Stop Watching the Market—Start Building Wealth

Summary

Podcast Summary: The Ramsey Show – "Stop Watching the Market—Start Building Wealth"

Release Date: April 4, 2025
Host: Ramsey Network
Duration: Approximately 76 minutes

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Introduction

In this episode of The Ramsey Show, hosts Ken Coleman and George Campbell delve into actionable strategies for building wealth outside the volatility of the stock market. Emphasizing financial stability through debt management and disciplined budgeting, the duo addresses real-life financial challenges faced by callers, offering personalized advice rooted in Dave Ramsey's proven principles.

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Key Discussions

1. Avoiding Market Panic and Staying Invested (00:39 – 01:32)

George Campbell opens by addressing the common fear of stock market fluctuations, urging listeners to remain calm and avoid making hasty decisions based on daily headlines.

• George Campbell [01:24]: "You're not cashing out your retirement today."

Ken Coleman reinforces the message, advising against reacting to market dips by withdrawing investments.

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2. Caller Michael's Financial Recovery After Fraud (01:55 – 08:05)

Caller Background: Michael from Charleston, West Virginia, shares his ordeal of losing an $8 million settlement due to fraud by a trusted bank official. With a recent malpractice settlement of $531,000, Michael seeks guidance on managing his limited funds while recovering from financial betrayal.

Key Insights:

• Debt Management:

  • George Campbell [06:35]: "Sell the camper, use the profits to pay off the credit cards, Never touch debt again. Build up an emergency fund with some of the settlement money and invest the rest."

• Emotional Recovery:

  • George Campbell [07:07]: "You're in survival mode."

• Future Financial Planning:

  • Ken Coleman [08:05]: Encourages Michael to explore opportunities for increasing income, suggesting that building confidence through investment can aid in financial recovery.

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3. Jill's Struggle with Reaching Baby Step Four (10:31 – 18:00)

Caller Background: Jill from Detroit, Michigan, is nearing the end of baby step two with $9,000 left to pay off. She works tirelessly but is exhausted, uncertain whether to aggressively pay down her mortgage or continue with side gigs to meet the investment goal of 15%.

Key Insights:

• Budgeting Focus:

  • George Campbell [11:42]: Emphasizes adjusting the budget to include 15% investments without the need for prolonged side gigs.

• Income Enhancement:

  • Ken Coleman [16:11]: Motivates Jill to explore higher-paying opportunities beyond teaching, suggesting corporate training roles that could significantly boost her income.

• Strategic Planning:

  • George Campbell [15:33]: Advises distinguishing between gross and net income to better allocate funds towards investments.

• Long-Term Perspective:

  • George Campbell [14:57]: "You can enjoy life a little."

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4. Caller Lisa's Tax and Investment Dilemma (22:10 – 25:18)

Caller Background: Lisa from Milwaukee navigates the complexities of increased income from her real estate business while managing student loans and minimal business deductions.

Key Insights:

• Retirement Account Choices:

  • George Campbell [23:57]: Recommends sticking with a Roth IRA over switching to a Traditional IRA, emphasizing long-term tax benefits.

• Emergency Fund Priority:

  • George Campbell [25:14]: Advises Lisa to prioritize paying off student loans and building an emergency fund before venturing into additional investments.

• Debt-Free Focus:

  • George Campbell [26:03]: "It's going to move you backwards and you're not going to be able to build wealth because you're going to be dealing with all these ankle biter things."

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5. Uche's Credit Management as a New Immigrant (32:53 – 43:32)

Caller Background: Uche from Alexandria, Washington, a recent immigrant, grapples with managing $12,000 in credit card debt, a car loan, and $8,000 in student loans while attending school full-time.

Key Insights:

• Debt Snowball Method:

  • George Campbell [36:59]: Urges Uche to cover basic expenses, make minimum debt payments, and prioritize paying off the smallest debt to build momentum.

• Educational Pause Strategy:

  • Ken Coleman [39:45]: Suggests considering pausing education to focus on debt elimination, highlighting the importance of financial stability over immediate academic progress.

• Budget Optimization:

  • George Campbell [37:32]: Recommends eliminating non-essential expenses and aggressively tackling debt once a basic emergency fund is established.

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6. Emily's Balancing Debt Repayment and Parental Leave Savings (44:16 – 75:07)

Caller Background: Emily from Philadelphia, earning $120,000 annually with a monthly take-home of $10,000, seeks advice on balancing aggressive debt repayment of $120,000 with saving for parental leave.

Key Insights:

• Strategic Debt Payment:

  • George Campbell [48:43]: Advises Emily to prioritize debt snowball while setting aside funds specifically for parental leave during pregnancy.

• Focused Financial Planning:

  • Ken Coleman [50:05]: Encourages open communication with her spouse about financial priorities and potential shifts in their financial strategy to accommodate upcoming family changes.

• Adaptable Financial Goals:

  • George Campbell [49:09]: Recommends pausing extra investments temporarily to allocate more funds towards debt elimination and emergency savings.

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7. Doug's Real Estate Debt Dilemma (76:04 – 83:32)

Caller Background: Doug from Nashville contemplates whether to hold onto a rental property that is losing money monthly or sell it despite not recovering his initial investment.

Key Insights:

• Sunk Cost Fallacy Awareness:

  • George Campbell [77:00]: Criticizes Doug for holding onto a losing investment due to past financial commitment, urging him to cut losses.

• Debt-Free Living Emphasis:

  • Ken Coleman [81:02]: Stresses the importance of eliminating debt over potential future gains from a stagnant investment.

• Actionable Steps:

  • George Campbell [63:14]: Recommends selling the property immediately to stop the financial hemorrhage and reallocating funds to more productive endeavors.

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Notable Quotes

• George Campbell [07:07]: "You're in survival mode."
• Ken Coleman [08:05]: "We want you to go see a Smartvestor Pro in your area or two or three, and have them explain how they're going to help you invest that money."
• George Campbell [11:42]: "Once you're debt free, you're going to start doing your budget."
• Ken Coleman [39:45]: "I would pause right now."
• George Campbell [26:19]: "It's going to move you backwards and you're not going to be able to build wealth because you're going to be dealing with all these ankle biter things."
• Ken Coleman [43:35]: "I'm not sure it's a word. I'm going to have to check that up."
• George Campbell [79:43]: "I hate banks in general."
• Ken Coleman [83:25]: "You could out earn your stupidity for a long time."

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Conclusions and Takeaways

• Debt Management is Paramount: Across various caller scenarios, the consistent advice centers on eliminating debt through structured strategies like the debt snowball method before venturing into investments.

• Budgeting with Precision: Emphasizing the importance of detailed budgeting, hosts advocate for understanding both gross and net income to allocate funds effectively towards debt repayment and savings.

• Emotional Resilience: Acknowledging the emotional toll of financial struggles, the hosts encourage maintaining composure and building confidence through strategic financial actions.

• Strategic Income Enhancement: Beyond budgeting, increasing income through side gigs or career advancements is recommended to accelerate debt elimination and enhance financial stability.

• Avoiding Financial Shortcuts: Hosts caution against relying on dubious financial solutions like debt relief companies, stressing the importance of self-discipline and informed financial planning.

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Final Thoughts

This episode reinforces the timeless message that building wealth transcends market trends. By prioritizing debt elimination, meticulous budgeting, and income augmentation, listeners are empowered to cultivate financial resilience and achieve lasting prosperity.

Transcript

[George Campbell]

Foreign.

[Ken Coleman]

This is the Ramsey show, where America hangs out to have a conversation about life, specifically money, your professional career and your relationships. 888-255-225 is the phone number 8888. Currently holding his stock position and sitting alongside me is George Campbell. Welcome, pal.

[George Campbell]

Can I be honest, Ken? I haven't even looked at my 401. I have no desire.

[Ken Coleman]

Good decision. Good decision.

[George Campbell]

I'm riding it out.

[Ken Coleman]

I'm Ken Coleman. We'll be with you together. We always have a lot of fun together. George will take the lead on your money questions. I'll take the lead on your income questions. That's what we want you to do. And for heaven's sakes, let's address the elephant on the map, not in the room, George. We just got to say, hold, hold, hold. Don't freak out, chill out. Don't look at your 401k. Don't look at the headlines today. Yeah, today's probably a good day to just play board, you know.

[George Campbell]

He's having a good day. All of the news outlets who are getting a lot of views from you.

[Ken Coleman]

Guys, very excited, Very.

[George Campbell]

All of your clicks and eyeballs going, oh, my gosh, it's all coming down. Yeah, calm down.

[Ken Coleman]

Calm down.

[George Campbell]

It's going to be okay.

[Ken Coleman]

Calm down.

[George Campbell]

You're not cashing out your retirement today.

[Ken Coleman]

That's right.

[George Campbell]

Leave it alone.

[Ken Coleman]

Just breathe.

[George Campbell]

Go find a ho.

[Ken Coleman]

Yeah.

[George Campbell]

Keep investing.

[Ken Coleman]

It's gonna be okay.

[George Campbell]

It's on sale. Look at it that way. It's been a while since it's been on sale. And it's on sale.

[Ken Coleman]

It's on sale. It's a good way of saying next.

[George Campbell]

Time you invest, those stocks are a.

[Ken Coleman]

Lot cheaper and I'm gonna bite my fingers until they are completely gone. To not go on a rant today about what I think about these tariffs, but I will let that alone for today, I think. Let's go to Michael in Charleston, West Virginia. Michael, how can we help?

[Caller]

I'm having a little issue. I lost my husband in 28 and got a settlement because he died on a. In a work accident and had a family friend who was a trust officer at a regional bank and offered to help me walk through the whole process and drew up some trust for me and my kids. And two years ago, I found out that he stole all the money.

[Ken Coleman]

Oh, my goodness.

[George Campbell]

Two years ago?

[Caller]

Yeah. Should have been about $8 million in the accounts, and there was nothing. So I just recently received a malpractice settlement for $531. $531,000 and took me two weeks to even put it in the bank because I was scared to let go of the check.

[Ken Coleman]

Sure.

[Caller]

So I've just got it in a money market account right now, 3.75 interest because I just needed it somewhere safe. But I need it to grow and I'm just scared to do anything with it now.

[Ken Coleman]

Sure. Can we just ask what happened? Did you report this to the law? Is there any, anything working on this?

[Caller]

We have, I have some attorneys that are working on it, but it looks like he has spent all of the money. I might possibly recover a couple hundred thousand dollars maybe.

[George Campbell]

Is he in prison now? Where is this guy?

[Caller]

He's in Florida right now and we found out there's other widows. He's done it too.

[Ken Coleman]

Oh sure. Well, I'm. I'm hoping that he's going to be arrested soon.

[Caller]

Well, that's, that's the hope.

[Ken Coleman]

Okay. But we all, in the meantime, you, we've got to help you with this 530 some thousand dollars. Do you have any debt right now?

[Caller]

I moved into a trailer when I found out or in a key into a camper when I found out the money was gone because I panicked and didn't want to be spending any more money. So I owe about 12 on the camper and I have a little bit on a credit card because that accounted in my backup while I was figuring things out.

[Ken Coleman]

Do you have a job?

[Caller]

No, I still medically am not in a place that I can really get a job but I do get workers comp for my husband's accident.

[Ken Coleman]

Okay, so what are your monthly expenses and then are you able to cover those with your medical.

[Caller]

Well, I just recently the guy who took the money was giving me a paycheck so I had Obamacare and when he took the paycheck, now I'm on Medicaid. And then I just found out that because of this settlement I'll probably lose the Medicaid. So just little things that are up in the air that I'm not sure what to do. But I don't have a lot of expenses. I get about 2783amonth from workers comp and I have about $1500 give or take. I pay extra on the camper and medical bills and things like that.

[George Campbell]

Do you have any family? Do you have kids?

[Caller]

I have two grown children and I actually my camper is on my mother's property.

[George Campbell]

Okay, and where were you living before?

[Caller]

I had an apartment. I went straight from my mom and dad's house. To my husband's house. I got an apartment and decided I would live in town and do that for a few.

[George Campbell]

And so what would it cost you to rent somewhere? Let's say you got rid of the camper.

[Caller]

Everything I've looked at the camper's better than what I would spend to rent.

[George Campbell]

Well, better is. I want to argue with that word. I don't know that. Your quality of life is amazing right now, living in this camper on your mom's property. I think you need to stand on your own two feet and do some sort of work that you can do, Because I don't know that this is going to provide enough income for you to cover for the rest of your life. When does this worker's comp end?

[Caller]

I get it. Until I'm 70.

[George Campbell]

And how old are you now?

[Caller]

53.

[George Campbell]

Okay, so you got another 17 years of this. 2783. But that's not enough to cover your bills and have a life.

[Caller]

No. That's why I need to know what to do with the money.

[George Campbell]

Well, you're going to need to invest the money. You don't need a big portion of it right now, other than paying off this debt, which I would just suggest selling this camper and getting rid of it. Are you underwater on the camper?

[Caller]

No, I went very minimal on one.

[George Campbell]

So you owe 12k. What is the camper worth?

[Caller]

It's probably worth 20.

[George Campbell]

Okay, so you could profit off of that. And then what's the credit card balance?

[Caller]

It's like 5,500 right now.

[George Campbell]

Okay.

[Caller]

Medical stuff on it.

[George Campbell]

So you could sell the camper, use the profits to pay off the credit cards, Never touch debt again. Build up an emergency fund with some of the settlement money and invest the rest.

[Caller]

Yes, that's what I would. My brother. My husband and I did financial peace before he passed away. So I've just. I've just been in this situation now that it's that I had a little bit of credit card debt in the camper because of what happened.

[George Campbell]

Well, you're gonna start a new chapter now, and it's been a long time, and I think you've been stuck in the sort of fight or flight, and then all the grief of learning that this money's gone, and the frustration, the resentment, the anger that you must be feeling. There's a lot going on here, and I think we just need to move forward, and I hope that you can get some resolution. I don't think you're gonna get all your money back. I do hope this guy gets what he deserves. But for now, you got to go find something you can do and create a life for yourself.

[Caller]

Yes.

[George Campbell]

You're in survival mode.

[Caller]

I am? Very much so.

[George Campbell]

So what would it take for you to be able to do some sort of work? Is it physical therapy, rehab therapy?

[Ken Coleman]

What would it take?

[Caller]

It's all surgical. I just have a lot of internal issues now from all the surgeries.

[George Campbell]

Could you do something from home customer service? You're talking to us. And so I feel like there's got to be something out there you can do to create some income.

[Caller]

Plausibly, I could do something from home. I guess it's probably a little lack of confidence, too. I was going to stay home, mom, since I was 24, so.

[Ken Coleman]

Well, you've got a good personality. You've got good common sense. Your brain's working fine, and you need to be working for momentum's sake. It's not about a ton of money that you need, but it's about momentum across. Across the board. Your shoulders will go back a little bit more. Your head gets a little higher as you begin to see that I can take care of myself. And the good news is, if you do what George told you to do, we also want you to go see a smartvestor pro in your area or two or three, and have them explain how they're going to help you invest that money. And then your confidence begins to grow and you can still climb back here. Thank you for calling. This is the Ramsey Show.

[George Campbell]

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[Ken Coleman]

Good to have you here with us. So are you staying on track with the baby steps? You can take a quick quiz to check your progress. Receive a personalized plan just for you. Simply head to the show notes, click on the link titled are you on track with the baby steps? And complete the quiz. You'll get a result and that'll help you get caught up with all of our content because we want you to hit the ground running, no matter how fast that is. Sometimes you just got to crawl before you walk. Remember that. And we're here along the way. Let's go to Detroit, Michigan next, where Jill joins us. Jill, how can we help today?

[Caller]

Hi. Oh my gosh, I'm so nervous.

[Ken Coleman]

Oh, well, it's because George is on. He's very intimidating. But I'm going to be here for you.

[Caller]

Yes. So I am currently in baby step two. I have only 9,000 left to go. I've been working like crazy seven days a week and evenings and I'm exhausted. But I'm trying to figure out once I'm in baby step four, how to invest 15% because I don't see the numbers working out. And I'm wondering if I should pay off my mortgage like it's baby step two or if I need to just do side gigs for the next decade or so or so.

[George Campbell]

Side gigs for a decade. I'd rather see you get your full time income up. But let's dig into the numbers here to see what's actually going on for a budget.

[Ken Coleman]

Ectomane.

[George Campbell]

Okay. What is your income?

[Caller]

Yeah.

[George Campbell]

Your gross income.

[Caller]

I make 57,800. I'm a teacher, so I also make about 3,000 or 3,500 gross in the summer.

[George Campbell]

Great. So that 60 grand. Okay. And you're saying you can't invest 15% once you're debt free. You're not going to have the margin to do it.

[Caller]

I mean, according to the numbers that I, according to the math that I did, I, my household expenses are around 3,000.

[George Campbell]

Okay.

[Caller]

And I think my net income according to my paychecks is about 32.25. And then the summer, I mean divide that by 12 and add that to the income.

[George Campbell]

So you're talking about investing $750 a month. That's what 15% is of your gross income. And so when you do your every dollar budget and you list out your take home pay, now it's coming out before it hits your bank account. You have a 403 through your employer.

[Caller]

I do. I'm not investing right now, but I get a 4A. Yeah. 4% match.

[George Campbell]

Okay. So once you're there, you invest 15%. Whatever's left becomes your Take home pay that you're going to pay all of your bills out of.

[Caller]

Okay.

[George Campbell]

So it may not be as much of an issue as you think, as long as you can live off the rest of that take home pay.

[Caller]

I miss, like when I look at my margin, it's like $475. So I mean, unless I'm missing something.

[George Campbell]

Well, that's on the net side. You're looking at your budget with your take home pay. So it would reduce your gross income by 750 bucks. So if you were making 5,000, what's going to actually end up in your bank account is 4250. You tracking.

[Caller]

Okay, so I think so right Now I have 6% being taken out for my pension automatically. Okay, so that's already. And I think you guys say to cut that in half.

[George Campbell]

Yes. We would count that as half of your 15%. So we would count it as three. You would still need to invest another 12.

[Caller]

Okay. And then I wanted to do the 4% for the match and then do the rest in a Roth ira. And so that's why I was doing net income. Does that make sense?

[George Campbell]

Yes. But I'm thinking here, what were your debt payments when you started this process? What were your total debt payments per month?

[Caller]

Not much. So I think only like 100 bucks per month because most of it's student loans and I have a 0% payment or $0 payment right now.

[George Campbell]

Okay. So what I would do is once you're debt free, you're going to start doing your budget. I would ratchet it up to 15% and then see what the deficit is, if there is one. I think the numbers are going to work here. I don't know what all the rest of your expenses are and what you can trim out of the budget, but there's two ways to find this margin. Either spend less or make more. So before you go sign up for a side gig for the next decade, I'd rather see us work on spending less and reducing our bills so that you have the margin to do this. By the way, there's still other baby steps. You know, like you said, you want to pay off the mortgage early. Do you have children?

[Caller]

No.

[George Campbell]

Okay, so we can Skip baby step five and we're going to move on to six, which is any extra income beyond the 15% we can start throwing at the mortgage. But no, you don't have to treat that like a baby step two item. We move from intensity to intentionality when we move out of baby step three into four. So that could be a seven to ten year journey. You don't need to do this in three years. I think you need to enjoy life a little. Wouldn't it be cool to take summers off?

[Caller]

I'll be able to afford to as a teacher.

[George Campbell]

Would you want to take a summer off or do you enjoy doing it?

[Caller]

I just. Well, I do get bored if I have taken somewhere off before and it does get boring. But I don't know, I just didn't see the numbers working out like I thought so.

[George Campbell]

Well, the every dollar budget will tell you, but I want you to just make sure you're looking at the right numbers. Gross versus net because that'll be deducted from each paycheck. So I don't want you to get spooked by saying, well, I don't have the money in the every dollar budget because that's just your take home pay.

[Caller]

The Roth IRA though, doesn't. The net, it doesn't come out of your net though.

[George Campbell]

Roth ira, you would invest on your own, so that wouldn't come directly out of your paycheck. That's not through your employer. Do you have a Roth 403 through your employer?

[Caller]

No, I don't.

[George Campbell]

They don't offer a Roth option. Okay, so yeah, you do. Match beats Roth, beats traditional. So invest up to the match, that's 4%. Move on to your Roth options, which would be an IRA outside of your employer. And then if you still haven't hit 15%, you would move back. But it sounds like you will, you will hit that with your employer, so you won't need to move back to it.

[Ken Coleman]

Okay, you got this. Now do you believe Jill?

[Caller]

I don't know. I guess. I mean, maybe when I get there.

[George Campbell]

It'Ll be different, but I think so. And you'll make more money over time, right?

[Caller]

Yeah, that's true. I mean, I'll move up to 61,000 that fall or this fall.

[Ken Coleman]

I want to see you, actually. I want you to look outside the teaching world. I really would like to see you try it. Just look at it. Just see where you could take your experience and skill set and make a sizable chunk more. And then I also think while you're looking at that, you ought to be looking at some, some good money earning opportunities in the summer. Let's see if we can keep that income going doing something else during the summer. You've got to look and Jill, I can hear it in your voice. You're one of those. You're the, you're the true Doubting Thomas from the Bible, you know, you got to see the scars. And George laid it out for you. So you're going to have to try this stuff so you can see what he's saying, because even as he lays it out, you're having a hard time believing it's possible. But I've sat with him long enough to know he's right. But you're going to have to try some of this stuff. So I'm really going to push you in two other areas. I really do want you to see what you can make in the summer. Let's see if we can max out the summer. Can we make $9,000 in the summer? Let's. Let's set a goal. Let's look. Could I transition from the traditional teaching world into a different role? Because I've counseled so many teachers, George, you know this on my old show, the Ken Coleman show, where they didn't think they could do anything but teach, but you can. Those skill sets. You are an instructor at heart, and you are an instructor by trade. That's really, really valuable. So if I were to just tell you to kick the tires on looking at corporate training, for instance, you know, I think you should be making somewhere between 75 to $100,000.

[Caller]

Wow.

[Ken Coleman]

But you won't see it if you don't look for it.

[Caller]

Well, I will say I don't. I do live in a smaller town. I'm not in Detroit, but I have. I just do, like, Department of Natural Resources summer gigs like that. That's what I've been doing.

[Ken Coleman]

I know, but that's. That's bottom of the barrel.

[Caller]

You're.

[Ken Coleman]

You're worth more than that. I'm trying to get you fired up a little bit, you know, I'm trying to be your cheerleader in the locker room. Because if you head out on the field acting like you are right now, you're going to get beat by 100. You got to come out of that locker room like you're going to destroy the other team. And you need to come out of this thing going, I'm going to actually do what George told me to do, and that's just the beginning. And I'm going to absolutely win. And if I got to move, I'm going to move. But you need to happen to life, Jill. I think too much of life is happening to you.

[Caller]

I guess I just don't know what to do in the summer then, because that's.

[Ken Coleman]

I know you don't, because you have a look for it. You have a look for it. You Got to get your head up. You got to start looking. You got to start talking to everybody. Hey, I'm a teacher. This is the skill set I've got. George, I've done this for this many years. I'm looking for this kind of work here. And you got to look for it. You cannot find it if you don't look for it. And looking for it means I believe if I look for it, that I'll see it. Come on, Jill, let's go happen to life a little bit. Coach Ken, I need to bang the locker room. Blow a whistle or something.

[George Campbell]

Rachel, do you ever get these sketchy text messages that are like, hey, you need to update your address and verify so we can get you the package you didn't order?

[Caller]

Yes, I have, George. Sketchy. And never trust them.

[George Campbell]

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[Caller]

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[George Campbell]

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[Caller]

That's right. And then once they remove your information, then they're going to send you a detailed report telling you where they found your information, when they removed it, how many hours they've saved you. I mean, it is incredible. So detailed and it's beautiful.

[George Campbell]

I love these reports so far. Get this. They've reviewed listings on my behalf, removed me from 240 data broker sites, and saved me 77 hours of time. It's incredible.

[Caller]

Absolutely amazing. And Winston and I now get fewer texts, weird emails, spam calls, all of it.

[George Campbell]

I love it. So you got to be sure to check them out. Ramsey fans get 20% off their annual plans. Just go to JoinDeleteMe.com Ramsey. That comes up to less than nine bucks a month. Super affordable.

[Caller]

Amazing. So again, that's JoinDeleteMe.com Ramsey. Make sure to check it out, you guys.

[George Campbell]

Hey, what's up, guys? It's Jade Warshaw. And look, if there's anybody who knows student loan debt is a problem, it's me. My husband and I had $280,000 of it, but we were able to dig ourselves out. And you can too. If your student loan payment and interest rate are burying you, refinancing could be the solution. Now I recommend contacting my friends at Laurel Road today through their online application, you can get an initial rate quote in less than five minutes. And if you have a more complex situation, you can schedule 30 minutes to.

[Ken Coleman]

Talk to an actual human being.

[George Campbell]

Thank goodness Laurel Road makes it simple. There are no fees involved and you could save thousands over the life of your loan. Remember, you should only refinance if it makes sense in your situation. So if you're looking for a low rate or a shorter term so that you can pay off these student loans fast, talk to my friends at Laurel Road about their competitive interest rates and how you could actually get a lower rate by signing up for autopay. Listen, nobody's coming to save you from student loan debt. If you want them gone, you can't mess around. Go to LaurelRoad.com Ramsey to find out more about student loan refinancing. Again, that's LaurelRoad.com/Ramsey. Laurel Road is a brand of Key Bank National Association. All credit products are subject to credit approval.

[Ken Coleman]

Lisa from Milwaukee is up next. Lisa, how can we help?

[Caller]

Hi, George and Ken, thank you so much for taking my call. You bet. My question, a little bit of a background. I started a business in 2023 and it took a little time to get it ramped up. So I didn't make that much in 2023. So the taxes that I paid were relatively low. But in 2024 I did much better. And I, as I was giving all my documents to my tax preparer, I said, oh my gosh, I'm sick. I can just imagine how much I'm going to have to pay in taxes. Is there anything I can do to reduce my tax bill? I'm in real estate and I said, aside from purchasing properties, I'm not in that in that mode yet. And he said that I could, I have a Roth, a self directed Roth ira, but that won't reduce my tax bill. He said I could open a traditional IRA, a SEP, a simple IRA, or a self directed 401k. But at this point, my only option is a traditional IRA for 2024 tax benefits. Is it beneficial for somebody self employed to open a traditional IRA for tax benefits?

[George Campbell]

Well, I mean, you're just switching it up. So with the Roth side, you're paying taxes now and then never again. And so what you're saying is, well, I'd rather not pay the taxes now, but one day when you go to withdraw that money, you're gonna pay taxes on it. So there's no way to really avoid the tax man. You're gonna do it on either side. And I would, if I'm in your shoes, I would just stick with the Roth. I don't like doing anything for the tax benefit. I know it stinks to pay taxes, but it's just part of making an income in America today. And so I would do any other thing you can do to reduce your taxable income through deductions and credits. But I don't think it's worth switching to the traditional side just to save a little bit on taxes.

[Caller]

Should I have an additional retirement account besides the self directed Roth IRA for any. Because my expenses for my business, my startup expenses, I had some, some more. But now my expenses are very minimal. So the amount of deductions that I have are very small. So the only thing that he said that could reduce is either purchasing real estate, which again isn't my.

[George Campbell]

You're out of options as far as tax advantage retirement accounts.

[Caller]

Okay.

[George Campbell]

Do you have a health insurance plan?

[Caller]

I'm through Marketplace. I was diagnosed with cancer four years ago, so my, my health insurance is astronomical.

[George Campbell]

Is it a high deductible plan or is it PPO? Do you know what it is?

[Caller]

I believe it's HMO, but based on my income it's. It's $600 a month.

[George Campbell]

I was asking because if you have a high deductible health care plan, you can do an hsa, which is a health savings account and you can actually invest through there with tax advantages. So it kind of becomes a bonus retirement account in that way, you know, outside of your, your Roth ira. Beyond that, beyond the hsa, a Roth ira, if you have no other options that you can do, you could all always go to a taxable brokerage account, non retirement, and just dump money in there into some S and P index funds.

[Caller]

Okay. And that would give me a tax advantage then?

[George Campbell]

It wouldn't give you a tax advantage, but it's another way to invest if you're not hitting that 15%. Are you debt free with an emergency fund? Currently.

[Caller]

For two years when I was healing cancer, I didn't work at all. So I was living off of credit cards. So in 2023 I paid off about 10,000 and this past year I paid off the remaining 50,000 in credit cards. Well, I should feel great, right? But because my income is still unpredictable, it really took everything. Besides, I had enough money. I didn't know how much I was going to pay in taxes, but.

[George Campbell]

So where are you at now in terms of your debt?

[Caller]

So no credit card? I do, I do have about 17,000 remaining on a student loan, which I was hoping to tackle this year.

[George Campbell]

Okay. If I was in your shoes, and again, you called our show, this is the way we do it, I would pause all investing, you know this, and knock out the student loans. Get an emergency fund. Because right now you are skating on some thin ice. All it takes is one more emergency and you're back to using the credit cards.

[Caller]

Yeah.

[George Campbell]

It's going to move you backwards and you're not going to be able to build wealth because you're going to be dealing with all these ankle biter things. And so getting rid of that debt, getting the emergency fund in place, should be your A1 before you get to investing.

[Caller]

Okay. I thought you would say that, but I wanted confirmation.

[Ken Coleman]

There you go.

[George Campbell]

You got it. We are here for you, Lisa.

[Ken Coleman]

He's consistent for you. Yeah. I'm telling you, the clock and George Campbell got the same consistency.

[George Campbell]

I'm ticking.

[Ken Coleman]

Going to hit the mark. Speaking of taxes, you know, we are up against the that favorite time of year for most Americans. Got to get those taxes in. And right there in my hands, I've got some myths about taxes I want to run by you, George. Okay, ready?

[George Campbell]

Hit me.

[Ken Coleman]

Myth number one, a tax refund is free money. What say you, George?

[George Campbell]

It's a real gear grinder for me, Ken.

[Ken Coleman]

Oh, okay.

[George Campbell]

I don't understand people. The government blessed me with free money. That's not how it works. You just overpaid your taxes throughout the year and the government says, hey, you overpaid, Here's a little bit of money back. So here's what you should do instead. Adjust your withholdings to keep more of your earnings during the year. Get to as close to zero as possible. You don't want to owe too much. You don't want to get refunded too much.

[Ken Coleman]

All right, myth number two, higher tax brackets are bad.

[George Campbell]

Oh, boy. This one's hilarious. People go, well, Ken, I don't want to make, I don't want to get a raise. I'm going to owe more in taxes when I get kicked into another bracket.

[Ken Coleman]

Dumbest thing I've ever heard.

[George Campbell]

That's not how it actually works. Only the income within each bracket is taxed at that brackets rate. So it's this much up to 10%. Then the next batch is up to 12%. So you're not actually paying 22% on all of your money?

[Ken Coleman]

That's right.

[George Campbell]

There's marginal and effective. So you got to look at that. Earning more increases your income, not the overall Tax rate.

[Ken Coleman]

All right, myth number three. Keeping debt for tax deductions is beneficial. Oh. Oh, boy.

[George Campbell]

You're just trying to rile me up.

[Ken Coleman]

It burns your biscuits, doesn't it?

[George Campbell]

Yeah. Paying interest in order to gain a tax deduction is very counterproductive. Your tax advisor is suggesting you do this. You should fire them. It is way better to pay off your debt, save on the interest payments, and free up that income. Never do anything just for the tax deduction.

[Ken Coleman]

All right, myth number four. The team hates the paper crinkle.

[George Campbell]

They hate it so much, but I.

[Ken Coleman]

Think the audience loves it.

[George Campbell]

America said, yes, they do.

[Ken Coleman]

Pay by tax day or don't pay at all.

[George Campbell]

That's a funny one. So they go, well, I can't pay what I owe, so might as well just not file at all. Yeah, that's how you go to jail.

[Ken Coleman]

That's not a good plan.

[George Campbell]

So, the penalty for not filing a return or filing late can be up to 10 times as much for the penalty for not paying on time. So you still have to file the return by the regular deadline, pay as much as you can by the deadline, and then set up a payment plan with the IRS for the rest that you owe. But you gotta file by the deadline.

[Ken Coleman]

That's right. Unless you look good in stripes or orange.

[George Campbell]

Hey, that's not me.

[Ken Coleman]

Okay? I. Neither one of us.

[George Campbell]

Not flattering.

[Ken Coleman]

Or one of us. And finally, myth number five. You're not smart enough to do your own taxes.

[George Campbell]

Now, that one. The jury's out on that one.

[Ken Coleman]

Well, now I'm not. So in this situation, I. That would be reality, James. I would go to jail accidentally because I'm just bad with details.

[George Campbell]

That's fair. Well, here's the good news. You're probably better off filing your own taxes if you have a simple tax situation. So if you're a normal W2 employee, didn't have a lot of life changes this year, then it's fine. You can use Ramsey Smart Tax and file on your own. But if you have a more complicated tax situation. You own a business, you bought a home, you had a baby. You're Ken Coleman. You want to consider connecting with a tax professional.

[Ken Coleman]

Yeah.

[George Campbell]

So regardless of all this, you got to file by April 15. The deadline is upon us. And if you're ready to file online, be sure to check out Ramsey Smart Tax. It's tax software that's easy to navigate. It is foolproof. Even Ken Coleman could do it.

[Ken Coleman]

That is True.

[George Campbell]

Go to ramseysolutions.com smart tax or click the link in the description if you're on YouTube or podcast.

[Ken Coleman]

All right, so I'm glad we went through that.

[George Campbell]

Painless.

[Ken Coleman]

It is. And so many people make bad decisions around taxes. The one that kills me is. Is the idea that I'm going to go spend money in order to get a little tax relief. Oh, you know, we hear that one a lot. That didn't make the myths. But, you know, the idea is, well, I've got a business. See, there's a lot of business owners, so I'm gonna go out and spend a bunch of money and deduct it as an expense. Yeah. As opposed to saving it or investing.

[George Campbell]

It's not a dollar for dollar.

[Ken Coleman]

Doesn't that drive you crazy?

[George Campbell]

Yeah, well, that because. And this stuff is all over Tick tock and social media.

[Ken Coleman]

That's why I bring it up, to let you just swat it.

[George Campbell]

They're going, hey, let me go buy a. Let me go buy a G wagon so that I can write it off.

[Ken Coleman]

Right. As if the write off is better than saving the money. Where does that come from? Where does this notion come from?

[George Campbell]

Well, it gets a lot of clicks on social media, and then people go, well, it makes sense. And then your tax pro is telling you the same thing because that's what you want to hear. You want to go spend money. Great. Just write it off.

[Ken Coleman]

Yeah.

[George Campbell]

It's not a dollar for dollar deduction.

[Ken Coleman]

Yeah.

[George Campbell]

And it's unwise to spend money that you don't need to be spending. That's not how a successful business is run.

[Ken Coleman]

Amazing how that works. More money.

[George Campbell]

Who knew you'd rile me up about tax myths on a Friday? Well, the last thing America needs right now.

[Ken Coleman]

Well, it's to be fair, George. You're so even keel that most of Americans can't tell when you're raging versus when you're relaxing. And I envy that, my friend. You're as steady as they come.

[George Campbell]

Thank you.

[Ken Coleman]

Steady Eddie. They would have called you back in the day.

[George Campbell]

I'll take that name.

[Ken Coleman]

Never heard that before.

[George Campbell]

No.

[Ken Coleman]

Yeah, it sounds like it's from the 1950s into the way back. Back every once in a while. Yeah, I'm still in touch with the 50.

[George Campbell]

That's when you can hit a vending machine and make some pop. Just roll out.

[Ken Coleman]

Pop?

[George Campbell]

Yeah, that's what they call it.

[Ken Coleman]

I'm gonna get you a can of pop.

[George Campbell]

Thank you.

[Caller]

You spent years trying to get everything just right for your family. Now you need an easy way to make sure your important financial documents are as organized as the rest of Your house. Well, good news, Knockbox, that's n okay box, as in next of kin box is a complete system that helps you be sure that you leave happy memories, not a mess when you pass away. Knockbox is a simple way to organize important paper and digital documents, IDs, tax returns, insurance policies, estate plans, accounts and other personal history. And one manageable place your family will feel your love and every detail you take care of. So start taking care of [e-mail] Ramsey A well organized legacy is a gift to your family. That's nokbox.com Ramsey.

[Ken Coleman]

Uche joins us next in Alexandria, Washington. It says here, all right, I'm familiar with the Virginia. I didn't know. All right, Uche, how can we help?

[Caller]

Hi. So I was calling mostly because I needed some kind of coaching and advice. I've just been in this country since 2022, so I don't know much about the credit. That being said, I do have a credit card debt of $12,000 and I have my car loan that I'm still paying. And I'm currently in school. So I have about. I think not. I think it's 8,000 on student loan. And right now I was working to see how I can manage it so it doesn't go out of hand because already it's quite a lot. I can make payments on my credit card. However, I came across national debt relief and after I heard, you know, spoke with one of their consultants. They said they can negotiate that and bring it down to 50%. Obviously, I'm gonna have to pay their fees in total. Instead of paying 12,000, I'm gonna pay 8,400. Now, it all sounds good, but I have no idea for anyone to tell me how that affects me. If I should just go ahead and pay off the card myself or if I can work with them on that.

[Ken Coleman]

You've got George.

[George Campbell]

I'm so glad you called. You did not sign anything with these people, did you?

[Caller]

Not yet.

[George Campbell]

Please don't. Please run so far away that they can't see you anymore. They can't contact you, block their numbers. These people are not here to help you. Do you understand how these work? So they tell you, hey, we'll reduce your debt one month. One easy monthly payment. Your life's going to be so much better. Here's what actually happens behind the scenes. They tell you to stop paying on all your debts, stop paying your creditors, let your accounts go to collections, which tanks your financial world. Then instead of sending your payments to the debtors, you send it to them. Right. They put it in accounts and they hold it for you. And they wait months, sometimes years to negotiate a lower lump sum and they charge you for it. That's the fees you're talking about. So you pay thousands of dollars for someone else to attempt to fix your financial mess while taking your financial world. Right now, the creditors, they don't have to do any of this. They can still sue you. They could take you to court. And even if they do settle a debt for less than you owe, the IRS considers the forgiven amount as taxable income. So you still have to pay taxes on that difference. And so instead of doing the shortcut, I believe in uche and your ability to pay off this debt on your own without this shortcut, that's going to really harm you in the long run. So here's what you do instead. Pause everything you're doing in your financial world and cover your four walls. Can you cover your food, utilities, transportation, housing with your current income?

[Caller]

Well, yes. Yes, I can. I definitely can because I already use their every dollar to comp. The only part is I always feel like I'm on the edge of not being able to get other personal items. Or let's say I run out of something during the week. I'm like, I don't know if I have enough for next. So I was trying to see how I can not live on that edge.

[George Campbell]

That's your four walls. So you need enough to cover the basics, nothing more. And then beyond that, we need to make the minimum payments on our debts. Can you do all of that right now?

[Caller]

I can definitely work towards the minimum payments.

[George Campbell]

Okay, and then do you have anything left over to throw at your smallest debt? No, beyond your basic bill. So what is your income right now?

[Caller]

I currently have 3,697 after taxes every month.

[George Campbell]

Okay. Are you doing any investing right now?

[Caller]

I have not started it, but I started putting out about $21 to what if I can save with those? I just have it in a savings account for now. Just because I like that I'm always living on the edge. So it's like maybe I can just put whatever small I can find.

[George Campbell]

So how much do you have? How much do you have in savings? Do you have a thousand dollars saved yet?

[Caller]

No, I don't have a ton.

[George Campbell]

Okay, so that is your A1. You're going to cover your four walls, nothing more. Cover all of your minimum payments. Any extra dollars need to go to a savings account until you have a thousand. That's going to help you cover those Ankle biters like you're mentioning.

[Caller]

Okay.

[George Campbell]

Then once you have a thousand, you're going to move on to the debt snowball. That's baby step two. List out your smallest debt all the way to largest debt and just attack the little one with a vengeance while you make minimum payments on the rest. So what is the smallest debt? If you listed them all out.

[Caller]

The smallest one would definitely be the credit card. It's supposed to be school loans, but they're not due yet and I'm still in school. I have 8,000. So I have not contacted him and how to pay it back.

[George Campbell]

Okay.

[Caller]

So whatever I have to pay right now, it's just my credit card and it's one credit card that I.

[George Campbell]

Are you still using that credit card?

[Caller]

No, I have not used it in the last two months.

[George Campbell]

Good.

[Caller]

I've been working with my own because I'm trying to see what is possible. And that's where I met right now.

[Ken Coleman]

What is it? What is your relationship from the amount of hours you're working to schooling?

[Caller]

Well, it's quite tight. I work full time and I go to school full time. I go to school online and then I'm working full time because I do not want to have to do everything on credit.

[Ken Coleman]

Sure. What are you going to school for?

[Caller]

Well, bachelor's semester's in psychology. I'm trying to be a behavior analyst.

[Ken Coleman]

Okay. How much more do you have schooling wise?

[Caller]

One and a half to two years, depending. If I don't have any gap.

[Ken Coleman]

I'm going to throw this out here because I want to hear what George's take is. And I'm. And I'm not actually recommending this. I'm just wondering if we don't think about pausing school for a season to get through this. You're so tight right now and the degree will still be there. And I just wonder if it's not a good idea for you to spend that. Let's say you spent half the amount of time that you're in school working an extra job just for a short season to knock this debt out, get an emergency fund in place and then finish. It just feels like you're trying to do a lot right now and you don't have to do the school I know you want to. And I'm not in any way trying to discourage that goal. But I think that there is a season for everything. And it feels like trying to get out of debt and get your life set up financially and be in school full time is not the best play. George, do you Disagree with that. Yeah.

[George Campbell]

Well, you're making decent money right now. What are you doing full time?

[Caller]

Well, I am a behavior therapist.

[George Campbell]

So you're doing all of this for like a ten grand raise? What's the upside? At the end of this.

[Caller]

It will be about 20 grand rate. Well, that's the minimum. 20 grand raised from what I already am.

[Ken Coleman]

I would pause right now. I'm even more bullish on this idea.

[George Campbell]

Yeah. Would they help you cash flow? This your employer?

[Caller]

Will they help? Well, no. The most they did was put me on salary because typically you get it hourly pay. So when I had reached out to them and I said, hey, this what I'm doing, because it was my supervisor that I spoke to, like I said, I came here very without information. So when I thought about going to school, they were like, oh, you can go to school. I was like, I don't have the money. And they're like, oh, you don't have to pay it right now. Usually you sign up fast time and then you do this. So I was already in this and I started understanding the system a little better. And I'm like, okay, now I need help with this because they threw it out there. Like, that's just how it, you know, it's that easy. Of course, if it's that easy, everybody would do it.

[Ken Coleman]

But nothing about your life is easy right now. Nothing.

[Caller]

I know, I know. It's. Sincerely, I've thought about pausing school, but I keep feeling that pressure in me. Like, no, what are you.

[George Campbell]

You're not going to lose the credits, right? Can you pick up where you left off six months a year from now?

[Caller]

Okay.

[Ken Coleman]

Yes, you can.

[Caller]

I know. I feel a lot of dittos because, like, where I'm from, my culture, like going to school and becoming something, there's the real reason. But uche, I cannot.

[Ken Coleman]

Uche you are. I'm not saying drop out. I'm saying pause. The pressure you're feeling from the finances is way more than the pressure you're going to feel from back home or anything else. And you're not quitting. I'm not suggesting you quit. I'm saying pause.

[George Campbell]

Do they pay your bills?

[Ken Coleman]

No.

[George Campbell]

Your family, that's putting all the pressure on you?

[Caller]

No.

[George Campbell]

I don't think they get a vote at this point. They're not experiencing the stress that you are trying to balance all of this at once.

[Ken Coleman]

Imagine uche if I can cast vision, imagine getting this debt paid off the way George instructed you. And you do this, you press pause and then you get set up. And you're, you have a strong financial base. You're debt free. You got an emergency fund. And now we start cash flowing our way through school. Think about how much less stress you'll have in your life as you finish. That's the vision.

[George Campbell]

You're actually going to feel like you got a raise because if you do it this way, on the track you're on, you're going to be throwing your entire raise at more debt.

[Ken Coleman]

Yeah.

[George Campbell]

Because you're going to keep racking it up.

[Ken Coleman]

Yeah. I. George, I'm bullish on this idea. I'm for pausing.

[George Campbell]

Yeah. I like that Plan. And maybe if the car, I don't know how much the car is worth, but you may want to sell that to get out of it and downsize. For now, if you got public transportation, you're in the D.C. area, so it may be possible.

[Ken Coleman]

Yeah. Good hour here on THE Ramsey Show. More coming up.

[George Campbell]

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[Ken Coleman]

Expose your family to.

[George Campbell]

And for more than 30 years, Timothy Plan has offered mutual funds and ETFs.

[Ken Coleman]

That won't contradict your values or sabotage your faith.

[George Campbell]

So if you're serious about investing with a clear conscience, Timothy Plan could be just what you're searching for. Contact your financial advisor today to see if Timothy Plan is right for you or visit timothyplan.com for more information. Investing includes risk, including possible loss of principal. Before investing, carefully consider a fund's investment objective.

[Ken Coleman]

Risks, charges and expenses contained in the Prospectus.

[George Campbell]

[e-mail] Read carefully before investing. Mutual funds distributed by Timothy Partners Limited and ETFs distributed by Foreside Fund Services, LLC.

[Ken Coleman]

This is the Ramsey show, where America congregates to have a conversation about money, your work and your relationships. Triple 882-55-5225 is the phone number 888-25-5225. I'm Ken Coleman. I'm joined by the Natalie Attired Shacket Man.

[George Campbell]

Wow.

[Ken Coleman]

George Camel, ladies and gentlemen.

[George Campbell]

Natalie, that's a word you don't hear a lot.

[Ken Coleman]

I'm not sure it's a word. I'm going to have to check that up. Check that out at Rather. I said check that up. Is Natalie. It's natty attire.

[George Campbell]

Yeah. It means a stylish or tidy.

[Ken Coleman]

You like that? Nothing describes you better than stylish. You are so happy right now. Look at the smile on your face.

[George Campbell]

Ken always teaches me a new word on this show. I hope you guys are learning along with me.

[Ken Coleman]

I try. George is going to lead out on coaching you on what to do with your money. I'm going to help coach you on how to make more of your make more money rather so that you can win and win big. Let's go to Emily in Philadelphia. Emily, how can we help today?

[Caller]

Hey guys, how's it going?

[Ken Coleman]

Well, we're having a blast. What's going on with you?

[Caller]

Well, I called in a few years ago and at that time I was making about 30 grand a year and it took me a little bit. But since then I have taken Dave's advice and got a more advanced license in my field. So these days I basically quadrupled my income.

[Ken Coleman]

Emily. Way to go. Emily. The studio audience is clapping for you right now. They did. You can't see this, but they're so excited for you.

[Caller]

Oh, that's awesome. Well, I really appreciate it and it's been quite the journey, but I'm glad I'm here now. In addition to that, since then I've gotten married and my husband is a veteran. He's currently in school for his undergraduate degree. So of course we get benefits that basically just cover our housing. We live in a pretty expensive area. So all of his income basically goes to helping pay for the mortgage, which makes me the sole earner for all of the other things, especially since he's planning to go to law school once he finishes his undergrad. So we're in a place now where we're really eager to have our first child within the next year or two. Which brings me to the issue. So the issue is that we currently have about 120,000 in non mortgage debt. And I'm really torn between two things here. I don't know whether to just keep plugging away at the baby steps and pay down my our debt. That's debt that I brought into the relationship, but pay down our debt really aggressively or to start saving up for parental leave since I'm partly self employed and partly employed by a company that doesn't have a parental leave policy in place. So I just want to make sure that I can take time off without worrying too much about our finances. But I also want to be smart about the debt. So we've just been talking about This a lot lately, and I'm hoping you guys can help steer the direction here.

[George Campbell]

Yeah. What do you make?

[Caller]

I make about $120 a year.

[George Campbell]

Awesome. And what is the total take home pay you guys are bringing in every month?

[Caller]

It's. It's right around 10,000.

[George Campbell]

Okay. And what are your bills every month?

[Caller]

So I have about 1,000 and personal loans, about 5,700 in credit card debt, 14,000 left on the car, and then just. Just under 100,000 in student loans. And then our mortgage is about 2,400amonth. So those are the big things.

[Ken Coleman]

How much money would you need to have set aside or want to have set aside to offset the parental leave expenses?

[Caller]

I think I would feel super comfortable if we had 20,000 set aside. That's what would make me feel really good to know that every bill that needs to be paid is getting paid. We've got a little bit extra for things that might pop up. Okay. You know, any unexpected medical bills. I do thankfully have health insurance, but. Good. You know, babies are expensive.

[George Campbell]

So just how much is left over once you cover all of your basic bills, minimum payments on the debts, how much extra is there?

[Caller]

It winds up not feeling like a ton. I want to say like a ballpark of maybe 1,000amonth.

[George Campbell]

You're telling me you guys are spending $9,000 a month?

[Caller]

I think so. And I think part of the. Well, maybe not problem, but part of what we've been doing is paying down on previous personal loans that were really high. So we've been paying on those really aggressively. If we were to just stop paying all the extra on the debt, that would be significantly less going out every month. I mean, I think we'd probably have four or five thousand left over.

[Ken Coleman]

Okay, that's good news.

[George Campbell]

So here, if I'm in your shoes, here's what I would do. Once you're actually pregnant, it's fine to go into stork mode and just stack up cash and two grand a month. For the nine months of pregnancy, you'll have 18 grand sitting in that one account.

[Caller]

Okay.

[George Campbell]

And so that'll. That'll get you by.

[Caller]

It's so easy when you say it.

[George Campbell]

Yeah. That's just the basic math. What I wouldn't do is go, well, we don't know. So let's just start saving now and not pay on our debts and just make a minimum payments. I would continue the debt snowball until we go. All right, game on. Nine months until baby. Then I would pause and stack up cash. Once you and Baby are home safe. You're done with leave, you've got the money left over. Start chunking out at the debt and push play on the debt snowball.

[Caller]

Okay, what is.

[Ken Coleman]

What is your that? Yeah. And real quick question. What is your hubs getting his degree in?

[Caller]

He's studying sociology right now. Although the plan again is for him to go to law school school and then probably commission as an officer back into the military.

[Ken Coleman]

Yeah, I, as a part of this plan, I always like to throw something out for people to think about. I'm not suggesting that he do this or that you all do this, but I would sit down and talk about it. I would entertain what a gap could look like between his undergrad and law school. There is this drive in America. I don't see it anywhere else. It is such an American cultural pressure to. I gotta knock it all out as fast as I can. I'm gonna slog through it. I'm gonna come out on the other side with all these degrees. And then you're saying he may actually go into the military.

[George Campbell]

It didn't sound like he needs a law degree to do that.

[Ken Coleman]

It doesn't. And so especially with that little wrinkle you threw at me, why not go work for a year or two and again, kind of bring in some more income. And let's fast forward our financial progress and law school is always going to be there. The other thing that I would recommend is that he work really hard on getting a strong LSAT score because we know for a fact I've proven this over and over again. You can do some research, check me on this, because I'm right. But there are a lot of smaller, lesser known law schools that will give your husband a full ride if he gets a very high LSAT score. So these are things to be thinking about as opposed to just going through the motions of, well, we're going to grit our teeth and stay on one income. And especially if baby's there now. I would just have a conversation about that. That's all I'm suggesting.

[Caller]

Yeah. Yeah, I think that's really fair and I appreciate all of the advice and your time. Thank you so much.

[Ken Coleman]

Yeah, you bet. The call.

[George Campbell]

And look at the basic napkin math on this too, Emily. Five grand a month thrown at this debt, you're done in two years. Yeah, it's 120 grand. It's a lot. But you just told me you could free up four to five grand if you guys got intentional, got on a budget. And so that's my goal for you. Guys, is two years. Now, this is aside from if you get pregnant, even if, by the way.

[Ken Coleman]

George, if his income goes up, boom.

[George Campbell]

Now it's like 18 months.

[Ken Coleman]

And that's why I'm. I'm presenting the idea of a pause between graduate school. Especially when you're in debt. Get out of debt, George, is my play.

[George Campbell]

Sometimes you gotta. You gotta hit pause to move forward.

[Ken Coleman]

Yeah, yeah, I like that. Very good. Well, George and I will continue to talk that philosophy. And, you know, very Socratic. So I like that. It's very good.

[Caller]

All right, Dave, you have some strong opinions, possibly? Yeah, I think so. Okay. Because you really prefer credit unions over big banks. So why, why is that?

[George Campbell]

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. And that's 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]

Yes, well. And I think we have found one that is incredible and that's fair winds. They are an incredible credit union that is really out with the heart to help the customer.

[George Campbell]

You know, that's why we're partnering with them, because they've got a scope to be able to handle the Ramsey audience, and 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]

Yeah, absolutely. And you're right, their customer service is unbelievable. Winston and I just signed up and we got an account.

[George Campbell]

Yeah.

[Caller]

And I'm not kidding, it took. 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. So again, you guys, I know it can be a pain to switch banks or to open up new accounts, but Fairwinds, again, they make it so easy. 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.

[George Campbell]

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]

Yeah, you guys, it's so easy to join Fairwinds no matter where you live. So go to Fairwinds.org Ramsey to learn more. That's F A I R W I n d s.org Ramsey hey, guys, good news.

[George Campbell]

Presale is on now for my new book, build a business you love. If you're a business owner, you know running a business is hard. That's why I wrote this book, to share what we learned over the last 30 years so business owners can grow your business faster with fewer mistakes. Pre order your copy today and you'll get access to over $350 in bonus items only at ramseysolutions.com store ramseysolutions.com store pre order today.

[Ken Coleman]

All right, time for our question of the day, brought to you by our friends at why refry?

[George Campbell]

Little tongue twister.

[Ken Coleman]

Why refi. Wow, Freudian slip there. I think. If you've got defaulted private student loans keeping you up at night, why Refi can help you lower your payments and your interest rate. Visit why refi.comramsey and start resting easier. That's the letter Y r e f y.com Ramsey it may not be available in all states.

[George Campbell]

Today's question comes from Marissa In Oregon. My husband and I are working hard to pay off our debt. We set our budget each month and try to stay with it. Our problem is that we have way too many auto withdrawals coming out of our accounts. I started a calendar to track our finances, but that doesn't seem to help. What advice do you have regarding budgeting for scheduled withdrawals?

[Ken Coleman]

Oh, my goodness. I don't know that I've ever seen a question more teed up for you.

[George Campbell]

I think Ken fell asleep while I was my second reference of withdrawals. He was like, I'm losing it. Okay, this is actually a good question.

[Ken Coleman]

It's a really good question.

[George Campbell]

It's very tactical. But I think this will help a lot of people out there who are also struggling with this. So when you have auto withdrawals, they're on autopay. The electric bill is going to come out on the 17th every single month. So you say that you are. You're setting your budget. I don't know what budgeting method you're using. You. You didn't mention that. I personally use the EveryDollar budgeting app, you can jump on there and use that for free. Get it in the app Store. And what I love about this is that you can set the due dates with each item in the budget, each transaction, and you can have reminders in there. And so one thing you can do is with the premium version, there's a paycheck planning tool where you can see exactly when you're going to run out of money based on when those bills are coming out. And then the process would be call the utility company, get online, and you can change the payment date within a certain window and to say, hey, I need this to come out on the 16th instead of the 14th so that it can come after the next paycheck and not before. And that will help you over time. And it sounds like you guys are also, you're running it real tight right now. I would keep a buffer of a hundred bucks, 200 bucks, 300 bucks in your checking account so that you're not running up to zero and overdrafting. That's what you want to avoid here. So doing all of that will help. And over time, it's going to get easier as you understand when these bills are coming out. But doing that every dollar budget is really going to help you understand. Paycheck one hits here, here's all the bills that come after it. Paycheck two hits here, here's all the bills that come after it. And over time, you'll get it dialed in and you'll, you'll start making that progress.

[Ken Coleman]

But speaking of every dollar, we have multiple free trainings. These are webinars that are absolutely free for you this month. You can live. Excuse me. Join in on a live webinar and we walk you through how to break that paycheck to PayCheck cycle in 90 days, step by step, like George was talking through the every dollar budget app. Over 160,000 people have signed up already. Join it. It's free. Go to everydollar.com webinar everydollar.com webinar Macon, Georgia is where Alan is waiting for us. Alan, how can we help today? Hi, I just had a question for you guys. Needed to know if my plan I know nothing about really, you guys is just I'm an idiot or how much.

[George Campbell]

Of it is I'm an idiot to.

[Ken Coleman]

Try to get everything straightened out financially. Well, don't beat yourself up too much. You don't know us and yet you decided to call us. So somebody close to you said, alan, call these guys. Am I getting this, right?

[George Campbell]

Yes.

[Caller]

You guys had been referenced to me before by a co worker over a year ago.

[Ken Coleman]

I wrote it off as nothing and then was like, oh boy. Maybe there's something to it that tells actually how desperate you are.

[George Campbell]

Fine.

[Ken Coleman]

Year later, a year later, I'm desperate. I'm going to call these clowns and see if they can help me.

[George Campbell]

We'll do our best.

[Ken Coleman]

We will do our best. Give us a little bit more detail here on the real problem.

[Caller]

All right. So me and my wife are pregnant.

[George Campbell]

Well, I'm not.

[Caller]

She is.

[Ken Coleman]

Thanks for clarifying that.

[Caller]

Pretty soon I talked to try to.

[Ken Coleman]

File bankruptcy that cost over two grand.

[Caller]

So I didn't do it.

[Ken Coleman]

They estimated me at about 12,000 in debt and that's including her car. I don't have one.

[George Campbell]

You tried to File Bankruptcy over 12 grand?

[Ken Coleman]

Yeah.

[George Campbell]

Now I told you, I don't know what I'm doing. How much of an idiot I am.

[Ken Coleman]

I don't know. Let's stop.

[George Campbell]

I'll tell you this. Bankruptcy is not your answer answer. You guys are the solution to this problem and so we're going to get you out of it. You're working full time?

[Caller]

Yes.

[Ken Coleman]

My hours vary and so does my paycheck. It's highly inconsistent. What kind of work are you doing?

[Caller]

Geotechnical field technician.

[Ken Coleman]

That sounds really fancy. What does that mean?

[Caller]

Summed up.

[Ken Coleman]

Construction needs testing done before they can build or. Or any of that.

[Caller]

I run a bunch of tests, but.

[Ken Coleman]

That'S not a consistent 40 hour a week gig. Sometimes it can be just below 40 hours. I'll make less than 400 or 500 bucks. Sometimes I'm working almost 60 hours, still make less than $800. I never know what my check's going to be.

[George Campbell]

What is your. Is it an hourly rate? Who's setting this?

[Ken Coleman]

It's 15 an hour.

[George Campbell]

Okay. I think you need to be making more money doing something.

[Ken Coleman]

Yeah. Better job. Better job. So let's just check that out.

[Caller]

Told me today Sor that he was.

[Ken Coleman]

Looking to give me a raise soon but has no idea how much or.

[Caller]

How little it'll be.

[Ken Coleman]

Does that like that just makes my head hurt listening to that entire sentence.

[George Campbell]

Right. But I had come back to them.

[Ken Coleman]

Because we had moved back up to Georgia from Florida because that was a bust at every Avenue and they were the only place I could find to go back to work for.

[Caller]

I did get my real estate license in Florida and I got the paperwork printed out to transfer it up here. So my plan is to try to.

[Ken Coleman]

Get what time I Have not working because I could work through the weekend.

[Caller]

At a moment's notice.

[Ken Coleman]

You get told at the end of.

[George Campbell]

The day whether you got to be at work.

[Ken Coleman]

Alan, Alan, Alan, you're making too many excuses as to why you're stuck.

[George Campbell]

This whole.

[Ken Coleman]

Where my plan comes in is I want to get into the real estate and find a secondary gig, put that as a luxury.

[George Campbell]

You need money now. Yeah. Not I hope to make a commission seven months from now to sell my first house. Yeah. I'd be working 60 hours a week doing retail. And you'll make more.

[Ken Coleman]

Yeah, that's absolutely right. You can get. You can be making $20 an hour stock and shelves somewhere at this point. You've got to get really intentional. This whole I'm an idiot act. It's a function of. If I can be very straight with you, you're making a lot of excuses. And George is right. You presented us with $12,000, which in the grand scheme of things, my friend, is not a lot of money to pay off. If you have intentionality, in other words, a much better paying job and then you do what George tells you to do to pay it off.

[George Campbell]

The debt mathematically is not your issue here. Absolutely, I understand.

[Ken Coleman]

I just started getting real with these things, like a wake up this week. So I knew I had nothing together. All right, well, listen to George here. I think here's what happened.

[George Campbell]

You got a baby on the way and it was a reality. That's right. And you went, oh my goodness, I got to be like an adult all of a sudden, right?

[Caller]

Yes.

[George Campbell]

And your wife is feeling the stress too.

[Ken Coleman]

Is she currently working, doesn't care about money.

[George Campbell]

She does when she doesn't have it and she can't feed her baby. She's got to start caring.

[Ken Coleman]

Walking through how he gets out of this. Listen, Allen paid attention like you've never paid attention to anything else in your life.

[George Campbell]

You need income asap. The debt, I'm guessing the minimum payment is a few hundred bucks.

[Caller]

Yes, sir.

[George Campbell]

Okay. And you owe 12 grand and it's a car.

[Ken Coleman]

It's. It's a couple of things.

[Caller]

A credit card, her car, a lawyer from a previous divorce.

[Ken Coleman]

That's only two grand.

[George Campbell]

Didn't even use them. And what's the car worth and what do you owe on it?

[Ken Coleman]

I believe she said the car's worth like 20 something.

[Caller]

30. And she. It should be paid off next year.

[George Campbell]

No. What. What do you owe on the car?

[Caller]

I think like seven.

[George Campbell]

You need to sell that car today. It's worth 30 grand. And you owe seven.

[Caller]

I think that's what she said last time I asked her.

[George Campbell]

So you could make 23 grand from this sale, use that to pay off the rest of your debts and still have money left over to buy another car used in cash. You hear that? You just solved the problem right there, Allen. And then the next step is let's get our income up and start stacking up cash that we have some when the baby's here. You guys are going to be debt free with an emergency emergency fund by the time this baby arrives into this world. Mark my words. And we're going to send you Financial Peace University. You and your wife sit down, watch all nine lessons and then you will be on the Ramsey train on the path to building wealth.

[Ken Coleman]

And Alan, let's change the label. You're not an idiot. You're a good man. You're a husband, you're a father. You're a hustler. Pick a label, own it and go happen to the this situation. George just gave you the game plan. I'd be listening to that car in the next five minutes. 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.

[George Campbell]

Lets play a game. Raise your hand if you've already filed your tax return. Ready? Go. Okay. I can't actually see any of you, but I can feel it in my bones that not enough of you are raising your hands. Y'all need to get on over to Ramsey SmartTax and file your dang taxes. Ramsey Smart tax is a 100% accurate tax software that won't pilfer your wallet or surprise you with garbage hidden fees. Plus it's powered by Taxslayer who's been trusted in this industry for more than 50 years. Go to ramseysolutions.com smarttax and file with tax software you can trust. That's ramseysolutions.com smarttax.

[Ken Coleman]

In the lobby of our Ramsey Solutions headquarters here, just across the studio here through the glass on the debt free stage is Rachel. Welcome, Rachel.

[Caller]

Hi. Thanks for having me.

[Ken Coleman]

You bet. Where are you from?

[Caller]

I'm from Dallas, Texas.

[Ken Coleman]

All right. And you're here to do your debt free scream, I'm told.

[Caller]

I am, yes.

[Ken Coleman]

So exciting. Okay, give us the data here. How much debt did you pay off?

[Caller]

I paid off $65,000.

[Ken Coleman]

Okay. And how long it took?

[Caller]

14 months.

[Ken Coleman]

All right, way to go. And what was your range of income during that time?

[Caller]

It started at about 105, up to 115,000.

[Ken Coleman]

What do you do for a living?

[Caller]

I'm a director of revenue for a hospitality management company.

[Ken Coleman]

Oh, nice. And was the bump due to side work or just a raise at your job?

[Caller]

It was mostly from starting a side hustle at a gym.

[Ken Coleman]

No. You started a gym?

[Caller]

Oh, no, no.

[Ken Coleman]

Oh, okay.

[George Campbell]

I'm sorry.

[Caller]

I work at a gym. Okay.

[Ken Coleman]

I was going to say, that's quite the side hustle. I was about ready to be blown away. Yeah, fun stuff. All right, so take us back to 14 months ago when you started this journey. What led to this?

[Caller]

I had been with my boyfriend for a while, seriously dating. And, you know, we started to have deeper conversations about what we wanted our future to look like. And I just started to realize that the path I was going down was going one way. And the path I said I wanted to go down was another way. And something needed to bridge that together. So decided to get serious about paying off debt. It was a good time. No spouse, no kids. Just a good time to hustle and lay a good financial foundation.

[Ken Coleman]

Now, how'd you hear about what we're doing here?

[Caller]

Started with my parents giving me fpu.

[George Campbell]

Okay.

[Caller]

Right after I left college with six figures of debt.

[George Campbell]

Oh, boy. Wow.

[Caller]

Good luck to you.

[Ken Coleman]

Sweetie, I gotta ask. I don't want to. I don't want to belabor it or stay here too long, but when you had this conversation with the boyfriend and you said, I realized I was going down one path, I wanted to go another path. Did he come along for the journey or was he. Was he out?

[Caller]

Oh, yeah. No, he was so excited and definitely on board. You know, obviously our finances are not combined, but we hustled.

[Ken Coleman]

So he's still around?

[Caller]

Oh, yes, very much.

[George Campbell]

You left us on a cliffhanger there.

[Ken Coleman]

No. Okay, so he was Supportive. Okay, good.

[Caller]

Shout out to Ryan.

[Ken Coleman]

Shout out to Ryan. You're a good boyfriend. Sounds like to me.

[George Campbell]

Yeah. So was he on the debt free journey too, or did he not have debt?

[Caller]

He is, yeah. He's still on the ride, but you.

[George Campbell]

Beat him to it, so that's good.

[Caller]

Yeah, yeah.

[George Campbell]

So what kind of Debt was the 65?

[Caller]

Oh, it was the all American variety pack. I had student loans, multiple credit cards, auto loan, personal loan, and medical debt.

[George Campbell]

Wow.

[Ken Coleman]

Good for you.

[George Campbell]

A little potpourri of debt.

[Ken Coleman]

So what did it look like intensity wise for you when you jumped all in to knock this debt out? What were you doing? What cuts did you made? Give us a sense of what the journey was like?

[Caller]

I think the biggest piece was writing a budget for the first time in my adult life. So that was a huge game changer. And then really learned to track where my spending was going and cut out all of the non essentials and. And I think another big piece for me was initially doing the numbers and finding an end date that I could focus on, you know, like if I can just stay intense for 14 months. And that really kind of helped just to see where the finish line was.

[George Campbell]

I love that. So it wasn't just a never ending journey. There was a destination and you knew where it was. And so if it's like you're going on a road trip, you know the eta.

[Caller]

Yeah.

[George Campbell]

And that's what that did for you, having that goal set and going for it. And did you stay on track the whole time? Did you exceed your goal?

[Caller]

I, I met my goal. It was to pay it off by December 31st of 2024 and I hit it.

[George Campbell]

Boom.

[Ken Coleman]

I got a feeling that that's not abnormal for you. Are you one of those people that sets a goal and goes and gets it? You're like a super achiever.

[Caller]

100%. Yes.

[Ken Coleman]

I love that. Where does that come from, do you think?

[Caller]

Oh, I'd say both my parents. I would say my mom's the analytical one and my dad was the a creative mind. But both of them goal driven.

[Ken Coleman]

Yeah. And I gotta point out for our audience viewing, audience can see this on YouTube if we can lock in. But Rachel, you've got some customized jeans, which I'll be honest, normally I'm a little bit worried about, but I think you nailed those. Walk us through what's happening there.

[Caller]

Thank you. These are in case I forget why I'm here.

[Ken Coleman]

Yeah.

[Caller]

Free pants.

[Ken Coleman]

And how did you go about doing.

[George Campbell]

Is that hand stitched? Is embroidered?

[Caller]

Yep. I just went to Goodwill bought some jeans and then I cut up and sewed another pair on top of these.

[George Campbell]

No way.

[Ken Coleman]

Did it yourself?

[Caller]

Yep.

[Ken Coleman]

Did you self teach or were you already taught in the art of sewing?

[Caller]

I was taught by my mother.

[Ken Coleman]

When I go, mom, I think this.

[George Campbell]

Could be your next side hustle, maybe making personal finance themed clothing.

[Ken Coleman]

How much did the jeans cost at Goodwill?

[Caller]

Eight bucks.

[Ken Coleman]

Eight dollars, Jordan. That's your kind of jeans right there.

[George Campbell]

That is thrifting. Wow, I love this so much. So what's next for you now? You're debt free. You're still young. You got time on your side.

[Caller]

Yeah, I'm just enjoying life. Obviously, coming here was an exciting opportunity and have a few trips planned later this year and really just continue to save for the future.

[Ken Coleman]

And we think Ryan's going to finish his race soon. Yes. When is he expected to be debt free? Do we know?

[Caller]

Sometime this year.

[Ken Coleman]

Oh, boy. Yeah, we think he's going to pop the question. What are we talking about? You don't know? It's not that serious yet. I like putting pressure on the young man.

[George Campbell]

George popped up behind the wall. No, that would be epic. That'd be good.

[Ken Coleman]

Look at her. She's already hyperventilating.

[George Campbell]

He's not here. He's not here.

[Ken Coleman]

He's actually not there. Sorry, Ray. George, look what you did.

[George Campbell]

I'm sorry.

[Ken Coleman]

All right, so one of the questions we'd love to ask those who step on that stage, who have finished this journey is, is what was the key for your particular journey to get debt free? What would you say that is?

[Caller]

I think the. The budget just played such a big role, assigning every dollar a place so that it didn't just disappear. And then for me, a little bit more personally, I would say, just not feeling the need. I'm a people pleaser. And so it was very difficult to feel like I was letting people down by saying I couldn't do certain things or attend certain, you know, important moments and other people, people's lives. And that was. That was tough.

[George Campbell]

But the weddings, the birthday parties, the girls trips, it had to be, hey, I'm on a journey. You guys know I'm gonna become debt free. Yeah. And now they're gonna be asking you questions, going, hey, tell me more about that plan you did. Because we make like the same money and I got all this debt and if it worked for you, could it work for me? Have you been encouraging friends now?

[Caller]

Yeah, that's been a really cool piece. To this as well, is seeing others that I've inspired To start this journey as well. And yeah, now I get to cheer them on.

[Ken Coleman]

Speaking of being cheered on, we see mom over there. Besides mom, who else were some big cheerleaders for you on this journey?

[Caller]

Oh, my family. I have some siblings back home in San Antonio and people from work, obviously my boyfriend Ryan.

[Ken Coleman]

And that's awesome. So fun.

[George Campbell]

We got a little gift for you. A parting gift to every dollar premium subscription good for a year. You can use those. You can pass them along to one of the friends you're encouraging. And that's our parting gift for you joining us here in Nashville.

[Caller]

Amazing. Thank you.

[Ken Coleman]

And I think you've modeled this. I want to remind people as they're listening to your story, it's so much easier to say no on the debt free journey. No to all the friends, no to all the invitations. When you've already said yes to getting out of debt and yes to this process, you make that decision first. The no's become a lot easier. I'm just saying that for all recovering people pleasers like myself, I mean, that's. That's so key. Love your story, Rachel. And it can be done. What would you say to young people who think maybe it's not possible to pay off 100, excuse me, 65,000 in 14 months?

[Caller]

It absolutely can be done if, you know, you stay intentional and really just fight for the life you deserve and can be easy to see, you know, social media or society trying to serve you up what you think is a good life, but just knowing what you want and staying true to that.

[Ken Coleman]

Well, you did. You knew what you wanted and you stayed true to it. We're so proud of you. Thanks for sharing your story. All right, the moment has come. Rachel, you've worked so hard for this. Rachel from the Dallas, Texas area. She paid off $65,000 in 14 months, making 105,000 all the way up to 115,000. Rachel, you know what to do. Take it away. It's time for your debt free scream.

[Caller]

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

[Ken Coleman]

She is. She did it, folks. I love it. She is debt free. And normally we have Mel Gibson screaming from. So we need you to do your best. Freedom. Very good, Jordan.

[George Campbell]

That's as good as it gets.

[Ken Coleman]

All you need is some blue face.

[George Campbell]

There it is.

[Ken Coleman]

There we go.

[George Campbell]

Who did it better? Who did it better? I don't know.

[Ken Coleman]

I think you did it better, George.

[George Campbell]

I might trade in my skinny jeans for some of those right there.

[Ken Coleman]

I want to see what a goodwill. And get yourself a pair of jeans. For less than 10 bucks. How about that? That's what I want. That's your homework assignment this weekend, George.

[George Campbell]

I'll leave the embroidery to Rachel.

[Ken Coleman]

Good choice. Good choice.

[George Campbell]

Are you sick and tired of being sick and tired? You can take control of your money and your relationships. And it starts with just one night. Join me and Dr. John DeLoney live in a city near you on the Money Relationships Tour. We're covering the real life stuff that matters so you can break the cycles that have left you stuck. It's coming up fast, so get your tickets for Louisville, Durham, Atlanta, Phoenix, Fort Worth, or Kansas [e-mail] tour today.

[Ken Coleman]

All right, let's get to Doug, who is joining us here in Nashville. Doug, how can we help?

[Caller]

Hey, guys, thanks for taking my call. I've got a question. I'm 100% stumped on what to do. I'm currently in about $7,500 a month worth of mortgage debt. It's two more mortgages. The first one's about 3,000. The second one's 4,500. I live in the one is my primary residence. The other one I'm holding on to. It's renting out, but it's losing money every month. So I don't know whether I hold the property and wait for it to appreciate and just weather the loss or and take the tax deduction from it every year from the interest or do.

[George Campbell]

I look to sell the property and I won't recover what I put into it.

[Caller]

So I'm not going to be recovering my closing costs or any of my down payment. I basically break even if I sell it. I bought it at the height of the market.

[George Campbell]

You are the violinist on a Titanic, man. You're going, hey, we're going to play until the ship goes down. Get off the ship, man. Get off your bleeding money.

[Ken Coleman]

You're just blood pressure issues, Doug, just setting that up. George is having a reaction over here.

[Caller]

I know, I know. And I just.

[George Campbell]

But I look at it and I.

[Caller]

Say, hey, you know, I'm saving a.

[George Campbell]

Little bit maybe from the. You're not. You're drowning. It's called a sunk cost fallacy. I put money into this. I was hoping it was going to work. Take what you can get out of it and call it a stupid tax and move on with your life. You took on a lot of risk and it didn't pan out, and that's okay. We've all done stupid stuff. I'm not here to beat you up, but I'm telling you man, now is the time to get out.

[Caller]

So do my calculations matter on this? Because I've basically looked at, if I.

[George Campbell]

Hold onto this property at a 3.

[Caller]

Or 3.5% appreciation over the next three.

[George Campbell]

Years, I can pull my money out.

[Caller]

I can get what I put back into it.

[George Campbell]

You're going to be calling us back saying, I'm doing even worse now. I thought it was going to work out. None of the calculations make sense. This is a third grade math problem. You are bleeding money every single month. Get out while you can. It's only going to get worse. I don't do anything to hang on to a stupid interest rate. And it's only going to harm you in the long run to stay in this thing. Okay? I know you'll be sad to lose your interest rate, but at least you won't be bleeding money out because you're losing money. Even if it was breaking even, it would still be a bad idea. But you're losing money on this thing every single month. What's your income right now? Income?

[Caller]

Right now I make a decent income. I bring home about 220net.

[George Campbell]

Amazing. And so this is not money you even need. Even if it was working out, it's still not working. No.

[Caller]

And I mean, I think, yeah. The thing is, I think with my higher income, I feel like, hey, it's not that big of a bleed every month. And if I can make up this money in the long run and then sell it and get some of that.

[George Campbell]

You know, that cash back that I put into it.

[Caller]

So it doesn't hurt as bad as it probably looks to you guys. Which is why I needed a little bit of clarity on it, because I really feel like I want to hold on to it. But.

[George Campbell]

Well, as Dave Ramsey would say, you can out earn your stupidity for a long time. And so I get that you don't feel it as much in your budget because you're going, well, I got margin. But you're not running a charity here. If you want to run a charity, go start a charity. But you got into the real estate business to make money, and it's not worth hanging on to the appreciation. It's not worth hanging on to it for the interest rate. I would just get out. And next time you buy real estate, do it in cash and do some due diligence to make sure that it will roi for you. Okay. And you'll be able to do that fast.

[Caller]

Okay.

[George Campbell]

I mean, are you debt free outside of these mortgages?

[Caller]

Well, I have. So I have the mortgages of Course.

[George Campbell]

I have a vehicle.

[Caller]

And other than that, no, I actually use the debt snowball. Paid off all my credit cards, paid off all my medical debt, paid off all my student loans. Probably paid off about $80,000 worth of debt.

[George Campbell]

Right. What's left on the car?

[Caller]

We knew.

[Ken Coleman]

So the car has.

[Caller]

The truck, is 35,000 left on it.

[George Campbell]

Okay, how quickly can you pay that off once you get rid of this house? Well, if I look at it, you.

[Caller]

Know, I'm so I'm currently contributing and this goes into another question. I'm contributing to my savings plan through work. You know, they match up to a certain percentage I'm putting away into a high interest, high yield savings account every month. I could take that money. Stop it. I could have it paid off in a year. Because as it currently sits, I'm about 3,000amonth cash positive.

[George Campbell]

Can I be honest, Doug? For a guy who makes 220, your plan sucks. It's going to take you a year to pay off 35 grand. Making 220?

[Caller]

Yeah, I mean my monthly. My monthly.

[George Campbell]

You're making 15 grand a month, aren't you?

[Caller]

Right now? About 10. What's that?

[George Campbell]

Are you making like 15 grand a month take home?

[Caller]

Yeah, about 16, 16, 5amonth, roughly.

[George Campbell]

I mean, basic math says you can get rid of this thing in a few months. 35 grand. Throw seven, eight grand at this thing, get your expenses low. I think you've been living high on the hog for a long time now. Yeah, I mean the income is. I have been, but the income hasn't always been there.

[Caller]

So I'm making up for all the.

[George Campbell]

Pain and suffering that it's lifestyle earlier on.

[Caller]

I finally.

[George Campbell]

Yeah, because I guarantee you, I finally kind of realized it. You could be making 300 a year from now, and then you still have debt hanging around. There's no reason a guy as successful as you are is hanging on to any level of debt. And you can get rid of this car debt fast. I would pause investing and saving. You're going to do that for like three months. I'm telling you. Three, four months. You can get rid of this truck debt, be completely debt free, free up the payment, get back to you have an emergency fund in place.

[Caller]

So I do, I have my retirement, you know, investments, of course. I've got about 25,000 in cash.

[George Campbell]

Amazing. So you could be debt free even faster.

[Caller]

Okay.

[George Campbell]

You could liquidate most of that savings, throw it at the car, that the truck and be done in, let's say two months, 60 days, this truck is gone. Between your savings and your cash flow and selling this other property, you're going to be in a really good place four or five months from now if you follow this plan.

[Caller]

Okay.

[George Campbell]

And then you can save up and buy real estate real quick. Making 220 with no payments in the world other than your mortgage, which is reasonable considering your income. It's only. Is it a 3,000 mortgage on your primary.

[Caller]

No, the primary is the 4,500. So.

[George Campbell]

Okay.

[Caller]

You know.

[George Campbell]

Yeah.

[Caller]

And just, of course, given the market, I mean, you know how it is here. So it's. It's difficult.

[George Campbell]

It's a hefty mortgage for sure. But it's doable if you continue this trajectory.

[Caller]

Part of the school system, so. Okay.

[George Campbell]

You got this, Doug.

[Caller]

Well, I appreciate that.

[Ken Coleman]

Yeah. There you go. I. I hope he follows your advice. I think Doug's on the fence. I really do. I think he's trying to make it all work.

[George Campbell]

And I got. I got riled up because he's too successful to stay in this mess in quagmire. Doing 17 things at once, no question.

[Ken Coleman]

Makes really good money.

[George Campbell]

Yeah.

[Ken Coleman]

No need to play this out the way it played out. But again, this is what happens when we do calculator psychology. You know, we start going, well, if I wait three years, if I hold on to it, then I get. You know. And you start trying to calculate and justify a thought.

[George Campbell]

Yeah.

[Ken Coleman]

To try to bail yourself out as opposed to actually bailing yourself out.

[George Campbell]

Yeah.

[Ken Coleman]

Like, you can't. You know this, George, you write about this in your book Breaking Free from Broke. But people get into messes because they're trying to shortcut wealth, and then they stay in messes longer because they're trying to shortcut their way out of it. It feels like we got too many shortcuts. And this was as. I was just sitting here listening. He's trying to shortcut everything. Am I right?

[George Campbell]

Yeah. I was getting riled up. And, Ken, thank you for just peeling back some layers.

[Ken Coleman]

Somebody had to be the voice of reason over here.

[George Campbell]

Speaking of, I got a clip I want you to react to real quick before this hour is up. I think you're gonna have a really good take on this. Can we play it, James?

[Ken Coleman]

Okay. Oh, no. This is me and Jade at 80s night on the Ramsay cruise.

[George Campbell]

This is a core memory for me now.

[Ken Coleman]

I did not know this was so. Now Jade and I are both attempting to warm up. You'll notice she's warmer than I am. I look very stiff and uncomfortable.

[George Campbell]

Honestly, it's kind of a weekend at Bernie's vibe you get going on, it almost looks like a cadaver that's being.

[Ken Coleman]

I want you all to listen in. You hear that cackling woman? That's my wife. She thinks this is funny. Audience of one. Now, this is all ad lib. Watch this move. There goes the fish hook. There I am.

[George Campbell]

Oh, my goodness.

[Ken Coleman]

Jade has caught the tuna. Watch the slap. Oh, man.

[George Campbell]

If you weren't watching that on YouTube or wherever, you got to get that on video. You can't just listen. So I hope that convinces people to tune in. And I got to say, Ken, you have some moves, and that's generous.

[Ken Coleman]

I was going to say that's one way to describe them. There's no moves at all.

[George Campbell]

I didn't want to encourage it, but I just thought, this is too good.

[Ken Coleman]

Well, I feel like we should give some context to this. I did not set out, James, for that to happen.

[George Campbell]

To win a dance battle?

[Ken Coleman]

No, no. I was tagging along with Jade Warshaw and my wife Stacy. They were Thelma and Louise. And I'm just, you know, hanging out. And all of a sudden, Michael Reddish, our dear friend, he's on the mic. He goes, all right, we've got two Ramsey personalities here. Let's get Ken Coleman, Jade Warchild on the dance floor for a dance off. At which point I was already defeated. Jade's got more soul in her pinky finger than I do in my entire body.

[George Campbell]

Amen. I'm just glad we were under maritime law because you could have gone to jail for what you did on that dance floor.

[Ken Coleman]

That's a shortened version of the video. The full video. I want it. But because, James, I dropped down and did three push ups with a clap. So when I came up, I was able to clap, and. And that won the crowd over with tv.

[George Campbell]

We can't even air that. Too much up.

[Ken Coleman]

It's too much for the young mens to see. Put the women and children to be.