financial Future

Date: May 7, 2026
Hosts: George Kamel & Dr. John Delony
Guest Host: Chris Hogan

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Episode Overview

This episode of The Ramsey Show reinforces the core message that no matter what financial "rock bottom" you've hit, your mistakes do not define your future. George Kamel, Dr. John Delony, and Chris Hogan respond to real listener calls about money messes, relationship tangles, and emotional setbacks, emphasizing actionable steps, ownership, and radical honesty. The episode covers a wide range of financial and relational issues—from complicated family housing situations to blended family investing strategies, recovering from financial betrayal, managing grief, and making big life or money decisions with confidence.

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Key Discussion Points & Insights

1. Complex Housing/Junk Mortgage Situations

[00:31–09:18] — Steve in Hartford, Connecticut

• Situation: Steve co-owns a home with his ex-stepfather, has his mother living in the basement, and is financially stretched.
• Issues: Utility burdens, tangled ownership, family strife, feeling stuck.
• Advice:
  • Clarify if you want to keep the house.
  • Consider buying out the stepfather if possible or selling the house for a fresh start.
  • Have an honest conversation with your mom about paying her share or moving out.
  • Accept that relational issues are often the root—not just the financial ones.
• Quote: “This is all purely relational.” —George Kamel [06:43]

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2. Blended Family & Kids’ Financial Fairs

[10:50–20:13] — Todd in Pittsburgh

• Situation: Newly married, blended family, differing kid ages (7, 10, 16, 17), wants to invest fairly for their futures.
• Key Insights:
  • Set a goal-based amount for each child, not a fixed monthly “fair share.”
  • For older kids (close to college), use high-yield savings for liquidity; for youngers, invest in 529s or ESAs.
  • Communicate openly with kids; explain why things will never be “exactly even”—circumstances and opportunities change.
• Quote: “None of this is going to be exactly fair… do the best you can with what you got when you got it.” —Chris Hogan [19:09]

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3. Financial Infidelity and Rebuilding Trust

[22:03–32:14] — Betty from Toronto

• Situation: Wife discovered husband hiding debt; partial household fund access; emotional fallout; five young kids.
• Advice:
  • Call out “financial infidelity”—treat it as serious as any other betrayal.
  • Pull credit reports for all family members, including kids, to get a full reality check.
  • Husband must participate in full transparency and counseling; if not, prepare consequences.
  • Emotional management is critical, but honesty is paramount.
• Quote: “You’re also right to ask: ‘What else have you been lying about?’ …Until you know the depths, you can’t rebuild.” —Chris Hogan [25:41]

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4. Smart Car Buying & Timing Big Purchases

[33:13–42:25] — Sarah from Jackson, Mississippi

• Situation: Newlyweds, debt-free, sitting on $98K cash, low income but soon to double, considering a $32K car purchase.
• Advice:
  • Don't let upcoming income influence today’s decision—wait until it’s real.
  • Car value should be less than 50% of annual income; buy used, pay cash, don’t “spend to your limit.”
  • “Walk away power” is critical at the dealership—avoid being upsold.
• Quote: “If you’re having this much doubt about it, maybe you should wait.” —Sarah [38:28]

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5. Mortgage ‘Hacks’: Why Simple Wins

[44:01–51:47] — Rochelle in Sacramento

• Situation: Husband wants to do “velocity banking” (first-lien HELOC with sweep account) to pay off mortgage faster.
• Advice:
  • Such “hacks” are risky, complex, expose you to variable rates, and rarely outperform a simple 15-year fixed mortgage.
  • If a “solution” can’t be explained simply, run away.
  • There’s no secret loan to avoid paying off the principal and interest.
• Quote: “The more variables, the more fragile the whole system is.” —Dr. John Delony [51:17]

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6. Kids with Substantial Side Income

[54:33–59:17] — Carlos in Texas (written question)

• Situation: Pre-teen is making $5K/month on YouTube; question about tithing and saving.
• Advice:
  • Tithe/give, save, and let the kid spend some to learn through experience.
  • Set up sinking funds for bigger goals like a car or college; teach tax withholding.
• Quote: “Let them buy what they want to buy…that’s the way they learn.” —Chris Hogan [55:09]

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7. Rock Bottom: Financial and Emotional Clean Starts

[60:09–75:07] — John (Orlando), Jordan (Miami)

• Segment Highlight: Jordan’s Loss & Grief
  • Situation: Lost entire family in a car crash, in debt, stuck in sales job, feeling hopeless.
  • Advice:
    • Acknowledge grief, seek therapy, and realize some holes aren’t fixed by more hustle.
    • “You can’t give what you don’t have”—best helpers first need healing.
  • Quote: “You’re not going to be able to power through this because there’s nothing to power through.” —Dr. John Delony [72:17]

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8. Massive Life Transitions & Regaining Control

[76:34–86:17] — Sean (Daytona), Carson (San Antonio)

• Sean’s Story: Merchant marine, lost income due to divorce, wants life local to his child.
• Advice: Own your choices, sell the house, be willing to downsize, and don’t cling to sunk cost “dreams.”
• Quote: “When you take that level of ownership, it puts you back in the driver’s seat of your own life.” —Chris Hogan [81:19]

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9. Student Loans vs. Mortgage: Which First?

[86:43–94:11] — Carson in San Antonio

• Situation: Huge student loan and mortgage balances; family health concerns increase urgency.
• Advice:
  • Stick with the debt snowball—student loans first for flexibility and risk mitigation, especially since mortgage is tied to an asset.
  • Secure term life insurance for family’s safety net.
  • Don’t let “worst case” future fears rule smart present actions.
• Quote: “The fact that you dug a $180,000 hole for your family… you have a responsibility to knock that out.” —Chris Hogan [91:17]

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10. Relationship Money Dynamics Without Marriage

[96:05–105:29] — Courtney in Miami

• Situation: Woman, financially independent, living with long-term boyfriend, struggling with “fair” household contribution.
• Advice:
  • There’s no way to make the money side equal without true commitment—legal and relational.
  • “Playing house” without marriage creates inevitable inequality.
  • If you can’t see yourself tying your life to his, acknowledge that honestly.
• Quote: “As long as you’re his landlord and his bank, there is always going to be inequality in your romantic relationship.” —Dr. John Delony [98:09]

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11. Insuring What Matters (and What Doesn’t)

[107:20–115:16] — John (NYC)

• Situation: Pet insurance premiums for aging cat skyrocketing; never used the coverage.
• Advice:
  • For most, self-insure for pet expenses.
  • Weigh the sunk cost fallacy—don’t keep paying for coverage unlikely to ever “pay off.”
  • Set a max amount you're comfortable spending on vet care and stick to it.
• Quote: “Insurance companies never lose… you’re better off socking away that money in a fund.” —Chris Hogan [115:03]

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12. Car Leases: Expensive Lessons

[118:12–125:25] — Kelsey in Atlanta

• Situation: Leasing an EV, way over mileage, facing $5K+ in penalty fees, considering buying a beater car to “park” the lease.
• Advice:
  • Explore all “least bad” options: early termination, buyout, or parking with a beater.
  • Use the pain as a lesson: never lease again.
  • “Who’s getting rich off this deal?” — it’s not you.
• Quote: “It is the most financially irresponsible way you can possibly operate and not own a vehicle. Do not do it to yourself.” —Kelsey [125:16]

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Notable Quotes & Memorable Moments

• Chris Hogan [25:41]: “You’re also right to ask, ‘What else have you been lying about?’ Because we had this little secret world… you’re out of it. You stepped out of it.”
• George Kamel [31:04]: “If he says, ‘No,’ to the credit report, that is the biggest red flag.”
• John Delony [51:17]: “The more variables [in a financial product], the more fragile the whole system is… I'm out.”
• Chris Hogan [55:09]: “Let them buy what they want to buy… That’s the way they learn.”
• George Kamel [72:17]: “You’re not going to be able to power through this because there’s nothing to power through.”
• Chris Hogan [81:19]: “When you take that level of ownership, it puts you back in the driver’s seat of your own life.”
• Dr. John Delony [98:09]: “As long as you’re his landlord and his bank, there is always going to be inequality in your romantic relationship.”
• Kelsey [125:16]: “It is the most financially irresponsible way you can possibly operate and not own a vehicle. Do not do it to yourself.”

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Helpful Timestamps

• [00:31] — Steve in CT: Housing/mortgage family mess
• [10:50] — Todd in PA: Blended family college investing
• [22:35] — Betty in Toronto: Financial betrayal, marriage
• [33:13] — Sarah in MS: Car buying with major income change
• [44:28] — Rochelle in CA: Velocity banking mortgage hack
• [54:33] — Carlos: Kids’ YouTube side hustle, tithing
• [60:09] — John and Jordan: Recovering from loss, debt, and depression
• [76:34] — Sean: Merchant mariner, post-divorce financial reset
• [86:43] — Carson: Student loans vs. mortgage payoff order
• [96:05] — Courtney: Cohabitation, money fairness vs. commitment
• [107:20] — John (NY): Pet insurance for aging cat
• [118:12] — Kelsey (Atlanta): Leased EV, over-miles dilemma

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Overall Tone and Approach

• Direct, empathetic, non-judgmental: Callers are treated with dignity, even in hard truth.
• Relational focus: Many money issues are relationship issues in disguise.
• Personal responsibility: Emphasis on ownership of one’s choices as a path to freedom.
• Actionable solutions: Always offer steps, resources, and tangible advice.

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Conclusion

This episode reminds listeners that even at financial or emotional rock bottom, you always have agency and a path forward—starting with honesty, practical steps, and the willingness to own your story. The Ramsey team balances tough love with encouragement, offering not just financial advice but holistic guidance toward healing, clarity, and a brighter next chapter.

Transcript

[Chris Hogan]

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[George Kamel]

Normal is and common sense is weird. So we're here to help you transform your life. From the Ramsey Network and the Fairwinds Credit Union studio, this is the Ramsey Show. I'm George Camel joined by my friend Dr. John Deloney. And we're taking your calls at 888825 5225. Steve is going to kick us off in Hartford, Connecticut. What's going on? Steve?

[Caller]

Hey, how's it going?

[George Kamel]

Doing great. How are you?

[Caller]

Oh, hanging in there.

[George Kamel]

What's your problem today? What's going on? Geez, George, what's your deal, man?

[Chris Hogan]

Steve, what's your problem?

[George Kamel]

Unless you just want to celebrate a win today, no.

[Chris Hogan]

What's up, man?

[Caller]

So I'm in an interesting situation. Back in 2018, I had purchased a house with my stepfather at the time and it seemed like a good idea. We were splitting the percentages. It was going to get me into a house a little bit sooner. I had a growing family and they were supposed to only be there six months out of the year. Fast forward to a couple years ago. Him and my mother had split up and at this point in time now my mother is living downstairs in the in law apartment of which I am responsible for all the utilities right now. And it's really hindering my ability to make any progress on my debt snowball and make some progress in the baby steps. And I'm just wondering, you know, should I look to sell this house? My mortgage is super low. My mortgage is under $1,000 a month and I do have some equity in the home. But I'm wondering if it makes sense for me to sell, uproot my kids, find somewhere else to go, either raise my mortgage or even have to potentially get a rent or if I should have just a conversation with my mom, start trying to get some utilities from her. It's a sticky situation. I don't know where to go with it.

[George Kamel]

I'm so confused. So let me get the facts straight. Your ex stepfather is on the mortgage,

[Caller]

but yes, my ex stepfather is on the mortgage. We're going to get really weird here. So my ex stepfather is Actually my mortgage holder and he owns a part of my house.

[George Kamel]

So. He is the bank. He is the bank, but he doesn't live there.

[Caller]

He does not live there any longer.

[George Kamel]

Your mom lives there. And you're saying you can't pay off your debt because the utilities that your mom isn't paying for are crushing you financially?

[Caller]

I'm saying that with utilities, the extra utilities that I have for the house, it's a, you know, it's a 2,500 square foot home. I live in 1700 square feet of it. But I am responsible for all, all utilities and all expenses of the home, insurance, everything.

[Chris Hogan]

So yeah, that's like, that's like 150 bucks a month.

[George Kamel]

I just don't want you blaming mom for, you know, the $40 extra in water bills. That, that's why you can't get ahead financially.

[Caller]

So my electric bill during the, during the winter months is over $750 a month. I have electric heat, so my utility bills are in 7 to $1,000 range a month.

[George Kamel]

So what's the ideal situation? Your mom pays rent or your mom gets out?

[Caller]

That. I don't know. I feel like I should get out of this deal. Like I said, my mortgage isn't high. My mortgage only lives less than $1,000 a month. So I don't want to sell, but I also kind of don't want to be in this deal any longer either. I kind of want to be that

[George Kamel]

to me, that's worth it to get out of this weird deal with your ex stepfather that.

[Chris Hogan]

But that sounds like the real issue is that the real issue is your mom using $500 a month in heat in the basement.

[Caller]

No, it's. There's a little bit more to, to my mom's side too. Don't necessarily want to share here, but it's also kind of affecting my relationship with.

[George Kamel]

There we go.

[Caller]

My mother.

[George Kamel]

Okay. We just didn't want to make this about the surface level, you know, dollars and utility bills. There's more there, which is cool. You don't need to share it all. And could you. Do you want to keep this house? That's step one. If you had it on your own, would you want to keep it? And if you could afford it.

[Caller]

I'm 50. 50. I love the neighborhood. I love where my house is. I don't. With the in law apartment that's downstairs, the house doesn't make sense for me to own it 100%.

[George Kamel]

Okay.

[Chris Hogan]

But I mean, could you go to a mortgage company and buy your ex stepfather Out.

[George Kamel]

Just get a mortgage from them.

[Chris Hogan]

Get a mortgage from them. Buy him out, get him out of there. And then a hard conversation with your mom about whether she's going to pay rent or not or she's got to move out because you're going to hire, you're going to get a real renter in there.

[Caller]

I, I could, I can't, I can't legally rent it. It's not a, a legal in law apartment, so I can't legally rent it.

[Chris Hogan]

So you can't rent a room in your house?

[Caller]

It's not a room, it's a, it's a 1100 square foot in law apartment.

[George Kamel]

But is there Connecticut laws that say it's not zoned for it's rent?

[Caller]

I don't know. It's not, it's not currently set up right now to have someone externally outside of my, my family live in it. It's connected into my house. There's, It's.

[Chris Hogan]

Okay, well that's not against the law. That'd be awkward or weird.

[Caller]

But it's, it's weird. It's weird.

[Chris Hogan]

Okay, it could be weird. And again, I, I've lived in Texas and Tennessee. I could rent my roof if I wanted to. But you may have different laws in Connecticut. But yeah, if you don't want strangers walking in and out of your front door. I, I get that all things are

[George Kamel]

pointing to you sell this house, you get out of this weird ex stepfather situation. Mom then needs to go find her own place and you start a new chapter. That feels like the cleanest thing to do.

[Chris Hogan]

Yeah, but that has nothing to do with you because let's say your rent goes to fifteen hundred dollars. I mean your mortgage comes to fifteen hundred a month or seventeen hundred a month. You're still, you're solving for the relationship issues that you got in this deal. But you're going to be dollar for dollar, about the same, right?

[Caller]

Yeah.

[George Kamel]

What do you make a month?

[Caller]

I take home about $7,500 a month.

[George Kamel]

Great. So even if your mortgage or even if you rented for a while until you figured out where you wanted to buy, you'd be just fine.

[Caller]

Yeah.

[George Kamel]

So this is all purely relational.

[Caller]

I have four kids, so I do need some, some space.

[George Kamel]

Are you single?

[Caller]

I'm married.

[George Kamel]

Okay. And does your spouse live in the same house?

[Caller]

She does.

[George Kamel]

What does she think about all this?

[Caller]

She's about the same as where I am.

[George Kamel]

She'd be happy to start fresh new house without all these financial family ties.

[Caller]

Yes.

[George Kamel]

Okay. I think you got your homework or home Shopping.

[Caller]

Yeah.

[Chris Hogan]

But I, I still wanna, I wanna challenge you on one thing and then I'll let you go. Are you, how old are your kids?

[Caller]

I got an eight year old, I got a seven year old, a four year old and about to be a one year old.

[Chris Hogan]

Okay, so you're fully in it. You're gonna do six. And again, I know people all over planet earth live in different arrangements and that's awesome, but you're sitting in a 2,500 square foot house. You're gonna do life with six people in a 1500 square foot house or a 1700 square foot house.

[Caller]

That's where I am right now. That's my living space is 1700 square feet.

[Chris Hogan]

I know, but you're telling me that's all you need and you've got too much house? Do you have too much house for you and your mom to be there or could your family expand to use this, this basement space too?

[Caller]

We could expand to use the basement space, it just doesn't, it's, it's a raised ranch, so it doesn't really make sense. The downstairs, it'd be kind of hard to split my family up in, in the space. So having both, I don't think makes sense for me logically to buy him out and want to own the whole thing.

[Chris Hogan]

Is he going to be willing to sell if you put this on the market?

[Caller]

Yeah, I'm sure.

[George Kamel]

What would he get out of it versus you as far as the proceeds?

[Caller]

He's just going to get his percentage.

[Chris Hogan]

Okay, yeah, I would sell it today.

[George Kamel]

Yeah, I would. Take what you can get out of that. And if you can't afford to buy a home based on those proceeds, the one you want, then you just got to wait and maybe rent somewhere for a while until you can't afford it. But this whole thing is just so intertwined, I would just want out emotionally. Best of luck.

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[George Kamel]

Todd is in Pittsburgh up next. Todd, welcome to the Ramsey Show.

[Chris Hogan]

I thought you said God is in Pittsburgh. He's also Todd is in Pittsburgh.

[George Kamel]

All right, God and Todd are there.

[Chris Hogan]

What's up, Todd?

[Caller]

Hey, guys, thanks for taking my call. My wife and I just got married December 27th. We're in baby step three. We now have four kids. We're a blended family. And I'm wanting to know way to invest in the kids future when they are all vastly different ages.

[George Kamel]

Oh, are you trying to decide what's fair versus okay, one kid's about to go to college. Do we invest the same for the 4 year old?

[Caller]

Exactly. So their ages are 7, 10, 16 and 17. And my wife and I, my wife didn't get help with college when she was growing up. I went straight into a family business and construction, so I didn't go to college. So we are clueless on how to even invest for the kids.

[George Kamel]

Well, what do you want to do for these kids?

[Caller]

I would, I mean, I would like to be fair, but I understand that because of the difference in age, it would be nice if I could, you know, just give them put up all the same amount for each of them. And like I said, we're just in baby step three. But I'm just kind of looking ahead because we're looking for baby step three to kind of be a breeze. And it's just nothing. I really know, but I don't know if there's a certain type of account to put up for each of them or what.

[Chris Hogan]

I'll tell you, I had a similar situation, not with a blended family, but I worked in universities for 20 years. And part of working at a university for that long is you get some sort of, if not all of your tuition covered for your kids if you work there. And then I left and took this job. And so my, I didn't have any college savings because I was working in colleges. My wife was working at university. And that was just our plan. And so I have a 16 year old right now and a 10 year old. And so the way we've handled it is we came up with a dollar amount that we want to have saved for each kid. But that means I had to accelerate the savings for one kid and I'm slow playing it for, for the other. So if you look at my budget every month, I'm not being quote unquote fair. I'm holding back more money for one kid than I am for the other. But the number we're going to try to get to is, is going to be comparable.

[Caller]

Right, Right.

[Chris Hogan]

So, and I think part of this is pretty solvable for you all because y' all don't have any money for the 17 year old right now. Right?

[Caller]

Right.

[Chris Hogan]

And so some of that problem takes care of itself. You might want to look at the death of two younger kids and say, okay, we want to make sure this is different for them too. But your 16 and 17 year old have found themselves like life just happened. And so y' all need to have some honest conversations about what we can afford and what we can afford and what debt has done to us over the years. And here's the options in our local area, free community college, low cost state tuition. Like you just need to have those honest conversations with a 16 and 17 year old.

[Caller]

Okay. Yeah. So with the 17 year old, he's getting ready to go to the marines.

[Chris Hogan]

Okay, great.

[Caller]

That's when we helped him out with his first car.

[George Kamel]

Great.

[Caller]

So which only ended up being 5, $500 Ford Ranger, which is ran Great.

[Chris Hogan]

That's awesome.

[Caller]

So that was, that was a good start. Now I don't, I just don't have any expectations as to what to do from here on out. And then if I do come up with a number amount or you guys help me do that, where, where does that money go until it needs to get it out.

[George Kamel]

So if you want to invest that money, which if we're talking about investing, that's a five plus year time horizon, which means it doesn't make sense for the 16 or 17 year old if you're investing for education, for example, when you got one or two years ahead of you. But for the seven and 10 year old, you could invest for college in a 529 savings plan, for example, or an education savings account. So you're going to earmark that money for college. It's going to have great tax advantages and, and you'll have the power of compound growth for the next, you know, eight to 11 years. So that's one place I would put some money if you want to help cover college. Now the good news is, let's say they don't go. You can also change the beneficiary at any time. So anybody, it's a pretty loose definition of family that you can change that beneficiary to. And with the new Secure Act 2.0, you can roll over up to $35,000 over time into a Roth IRA for that child. So it can become kind of a bonus retirement account for them as well. So that's one way to invest. And I like what Deloney is saying here. I would make it more goal based rather than monthly contribution based. So the goal is all of the kids go to school without debt if they choose to go to school. The goal is every child gets a paid for cash car. That's reasonable. Those are good goals. And then the number changes depending on the ages and what you guys can do. Right now your emergency fund is the priority over saving for the kids and followed by that, your own retirement is the priority before investing for the kids. So what's your household income?

[Caller]

Between my wife and I, probably about 180.

[George Kamel]

Fantastic. That's great. So we're talking, I mean we got out of 27 grand or so invested.

[Caller]

What's that?

[George Kamel]

If you do 15% of that, that's baby step four. So if you're walking through the Ramsey plan, you're in baby step three, saving up three to six months of expenses. Once you've got that covered, now we start investing 15% of our household income into retirement accounts. So if you've got a match through your employer, start there, you have access to any Roth accounts like a Roth 401K Roth IRA. Let's fund that. And if you still haven't hit 15%, go to the traditional accounts. And then any money beyond that 15% can start going towards kids investing goals like college.

[Caller]

Okay, that makes sense.

[George Kamel]

And for short term savings goals like you're talking about with a 16 or 17 year old, a high yield savings account will do the job for that. That's going to keep the money liquid. It's not going to fluctuate with the market. And so you're much better off there versus the kid turns 18 and the market took a dip and now you're, you're stuck.

[Chris Hogan]

Yeah, my, my 16 year old college fund is in a high yield savings account. It's exactly where it is.

[Caller]

Okay, great. And so that's better of course, versus like a brokerage account or Something like that.

[George Kamel]

Yeah. The brokerage account. Now that's something I utilize for my kids, that is for future goals that are non education related. So I have a, you know, a two year old and an infant. So I'm saving up, going, all right, I want to cover their wedding one day. I want to be able to help them get a car, maybe a home, down payment, those kinds of things. And so I'm going to invest outside of the 529 for that in just a brokerage account in, you know, low cost index funds.

[Caller]

Okay, great.

[George Kamel]

So those would be the three places I would put money is 529 for education, high yield savings for any short term goals and brokerage account for any long term goals for the kids.

[Chris Hogan]

And let me just free you brother, none of this is going to be exactly fair. And what I mean by fair is there's no way you're going to be able to find another 500 great running car.

[Caller]

Right.

[George Kamel]

When the 7 year old is 16 trying to get a car, a beater car is going to be $10,000. Yeah.

[Chris Hogan]

And hopefully you're making 280 at that time.

[Caller]

Right, right.

[George Kamel]

And you're going to be in a better place financially when that seven year old is going to college. And so it isn't going to be fair. You're going to be doing much better

[Chris Hogan]

by then and just, just go ahead and build in the psychological cushion for your oldest getting back from the Marines, being like, are you kidding me? You bought so and so and you'd be like, yep, right. And that's just, that's part of being a parent. Right.

[Caller]

I think that's what I needed to hear the most. So thank you for that.

[Chris Hogan]

Yeah, you got it. Like do the best you can with what you got when you got it. The only thing I'll ask is be as honest as you can with your kids in real time. It is, it can be embarrassing, it can be shameful. You could feel not, you shouldn't be ashamed, but you could have feel shame like hey 17 year old or your 17 year old's going marines. But hey, 16 year old, this is the situation we've been in and this is what we're going to have to contribute. We're only going to have $10,000. And so let's go through the honest options here and let's figure out what's right. Like it's just being as honest as you can and then look at your 7 and 8 year old and say let's make sure this never happens again. And so we're going to start putting more away for them to have different opportunities, which is awesome.

[George Kamel]

Yeah. It's when they're surprised, that's when the resentment starts to build up because nobody told them they didn't know they saw one sibling get treated a different way. So communicate openly and honestly with all four kids.

[Caller]

Yeah.

[George Kamel]

Say, hey, here's where we're at financially. Here's what we want to cover. Here's what we can cover right now means you got to figure out a plan. 16 year old because we can't cash flow 4 years at an out of state school, it's going to look different for you. Thanks for the call, man.

[Caller]

Great question, Sam.

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[George Kamel]

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[Caller]

Thank you so much for having me.

[George Kamel]

How can we help today?

[Caller]

I just feel just so, so desperate for help right now. I am in my mid-30s. I've been married for 10 years and we have five, five kids together under seven. And I thought we were doing really good with our baby steps. 4, 5, 6. And then I just found out that he's been just hiding some debts that I didn't know was happening.

[Chris Hogan]

Oh, man.

[George Kamel]

How'd you find out?

[Caller]

I just had a feeling something wasn't right. And when I asked about it, he was very defensive and nope, nope, nothing. And I just had the boldness to keep pressing. And then he was like, yeah, like, this is why I haven't wanted to fully share an account, because my account is always negative.

[George Kamel]

And then what did he. Did he actually give you the facts afterwards? Was he honest or did you have to keep pressing?

[Caller]

So the numbers did change a little bit, and he did look a little scared. And I just tried to be very calm, very safe so he would feel comfortable telling me the truth. And I said, I need. I need to see your account, which still hasn't happened,

[Chris Hogan]

so.

[Caller]

And I want.

[Chris Hogan]

Go ahead. Go ahead.

[Caller]

And I said, I want you to see a counselor with me because we, like, we will figure this out. And we need to stay together like we have five kids. Like I'm forever tied to him.

[Chris Hogan]

Okay, I'm going to give you some hard reality. Okay? How much. How much money does he say he owes?

[Caller]

It's not much, but, like, every pay, about 40% just goes to whatever he's been spending. So his check goes into his account, and 40% just gets eaten up. And then 60% I see. For the household expenses and.

[Chris Hogan]

All right, so.

[Caller]

But he's still negative every. Every pay.

[Chris Hogan]

Okay? So here's what you're going to need underneath your feet. Okay? I call this financial infidelity. He's been cheating and lying to you. Okay? And so first off, I want you to not think you're crazy for this, blowing up your world. It did.

[Caller]

Yeah.

[Chris Hogan]

Okay. You're at home managing five kids, a family of seven, trying to feed them on allegedly 60% of the paycheck. Okay. You should feel like the rug got pulled up from under you, because it did.

[Caller]

Yeah.

[Chris Hogan]

And you're also right to ask, what else have you been lying about? What else are you hiding from me? Because we had this little secret world that we built together, and you were out of it. You stepped out of it. You're not going to have any sort of ability to rebuild this marriage until you know how the depths of where these things go. I would recommend you pull a credit report today on both of you. Okay? He will have to pull his credit report. And if he says no, then that is. I can't think of a bigger red flag because. And again, I'm giving you the worst case scenario here. Okay? But when this happens in this way, it's not uncommon. For what's being hidden is not just screwdrivers and motorcycles, but it could be hotels, it can be dinners, it can be addictions that you don't know about. Everything is now on the table. And so I want to pull a credit report and not just look at his account. I want to see who he owes money to and I want you to pull your credit report. And this is going to sound caustic. I want you to pull a credit report on all of your kids using their Social Security numbers. Because when we. People call into the show all the time and they don't realize how bad it is and people start gambling or people get in over the head and they pull a credit, a credit card out on their nine year old and use that Social Security number to get a quick thousand bucks here or quick $2,000 there. And so that will give you the big picture of who you owe to what, who your family owes to what. Hopefully you have nothing on yours and your kids have nothing on theirs, and his is minimal. And what this is was a scared, embarrassed husband that took the easy way out and he is ready to stand tall, take his medicine, and y' all can rebuild trust. Worst case scenario is you're in a way bigger mess than you know yourself to be in. But you can't, you can't go to an untrustworthy person and demand that now you be trustworthy and think you're going to get any sort of nervous system stability from that because they've proven themselves to be untrustworthy over a long period of time. And so I need to see this stuff with my own eyes.

[Caller]

So how do I get a credit report done?

[George Kamel]

Like I got, it's a simple website.

[Chris Hogan]

It's all free.

[George Kamel]

It's annualcreditreport.com and you can pull free weekly online reports from all three major bureaus. It's Equifax, Experian and TransUnion. And so you'll just go through the steps, enter it. You never pay for this. This is free. So just go to that website and you can get that all done annualcreditreport.com and that, like John said, that will be the full truth and nothing but the truth. So regardless, I really don't care what he says. I want the reality of the situation. And again, if he's unwilling to do that, that speaks to much deeper things he's hiding. There's an alternate life here and that tells me he doesn't want healing in this marriage if he's not willing to come clean.

[Caller]

Right.

[Chris Hogan]

And let me say this. I want to applaud you for. Would you say you were calm so that he could feel safe enough to come forward? I. I want to applaud you for being in control, feeling big feelings, but being emotionally mature. But you don't owe him dishonesty either. Okay? Yeah, you're right to be enraged. You're right. You're right to be sobbing at the table because this man lied to your face into the face of his. Of yalls five kids. And so you don't also owe him a silver platter that he can gently put out his receipts on.

[Caller]

Right.

[Chris Hogan]

And so what? When I mean, be. You're responsible for the emotional, like, mature next Right. Action. That means I'm not going to hit him. I'm not going to swear at him. I'm not going to punch a hole in the wall. Everybody deserves dignity and respect, but you, you're dang well going to know I'm pissed off. Yeah, you're gonna know that everything in my life. I'm questioning it now.

[Caller]

Right.

[Chris Hogan]

And you're not crazy. And you don't owe him a false sense of yourself so that he feels comfortable coming forward with it.

[Caller]

Right?

Yeah.

[Chris Hogan]

That's not your responsibility to massage his ego through this. Also,

[George Kamel]

do you guys share an account or is everything.

[Chris Hogan]

No, he wouldn't share it.

[George Kamel]

So you have no access to anything financial. He pays the bills.

[Caller]

So he does pay the bills. We do have a joint, but he has his own as well.

[George Kamel]

So 60% he diverts to the joint account. 40% diverts to this secret account that's his.

[Caller]

Yes. Yeah.

[George Kamel]

Okay, well, starting today, he's going to divert 100% into this joint account.

[Caller]

Okay.

[George Kamel]

Or you separate if he's untrustworthy and he's going to destroy your financial life further.

[Chris Hogan]

Yeah, and Betty, that's. That's a great point that George brings up. You need to get really clear on your what I call your or what statement. Because if he looks across the table from you tonight and says, I'm not pulling a credit report and I'm not giving you access to this account, period, you have to have your or what statement ready or me and the five kids are going to my mom's house.

[Caller]

Or.

[Chris Hogan]

Well, okay, then I'll guess I'll just have to live with it. And you mentioned we have to fix this and stay together because we have five kids together. I need you to say that's the picture y' all created. And that picture is over because of his financial infidelity. Now y' all have to rebuild something new. And I hope it includes him and you and those five kids in the same house all working together to build something amazing. I hope that's the case. But you have to have the courage to say or what comes next and then be willing to live into your own boundaries. There. If he looks at you and says, I'm not playing.

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[George Kamel]

Sarah is in Jackson, Mississippi. Up next. Sarah, welcome to the show.

[Caller]

Hi. Thanks for taking my call.

[George Kamel]

Absolutely. How can we help today?

[Caller]

So me and my husband got married two weeks ago and we are debt free. Thank you.

[George Kamel]

How was the holiday? Did you guys go on a trip?

[Caller]

Not yet. We've both been at work. We're both in the military. And so as soon as we get a time where we can take some leave, we're planning on taking a little honeymoon.

[Chris Hogan]

I can hear you smiling through the phone.

[Caller]

Well, thank you. We're both still very excited.

[George Kamel]

I love it, dude.

[Chris Hogan]

I'm so happy. I love, love, love. I just think marriage is good. So good for you. So what's your question?

[Caller]

So we have $98,000 in cash combined. We just finished combining our checking accounts and savings account. And so we have that 98,000 in cash and currently we're bringing home $53,000. And we're trying to figure how figure out how much money we should spend on a vehicle. We really need to upgrade one of our vehicles. So out of that 98 grand, we're trying to figure out what is like a good amount to put towards a vehicle.

[George Kamel]

And your annual income is 53,000 a year between the two of you?

[Caller]

Yes, currently. But we're expecting it to go up within the next six months.

[George Kamel]

Okay, do you know an exact number or is it just sort of, you're not sure yet?

[Caller]

In about six months, we're expecting to start making 100 grand. Between the both of us, we're anywhere from 100 to 110 grand.

[George Kamel]

Wow, that's awesome. So you're about to double your income?

[Caller]

Yes.

[George Kamel]

Okay, and what's the urgency of the purchase? Does this need to happen tomorrow or six months from now?

[Caller]

It could happen six months from now. So, like currently I'm driving a 2005 Honda Odyssey and it's great for getting me to and from work. And he has a 2014 Dodge Charger. And we just know that, you know, they're both having some issues and we know that it's soon going to cost more to repair the vehicles than they're worth. So we've just been shopping around.

[Chris Hogan]

I would like you to know I just learned about this in Sunday school. Women who marry men with Dodge Chargers get a express pass to heaven.

[Caller]

Oh, my husband's gonna love to hear that.

[Chris Hogan]

Because generally men with Dodge Chargers are not marryable. But you did it. And so congratulations.

[George Kamel]

Debt free. Yeah, that's impressive.

[Chris Hogan]

I'm just playing, but congratulations.

[George Kamel]

So here's, here's the parameter for cars. Number one, you pay cash. You're going to do that, right?

[Caller]

Right?

Yes, we are.

[George Kamel]

Number two, we're going to buy used, unless we are net worth millionaires to where we can stomach that major hit on depreciation that cars experience in the first few years.

[Caller]

Okay.

[George Kamel]

And then number three, you want to make sure that all the things with wheels and motors in your life don't add up to more than half of your annual income. That's why I was digging at your income. And if it's going to go up, well, that changes the numbers drastically because right now you should have no more than $26,000 in cars as far as their value goes. But six months from now, that number can change because it's a smaller part of your world. So now you could have $50,000 worth of cars sitting in the driveway. So that's where I'm trying to go. Okay, can you wait six months to where you can get a nicer to you car because you have the money to do it? It's not going to hurt. You're not going to even dip into this 98k if you go spend 25 today. So what are you guys wanting to get? Because that really. Basically, what is the car you can afford in cash today that you think would last you at least the next five to seven years?

[Caller]

Okay, so we found. The reason we started asking these questions is we found a 2001 Ford Bronco with 12,000 miles on it for 32 grand. And so it's a little bit more than that. $26,000, but it's. You know, we've got the 32 grand for it. We just couldn't decide if, you know, it kind of hurts whenever you let go of 32 grand.

[George Kamel]

Yeah, I mean, it will hurt. And that's why I actually like it. Too many people, we've lost friction when it comes to purchases. And all you see is a $400 payment that the car salesman worked out for you on his paperwork. What you don't see is the interest you're paying, the length of the loan, how you got screwed on the purchase, the extra warranties they threw in there, because you're not going to feel it in your payment. And when you write a check for 32 grand, you go, okay, let's treat this car differently. We're going to treat this purchase differently. We're going to go slower.

[Chris Hogan]

What is it about an 01 Bronco? Has it been redone?

[Caller]

I'm sorry. It's a 20, 21.

[Chris Hogan]

I'm sorry. Yeah, okay.

[George Kamel]

I heard 2001.

[Chris Hogan]

Okay.

[George Kamel]

Wow, that's an expensive Bronco.

[Chris Hogan]

It must be completely redone. And, like. And those are. Man, Those guys who go redo Broncos, they're. They do amazing work.

[George Kamel]

Okay, 20, 21 Bronco, 32 grand. Here's my catch. I would wait until your income actually goes up and this becomes sort of a celebration of your. Your newfound income. But I would not buy it today because there's. There's just too many variables.

[Caller]

Okay. Yes.

That.

That's some good advice, because, like, we're both so undecided about it. And I told him. I was like, if we're having this much doubt about it, maybe we should wait.

[Chris Hogan]

He won the lottery marrying you. Yes. Yes. And, hey, George, tell me if I'm wrong here. I find that I get in trouble when I say I'm gonna. I have this much money to go. I'm gonna date myself. I'm gonna. I have this much money to go spend at the mall. I've got 500 bucks to spend at the mall, I need to get a pair of pants and some shoes and a shirt. I will figure out how to spend all $500. Where I've seen success is I have a boundary. I can't go beyond this 500 bucks. But I need to go buy a pair of shoes and some jeans and a shirt and then I only spend a couple hundred bucks. You get what I'm saying? And so I would love for you guys to plant to dream about what kind of cars do we want actually and what cars are going to last us for a while. And then over the next six months, you can keep your eye open for because you might find this exact car in two months for 19 grand or 18 grand spend. And instead of saying, okay, we have this much to spend because you'll figure out when it comes to automobiles, especially how to spend exactly 50 of your income. And that's like a stretch goal, right? You don't have to spend that much. And you two are awesome at driving used cars. That's, that's your life. It looks like your, your identity isn't in them. And that's awesome. I would, I would sit down and say, what do we actually want to have together there? And then plan that way.

[Caller]

Okay.

[George Kamel]

And let me tell you, a $3,000 repair, as much as it would suck on a really old car, is still so much cheaper than $32,000. And so that's what I want. Encourage too many people go, well, the rep I had a repair, so we had to get a new car, didn't want to deal with the repairs. And they just justified in their minds thinking this thing's a clunker. So even if you have to buy yourself some time for the next six months until your income goes up and this becomes a no brainer, it's worth the patience to do it right and go slow. But you're all, all things considered, it's all green flags in my book.

[Caller]

Okay, awesome. Well, I'll be sure to tell them. And, and thank y'. All. Y' all definitely brought some clarity to the situation.

[George Kamel]

Happy to do it. Thank you for your sacrifice and service to both of you.

[Caller]

Oh, thank you. We are so glad we get to do it.

[Chris Hogan]

Yeah. And the last thing I'll tell you is you got the Honda, so you're probably going to be driving that to the apocalypse.

[George Kamel]

I do have one reel in my house. The wife should be driving the nicer car. I just, I don't like it when the guy drives a nicer car.

[Chris Hogan]

I'm with you. That's always, I've always had a weird thing about that.

[George Kamel]

It just feels always, always, always so. Especially if she's, you know, toting the family around and the guy has like a sweet sports car that's just for him. I'm like, all right, you're a Grown

[Chris Hogan]

man, dude, 1000% with you.

[George Kamel]

The other thing is, and John, people get screwed on this. They go to the dealership and the dealer says, hey, you know, for, for five grand more, we can get you into the brand new one you got on the lot. Look at this. It's got these extra features and hey, if you do the financing, we'll knock a thousand bucks off. Now all of a sudden you are buying a brand new car that was way more. They suckered you into the warranty in the paint protection package and the giant dock fee, dealer fee they just throw on there. And you're so starry eyed, you just want to get out of there after six hours and go drive this thing.

[Chris Hogan]

And by the way, that 5,000 extra you spend on the new One One, you might as well set it on fire because the moment you drive it off, it's gone. You just lost it. It's now worth what you were about to pay for the used one, Right?

[Caller]

Yeah.

[George Kamel]

A new car will depreciate 10% the moment you drive it off the lot.

[Caller]

There you go.

[George Kamel]

And within the first five years, 60% on average. Yeah, that's pretty wild.

[Chris Hogan]

I love, love, love buying cars that are five years or older because of the, the depreciation has burnt off so much.

[George Kamel]

Yeah. My last car, one owner, 4,000 miles on it, and I got 26% off of what I would have bought it brand new. So I went, all right, I'll deal with that. I'll take. And you know, I could have bought it new, it would have been fine, but I just like going 25% off feels pretty good.

[Chris Hogan]

And I've got cash, so. Yeah, and I'm not afraid of that.

[George Kamel]

You gotta have walk away power. That's the key. You walk in with a check of, here's our budget. Either make it work or we'll go down the street. And eventually if they want, you know, to feed their family, they're gonna go, all right, we'll take it. Yeah, don't let them bully you. Focus on the out the door price. Have your principles and values, stick to it and you will make a wise decision when it comes to those cars. Love it.

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[George Kamel]

to remain active on Boost Mobile unlimited plan. Welcome back to the welcome to the Ramsey show in the Fairwinds Credit Union studio. I'm George Camel joined by best selling author Dr. John DeLoney and we're taking your calls at 888-25-5225. Rochelle is in Sacramento. Up next. Rochelle, how are you doing?

[Caller]

I'm doing well. How are you two?

[George Kamel]

Fantastic. How can John and I help today?

[Caller]

So my husband and I are considering purchasing a new home. Our house is currently up for sale. We've identified a property that we would like to purchase with the equity from the sal current home. We would have a rather sizable down payment. Looking to put down at least 50 if not 60% on a new house. My husband has brought up the idea of getting a first lien HELOC with a sweep account versus a conventional mortgage. And he's explained to me that with this first lock HELOC with a sweep account rather than getting into a 15 or 30 year loan, we would be able to pay off a $400,000 mortgage in eight years.

[George Kamel]

So I'm wondering, is he clarifying?

[Caller]

No, the speaker came on his phone. I apologize.

[George Kamel]

Oh, it's all good.

[Caller]

So I was wondering. It sounds great. I've never heard of this before. So I was wondering what you guys thought about that.

[George Kamel]

So this in the, in the TikTok world is called velocity banking. He may have heard about it on social media. I don't know where you know, this is it but it's a trend where they call it like a mortgage accelerator. And the idea is there's this revolving line of credit almost like a big credit card that's secured by your house, but it's your only loan on the property. So you're right, it's your first lien and that there is no mortgage there. And so then what you do is you dump all of your income into this heloc, draw it out for expenses, and if you do it perfectly, you can save a little bit on interest which supposedly pays off the house faster. So that's what he is wanting to do. There's still a lot more risk with it. And it sounds sophisticated and it's more complex and that doesn't make it better. So have you guys priced out a traditional 15 year mortgage on this?

[Caller]

We've priced out a 30. We have not priced out a 15.

[George Kamel]

Okay, I would price out a 15 and see if you guys can afford that payment where it's a quarter of your after tax monthly income. And if not, it tells me the house that you're looking to buy is too much house.

[Caller]

So your recommendation would not be to do a first lane?

I wouldn't do it with a sweep account.

[Chris Hogan]

No.

[George Kamel]

And I think the way he found this was probably online and there's a bunch of people out there who are proponents of this. And again, it's called velocity banking. You can look this up on social media and it's going to be some slick dude telling you how this is the hack. Here's the only hack that works. You get a 15 year mortgage which is going to have a lower interest rate than either of these and then you pay it off aggressively.

[Chris Hogan]

Here's the thing that if you take out, if you have a $400,000 mortgage and y' all put down 50% and you have $200,000 left, there is no secret loan that makes you not have to pay back $200,000 plus interest. And so the only true way, like, so like we can do a 30 year note, but we can pay it off in eight years, you're still going to pay back that money plus interest. And so if y' all want to pay it off in eight years, that's amazing. Pay it off in eight years. But that just means every month you're going to be paying more towards the principal balance to pay it off faster. But there's not like a secret loan you can do that. You pay back a hundred grand to pay off $200,000. You get what I'm saying? Like the whole hack is technically you can get a lower interest rate and technically you can take that lower interest rate that you're paying and pay off More principal, but the same thing applies, just paying it faster.

[Caller]

Understood the way he was explaining it to me. And this is kind of where my brain starts to shut down and my eyes glaze over. Same girl, the finance, he's more of the finance person. He was explaining to me that it gets paid off quicker because they compound the interest daily.

[George Kamel]

Yeah. The way it's calculated, that's where the interest savings come in. But there's still all of the elements of a heloc, which is a variable interest rate, which means the payment can go up, the banks can freeze or call the line, which adds more risk to it. It's revolving line of credit secured by your home. And so all of that just makes me go, why are we doing all this? Why all this gyration? To maybe save a little bit of interest.

[Chris Hogan]

I 100. Especially with all the volatility in the world right now. Like go back 10 years in your life. Can you have imagined now?

[Caller]

Right.

[Chris Hogan]

No. None of us could have. And so with all the volatility in the world, the chances of me touching a variable interest rate is zero.

[Caller]

Right. Right.

[Chris Hogan]

And so you can get in if you got in today and the banks. And suddenly Jerome Powell comes up tomorrow and says, hey, because of X, Y or Z, we're raising interest. Like, man, y' all are on the hook for it.

[Caller]

Right.

[George Kamel]

And there's far more of these ending up in foreclosure versus a 15 year mortgage. And so that's where I go, okay, why aren't we doing a 15 year mortgage and just putting extra on the principal? It's the exact same thing without all the extra risk and, and complexity.

[Chris Hogan]

I'll, and I'll, I'll go one more. I'm putting my baggage out in the world. So this may not be you and your husband, but if you give me a revolving line of credit and suddenly I don't like my floors, I'm going to get new floors. Because it's not real money. It's just coming out of, coming out of the revolving line of credit. Oh, we need to fix this cabinet. We need to get a new fridge.

[George Kamel]

Let's just Monopoly money.

[Chris Hogan]

Let's just go ahead and do it. It becomes not real money. And yeah, I, I'm just going to lock myself in and pay it off. And if I want to accelerate and pay it off faster, I'm going to do that.

[George Kamel]

That I don't know that we can convince your husband, but I hope we convinced you, which I hope puts enough of a wedge between you guys that you don't do this.

[Chris Hogan]

And here, here's my rule of thumb, George. If somebody's explaining something to. You know who I learned this from, of all people? Ashton Kutcher.

[George Kamel]

Not on my bingo card.

[Chris Hogan]

And here's why he was talking about. Somebody was asking him once on a panel, why do you seem to have so much success with these companies you invest in as an angel investor? And I forgot all, I think, Airbnb and Pop Chips and, and Uber. So he got in on the ground floor of all these things, and he said he. I think he dropped out of high school, or maybe he finished high school but didn't go to college. And he said his one line was, explain this to me like I'm a high school dropout, or explain this to me like I'm a high schooler, and if they couldn't do it, I didn't invest. And so for me, when somebody's trying to explain to me a thing we're getting into and, hey, Deloney, I want you to invest in this thing. If my eyes start glazing over that, I'm out. If you can't explain it to me, very simple. Here's why, here's the terms, here's the payout, or here's the risk we're all going to take together. If you can't do that in a sentence or two, I don't want to participate in it. Yeah, because. Because it's not. It's not worth all the complexity because now the more variables, the more fragile the whole system is and the more dependent it is on other people to do what they said they're going to do and that what those other people said they were going to. I'm out. I'm out. It's too fragile.

[George Kamel]

Yeah, well, there's a lot of people that talk about these things, and I see very few people actually doing it. I've never heard of someone saying, yeah, the way I paid off my house early was I did velocity banking.

[Chris Hogan]

I know zero people who have told me that. That line.

[George Kamel]

There's a lot of people talking about it, though. And so that tells me something. It's. It gets the clicks and the views, but it doesn't work in reality. And you don't see the people who foreclose on their home, they're not sharing that on Instagram. They're only sharing the wins. And so I'm always very cautious with any financial advice on the Internet that I don't understand. And we always tell people, don't invest in anything. You don't understand. The same applies to crazy mortgage hacks. Here's a hack get as small of a loan as possible on a short of a term as possible and pay extra towards it. I can understand that. I could explain that to my toddler and she would get it. There you go. So the real question is, how are you going to approach this with your husband in a way where you come to a compromise? And I hope that compromises go with the thing that you both understand that you both can handle. Hey George Camel here. Let me pull back the curtain on something you may not know. If you're in debt and collectors are threatening lawsuits, the worst thing you can do is ignore it. That's exactly what they're counting on. Because when you do nothing, they can take you to court. And if you don't respond, they can win by default and even get access to your bank account. And that's why I tell people about Guardian Litigation Group. Guardian Litigation is not another debt relief company with some bait and switch tactic and empty promises. They're an actual law firm with real attorneys. And from day one you get an attorney who represents you. They step in when collectors are trying to push you around and they handle it. So instead of panicking, you've got a plan for peace of mind. So if you're backed into a corner and facing imminent legal action, don't stick your head in the sand. Ignoring it will make it worse. And Guardian Litigation is who you contact when it gets worse. So go to guardianlit.com Ramsey that's guardianlit.com

[Chris Hogan]

Attorney Advertising Results may vary and no

[George Kamel]

specific outcome is guaranteed. The Ramsey Show Question of the day is brought to you by why Refi? If your private student loans are in default and you're not sure what to do next next, why Refi can help you explore refinancing with a low fixed rate and a payment plan based on what you can actually afford. Go to yrefi.com Ramsey that's the letter y r e f y.com Ramsey may not be available in all states.

[Chris Hogan]

Today's question comes from Carlos in Texas. He says my pre teen son has his own YouTube channel and he's on pace to earn over 5,000 bucks a month soon. Should he be tithing on this income? Income? How much should I encourage him to save or invest versus spend? He understands taxes so we've got that part down. Left to his own devices, of course he's a preteen kid. He would buy all the Legos in the world.

[George Kamel]

Yes, of course that's all this is fantastic.

[Chris Hogan]

That means he's a good regular preteen kid and he's an adult in his life to help Steward. Steward, how he spends his money.

[George Kamel]

Yeah. So he's making, I mean if he's on pace to do five grand a month soon, that's 60 grand a year that a preteen is making.

[Caller]

Right.

[George Kamel]

Which tells me he's what, 11 or 12 possibly. Pretty nuts.

[Chris Hogan]

That's great. So like right off the top we can just do the math real quick. Some people, and I'm assuming tithing, it means you're, you're a person of faith. And so tithing some people tithe off the top line, meaning you would tithe at 10%, 6,000 bucks a year if you're making 60s. Some people tithe on after taxes are gone. What do I, what am I bringing home that I can spend? They tithe off that. Every one of those things is a matter of you and your spirit. But I do, George, think it's important to teach kids. We save a piece of our money, we give away a piece of our money. Even if you're not a person of faith, generosity has all, I mean it's wired into us, it's, it's part of our psychological and emotional and spiritual health. And spend, you have money to spend. And George, I like the idea with a pre teen kid when it comes to spending. So after you've saved a chunk of money, after you've given a chunk of money, I like to let young kids, my kids kind of buy what they want to buy because they, that's the way they learn. Oh, I wish I had that hundred bucks instead of that completed LEGO set. Or maybe they get that completed LEGO set and it's great and they learn what they like and don't like. But man, watching my 10 year old navigate date. I got $50 and I want to go buy a thing. Are you sure? Yeah, I really want to buy it. And then the next time she wants to, she earned, saves up some money, she wants to buy something, then we could say, hey, where's that thing you bought last month or two months ago or three months ago? Oh yeah. Do you really want that? No, I don't want.

[George Kamel]

They sort of learn.

[Chris Hogan]

So you, they learn temporary effects of stuff. Yeah. Telling a pre teen, you don't really want those Legos, they're like, yeah, I do. And so I like letting them, when they have their spend money, kind of let them buy what they want to buy. Unless obviously not, not grand theft auto or something, but like within your family's values. But I like them to learn that lesson. But they should be saving some, they should be giving some. And that's, that's going to be a personal decision.

[George Kamel]

Yeah. And at this age, it's less about, you know, you got to be legalistic about these percentages. It's more about, hey, are you kind of budgeting this money like a business, like a profit and loss statement. So I would have him, you know, jump on everydollar, make a free account and put his 5,000 there and say, all right, I'm gonna give 10%, 500 to the tithe. I want to invest a thousand before I ever get to enjoy the money. I'm going to sort of eat the vegetables, do the things I know are good for my future, good for me. Now invest 1,000 bucks, maybe you save 2,000 bucks. He probably has some goals to like, get a car one day when he's 16. And I would spend a thousand bucks. I feel like it's a reasonable amount out of five grand for a kid with no expenses. Let him do it. Let him see what's actually worth putting his money into and what's not and even reinvesting into the business.

[Chris Hogan]

Yeah.

[George Kamel]

And maybe you want to upgrade equipment.

[Chris Hogan]

That's right. There you go. And I, for a young kid especially, I think for adults too. But for a young kid, I think it would be valuable, let's say he's 12, to say how much if you make 60 grand, which by the way, if you're living off YouTube, they change their algorithm every other week. And so best of luck to you. But college would. We want to put $150,000 in a college fund. So let's reverse engineer that by month. What would we need to start saving now that would get us that amount of money? You want a car when you're 16, you're 12 now, so that's four years away. Let's say we want $20,000 for a car. What do we need to start saving now? So creating long term sinking funds will teach him at a young age. Like, okay, if I want something big like college, like a house, like a car, I got to start planning now for those things when I get there.

[George Kamel]

And if you can teach them about taxes, about quarterly estimated and self employment, 15%.

[Chris Hogan]

So he's one.

[George Kamel]

Like, as soon as that check hits his account, 30% goes into a savings account earmarked for taxes.

[Chris Hogan]

Yes.

[George Kamel]

If he learns that now, he's never going to be calling in saying, I owe the IRS 150 grand. Because I didn't realize I owe taxes on this money. That's adults call into the show doing that. So yeah, 12 year old can figure this out.

[Chris Hogan]

I think I heard Dave say this once that one of the greatest tricks the government ever pulled was the automatic tax deduction that if every American had to write a check every month, month,

[George Kamel]

show up at the tax office and hand over a check or cash, we'd

[Chris Hogan]

be paying a lot more attention to what the government spends. Right.

[George Kamel]

Throwing some tea in the harbor again.

[Chris Hogan]

Correct. So you want to change culture. You want to create a generation of Libertarians. Have your 12 year old start making some money and saying, oh, you made 5,000 bucks this month, 2400 bucks. Not yours. Like why not? Well, you know, ouch. We gotta keep these pet projects going.

[George Kamel]

That's a great problem to have. And again, we don't know how long this is gonna last. So enjoy the ride while it lasts and make sure that he, you know, keeps his head on straight and watches his mental health because YouTube is a. Can be a wild place. All right, John is in Orlando up next. John, welcome to the show.

[Caller]

Hey, thanks for having me, guys. How you doing?

[George Kamel]

We're doing great. What's your question today?

[Caller]

Okay, so I'm 52, I have a nine year old son. I have 50, 50 custody of. I make about 65,000 a year. 25% of that is being garn and that'll be going on for another about a year and a half. I have an additional 25,000 in IRS debt and 25,000 in credit card debt. I have just come upon and found these trading cards, baseball cards that I had put away. And they are now worth a lot of money. They're liquid up to about, I'd say over 200,000. Wow. I don't. Yeah, they're like Shohei Otani rookie cards that are signed. I don't have any savings. It's a long. The divorce was bad. Yeah. You.

[Chris Hogan]

Based on what you just told us, you went through a pretty rough season, huh?

[Caller]

Yes, it was really bad. I lost my dad, I lost my job of 12 years. Then I got divorced. My son was born in, in. I don't want to give the exact date, but in December I lost my job. The following January I bought my first house. Six months before that we moved into. And then I got divorced two years later. It was just. I lost my dad nine months before my son, 10 months before my son was born. So it was a bad time. So anyway though made bad choices. The 401k was emptied out when I lost my job. I stayed at home. The best thing that happened was I stayed at home with my son for nine months and that was a great time. But we went through my 401k at that time and due to that and because I was in a different state at that time, they wanted the taxes on that money from the 401k distribution. That was early. And I had also inherited some money from my dad which they wanted from that too. Unfortunately I wasn't in Florida at the time or else I would have been fine from what I've learned. So anyway, what I want to ask is I have this debt, I have these cards that are probably going to be even worth more money down the line. But I have this debt now and I want to leave something for my son and I can't just keep living paycheck the check right now because I'm just at the end of it. I just can't do it anymore.

[George Kamel]

I'll tell you this, John. I'm going to solve for peace in the present, not go man. What, what could I have if I hung on to him for five more years? I'm paying off the debt, all of it. That's 50k. I'm setting up an emergency fund for myself of six months of expenses. I'm going to fully fund a Roth IRA for the year to set myself up for the future and then maybe have some leftover to enjoy and spend and set aside some for taxes because you're going to have capital gains on that.

[Caller]

Yeah, my work does offer 4% match which I haven't signed up for yet because I didn't know if I was going to go bankrupt before I realized what I had.

[George Kamel]

Not anymore. This is your fresh start, man. I would pay off the debt they

[Caller]

offer the 401k pre tax or the IR Roth IRA up up to 4%. Yeah, the Roth IRA.

[George Kamel]

I mean I love the after tax option because then it's going to grow tax free for the rest of your life. And so I would definitely pay off the debt, get the emergency fund fund, get the 4%, at least fund a Roth IRA and if you hang on the line, I'll send you my book Breaking Free from Broker to walk you through that whole plan. But I would sell these cards to give yourself a fresh start.

[Chris Hogan]

Never look up their potential future value again. Sell them and be done.

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[George Kamel]

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[George Kamel]

Buying or selling your home is one of the biggest financial transactions of your life. So you want an expert in your corner who's fighting for you to find the best deal for the right price. And the Ramsey trusted program is the only way to find a top agent you can trade trust who will help make your home a blessing, not a burden. Super easy. You can compare agent profiles, interview them and choose the right one to work with. You can find a local Ramsey trusted real estate pro for [e-mail] agent or click the link in the description if you're on YouTube or podcast. Jordan is in Miami. Up next. Jordan, welcome to the show.

[Caller]

Thank you. Thank you.

[George Kamel]

Sure. How can we help today?

[Caller]

Hey, I'm just trying to figure out how I get out of this momentum of just wanting to keep going just with my life in general. I'm not like a point, I'm not like a breaking point in my life where I'm currently stuck in the city I'm at with the job. I just, I'm not good at and I'm 3,000 miles away from home, so it's kind of been a little hard for me.

[Chris Hogan]

Yeah. Hey, do me a huge favor. Talk right into the phone, brother.

[Caller]

What?

[Chris Hogan]

Why are you stuck in in Miami?

[Caller]

So I recently bought a car from a dealership that they claimed had no problems up in Idaho. And I had a friend who does door to door sales and he's like, hey, let's do some sales with me. I'm like, you know what's gonna hurt doing that? I reached Nebraska. My car has transmission problems. I take it to Subaru. They can't buy it off me, so I have to leave it as storage unit, fly out down here with the rest of the money I had. And now I'm just struggling and with sales I just, I'm just lost of what I need to do. Plus I'm in debt, so.

[Chris Hogan]

But I mean, when you say stuck,

[George Kamel]

can you legally move tomorrow?

[Chris Hogan]

Yeah. Could you get a bus pass or could you like, like just suck it up and call your parents and say I need a bus pass home and go home.

[Caller]

I don't have parents.

[Chris Hogan]

Okay. Could you work really hard for the next 30 days and get a bus pass and go home and get out of this mess?

[Caller]

That's, that's the issue. It's like I feel like every, everything I do I got, I got. For the past week, I've been, I've been busting my butt. I've been out there 10, 12 hours a day and trying to make these sales.

[George Kamel]

Doing door to door sales?

[Caller]

Yes, sir.

[George Kamel]

What are you selling?

[Caller]

Pest control.

[George Kamel]

Are you making money doing it? What's your average week or month look like?

[Caller]

So the average week is around 4,000. That's just in like sales commission, which is like $1,000. Personally.

[George Kamel]

Four grand a week

[Caller]

for market. It's based off of commission. So we've sell the thousand dollars, but that's for the company.

[George Kamel]

Okay. What are you taking home though? What ends up in your bank account at the end of the week?

[Chris Hogan]

1,000 bucks a week.

[Caller]

A little less. Probably like 600.

[George Kamel]

So you're making about $2,400 take home pay doing this?

[Caller]

Yes, sir.

[George Kamel]

Okay. And that's going to stay that way for the foreseeable future. I mean, this is you busting it.

[Caller]

Yeah.

[George Kamel]

For 600 a week. What's stopping you from going to find a different job in Miami?

[Caller]

Well, the way they have it around here is there's a five. It's like a hotel room with three rooms. And it's just a rent problem. And I don't have. If I tell them like, hey, I need to find them a job, I don't know if they're gonna allow me to stay. So it's either.

[George Kamel]

So you're living rent free as part of the deal?

[Caller]

No, it's 800amonth.

[George Kamel]

So you could find a couple of roommates and go elsewhere.

[Chris Hogan]

Yeah. This is a nature of servanthood, man.

[Caller]

Right.

[George Kamel]

I don't think you're as stuck as you think you are. I think you're just depressed.

[Chris Hogan]

Yeah.

[George Kamel]

Yeah. And you don't have the energy to get unstuck.

[Caller]

Right.

[Chris Hogan]

Where's your parents, brother? What happened to them?

[Caller]

They passed away.

[Chris Hogan]

When did they pass away?

[Caller]

Last year.

[Chris Hogan]

Okay. Do you have siblings?

[Caller]

They also passed away.

[Chris Hogan]

So you lost everybody in your family

[Caller]

was a hit and run with a drunk guy. Device in my truck, man.

[Chris Hogan]

I'm so sorry, brother.

[George Kamel]

You got any friends in the area?

[Caller]

I'm with my best friend. He's the one who's kind of like. Because I. I've been working in Idaho just as like, as a manufacturing company doing like, AR triggers just for a, you know, 16 hour. And it was miserable. And he was like, dude, we gotta get you out. We gotta, you know, get some life back into you. And I was starting to believe him because it's Miami. I mean, who doesn't have fun in Miami? And I was just like, yeah, man, let's do it. Whatever. And then as life can't get worse, this dealership screwed me over with my dream car that I saved up a lot to buy.

[George Kamel]

What do you owe in the car?

[Caller]

21,000.

[George Kamel]

And what's it worth?

[Caller]

About 25.

[George Kamel]

Is that in its current condition, it's worth 25?

[Caller]

No. In a certain unit, it's probably worth like eight grand because there's transmission problems

[George Kamel]

and you can't afford a new transmission, obviously.

[Caller]

No.

[George Kamel]

What other debt do you have?

[Caller]

A storage unit in Nebraska.

[George Kamel]

What other debts do you have?

[Caller]

I have a personal loan for about three grand. I was hoping to use that to kind of just get me a little push forward while I'm in Miami. I mean, so far it's not going horrible. I just need to find a way to get myself out of this mentality where I'm not good enough to or where I feel like I'm not trying enough to make these sales or keep going.

[Chris Hogan]

Bro, I. I know you feel like you're at the bottom right now, but I'm telling you right now, I've been doing this for my whole career. You, it's. You had a massive loss in your life and you got to go sit down with somebody. And I know you can say you don't have time or you don't even have the resources. I. I'll give you six months free with better help. But I think you're going to need some in person sitting with somebody to metabolize the amount of grief and loss you've. You've experienced in the last year.

[Caller]

Year. Right.

[Chris Hogan]

And I'm just telling you, therapy changed my life. I'm still here because of it and it's worth it and you're worth it. But you got to go sit down and talk to somebody. You're not going to be able to power through this because there's nothing to power through.

[Caller]

Right. It's kind of like treading through mud with.

[Chris Hogan]

That's right. That's right. And another loan's not going to get it. A dream car is not going to get it.

[George Kamel]

Even another job isn't going to heal it.

[Chris Hogan]

Yeah. 16 hours another job might give you some margin. It might keep you from feeling like you're living a failure factory.

[Caller]

Right.

[Chris Hogan]

I couldn't do. I would be terrible at door to door salesman. I would do it if that's the only way I could feed my family. But I'd be terrible at it. I don't want you doing something that you're terrible at that is just compounding this vision of yourself in the mirror.

[Caller]

Yeah. And it's like, I do have a dream. I want to help people. Like, I want to. I always talk with my parents about this because they've always noticed it about me. I want to, like, I want to help people, especially literally the situation I'm in right now. Like, that's what I want to do. I want to, you know, be able to tell my story or.

[Chris Hogan]

Yeah.

[Caller]

You know, help them. I want to be a psychology.

[Chris Hogan]

That's awesome. But listen, you. You can't give what you don't have. And so the best therapists I know as friends and colleagues myself, the people who are best at helping others, have had their own, own journey getting the help they needed.

[Caller]

Right, Right.

[Chris Hogan]

And it's you just opening your hands up saying, okay, I've tried a new car, I've tried a new job, I've tried a new state, I've tried a new location. It's time for me to get with a professional and face this head on.

[Caller]

Right, Right.

[Chris Hogan]

But I would tell you, I don't think you're broken. I think your body is trying to take care of you, man. And it's just saying, hey, we got a lot to metabolize and a lot to process and a lot to walk through it'. Oh, so much, brother.

[Caller]

Right.

[Chris Hogan]

Okay, so hang on the line here. I'm going to hook you up with six months of better help, license counseling so you can get started today. You can reach out to them today and then hopefully they can connect you with some resources in your local area.

[George Kamel]

I'd also like to get them a copy of your book, John.

[Chris Hogan]

I'll send you a building on anxious life. I'll send you the audio book and the regular book. Maybe you can listen to it while you're walking door too. But it's not going to be the thing that fixes you in this moment. I don't think you're broke and I don't think think you need fixing. I think you need healing and I think you need somebody to sit with you for, for a season. But man, we're, we're praying for you and we'll be walking along. We'll give you the resources we got. We'll send you every dollar too to get you get help you get your money screwed on straight. But man, for as hard as you're working for 600 bucks a month, maybe a fast food job or something would help.

[Caller]

Foreign.

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[George Kamel]

Sean is in Daytona beach up next. Sean, welcome to the show.

[Caller]

Hi, thanks for having me.

[George Kamel]

Absolutely. How can we help today?

[Caller]

All right, so I'm a merchant marine. Merchant Marine for about 20 years.

[Chris Hogan]

Rich, do me a huge favor, Sean, talk directly into the phone for me.

[Caller]

Sure.

[Chris Hogan]

There you go.

[Caller]

I am a merchant Mariner. I've been one for about 20 years now.

[Chris Hogan]

Awesome.

[Caller]

I have multiple jobs but my primary is in the merchant marine. My other is I'm an over road trucker and I do construction and that sort of deal too. But basically what ended up happening to me was I was married for 10 years and I had moved up pretty high on the ships. I was doing about 110,000 a year for myself. And then my ex wife was doing an additional maybe 50 or so. So we had the bills associated with $160,000 a year household. During COVID I got forced to step away from my job because I didn't get vaccines, because I didn't trust it. And also I wanted to retire to be home with my young child. So basically I forcibly retired with about $100,000 in the bank. And then we got hit by a hurricane and I had to do a second mortgage on the home from the SBA to, you know, pay for the roof, the fence and everything that got destroyed. And then we got talked into the solar panels and. And while I was home, I was working 10 jobs and making about an eighth of what I was making on the ship. So my ex wife decided that because. And this is what she said to my face, because I was making less than her. She lost all respect for me as a man. And then she cheated on me with someone who made way more. And yeah, everything. So the divorce happens. Just settled the middle of last year and I went back to the ship because I was not mentally healthy. And in order to keep my kid through the divorce, I basically had to swallow all of the bills for $160,000 a year household. And by stepping away, I lost my promoted position. So now I've gone from about 110 a year personally down to about 74. So I have about $250,000 worth of debt and almost all of it is in the household. I'm just so stressed.

[Chris Hogan]

Yeah. All right, so how can we. You've been through a lot. How can we help? Help?

[Caller]

Well, I. I just think I might need somebody to tell me that my, my five year plan is somewhat workable and that I'm not an idiot.

[George Kamel]

But it's five year plan to what? What's the goal for you

[Caller]

to be able to actually retire and actually go see my son.

[George Kamel]

How old are you?

[Caller]

He's six, but he is barely in the past. I'm 37.

[George Kamel]

Okay. Why do you need to retire in five years or else? Where did that come from?

[Caller]

Well, I don't need to. That's kind of what I would like to do. At least retire from this career and do some work.

[George Kamel]

When you say retire, you mean you have enough assets that replace your income to cover your bills and lifestyle style? Correct?

[Caller]

By. By retire, I mean be able to shift into a career where I can remain in the area of my home.

[George Kamel]

Got it. So you just want like an encore career that keeps you local, Right?

[Caller]

I mean, that's Currently I'm an over the road trucker and a merchant mariner.

[Chris Hogan]

Okay, here's the thing. I, I, I again, I know these, these conversations are really compressed. And so what I'm hearing is, and none of your plan is going to work unless you make this change. Okay?

[Caller]

Right.

[Chris Hogan]

You have to take ownership of all the choices you've made. Because the way you told that story, other than your wife being like a horrific human. Human. Right. Other than that, every choice you made from. I had to get a second mortgage. I got talked into the solar panels even though I had 100 grand in the bank. I had to do this, I had to do that. I chose like, I want you to take ownership of. I made some choices that have landed me here. Or I made some choices that gave me no margin and then boom, I got hit with a literal hurricane and a hurricane inside my mare courage. And I had no cushion because I made some choices. And when you take that level of ownership, it's it, it, this is all neuroscience, brother. It puts you back in the driver's seat of your own life and it begins to.

[Caller]

I'm fully aware that I made some mistakes here.

[Chris Hogan]

Okay, awesome. So I, I'm hard pressed to believe that a guy that works as hard as you do, that has the skill set you have, could not find a $75,000 a year construction job or a building job in your local community. Am I crazy?

[Caller]

No, you're actually, that, that doesn't work. I have looked. There's very few jobs in my area that would pay that without forcing me to go get an entirely different skill set.

[George Kamel]

Okay, you have like seven skill sets. Get an eighth one.

[Chris Hogan]

Yeah, yeah.

[George Kamel]

What's stopping you?

[Chris Hogan]

That's what I'm saying. Like the picture you had of your life, it's over now. It's ended. And so the question before you is, do you want to keep living a life where you won't see your kid till you're 11? And I'm not judging that. I just want you to take ownership of this is the choice I'm making. Or I'm going to sell this house and get a one bedroom apartment because this dream is over.

[Caller]

And. Well, I didn't really get to that part, but currently the house is on the market.

[Chris Hogan]

Okay, great.

[Caller]

It, it should sell somewhere between 215,000 to 230,000, which would give me roughly about 10 to 15,000 cash in hand.

[Chris Hogan]

Amazing.

[George Kamel]

Is that after you pay off the solar, pay off the second mortgage.

[Caller]

Yes.

[Chris Hogan]

Awesome.

[George Kamel]

Okay, great.

[Chris Hogan]

I mean, that gets us, I'M proud of you for that.

[George Kamel]

That gets rid of a large majority of the debt. What other debts are there in this? 250k?

[Caller]

I just managed to pay off $25,000 worth of credit for deadlock. And out here.

[Chris Hogan]

Amazing. That's awesome.

[Caller]

So I got an additional 5,800 worth of credit card debt. My ex wife's car loan is still in my name but she pays on that thankfully. But basically what I'm seeing for my future here is I need to be a merchant marine because it's the most. My child's health insurance free of charge. No, nothing.

[George Kamel]

Got it.

[Chris Hogan]

Okay.

[Caller]

So saves me.

[Chris Hogan]

I, I personally, I, I personally like you just laid out a map and I'm, I'm hearing a man stand up and get in the driver's seat of his own life. I'm going to sell this house and I'm going to have 15 grand in the bank and I'm going to pay off this 5800 credit card. I'm going to owe nobody anything. And then dude, if you go make $50,000 as a school teacher, it will come with health insurance. Personally I'm gonna, I would choose less money and more time with my kid than I would never see my kid for this quote unquote free health care. That free health care is coming at a major cost to your relationship with your son, to your psychological well being, to your overall financial well being. And so you make some sacrifices like you're making right now. I'm gonna be a one bedroom apartment dad right now. That's the world, that's the cards I've got. And I'm going to be a teacher and on the weekends I'm going to drive trucks and in the evening I'm going to repair, I don't know, people's front porches or something because you've got that skill set. I'm going to do what I got to do to scratch and claw. I'm telling you man, that kind of hard work gets rewarded over time. But you're, you're, it's, again, it's, you're making some amazing sacrifices. And also so another foot is still trapped in this. Well, I guess I gotta. And dude, I've got personal family and friends who are locked into a forever blue collar life that's killing them because I get a good deal on health insurance or whatever and that's just not a trade.

[George Kamel]

This 160 grand lifestyle, your income got cut in half.

[Caller]

Yeah.

[George Kamel]

You have a $74,000 lifestyle now and so you're gonna have to make changes to your life, your budget, your career to have the this life you want. We're rooting for you. We think you have more agency than you think.

[Chris Hogan]

Yeah. And you're doing it. You're doing it.

[George Kamel]

Welcome back to the Ramsey show and the Fairwinds Credit Union Studio. I'm George Camel here with Dr. John Deloney taking your calls at 888825 5225. Carson is in San Antonio. Up next. What's going on, Carson?

[Caller]

Hi. Thank you for answering my call.

[George Kamel]

Sure.

[Caller]

So I learned about Dave Ramsey last year, and I've been following this debt snowball. I paid off over $40,000 of credit cards, cars, and wedding debt last year.

[Chris Hogan]

Congratulations, man.

[Caller]

Oh, thank you.

[George Kamel]

Just please buy that.

[Caller]

Thank you. I only have two debt left, but these are really big. So I have $180,000 of student loans and also 180,000 doll mortgage. They're both at 5.875%. So it's a bit of a marathon to pay these off. But I did learn that my family has a history of cancers like lung cancer, thyroid cancer. My dad actually went from seeing colleges telling him that he doesn't have cancer to battling stage four lung and brain cancer a year later.

[Chris Hogan]

I'm sorry.

[Caller]

It's okay. And also, his cancer was all genetics. I guess my question is I'm a little bit scared. Or I guess, yes. I'm scared to death that something might happen to me before I finish this marathon. Right. And I do want to leave something for my wife and daughter. I know Dave Ramsey wants, he says to, like, pay off all the debt besides the mortgage first. I just wanted to know because of federal student loans would potentially die with me if something happens to me. So I just wanted to see if it's reasonable for me to potentially pay off my mortgage first before my student loans.

[George Kamel]

Wow.

[Chris Hogan]

That's actually. You know what? That's a good question. I will celebrate that question. That's. That's a. That's an interesting dilemma that you find yourself in, especially because the numbers are so, like, they're. They're exact. Right. Interest rates, dollar amounts, exact. How much do you make a year?

[Caller]

I make $130,000. Okay. Yeah. As a pharmacist. Yeah.

[George Kamel]

And how old are you?

[Caller]

28.

[George Kamel]

What ages did your family get diagnosed?

[Caller]

So my dad got diagnosed when he was 50, but I also have other family members that got diagnosed a lot sooner, like in their 40s and so on.

[George Kamel]

Okay. Because my. My hope and prayer is that you never get diagnosed, but also that if there was. If this was to happen, this is a decade or two or three from now and therefore your student loans will be paid off if you stay at the pace you're you're going for. Would the student loans be paid off in four years?

[Caller]

Yeah, I hope so. I'm trying my best here.

[George Kamel]

And then the mortgage is another three to four years as your income's probably up by then.

[Caller]

Yes.

[George Kamel]

So we're talking about seven years. You're completely debt free, housing everything by 35. So that's the kind of goals I would be setting versus which one should I pay off? I still feel like the debt snowball because you probably have multiple student loans, right? It's not one giant one.

[Caller]

Yes, that's correct.

[George Kamel]

So freeing up those payments along the way makes me. I'm still team student loans, but I totally think your logic here is justified. To grapple with it, I assume you don't have term life insurance. Did you try or did you not qualify?

[Caller]

No, I haven't tried that yet. I actually just heard about that not too long ago. I was looking into it still today.

[Chris Hogan]

Today. Okay.

[George Kamel]

Go to xander.com and apply and be honest with, you know, your health situation. We're not asking to commit fraud here, but if you can get term life insurance, you have solved the problem of what happens if something happened to me. How would my wife pay the mortgage? Boom. Problem solved. 10 to 12 times your income in term life insurance on a 15, 20 year policy will do the trick. So you make.

[Caller]

It just makes me feel like it gets more my life a little bit. Meaning if I were to like have left something behind, you know.

[Chris Hogan]

Did your, did your dad pass away?

[Caller]

Not yet. He's still battling cancer right now.

[Chris Hogan]

So I want you to remember what I'm about to say for the rest of your life. Okay?

[Caller]

Okay.

[Chris Hogan]

Are you a good husband?

[Caller]

I try to.

[Chris Hogan]

Are you a good dad?

[Caller]

I try my best to. Yes.

[Chris Hogan]

Then you've left something amazing. Thank you. And we have a what? No pun intended, but we have a cancer in our culture, which is we ask somebody, what are you worth? And we answer that with a number and I think that's insane. It would be. It would be amazing to be 35, 38 and owe nobody anything and have a paid for house for your family. That would be awesome. Awesome. And the truth is you dug $180,000 hole for your family in pharmacy school. So I think you have a responsibility to knock that out.

[Caller]

Okay.

[Chris Hogan]

Also, this is me playing devil's advocate all across the board. Okay. I also don't trust in 10 years that that's still going to be the case. At some point, the United States is going to have to deal with a $2 trillion hold, that is student loans, and they're going to have to deal with their 30 or 40 trillion dollars deficit. It would not surprise me in the least. They've already made b student loans not dischargeable by bankruptcy. It would not surprise me if they stopped them dead on. I mean, that, that they go away if you pass away. Okay. That. I've never even heard of that being a possibility. But here's what I'm trying to get you to do. Projecting 10 years out on what might happen happen is, is a good idea. But to drag 10 years from now the crisis that might exist in 10 years and try to solve it in today, that is. We call that anxiety.

[Caller]

Right?

[Chris Hogan]

And so the fact that you're a good husband, the fact that you're a good dad, you've been burning through this debt, getting your family taken care of, and you're on a trajectory in seven to 10 years to owe nobody anything, including your home home. That is a huge, huge win. And you have some signals that you're going to pay attention to. So you're going to be one of those guys like me that goes and gets cancer screenings every year. I'm going to pay extra close attention to my blood work. And I'm watching the AI advancements on cancer detection close very closely and they're getting astonishingly good at catching stuff really, really early. So I can imagine a world in three years and four years where you're able to know in 10 years and 15 years, I've already got signs that we weren't able to detect. Now, all that to say is if you're going to imagine the worst case scenario in 10 years, the honest thing is to also imagine the best case scenario and then make informed choices in the present. Do you get what I'm saying?

[Caller]

Yes. Yes.

[Chris Hogan]

And so, man recognizing I have a heightened risk of cancer because of the set of genes that I, I got. That is you being honest with reality. And I'm going to take every responsible measure I can. Also not counting on the government to do a thing in 10 years. That's two elections from now, brother. You tell me, right? Who knows, right? So I'm gonna see that. I'm not going to rely on that either. And I'm gonna get really good life insurance with George and I both have with Xander. I was with Xander Before I started working at Ramsey because I tried trust them. Right. And I'm going to work really hard and get this stuff knocked out.

[Caller]

Okay. So I suppose I will pay my stand loans first.

[Chris Hogan]

I. I would and here's, here's one other variable. What happens it. And again I'm, I'm just being ridiculous now. But what happens if your pharmacy closes or sells? If you have to move to Nebraska to do pharmacy there? The beauty of a pharmacy degrees. You can do it anywhere. But then that student loan is going to travel with you. Your mortgage won't.

[Caller]

Right.

[Chris Hogan]

And so let's take care of the thing that's going to follow me around the longest and let's knock that sucker out and then let's get our house taken care of. But man, really great insightful question.

[George Kamel]

So your homework, one thing you do right.

[Caller]

Right.

[George Kamel]

As soon as we're done with this call, go to xander.com. you're looking at one, one and a half million in a term life policy 20 to 25 years. Get as long as you can with the help, health history of your family and that you'll sleep well at night knowing your family's taken care of.

[Chris Hogan]

Hey, summer's rolling in soon. Vacations, camps, all the fun. And if you're already thinking, man, I hope I can afford all this, you can enter right now for a chance to win 10, $10,000 in the Ramsay May cash giveaway. $10,000. That's breathing room. You can fix the car. Say yes to plans. Stick to your budget without stress. We're giving away one $10,000 grand prize and weekly $500 prizes. No purchase necessary. Go to ramseysolutions.com giveaway.

[George Kamel]

Up next, we've got Courtney in Miami. Courtney, welcome to the Ramsey show.

[Caller]

Hi. Thanks for taking my call.

[George Kamel]

Absolutely. How can John and I help?

[Caller]

Yeah. So I have a question, I guess about what household contribution amount should be. So I've worked really hard. I paid off my student loans. I bought a car in cash. I bought a house and I paid off the house.

Whoa.

Yeah. So I've worked really hard.

[Chris Hogan]

Congratulations.

[George Kamel]

That's an understatement.

[Chris Hogan]

I can't wait for the other side of this question.

[Caller]

Oh, gosh. Okay. Yeah. So I guess the question is I am engaged. There are no plans right now for a wedding. We've been together nine years. But we are together and committed to each other. And I guess the question is I've saved up enough to move to a more desirable area and I can buy that new place in cash as well. And so what is, how do you divide the bills? Like where, you know. Yes. You split utilities and I know this is a weird situation. Like, what's the contribution? You know, obviously he doesn't live with me for free, but what, what is that number? And we just, I could even some help.

[Chris Hogan]

You're not going to like the help that we give you.

[George Kamel]

So he's been living with you this whole time?

[Caller]

Essentially, yes, we've been living together.

[George Kamel]

How does it work now?

[Caller]

So he basically pays essentially, rent. He doesn't like the word rent, but, you know, we split the utilities and the bills and it's. He pays about, you know, splitting the utilities and then like $500, but we're moving to a much better area. Area. Obviously, you know, the house is much more. Even though I'm paying for it. So, So I don't know how to divide it.

[Chris Hogan]

Here's the thing. I have spent the last two years of my life down a dark, dark rabbit hole studying romantic relationships. Okay.

[Caller]

Yeah.

[Chris Hogan]

As long as you're his, his landlord and as long as you're his bank, there is always going to be inequality in your romantic relationship.

[Caller]

Okay.

[Chris Hogan]

There's no way around that. Even. You saying he doesn't like the word rent? Of course not. Because it's a daily reminder that y' all are unequally yoked. And the more you talk about how hard you've worked. You've been with him for a decade, so you, you leading the question with how hard you've worked. Worked infers to two just random dudes you're calling. He hasn't worked that hard.

[Caller]

Which is not the case.

[Chris Hogan]

I know, I know, but it's, it's the posture with which you're entering into this. And so the reason that we tell everybody to get married is twofold. One, your individual stuff becomes Yalls stuff. And if you're not ready to do that, then you're. Then the romantic relationship you think you have is not what you think is. It is after nine freaking years. The other reason we tell people to get married, besides the spiritual stuff, like take the Sunday school stuff and move it aside, is because there is a legal separation baked into that. Meaning there is a contract y' all sign, there's some financial protection, and you're protected. And so I, I, I can't in good faith tell you to do this thing when I know the data. And this is secular psychological data. I mean, economic data. Data says if y' all get married and your stuff and his stuff becomes Yalls stuff, the it, it's it rois in a spectacular way because you have two people hanging on to the same anchor point and allows two people to take bigger swings at life with. With margin. But as long as he's paying you rent and he's Venmoing you for the Arby's meal y' all split last night, it's always going to be yours and mine. And making a romantic relationship work that way, long term. Even the data says that cohabitating couples who live together over a long period of time, they don't do as well, health wise, financial wise, happiness wise, as those that say, I'm all my chips are on the table. I'm all in.

[Caller]

Yeah.

[Chris Hogan]

And if you have hesitancy to go all in with him, I. That's a huge flashing red sign for me. Red flag is the. As the king kids say.

[George Kamel]

Okay, in your own words, why haven't you guys gotten married? Forget a wedding and all that.

[Caller]

Yeah. So there's, I guess, a bright. A past with him. So he was married before. It didn't go well. There's some financial stuff on his end, past addiction issues that I'm not. I'm not ready to tie to.

[Chris Hogan]

Okay.

[Caller]

I don't know if I ever will be.

[Chris Hogan]

Okay, then you need to have that conversation with him, because otherwise, I mean, I don't. I'm trying not to be ugly.

[Caller]

Right.

[Chris Hogan]

I'm trying to, like, be. I'm know that I'm on your side.

[George Kamel]

We are Team Courtney.

[Caller]

Yeah, but.

[Chris Hogan]

But y' all are playing house, right?

[Caller]

Yeah.

[Chris Hogan]

And. And he knows. Let me tell you. He knows in his nervous system that you're not all in. And that makes you more his mom than his. Than his father, Beyonce. That makes you more his landlord addiction specialist than his wife.

[Caller]

Yeah.

[Chris Hogan]

And I don't want to blame you for that. I want you to trust your gut, but I want you to trust your gut all the way in either direction. You get what I'm saying?

[Caller]

Yeah. Yeah. That's hard.

[Chris Hogan]

But, yes, it's real hard. Tell me. Push back on me. Am I wrong?

[Caller]

No. No. Yeah. No, you're right. I just. I think I'm thinking of it as like, we are. We are together, but separate to an extent.

[Chris Hogan]

You have a.

[Caller]

You have a. I know.

[Chris Hogan]

You have a great roommate with benefits.

[George Kamel]

I. I don't think you should make this move until you've solved this.

[Caller]

Yeah.

[Chris Hogan]

100%. And I'll tell you, I think you're worth being in love with somebody that you can go all in on. And honestly, I think he's worth that, too.

[Caller]

Yeah.

[Chris Hogan]

And if. You know right now, I'm never going to fully get there with him. Based on his past, based on the things that flare up now, he deserves that honesty as opposed to a Venmo reminder. You owe me 500 every month.

[Caller]

Yeah. Yeah. So I guess this is it. Yeah. And I was. I was approaching it of, like, what's the dollar amount? We. We disagree on the dollar amount.

[Chris Hogan]

Yeah. I call that.

[George Kamel]

That's the least of your problems.

[Chris Hogan]

Yeah. I call those romantic proxy wars. That's not the. The real issue.

[Caller]

Yeah, for sure. Okay. Thank you. I. Yeah.

[Chris Hogan]

And financially speaking, can George and I just both celebrate you? Amazing job.

[Caller]

Thank you.

[George Kamel]

To do all this on your own is.

[Chris Hogan]

It is astonish.

[George Kamel]

Impressive.

[Chris Hogan]

Yeah.

[George Kamel]

How old are you?

[Caller]

Thank you.

I'm 39.

Awesome.

[George Kamel]

Well, please also don't have the sunk cost fallacy of. Well, it's been nine years. Like, this is all I know. I basically grew up with this, and now I just got to stay in it because it's easy and comfortable. Comfortable. Which I'm sure it is, and I'm sure he's a great guy, but, yeah, absolutely. You guys both deserve. If you're going to live another 50 years, let's do it with some intentionality and some commitment and build wealth together instead of having this. Yeah, we're together, but not fully. I just don't think that's. That. That's a way to live life. And so I would solve for that before making the move. And I hope that if you do make the move, you guys are married on paper, at the courthouse. You combine finances.

[Chris Hogan]

There's somebody in my yard. Once they came over. My. My daughter was like, the flower girl. I mean, you. You don't have to have a. And we did it for free. Like, you don't. My manager took the photos. Like, you don't have to do a big, elaborate thing.

[Caller]

Right.

[Chris Hogan]

But there is legal protection there, and

[George Kamel]

if there's a red flag you can't move past, it's okay to call that out and say, hey, it's been a great run of a decade, but I think we both deserve somebody that we can fully commit to.

[Caller]

Yeah. Okay.

[George Kamel]

I know that's not the answer. You wanted

[Chris Hogan]

the rent amount.

[George Kamel]

I wish I could have been like, well, it should be 60% versus 40% based on the numerical.

[Chris Hogan]

Man, we are fun ruiners.com today, George.

[George Kamel]

Oh, man. And I. I mean, I am rooting

[Chris Hogan]

for Courtney so hard.

[George Kamel]

I like Courtney as a person, and I want to see her win. And I'm so proud of her. And the truth is, she's proven to herself that she can build wealth regardless of the relationship and what's on the other side. But, man, it's just so much more fun to do it with a true, true partner.

[Chris Hogan]

A ride or die dude.

[Caller]

Yeah.

[George Kamel]

A ride or die.

[Caller]

Yeah.

[George Kamel]

This is our money. This is our life. This is our goals. Instead of. Yeah, well, we don't combine because I don't trust him to accomplish this financial goal that I have.

[Chris Hogan]

Yeah. I trust you enough to live here and not murder me. I trust you enough to fill in the blank, but I don't trust you.

[George Kamel]

Trust my checking account.

[Chris Hogan]

All of me.

[Caller]

Yeah.

[Chris Hogan]

Yeah, yeah.

[George Kamel]

Oh, man. This is. This is not one conversation. This is going to be a series. Series of conversations, maybe even some counseling to get to the root of this, to get to the fork in the road.

[Chris Hogan]

Honestly, Courtney was so honest. And, I mean, that's. That's a brave thing she said. Like, I don't know that we need to get to the root. I think she's at the root. The hard part is, am I going to take that next honest?

[George Kamel]

It's so scary.

[Caller]

Yeah.

[George Kamel]

It's just like free falling into this next chapter, but you're worth it. Courtney. Thanks for the call.

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[Caller]

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[George Kamel]

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[Caller]

Hey, how's it going?

[George Kamel]

Great. How are you?

[Caller]

I'm okay. I'm calling with not the most concerning financial issue, but something I'm torn about.

[George Kamel]

I could use a first world problem right now.

[Caller]

Yeah, I'm trying to decide if I should keep my pet insurance for my cat. The monthly premiums are going up from $70 to $105 a month. Whoa. And I know.

[George Kamel]

Why is that?

[Caller]

I mean, she's about 10 years old now. I got the insurance right when I got her. And it was relatively cheap. It was low. It's been steadily going up. And last year when it went up to 70, that was a big jump. It went from maybe like 45 to 70 bucks and now it's 105.

[George Kamel]

Yeah. That's pricey in the pet insurance world.

[Caller]

Yeah.

I've been paying this for years.

[Chris Hogan]

And have you calculated how much you've paid out over the years?

[Caller]

No.

[George Kamel]

Between out of pocket costs plus the insurance, I'm guessing you'd throw up if you did.

[Caller]

I probably would. I probably would. And I've actually never used the insurance.

[Chris Hogan]

Exactly.

[George Kamel]

You've never used it.

[Chris Hogan]

I would love for you, just for your own emotional well being, just to map out how for the last 10 years, how much you've spent on, on pet insurance and what would have to happen to a pet to justify that cost.

[Caller]

Yeah.

[Chris Hogan]

And by the way, George and I are split on this. We disagree on this. And so. But I, I like to just look at it, just the math and I know like I love my dogs a lot. A lot, a lot. But just looking at the math, does it play out out?

[Caller]

Right, Right.

[Chris Hogan]

Or let me ask you another question. How much would you spend? Like there's probably going to be a max, right? Is it 3,000 or 5,000 bucks? Max? They would cover

[Caller]

the health insurance.

[Chris Hogan]

Yeah.

[Caller]

Pen insurance. There's actually no cap.

[George Kamel]

Okay. So they'll cover. If it's a 20 grand surgery the cat needs, they'll cover it.

[Caller]

80% reimbursement. Reimbursement.

[George Kamel]

Okay, that's the deal.

[Chris Hogan]

So what is your. Do you have a magic number that you would spend on a thing with the cat?

[Caller]

I mean, I can't see spending more than like three grand for some. And even that, it's just, it's, it's a lot.

[Chris Hogan]

Yeah. For a 10 year old cat, a $3,000 surgery, like. And I would look into quality of life. Are you keeping that cat alive for years, you or for the cat? Right. So there's all those kind of questions I want to ask Right.

[George Kamel]

What, what's your financial picture look like? Do you have any debt? Do you have savings?

[Caller]

Yeah. No, financially. Great, great. No debt. Got plenty of savings.

[George Kamel]

Okay, great. You're self insured. As far as this cat goes, if something happened, you could fork over three grand if you chose to.

[Caller]

Yes.

[George Kamel]

So the question is, is it worth paying now? $1,300 a year, year for the just in case to avoid paying potentially one grand, two grand, three grand. So that's where I go. I don't think this is worth it at this point. You're better off socking away 100 bucks in a savings account at this point to cover if something happened. Maybe a sinking fund for just pet needs in general, vet bills, all of that, because as they get older, there's a higher chance there's going to be

[Chris Hogan]

a vet visit, which is insurance companies never lose. Right. So that's why they keep rise, raising the premium.

[George Kamel]

It's all about risk. Their risk is higher as that pet gets older. So I personally would cut it in your shoes.

[Caller]

Yeah.

[George Kamel]

Is this your only pet?

[Caller]

Yes.

[George Kamel]

Are you single?

[Caller]

I have a girlfriend. We live together.

[George Kamel]

Okay. Does she like the cat?

[Caller]

Yeah.

[Chris Hogan]

As though that matters.

[George Kamel]

I think it matters. She hates the cat. That's even more reason to cut the insurance. But I personally would. John, again, this is not a make or break for you. Now if your pet had like a history of health issues that were costing you a lot of money and this insurance was a lifeline that was saving you a lot, I would get rid of it. But in general, our pr, our recommendation on pet insurance is just to self insure, sock that same amount of money away in a sinking fund and an emergency fund if there was an issue. Yeah, because the insurance, it's like the house always wins. And there's rare occasions where someone goes, no, no, there was a one time where my dog needed a surgery and it actually, actually really worked out. And so it's more about peace of mind. And I think at this point, with the age of your cat, at this point, just let it ride. And when things come up, cash flow it. And if you decide you don't want to cash flow it, then you let that ride. And if it's the pet, you know, the cat's time, it's the cat's time. Because I have seen friends who, they'll pour unlimited amounts of money to keep their, their pets alive. And I'm like, man, this is, it's getting to a dark place where you're like, to John's point, are you Doing it for you or the, the cat?

[Caller]

Yeah, totally. I definitely don't want to be in that scenario, you know. Yeah, I definitely don't see myself being in that scenario.

[Chris Hogan]

Yeah. And here's the thing. There's been a lot of talk. Arthur Brooks has kind of led the charge here about the role suffering plays in our life. I can count on one hand the number of times I cried hard. Harder than when I put down when my dog got so sick and that was the end for her. It was devastating, like literally devastating to me that that dog was my, my original ride or die. And what I got on the back end of that hurt. And that grief was, that's what commitment feels like and that's what love feels like and that's what deep relationship feels like. And sometimes we try to put these dollar amounts when it comes to your family. Yeah, dude, no question about it. When it comes to our pets. It's like you enter into a short term relationship and that thing looks to you for love and care and support and all that kind of stuff. And it's amazing and awesome. But there's going to be grief on the back end of that. And sometimes there's people out there who want to sell us things and try to extend that or push that off or pretend it's not coming. It's coming. It's part of entering into a relationship with a pet, however hard that is to hear.

[Caller]

Year.

[Chris Hogan]

And so preparing yourself for that emotionally, that day will come. Hopefully it's a long time from now. And then getting a number in your head. This is what I'm willing to invest in this pet of mine. And I've always got to check myself and make sure I'm not my, my pet isn't living miserably so that I don't have to deal with this grief that's going to come.

[Caller]

Right, right.

[George Kamel]

That's a good word. So, John, what are you going to do? America wants to, to know.

[Caller]

You know, honestly, I think I knew what I should do, which is to cancel it. But I just sort of needed the, needed somebody to tell me to do it. You know, I just, Yeah, I know it's the logical thing. My theory that like I cancel and then like tomorrow or you know, like in a couple weeks, something does happen. It isn't going to be like, you

[George Kamel]

go, dang it, why did I cancel it? It would have covered this.

[Caller]

I, I, I know. I feel like that's been how I felt the all 10 years I've had this insurance.

[Chris Hogan]

Yeah.

[Caller]

But now it's at 105 bucks a month.

[George Kamel]

Yeah.

[Chris Hogan]

That's the sunk cost fallacy. You're like I've already put this much in, I might as well keep going.

[Caller]

Right? Yeah. There's a real like mental component to this. Yeah, yeah.

[George Kamel]

It is more mental than financial and that's the, the hard part to grapple

[Chris Hogan]

with or it's not mental, it's emotional. Right.

[Caller]

Yeah.

[George Kamel]

And the, the financial part. Well, let's talk about insurance for a second. The whole point of insurance is to trans transfer risk so you can't bear the burden of your, a house fire taking your house and now you got to replace it. So we get homeowners insurance and so that's the point of insurance. And at one point you're self insured or the risk is so low and the insurance companies will just know, hey, we're going to make money on this because the risk is so low. And pet insurance definitely falls in that category. And there has been a change in the last decade, John, where people just care about their pets more they than our parents generation.

[Chris Hogan]

Well, we're getting lonelier and lonelier as people.

[George Kamel]

We're not getting married but we have our dogs.

[Chris Hogan]

Pets are filling that, that gap of human disconnection.

[Caller]

Yeah.

[George Kamel]

Or we don't want the burden of kids and paying for kids but we'll get a dog.

[Caller]

Yeah.

[Chris Hogan]

Or we don't want the burden of leaving our house to go meet strangers, to become friends. And so I got a, I got a dog that will come in and love me.

[George Kamel]

Yep. And it's, I mean this is speaking to my heart as a guy who, who gave more money to the emergency vet than I have given to anyone. One place in my life I could have furnished my house with the amount I, I helped them get a second home. I think so they love us. But French bulldogs are as I've told you, John, are born broken. So we kind of knew going into it. You're kind of picking up a project here. I should have got a dog from

[Chris Hogan]

the pound of no issues expensive project.

[George Kamel]

Dog from the rescue never has any issues. They live to be a thousand happy healthy these purebred dogs, man, they'll get you. So hug your pets today guys.

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[George Kamel]

Welcome back to the Ramsey Show. I'm George Camel here with Dr. John DeLoney. Open phones at 888-825-5225. Our scripture of the day, Titus 2, 7 and 8. And in everything, set them an example by doing what is good in your teaching. Show integrity, seriousness and soundness of speech that cannot be condemned so that those who oppose you may be ashamed because they have nothing bad to say about us. I like that. Be above reproach. Warren Buffett said it takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently. Amen. Kelsey is in Atlanta. Up next. What's going on?

[Caller]

Kelsey, hi.

Thank you so much for taking my call.

[George Kamel]

Sure. How can John and I help?

[Caller]

Yeah, So I am currently leasing a vehicle and I am so excited to get done with it. My plan was to buy a beater car once the lease is up, but I have another 11 months to go on it. I'm currently 5,000 miles over already.

What I'm supposed to be.

[George Kamel]

What are they dinging you for that? What's the fee?

[Caller]

It's 25 cents a mile. So by the time I figured. On average, how much? Yes, on average, how much I drive, by the time I turn it in, I'm looking at an extra $5,000 I would pay for the overage on the mileage. So my question is, should I go ahead and buy a beater car? Right now I'm thinking in the range of 5,000 to $6,000 and go ahead and park my leased vehicle. Go ahead and just let that ride out. And then I'll have pretty much. I'm allocating my money to spending it on a beater now instead of giving it to a dealer at the end of the lease. Would that make sense?

[George Kamel]

Hmm.

[Chris Hogan]

That's a great question. Could you go buy the car outright?

[George Kamel]

Yeah. What's the early buyout amount?

[Caller]

I could. It would be a little north of $40,000.

[George Kamel]

Goodness gracious.

[Caller]

What are you driving right now is worth 20. It is an EV, and so it's depreciated immensely.

[George Kamel]

Ouch. So you'd have to pay 40 to get it, but then if you sold it, you're 11 grand underwater.

[Caller]

Correct.

[George Kamel]

Immediately.

[Chris Hogan]

Wait, there's. They're charging you 25 cents a mile on an EV?

[Caller]

Yes.

[George Kamel]

That should be okay, what EV is this? What's the make and model?

[Caller]

It's, It's a Volvo C40 Recharge and it's a 2024.

[Chris Hogan]

Oof.

[George Kamel]

All right, I'd probably put this in the stupid tax category, but you're saying, hey, instead of paying five grand in penalties because you're going to continue to go over the mileage based on your commute.

[Caller]

Absolutely, yes.

[George Kamel]

You're saying just park it. I'd rather just use that five grand to get me a beater car so that when all said and done, at least I, I have a working vehicle. Vehicle.

[Caller]

Yes. That's kind of where my mind's at. Of course it kind of, it breaks my brain a little bit to have two vehicles at the same time, but circumstantially, this is kind of where I'm at.

[George Kamel]

Yeah, I mean that is a pretty wild solution, but it's, it makes sense in my head and I'm, I'm trying to think if there's other scenarios I'm trying to go through, like what are all of the options and then what's the one that sucks the least? Have you talked to the dealer about this?

[Caller]

So I haven't talked to them about this scenario specifically. I have looked to see if I'd be able to have someone else take it over and they will not allow that.

[George Kamel]

Okay.

[Caller]

By the time I.

[George Kamel]

What's the early termination?

[Caller]

I don't know. The fee? To be honest, I haven't looked at it because I'm just assuming it's so unreasonable. So I could look into that.

[Chris Hogan]

That's probably a great assumption. Gosh, I still can't get over like on a, on a, on an engine, a gas powered engine. There's going to be wear and tear. That's unique and different than on a, on an EV. I just can't believe they're charging you 25 cents a mile. That's.

[Caller]

Yeah, whatever.

[Chris Hogan]

I think they can't get worse. They get worse. It's impressive, right?

[George Kamel]

Leases are definitely my least favorite way to have a V. I was going to say own a vehicle, but you don't even own it. You're just renting. Expensive. What's your lease payment?

[Caller]

It's $663 a month.

[George Kamel]

So you're gonna have to pay that for 11 more months while it's just parked.

[Caller]

I'll have to pay it for 11 more months while it's parked.

[George Kamel]

I would try to level with them at the dealership. Not that they're competent, nice people, but I Would explain the situation. Say, hey, listen, if I buy it out, I'm 11 grand under day one after already forking over 40 grand that I assume you don't have in cash right now.

[Caller]

Correct.

[George Kamel]

The other option is, is the termination, which I would find out what the early lease termination fees are in case. This is a wild. In case. In case it's the cheapest option, the lowest amount of stupid tax you could pay to get out of this thing. Since they won't let you do a lease transfer because the buyout is not an option. And so therefore you might at least then sort of get rid of the other options to go. Okay. My best option is to just hang onto it, pay it, stay under the mileage, and. And save up for a beater car in the meantime.

[Chris Hogan]

Do you have 29 grand? Do you have 30 grand to buy it from them?

[Caller]

I do not.

[George Kamel]

Okay, how much do you have?

[Caller]

So right Now I have $6,000, and that is a sinking fund. Knowing that I am going to potentially have to pay that in fees when I turn it in. And I'm like, very aggressively paying down student debt, so I just don't have that cash on me.

[Chris Hogan]

Not. That's great.

[George Kamel]

What do you make? What do you make a month?

[Caller]

$6,584.

[George Kamel]

Okay. I love the specificity. That's great. And what other debts do you have?

[Caller]

So I've got a student loan, and that is $21,844.

[George Kamel]

And that's it. Student loan and the lease?

[Caller]

Yes.

[George Kamel]

Okay. Yeah, it's going to be hard. Hard to do both to chip away at the student loan debt, pay the lease payment, save up for the beater car. But I like the idea of limiting the damage in fees we're paying on this lease, at least if you do nothing else. And then I would see what your options are with the dealer. I would do a whole lot of research to find out what your rights are, what your options are before you make any big moves.

[Chris Hogan]

But my guess is it's pretty ironclad.

[George Kamel]

I mean, you sign the contract, here's the finance print, and they're going to say, deal with it, right?

[Caller]

Yeah. And I was definitely going to take your advice to see if there's any way I can have some wiggle room that I just am assuming I don't have right now. But if. If that is not an option, would you suggest I just park it and drive a beater?

[George Kamel]

Yeah, I would do the math. Says that might be the best option. That's the wild part. As much as hurts your soul to pay 660 bucks. Bucks for parking a car.

[Caller]

Yeah.

[George Kamel]

Oh, my gosh, I'm so sorry.

[Caller]

It's already hurting my soul. I'm like, if this can minimize the damage, I'm all game.

[George Kamel]

Well, the good news is you'll never lease a car again.

[Caller]

Oh, you.

You better bet.

[George Kamel]

So that might have been worth all the fees in the world if it means you're avoiding a bad money decision. So I'm rooting for you. You're. You're going to survive it, and it'll be a fun story. Tell your kids one day.

[Chris Hogan]

Kelsey. Give. Give America. Who's listening? Give them your opinion on the lease on. On someone sitting there like, I don't want to buy a car. I want to go lease it. What would you say? This is your opportunity for a commercial.

[Caller]

It is the most financially irresponsible way you can possibly operate and quote, unquote, not own a vehicle. Do not do it to yourself.

[George Kamel]

Thank you for, for that. Very helpful. Appreciate the call. And it's a good reminder on leases, John. So a car lease, people say, well, John, it's not debt. Technically, there's no, like, loan. It's just a contract where I have to pay this amount and there's no way out of it. If that's what you want to tell yourself that it's not debt. Even though there's a monthly payment attached that you have to pay. I'm going to call it loosely, a form of debt. And the depreciation is built right into your lease payment. So you're paying the most expensive part of depreciation to the dealer.

[Chris Hogan]

Well, and so think about. I always like to ask myself, who's getting rich? Right. It's the reason I quit using airline miles. And, you know, I've talked about this off air, but, like, I remember getting a credit card with a ton of miles on it because I had to make a huge purchase that I was going to immediately get reimbursed for. And I remember thinking, hey, they're not my. This company's not my friends. Who's paying for these flights I'm getting or these hotel points? And it was people who found themselves in financial straits or having to pay. And I was like, I don't want single moms who are struggling to put food on their table to pay for my free flights. I'm out of this program. So that is what got me inspired to say, who's getting rich off what I'm doing next? And the lease is one of the greatest inventions for a car company. They get a brand new car, they give it to you for two years. You give them. You basically buy down all of their depreciation, you give the car back to them. They have a gently used car that they have contractually kept.

[George Kamel]

Now they can sell that. Now they still make a profit.

[Chris Hogan]

They still. They sell a gently used car that's got very low miles. It's perfect with no depreciation on it because you've paid it. Right.

[George Kamel]

It's brutal. Well, that puts this hour of the Ramsey show in the books. Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of peace, Christ Jesus sa.