Stop Messing Around & Follow the Plan That’s Proven To Work

Summary

Detailed Summary of "Stop Messing Around & Follow the Plan That’s Proven To Work" | The Ramsey Show

Release Date: April 25, 2025

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Introduction

In the episode titled "Stop Messing Around & Follow the Plan That’s Proven To Work," Jade Warshaw and George Camel host The Ramsey Show, providing listeners with actionable financial advice and answering real-life money questions. The episode focuses on adhering to proven financial plans, overcoming debt, and building wealth through disciplined strategies.

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Segment 1: Navigating Bankruptcy and Home Repairs

Caller: Abby from Fort Worth, Texas

Timestamp: 00:41 - 07:02

Abby discusses her family's transition from Chapter 13 to Chapter 7 bankruptcy due to mounting debts after a medical emergency and her son's autism diagnosis. They face extensive foundation repairs estimated at $25,000 and are contemplating whether to sell their home and rent to avoid further debt.

Key Points:

• Financial Strain: Abby and her husband are burdened by debts, including car loans ($43,000 and $18,000) and a $3,000 student loan.
• Home Repair Dilemma: Half of their home's foundation was previously repaired under warranty, but the other half now requires significant repairs.
• Income vs. Expenses: With a combined annual income of $153,000 and a monthly mortgage of $3,100, they are struggling to manage their finances post-bankruptcy.

Notable Quotes:

• Jade Warshaw (02:49): "So you could still come out of this thing and make a little bit after fees."
• George Camel (07:02): "I’d get current. And I’d also see if you can get rid of that $43,000 loan."
• Abby (07:18): "We've been looking at places because I told my husband if we're moving and renting, I want to spend as little as possible."

Advice Given:

• Sell and Rent Approach: Jade recommends allocating any proceeds from selling the home towards debt repayment rather than high-yield savings.
• Debt Management: George emphasizes paying off high-interest loans to reduce financial burden and free up income.

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Segment 2: Credit Unions vs. Big Banks

Caller: Chelsea from New Hampshire

Timestamp: 09:16 - 11:56

Chelsea shares her positive experience with Fairwinds Credit Union, highlighting the benefits of credit unions over traditional big banks.

Key Points:

• Credit Union Advantages: Nonprofit status leading to better interest rates and customer-centric services.
• Personal Experience: Chelsea praises Fairwinds for their user-friendly app, extensive ATM network, and exceptional customer service.
• Host Endorsement: Dave Ramsey endorses Fairwinds, urging listeners to explore the Ramsey Tribe credit union bundle.

Notable Quotes:

• Dave Ramsey (09:25): "Customer is the owner, changes the spirit on the credit union."
• Chelsea (10:23): "It took less than five minutes. It was so user-friendly."
• Dave Ramsey (10:54): "Talk to our friends at Fairwinds and check out the combined checking and savings bundle that they created just for the Ramsey Tribe."

Advice Given:

• Choosing Financial Institutions: Listeners are encouraged to consider credit unions like Fairwinds for better rates and customer-focused banking solutions.

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Segment 3: Managing High-Yield Savings and Emergency Funds

Caller: Chelsea from New Hampshire

Timestamp: 11:56 - 16:12

Chelsea inquires about the security and accessibility of her High-Yield Savings Account (HYSA), expressing concerns over limited direct access during emergencies.

Key Points:

• HYSA Benefits: Higher interest rates compared to regular savings accounts.
• Accessibility Concerns: Limited immediate access to funds can cause anxiety during emergencies.
• Personal Strategies: Jade prefers keeping part of the emergency fund highly accessible, while George trusts in the ability to transfer funds in manageable timeframes.

Notable Quotes:

• George Camel (12:40): "When it comes to emergencies, very rarely is it if I need cash within the next hour."
• Jade Warshaw (13:15): "I kept my emergency fund in a regular savings account because I’m like, which, that’s fine."
• George Camel (14:24): "I like a little boundary line there."

Advice Given:

• Tailoring to Personality: Choose an emergency fund arrangement that balances earning interest and accessibility based on individual comfort levels.
• Diversification of Savings: Consider multiple savings accounts or financial strategies to ensure both growth and access.

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Segment 4: Adjusting Debt Snowball Priorities

Caller: Sarah from Seattle, Washington

Timestamp: 16:13 - 21:19

Sarah seeks advice on modifying her debt snowball strategy by prioritizing her personal loan over student loans to accelerate debt repayment.

Key Points:

• Debt Composition: Sarah has multiple student loans ranging from $5,500 to $8,000 and a personal loan of $8,500.
• Financial Pressure: Managing child support and high therapy costs for her child with autism adds to her debt burden.
• Strategic Debt Repayment: She aims to free up $1,000 monthly by addressing the personal loan.

Notable Quotes:

• Jade Warshaw (18:10): "My loans are active even if I'm not would still make me want to work this in order."
• George Camel (19:00): "What is your total debt amount right now?"

Advice Given:

• Stick to the Plan: Jade emphasizes the importance of following the established debt snowball to build financial discipline.
• Debt Consolidation: George suggests focusing on eliminating higher-interest debts to reduce overall financial strain.
• Consistent Payments: Maintaining regular payments on all debts to adhere to the bankruptcy terms and rebuild credit.

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Segment 5: Investing and Mutual Funds Explained

Timestamp: 33:46 - 40:36

In the "Talk Nerdy to Me" segment, Jade and George demystify mutual funds, explaining their structures, benefits, and different types.

Key Points:

• Mutual Fund Basics: Investment vehicles pooling money from multiple investors to buy diversified portfolios of stocks, bonds, or other securities.
• Types of Mutual Funds:
  • Growth Funds: Invest in medium to large companies expected to grow.
  • Aggressive Growth Funds: Focus on small-cap companies with high growth potential.
  • International Funds: Provide diversification by investing in non-US companies.
  • Money Market Funds: Similar to high-yield savings with low volatility.
• Benefits:
  • Diversification: Reduces risk by spreading investments across various sectors.
  • Lower Costs: More affordable than trading individual stocks.
  • Professional Management: Expert teams actively manage fund portfolios to maximize returns.

Notable Quotes:

• George Camel (33:52): "Mutual funds are investment vehicles that pool money from multiple investors, to purchase a diversified portfolio of stocks, bonds, or other securities."
• Jade Warshaw (36:12): "When you hear the word index fund, well, that's really just a type of mutual fund."
• George Camel (37:39): "As the company stock share value goes up, we make money."

Advice Given:

• Investment Strategy: Allocate investments evenly across different types of mutual funds (25% each) to ensure balanced growth and risk management.
• Long-Term Planning: Reinvest dividends and focus on compound growth for retirement accounts.

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Segment 6: Debt-Free Success Stories

Caller: Jonathan from Franklin, Indiana

Timestamp: 68:15 - 77:25

Jonathan shares his inspiring debt-free journey, highlighting how he paid off $89,600 in debt, including his house, within eight years on a teacher's salary.

Key Points:

• Debt Elimination: Jonathan followed the Ramsey Plan diligently, eliminating credit cards within six months and paying off his mortgage in eight years by making substantial additional payments.
• Multiple Income Streams: He diversified income through side gigs, including work with the U.S. Census, Subway, and as an interpreter, alongside his role in the Air Force National Guard.
• Financial Goals Post-Debt: Plans to save for home repairs and personal development, such as learning French in France.

Notable Quotes:

• Jonathan (72:45): "I'm debt free."
• George Camel (73:09): "Jonathan, count it down. We want to hear your debt free scream."
• Jonathan (73:35): "If you're laser focused and really willing to work extra jobs and really, really worry, it is definitely possible."

Advice Given:

• Affordability: Purchase homes within 25% of take-home pay to ensure financial stability.
• Consistency: Maintain disciplined budgeting and consistently allocate extra funds towards debt repayment.
• Community Support: Leverage support from financial communities and use tools like the EveryDollar app to stay on track.

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Segment 7: Audience Questions and Financial Guidance

Timestamp: 80:27 - 87:56

Listeners pose varied financial queries, ranging from investment strategies during market downturns to car repairs vs. purchasing a new vehicle.

Key Points:

• Investment During Market Drops:
  • George Camel (80:42): Advocates for consistent investing regardless of market conditions, emphasizing dollar-cost averaging.
• Car Repair vs. Buying New:
  • Caller (Liz from Columbus, Georgia) (86:00): Torn between repairing a 15-year-old car costing $5,000 or buying a used $15,000 vehicle.
  • Jade and George's Advice: Recommend repairing the existing vehicle to avoid unnecessary debt and expenditure on a newer vehicle.

Notable Quotes:

• George Camel (80:54): "I don't increase or decrease investing based on anything the market is doing."
• Jade Warshaw (86:46): "I can’t afford this house right now."

Advice Given:

• Consistent Investing: Maintain regular investment contributions without attempting to time the market.
• Prudent Debt Management: Avoid accruing new debt for depreciating assets like cars; prioritize repairs if feasible.
• Financial Stability: Ensure emergency funds and debt repayment plans are in place before making significant financial decisions like home purchases.

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Conclusion: Empowering Financial Independence

The episode underscores the importance of discipline, consistency, and informed decision-making in achieving financial peace. Through real-life examples and expert advice, The Ramsey Show equips listeners with the knowledge to overcome debt, make strategic investments, and build a secure financial future.

Closing Remarks:

• Jade Warshaw: Emphasizes the significance of having clear financial goals and maintaining a robust emergency fund.
• George Camel: Highlights the impact of proper budgeting and the benefits of financial tools like the EveryDollar app.
• Dave Ramsey: Reiterates the necessity of taking control of one’s finances through budgeting and disciplined spending.

Final Notable Quote:

• Jade Warshaw (78:06): "Having something to shoot for, you can accomplish more than you ever dreamed possible."

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This episode of The Ramsey Show serves as a comprehensive guide for individuals navigating financial challenges, offering practical solutions and inspiring success stories to motivate listeners toward financial independence.

Transcript

[Dave Ramsey]

Hey, guys, this is Dave Ramsey from the Ramsey show podcast. If you're sick of money, stress, and tired of living paycheck to paycheck, we're here to help. Check out our latest episode, streaming now on Amazon Music, brought to you by the EveryDollar app. Start budgeting for free today.

[Jade Warshaw]

From the Ramsey Network, it's the Ramsey Show. I'm Jade Warshot. Next to me is your co host, George Camel. We're chopping it up with you, taking your calls about your life and your money. So let's get right into it. George, you ready to do this?

[George Camel]

I'm pumped.

[Jade Warshaw]

All right, let's go to the phone lines, man. We've got Abby, who's in Fort Worth, Texas. What's going on, Abby? Hey, guys.

[Caller (Abby)]

Thanks for having me on today.

[Jade Warshaw]

So I have.

[Caller (Abby)]

My husband and I are currently in the process of converting our Chapter 13 bankruptcy into a Chapter 7. And we just found out a couple weeks ago that our home has some pretty extensive foundation repairs that could be necessary. That could cost around $25,000, and we don't want to go into any more debt for that. So we're wondering if we should sell our home and rent in the meantime in order to kind of restart our lives back after this bankruptcy, man.

[Jade Warshaw]

So $25,000. Have you gotten multiple quotes on this or is just one guy said this?

[Caller (Abby)]

It's one. But half of the house has already had foundation repairs, so that happens already. Warranty. So it's kind of a weird situation where we feel like we need to use that company in order to use the warranty on the half that has been done.

[George Camel]

So that half hasn't been paid yet?

[Caller (Abby)]

No, it has. It's like was done. Like Texas foundation is weird. Whatever. Half of the foundation only needed at one point, so they only did the repairs back in like 20, like a long time ago. And now the other half has kind of shifted and need about the same repairs.

[George Camel]

But that part's not under warranty.

[Caller (Abby)]

They would. No, it's not. And they would use the warranty to do adjustments on the half that has.

[Jade Warshaw]

And that would lower the cost, Is that what you're saying? I'm just asking. Could there be another company out there? It's been a couple of years, I guess. Could there be another company out there where you could get it done less and it still be under warranty once the work is done?

[Caller (Abby)]

Possibly. I haven't. I haven't looked too much into it because I'm a little hesitant to do foundation repairs at all because in Order to do that, we have to move completely out of our house and then for about two weeks and then move back in. So even if it was, you know, 10 or 15,000 still kind of is a put off to me.

[Jade Warshaw]

Well, let's talk about those numbers a little. Yeah, tell us, tell us what you're on the hook for after the bankruptcy. That, that the bankruptcy didn't clear and tell us the numbers, what you own, your house and what it's worth.

[Caller (Abby)]

We have. We'll have two cars left after the bankruptcy. One is 18,001 is about 43,000 left. And then just a student loan for about 3,000 and that will be all that's left after the bankruptcy.

[George Camel]

So what was the bankruptcy clearing?

[Caller (Abby)]

Yeah, we had in 2019, I had a surgery that went bad and was out of work for about a year because I was flight attendant. And so we. My. I was paying rent on credit cards. I mean, I did everything using a credit card and all of the really expensive medical bills and therapies that I was having to do.

[George Camel]

So you said you did chapter 13, which would be the payment plan?

[Caller (Abby)]

Yeah, yeah, so I did chapter 13. We were keeping up with the payment plan as best we could, but my son got diagnosed with autism. He's two and a half. And so his therapy costs are through the roof. And so we couldn't even keep up with the Chapter 13 payment plan anymore. And so after about a year and a half, we've done a conversion into chapter seven.

[Jade Warshaw]

So are they going to, are they going to take any of your assets to pay this off? Like, are they going to take your cars and sell them to try to make this happen or.

[Caller (Abby)]

No, because we are worth so little that like, even our, like that we all, we fall under all of the exemptions of all the homestead exemption and the wild card exemption, I think, or something in Texas, like nothing we own is.

[George Camel]

So are you current on your payments on the cars and the student loans?

[Caller (Abby)]

Yes. Yeah, I was behind on the student loans for quite a while and we. I just made a payment this month and caught it back up.

[Jade Warshaw]

Okay. Okay, question with the car.

[Caller (Abby)]

One of them. My parents bought it for me because I wrecked my car while literally right after we had filed for chapter 13.

[Jade Warshaw]

Which one was that, the 18 or the 43?

[Caller (Abby)]

The 18. So I couldn't even get a new car if I wanted to. So my parent, my lovely parents said, let's let us get it for you. We'll pay cash and pay us.

[Jade Warshaw]

So you're paying them right now?

[Caller (Abby)]

Kind of calling. Yep. So I pay them 400amonth when I can.

[Jade Warshaw]

Okay. The $18,000 car, what's it worth?

[Caller (Abby)]

About 17. It's not, we're not underwater too much. Like if I did private party, I looked and it was like maybe 17 was on the higher end.

[Jade Warshaw]

And the 43,000 dollar one, what is that one worth?

[Caller (Abby)]

About 34.

[Jade Warshaw]

Okay, and what's the. Can you tell me what you're paying your parents every month? How much is that just to see?

[Caller (Abby)]

Mm, I pay 400 for my car.

[Jade Warshaw]

All right. Yeah. What you didn't tell us the house. What do you own it and what's it worth? That's okay.

[Caller (Abby)]

Yep. It. We have 294 left of our principal and if we put it on the market today, we would list it for.

[George Camel]

345 with the repairs needed. That's as is.

[Caller (Abby)]

No, we're not as is as is.

[Jade Warshaw]

Okay.

[George Camel]

So you could still come out of this thing and make a little bit after fees.

[Jade Warshaw]

Just a little bit.

[Caller (Abby)]

Yeah. And like our hope was maybe if we sell it and you know, even if we get 10, 15 after closing costs, we put that into a high yield savings. We rent for two years, build up a down payment and then you know, hopefully get into that debt free start immediately working on.

[Jade Warshaw]

Well, we wouldn't put it in the high yield savings. We'd really put it towards once you get settled in your new rental, the rest would go towards debt technically. Right. Because at this point we're working those baby steps in order.

[George Camel]

So what's your household income? Did you guys mention that we make.

[Caller (Abby)]

Annual combined about 153. So not bad at all. Like we bring in good monthly income. It just, it cost us so much it feels like to live. So our mortgage right now is, is 3100amonth.

[Jade Warshaw]

Okay. That's going to give you a lot of breathing room. My question for you is if the. If is there any way to roll back this bankruptcy and give you guys control back over this? Because if you sell the house, that's going to give you a lot more money back in your pocket. I mean I didn't ask you what's it going to cost you to rent?

[Caller (Abby)]

We've been looking at places because I told my husband if we're moving and renting, I want to have as spend as little as possible. So we're looking like at places that are max 2400.

[Jade Warshaw]

Okay, good.

[Caller (Abby)]

But we do have to a two year old, a one year old and one on the way that's coming in August well, the good news has to be, like, it's.

[Jade Warshaw]

Well, the thing is. Kids. Kids. No, it doesn't. Kids are crazy. But they don't take up a whole lot of space. Right? They take up a lot of space with our energy and mental space, but like, physically, they don't take up a lot of space. So this is your season. I want to encourage you with a two bedroom. Abby. This is your season to do the most. And by doing the most, I mean sacrifice to layers that you never thought you had in you. This is the season where you live in that really small, really cramped apartment that you'll tell stories about, you know, 20 years from now, right, when they're grown. And you'll say, when you guys were kids, we lived in this little apartment. Because this is you taking your life back. And so you're going to have to make decisions that are vastly different than anything you've ever done before. The fact that you understand that you need to sell this house is so important. But look, if you sell this house and you don't gain the margin out of it monthly that you need to make this happen, it was all for not. Right. So make sure that you don't, don't let your eyes get big and see an apartment that goes, oh, well, that would be a lot nicer because then you're taking the whole sting out of this punch. So make sure that you live in something smaller and try to, if you don't have to go through with converting this bankruptcy, don't. If you can get out of it and say, you know what, we're taking control of this, I would do that immediately.

[George Camel]

I'd get current. And I'd also see if you can get rid of that $43,000 loan.

[Jade Warshaw]

Oh, man, Sell it.

[George Camel]

Insane. Yeah. Find the amount you're underwater and get rid of that thing. Even if you take out a loan to cover the difference.

[Caller (Chelsea)]

All right, Dave, you have some strong opinions, possibly. Yeah, I think so.

[Jade Warshaw]

Okay.

[Caller (Chelsea)]

Because you really prefer credit unions over big banks.

[Dave Ramsey]

Well, credit unions, for one thing, are nonprofit, which means that the members, the customers own the credit union. So any profits that the credit union makes goes back into customer pricing. So you get better interest rate on savings, cheaper checking and so on, that kind of thing. But what's more important than that, though, is the fact that the customer is the owner, changes the spirit on the credit union. So I find very few credit unions that aren't very customer centric.

[Caller (Chelsea)]

Well, and I think we have found one that is incredible, and that's Fairwinds they are an incredible credit union that is really out with the heart to help the customer.

[Dave Ramsey]

They're the right kind of people with the right kind of values and they've done a really, really good job with customer service and the deals that they're offering. The Ramsey Tribe is incredible.

[Caller (Chelsea)]

Yeah, absolutely. And I love that the things that we teach they so line up with. And you're right, their customer service is unbelievable. Winston and I just signed up and we got an account.

[Jade Warshaw]

Yeah.

[Caller (Chelsea)]

And I'm not kidding, it took less than five minutes. It was so user friendly. Like, the step by step approach was unbelievable. And then the next day my phone rings and it says fair wins on my phone. So I answered it and talked to someone there and they said, yeah, they give calls to every new customer. And so again, they just really care about your experience. And I, I so, so appreciate that. Plus, anything that you can do at a traditional branch, you can do with [e-mail] or on their app. And you'll have free access to over 33,000 ATMs.

[Dave Ramsey]

You guys know how much I hate banks in general, and so for me to do this is a big deal. Talk to our friends at Fairwinds and check out the combined checking and savings bundle that they created just for the Ramsey Tribe. You guys, it's incredible.

[Caller (Chelsea)]

Yeah, you guys, it' so easy to join Fairwinds no matter where you live. So go to Fairwinds.org Ramsey.

[Jade Warshaw]

Our question of the day is brought to you by Y Refi. If you've got defaulted student loans that don't let you gain any momentum, I get it. No judgment. But also, nobody's coming to bail you out. So take charge of your wi fi your so take charge today. @yrefi.com Ramsey they offer refinancing to a low fixed rate loan built just for you. That's the letter Y, r, e, f y.com/ramsey. Remember, it may not be available in all states.

[George Camel]

Today's question comes from Chelsea in New Hampshire. She says, I'm currently on baby step two. I recently followed George's advice and put half my emergency fund in a Laurel Road hysa. It's a high yield savings account. I didn't move at all because it made me a little nervous. But after seeing roughly $2.35 of interest deposited in the High Yield Savings and the measly $0.01 of interest in my regular savings account, I really want to move it all over there. My fear is that if I have an emergency, it's going to be difficult because there's no debit card attached to the account. Not having direct access kind of scares me. What should I do? Oh, it doesn't sound like you got much to cover an emergency at this point. I did the math, jay. There's probably 800 bucks in this account. If it's making 2 bucks in interest a month.

[Jade Warshaw]

Yeah.

[George Camel]

And so I would be more concerned. Now you're in baby step two. She's a thousand. She's saying, I put 500 over here, I got 500 over here, but I need direct access. Here's what I found. When it comes to emergencies, very rarely is it I need cash within the next hour. If that's the case, you're probably getting scammed. It's probably some kind of Western Union transfer thing. They want you to buy some gift cards. Most emergencies I found there's time to transfer it out of the savings account to the checking account. And so you've got a little bit of time. You can take a day or two to get that, that money in there. And so it's really not that big of a deal. I found I keep all of my money in high yield savings.

[Jade Warshaw]

I will say, you know, this might be you and I might vary on this a little bit because you know George, he's very level headed, very cool, calm and collected. I, on the other hand, tend to freak out. So I kept my. So when we were on baby step one, George, I kept the thousand dollars in like the same account that's connected to your check. Yeah. Just like a normal savings because I'm like, which, that's fine. I'm not trying to earn interest on this. Like I don't care. I just want to be able to get to it. And then when we moved up to the three to six months, then I popped that in the hysa because it's true. I do feel like those bigger emergencies like your foundation or your roof or I don't know, you need a new car or something like that. Yeah. Then it's like, yeah, I can take some time, I'll take some days. And to your point, George, it gives you time to think rationally. Is this the best decision? Have I spent time on this? And then by the time the funds transfer, you can feel like a responsibly a financial responsible adult.

[George Camel]

Yeah. The bigger problem is when you have the access is too easy and you go, whoops, oh man, I just moved it from savings to checking and now it's gone.

[Jade Warshaw]

Yeah. That is all. That's a good point. You kind of have to know your personality, Right.

[George Camel]

I like a little boundary line there. But you can also do, you know, wire transfers and things like that a little quicker, so.

[Jade Warshaw]

That's true.

[George Camel]

Good question, though, and I appreciate that.

[Jade Warshaw]

That is a good question. Wait, let's take this a step further. So you could do. There's three options here. So let's say you bank with, you know, well, I'm making up a name, Wall street bank, right? And you've got your checking account at Wall Street Bank. And so you then put your savings account there to keep your thousand dollars at Wall Street Bank. Then there's an option of saying, hey, I don't want it there, but. And I want to put it somewhere else. So you put it on an online high yield savings account, but you feel like, hey, that's. That's kind of too far away. I have to do the transfer. You could do another checking account at another bank that's not online. So you do have the debit card, but it's not the kind of thing that whenever you pull up your. Your bank balance, you just see it sitting there. Because my thing is, if I see it, then I'm tempted by it. But if it's on a whole other app on a whole other bank, I'm.

[George Camel]

Not a side out of mind, out.

[Jade Warshaw]

Of sight out of mind. This is just. This is the way my mind is.

[George Camel]

Going to have needed the money faster than, you know, the two business days or whatever it is. I just do a wire transfer. I call them. Do wire transfer. It's there within 24 hours, you know.

[Jade Warshaw]

What was the last emergency you had?

[George Camel]

Oh, my goodness. That I really needed the emergency fund. Yeah, I can't remember. I only remember the ones when I was broke and didn't have it. But once you have the emergency fund, I started doing better maintenance. I would just cash flow it out of our checking out of our budget and switch around some line items in that.

[Jade Warshaw]

Funny how that happens.

[George Camel]

I don't remember the last big. Where it was like a $5,000 emergency. We tended to be like a, you know, a plumbing guy, though. The electrician.

[Jade Warshaw]

Yeah.

[George Camel]

A few hundred bucks.

[Jade Warshaw]

Yeah, that's true. The last big one we had was, let me think. Our washer and dryer. Our washer. Our washer went out.

[George Camel]

Oh, boy.

[Jade Warshaw]

And of course, I did what any American would do and say, well, if you got to replace the washer, you got to replace the dryer so they can match. That wasn't the smartest choice.

[George Camel]

Aesthetic.

[Jade Warshaw]

It's all it was all about aesthetic. I don't regret it, but it might not have been the most savvy choice. Let's go to the phone lines. We've got Sarah in Seattle, Washington. What's up, Sarah?

[Caller (Abby)]

Hey, how are you guys?

[Jade Warshaw]

We're doing good. How can we help?

[Caller (Abby)]

So I want to do my snowball out of order, and I have a reason. So I am a full time working adult student. I have paid off several debts till now. My next four debts are student loans. Because I'm still a student, I don't have a payment due on them. So I wanted to jump to my. If that. That would make it so that I can free up a payment and do my snowball. Grow my snowball faster.

[Jade Warshaw]

Oh, I see. So you're. You're not doing the baby steps out of order. You're doing the debt snowball out of order.

[Caller (Abby)]

Yes.

[Jade Warshaw]

Okay, what's.

[George Camel]

What's that debt that's outside of the snowball you want to start on?

[Caller (Abby)]

So I had some legal issues with my ex husband and I had to take a personal loan. So if I get that payment freed up, that's almost $1,000 a month that I'm having to pay. That would contribute significantly to growing my snowball.

[George Camel]

Is that your only debt outside of the student loans?

[Caller (Abby)]

No.

[George Camel]

What else?

[Caller (Abby)]

I. So pretty much all of my debt is related to the legal issues I had with my ex and then my house.

[Jade Warshaw]

How much is the personal loan? You said how much it is a month, but how much is it total?

[Caller (Abby)]

That loan right now is about $8,500.

[Jade Warshaw]

Okay. And is that technically the. The next smallest after the student loans?

[Caller (Abby)]

Yeah. So my student. My four student loans range from 5,500 to about 8,000. So they're. They're right in order. It's just.

[Jade Warshaw]

Yeah.

[Caller (Abby)]

Would come before the personal loan.

[Jade Warshaw]

The only question I had in this is, and this is kind of getting in the nitty gritty, but I'd be wondering, okay, are these loans subsidized? Are they unsubsidized? Are they still are. Do they have the ability to gain interest even though I'm still in school? Do you know the answer to that?

[Caller (Abby)]

Yes. Three are subsidized or not subsidized. The smallest one is subsidized, so only one is not gaining interest.

[Jade Warshaw]

Okay.

[Caller (Abby)]

My employer is paying for my tuition now. And before this legal issue with Max, I was house flowing school.

[Jade Warshaw]

I see, I see. I mean, knowing that my loans are active even if I'm not would still make me want to work this in Order. But I understand the temptation that you're saying of getting like the thousand dollars back because you're spending that. So that's what my brain would do. My brain would be like, listen, student loans are a major problem. I want to knock these things out as soon as I can. How amazing to have paid them off before you've even graduated. That's kind of where my mind goes. George, what about you?

[George Camel]

Well, I want to zoom out a little bit and go, what is your total debt amount right now.

[Caller (Abby)]

Excluding the house?

[George Camel]

Yes.

[Caller (Abby)]

About 78,000.

[George Camel]

Okay. And what is your income?

[Caller (Abby)]

About 135 while a full time student. Child support? Yeah.

[George Camel]

Wow, you're amazing.

[Caller (Abby)]

I'm not, I'm not a full time student. I work full time and I'm doing school online.

[Jade Warshaw]

Okay, well, what's the other debt? Because you named about 30,000 in student loans. I feel like, give or take, what's the other debt in student loans and personal loans?

[Caller (Abby)]

So literally it is all related to. What is it with my. It's. So I've got the 85. I said another personal loan for 14, credit card for about 27. I owe my mom some money and then my house.

[Jade Warshaw]

How much do you owe your mom?

[Caller (Abby)]

About 17.

[Jade Warshaw]

Okay.

[George Camel]

That's some for sure.

[Jade Warshaw]

Yeah, yeah.

[Caller (Abby)]

It was a two year legal battle. So.

[Jade Warshaw]

In the. In here's. This is gonna sound nitpicky. Okay. And there's method to my way of thinking of this and George might have another take on it, but you know, my husband and I paid off $460,000 of debt. 280,000 of it was student loans. And it's, it's just daunting to look at a task like that. And I'm sure you feel the same way, Sarah, but I found that there's something about. If I have found a system in a solution, if I can build the muscle of sticking to the plan. Every time I stick to the plan, I stick to the plan. I stick to the plan. It takes the guess out of it and it causes me to be more consistent long term than kind of jumping around and picking and choosing. Because this is. You're going to hit peaks and valleys on this. There's going to be times where you're ready to run through a wall because you're so like geared up to do this. And then there's going to be times when you want to quit. But if you build up the muscle of I stick to the plan. I do, I stick to the plan, then there's something about that that really helps. And so in this case I would stick to the plan even though that thousand dollars is waiting there. Build the muscle of doing the plan the right way so that when the rubber meets the road, you'll do the plan the right way.

[George Camel]

I love that you're going to free up a lot of money cleaning up those student loans too. Those payments will also get free.

[Jade Warshaw]

That's.

[Caller (Chelsea)]

When you go through a job loss or job change and lose your employer sponsored health insurance. There's no better time to try Christian healthcare Ministries. That's right. There's another option besides COBRA to take care of your family during that time. Because if you didn't know, the cost of COBRA has gone up a lot in the past few years. And CHM is an affordable, biblically based alternative to health insurance. So do your own research. CHM is a great option that's potentially a third of the price of cobra. It's a health cost sharing ministry that's helped hundreds of thousands of families like yours take care of over $11 billion in medical bills since 1981. And the support you get from CHM goes beyond helping you pay for medical bills. Members become part of a family that prays for them when they have a medical event. Try getting that with cobra. So if you're going through a job loss, life change, or just want to explore other options to save on healthcare, CHM might be perfect for you. CHM programs start as low as $98 a month, so find out [e-mail] budget that's chministries.org budget.

[Jade Warshaw]

Buying or selling your home is a big deal, guys, and you want an expert in your corner. You need someone fighting for you to find the best deal and the right price. So the Ramsey trusted program is truly the only way to find a top agent that you can trust. Someone who's going to make your home a blessing and not a burden. It's really easy. Just compare agent profiles, interview them and choose the right one to work with. It's up to you. So to find a local Ramsey Trusted real estate pro for free, I might add, go to ramseysolutions.com agent or click the link in the description if you're listening on YouTube or podcast. Love that. Let's go to the phone lines Eric in Seattle, Washington. Eric, what's up?

[Caller (Abby)]

Hi, this is Eric. How do you do?

[Jade Warshaw]

How do you do? We do good.

[Caller (Abby)]

I'm good, thank you. Do you have any questions for me before I ask my question?

[Jade Warshaw]

Should I? I've never done a pre question I think you should start this one out for us, Eric.

[Caller (Abby)]

Okay, well, here's the story. I have. I have two children. I have a son, 37, and a daughter, 27. Okay. And I have. You know, for a few years, I've had a dream of becoming wealthy and being able to afford to buy a home.

[Jade Warshaw]

Okay.

[Caller (Abby)]

For my. For my children. And that is starting to look like a reality. But I was thinking about it, like, is this something I really want to do? And I realized that by giving them a home, I'm not really giving them anything. I'm taking away the thrill that they would have of achieving this milestone on their own.

[Jade Warshaw]

So I. I mean, are you picking the home? Are you picking the home, or are you just giving them the cash?

[Caller (Abby)]

I was. I was thinking I would help them pick a home, but I just. I don't think it's a good idea. I think they. It's. It'd be more satisfaction if they could do it themselves.

[Jade Warshaw]

Maybe ask them.

[Caller (Abby)]

So I came. Well, I came up with the idea of putting an incentive plan together for them to start saving up for a down payment.

[Jade Warshaw]

Okay. And is this a home together? Can you. Can you clarify? Are you talking about buying, like, a big family home, or are you talking about buying individual homes? Oh, wow.

[George Camel]

How much money do you have for this purpose?

[Caller (Abby)]

Not that much right now. But I own. I own two software companies. They're both doing well.

[George Camel]

Okay, so are you worth multiple millions dollars?

[Jade Warshaw]

So here's what I would do. Let. Let's just make this cut and dry. If you're wondering if it would steal their joy or not, just ask them. Say, guys, here's what I was thinking of doing. I was thinking of saving up some money to buy you guys a house, but I don't want to steal, you know, your joy out of this. Would you want me to help you pick it out, or would you prefer to just be gifted this cash? Would you prefer to help me with. For me to just help you with the down payment? I think if we have questions in these situations, George, the best thing to do is just ask and I listen. I'll tell you, I, for one, would have loved if somebody was like, let me give you this skinny Gen Z.

[George Camel]

Millennial who's struggling to wonder if they'll ever afford a home. And they went, I don't want to steal your joy.

[Jade Warshaw]

Come on.

[George Camel]

I think they'd all say, no, I'll take the house. I'll be very joyful.

[Jade Warshaw]

Ultimate joy. Oh, yeah.

[George Camel]

The question is, how are they doing financially, right? Because if they're already struggling, broke, and they can't take care of this home, it could be a burden instead of a blessing.

[Jade Warshaw]

That's true.

[George Camel]

There's a lot more we need to dig into to understand. Are they responsible financially already? What is the cause?

[Jade Warshaw]

Yeah.

[George Camel]

What's causing them to not be able to afford a home right now?

[Jade Warshaw]

Yeah.

[George Camel]

And is this home going to cause some level of entitlement? There's a lot to dig into, but it starts with a conversation with them.

[Jade Warshaw]

Yeah, that's right. So if your kids are like. Like George said, if they're entitled, if they're doing something that's like a failure to launch and they're struggling. Yeah. Monetary gifts probably aren't the right thing.

[George Camel]

Or if there's a lot of misbehavior and they're just going into credit card debt.

[Jade Warshaw]

Yeah.

[George Camel]

Just buy stuff they can't afford. I wouldn't just throw a home at that.

[Jade Warshaw]

No. But if they're great citizens and they have great jobs and they're managing their money well, that is a wonderful gift. And I think something like that, especially younger in life like this, he said they're 37 and 27. That truly has the ability to set somebody up for life. Like, truly. Can you imagine? I mean. Well, George, you're the exception. You bought. You bought your house early, and you paid it off pretty fast.

[George Camel]

Yeah. But I've thought about this exact question. What? I want to buy my daughter. My daughter's not even two yet. Like, what? I want to save up, because who knows what a home's going to cost? She's 25.

[Jade Warshaw]

Yeah.

[George Camel]

Is it going to be a million dollars?

[Jade Warshaw]

That's true.

[George Camel]

And so I. I kind of want to be ready, but I also want to make sure she has some skin in the game.

[Jade Warshaw]

Yeah.

[George Camel]

And that this doesn't turn into an entitled brat who goes, well, Daddy said he's going to buy me a house, so I don't need to try in life. Well, that's always the fear as a parent.

[Jade Warshaw]

That's true. Like, Sam and I, we put aside for our kids. We have two of them. They're five and seven right now. And in my mind, I'm thinking, yeah. Like, I don't know when that day is going to come for them. If it's. If it's when they're in their 20s or 30s or 40s. But the thought is, yeah, we'd like to be able to give them, if not the whole thing, like, at least the down payment, because Sam's mom helped Us quite a bit when we bought our first house. And it was such a blessing. Like, it was such blessings.

[George Camel]

Did you feel robbed?

[Jade Warshaw]

No. I was like, oh, thank the Lord for Nina Warshaw. Like, she is a saint. Like, that's. It's such a gift.

[George Camel]

Grace and mercy right there.

[Jade Warshaw]

Yeah, man, I know.

[George Camel]

That's so. I. I think it really depends on the person, but if the kids are working hard, they have a great work ethic. They're debt free. They have an emergency fund, and they're just plugging away at this down payment and it's tough because of where they live. Then. Yeah. I think it's a really awesome thing to do is kind of leave the legacy while you're alive.

[Jade Warshaw]

Yeah.

[George Camel]

Instead of when you're in the grave and you throw a bunch of money.

[Jade Warshaw]

Because by then they're probably all right anyway.

[George Camel]

Exactly. So I like that mentality of sort of leaving the inheritance while you're still around to watch them enjoy it and help them grow.

[Jade Warshaw]

I think we can help Chris in Moses Lake real quick before we go to break. Let's go. What's going on, Chris?

[Caller (Abby)]

Hey. Yeah. I got a quick question for you. So me and my wife were trying to get out of debt as fast as we can. We've got a pretty big mortgage that we took out two years ago on the house. So we. It was 637,000 for the house. We put 20% down. So we're at 508,000. We've been paying it for two years. Our interest rates is 5.99. Payments are 3,446amonth. But I've been making additional payments on it because I don't want to be here forever.

[Jade Warshaw]

Good.

[Caller (Abby)]

So right now I'm. We've been. For a year and a half. We've been doing about 5,000 to 5,200 on it.

[Jade Warshaw]

And this is your only debt?

[Caller (Abby)]

This is my only debt. I have credit card debt. I want all my houses. I mean, all my cars I don't have. Don't use credit cards. I only use them for, like, a debit card. Basically, it's a credit card, but I pretend, I guess a debit card we just paid off.

[Jade Warshaw]

I'm just going to glaze. I'm a glaze over that for now and pretend like you didn't say that so we can answer your next real question. What's the question you have today?

[Dave Ramsey]

So.

[Caller (Abby)]

So my thing is, is me and my wife, we're working on it real hard to pay it down. We're Looking at, we're on track to pay this off in 11 years. It's a 30 year loan. But if we keep paying the way we are, we should be done in 11 years.

[Jade Warshaw]

Right.

[Caller (Abby)]

I've also been putting money aside saving because I believe that if you have a savings on the side, morphe doesn't show up in your life as long as you have a good savings on the side.

[Jade Warshaw]

Well, we would teach, we would teach for you to have three to six months of expenses and then after that you're in baby steps four, five and six where you're investing, saving for the kids, college and putting extra payments towards the house. So that's all good. How can we help you today?

[Caller (Abby)]

So my thing is this. So me and my wife and doing that we put away. So I'm savings, I've got 95k and I've got it in a high savings interest, it's at 3.7%. So we're making some off of it.

[Jade Warshaw]

Good.

[Caller (Abby)]

But my thing is, is I'm trying to, my wife is like to. We've been kind of waiting and hoping that the interest rates would go down, but I don't think they're going to. We were thinking about taking a big lump sum right now and from my savings and putting a big down payment on, you know, to knock the loan down. Stephen More.

[George Camel]

Yeah.

[Caller (Abby)]

Or do I just stay the course that we're doing? Because we are, you know, knocking it down pretty quick.

[Jade Warshaw]

I wouldn't use your emergency fund, if that's what you're talking about. If the 95,000 is your three to six months of expenses, I would leave that there because you need that there as a cushion.

[George Camel]

I'm guessing that's more than that. So anything above six months, I would take that as a lump sum and throw it at the mortgage. Because the less principal you pay or the more you throw at the principal, the less interest you'll pay the following month, which will save you money in the long run. So I would not wait for entrance rates to do anything. I would just be plugging away at that mortgage every single month like you're doing consistently, and knock that thing out and try to even beat your goal. Do it in 10 years or less. Yeah, so we found the average millionaire does in our study 10.2 years.

[Jade Warshaw]

Woo. That's so that's lightning fast. I, I imagine that when a person who's not used to hearing our show hears that, they're like, george, you're lying.

[George Camel]

It's the data. Oh, I would 10.2 is too random to make up. That's just what the data said from 10,000 millionaires. And it wasn't necessarily their first home.

[Jade Warshaw]

Let me make that clear.

[George Camel]

Could have been their second home. They rolled equity into it, but 10.2 years, they got that mortgage knocked out. They didn't hang on to it for interest deduction or anything crazy like that.

[Jade Warshaw]

Yes, because they were going to invest it and make the spread.

[George Camel]

Heard that one before, Jade. Don't get me started.

[Jade Warshaw]

I won't get you started. Till next segment.

[Caller (Chelsea)]

There's a time in your life and did the baby steps for renting. But you don't want to do it forever because when you rinse, you're still paying for a mortgage, just somebody else's. Plus, rent means instability in your budget because it always goes up, never down. So when you're ready to buy, make sure you work with a mortgage partner. You can rely on Churchill Mortgage. Churchill is Ramsey, trusted to help you make the move from renting to home ownership wisely. Churchill understands that when you buy a home, the Ramsey way, you're more mortgage payment will be a consistent, manageable part of your monthly budget. Plus, when your home is paid off, that was your largest expense. Now it's extra money in your pocket and an asset towards turning you into a baby steps millionaire. Get started on the American dream of home ownership [e-mail] that's churchillmortgage.com.

[Jade Warshaw]

All right, so, George, it's time for one of my favorite segments on the Ramsey Show. Talk Nerdy to Me.

[George Camel]

All right, let's do this. What is our topic today for Talk Nerdy to me?

[Jade Warshaw]

Okay, we're talking about what the heck is a mutual fund?

[George Camel]

Wouldn't you like to know? Well, Jay knows, but for the benefit of the group, a lot of people go, okay, I know Dave talks about that a lot. Good growth stock mutual funds.

[Jade Warshaw]

Right?

[George Camel]

That's a classic Dave line. But what is actually going on there? So let's talk about this. Mutual funds are investment vehicles that pool money from multiple investors, AKA you and me and Jade and me to purchase a diversified portfolio of stocks, bonds, or other securities. So how do they work? So you're buying shares of a collective portfolio.

[Jade Warshaw]

You're buying. Wait, wait, wait. George, George. Share, George. I heard equities. I heard securities. I heard.

[George Camel]

Come on, glasses up for you.

[Jade Warshaw]

Make it. Make it. Put it on the bottom shelf for us.

[George Camel]

All right, so shares are tiny pieces of a company, tiny pieces of ownership.

[Jade Warshaw]

Ah.

[George Camel]

So mutual fund. Let's say there's 90 to 200 companies within this one fund. And so when you buy a piece of the fund, you're really buying a piece of these 200 companies.

[Jade Warshaw]

Amazing.

[George Camel]

Got that? Yeah. So investors, we all benefit from this diversification because we all know, oh, my gosh, Elon burped and Tesla stock went down 40%.

[Jade Warshaw]

Right.

[George Camel]

Well, we don't have to worry about that when there's 199 other stocks from other companies to balance it out.

[Jade Warshaw]

So when you say that, you could have a fund that's got everything from Procter and Gamble to Pfizer to Coca Cola to Home Depot. All of that. All of those different stocks in one fund.

[George Camel]

Exactly. So the benefits here, instant diversification. You have lower costs because trading single stocks can get expensive. Mutual funds make it really affordable to invest in a range of stocks without all these transaction fees because you're not doing these little nickel and diming transactions. And with an actively managed mutual fund, which is a lot of time, what we're talking about on the show, there's a team of investment experts that have come together to decide which stock should go in here. And they're actively going, hey, should this one move out to this one move in.

[Jade Warshaw]

And what are they trying to do when they do that?

[George Camel]

Well, they're trying to get the best return for us, the investors. Yes. So that's the goal. So when you hear about, you know, a few types of mutual funds, for example, good growth stock funds, so what that means is these are equities to their stocks. These are not bonds. They're meant to grow. So we say good growth stock. These are companies that we expect to see some growth from.

[Jade Warshaw]

That's right.

[George Camel]

When you hear the word index fund, well, that's really just a type of mutual fund. And what people are generally referring to is a passively managed mutual fund. So nobody's deciding what's in the fund. It's just taking the top 500 companies. So an S&P 500 index fund is just going to take the top 500 companies and buy those stocks.

[Jade Warshaw]

That's right. And you could have different indexes. Yes. So we talk about the S&P 500 a lot. That's kind of like the, the holy grail of indexes that people follow. But you might have heard of others like nasdaq, Dow Jones, Dow Jones to.

[George Camel]

The ticker symbols up. So there's just different, you know, pools of companies. Some are tech focused, some are other healthcare focused. And then you've got bond funds. And these are really fixed income. These are for people who don't like the volatility of the market. They just want something stable. So these invest in corporate or government bonds. There's regular interest income, lower volatility. So some people like that.

[Jade Warshaw]

This is just getting nerdier and nerdier. I'm liking it. It's.

[George Camel]

Yeah, I'm trying to put it on the bottom shelf so that in five minutes we can all go, great, we learned it. Yeah, we can move on. And then lastly, a money market fund. So you hear about that. That's almost like a high yield savings account basically where it's just sort of sitting short term debt instruments. But it's high liquidity, meaning you can take that money out and you're not going to worry that it's going to go up and down. It's just going to sort of sit there making a little bit of interest like a savings account.

[Jade Warshaw]

Love that. So George, how do mutual funds make money? I mean, you told us what they are, but technically how are they making money? Are we making money every time the company makes money or how does that work?

[George Camel]

Yeah, so as the company stock share value goes up, we make money. And sometimes that's paid out in a dividend. So think of that like profit sharing. The company made some profit. They're going to reward the shareholders for holding on to these stocks for the long term by giving them a little bit of money.

[Jade Warshaw]

Love that.

[George Camel]

Or it can be reinvested. And so that's what we do in our retirement accounts. We're not getting dividends off of that, we're just reinvesting the growth.

[Jade Warshaw]

That's right.

[George Camel]

And that's what creates this amazing compound growth. And the other way is capital gains. So when you sell it for a higher price, if I buy Apple stock at $100 and five years later, it's $150, well, I made 50 bucks per share.

[Jade Warshaw]

That's great.

[George Camel]

That's another way to make money. If I sell that. And now you don't want to do that in a retirement account. But unless you're of age to retire, that's true. But if you're, you know, under 60, you want to just hang on. But if it's in a taxable brokerage account, meaning it's non retirement, you would sell and you would have capital gains tax either short term or long term, depending if you've held it for a year or longer.

[Jade Warshaw]

So George, I hear Dave and you guys and myself all the time, we talk about the four different types. Can you go through those so that people know once and for all we're talking about.

[George Camel]

So you'll hear Dave say growth and income. Growth, aggressive growth and international. Here's what you might see that listed as. If you're looking at your 401k, for example, you might see it listed as large cap. That would be your growth and income. These are large, boring, stable companies like your Home Depots. They're out there. They're not going to be skyrocketing. They're not like innovating in crazy ways.

[Jade Warshaw]

Yeah, but they're stable. Yeah.

[George Camel]

You need these as the foundation. Then you have the medium cap, which is going to be your growth funds. So these are medium to large companies. Then you have small cap. These would be considered your aggressive growth companies, like small tech startups. And those are going to be the wild child. It's going to go really high.

[Jade Warshaw]

That's right.

[George Camel]

And then finally international. So you want to have this as a hedge. Think like BMW, lg, Samsung. These are international companies. And what we found, Jade, when the US market just took a dip like it did recently, what happened? International funds.

[Jade Warshaw]

So they balance each other out.

[George Camel]

So it balanced out. And people have said, well, Dave, international funds have been out, you know, underperforming the US stock market for a long time. Should we switch that up? And we just saw a great example of why Dave keeps international as a quarter. So when you talk about investing in your retirement account, we recommend just a quarter in each 1/4. So 25% in that large cap, 25% medium, 25% small, 25% international. And if you just choose those four funds in your 401k that have a long track record.

[Jade Warshaw]

Yeah.

[George Camel]

And have a solid return, you're going to be okay. It's as simple as that.

[Jade Warshaw]

That's right.

[George Camel]

You don't need to overcomplicate it.

[Jade Warshaw]

I love that. I feel like you made it very clear for us.

[George Camel]

I tried. And we do have. There's, there's some great next steps you can take. And number one is connecting with a SmartVestor Pro. So these are financial advisors that can teach you all of this stuff in depth, that you understand what you're doing. They're not making decisions for you. The ball is in your court. But you need to know what's going on with your investment so you can reach out. Connect with a SmartVestor Pro, Ramsey solutions.com SmartVestor or click the link in the description if you're listening on YouTube or podcast.

[Jade Warshaw]

Very, very good. I like it. This is very, very Helpful stuff. All right, George.

[George Camel]

I'm the Miss Rachel of mutual funds. You know, I try to just keep the cookies on the bottom shelf.

[Jade Warshaw]

You said the Ms. Rachel?

[George Camel]

Yeah, that's for kids. Oh, you're beyond that phase. I'm in the Miss Rachel phase right now.

[Jade Warshaw]

Oh, so this is like cocoa melon, that kind of deal. Got you. All right, George, let's take a social question. Let's do it. All right, so Jane from Instagram asks, does Dave or George ever recommend not paying off your home if you are retired?

[George Camel]

I gotta think about that. That's like a little riddle here.

[Jade Warshaw]

If Jane retires at 67 and Dan retires at 68, who will pay? It's like a word problem.

[George Camel]

Would we ever recommend not paying off your home if you're retired? I mean, you. You need to have the money. So if you're retired and you don't have an. All you have is enough income to keep up, well, you don't have the extra money to throw at the mortgage.

[Jade Warshaw]

Right.

[George Camel]

But if you're able to knock it out and then still have the rest of your retirement, now we don't know, it'd be great if we know when you were going to pass from this earth. That would really help us with our calculations.

[Jade Warshaw]

Also true, but we don't.

[George Camel]

So if you're able to pay it off and able to throw extra at the principal, why not? I've never heard Dave say, no, it's a terrible idea. Keep the mortgage around.

[Jade Warshaw]

I agree. I've never heard it either. All right, we've got another one. Kendall from Tick Tock. I like this one. She asks, what do you think is the hardest baby step?

[George Camel]

Oh, that's a tough one. What do you think, Jade? You went through a slog with baby step two.

[Jade Warshaw]

I do think that baby step three is a sleeper. Like, I peop. I think people sleep on it thinking, oh, it's gonna be easy. I'll finally be paying myself. And I. I felt that way. And then once I got in it, I felt tried. I was like, you guys told us that this was gonna get easier. And it. For us, it felt. I don't want to say harder, because baby step two is a. That's a struggle. But baby step three, man, people sleep on it.

[George Camel]

Well, it's almost like you run the marathon, and at the end they go, okay, the 5K starts now. And you're like, what? Can I just get a break?

[Jade Warshaw]

Exactly. Exactly.

[George Camel]

I gotta keep doing this.

[Jade Warshaw]

Exactly. I mean, what did you think?

[George Camel]

Oh, man, I don't Know, I think hardest is the. Is an interesting term because baby step two, while it is really difficult, it's also kind of exhilarating.

[Jade Warshaw]

Yeah, it's gratifying. Yeah.

[George Camel]

It's like you get angry at the debt and it's kind of this us versus versus them.

[Jade Warshaw]

And you feel it. Like you feel the results. Yeah.

[George Camel]

But you're right. The baby step three part, where you're not quite building for the future, but you're done paying for the past. It's just this purgatory in the baby steps.

[Jade Warshaw]

Yeah.

[George Camel]

So for that, I'm gonna go baby step three today. Don't hold me to it.

[Jade Warshaw]

Wow. We both said baby step three.

[George Camel]

My mind could change.

[Jade Warshaw]

Wow. Okay. Will Rudder is saying baby step two.

[George Camel]

A lot of folks are saying two.

[Jade Warshaw]

Okay. Oh, two a whole day.

[George Camel]

I guess we were wrong.

[Jade Warshaw]

Baby steps step two is difficult. Like nobody like, no, don't put shade on us for that. We're saying it is difficult. Hey, that does it for this hour. I'm not going to talk about it anymore. You'll have to hang on and check us out. In the next episode.

[Dave Ramsey]

Statistics show that half of Americans don't have enough life insurance or they don't have any at all. I don't understand this, John. Why don't people want to take care of their family? They think they're going to die or something.

[Caller (Eric)]

Well, I used to be one of those guys.

[George Camel]

I didn't even think about it. And one of my buddies said, hey, the only reason to not have life.

[Caller (Eric)]

Insurance is if you hate your wife and kids. And I immediately went and got term life insurance.

[Dave Ramsey]

That's a gut punch.

[Jade Warshaw]

And.

[George Camel]

Oh, you're telling me. And for decades, Dave, I've sat across people who've lost a spouse, they've lost.

[Caller (Eric)]

Somebody important to them.

[Dave Ramsey]

Me, too.

[George Camel]

They don't know what to do next.

[Dave Ramsey]

Me, too. I mean, you're gonna have a crisis here, and, you know, you got two options. While you're sitting and talking to a young widow, she's concerned about how she's going to invest all this money properly and not mess this up. Or she's concerned how she's going to eat tomorrow.

[Caller (Eric)]

That's exactly.

[Dave Ramsey]

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

[Caller (Eric)]

Term life insurance can replace income, pay off debts, cover funeral expenses.

[George Camel]

So your family can actually have the opportunity to just be sad.

[Dave Ramsey]

Yeah.

[Caller (Eric)]

To just miss you.

[Dave Ramsey]

That's exactly what it's supposed to be. It's saying I love you to your family. Term life insurance. Jeff, Zander, and The team at Zander Insurance makes it easy and affordable. I've used them personally for 25 years. They're the only people I trust. Go to Zander.com or call 800-356-4282.

[George Camel]

I hate to admit this, but I don't always eat right. I know I need to eat more fruits and veggies, but sometimes I just have to pound some chips because they taste so good. That's why I love my field of greens. It helps me eat healthy when I don't have much time. And each fruit and vegetable in field of greens was doctor selected for a specific health benefit. Heart, lungs, kidney, metabolism, even healthy weight. And folks, I ain't getting any younger. It's super easy to mix with water. And here is the great part of it. I thought it might taste like grass, but it tastes great. And only Field of Greens makes this promise. Your doctor will notice your improved health or your money back. So go to fieldofgreens.com Ramsey for 20% off your first order. That's fieldofgreens.com Ramsey to save 20% on your first order.

[Jade Warshaw]

Thanks for hanging out with us on the Ramsey show. I'm Jade Warshaw. George Camel. It's always good to be here with you. We're taking calls about life and money. It's a free call in show. If you didn't know, you can call in, triple, 882-55-5225 is how you get your call onto this show and onto the board. And Alex did exactly that. He's in Tampa, Florida. So let's go to Alex. Alex, what's going on, man?

[Caller (Abby)]

Hey, guys, thanks for taking my call today.

[Jade Warshaw]

You're welcome. How can we help?

[Caller (Abby)]

Sure. So I want to know if I should sell my car or not. So I'm on baby step two and I'm doing the debt snowball. Right now I'm working on a credit card that's about 3,000 and then paying the minimum payments on my car and I'm not sure if I should sell it or not.

[George Camel]

What's the car worth and what do you owe?

[Caller (Abby)]

Yeah, so I owe about 11k on it. And I did the Kelly blue book. It's between six and eight. So eight private.

[George Camel]

Okay. And what do you make a year?

[Caller (Abby)]

My take home is about 50k 41amonth.

[George Camel]

Okay. Now there's no reason to sell this car.

[Caller (Abby)]

Okay.

[George Camel]

Number one, you're underwater on it and number two, you're gonna have to turn around and buy a six to eight thousand dollar car. So it's not going to do you much good.

[Caller (Abby)]

Yeah, that's what I was battling with. I wasn't sure because I'd heard in other different segments like to get rid of it and take, you know, the little bit of a hit. But I wanted to call because, well, if you.

[George Camel]

If you owed, like $30,000 and you're making 50,000 a year, that's way too much car. And we'd say, hey, sell it for that reason. And even if you have to take a little hit, but you got 14 grand total in debt, or is there more?

[Caller (Abby)]

No, no, 14 total.

[George Camel]

Okay. And you make 50k a year. So you're going to be done with this thing in 12 months or less.

[Caller (Abby)]

Yep. That's the game plan.

[George Camel]

Right. Are you throwing at least a thousand toward these?

[Caller (Abby)]

Yeah, I put about 1100 into my debts per month.

[George Camel]

Perfect. Yeah, you're right on track, man. Knock it out and try to get your income up, maybe get a side hustle. But the car is. Is not. It's not the main problem, and it's not going to be the solution to sell it. So I would just keep on going with the debt, snowball. Knock out that credit card debt, and then really hunker down on that car loan, get rid of it and never do it again.

[Jade Warshaw]

Good question. Thanks for the call. Yeah, George, you're so right. Sometimes it's like once you've done all you can do, you just. Just make those payments. There's nothing else to do except just make the payments until it's done.

[George Camel]

And it's not, probably not that big of a payment if he owes 11k on it. I don't know where it started, but it sounds like the car is a reasonable purchase outside of him using debt to cover it.

[Jade Warshaw]

Agree. All right, St. Louis, Missouri, we've got Blake on the line. Blake, what's up?

[Caller (Abby)]

Hey, there. I was just calling because about a month ago, I finished Baby step two, and I am. I've been doing it for six years, and I'm just, like, not feeling the excitement that I see other people doing it. I still feel like a gazelle hunting by a lion.

[Jade Warshaw]

Why tell us more?

[Caller (Abby)]

I don't. I. That's the thing is, I just can't figure it out, you know?

[George Camel]

Why did you start this in the first place?

[Caller (Abby)]

Huh?

[George Camel]

Why'd you start this whole thing six years ago in the first place? What was going on in your life where you decided, I'm done?

[Caller (Abby)]

I had a business that got destroyed by a tornado. Ripped the roof off my house.

[Jade Warshaw]

Whoa.

[Caller (Abby)]

And blew. Blew Both of my business buildings to the ground, and I ended up in severe debt. And I was about $120,000 in the hole and opened up my fridge and I had no food in there, and I had about A$50 to my name, and I just fell on the ground crying. And I was like, I gotta change something. So I got a second and third job and hustled my way to where I am now.

[George Camel]

Wow.

[Jade Warshaw]

Was this the big tornado that we heard about on the news years ago?

[Caller (Abby)]

Yep.

[Jade Warshaw]

The Joplin one?

[Caller (Abby)]

Yep.

[Jade Warshaw]

Wow.

[Caller (Abby)]

Huh.

[George Camel]

Wow.

[Jade Warshaw]

That's crazy.

[George Camel]

So how much context helps?

[Jade Warshaw]

Yeah. How much debt was this total that you got that you paid off today?

[Caller (Abby)]

It's about 125, 126.

[Jade Warshaw]

Wow. So you started your whole life over? Essentially, yes. So my guess is, you know, I think that when we do these things, as much as we do them out of. I a must, like, I must do this. This is the right thing to do. It's my only choice. Like, when your back is up wall, a lot of times you're like, this is my only choice. But if you also don't have that clear vision for the future kind of like the. The sunny side of it, the why, then sometimes we can accomplish those things. And it's like, okay, I did what I was supposed to do. I did what I had to do, but what was it all for? And it sounds like you're kind of feeling that, right?

[Caller (Abby)]

Yeah, you know, I. You know, I know Dave normally says, like, hey, go, you know, talk to a pastor or something like that. Unfortunately, my pastor has just left the church two months ago. I'm kind of. You know, I don't really have family relationships. I don't. Are you feeling a little, like, mentorship?

[Jade Warshaw]

Are you just feeling a little down and depressed? Is that what it is? You're just kind of down in the dumps right now.

[Caller (Abby)]

Yeah. Well, you know, everything in my life is going very well, but I just, like, don't feel excited the way I think I should be.

[Jade Warshaw]

Yeah. I mean, listen, Dr. John is not here, but sometimes you. You can. You just kind of go through those periods of melancholy, and. I don't know, it sounds like you linked it to the debt payoff. Maybe it has nothing to do with that, but I do know, like, when you go through those seasons where the things that are supposed to kind of light you up, you're just kind of numb and you're just kind of melancholy. Yeah. That's a time where I would reach out and talk to somebody. And if your Pastor is not available. You know, I'd get on betterhelp, or I'd get on. You know, get on with a. A counselor or somebody who can help me just talk through it and kind of give me some tools to work through it every day.

[George Camel]

I think you're stuck still in this fight or flight from all the trauma that you experienced and just paying off the debt you thought would solve everything. It solved something. It got rid of the money stress. But it didn't just magically give you this dream life either. And so I think there's a lot more to now explore now that you got the money out of the way. Now we can focus on career and relationships and all the other aspects that make life worth living. It's just when you're broke, it's hard to focus on those things.

[Jade Warshaw]

And what George just said is a big deal, what you experience. And I know this is a buzzword in society, but here I really think that it applies. Dude, you experienced a trauma like, that's wild to have a tornado of that impact and that size and magnitude, not only to experience that, like, in your emotions and that be in your neck of the woods, but for it to actually destroy your business in your home, like, that is a big deal. And that is not something that is just going to go away because the storm passed. You know, you're going to have to unpack that with some people, because the truth is, a lot was in danger. Your life was probably in danger more so than you know. It wasn't just a financial thing.

[George Camel]

To George's point, Baby step two kept you so busy, you didn't have to really deal with all of that. You sort of just probably numbed from it and went, I'm just going to work hard and get rid of this debt. So you know what to do. Blake, it's going to take a little bit of work to get there, but I'm rooting for you, man.

[Jade Warshaw]

That's a tough one.

[George Camel]

Just know it's. It's gonna get better from here. It is solve for peace.

[Jade Warshaw]

Do you remember seeing that on the news when that.

[George Camel]

Yeah, I didn't put two and two together.

[Jade Warshaw]

I think there's a Netflix documentary about it now. I think I saw that.

[George Camel]

That would make sense.

[Jade Warshaw]

The twister or one of the biggest.

[George Camel]

I mean, it feels like now there's big events happening all the time, but that was a huge one.

[Jade Warshaw]

It was a big one. Okay, I'm gonna ask another quick. These are fun question.

[George Camel]

Okay.

[Jade Warshaw]

Wondering what banks have the best interest for your money. I'm gonna read this, but I don't know what they mean by it. Wondering what banks have the best interest for your money. Is a redneck bank a good one? What does that mean?

[George Camel]

That's a real place. I've never heard of this. I just googled it. But their tagline is where banking's funner. That's pretty funny. But no wonder. What banks have the best interest? There's a lot of. There's a bajillion banks. The one that I personally use is called Laurel Road for high yield savings. And the rates change all the time, so I don't rate Chase anymore, but they've stayed very competitive. So Laurel Road is the one I personally use. Jade probably uses a different one.

[Jade Warshaw]

I use Marcus by Goldman Sachs because a good friend told me about it. And I also use Ally from time to time.

[George Camel]

Yeah, I wouldn't rate Chase. They're all going to be solid. What you want to make sure is FDIC insurance, no minimum balance required to open an account, and no monthly maintenance fees.

[Jade Warshaw]

Yeah.

[Dave Ramsey]

Hey, technology has changed a lot in the last 30 years. Now the hot topic is AI. And I understand that it might seem intimidating, but if you use AI the right way, it's just another tool to help you work smarter and faster, like a calculator or a cordless drill. So if you run a business, you better get on board with it before you get left behind. And NetSuite by Oracle offers AI powered tools that help small businesses improve efficiency and make smarter decisions by bringing all their major business processes into one platform. That way, there's one source of truth for the real time data you need to take advantage of opportunities. Then you can forecast better, scale more efficiently, and streamline those manual tasks that take too long. So join the more than 41, 000 businesses, including Ramsey Solutions, that rely on NetSuite to help tackle some of their biggest challenges. And right now, you can download the CFO's guide to AI and machine learning at netsuite.com Ramsey that's free at netsuite.com.

[George Camel]

Ramsey People ask me all the time, George, what's your number one money saving hack? Glad you asked. Nothing makes me happier than helping another frugal friend. So here's the hack. Get on a budget. Seriously, how are you supposed to save money if you don't know how much you're spending in the first place? And that's what makes the EveryDollar budgeting app a game changer. With every dollar, you'll get a clear picture of your spending and from there, it's easy to see where you can get more intentional cut back and save more money. So how much money are we talking here? Well, the average EveryDollar budgeter frees up $395 in their first budget. That's the hack. And if you ask me, I think you're way above average and you'll save even more. So what are you doing still listening to me? Go download the EveryDollar app for free and start saving more money right now.

[Caller (Abby)]

Foreign.

[Jade Warshaw]

You'Re listening to the Ramsey Show. Let's go directly to the phone lines where we've got Liz in San Diego, California. Liz, what's up?

[Caller (Abby)]

Hey. So my dad and mom bought a house in 2019 that I'm currently living in with my five children. And we want. And I want to buy it from them, but there's a problem, but I don't know if I can necessarily afford it just with everything going on with economy and my personal finances. And I just. And I feel like right now it's a little bit of a. Like I need to. The timeline has been rushed because my dad, my mom passed away and my dad's gonna get remarried soon. And so I just feel like my financial security with my kids is up in the air a little bit.

[Jade Warshaw]

Okay, were the parents living there with you or you were living there alone with the kids?

[Caller (Abby)]

I was living there alone. It was a. It's a second. It's a considered a second home.

[Jade Warshaw]

And so your dad's getting married to a new wife. So I'm trying to understand why that's connected to rushing you out of the house.

[Caller (Abby)]

Just because he's been. Because he just retired as well. And so I think that he wants to kind of gain more financial freedom from us, like, and get well, you know what I mean? Like, not.

[George Camel]

So does that house have a mortgage on.

[Caller (Abby)]

Does. They bought the house for 510. And it was in the middle of my divorce, so we didn't want to put my name on it. So it wasn't going to be tied at all to any of the proceedings. And then what's left on the mortgage? He. I am pretty. Well, he. We agreed that I would buy it for the price, so it doesn't really matter for 510.

[Jade Warshaw]

Are you assuming. Are you trying to assume the old mortgage or you're just like trying to start from scratch with your own to give him the money?

[Caller (Abby)]

I guess that's the thing is I don't know. I don't know which route because we've Never done this before. What would be the, the best for both of us going into this? Like, should I. But I don't think I would qualify.

[Jade Warshaw]

Well, that's my, that's the hard part of this. So it sounds like you're wanting, it sounds like you're wanting to keep the house more so for stability of your family because your family's been living here since 2019.

[Caller (Abby)]

Right.

[Jade Warshaw]

And it's just a rental. It's not like the house you grew up in or anything like that. Right.

[Caller (Abby)]

Right. Yeah.

[George Camel]

Okay.

[Caller (Abby)]

But it's become my kids home.

[Jade Warshaw]

Sure. You know, my question is, I mean, here's the thing. If you buy this house and you can't afford it, you, you will not be able to keep it long term and you will end up moving because you won't be able to afford it. So I think it's really important to run those numbers out. And the way we teach it here, which is really the best way to buy a house, is when you run those numbers out. Liz, if it's going to be any more than 25% of your take home pay, you, you can't afford it. And if it's creeping up over 35%, especially like that is just a rope tightening around you, like it's going to make you feel completely bound up. You won't have the money to do any of the things that you need to do really to further your life. You won't have the money to invest, you won't have the, the money to pay for, help pay for your kids college, that sort of thing. So that's why we teach it that way. Have you done any rough estimate on this to see what that might look like?

[Caller (Abby)]

No, because I, I'm not sure if I should try and get my own conventional and I don't think I would even, I don't know if I would qualify or if there's some kind of a way for me to assume.

[Jade Warshaw]

Well, assumption is even harder because now you're dealing with the equity that's already there and you're kind of on the hook with that. So I, I can't see that being the route. Especially if you already feel like you can't afford this. I would be thinking, yeah, run it, run it out as a conventional loan and see what, where you, where you match up. What's your income?

[Caller (Abby)]

I, so gross from my job I make about 80,000 a year. But then I, I have alimony for the next three years and I'm just, I'm graduating soon with my doctorate and so I'm hoping to get a bump, an increase in my circumstances, but, I mean, it's not set in stone yet.

[Jade Warshaw]

George has got the mortgage calculator pulled up. Let's just run some quick math and see.

[George Camel]

Are you debt free?

[Caller (Abby)]

I have about 11,000 in debt.

[Jade Warshaw]

Okay.

[George Camel]

11,000 in debt.

[Caller (Abby)]

Mm. My cars are paid off.

[George Camel]

What's the 11,000?

[Caller (Abby)]

Just credit cards. I have medical. Medical expenses. My. I have special needs kids.

[Jade Warshaw]

Okay. Okay. So I see even more why you're wanting no savings.

[Caller (Abby)]

No, because it's been used.

[George Camel]

Okay. That's the part that worries me, is you haven't built the foundation to now support being a homeowner and the expenses that go along with that. And so not only do you not have an emergency fund, you still have debt. You also don't have a down payment. And so to buy this house for $500,000, you need to take out the full amount as a conventional loan, right?

[Caller (Abby)]

Yeah. That would have to be how. That would have to be it. And that's what I don't. And that's what makes me nervous is I. I mean, like, I just don't think I can do it.

[George Camel]

Well, you're talking, you know, that's going to be $4,000 a month, which is going to be most of your take home pay.

[Caller (Abby)]

Yeah, right. Yeah. Because I think my take home is about. I'm trying to think. Because I have 401, I try to pay in as much as I can.

[Jade Warshaw]

Okay, let's give you. Let me give you a couple of tips, because I hear a lot of things that you're saying, Liz, and I think we can do. Give you a couple of practical things to really help you. Number one, if you want to be ready for this house, like what George said, you need the foundation, you need to pay off this $11,000 of debt, and we want you to save up three to six months of expenses. That way, if something happens, let's say you do buy the house and the AC goes out, you've got the money to fix it. You get a hole in the roof, you have the money to fix it. Right. Homeownership is expensive, and you want to have the money there so that you don't go into debt to deal with the things of home ownership. So, number one is that foundation. Number two, you got to have a budget. Because I can always tell when somebody doesn't have a budget when I ask him how much they make. And it's kind of like. And I don't say that to throw any shade that is most Americans. So I want you to be better than average and know your numbers through a budget. So before you get off the line, we're going to give you every dollar. And, Liz, just having that is going to give you so much control because you're going to know exactly where your numbers are, exactly how much is going out, exactly how much you can put on this debt. And then you can start doing the calculator, the mortgage calculator that George has here, and we'll make sure you have the link to that. So then you can project out and say, okay, here's the margin I have. With every dollar, you'll be able to see how quickly you'll have it paid off with their financial roadmap, and you'll be able to see how quickly can I actually buy this house? And then maybe, Liz, you can sit down with your dad and say, dad, my kids have been living here since 2019. You know the situation I'd really like. Stability is there, and you can start a path forward. I will have my debt paid off by XY date. I will have my emergency built up by then. And then it'll take me this long to save for the down payment. Is there any way that we can elongate this so that I can keep my kids stable? That's your best bet here. But definitely, getting into a house you can't afford is not.

[George Camel]

Yeah. Would he be willing or does he need this money?

[Caller (Abby)]

I think he's. I. It's one of the. It's. Yeah, I think he's willing. Like, he's been. He's been pretty supportive up till now. I think it's just because my mom's death was very unexpected.

[Jade Warshaw]

I'm sorry.

[Caller (Abby)]

That just increased the timeline.

[Jade Warshaw]

Yeah.

[Caller (Abby)]

Sorry.

[Jade Warshaw]

No, don't apologize. That is a tough thing that you're walking through.

[George Camel]

And you've got a law on your plate. You got five kids you're taking care of by yourself.

[Caller (Abby)]

Yes.

[Jade Warshaw]

You've got a lot, Liz. And here's the thing. You're. You're searching for something to grab onto, right? You've got a lot going on, and you're searching for that thing that can just anchor you in right now. And a lot of times we do find that when people go through something really tough like this and they've got this kind of overwhelming. It is easy to reach for something that's the wrong choice and it ends up making it worse. And so if you don't remember anything else from this call, just remember right now, I can't afford this house right now. I can't afford this house. And that way you won't do something that you'll regret. And getting these numbers will help you make a case with your dad. And honestly. Yeah, you know, that's the best. I mean, that's the best I can tell you right now. I hate that you're going through this, Liz.

[George Camel]

Homeownership. You didn't. You need to make that decision from a place of strength. And right now we're in a place of weakness and desperation and dad really needs this. And that's not the right time to make the biggest financial decision of your life. So I would push pause, find another way, rent for a while, build your own foundation and buy a house when the time is right, whether it's his house or another one.

[Jade Warshaw]

Yeah, we're rooting for you, Liz. This is a tough season, but it's not going to last forever. You're going to look up months and a year from now and you're going to feel a lot better about what your life is looking like. Foreign.

[Dave Ramsey]

I've been helping people get out of debt and change their lives for over 30 years. So I know change isn't always easy, but it's worth it. And here's change that's actually easy and worth it. Switching to Boost Mobile Boost gives you nationwide 5G coverage for reliable cost calls and streaming. And their plans start at just 25 bucks a month for unlimited talk, text and data. With Boost Mobile, there's no junk fees, no contracts and they offer a 30 day money back guarantee. Plus their customer service team is made up of real people, not robots. So switching is easy. So go to boostmobile.com Ramsey that's boost mobile.com Ramsey all right, let's cut to the chase. It's easy to get discouraged about crazy house prices and interest rates. But when you have the right real estate agent to help you buy and sell the right way, you'll have confidence to make smart decisions. Ramsey trusted agents aren't just experts who guide you through buying or selling. They're people you can trust to have your back. From the first call to closing day. Find a Ramsey trusted agent near [e-mail] agent. That's Ramsey Solutions.com.

[Jade Warshaw]

Around here we like to do something called the debt free scream. It's when we invite folks out. Really anybody can come. You can sign up to do your debt free scream. But we've got an amazing lobby here where we host guests of the show. And if you want to do your debt free Scream. There's a really nice stage here where you can do it on. These are people who have paid off debt. They've been walking the baby steps and they're excited about it and they want to truly shout about it. Right. That's what it is. And so we've got Jonathan here, he's from Franklin, Indiana, here to do his debt free scream. Jonathan, what's up? Hi.

[Caller (Eric)]

How's it going? Jaden George?

[Jade Warshaw]

It's going good.

[Caller (Eric)]

Oh, very good, very good. Well, I just paid off on November. I paid off 89, $600 approximately. And it was, it was my house.

[George Camel]

Way to go.

[Caller (Eric)]

Thank you.

[George Camel]

Just nonchalantly dropped that in there, right?

[Caller (Eric)]

Yeah, yeah. Like it's no big deal. But it really was a big deal in my life. Absolutely.

[Jade Warshaw]

Oh, that's a big deal. All right. How old are you?

[Caller (Eric)]

I'm 36.

[Jade Warshaw]

Holy smokes. 36 years old. How long did it take you to do that?

[Caller (Eric)]

It took me, well, paying off the house, it took me about eight years. But when I started the Ramsey plan, it was about six and a half years.

[George Camel]

Nice.

[Jade Warshaw]

Wow. So you had debt previous to the house that you paid off in six and a half years, then you turn around and do the mortgage in eight. Is that what I understood?

[Caller (Eric)]

Yeah, yeah. So I started following the baby steps in about July 2018. I heard about it in January. Took me about six months to ditch the credit cards. You know, I thought I was winning with my 800 credit score, my credit card rewards. But from July 2018, it took me, you know, about six and a half, six and a half years to pay off the house from when I got full, like full gazelle, intense, like on the day plan, 100%.

[Jade Warshaw]

Holy smokes. So 89,000. How much money were you making during that time?

[Caller (Eric)]

My range of income was about 50 to 80 thousand dollars.

[Jade Warshaw]

Wow. What kind of work do you do?

[Caller (Eric)]

I'm a middle school languages teacher.

[Jade Warshaw]

This just gets better and better because, you know you're breaking through all the stigmas, right?

[Caller (Eric)]

Oh, yeah. What stigmas?

[Jade Warshaw]

I mean, people think, oh, a teacher.

[George Camel]

You know, teacher salary, so single. So one income.

[Caller (Eric)]

Yes.

[George Camel]

Teacher salary.

[Jade Warshaw]

Yeah.

[George Camel]

And you paid off your house?

[Caller (Eric)]

Yes, absolutely.

[Jade Warshaw]

That's rare. And you did it so fast.

[Caller (Eric)]

Yeah, yeah, absolutely. Well, number one, I bought a house that I could afford and also just worked extra jobs and came home from school and just ready to game on. Was just ready to, ready to get the house paid off. Was really, really happy about getting it done.

[Jade Warshaw]

What caused you to be so intense about, like, what clicked in Your brain. What caused that? A lot of times people have an I've had it moment, or there's something that's kind of driving that intensity. What was that for you?

[Caller (Eric)]

Yeah, I mean, for me, I was already a little bit weird. I already knew, like, before I'd ever heard of Dave, that I really wanted to get the house paid off. But once I heard about Dave and I had, you know, really had the. The baby steps and really started following them 100%, it was just. It was just game on. And I was just ready to. Ready to do it. I really became an obsession, honestly.

[Jade Warshaw]

He sounds like a numbers guy, like a logic. Like, I just want to follow the system to get the thing done.

[George Camel]

What was the. Did you have a specific goal in mind if I want to pay it off by this time or in this many years?

[Caller (Eric)]

Yeah, I kind of. I called the show back in 2018, and that's when I really started getting full game. And Dave told me, he said, it's just going to a short amount of time where you have to, you know, you have to pause retirement, that kind of stuff. Here. Dave told me, I think you'll get it paid off in five years. Well, it took me just over six from that point, so I'm sure he's not too disappointed.

[Jade Warshaw]

He's cheering for you, dude.

[Caller (Eric)]

Oh, yeah, absolutely.

[George Camel]

What were the side gigs you had?

[Caller (Abby)]

Oh, I had a lot.

[Caller (Eric)]

I worked for the U.S. census. I worked for Subway for a while. I worked as an interpreter. I interpreted Spanish over the. Over the phone. So, yeah, a lot of. A lot of side gigs. And I'm also in the Air Force, National Guard and everything.

[Jade Warshaw]

Wow.

[Caller (Eric)]

Yeah.

[George Camel]

That's incredible.

[Caller (Eric)]

Well, thank you.

[Jade Warshaw]

You're. You're a guy who makes the most of his time. Like, you're not sitting around much.

[Caller (Eric)]

Yeah, definitely not.

[Caller (Abby)]

No.

[George Camel]

I was either serving sandwiches or serving his country.

[Jade Warshaw]

He's doing something.

[George Camel]

He's out there.

[Jade Warshaw]

Yeah. Thanks for your service.

[Caller (Eric)]

Thank you.

[Jade Warshaw]

Who was. Who was cheering you on?

[Caller (Abby)]

Or.

[Jade Warshaw]

Tell me, was it folks cheering you on or folks looking at Jonathan going, man, this Jonathan guy, like, he's bizarre. Like, this guy's nuts?

[Caller (Eric)]

I would say, oh, definitely. A little bit of both. People are definitely rooting me on. When they heard about the story, they said maybe I couldn't quite go that fast, but definitely were. Were cheering me on. Thought it was great. I got a lot of encouragement from friends, family, and just people that I'd met who found out about the journey.

[Jade Warshaw]

That's crazy.

[George Camel]

What's your next financial goal now? That You've hit baby step seven.

[Caller (Eric)]

Oh, it's awesome. My next financial goal. Well, number one, I've kind of been putting off some of the repairs on the house. I got to get that. Saving up a little bit for that, eventually get another car. But what I would love to do is go over to France and just learn French for a while. Yeah, save up for that. Yeah.

[Jade Warshaw]

That's incredible. I definitely think you should do the travel abroad thing. That's incredible.

[George Camel]

Jade's gonna vote for the fun thing instead of the home repairs.

[Jade Warshaw]

You have plenty of time for that. I mean, gosh, you're only 36 years old. You. You're gonna be a bazillionaire number one, and you've got all the time in the world.

[Caller (Eric)]

Yeah, it really feels great. It feels like a big load off my shoulders. I don't have to work these extra jobs anymore, so it feels kind of nice just to come home from work and not have to work anymore. So it's been. It's been wonderful. It's been a great, great journey. Really glad it's over and really excited for the future.

[George Camel]

What's the home worth?

[Caller (Eric)]

The home is worth Just about $200,000.

[Jade Warshaw]

Nice.

[George Camel]

What do you have in the. In the nest egg?

[Caller (Eric)]

Nest egg? I've got just shy of about $200,000 as well.

[Jade Warshaw]

On your way. You're.

[George Camel]

You're halfway to baby steps Millionaire.

[Jade Warshaw]

Yeah.

[Caller (Eric)]

It just doesn't seem real, but, yeah, it's.

[Caller (Abby)]

It's.

[Caller (Eric)]

It's definitely coming.

[George Camel]

It's incredible. Well, you know, teachers were the number three career out of our millionaire study, and so you are living proof of. Well, how do. I don't understand our teachers. Well, here's how you do it. You just follow the principles, stay out of debt, and at 36, you're going to be a millionaire. Probably by the time. My guess is early 40s, you're going to hit that.

[Caller (Eric)]

Wow, that sounds about right. It's. It's. It's kind of crazy when you say that out loud, but, yeah, that does sound. That does sound right.

[Jade Warshaw]

Have you played with an investment calculator?

[Caller (Eric)]

Yeah, a little bit. A little bit? I would say probably. Definitely. Realistically, within the next five, 10 years, it's. It's probably going to happen.

[Jade Warshaw]

Oh, yeah. I'm excited for you.

[Caller (Eric)]

Yeah.

[Jade Warshaw]

So what do you tell the person listening? I mean, we hit on it earlier. You. You busted through a lot of stigmas, right? Single income. A lot of people think, oh, they look at us.

[George Camel]

Be nice to be marri.

[Jade Warshaw]

Right. And. And you're like, no, didn't have that. Now you're on a teacher salary and, and you're purchasing a house which a lot of people think it's hard enough to purchase it, let alone pay it off. But you've done all of this in eight years. What do you say to that person?

[Caller (Eric)]

I say it's definitely possible. Like, like I said before, you gotta buy an affordable home. So this might not be a nice house. A lot of people want to upgrade their houses. A lot of people want to take a, you know, take a HELOC out to, to get things, get things upgraded. Just if you're laser focused and really willing to work extra jobs and really, really worry, really willing to stay focused on that goal, it is definitely, definitely possible. You know, if you live by what you guys teach them. You mentioned it before, 25% of your take home pay. If you start with that and you work very hard and you put all the extra income you can on the principle, the balance, it'll get paid off in no time. And that's exactly what I did.

[Jade Warshaw]

Word of wow. Way to go. Well, well, here we have it. We've got Jonathan from Franklin, Indiana, paid off $89,000. It was his house. He did it in eight years, George, making eight. 50,000 to 80,000. Jonathan, count it down. We want to hear your debt free scream.

[Caller (Eric)]

Three, two, one. I'm debt free.

[Jade Warshaw]

That's what I'm talking about. That's what I'm talking about. They say it can't be done, George, but we see it's done.

[George Camel]

The proof is in the pudding.

[Jade Warshaw]

The proof. Proof is in the pudding.

[George Camel]

I'm sure his middle school students are now watching him as a YouTube sensation now going, that's our teacher.

[Jade Warshaw]

Oh yeah, oh yeah. I mean he's got all the time. He's 36. That's like, he's a young gun.

[George Camel]

That's wild. Yeah, he's not even old enough for a midlife crisis yet.

[Jade Warshaw]

I'm inspired. What do you do now? Yeah, what do you do now? Well, he's going to France.

[George Camel]

I'd like to go to France.

[Jade Warshaw]

San Tropez.

[George Camel]

I bet he'll never eat a Subway sandwich again though.

[Jade Warshaw]

No, he's got, he'll be.

[George Camel]

Once you do the side hustle, you're like, oh, you see how the sausage is made? You go, all right, I'm done with that.

[Jade Warshaw]

Yeah, I know that's true. If you, if you're taking a trip abroad, George, where are you going?

[George Camel]

Oh, France is definitely the France and Italy. I Think are my top two right now? Top two because I think I'm in my bougie phase. So I just want to eat really good.

[Jade Warshaw]

Yeah.

[George Camel]

So I think as far as food goes, maybe Greece would be nice too.

[Jade Warshaw]

Greece is cool. So you're saying the bougie. This is a phase. I feel like this is just who you are.

[George Camel]

Well, you know, some people want to go for adventure. They want to like go hike. I'm like, no, no, no, no.

[Jade Warshaw]

I want to eat.

[George Camel]

Take me to the finest dining.

[Jade Warshaw]

Yes, I want to eat. I don't. I mean, I'm an active person. I don't mind a walk. I'll take a walk after I eat.

[George Camel]

A walk for you is a h. Well, I don't. We have different definitions. Jake goes on 10 mile walks.

[Jade Warshaw]

I don't want to do that on vacation. On vacation, I'm like you. I want to sleep in late. I don't want to have like this big itinerary that I have to wake up at 6am and check all the things off the list. I want to sleep in. I want to order room service. I want. It's all about the food.

[George Camel]

That's where it's at for me.

[Jade Warshaw]

Yeah. So Italy.

[George Camel]

When I say I want to experience culture, I really just mean I want to eat their amazing food.

[Jade Warshaw]

I think that's a great way to experience it.

[George Camel]

Oh, we have a gift for Jonathan we forgot to mention.

[Jade Warshaw]

Oh, we did? What is our gift to every dollar?

[George Camel]

Prem subscriptions. Good free year. So you can use that. You can pass it on to someone who cheered you on, maybe even a naysayer. Give it to the hater and say, hey, this is how I did it. If you want to know, the budget was the key. It's on me.

[Jade Warshaw]

I love that. I love that. And it's just a reminder, you know, when you do things like this, you gotta dream about it. Like Jonathan reminded us. Let's dream. Why are we doing this? Why are we paying off our debt? Why is it important for us to build the savings, have that really clear picture so that you can actually see it through to the end? I don't care if it's a trip to France. I don't care if it's, you know, you buying your dream car or a new pair of Jordans. But having that, why having something to shoot for, man, you can accomplish more than you ever dreamed possible.

[Dave Ramsey]

Listen, guys, I've heard just about every excuse for why folks think they can't get ahead with money. So let's go ahead and settle this right now, you get the final say on what happens with your money. That's why you have to start telling your money where to go so you can stop wondering where it went. So if you're gonna start winning with money, you have to get on a budget. The easiest way to get started and stick to it is with the EveryDollar budget app. It'll help you make a plan for every single dollar coming in and every single dollar going out every single month. And guess what? It's free. So no excuses. Download every dollar in the App Store or Google Play. Today.

[Jade Warshaw]

George, we just witnessed that amazing debt free screen from Jonathan. Paid off $89,000. It happened to be his house. He did it super quick. Eight years and on a teacher's salary. And we found time and time again that what allows people to win like that is the foundation of having a really, really good budget. And our Every dollar budget is just that. And so our every dollar team has multiple free trainings for you this month, which is basically trainings for you to use. Every dollar at its optimal capacity is basically what it is. So join a live team and a live webinar to learn how to break the paycheck to paycheck cycle in just 90 days. And you'll get a step by step walkthrough of the Every dollar budget app. This is the only budget app that I use. It's the one that George uses. And so you'll get the biggest budgeting questions answered. It's a live Q A and yeah, it's just for you. Over 160,000 people have already done these webinars and I'm sure they would say that it was a breakthrough for them. Right? Spots are limited. They're always going to be limited. So sign up now for free at www.everydollar.com webinar. I haven't said www.

[George Camel]

Yeah, I was in a long time. You took us there, Jade. That's what it says on the paper. Surprised?

[Jade Warshaw]

Also known as everydollar.com webinar HTTPs://, slash, slash. Listen, I. I'm read. Let's go to Summer. She's in Orlando, Florida. Summer, how can we help today?

[Caller (Abby)]

Hi, thanks so much for taking my call. So my question is, should I start increasing my investment contributions as like the stock market, you know, drops, you know, to capitalize off of some of these like lower prices and costs.

[George Camel]

Right now you got a crystal ball we need to know about. How do you know it's going to keep dropping?

[Jade Warshaw]

You're, you're saying you want to buy them when they're on sale is what you're saying?

[Caller (Abby)]

Yes, ma'am.

[George Camel]

Yes. The answer is I don't increase or decrease investing based on anything the market is doing. I'm accidentally dollar cost averaging, meaning I just invest 15%. Well, now I do more because I'm in Baby Step 7. But if you're in Baby Step 4, 5, and 6, invest 15% of every single paycheck, regardless. If the market's up, the market's down. And so I don't time it, I don't go, well, it's on sale, I'm going to buy more. I just keep buying exactly the amount I was. And you're going to naturally buy more because 15% of something on sale is going to be more shares.

[Jade Warshaw]

Okay, where are you in the baby.

[Caller (Abby)]

Steps summer like 5, 6, and 7? I don't have any debt. I do more than the 15 now. And I'm just trying to save up to buy a house in addition to my retirement.

[Jade Warshaw]

So you haven't bought a house yet.

[Caller (Abby)]

Correct.

[Jade Warshaw]

I see.

[George Camel]

How much are you investing? What percentage?

[Caller (Abby)]

It's over 15% because I do so at probably 18 to 20%.

[Jade Warshaw]

And how much are you putting aside for your down payment? Or is that just not something you're like gunning towards just yet?

[Caller (Abby)]

That. I am saving up for that. I mean, I want to pay full cash. Right now I have about 12,000 for a down payment, but I'm looking eventually, you know, for six years from now to pay full cash for.

[Jade Warshaw]

Oh, so that's your plan. You're like, I'm just going to save up over the next six years and just knock it out in cash?

[Caller (Abby)]

Yes.

[Jade Warshaw]

Interesting. What I. Listen, I'm. I love that plan. What would. What's your thought on that versus saying, hey, if I really put the pedal to the metal, I could put a really nice down payment now, get in the market as sooner. Do you know what I'm saying?

[George Camel]

Yeah, because from, you know, let's say 2019 to 2022, we saw home prices skyrocket. So the, the fe. With that length of timeline, housing market could increase to where it's a moving goalpost. And you went, oh, my gosh, I saved up 250,000 and now that house is 300. And so this sounds crazy to say I'm all for paying cash, but if it's going to take you that long, it might be wise to ratchet down to 15% with investing. Throw everything else that you can toward a down payment. And once you can buy the home that you want, where it's going to be 25% of that after tax monthly income, pull the trigger on a 15 year fixed rate and then aggressively pay it off.

[Caller (Abby)]

Okay.

[George Camel]

That essentially locks in a lower price for that home and allows you to have margin because 25% on a 15 year is about as conservative as you can get with a home. And then you're still going to have a paid for cash home within six years.

[Jade Warshaw]

And you have had that time to also build equity in the home all of this time, which is nice.

[Caller (Abby)]

Okay, perfect. Thank you so much.

[Jade Warshaw]

Just a thought here.

[George Camel]

You're doing a lot of good things. I would just make those light tweaks of just, hey, let's bring this down to 15% freeing up a little bit of money toward that down payment so we can speed that up so that you're not looking at a six to ten year journey to get into a home.

[Jade Warshaw]

Exactly. Very good question. Good question. Let's go to Jenny, she's in Columbus, Georgia. Jenny, what's up?

[Caller (Abby)]

Hey, how are you?

[Jade Warshaw]

We're good. How can we help?

[Caller (Abby)]

Good. So my husband and I, we finally took financial peace this spring. We are almost out of debt and we have reached a three month fully funded emergency fund. When my motor needed to be replaced, we were able to pay in cash to get a motor to put into our 15 year old vehicle. And a few weeks later the car started acting up again. The shop told us that the transmission is going out, but it can wait a little bit longer and we don't have the cash right now to cover all of it, so we decided to wait. Yesterday the same car started smoking. We don't know the source of this yet or what it might cost to fix it. Currently our savings is down to about a one month emergency savings because of the motor. Okay. Now we have three children and we are expecting our fourth to arrive in about three weeks.

[George Camel]

Oh my goodness.

[Caller (Abby)]

Yes, we have. Our 15 year old car has 175,000 miles on it and it will cost a minimum of $5,000 to fix. That's just the cost of the transmission. We don't know about what the new thing is. We have found a decent replacement car, but the price tag is $15,000 before interest and all the fees. But this car only has 85,000 miles on it. Our concern is that since this is the only family car we have. Should we go into debt fixing a 15 year old car or should we go into debt by getting a used car?

[Jade Warshaw]

I would not do that. I mean, here Hear me?

[Caller (Abby)]

Yes.

[Jade Warshaw]

My car's pretty old, and the car I had before that was pretty old. And. And our family rides in it just fine. And the 145,000 miles. My car's got more than that. So there's no.

[Caller (Abby)]

It's 175,000.

[Jade Warshaw]

Even still, I don't. You can't see who I'm looking at through the glass right now, but one of our producers, Will Rudder, has got one of the oldest cars. What is it? His has got 350,000.

[George Camel]

Is that.

[Jade Warshaw]

Oh, 450,000.

[Caller (Abby)]

Oh, wow.

[Jade Warshaw]

380, 380. Three eighty.

[George Camel]

380 bob.

[Jade Warshaw]

And he's going strong. So my point is, okay, I'd rather, you know, it's. When it's your car, it's like the, you know, you know what's wrong with it, right? And you're like, okay, let me just go ahead and get this thing fixed. It doesn't make Sense to spend $15,000 when you could really spend 5 because it's still money. Right. Don't forget math. Just because one's dead and one isn't. So I would be coming up with the money to get your current family vehicle fixed. Now it's about figuring out how we can do that. So can you tell us what your income is?

[Caller (Abby)]

Yes, our monthly income is 9,000.

[Jade Warshaw]

Okay.

[George Camel]

How much of that could you put away? Because this baby's coming in three weeks, you said yes. So like next in three weeks time, how much more money can you set aside?

[Caller (Abby)]

Like about 3,500.

[George Camel]

Okay, so plus you have how much in savings?

[Caller (Abby)]

Right now we have about 3,000.

[George Camel]

Okay. So that's 6,500. So that gets the repair done.

[Jade Warshaw]

Yeah.

[George Camel]

Without going into debt.

[Caller (Abby)]

Right. I'm just, I think my. My husband is very concerned about us even being in the car before. Before it being sick.

[George Camel]

We're going to get it looked at and understand where the smoking's coming from. Is it a solvable problem? But that I don't like the option A, going to debt for this. Option B, going to debt for this. I think that's what we painted ourselves in a corner. The goal is to avoid debt and also stack up cash and make sure that you and baby are home safe before we do anything else and make any big financial decisions.

[Jade Warshaw]

How much is. How much of the 9K is your mortgage payment?

[Caller (Abby)]

So we don't have a mortgage right now. We are staying. We have our rental cost right now, which is only 1200.

[Jade Warshaw]

Okay, great. So there's a lot of money here. I think that if you guys get really creative, if just in a month you've got 3, 500 of. Of margin, I think you guys can get really creative. To find the other 1500, you need to get this car fixed really fast.

[George Camel]

But the worst, worst case, you could rent a car for a while, borrow a car for a few weeks just to get by. And I think those are good options versus going into debt for a car we can't afford.

[Caller (Abby)]

Okay. Okay.

[Jade Warshaw]

Yeah. George has a really good. That's a really good thing, George. We hear it. I hear all the time. I mean, I have a personal story of a friend of mine who I don't want to give away who it is. So basically their car broke down and they showed up the next time I saw them and they had a brand new vehicle and they were like, well, it was going to cost 800 to get the car fixed and we didn't have that. So we just rolled the equity into another brand new vehicle. And next thing I know, they've got like this super nice. And I'm like, oh my gosh. That is the definition of broke.

[George Camel]

The train has left justification station.

[Jade Warshaw]

Yeah, that is. Is the definition of rope right there. So that's a good indicator that it's time to make some changes with your money. And we'll help you do that. This is the Ramsey show.

[George Camel]

Hey, what are you still doing here? You know the rest of the show's happening on the Ramsey network app, right? So you gotta jump over there to continue watching. You can download it for free. Just go to your app store, type in Ramsey network, it's completely free, and I'll drop a link in the show notes to make it easy for you. So if you're watching on the app, you're in luck. But if you're watching anywhere else, this show is over for you. So jump onto the app and let the fun continue. All right, go on now. Don't make it weird. Okay. I got nowhere to go, so you need to go. Okay, bye bye now. All right, this is. It's getting weird over there, guys.

[Caller (Abby)]

What do we do?