The Payment Mentality Is Keeping You Broke

Summary

The Ramsey Show: "The Payment Mentality Is Keeping You Broke"

Date: April 14, 2026
Hosts: Rachel Cruze & George Kamel
Podcast Theme:
This episode tackles the “payment mentality”—the deeply ingrained habit of fixating on monthly payments rather than the actual cost and consequences of debt. Through live calls, Rachel and George counsel callers wrestling with debt, budgeting, family finance drama, and big windfalls, driving home practical, no-nonsense advice for building wealth by breaking free from cycles of borrowing and embracing intentional financial decisions.

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Key Topics & Insights

1. Breaking Down the "Payment Mentality"

• Core Idea: The belief that life and success are built around what monthly payments you can “afford” keeps people trapped in debt and robs them of wealth-building opportunities.
• Quote (07:22):
  Rachel Cruze: “Mathematically, it can't keep up our lifestyle. ... That has to seep so far down that the sacrifice is so deep.”

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2. Callers in Crisis: Budgeting, Debt, & Hard Truths

A. When Bankruptcy Looms

• Tracy (Austin, TX) [00:46–09:01]
  • High earners (avg. $250k/year) struggling with $270k in non-mortgage debt due to business embezzlement and lifestyle creep.
  • Monthly deficit of $5K, with $4.3K/mo in credit card payments alone plus heavy business and lifestyle expenses.
  • Advice:
    • List and prioritize debts.
    • Stop all further borrowing.
    • Ruthlessly cut expenses—“kids in college” and business luxuries are “wants,” not “needs.”
    • Sell assets, possibly the house, before considering bankruptcy.
    • Quote (07:22):
      Rachel Cruze: “Sorry kids. Mom and dad are broke. We’re on the brink of bankruptcy. We can’t keep paying your rent like we’re done.”

B. Sizable Inheritance: How Not to Lose it

• Kyle (Lansing, MI) [95:10–104:20]
  • Inherits $2M+ from parents. Stable, debt-free, wants to ensure he’s a good steward.
  • Advice:
    • Use a blend: give, save, spend.
    • Invest wisely for generational wealth; don’t let it “trickle away.”
    • Enjoy some as experiences and memories.
    • Superfund college savings for child, but also consider gifting and investing.
    • Quote (99:47):
      Rachel Cruze: “Create good memories too with your daughter... Not just stuff.”

C. Young, Disciplined—and Ready for a Vacation

• John (Greenville) [22:08–27:45]
  • Newlyweds, no debt, large emergency fund, invest 15% for retirement, but John hesitates on vacation.
  • Advice:
    • “You’re way ahead. Go make memories now.”
    • Opportunity cost is minimal compared to the joy and bonding created by experiences.
    • Quote (24:28):
      George Kamel: “You guys are going to be multi, multi, multi millionaires if you keep living this way. But you're going to have a miserable marriage if you keep living the way you're wanting to live...”

D. Dangerous Debt-to-Income Ratios and Car Loans

• Multiple callers struggle under huge car loans, upside down loans, and high payment burdens exacerbated by lifestyle choices made “because we had to.”
• Advice:
  • Sell any car that is crippling your cash flow, even if it requires coming up with cash to get out of negative equity.
  • Don’t rationalize expensive cars as “needs” if you can’t afford them.
  • Make a tight, line-by-line budget and eliminate all unnecessary spending.

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3. Real Estate, Investments, and Family Financial Drama

A. Should My College Kid Buy a Rental? [76:00]

• Parent wants to co-sign on house for 19-year-old to buy at college, planning to rent rooms.
• Advice: Absolutely not. Risky, creates entanglements, not a sound investment unless you'd buy it anyway.
• Quote (76:21): George Kamel: “I don’t want to combine these things... If you want to do it, just buy it outright yourself.”

B. Family-Owned Property Wars & Unwritten Agreements [118:05–124:50]

• Emily in Phoenix stuck in a multigenerational house, no one will buy her out, complicated by informal agreements.
• Advice:
  • Get formal with a buyout offer; consider a partition action through a real estate attorney if family refuses to cooperate.
  • Warning about family and real estate: it “rarely works.”
• Quote (125:49): Rachel Cruze: “I can count on zero fingers how many calls we've got... we're like, this was the biggest blessing in my life that I co-owned it with my mother in law, my sister.”

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4. Investing & Savings: Mindset and Methods

A. The Markets Make You Nervous? Think Long Term. [10:27–19:47]

• Sally in LA sold a house, wondering if now is the right time to invest the proceeds.
• Advice:
  • If you don’t need the money for 4+ years, invest in index funds rather than savings.
  • Don’t try to time the market; “time in the market beats timing the market.”
  • Automate contributions and don’t obsess over short-term losses.
  • Quote (14:59):
    George Kamel: “Time in the market beats timing the market. It's just easier to not look at it.”

B. Pay Down Debt or Keep Emergency Fund? [27:53]

• Brandon (Columbus): $66k in HYSA and $48k in truck, garage debt.
• Advice:
  • Use most of the cash to pay off all but $1K–$14K, then rebuild savings.

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5. Insurance, Banking, and Financial Products: Worth It?

• Wind & Hail Standalone Policy [33:09]
  • Not necessary if you can self-insure, mostly a “gimmick.”
• Bank Nightmares [37:32]:
  • Kim (Richland, VA) has $5K frozen after a fraud scare.
  • Advice:
    • Be the squeaky wheel with compliance/legal, try state regulators if necessary, and consider banking with a credit union.

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Notable Quotes & Timestamps

• “Mathematically, it can’t keep up our lifestyle... Mom and dad are broke.” — Rachel Cruze [07:22]
• “Time in the market beats timing the market.” — George Kamel [14:59]
• “You guys are going to be multi-millionaires...but you're going to have a miserable marriage if you keep living the way you're wanting to live...” — George Kamel [24:24]
• “If you keep thinking like this, you're gonna stay in this cycle... do the opposite of everything you guys have been doing.” — Rachel Cruze [51:12]
• “I can count on zero fingers how many calls we've got... we're like, this was the biggest blessing in my life that I co-owned [property] with my mother-in-law.” — Rachel Cruze [125:52]

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Takeaways & Action Steps

Core Ramsey Solutions Principles Reinforced

• Debt is not your friend; payments erode your wealth and peace of mind.
• Budget every month—intentionally.
• Own your decisions; stop explaining away poor choices as “no other option.”
• Sell off assets that keep you in a deficit or payment cycle.
• Invest with a “long game” mindset: automate, diversify, don’t tinker.
• Experiences with loved ones are worthy spending—don’t let “saver guilt” keep you from living.
• Avoid financial entanglements with family on property or loans.
• Insurance: insure against financial risk you can't cover, not every possible little loss.

Humorous & Memorable Moments

• Rachel Cruze mispronouncing Amarillo as “Armadillo,” which spawns a lighthearted exchange. [85:40]
• "If every company in America goes bankrupt, we've got bigger fish to fry." — George Kamel [18:39]
• Encouraging vacation-resistant newlywed: “And as punishment, she gets $500 in fun money.” — George Kamel [26:01]

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Useful Timestamps

• [00:46–09:01] Tracy’s debt/losses—dealing with bankruptcy fears
• [10:27–19:47] Sally: Investing windfall proceeds and riding market volatility
• [22:08–27:45] John: Newlywed vacation spending vs. future savings anxiety
• [27:53–31:02] Brandon: Using cash savings to pay off all consumer debt
• [44:28–52:54] Matthew: Crushing car loans leading to being financially stuck
• [76:00–77:26] Should a college-aged daughter buy a house and rent rooms out?
• [95:10–104:20] Kyle’s inheritance: Strategy for handling a sudden $2 million windfall
• [118:05–124:52] Emily, family property, and the perils of co-ownership without written agreements

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Final Thoughts

Rachel and George hammer home that the norm of “barely scraping by” is a result of payment mentality and a refusal to get honest about lifestyle, priorities, and the hard choices required to build wealth. The show is both motivating and sobering—callers receive practical, sometimes tough love rooted in the essentials: get out of debt, budget, communicate, invest long term, don’t put family or lifestyle above your means, and choose experiences over things.

Original tone: Upbeat, supportive, occasionally blunt, always practical.
Quote (Closing):
Rachel Cruze: “Money doesn't change the family tree out of this idea of like, oh my gosh, we're suddenly rich. It just, it gives opportunities to do amazing things for others and your family.”

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Listen to this episode if you:

• Need motivation to break out of debt cycles
• Wonder if you can ever dig out or catch up in life
• Want advice on handling inheritance
• Feel overwhelmed by complex family money or investment choices
• Need a reminder of the power of budgeting, decision, and sacrifice

For more guidance, visit: ramseysolutions.com

Transcript

[Dave Ramsey]

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

[Rachel Cruz]

Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network in the Fair Winds Credit Union studio. This is the Ramsey show, and I am Rachel Cruz, hosting this hour with my good friend and co host of Smart Money Happy Hour, George Camel. And we are taking your calls live at 888 825-5225. So give us a call. All right, kicking us off this hour in Austin, Texas, we have Tracy on the line. Hi, Tracy.

[Caller]

Hi. How are you?

[Rachel Cruz]

Hi. We're doing great. Thanks for calling in.

[Caller]

Yeah, absolutely.

[Rachel Cruz]

How can we help today?

[Caller]

So, long story short, we've had some financial losses that were out of our control. You know, our income has gone down, our costs have. We've blown through all of our savings trying to, you know, stay afloat. Went to credit cards to, you know, for all of our business, business expenses, our household expenses, all of those things. And we're, we're still behind borrowing from family, all of the things. Right now we are running at about a $5,000 deficit a month even, you know, all things considered. I'm just trying to figure out, you know, do we, at what point do you give up and file bankruptcy? You know, do we keep trying to dig out of this? Like, what is the smartest path forward with everything that's happened?

[Rachel Cruz]

So what do you guys make? What are you bringing in a month?

[Caller]

We, it's, it's variable, so it's about 12 to 17, but 250 a year on average.

[Rachel Cruz]

Okay. And you're, and you are. So you guys make $250,000 a month or. I'm sorry. I'm sorry. A year.

[Caller]

Yes.

[Rachel Cruz]

And you're still behind $5,000 a month. What are you guys spending your money on?

[Caller]

Well, a lot of it is going toward credit cards. So about $4,300 a month is credit cards and fees. Unfortunately, a bunch of our cards are, you know, 12 to 30% interest. So I've reached out to them for their hardship programs and tried to get the interest down so that we're able to tackle more of the debt.

[George Kamel]

What part. It wasn't in your control. You were saying something about how it's not. It wasn't in your control.

[Caller]

Yeah, yeah, yeah. One of our companies that we run, someone had embezzled money from us, and it took away about 70 or 80% of our income.

[George Kamel]

How much money are we talking?

[Caller]

They embezzled about 1.6 million.

[Rachel Cruz]

Oh, my gosh.

[Caller]

Total.

Yeah.

[Rachel Cruz]

Are they in jail?

[Caller]

No, no.

It happened in a big city, and they have bigger fish to fry. So.

[George Kamel]

What do you mean you didn't press charges?

[Caller]

It's all. I don't know how much I can say. They're working on it.

[George Kamel]

So do you have an attorney?

[Caller]

Yes, yes, we've got an attorney that's working on it for us.

[George Kamel]

You acted like you're like, well, it's water under the bridge. We're moving on big city, what can you do?

[Caller]

No, we had investors, and it was our investors money that was. It was a whole situation.

[George Kamel]

But, okay, so it wasn't your money to begin with. You didn't go into debt. 1.6 million.

[Caller]

No, no, no.

But we managed that fund, and when the fund disappeared, our income disappeared. So we, you know, we've taken on additional jobs. We've cut business expenses that we didn't need, you know, sold assets that weren't performing, you know, so we're, you know, selling everything that, you know, like. Yeah, what's the saying? Like, sell so much, the kids think they're next. So.

[Rachel Cruz]

Yeah. Yeah. Okay, so what other debt do you guys have? Tracy? I'm just trying to figure out where. Where $15,000 a month is going. How much is your. How much is your mor. Mortgage?

[Caller]

The mortgage is 5,500. We did take out some of our equity to try to pay down. Pay down our assets, so. Or our debt. So the. The home is worth about 700, and we owe about 550 on the. On the mortgage. So.

[George Kamel]

Okay, so was that a HELOC you took out or a home equity loan?

[Caller]

Finance? Yeah, we did financed, and then we've got about three to $5,000 a month that's going out in expenses for the businesses that we run out of our home. So we've got, you know, the 4,300 in debt service, you know, 13 to $14,000 in monthly expenses, kids in college, you know, all of. All of those things, you know, tuition, rent, and then our business expenses. So it comes out to about $20,000 a month.

[Rachel Cruz]

Okay. Is your business expenses, Tracy, not with Inside the Business. Why is that coming?

[George Kamel]

Your personal budget?

[Caller]

Yeah, well, it's. It's. It's kind of all in one lump now, like, because we're just trying to keep everything current. So I, like, I'm not even taking a.

[George Kamel]

But you have a business checking account, and you have a personal checking account, and you're paying business expenses from the business checking.

[Caller]

Yes, everything is coming from Business checking. I'm not taking a paycheck from.

[Rachel Cruz]

But the 3 to 5,000 on business expenses is coming out of a business account. That has nothing to do with the 12,000 you're bringing home every month, correct?

[Caller]

Sure. Yeah.

[Rachel Cruz]

Okay. I mean yeah. And I would separate it. Okay. So then you got kids in college?

[Caller]

Yes.

[Rachel Cruz]

Are they working?

[Caller]

No. Have a good number.

[George Kamel]

Speak directly in your phone. Tracy, we're having a hard time hearing you.

[Caller]

Yeah, yeah, sorry.

They've.

We've got scholarships and grants so there's not a lot that's coming out. It's about seventeen hundred dollars a month left over in tuitions and fees. But they are applying for scholarships like it is there full time job.

[George Kamel]

And what's the total amount of debt you guys carry outside of your mortgage?

[Caller]

So the total, the total debt we have some unpaid taxes. So it's hovering at about $270,000.

[Rachel Cruz]

That include the business?

[Caller]

Yeah, those are.

[Rachel Cruz]

Separate that out. What. What is just.

[Caller]

So credit cards. Just credit cards is 152. We owe family 30 and then we owe 88 in back taxes. We had an employee that said she was filing them and she did not. So we've had some, some things pile up. So we're just trying to doggy paddle through and figure it out.

[George Kamel]

Well, the key is going to be just debt snowballing this, listing it all out, smallest to largest balance and attacking the smallest one with a vengeance and just keeping up with minimum payments on the rest. But the income needs to go up and expenses need to continue to go down. Even just to work the job.

[Rachel Cruz]

Yeah. I mean Tracy, the way to do it and it's going to be harsh but you guys have to make a list of everything. And when the money runs out, the money runs out and we stop. We do not continue to borrow from on credit cards. We don't continue to borrow from family. Whatever that $5,000 is below the line. Food, shelter, utilities, transportation. You get your four walls, you pay your insurance. Everything else below is a want like kids in college. Sorry kids. Mom and dad are broke.

[George Kamel]

That's a luxury.

[Rachel Cruz]

We're on the brink of bankruptcy. We can't keep paying your rent like we're done Mathematic. It can't keep up our lifestyle. And I think there has you, you and your husband, you. You guys have to come to a really hard reality of that. We, we can't keep doing this. And I know that's why you're calling us but like that. That has to seep so far down that the Sacrifice is so deep. Like, you know, do you guys have any. Anything owed on the cars at all or are those paid off?

[George Kamel]

Sorry you broke up again, Tracy.

[Caller]

Oh, sorry. No cars are paid for. We drive old cars. I even tried to sell them and see if we could.

[George Kamel]

Here's the. Another issue is this mortgage is huge compared to what your take home pay is now, which is 12 grand. It's almost half your take home pay just in this new mortgage. So you might need to look into selling the house and downsizing if you can't solve this within six months.

[Rachel Cruz]

Yeah, because you asked about, you know, when do you just file bankruptcy? Well, you sell everything, including the house to avoid a bankruptcy, you know, even cash. I don't want you to right now because we don't have enough time to dig into the numbers of like a 401. You do all of that to avoid a bankruptcy, but the IRS goes to the top.

[George Kamel]

That's the first thing in your debt Snowball. Right. Is those back taxes. And Tracy, I heard a lot of, well, this person, well, was there at some point. We got to look in the mirror and go, I'm responsible. I'm the one in charge here.

[Dave Ramsey]

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[Rachel Cruz]

Up next, we have Sally in Los Angeles. Hi, Sally. Welcome to the show.

[Caller]

Hi. Thanks for having me.

[Rachel Cruz]

Yes, absolutely. How can we help?

[Caller]

Big picture? I recently sold my house and I was able to get about 300,000 kind of tax free because I didn't have to qualify to do any capital gains on it because I lived in it in the past couple years and whatnot. And now I'm sitting on this little nest egg of mine and I keep. I've invested like the first 50,000 into stock and there's obviously some fluctuations on a day to day basis based on, you know what the President of the United States sometimes also tweets. Things change. What do you mean, Sally?

[Rachel Cruz]

What do you mean?

[Caller]

What are we supposed to. I just like, I'm like, I want to move, but I feel like I'm almost playing like hopscotch here where I'm like, no, no, can I go now? And I'm like, I. Right now it's just sitting there and I'm like, I'm thrilled I have it, but I also just. I don't want to be irresponsible.

[Rachel Cruz]

Are you needing this money anytime soon or were you looking at this just to put away for years down the road?

[Caller]

I'm looking to put it away. I think that is the best solution for me. I. My husband and I were doing fine, pretty much. He's covering all the current expenses. We have toddler where we're doing it, and I don't. We don't have any debt or anything along those lines. I don't feel like I can purchase anything with what I have in our current area. It's a high of living area, so that's not really an option either. It can be put away for a moment and. But I'd also like to maximize some of my earning possibilities for it as well.

[Rachel Cruz]

For sure. So do you guys own a home?

[Caller]

Well, he owns a home that we don't currently live in. He's renting it out. I also was renting out my old house before I sold it. And honestly, I sold it because I was like, I hate being a landlord. This is not the business for me. So much anxiety.

[Rachel Cruz]

Yeah.

[Caller]

So we have homes. We have, you know, the. Was it like. So we have the deductions from like being homeowners. We also have deductions from being parents. And so in this specific area, it's quite expensive. So it's like, I don't know if my little nugget would really make much of a dent.

[Rachel Cruz]

Well, I think eventually you guys need to talk about home ownership. So whether that's you guys moving back into maybe the home that he owns that. Are you guys. You guys are married?

[Caller]

Yes.

[Rachel Cruz]

Yeah. Yeah. I mean, homeownership needs to be a. A long term goal for you guys. And I know that you're in an expensive area, but for your, you know, financial future, ongoing homeownership will be the cheapest route because rent will just continue to go up. Right. So, so letting that.

[Caller]

Totally agree.

[Rachel Cruz]

Yes. So letting that be a goal which this money could be used for. And I understand you're saying not right now, which is totally fine. So we always say investing, you want to give it around a four year kind of benchmark. So to give it four years to do the up and down and in that time there'll be an election, like. Right, all of that. Right. So you think about the time frame, that kind of feels good to ride out the highs and lows if you're going to use this money down the road. So if you're going to use it less than four to five years, I would not invest it. But if you think you're going to keep it in somewhere for four to five years, then yes, investing still for me would be the answer because we're not looking at what you're saying a 30 day span. Right. If you looked at the last 30 days, yeah, it looks insane. But that's not always the case. In fact, last year the market was what, 20, over 20%, 20% last year, which is just exactly.

[Caller]

I don't want to even do like a high interest like savings account. And like I just feel like that's like money left on the table.

[Rachel Cruz]

That's right. That's right. So that's why the investing has a long term, you have to have a long term mindset. And so right now, actually, which George, you talk about this in your book Breaking Free from Broke. When you buy low, which is what it is, you know, right now with the volatility, you're actually going to get to buy more shares, if you will. So as everything goes up, you kind of have more eggs in your basket, if you will, when the market does go up. Because over the course of, you know, the trajectory of the, of what the stock market has done since its inception, like it does go up. The American economy overall goes up. So that just means you actually are going to be making more down the road if you buy now low. But that's kind of an investor's mindset.

[George Kamel]

Yeah. I like to say time in the market beats timing the market. And right now, Sally, it's stressful because you're trying to time the market and only God knows what's going to happen.

[Caller]

Right.

[George Kamel]

And so it's just easier to not look at it and just know I'm Going to lock this money away and just let it ride and keep adding to it. And then four or five years from now you're going to look up and there could be 5, 600 grand in there. And now that's a serious down payment even with the prices in LA five years from now. And so I would make it a goal and say, you know what, instead of going, well, we can't buy a house, just go, we're going to buy a house and we're going to save up 500,000 doll dollars as a down payment to do that.

[Caller]

Yeah, I like it.

[George Kamel]

So what is invested in? Because you said I'm invested in stocks and that scared me. Do you mean single stocks or like an index fund?

[Caller]

No, index. And honestly I don't feel like the most fluid was having this conversation on that topic. I right now just have like, I took 50,000 of that 300 and it's in like VO. And then the rest is just like sitting here.

[George Kamel]

Yeah, you can invest the rest in there and let it ride and keep adding to it every single month, make it a goal. Hey, we're going to add $3,000 a month to this. That's 36 grand a year growing for us with compound growth. And you can do some projections and see that five, six, seven years from now it's probably going to be closer to 700 grand if you do it this way. And then when you have enough to where you can go, all right, we can take out a mortgage. It's going to be 25% or less of our take home pay. 15 year fixed. Let's go ahead and pull the trigger and get this house.

[Rachel Cruz]

And I get it, Sally. I mean, and when I think about investing personally, I really, I look maybe once a year at what's going on because I would give myself a panic attack every time I looked at the market. To your point specifically right now, you

[George Kamel]

only look when it's down. Nobody looks when it's up and doing great.

[Rachel Cruz]

That's right. And that doesn't hit the news either. Right. It was not like flashing all over everywhere of how, how amazing the last

[George Kamel]

year record high we've hit.

[Rachel Cruz]

Yeah, I mean the last two years have been insane and then this year not so great. But that's what we're, that's what we're seeing in the news. And so, and I get it, Winston and I actually had some money in a high yield savings that we actually talked to you about this and we pulled some of it and invested it literally. Sally. I think like 32 days ago, it was like, right before everything hit the fan, and. And Winston and I were like, oh, that's insane to see it go down. And I was like, this is why I don't. This is why I do not look. Cause most of the stuff, you know, I'm like, just.

[George Kamel]

The vending machine ate your money.

[Rachel Cruz]

Yes. That's how it felt. But then I know, I go back to my brain of what I just talked you through, of what I know, and I'm like, we're not needing this money for a couple of years, so just let it ride and let it do its thing. So that is what you would have to do, and it would be the smartest thing. I would still do what we did.

[George Kamel]

Yeah.

[Rachel Cruz]

Again, because I know what's happening, you

[George Kamel]

know, and if you can, Sally, I would auto invest it. And that way it's out of sight, out of mind. I don't want to see the money. I want to just leave and go straight to that investment account. I don't want to touch it.

[Rachel Cruz]

And the reason you can be so, you know, blinded by it, if you will, is because what you're investing in is. Is. Has. It has a good track record, right? What we talk about with index funds or even mutual funds is you are buying, you know, 90 to 200 stock in a mutual fund. And even with some of the index funds, you know, it's the s and P500 in general, top 500 companies based on market. And so that's why you can kind of not have to look at it and feel like you have to manage it, because it's just doing what the economy's gonna do, right. It just kind of rides that wave versus stressing about Apple or Tesla or whatever, right. If you're trying to manage single stocks and all of it. So that's kind of the beauty of that diversification method that index funds or mutual funds give you, gives you, is because there's. There's a lot of kind of safety in it. Because if it all. If it all hits right down and it. And it all kind of falls out, then the American economy is done. Done.

[George Kamel]

So we got bigger fish to fry. If every company in America goes bankrupt, we're like, all right, this is the end.

[Rachel Cruz]

That's when. Hoarder Rachel.

[George Kamel]

What's helpful for me, Sally, is when you're looking at the line graph of, like, returns on whatever investment you have. I never look at it less than a three year, because if you look at it a one week, a one month, you're freaking out even one year. But when you look three years, five years, 10 years, the further back you go, the more up and to the right it goes. And so that's just a good perspective to have that you are investing for the long term. It doesn't matter if you on paper lost $20,000 because you didn't, you didn't sell, you hung onto it.

[Caller]

Yeah.

[George Kamel]

So keep, keep up the ride.

[Caller]

I think I need to just have talked like, get out of my way because I've never, I don't come from money. I've never, I'm thrilled that I'm here today, now having this opportunity and I'm like, oh, don't mess it up.

[Rachel Cruz]

Yes, yes, you're doing great.

[George Kamel]

You're doing better than you think.

[Rachel Cruz]

You know, and that caution, that's a good spirit to have. I mean, honestly, to really research. Yes, research and understand. And you have to feel good about it. But George and I, that's what we do personally. So we would not tell you something that we, we wouldn't do.

[Caller]

Sam.

[Dave Ramsey]

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[Rachel Cruz]

Tax season is upon us, so to get a free checklist and guide that will help you file, go to ramseysolutions.com taxes all right, let's head to Greenville and we have John on the line. Hi John, welcome to the show.

[Caller]

Hey, how are you guys doing today?

[Rachel Cruz]

Hi. We're doing great. How can we help today?

[Caller]

Yes. So me and my wife are newlyweds. Got married last year and having a little bit of a disagreement on whether we should take a vacation this year. She's wanting to take a vacation, and I'm thinking that we should probably use this time to get a little bit more financially ahead to invest for retirement and save up for a house and just wanted to call to get a fresh perspective.

[Rachel Cruz]

Okay, so, John, you're the money responsible guy, and your wife is fun.

[George Kamel]

Rachel relates to her.

[Caller]

I think she just, like, you're already

[George Kamel]

losing the battle, John.

[Rachel Cruz]

Vacation, she's ready to spend and have fun. And you're like, we need to think about retirement, which is responsible.

[Caller]

She says, I'm not trying to paint my wife in a bad light.

[Rachel Cruz]

Oh, no, I'm joking. I'm joking. No, I'm gonna be probably more on your wife's team in the call. That's why.

[George Kamel]

Do you guys have debt?

[Caller]

We do not have debt.

[George Kamel]

Do you have savings right now, like your emergency fund?

[Caller]

Yes, we do. We have about 23 grand in a savings account and then about 45,000 in a brokerage.

[George Kamel]

Wow, okay. And are you investing 15% of the household income right now into retirement accounts?

[Caller]

Yes, we have about 54,000 in retirement.

[George Kamel]

And how old are you guys?

[Caller]

Just turned 24.

[George Kamel]

Going the freaking vacation, man.

[Rachel Cruz]

John, what do you mean?

[George Kamel]

You got to catch up. You're ahead of, like, 99.9% of America.

[Rachel Cruz]

How much do you guys make a year?

[Caller]

115.

[Rachel Cruz]

Okay.

[George Kamel]

How much is this vacation going to cost?

[Caller]

I don't know. Probably. Probably about three grand.

[George Kamel]

Okay. If I told you, hey, John, when you retire, you could either have 9.85 million or 9.9 million, would you say, yeah, I'm willing to take the 9.85. That's fine.

[Caller]

Yeah, I would probably be okay with that.

[George Kamel]

Yeah, that's what we're talking about here. You guys are going to be multi, multi, multi millionaires if you keep living this way. But you're going to have a miserable marriage if you keep living the way you're wanting to live, which is. Well, that money is an opportunity cost, and you're talking to the nerd of all nerds.

[Rachel Cruz]

I was going to say you got. I'm telling you to go on the trip to spend.

[George Kamel]

Yeah. If you guys seriously had some, hey, we got a lot of debt that we're walking into this marriage with. We got to clean this up, I'd understand you went on the honeymoon. Let's take a pause on vacation. So we got our mess cleaned up. But there's no mess here. You guys are doing everything by the book. You got plenty of money. You're not going to stop investing to save up for the trip, right?

[Caller]

No, no. I think I just get nervous because we've been really trying to save up for a down payment for a house and everything's just so expensive. So it just makes me nervous. Or I'm just. I get in my own head of what could happen or anything like that.

[George Kamel]

Well, do the math. The three grand in vacation is going to cost you maybe a half a month in your house down payment fund, right?

[Caller]

Yes.

[George Kamel]

I mean, the next paycheck, you could fund this vacation.

[Caller]

Okay.

[George Kamel]

Right.

[Caller]

Okay. That makes me feel a little bit better.

[George Kamel]

Yeah. It's not gonna delay your home ownership goals, so don't let the fear of, well, I'll never be a homeowner mean I'm not gonna go on a trip for the next six years. Cause we gotta get a house. We gotta get a house. You're so young. You're doing so great. You guys will own a home before you're 30. And you're gonna do it the right way and it's gonna be super peaceful and be a blessing in your life. But if you don't also learn how to let go and live, you are going to be miserable in that house.

[Caller]

I was afraid you were going to say that.

[Rachel Cruz]

Tell your wife she won the argument. Not that it's a competition, but you

[George Kamel]

know what I think, John?

[Caller]

Three.

[Rachel Cruz]

It's three on one, John. Me and George.

[George Kamel]

And as punishment, she gets $500 in fun.

[Caller]

He kind of let me down.

[Rachel Cruz]

You gotta upgrade the hotel room now.

[George Kamel]

Upgrade the hotel room. And she gets more fun money than you feel comfortable with.

[Rachel Cruz]

That's, that's. Yeah, that's. That's the consequences, John, you know.

[Caller]

Okay. Okay. That's what I'll have to do.

[Rachel Cruz]

No, it's a good.

[George Kamel]

We're playing around.

[Rachel Cruz]

I appreciate the caution and wanting it, but let me encourage you that our friend Arthur Brooks talks about five things you can do with money. And he said four of them actually can bring you happiness and one does not. The one that does not bring you happiness is just buying stuff. But one of the things that can buy you happiness out of the four is buying experiences with people you love.

[George Kamel]

He said that's one of the best ways.

[Rachel Cruz]

So when you spend your money. Yes. And you go and have an experience with people you love, that actually incurs a level of happiness in your life. So we are. Yep. That's. That's George and I's marriage advice to you. Enjoy and have the goals, but you guys have them. You are on track. You are good. Nothing's going off the rails. And. Yeah.

[George Kamel]

And I'll be honest. I'm. I'm kind of living vicariously through them because I wish I went on more trips when we were newlyweds.

[Rachel Cruz]

Oh, yeah, now that you're a dad.

[George Kamel]

Because we got married. Yeah. We got, like, one great trip in 2019. And then Covid happened. Yeah. Travel. And then we had a baby. And now you're like, well, we got at least two good trips in.

[Rachel Cruz]

It's so true.

[George Kamel]

So you're gonna look back and go, man, we got kids now. It's much harder to travel. So when you're newlyweds, I'm like, and you're doing this great, and it's three grand.

[Rachel Cruz]

I'm like, go, go.

[George Kamel]

Six figures, debt free. Emergency fund. Retirement's kicking. Let's go, buddy.

[Rachel Cruz]

Yes. So great. Well done, John. You guys have done it. Fabulous job. Fabulous.

[George Kamel]

We can beat up on you because you're doing so good.

[Rachel Cruz]

I know. I was like, your wife seems like the fun. I was like, I don't want to paint her in a bad light. I'm like, not here.

[George Kamel]

Trust me, she's in the best light.

[Rachel Cruz]

We like those people. We like her. All right, let's go to Brandon in Columbus. Hi, Brandon. Welcome to the show.

[Caller]

Hey there. How are you guys?

[Rachel Cruz]

Hi. We're doing good. How can we help?

[Caller]

So I'm self employed, make about $50,000 a year. I have about 66,000 in a high yield savings. And then aside from a mortgage, I have about 50, 48,000 in debt between a truck, a garage, and then a loan to finish the garage. I'm trying to determine if it's best to kind of deplete that safety net and pay off some debt or if there's something else I should be doing with it.

[Rachel Cruz]

You say you make 50 grand a year.

[Caller]

Yep.

[Rachel Cruz]

And your truck is $48,000. You have a loan on it for 48,000.

[Caller]

It's 28.

[Rachel Cruz]

Oh, I'm sorry.

[Caller]

That's okay. And then I have a garage that I run the business out of. It's 17,000. And then a loan to finish the garage. Like the drywall and all that good stuff. It was 6700 is what's left.

[Rachel Cruz]

I gotcha. I gotcha. Okay, so, yeah, to answer your question quickly, yes, I would I would take it down to a thousand, which is going to make you sick. You're going to be like, oh my

[George Kamel]

gosh, just know that it's a false safety net. Because if you lost your job today, guess who doesn't care? Every lender you owe is still going to demand that payment. And so you're going to feel a whole lot better and more peaceful taking your account from 66 down to whatever, 10 or 15 grand that you'll rebuild real quickly without those payments in your life.

[Caller]

Okay.

[George Kamel]

That's the simple answer. Are you going to do it though? That's the biggest question on America's mind right now.

[Caller]

Well, that's what I think.

I've asked for advice from people I know and nobody could, hey, do whatever you want to do. And so I'm like, I got to reach out to somebody else and yeah, third party and see what they say.

[Rachel Cruz]

Yeah. Because the great thing is you'll have around 14,000 still left over in that high yield account. You won't take it all the way down to 0 or to 1000.

[George Kamel]

So you'd still be able to cover any emergency that came your way in the few months until you build it back up and then you'll be truly free.

[Rachel Cruz]

Are you married, Brandon?

[Caller]

Girlfriend? Living with. We have a child together.

[Rachel Cruz]

Okay. All right. Yep. So that's. Yeah, that's what I would do though is I would go ahead and pay off all the consumer debt and then practice, you know, paying for things that you can afford. Right. That we're not going to continue to go into debt because if, if you count this 14,000 as an emergency fund, you may want to bulk it up a little bit. Then the beautiful thing is you get to move on to investing into retirement. Right. And start really looking towards the future with this money instead of having to pay for things in the past, which is what debt basically is.

[Caller]

Right.

[George Kamel]

This is your never go into debt again insurance plan once you become debt free with the emergency fund. So next time you have a project, it's not, well, I got to take out a loan for that. I got to take out a loan for the truck. You just learned to go, I'm going to save them and pay cash. I'm a guy who doesn't owe money to other people.

[Rachel Cruz]

And well done on saving 66,000 though, for real. Because I mean by tomorrow you could be completely debt free, which is incredible for a lot of people. You know, they are having to work extra, you know, cut the expenses and it's a year long process us to get out of that debt, I might

[George Kamel]

use some of that remaining savings for a wedding ring. Never too late.

[Rachel Cruz]

You know what? Y' all have a kid together. If she's the one, do it. Seal the deal. Brandon.

[Dave Ramsey]

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[George Kamel]

results may vary and no specific outcome is guaranteed.

[Rachel Cruz]

All right, let's go to Sean in Indianapolis. Hi Sean, welcome to the show.

[Caller]

Hey, Rachel and George, good afternoon. Thanks for taking my call.

[Rachel Cruz]

Absolutely. How can we help today?

[Caller]

So, yeah, we are in the wonderful world of navigating home, auto and umbrella insurance policy renewals. And our insurance agent recommended a product that is somewhat new to us and was hoping to see if you have a position on is it something wise to purchase. Specifically, it is a standalone wind and hail insurance policy for the home and

[Rachel Cruz]

that being a separate policy beyond just the homeowners with your roof and all of it. Okay, so what does that cover that's different then, then if hail, if hail damaged your roof. Yeah, if. Yeah, if hail damaged your roof, you would have insurance to help replace the roof. If you, even if you didn't have

[Caller]

wind and hail product, the way that it's described is that it would be specific to wind and hail and it would essentially bridge the deductible on the homeowner's policy. So something again, relatively new and we weren't able to find a whole lot of additional information and we're seeing if you had familiarity with that Type of a product. And is it a wise purchase?

[Rachel Cruz]

How much is it extra?

[Caller]

It.

It's low. I mean, it's less than 230 bucks. For the year.

[Rachel Cruz]

For the year.

[George Kamel]

But it's essentially just covering the deductible. So you're saying it's covering that gap?

[Caller]

It does, exactly.

[George Kamel]

Okay. Because your homeowner's policy does cover it, but you're saying this other policy is basically a deductible insurance policy.

[Caller]

I like the way you said that, George. Right. And it's insurance on insurance. Right. So it bridges the gap of an increasing deductible on that type of peril, wind or hill damage.

[George Kamel]

Oh, interesting. So how much does it actually cover? What's the dollar amount?

[Caller]

Up to 12,000, which would be the deductible on the homeowner's policy for such apparel.

[George Kamel]

And it costs how much a month or a year?

[Caller]

Well, for the year, it's 2:30. So call it, you know, like maybe 20 bucks a month.

[George Kamel]

Okay. I'm just trying to figure out the break even on this thing. I mean, you know, for the year, in 10 years, you've paid 2300 bucks for this thing. And so if something happened in those 10 years and you needed to use more than 2 grand, you're like, all right, that was a good buy. So do you guys have them? Is this, like, easy money for you guys to cover this thing at this point in your financial life?

[Caller]

Oh, most definitely. It's not a burden at all.

[George Kamel]

And in the same stretch, if you had to cover a $10,000 deductible, you'd be able to do that with no problem.

[Caller]

We could.

[George Kamel]

That's where I go. I might hang on to my money and just if that happens, I pay it out of the emergency fund and move on with my life.

[Rachel Cruz]

Yeah, yeah. Because there's going to be things like this. It almost feels like an extended warranty feel to a degree of just.

[George Kamel]

It's a little bit gimmicky in that they were like, what else can we come up with? Just to make a little more money.

[Rachel Cruz]

Yes. To kind of just tackle on, to keep going. Do you know what I mean? And it's like an. It's an easy sell. Especially in the fear idea of, oh, my gosh, in the middle of a hail or windstorm.

[George Kamel]

If this was an imminent threat and you didn't have an emergency fund, I might go, hey, this might be a good way to float the gap for 200 bucks. It's like buying you some peace until you have that Money. So at this point you can run some calculations. It doesn't seem like a no brainer buy to me though. I would have some pause and go, I don't know if it's worth it. And at the same time, breath. You could burn 230 bucks on the kitchen table and not.

[Caller]

Yeah.

[Rachel Cruz]

And it wouldn't matter. That's right. Yeah. I think it's less about the money for you guys, Sean. It's probably more of the principle. So I would say if you did it, just be aware in the future of other things because there's all. I mean companies are constantly looking at how they can make money off of people. It's kind of nickel and dime and people. But to them they're just making so much and if people actually really do use it, so just, yeah, beware. I'd probably pass. I mean we don't, I don't think, I think we would probably just.

[George Kamel]

Well, and figure out your number because some of these policies, they'll say it's 1% deductible on wind and hail. So if your home is 300 grand, you might pay three grand out of pocket. Well then it wasn't worth paying 230 every single year for 10, 20 years. But if it's more than that and your house is worth a million bucks, well now it's bigger numbers. And so that's where the things I would start to weigh, you know, before you make the decision. But it's a non fatal decision either way.

[Rachel Cruz]

All right, let's go to Kim in Richland, Virginia. Hi Kim, welcome to the show.

[Caller]

Hi. Thank you.

[Rachel Cruz]

Hi. Absolutely. How can we help?

[Caller]

I was wanting to get your assistance and potentially getting some money back from my bank. My bank is a large bank and they have closed multiple accounts of mine back in early February. I can tell you, give you the background that if you'd like. But they've had my accounts closed and are holding my money since February 2nd. I've pursued numerous routes with them, numerous bank managers, numerous levels within the bank. I've also filed a claim with the OCC and the CFPB and still have had no success in getting any of my money back.

[George Kamel]

How much money are we talking?

[Caller]

I am not totally sure. I'm thinking it's around $5,000. The reason being I literally filed multiple accounts for people in my family and we had all just filed our return. So a little bit of tax return money coming back in maybe $1,000 apiece. So it could be anywhere between say 3 and 6,000 depending on if those credits had come back. But I.

And why did they close them accounts now?

Essentially I was on 12 different accounts because I had opened accounts with all of my children, checkings and savings when they were sort of 15 and initially started working and hadn't been tidy with my finances and taken myself off when they turned 18, 19, 20. So I have four kids, eight accounts there and four accounts with my husband and myself. But I was central to all of them. My youngest child deposited a check that he thought was a refund check. The person that issued the refund check then called the next day and said, oh, that was a mistake. Can you wire us the money back? And he knew instantly that was fraudulent. He called the big bank and said, hey, I deposited this check. They just called me. I think it's a fraud. I just wanted to let you know I haven't spent the money. And they said that's fine, we'll take care of it. And the next day they closed his account, which I was on and every account that was associated with me because of the fraud.

Correct that stuff.

So it wasn't great. And they didn't let me know. Basically my banking app disappeared and I called the bank number and asked and they said, oh, we closed all your accounts. And I said without email, phone call, mail. And they said yes, that's our policy is to close your banking app and then you have to call us, will tell you that we've closed your account.

[George Kamel]

Okay. What did they say about the money? I mean, it's FDIC insured, so it's not going to dissipate. They have to give you this money back legally?

[Caller]

Yes. I think it's just delay after delay.

[George Kamel]

Are they going to mail you a check or something?

[Caller]

Supposedly they're going to mail a cashier's check, but every time that I speak with them, they say they're still in

their quote, close process.

[Rachel Cruz]

How long ago was it?

[Caller]

February 2nd. February 2nd.

[George Kamel]

So it's over two months now?

[Caller]

Yes.

[George Kamel]

I might send a certified letter to the bank's legal and compliance department that's. That's more sure to get their attention versus customer service or like a branch manager who they don't have much power with.

[Caller]

Somebody in the. That is trying to resolve through the c. They've combined the OCC and CFPB and they are telling me they are with the bank but that they don't have any power to force the bank to do anything within its own system. So do you think the letter would have more power than that?

[George Kamel]

I mean, I'M just going to be the squeaky wheel. I'm going to hit it at 17 different angles until someone does something. You know what I mean? That's my style. I mean you can also go to your state's. Your state has a banking regulator, like a department of Financial institutions. And so you could kind of double up the pressure there.

[Caller]

Okay.

[Rachel Cruz]

But again, do you need the checking account? Kim, you had four with your husband, you said. So do you guys need that to, to live off of? I mean, I'm assuming five grand spread out at all those accounts. You don't.

[Caller]

Thankfully we did. No, thankfully we did have some in reserve at a credit union and so we've pulled out of that to cover what, what was in those accounts. And of course we're still currently getting income. So I am thankful that we had that set up. I do listen to you guys. So that's what tried to follow up.

[George Kamel]

Get some diversification in your banking.

[Caller]

What's that?

[George Kamel]

You had some diversification with your banking.

[Rachel Cruz]

Is it bank of America?

[Caller]

Who is is bank of America?

[Rachel Cruz]

Yeah.

[George Kamel]

She knew it. Ding, ding, ding.

[Rachel Cruz]

Corporate wouldn't put it past horrible. It is, it's horrible.

[Caller]

It is horrible.

[George Kamel]

It's why I don't do business with these huge banks. I love a credit union for that because they treat you like a person and we have a great relationship with Fairwinds Credit Union. Kim, if you want to diversify now and have a secondary backup, good people

[Rachel Cruz]

like that really do care.

[George Kamel]

Someone will actually pick up and help you. Especially tell them Rachel and George sent me.

[Rachel Cruz]

Yes. Kim, I'm so sorry. Yeah, I think the squeaky wheel approach is it. Cause honestly in a bank like that you're just a number. It's just you're just gonna be floating around out there like they're not worried about five grand, you know, so the more consistent you are, you know, you're 60 days out. But I mean I would, I mean daily probably just be calling, sending letters, doing what I can to get that and then never bank with them again.

[George Kamel]

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[Rachel Cruz]

Welcome back to the Ramsey Show. In the Fairwinds Credit Union studio, I am Rachel Cruz hosting this hour with George Camel. And the lines are open at 888-255-225. Up first we have Matthew in Charlotte, North Carolina. We were just there last week. Hey, Matthew. Welcome to the show.

[Caller]

Hey, how are you?

[Rachel Cruz]

Hi. We're doing great. How can we help?

[Caller]

Just trying to figure out how to stop living. Check to check. My wife works. I work. You know, we have a house, cars, kids, and we just can't seem to get ahead. We're just treading water constantly.

[George Kamel]

How much debt do you guys have?

[Caller]

You know, if we're not including the house and it's just the cars and probably around close to 90.

[George Kamel]

How much air on the cars? What's the balances of those?

[Caller]

My wife just got a new car because her previous car had a bunch of electrical problems and we were kind of upside down on that one. And so they rolled that one over into the new car and so that one's fresh. That one's at like 62 grand.

[Rachel Cruz]

Oh my.

[George Kamel]

What kind of vehicle is this?

[Caller]

It's a Nissan Pathfinder. Oh, boy. Nothing fancy.

[George Kamel]

How much underwater?

[Caller]

I mean, I'm drowning right now.

[George Kamel]

No, is that. Is it worth 40 grand?

[Caller]

End. Yeah. The car? Yeah.

[Rachel Cruz]

Brand new. Is it brand new?

[Caller]

Yeah.

[Rachel Cruz]

Okay, so you said nothing. You said nothing fancy. Matthew. You guys just bought a brand new SUV Pathfinder. So it's pretty. Pretty nice. Pretty nice. Okay, so we're just gonna. Let's just keep the reality where it is. You guys got a brand new and

[George Kamel]

electrical problems do not necessitate going out and buying a brand new car. That was an emotional decision.

[Caller]

We don't have them. We didn't have the money. To get it, the electrical problems fixed. And it wasn't.

[George Kamel]

I'm saying there was other cars.

[Rachel Cruz]

A $5,000 car.

[Caller]

Right.

[Rachel Cruz]

So. Okay, yeah, yeah.

[George Kamel]

So I'm not trying to beat you up. I'm just trying to get to the root here, which is we need to own up to the things that we did and not go well. We had to because that's usually the sign you're going to stay in the cycle.

[Rachel Cruz]

Yeah. And majority of this debt of the 90 is that 1 car. So what. What is the other car? What payments do you have on it?

[Caller]

I also had to get it recently. I got a used car because my car was. I had fifteen hundred dollars left on it to. Oh. And it required like eight thousand dollars in work.

[George Kamel]

So what's the balance of this car that you have? What do you guys make a year?

[Caller]

My wife makes about 45, and I brought home 96.

[George Kamel]

Okay, good. So you guys are clearing 140 grand a year.

[Caller]

Yeah. And not including my raise, my last raise that I'll be getting, which is a $14 increase. So I'll be.

[George Kamel]

That's big.

[Caller]

That's like 30 grand a year an hour.

[George Kamel]

You're saying it's going up by $14 an hour?

[Caller]

Yeah, I'll be roughly about 50 an hour.

[George Kamel]

Okay, so what's the other debt? You got 20 on one, 62 on the other. That's 82. Is there another eight laying around?

[Caller]

Yeah. Between credit cards? About that. Yeah.

[George Kamel]

Okay. Well, the main thing I would do is get out of this 62k debt. That about solves the problem, doesn't it?

[Caller]

Right. But then wouldn't it tank our credit and, like, how would I go about that? I just tell the bank, hey, we can't afford it, and they take it.

[George Kamel]

Here's what you need to do. You need to come up with the difference that you're underwater on, which is

[Rachel Cruz]

going to be a lot because you guys rolled negative equity into it. So how much?

[George Kamel]

You might need to save up 20 grand to go sell this thing, but then you need maybe another five or six more to go get a used car for now in cash.

[Caller]

Right.

[George Kamel]

But that gets you. What's the payment on that thing?

[Caller]

About 1200.

[George Kamel]

Would 1200 bucks freed up change your life right now?

[Caller]

I would like to say it would, but I. I don't think it would.

[George Kamel]

How much underwater are you guys every month on your bills?

[Caller]

Electric bill is about $1,000. We don't have heat or air conditioning. You know, we, you know, we steal From Peter to PayPal constantly well, you're

[George Kamel]

making what you're taking home nine grand a month

[Caller]

between the two of us? Yeah, probably. Okay, so he gets paid bi weekly, I get paid weekly.

[George Kamel]

What you guys need to do tonight is have a come to Jesus conversation and make a budget for the time in your marriage where you lay out, hey, here's the next paychecks coming in. Here's all the bills that are going out. We need to make sure that we're not spending more than we make. And you might. You might at least see the reality. We're two grand underwater every month and

[Rachel Cruz]

we're going to cut up the credit cards. Like, we're going to give ourselves no options of going any further into debt at all.

[George Kamel]

Right?

[Caller]

Yeah. Mine are in the freezer right now in a bunch of water.

[George Kamel]

Send them to hell. Forget the freezer.

[Rachel Cruz]

Her burn them.

[George Kamel]

They have not been. You need them.

[Rachel Cruz]

Yeah. And do you guys have any savings? Matthew?

[Caller]

No.

[Rachel Cruz]

No. Okay.

[Caller]

No.

[Rachel Cruz]

Okay. What's your. What's your wife. How. How is money between you guys in the relationship when you like the fact you're calling us? Does she. Is she begging you to. To change? Are you begging her to change? Like, where are you guys at?

[Caller]

I mean, it's. I would like to say it's more her constantly. Like, she doesn't get really good stuff for herself. I don't get stuff for myself. It's more or less like kids need shoes.

[George Kamel]

You got 82 grand in vehicles. I'd say that's getting something for yourself,

[Caller]

right? I mean, I see that as, you know, I need a safe vehicle for my wife and kids.

[Rachel Cruz]

Not when you can't afford it.

[George Kamel]

Matthew, can we be honest? A 2018 Pathfinder would have been just fine.

[Caller]

Right? But then you have to worry about warranty and, you know, something happens, we don't care.

[Rachel Cruz]

Not if you save $1,200 a month. You get to save up an emergency fund and have six grand in about, I don't know, a couple months.

[George Kamel]

You create your own warranty program. Yes, you are it called bank of Matthew.

[Rachel Cruz]

Yep. Yep.

[George Kamel]

So do you see what we're trying to get at here? If you keep thinking like this, you're gonna stay in this cycle. We're trying to break you out of this thing by making some really deep sacrifices so that you never say, well, I had to. Because if. If that's the case, we can't help you.

[Rachel Cruz]

So there's a. There is a change in perspective. You guys have to have to say, we are in charge of our money and our Decisions like, we're gonna choose what our money's going to do. We are in charge. We're not just gonna let things happen. And, well, we have to do this, we gotta do that. Oh, gosh, we're stuck in this corner. And there has to be a perspective change. And when that happens, then you actually get to look in the mirror, if you will, and say, all right, who's going to change our lives? We are. This is us. So now we have to. If we don't want to be where we are today with money, then we have to do everything opposite that we've been doing. We've not been saving. We have to be saving. We've been relying on debt. We can't rely on debt. We haven't been living on a budget. We don't really know where our money's going. We have to be on a budget. Budget. Like, I literally, Matthew, do the opposite of everything you guys have been doing. And so if you hang on the line, Christian's gonna pick up. We're gonna give you every dollar for a year. You guys need to sit down tonight and do a written budget. Where does nine grand go? Every single. Every single month? Like where? Line item by line item. Where is this going? And then your next goal is to save up $1,000. First and foremost, that's your starter emergency fund. And then you guys need to start working your way out of debt. But there. There has to be a level of ownership and agree. You know, you guys have to agree that we. We can't keep doing this. And so if you can't keep doing this, let's do the opposite of everything we've been doing.

[Dave Ramsey]

At Ramsey, we don't partner with companies chasing trends or pushing gimmicks. Trust is earned. And that's why we send people to Fairwinds Credit Union. See, a lot of banks rely on teaser rates, marketing hype, and fine print. But that's not how Fair Winds operates. They've been serving members for 75 years. And you don't last that long by cutting corners. You last by serving people well. There's a reason their name is on the studio wall. They built products that help you manage money intentionally, not pull you into debt. If you're looking for a practical way to organize your money the Ramsey way, check out the Fairwinds Smart bundle. It pairs a high yield savings account for your emergency fund with a checking account that doesn't drain your balance with fee after fee after fee after fee. Open your Fairwinds Smart bundle [e-mail] Ramsay Ramsey and get the Ramsey Be Weird debit card. That's Fairwinds.org Ramsey insured by the NCUA.

[Rachel Cruz]

Up next on the line, we have have Chris in Tampa, Florida. Hi Chris, welcome to the show.

[Caller]

Hi, how you doing?

[Rachel Cruz]

Hi, we're doing great. How can we help today?

[Caller]

Well, I'm going through a now three year divorce and having a hard time financing the rest of the divorce. We've used up quite a bit of assets during that time.

So you and your ex wife.

Yes. Yeah.

[George Kamel]

Why is it dragged out for three years?

[Caller]

Soon to be. She had a, she had a stakehold in her company that she works for. They have private shares. It's a private company. And so we had to do like long discovery process because they were unwilling to give the information. And so I had to hire a forensic accountant. The accountant had to do a lot of digging and you know, it just cost me probably 200,000 now over those three years.

[George Kamel]

Did you have that money?

[Caller]

I did. Now I'm out. So I've been signing up for credit cards to pay for the attorneys and the account.

[George Kamel]

How much credit card debt are you in?

[Caller]

About 30,000 now and counting. Because we're still not, we're still litigating.

[George Kamel]

I mean, where, where's the end in sight here?

[Caller]

We were supposed to be done in February, but the stock price changes every March.

[George Kamel]

So, so let's play this out. What if this is another two years and now you're $200,000 in debt? Was it worth this?

[Caller]

Yeah, because every year, and this is what I tried to talk to my ex wife about was every year the stock price goes up and we own about 300,000 shares in the company, which if it fluctuates a dollar, that's close to another half million in a year. Just if it's a dollar a share increase. So we're looking at 1.7 million difference from 2025 to 2026 in the value.

[George Kamel]

But at this point we're gambling because if you lose this thing and you're 200 grand in debt now, you're screwed.

[Caller]

Yeah, I'm kind of getting richer and poorer at the same time. So it's a weird prediction.

[George Kamel]

Can you move this to mediation?

[Caller]

We mediated three times now.

[Rachel Cruz]

And so I'm confused what the holdup is. What, why is this not. What else do you have to have for it to be final,

[Caller]

for her

to, I guess, give up and face reality? You know, we've tried to mediate and we're so far off on the Numbers that basically needs to go to trial. And the trial date just keeps on getting pushed off the docket and moved forward because of non cooperation on their side. We wanted to get it done, sent in offers, no counteroffers were put in. So it's just drawn out. I think she's just drawing that out so that she bleeds me basically is what it's worked.

[George Kamel]

Now you're going to crippling debt. At some point you're going to have to give up and wave the white flag while making lawyers really rich. You have funded some really a nice lifestyle for some lawyers.

[Caller]

Oh, for sure. I'm sure they're building pools in their backyard.

[George Kamel]

I mean, at some points we just need to make this a peace treaty and cut our losses or take what you come to a compromise.

[Caller]

I don't know how to do that.

[George Kamel]

Is it all or nothing for you? Like what is a. Let's say, what's a decent scenario that you get some of these shares?

[Caller]

Well, the company has a clause that clearly states how the shares get split in divorce and they write a check, you know, for whatever the court determines. So it's actually. The company is very simple. It's a simple process.

[Rachel Cruz]

So then what's from the legal perspective? Why is it drug out if it's that simple of what you're saying, I don't understand why all the lawyers don't see that.

[Caller]

Yeah, it was discovery. Discovery was the longest part of the process and the forensic accounting part. And then so. But it costs money, you know, that cost money. I knew that it was going to be a she we hit. We had separate assets and I hear it all the time with you.

[George Kamel]

Oh, we lost you. Chris.

[Rachel Cruz]

Chris.

[Caller]

Yes. Okay. Yeah.

[Rachel Cruz]

Okay. Well, you said discovery was the longest. Is it over? Because you said you guys kind of found everything. But then the stocks changed over in March, so now we're in April. So what's your, what's your. What's your final. Because you don't want to live five more years like this, Chris.

[Caller]

No, we're looking at possibly. So my lawyer has told me that we have a meeting in May and then we determine what the next trial date is. And that's supposedly going to be September.

[George Kamel]

And they're going to keep working on this thing that whole time?

[Caller]

Yes.

[George Kamel]

So this could go a whole nother year before there's some resolution, which means you're another hundred grand in debt easily.

[Caller]

Yes, but I don't know how to get out of that. I mean, you're stuck in the process.

[George Kamel]

What's your net worth today?

[Rachel Cruz]

How much do you have, Chris? How much? I mean, house, your assets, what. Where are you at? Financial?

[Caller]

I still have two properties in the Carolinas that are. I own outright. One burned down. My wife filed for divorce in February of 23, and then the house burned down a week later up in the Carolina.

[Rachel Cruz]

Okay, how much are those worth?

[Caller]

I believe 50,000. And then the other properties, about 15, 16 down.

[George Kamel]

What's your total net worth?

[Rachel Cruz]

Wait, a property? Is it. Is it just land?

[Caller]

Had a house. I had a house and it burned down. It got set on fire.

[George Kamel]

So the land is only worth 15 grand.

[Caller]

50 grand for that land. And then the land across the street is about 16,000. Okay, what's your income, those two properties? I have my own company, and it fluctuates. Like, last month I made like 30,000. This month I'll probably make like 5,000. So overall, what do you do about 100,000? I work on medical equipment.

[George Kamel]

Okay, man. I personally, I know this is like your sunk cost fallacy. I would cut my losses and go, you can rebuild a great life and build wealth from scratch. You're a smart guy. You'll get there. I also know that you could burn another 150 grand on the off chance you can make half million a year. I just don't think the risk is worth it. And the stress, it's going to take years off your life to keep this battle up emotionally and mentally on top of financially of what it is.

[Rachel Cruz]

Yeah. And I would sell those properties. I wouldn't be a long. Well, I was gonna say landlord. I don't think there's any occupancy in this situation. So I'd go ahead and just get

[George Kamel]

rid of those properties, sell funded. If you're gonna keep fighting this.

[Rachel Cruz]

Yeah, yeah. And that's 66 grand that you'll have to help at least pay off some of this credit card debt. And I think, Chris, you have to make a decision to say, okay, you know, whatever that breaking point is for you, we're never going to tell you to continue to go into debt. So yourself, if you're choosing to kind of play that game, you at least, please. You at least need a point in your mind to say, if we get to X points on the calendar and nothing has moved or there's no set, there's nothing. Like, even if a trial date, you know, keeps moving out, like, you can't just live in the cycle forever and ever. Like George said, this is the same

[George Kamel]

part of your brain, like a gambling addict. Where they just go, well, I just gotta double down. This time's gonna be different. I'm gonna get it this time.

[Rachel Cruz]

Yes.

[George Kamel]

I just don't think it's worth it when you're a smart guy making great money.

[Rachel Cruz]

Well, and it's a little confusing if it's so clear in the bylaws of the company of what happens to the shares in the case of a divorce, how that's not.

[George Kamel]

It would have happened by now.

[Rachel Cruz]

Yeah, maybe I'm being naive. Right. And again, I know every divorce is very different, every state is different, whatever. But how. It's just not spelled out like that. And then that's part of all the assets that are, you know, divvied up and everything. So my fear is that you've been in a three year roller coaster that

[George Kamel]

it's not a battle for custody of, of your children. It's just about I could have had a gigantic pile of money and I won't have that. Yep, that sucks. I would grieve that and move on.

[Rachel Cruz]

Absolutely. Oh, sorry, Chris. Hope that's helpful. It's probably not the advice you wanted, but sometimes it is just to, to cut the ties. Just to get everything settled and be done and move. Hey, you guys, did you know that there are thousands of data brokers whose entire business is collecting and selling personal information? Things like your home address, your phone number and even your relatives names. You guys, that is just crazy. But that is why I use Delete me. Because those companies pull information from public records, social media and all kinds of other places. Then suddenly all that information shows up on random websites and removing it yourself means going site by site, filling out forms and hoping they actually take it to down. It takes hours and then it can even pop up somewhere else again. But Delete Me's team of privacy experts removes your personal information from hundreds of those data broker sites. And within a week you'll get a report showing what they have found and what they have removed. And they keep scanning and cleaning up your data year round. So take back control of your Privacy. Go to JoinDeleteMe.com Ramsey and get 20% off your annual plan. That's JoinDeleteMe.com. If you're working the baby steps and the best and fastest way to do it is by using EveryDollar. So this is more than just a budgeting app. It really is a plan that is built right in and so you can track your progress and you can get personalized recommendations and coaching for your situation that will help you free up money even Faster. So it's like you having one of us walking with you and, you know, telling you what we would do if you had called the Ramsey show. That's. That is the hope. So make sure to check out EveryDollar. You can start EveryDollar completely free by downloading it in the App Store or Google Play. All right, let's head to John in New York City. Hi, John. Welcome to the show.

[Caller]

Hi, Rachel. Hi, George. Thanks for having me.

[Rachel Cruz]

Absolutely. How can we help today?

[Caller]

So I work for a very, very small family business and we don't have a 401k retirement plan. So the owner is offering me something called deferred equity. So this would be a small percentage every year that I'm there. But I don't get paid unless the business is sold. And if I leave, I get nothing. Is that too much risk for me to take on or is it a wise retirement choice?

[Rachel Cruz]

No, I would not bank on my retirement for that. I would be doing some other things with investing. But would that just be an added. I don't know.

[George Kamel]

Do you have to make contributions to it or are they just going to give this to you?

[Caller]

Regardless of this, they're going to give me one and a quarter percent retroactive to when I started.

[George Kamel]

So when would you even get that payout? You'd have to be still employed there when they sell it in order to make anything correct.

[Caller]

And so I guess the idea is I would get first dibs on the business if that, you know, when that day comes and I could use that deferred equity as a down payment on the business, or if I choose not to do that and someone else buys it, then I would get paid out.

[Rachel Cruz]

Are they planning on selling the business? Is that part of the long term plan eventually?

[George Kamel]

Is that 30 years from now or three? Because there's a big difference.

[Caller]

Exactly. I have no idea. It could be, I think realistically maybe around 10 years, but who knows?

[George Kamel]

Well, I mean, if it cost you nothing, take it. I still would prefer a retirement plan that's actually yours instead of basically a promise.

[Rachel Cruz]

Yeah. Is there an option of he would give you like a traditional 401k situation or this? Or is it that this is the retirement package? That's it.

[Caller]

This is basically a way to keep. I'm essentially running the business right now. And by providing this.

[George Kamel]

It's a retention plan.

[Caller]

Forward to. It's a retention plan.

[George Kamel]

Okay. What do you make?

[Caller]

I gross a little over 80 and I have. I get health insurance in a company vehicle.

[George Kamel]

Okay. And what kind of Industry is this.

[Caller]

It's. I'm not gonna say exactly what it is, but it's very niche and it will. I can guarantee it will always be around.

[George Kamel]

Do you want to take it over one day?

[Caller]

I could, I would, I think, if the circumstances were right. I would like to. It's something my family's been involved in for nearly a hundred years.

[George Kamel]

How old are you?

[Caller]

I could carry that on. I'm 35.

[George Kamel]

Okay. You got any debt?

[Caller]

Just the house.

[George Kamel]

Awesome. Are you investing?

[Caller]

Currently, very, very little. Just whatever fraction I have on my Roth ira.

[George Kamel]

Is it because money's too tight?

[Caller]

It's too tight right now.

[George Kamel]

Well, that worries me because you need to build wealth on your own. And if this equity doesn't happen, you're going to retire broke.

[Caller]

Broke, yeah.

[George Kamel]

So that's where I go. We have it. We have another fish to fry. Which is why can't I invest 15% of my income? Why can't I fully fund a Roth ira? I would at least be doing. That's the bare minimum is you funding a Roth IRA every single year without fail in order to set yourself up.

[Caller]

I need to make more money, which is something that I plan on negotiating because I know that it's there.

[George Kamel]

Can you make six figures doing this elsewhere?

[Caller]

Yes, but I don't know, I would probably have to relocate to do it.

[George Kamel]

I might be willing to do that. Are you single?

[Caller]

No, I'm married.

[George Kamel]

Okay.

[Rachel Cruz]

What does she. What does your wife do?

[George Kamel]

Is she working?

[Caller]

She works part time for college.

[Rachel Cruz]

Okay. Do you guys have kids?

[Caller]

Not yet, but we're planning on it.

[Rachel Cruz]

Okay. I would. She needs to go full time time. She needs to be working and you guys need to be funding 15% of your income into retirement. That's your answer, right?

[Caller]

Oh, I agree.

[Rachel Cruz]

Yeah. So I think you both need to sit down and say, okay, what do we want our lives to look like? And run some numbers you can use like even just the Ramsey investment calculator to say, hey, right now, if we fund 15% of our income into retirement, where are we going to go? So. So.

[George Kamel]

Cause if you make a hundred grand household, you could fund two Roth IRAs, you and your spouse. And if you can't do that, it tells me either your expenses are too high or the cost of living is too high, in which case you should go move. Because if you move somewhere where the cost of living is lower and you can make six figures, it's a no brainer. So I would not hang on to these golden handcuffs of a promise of equity at 1% per year that you might use as a down payment to buy the business one day, if you can even afford it. There's just way too many variables there for me to be comfortable with.

[Rachel Cruz]

And if they're giving that to you as a benefit and you're loving the job, and you, and you and your wife sit down and she works more and you guys kind of figure out, okay, here's what we can do for the next couple of years, then, yeah, take the, Take the benefit they're giving you. It's no harm to you. It's just going to be an extra thing you have in your back pocket. But I would not at all have the confidence that it's actually going to play out.

[George Kamel]

I would work on negotiating that to say, hey, I'm going to vest three years in, I can take that equity out. And you could pay me that if I do leave?

[Rachel Cruz]

Absolutely. All right, let's head to Zoe in Des Moines. Hi, Zoe. Welcome to the show Show.

[Caller]

Hi, how are you?

[Rachel Cruz]

Hi. We're doing great. How can we help?

[Caller]

Yeah, I was wondering if I should sell the car that I have currently. So there's like just under 12,000 left on it, and the payment is like 275amonth. And if I take what I have over $1,000 in my savings and just leave that thousand dollar emergency fund and then what I got back in a tax refund, I could knock it down. The loan would be about 6,500 instead. So I'm just trying to decide if I should get rid of this one, get a different car and have no payment, or if I knock it all the way down to 6,500 and pay it off before the end of the year, if that's okay.

[Rachel Cruz]

Yeah. How much do you make a year?

[Caller]

Like 40.

[Rachel Cruz]

Okay.

[George Kamel]

What's the car worth?

[Caller]

16.

[Rachel Cruz]

Oh, so you would make money on.

[Caller]

On it? Yeah.

[Rachel Cruz]

Yep. And you could. How quickly could you pay it off with the, with the 6500 take you. You said to the end of the year?

[Caller]

Definitely by the end of the year, yeah. Okay.

[George Kamel]

Do you like the car?

[Caller]

I do, yeah, but I don't like the debt.

[George Kamel]

Sure. Well, I mean, use that as fuel. If you don't like the debt, let's aggressively just pay the debt off. But the car is not inherently the issue here. It is a lot of car. I mean, it's worth 16k and make 40. That's a pretty big, you know, ratio. But it's not on fire. We wouldn't tell you, hey, you got to sell and if the car was worth 30 grand, I would say, yeah, this needs to be sold tomorrow.

[Rachel Cruz]

Yeah.

[George Kamel]

But you could if you wanted to. You know, you take your debt down to 6,500, you sell it for 16, leaves you with 9,500 to go buy and a new to you car. You could do that. But it's a lot of effort to then just have a different car that you might like less.

[Caller]

Yeah. Okay.

[George Kamel]

So I would aggressively just pay it off.

[Caller]

Off.

[Rachel Cruz]

I probably would too. Just from the hassle standpoint. When you look at the numbers, I mean you could try to earn an extra grand and have this paid off, you know, in. Well, I guess which would be close to the end of the year.

[George Kamel]

Sad. We're already there. I know in my head it's still February.

[Rachel Cruz]

I know. That's what I was thinking too. Yeah. So I think it's. It is either way. Zoe, I think is fine. I think it would probably be a personal choice at this point. If you do keep it be gazelle intense, pay it off as soon as you can. But if you're like, like so tired of it, which it kind of sounds like you are and you're just like, I don't care about the hassle. I will sell this thing. I will go down to, you know, a different car and just be done with it in 30 days.

[Caller]

Yeah.

[Rachel Cruz]

And have no payments and you're be happy you could do that too.

[George Kamel]

But it's 275amonth. So all things considered, it's not a make or break in your budget likely. But I mean it's still eating your lunch at 40k after taxes. You're like, if I could do a whole lot more with that 300 bucks if I didn't have it. So I would use it to fuel it to get rid of it faster. But no harm, no foul if you want to sell it.

[Caller]

Sa. Foreign.

[Rachel Cruz]

The Ramsey Show Question of the day is brought to you by why refi defaulted? Private student loans can leave you feeling stuck and overwhelmed. But why refi helps you explore refinancing options with a low fixed rate and a payment based on something that you can actually afford. So visit wirefi.com rainfall ramsey. That's the letter y r e f y.com Ramsey may not be available in all states.

[George Kamel]

Today's question comes from Patrick in Michigan. Do you think it's a good idea for my 19 year old daughter to buy a small home while she goes to college? I would be a co signer and she would rent out the extra rooms and manage it. She would use the rental income to pay the mortgage. But I could potentially be her backup. Does this sound like a solid housing plan for her?

[Caller]

Her? Oof.

[George Kamel]

I don't think so.

[Rachel Cruz]

Just shivered.

[George Kamel]

It sounds like you saw a tik tok that sounded really cool. Where it was like just. It's easy. Buy an investment property, your daughter lives in it and it'll. You can rent out the rooms. It's a money making scheme. I don't want to combine these things. These are good things, buying an investment property. But you're doing it in a bad way by co signing and forcing yourself to buy in that area.

[Rachel Cruz]

That's right.

[George Kamel]

Who knows if it's going to be a good area and it's not a long term property.

[Rachel Cruz]

It's usually a college town. Right. Is where you're buying. And so majority of the renters in that area are probably gonna be college students. So. No. I mean I would ask the question, would I buy an investment property in this area regardless if I had a child there or not? Yep.

[George Kamel]

And I wouldn't co sign. If you wanna do it, just buy it outright yourself.

[Caller]

That's right.

[Rachel Cruz]

That's right. And let her manage it for a fee or something. You know what I mean? Like if you wanted to like have something.

[George Kamel]

But he probably. I don't know if Patrick has a primary home with a mortgage on it, but I would not go get another mortgage. So if you can buy it in cash and you're just excited about this prospect of owning some property out there for whatever amount of time, I would. You can go for it. But I would not do it the way you're describing here.

[Rachel Cruz]

All right, let's head to Logan in. Is that Lafayette? Yeah. Hey Lafayette.

[George Kamel]

It's Lafayette, isn't it?

[Rachel Cruz]

Hey Logan, welcome to the show.

[Caller]

Hi. Thank you guys for taking my call.

[Rachel Cruz]

Absolutely. Welcome. How come here we're help.

[Caller]

So I'm kind of in a little bit of a pickle right now to where I'm trying to stick to the baby steps and make meaningful progress towards paying off my debt. But I just feel like, you know that thousand dollars I saved like I will push it up to about three grand and then I kind of feel bad for having that much money, know it to be used somewhere else and I just pay off my debt. Could get back down to a thousand dollar emergency fund. So I think it's just I need like a clear goal in mind while paying off my debt. And that's where why I'm asking you guys is how can I stick to that. Baby step number two.

[Rachel Cruz]

Well, that kind of is your goal, is each individual debt that you're paying off is what you're looking at and that's going to be your goal. Is the next smallest debt. Is there something that's happening in your life that you're going to need more in that emergency fund, or is it just the idea of having a thousand dollars that makes you nervous or what causes you to keep bumping it up?

[Caller]

Well, because I moved out with my girlfriend in August of this past year. I used to live in a different state and then we got jobs over here in Indiana. So that's where we've been for like the last eight months. But my girlfriend was actually in a pretty bad car accident in October and she did not have health insurance. So she just has a mountain pile of debt too, that she's trying to pay off. So that's why I was thinking that I probably will need a little bit more just in case. If she's unable to pay something off or pay her bills, then maybe I could step in and help that way.

[George Kamel]

How much debt do you have right now?

[Caller]

I actually just. I paid off my credit cards. It was about five grand worth of credit cards about two months ago. So I just got the auto loan, which I did about a $2,500 payment today, so.

[Dave Ramsey]

Nice.

[Caller]

It should be around 19 8, I believe.

[George Kamel]

So about 20 grand left on the car?

[Caller]

Yes.

[George Kamel]

What do you make a year?

[Caller]

I make about 41,000.

[George Kamel]

Man, that's a lot of car for your life.

[Caller]

Yeah.

[George Kamel]

What's the car worth?

[Caller]

I'm gonna be honest. I got it at a pretty bad interest rate too, but the car is worth probably around 11 to 13, give or take trading.

[George Kamel]

Did you roll over negative equity?

[Caller]

I did not.

[George Kamel]

I'm wondering private party value, if you can get closer to that 20 and you just save up five or six grand over the next couple months and just sell it and get a different car.

[Caller]

That was my plan too. But I think the main issue with that is me and my girlfriend, we all. We work different shifts. So.

[George Kamel]

Can you share one car?

[Caller]

I don't. I mean, we probably could, but I feel like it'd be more of a hassle just because I go to work at 12:30 and she goes to work at 4:30, so it's going to be kind of hard to.

[Rachel Cruz]

But y' all currently share one car?

[Caller]

We do not know.

She.

She has her own car.

[Rachel Cruz]

Okay, wait, so what's the. What. What's the problem? I don't Understand the issue about working different shifts.

[George Kamel]

You're not going to be using her car. I'm saying get a different car, you save up six grand or whatever the difference you're underwater in, and then save up enough to get a different car, a cheap car, and then you'll have a different car and with no payment, and then you can stack up that emergency fund really quick.

[Rachel Cruz]

Yeah. So basically instead of paying off 20,000, then just save up 10, cut your timeline in half, save up 10, pay off the negative equity and then go get yourself a $4,000 car.

[George Kamel]

Let's say you sell yours for 15, you owe 20. Right. So use part of your 10 to cover that. That's five. And then you'll have five left to get a new to you car.

[Rachel Cruz]

So you just cut your whole timeline in half, basically of getting out of debt.

[Caller]

So instead of just making extra payments on my car, just save up to ten grand in cash and just do it that way.

[Rachel Cruz]

Yep. Yeah, that's what I would do.

[George Kamel]

How quickly could you do that? If you got real aggressive, working multiple jobs, overtime if you can, all of

[Caller]

that probably by the end of the year, give or take.

[George Kamel]

Okay. That's not a bad timeline. And now it's, hey, I can survive on a thousand buck emergency fund till the end of the year.

[Rachel Cruz]

Yeah.

[George Kamel]

And if something comes up, you just stop the baby steps and stack up cash really quick.

[Rachel Cruz]

Yeah. Instead of all of 20, 27 still paying off this car. Do you know what I mean? Like a, it just, it shrinks down that timeline and then, and then after that car, you, you have the new car, the old one sell, you know, sold and all of that, then you start saving up an emergency fund.

[George Kamel]

And at this point, truthfully, you're not in a place to support your girlfriend.

[Rachel Cruz]

Yeah. You don't have the money, you're broke.

[Caller]

Yes.

[George Kamel]

So that's not a reality where you can cover her rent for her for any amount of time.

[Rachel Cruz]

How old are you guys?

[Caller]

She's 20 and I'm 21.

[Rachel Cruz]

Okay. Okay.

[George Kamel]

Do you have health insurance?

[Caller]

Sorry, say that again.

[George Kamel]

Do you have health insurance?

[Caller]

My dad pays for it. She has her own. Okay.

[George Kamel]

Okay.

[Rachel Cruz]

So Logan, I think what you're doing and your thought process of taking care of her is very honorable, but I would keep finances as separate as possible because there is no legal marriage here. There's nothing that protects you in any of the this because there's a. Yeah, I mean, I hope not, but there's a good chance that, you know, you guys, six months down the road aren't together anymore. And if you, you know, went into debt or started giving, you know, all this money to her. Yeah, you know, that's 10, 12 grand that you don't have going to someone that's you're not married to. And so it sounds really harsh. And again, if you're in a position to help pay for her and you want to, and even if she leaves or you leave and it's, you know, you look back years from now and you're like, oh, wow. And you feel good about it still, then that's one thing. But we just have talked to some people. They pay on, you know, people's student loans, and they're, you know, they're co mingling lives. And so what happens is you end up comingling money naturally because you basically are acting like you're married, but you're not. And so I would just. I would just give you a word of caution. You guys may need to set up some pretty hard boundaries when it comes to money.

[George Kamel]

And if she can't pay rent for foreseeable amount of time, she needs to go find somewhere she can afford it or go live with family while she heals, but you can't foot the bill for her.

[Caller]

Yeah, that makes sense. But it's also a fact that I've had a hard time saving over the years as well, to where I've actually never had probably more than like 4 grand cash at one time as well, throughout my working life for the last four years.

[Rachel Cruz]

Years, yeah.

[George Kamel]

And would you say that's due to having a little bit of debt?

[Caller]

Yeah, that's just doing stupid decisions when I was 18, 19 years old and translating to now. Yeah, so.

[George Kamel]

So let that fear be the fuel to get out of debt faster. With that thousand bucks going, hey, I'm not safe. I want to be at a place where I got 20 grand saved up to protect me. And that's where you'll be if you follow the plan.

[Rachel Cruz]

Yeah. And, Logan, you're on the right track. And I mean, being 21 and starting this plan is amazing. Amazing. There's people 41 that are starting this,

[George Kamel]

you know, wish I knew it when I was his age.

[Rachel Cruz]

I mean, you are ahead decades if you do this stuff. Logan, stay out of debt. Live below your means, have this emergency fund get out of debt, bump it up to a fully funded emergency fund, start investing in retirement. Literally walking the baby steps. You will retire a multi millionaire.

[Caller]

Foreign.

[Rachel Cruz]

Welcome back to the Ramsey show in the fair winds credit union studio. I am Rachel Cruz with George Campbell and we are taking your questions at 888-825-5225. All right. In Armadillo, Texas, we have Katrina.

[George Kamel]

Armadillo.

[Caller]

Armadillo.

[George Kamel]

But it was so I'm like, is there an Armadillo, Texas? Because there needs to be.

[Rachel Cruz]

Are Armadillos.

[George Kamel]

I literally was thinking Katrina, can you confirm?

[Rachel Cruz]

My gosh. Amarillo. I'll never live that down. Katrina.

[Caller]

Dad.

[Rachel Cruz]

Gummet.

[Caller]

Amarillo.

[Rachel Cruz]

I know. Oh, my gosh, Katrina.

[George Kamel]

She's so relatable.

[Rachel Cruz]

No, I love it. Katrina, welcome to the show. How can we help?

[Caller]

So I'm just kind of been chasing my tail like an armadillo or a cat. Like Katrina. Cat.

[George Kamel]

Oh, there we go.

[Caller]

Thank you.

[Rachel Cruz]

Thank you for helping that out.

[Caller]

You're fine. You're fine. So I have been chasing Mattel for a while. A series of bad luck with my family. Dave, he talks about Murphy's Law. Well, Murphy moved into my home and has affected me, my grown daughter, her good friend and my husband. And it's been heck like we are trying to balance out the bills. And basically we're on payment plans for everything and we have according to our budget and every dollar, it looks like it's going to be okay, but it's never okay because we're paying payment plans on everything, which is more expensive. For example, I just paid last month a $678 water bill bill.

[George Kamel]

So there's unexpected things that come up.

[Rachel Cruz]

Are you behind on utilities? Is that what you're saying?

[Caller]

Yes, on everything.

[Rachel Cruz]

On everything. Okay, so what's happened in life, Katrina? When you said Murphy moved in?

[Caller]

Well, I worked for a place that was grant funded and my grant was ending and fortunately took me a while, but I've got another job job and it's good. My daughter works at the same place.

[Rachel Cruz]

Okay, how old is she?

[Caller]

She's 22. She before this, she had her own place.

[George Kamel]

Okay, so she's living with you now because she can't afford her own place? Yes, because of this new job. Doesn't pay what she was making.

[Caller]

Yeah, it is. It's not even a living wage. And then.

[George Kamel]

And that's the same place you're working? Working.

[Caller]

Was working.

[George Kamel]

Okay.

[Caller]

We both worked at the same place.

[Rachel Cruz]

And what was it? What were you guys doing?

[Caller]

I was helping with healthcare navigation and she was helping with finding people homes. I worked for hud.

[George Kamel]

Worked for hud. Okay, what are you making now?

[Caller]

I am making about 4,500, I think a month.

[George Kamel]

Is that your household income?

[Caller]

No, just mine. My husband makes about 2400 bring home.

[Rachel Cruz]

What does he do?

[Caller]

He works for the state. He works for workforce development. He's been there for 20 something years

[George Kamel]

and he makes 30 grand.

[Rachel Cruz]

Yeah.

[Caller]

Yeah.

[George Kamel]

That doesn't make sense.

[Caller]

Yeah, it's. He said he had a raise and then they had a cut and that was another thing that messed us up. They gave him promotion and gave him a raise and then the most demoted across the board because the funding demoted everybody.

[George Kamel]

What does he do? What's his role?

[Caller]

He's a workforce development specialist. So he helps people find jobs.

[George Kamel]

Okay, so your take home pay is $6,900. And what's the total balance of all the consumer debts that you guys owe?

[Caller]

Consumer debt?

[George Kamel]

Everything but the mortgage.

[Caller]

Okay, that would be plus like 200, give or take.

[Rachel Cruz]

That does not include the mortgage.

[Caller]

No, that does include the mortgage. It's going to be about 150,000, I think 100 in my mortgage, about 144 that. It's less now because I paid it.

[George Kamel]

Okay, so you have $150,000 in debt aside from the mortgage. Mortgage break down some of those debts for us.

[Caller]

About 70 is his student loans, of course.

[George Kamel]

Whose are those?

[Caller]

They're mine. They're evil.

[George Kamel]

How long have you had them?

[Caller]

Since 2012. Okay, we have some credit cards and then we have about a 30,000. No, sorry. $20,000 left on a car. We paid one car off.

[George Kamel]

Okay, and what's on the credit cards?

[Caller]

It was basic living expenses.

[George Kamel]

But I mean, you got 70 in sued loans and 20 on a car loan. That's 90 out of the 150. So where's the other 60?

[Rachel Cruz]

Is that all credit cards?

[Caller]

No, it's not 60,000. I didn't math correctly. I'm sorry. Okay, closer. Closer. Closer to 15. Sorry.

[George Kamel]

Okay, it's all good.

[Rachel Cruz]

That's better.

[George Kamel]

That definitely helps. 150 grand was a worse number. So, all right, so you got just about $105,000 and most of it is those student pesky student loans. And then we got this car loan. So if you laid out your debt, smallest to largest, I'm guessing one of these little credit cards is the first one that needs to go.

[Caller]

Yes, it would be.

[George Kamel]

Okay, and right now you're saying when you do the budget, there is money left over? On paper?

[Caller]

Yes.

[George Kamel]

How much is left if nothing crazy happened in a month?

[Caller]

About 400.

[Rachel Cruz]

And what payment plans are you guys on? You said utilities.

[Caller]

Just utilities and of course, my mortgage.

[Rachel Cruz]

Okay. Yeah. Okay, so but you're able to pay your mortgage every month, Correct.

[Caller]

Now I'm paying 29 days behind.

[Rachel Cruz]

Okay. So I think our first goal is to get caught up. So we want to get out of this payment plan with the utilities, and we want to be caught up to the mortgage. Okay, Katrina, that's our.

[George Kamel]

And paying your four walls before any debt payments kept.

[Rachel Cruz]

Yes. So food, shelter. Yeah. Which utilities and house is this? So this is your. This is your A1 before anyone gets paid. Okay. Credit cards could go.

[George Kamel]

The car payment would be the next priority after the four walls because you got to get from A to B to get to work. But outside of that, if the student loans and credit cards can't get paid one month, I'd rather those go to default than your utilities and your housing.

[Caller]

Yeah, they haven't been getting paid.

[Rachel Cruz]

Who's not been getting paid?

[Caller]

And no, those have not been getting paid.

[Rachel Cruz]

The student loan or the credit cards?

[Caller]

No, we just stopped.

[Rachel Cruz]

So. So you have $7,000. How much is your daughter bringing in a month?

[Caller]

Whatever $11 an hour is.

[Rachel Cruz]

Okay, so she needs to go be

[George Kamel]

working 24 grand a year somewhere.

[Rachel Cruz]

Yeah, yeah. Somewhere else, too. You know what I mean? Be looking for a job. And you mentioned a friend. Is there a friend living with you all?

[Caller]

Yes, yes. Just a family friend that was a roommate with her.

[Rachel Cruz]

And is she working?

[Caller]

Lost his job. He lost his job, too, but he just now recently found a good one.

[Rachel Cruz]

They need to be paying rent.

[Caller]

They were, and then they. He. I don't make her do it, but he does. And. And he was paying, and then he had to stop because he lost his job. But he's got a good one now. Like, we're at the starting level. Everything's okay now. We just need to get out of this. Chasing my tail.

[Rachel Cruz]

Yeah. Okay, so the $7,000 a month, Katrina, that you guys have, you guys have to pay the mortgage on that and. And making sure that the car is paid for and your utilities. That's all you guys have to do. And you're going to be eating rice and beans. Beans and rice. I mean, the whole bit. Right? There's like, the food budget is nothing like we are. We're gonna eat, but it's like, that slow. We're doing nothing else but catching up. And that needs to be your goal probably for the next couple of paycheck

[George Kamel]

cycles on top of your husband getting a better job, that solves a whole lot of problems. If he can double his income by doing some work that pays him what he's worried about.

[Dave Ramsey]

Hey, guys, Dave Ramsey here. Every day on this show, we Help people work through real money problems and figure out what to do next next. Now, you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to ramseysolutions.com and try Ask Ramsey today. That's ramseysolutions.com.

[Rachel Cruz]

Kyle in Lansing, Michigan, is up next. Kyle, welcome to the show.

[Caller]

Hey, Rachel, thanks for taking my call.

[Rachel Cruz]

Absolutely. How can we help today?

[Caller]

Well, a few months ago, we lost my mom to an unexpected heart attack.

[Rachel Cruz]

Oh, my gosh. We're so sorry.

[George Kamel]

How old was she?

[Caller]

79.

[Rachel Cruz]

I'm so sorry.

[Caller]

Lost my dad five years ago to cancer, and I recently came into a sizable amount of money, and I just want some opinions on how to not lose it.

[Rachel Cruz]

Okay. What does a sizable amount of money mean?

[Caller]

It's a touch over two and a half million.

[Rachel Cruz]

Okay.

[George Kamel]

Was this from mom's estate or what?

[Caller]

It is. Yeah. Okay.

[Rachel Cruz]

Wow. So your parents did well. Obviously they did well. Yes.

[George Kamel]

Did you know about all this? Is this a surprise to you?

[Caller]

Yes and no. I have two siblings. We always knew that they were comfortable, but just not to this scale, I guess.

[Rachel Cruz]

Yeah.

[George Kamel]

You didn't know just how comfortable?

[Caller]

Right, right.

[George Kamel]

Wow.

[Rachel Cruz]

Oh, my gosh. Wow.

[George Kamel]

What kind of. How is this? Two and a half million divvied out. Is this in cash? Is it in an asset?

[Caller]

For the most part. Most of it's all at. Most of it's at, like, Edward Jones. Okay. There's about a half a million in IRA we got to get out in 10 years. And. And the rest is in cash. Wow.

[George Kamel]

Okay. What do you make?

[Caller]

Between my wife and I, we're about 200.

[George Kamel]

Fantastic.

[Rachel Cruz]

And how old are you guys?

[Caller]

I'm 45. My wife's 47.

[Rachel Cruz]

Okay. And how are you guys financially?

[Caller]

We're pretty good. Yeah. We just built a new house, just under 500,000 in that, which we borrowed the money from my mom to build and since has been forgiven.

[George Kamel]

Oh, wow.

[Caller]

We still have our old house that we're getting ready to sell. You know, painting and putting new carpet in and sprucing it up, and that's somewhere in the neighborhood of 300,000.

[Rachel Cruz]

Okay. So the payment to her, that 500, it just went away when she passed. That doesn't take out of your 2.5.

[Caller]

Well, it's part of the 2.5.

[Rachel Cruz]

Oh, okay. Okay. So would it be 2 million left, or was it supposed to be 3, but now it's 2.5?

[Caller]

No, there's just a little over 2 million left.

[George Kamel]

Okay.

[Caller]

After the house.

[Rachel Cruz]

After the house.

[George Kamel]

That's what we're working with. 2 million. And you guys have no debts whatsoever?

[Caller]

Nothing. No.

[Rachel Cruz]

But then when you sell this house, it goes back up to 2.3 in a sense, right?

[Caller]

Yeah, yeah, yeah.

[Rachel Cruz]

With everything.

[George Kamel]

Okay, that's great.

[Rachel Cruz]

And yeah, cash on hand for you guys. Where are you guys at?

[Caller]

Well, we just moved about 70,000 over into a money market because it was sitting kind of stagnant into just a savings account. And our financial advisor asked us to move that because that's not doing anything there.

[George Kamel]

Is that your emergency fund or is that for earmark for something else?

[Caller]

No, it's just. It's just money, Just extra money.

Okay.

[George Kamel]

Okay.

[Caller]

Yeah.

[Rachel Cruz]

And how much do you guys have in retirement for you?

[Caller]

I actually have a pension through work. My wife is about. She's a little over 200,000 in a Roth, and I've got about 55,000 in a Roth, I guess.

[Rachel Cruz]

Okay. All right. That's great.

[George Kamel]

So you guys are in what we call baby step seven. You got no debts whatsoever. Houses paid for. Which puts you in a really unique place because you have a lot of options now. And there's only three things you can do with money, and that's to give it, save it, spend it. And we would recommend doing all three with reasonable ratios.

[Caller]

Okay.

[George Kamel]

So I would be giving a portion of this money. That's up to you guys. It's a matter of the heart. I would be enjoying some of it. What's the thing? You guys really want to do the thing? You want to upgrade? Maybe it's a car, maybe it's a thing in the house. House. And then invest the rest of it and build generational wealth so you can be able to do this for your kids one day. Which, by the way, do you have kids?

[Caller]

Yeah, we have 116 year old. And that's, that's. I'm. I've always been a kind of a saver, I guess. You know, my parents, you know, they beat it into you when you're a kid. Save, save, save. You know, we've got a new house. We don't need to do anything else there. We've got good vehicles. I mean, neither one of us have any desire to buy new vehicles.

[George Kamel]

Right.

[Caller]

And I want to make sure that this opportunity is there for my daughter, you know, when I'm gone.

[Rachel Cruz]

Yeah.

[Caller]

So I just don't want this to trickle away in the next, you know, 30 years or 40 years.

[George Kamel]

I have a good feeling it won't. Just based on how you're talking to me, you're probably going to be handing over $10 million to your daughter at this rate.

[Rachel Cruz]

Yeah, for sure.

[Caller]

I hope you're right.

[George Kamel]

Because I mean, the money, if you just let it sit without adding anything to, it would double every seven years.

[Caller]

Years. Okay.

[Rachel Cruz]

Yep. So by the time, you know, if

[George Kamel]

you think about that 2 million to 4 million to 8 million to 16 million. Do you see where we're going with this?

[Caller]

Yep, yep, yep.

[Rachel Cruz]

And so I. Yeah. And so since you are a natural saver, Kyle, you know, I would sit down with your financial advisor and kind of you guys map out. But part of this too is, you know, create good memories too with your daughter. You know, if there's, you know, go on a great trip every year with some of this, you know, and like have some experience and live, live life well. Pay. Make sure, you know, she's paying for college. This could be part of, golly, her wedding funds, you know, even paying for her first starter home or something. You know what I mean? I'm like where she never would have debt. Like, like there's some big things that you guys can do with this money that's really wonderful. And you have the time for it for her specifically considering she's six. But, but enjoy some of this too. Yeah. And it doesn't have to be just stuff. I wouldn't just be like, oh, go buy a bunch of stuff. You can, you guys can afford it. But, but find some experiences that you guys can do together as a family.

[Caller]

We actually just got back from a Disney three day Disney cruise.

[Rachel Cruz]

Oh, great.

[Caller]

So that was a lot of fun.

[Rachel Cruz]

That is fun. Yeah. So like make memories together too. You know, I think your mom, you know, you just kind of think through, okay, what would my parents want for my nuclear family? And I think they would want peace for you guys. And financially, you know, being debt free and doing what you guys have done, you've created that, you know, create some great memories is what I would say as well. But I think this money, yeah. As you play it out mathematically is going to be plenty for you all in retirement and. Yeah. And to be passing on something to her as well.

[Caller]

All right.

[George Kamel]

Have you funded college?

[Caller]

She has about. My mom started a 529 for her and she's got about 28 or 29,000 in there.

[George Kamel]

Oh, that's awesome.

[Rachel Cruz]

That's great.

[George Kamel]

I Was going to say you could do something called super funding. It's already kind of super funded at 6. To have 30 grand is awesome, but you might want to put another 10 or 20 grand in there and then never touch it again and just let it ride and she'll be just fine.

[Caller]

That was part of our last meeting with our financial advisor and he, he advised us to not just dump a bunch in, he said just trickle a little bit in, you know, a couple thousand or a few thousand dollars a year.

[Rachel Cruz]

Yeah. Because you guys could just pay out of pocket too. If she ends up going, you know, you wouldn't get obviously the.

[George Kamel]

Yeah, super funding is basically instead of funding a few grand a year, you just put in 10 grand now and then never add to it.

[Caller]

Okay.

[George Kamel]

Because mathematically that'll be the best way if you can lump sum it now and then you won't have to add as much over time in total contributions. So that's one thing you can do. But that's such a tiny portion of this thing.

[Rachel Cruz]

That's what I was going to say. Yeah, it's a drop. Throw it in. Yep.

[George Kamel]

And so I would be investing most of this so that you can create generational wealth and I would at least be maxing out, you know, all of your tax advantaged retirement accounts first and then once you run out of options there, move to non retirement and a taxable brokerage account account. And so you got a lot of options on the table. And I would work with your financial adviser, if you trust them to walk you through the best method to invest those dollars. But man, you got a, a great problem to have and what a wonderful legacy.

[Rachel Cruz]

Does your, does your wife work, Kyle?

[Caller]

She does, she does. Yep.

[Rachel Cruz]

Okay. Yep. And, and you obviously are working.

[Caller]

Yep. Yep.

[Rachel Cruz]

I was going to say, yeah, I probably wouldn't change much unless, you know, one of you wanted to stay home and be a stay at home parent. You know, if something like that, like there's a big lifestyle shift you guys could do if you wanted. If that's like a value that you guys have, that's what, that's one beautiful gift of this money that could happen. But I definitely wouldn't change, you know, at least for you or her, you know, somebody to still be producing an income. You guys kind of living off of that for your primary source just to, there's a, there's kind of a grounding this there and then you kind of have this other fund over here that's growing, but when you want to do something big, it's it's available to you, you know, to be able to take out some money and, and enjoy it when the time comes. So that's wild, man.

[George Kamel]

They make 200 grand if they just put 2 million in there and the market does 10 this year, it just replaced their income, their whole income. That's pretty wild.

[Rachel Cruz]

I know. That's when if you hate your jobs, you know, you go do something for less money and you're good like, you know what I mean?

[George Kamel]

Like it's a freedom fund right there.

[Rachel Cruz]

To have like that still that purpose, there's something in that that's beautiful. So, wow, what an amazing testimony, you guys, of God that does.

[George Kamel]

That's how to do it right.

[Rachel Cruz]

And money doesn't change the family tree out of this idea of like, oh my gosh, we're suddenly rich. It just, it gives opportunities to do amazing things for others and your family. When people hear my story of paying off debt, they say things like, dang, that must have been so hard.

[Caller]

I could never do that.

[Rachel Cruz]

And I tell them, sure you can. It's a short term sacrifice for a long term gain. But do you know what's really hard? Working your whole life and never having

[George Kamel]

anything to show for it.

[Rachel Cruz]

Never having the long term gain gain. Just feeling broke and stressed and maxed all the time.

[George Kamel]

And sadly, that's the hard that most people choose.

[Rachel Cruz]

Listen, you're capable of transforming your situation

[George Kamel]

and living a life of freedom, but you need the right tools to do it.

[Rachel Cruz]

Like our EveryDollar budget app. In minutes, it'll build you a step

[George Kamel]

by step plan that's tailored to your money situation. And every day it finds ways you can free up extra money in your

[Caller]

budget so you can get rid of

[George Kamel]

your debt and actually build wealth. So make the choice today.

[Rachel Cruz]

Short term sacrifice, long term gain. Choose the tool to help you get it done fast.

[George Kamel]

Download the EveryDoll app and start for free today.

[Rachel Cruz]

Well, George, you know, we wish that, that we could get to every call and every question in a perfect world, but it's hard.

[George Kamel]

We live in a fallen world. We can't get to all of them 24 hours in a day.

[Rachel Cruz]

You know, we call some cities Armadillo instead of Amarillo. You know, sometimes that happens. So we're not perfect.

[George Kamel]

We're fallible creatures.

[Rachel Cruz]

We are. But here's the thing is most of our advice is consistent, right? What we talk about on this show is what it is. And for those of you listening and have been listening forever and ever, amen. You could probably answer, answer the questions just as well as me.

[George Kamel]

Or that you think you could, or

[Rachel Cruz]

you think you could. No, but, you know, that is a great thing because we are able to use technology because of that, because of so much content that is out there to feed an AI system, if you

[George Kamel]

will, language learning model, as they say.

[Rachel Cruz]

And we. Oh, thank you. And we created Ask Ramsey. So it is our own version of Ramsey AI. And you can actually go in, ask your question like you were calling the show, talking to one of us, and you will get the answer that we would say on the show. Because this has been fed, if you will, by transcripts from hundreds of these episodes. Yes. Of everything, you guys. So if you have a question about your life and your specific situation, head over to ramseysolutions.com and ask your question in the Ask Ramsey box. It's right there for you. Or if you're watching on YouTube or listening on podcasts, we'll put a link down below. But, you know, technology, you love it and you out hang, hate it. And this is a.

[George Kamel]

This is a love it.

[Rachel Cruz]

This is a love it because you're able to spread the information and help people. You know, if you're not able to. To get through. Right now, all of our lines are booked out.

[George Kamel]

And Even, like, the DMS, I go in my Instagram DMs, like, it's three paragraphs or 17 numbers. I'm like, I.

[Rachel Cruz]

Yes.

[George Kamel]

I'm like, go use Ask Ramsey. It will walk you through because it

[Rachel Cruz]

will, like, take all your numbers and do what you need. It's. It really is amazing. So again, check it [e-mail]. all right, we have another person calling from Charlotte. George. We were just there last week. That was a great event, by the way.

[George Kamel]

We had a great time. Thank you to everyone who came out.

[Rachel Cruz]

Yes. We're gonna be in Anaheim next week. George and I are end of the month.

[George Kamel]

Yeah. Oh, my gosh. It's already here.

[Rachel Cruz]

I think it's sold out. Denver. There's a crew that's gonna be there tomorrow. John Deloney, Jade Warshaw, and Ken Coleman. And then Ken Coleman, Jade Warshaw and myself are gonna be in Phoenix next week. So I think there's still some tickets to that one. I think all the other shows are sold out.

[George Kamel]

Oh, sweet. Jump on it.

[Rachel Cruz]

Yeah, go to ramseysolutions.com for tickets. So Ramsey show live plug for that. Because I see Charlotte, our board, and we had such a fun time.

[George Kamel]

And then people go, when are you coming to Charlotte? And we're like, dude, we were Just there.

[Rachel Cruz]

We were just there. I know, I know, but. But we are excited to talk to Philip, so. Hey, Philip, welcome to the show.

[Caller]

Hi, Georgia, Rachel. How are you guys doing?

[Rachel Cruz]

We're doing great. How can we help?

[Caller]

So me and my wife currently live in a mobile home here near Charlotte, and my in laws are currently we're about to receive an inheritance of $100,000. Wow. And they sat us down the other night and told us they wanted to pay off our mobile home. I was just calling in to get an answer as to whether there will be any kind of gift tax or. Or can they just, you know, put that money in their account and pay it off or.

[George Kamel]

So this is you're getting this inheritance while they're still alive? Is that the idea?

[Caller]

Well, well, my. My wife's grandmother, he's very sick. He. He's not expecting to make it.

[George Kamel]

So the inheritance is going to your wife's parents and then they want to gift it because they don't need it?

[Caller]

Yes. Yes.

[Rachel Cruz]

So is the 100. Is the $100,000, Philip, going to pay off the mobile home or they want to, in addition, pay off the mobile home?

[Caller]

Yeah, it will. Our mobile home payoff is like $31,100 somewhere around there. Okay, that would be.

[Rachel Cruz]

Yes. So are they. Sorry. Are they using the 100,000 for that, though?

[Caller]

They are.

[Rachel Cruz]

Yes, they are. Okay, so you guys would be left with about 70,000 in cash with a paid off mobile home. So. Yes, they can do that. You can, yeah. Each individual parent can give each individual child $18,000 a year without a 19.

[George Kamel]

Now, big upgrade.

[Rachel Cruz]

Is it 19?

[George Kamel]

They upped it to 19 this.

[Rachel Cruz]

This time. Okay.

[George Kamel]

For 20. 26. So that's 19.

[Rachel Cruz]

I had 18 in my head.

[George Kamel]

That's the annual gift tax excluded. And so if the in laws are married, you guys are married. That's potentially 76 grand in gift exclusions, which just means they don't have to file the gift tax form. That goes against their lifetime, you know, estate exemption. And so that you can do up to that much. Now, you guys will not owe anything in taxes. It's them that have to deal with, hey, if they give over that $76,000 threshold, they'll have to file a form. That's all.

[Caller]

Okay. Okay. Thank you.

[George Kamel]

Absolutely. So just make sure they're aware. And if they have, you know, a tax pro they work with, just say, hey, just so you guys know, if you do the full $100,000 this year, you might need to file a form for that extra. You know, 24ish grand.

[Caller]

Okay.

[Rachel Cruz]

Yeah. Philip, are you guys, do you guys have plans to move out of that home at all?

[Caller]

No, we're not. We're. We're staying. We're here for the long haul. So what?

[George Kamel]

Long haul

[Rachel Cruz]

until it's worth nothing for the foreseeable future.

[George Kamel]

Because that's the part that worries me is that mobile homes going down value.

[Rachel Cruz]

Yeah. Make sure you guys are saving on the side, Phillip, that one day, you know, if you guys. Yeah. From a value standpoint, from the, the value of the mobile home, it will start going down. So making sure that you guys have some money saved that if you need to upgrade andor go buy a house or something, you know, that you guys have, you're not, you're not building any equity right now, if you will. And that's where a lot of people build a lot of their wealth from a home perspective is in their equity in their home. So just be thinking about that on just the side that maybe you put, I don't know, maybe this, this other 70,000 away for who knows, you know, maybe a down payment down the road. So just be thinking about that. I'm so sorry. Yeah. For the loss. But I'm, I'm thankful that, yeah, you guys can put this money to good use. All right, let's head to Colton in Asheville. Hi, Colt Colton. Welcome to the show.

[Caller]

Hey, thanks for taking my call. So I've got a question about my retirement account. Basically, my financial advisor's wanting me to do something. Just doesn't make any sense to me. I was hoping I could get your advice. I worked for a company for two and a half years and during that time I went through Financial Peace University and I realized that instead of putting my retirement into a pre tax account, I should do the after tax 403. So I've got two accounts there. I don't work there anymore, but they are changing from Transamerica Retirement Solutions to some other company. And so they called me and said that like they wanted me to keep my money with Transamerica. Like Transamerica called me and so they want me to pull it out of that account and then put it into a Roth IRA with them. And I thought that sounded a little sketchy, so. So I called my advisor and he said, don't do that, but let's pull it out and put it into a normal IRA here at Edward Jones. But I'm most likely going to be going back to work with that company like in the next few weeks and it'll be a long term position. So I don't know if it even makes any sense to take it away from that company or just let them change to their new retirement solution company and keep it with them and start investing back into it.

[George Kamel]

Well, I would just hang on tight until we know what's going to happen in the next few weeks. If you go back to that job, you just reopen that 403 and keep investing. But it's not bad advice to say once you leave a job, you should do a direct rollout over to an IRA because you don't have control over that anymore. The employer doesn't want to manage this old fund. It's like keeping your stuff at your ex's house and it can be getting dinged with fees at the same time. And the IRA gives you basically unlimited options to invest where your employer plan might have 10 to 15 funds to choose from.

[Rachel Cruz]

Yeah. So, Colton, we do always suggest. Yeah. When you leave a company, you roll over your 401k or 403. A traditional IRA, that's great if it's

[George Kamel]

traditional 401k money or 430.

[Rachel Cruz]

That's true. If it was Roth, yes, that would be different. But since you may be going back there. Yeah. Instead of dealing with all that has

[George Kamel]

to do, just wait it out. If you don't go back, I would roll it over. You can do it through your advisor. You can do that on your own. There's a lot of options here, but they're not giving you bad advice. And an example is my wife worked at Ramsey for nine years. Well, when she left, we rolled over her money. She had some in traditional, some in Roth. We rolled over the Roth side to a Roth ira, rolled over the traditional side to a traditional ira, and it was direct rollover. So we didn't see the money. It was not in our bank account. We moved it directly to avoid any taxes.

[Rachel Cruz]

Yep. So good. Well, yep, Hope that helps, Colton. And yeah, good luck with all the transitions. I hope you kind of get settled and feel good about where you end up.

[Caller]

Sam.

[Dave Ramsey]

All right, let's cut to the chase. It's easy to get discouraged about crazy house prices and interest rates. But when you have the right real estate agent to help you buy and sell the right way, you'll have confidence to make smart decisions. Ramsey trusted agents aren't just experts who guide you through buying or selling. They're people you can trust to have your back from the first call to closing day. Find a Ramsey trusted agent near [e-mail] agent. That's ramseysolutions.com.

[Rachel Cruz]

Our scripture of the day comes from 1st Peter 4:8. Above all letters, love each other deeply because love covers a multitude of sins. Tina Fey said there are no mistakes, only opportunities. Thank you. Tina Fey. What a. What an original.

[George Kamel]

You know, who knew she's a poet and a comedian.

[Rachel Cruz]

We love Tina Fey and Amy Poehler. All right, let's head to Phoenix where we're going to be next week. Hi, Emily, welcome to the show.

[Caller]

Hi.

How are you guys doing?

[Rachel Cruz]

We're doing great. What are you doing next Tuesday night, Emily? Emily?

[Caller]

I'm not sure. Probably working.

[Rachel Cruz]

Probably working. Okay, well, we'll have Christian pick up at the end of the call and if you are open, I bet we, I think, yeah, we can snag you two seats to our Ramsey show live.

[George Kamel]

It's at the Mesa Art Center, April 21, 7pm we can even have you at VIP at 5 if you're free.

[Caller]

Oh my goodness, that would be amazing.

[George Kamel]

Okay.

[Rachel Cruz]

Okay, stay on the line. Christian will pick up. We'll get you some.

[George Kamel]

Rachel makes dreams come true.

[Rachel Cruz]

Hey, Emily, I did this two weeks ago. John Deloney and I were hosting and a guy called in from Charlotte and I said we're gonna be there next week in Charlotte. And he was like, really? So I got him two tickets, met him in the signing line. He said, I said, I'm the guy you gave the tickets to. So Emily, I hope I meet you next week.

[George Kamel]

Outrageous generosity.

[Rachel Cruz]

Yes. George won't be there, but Jade Wars Sean, Ken Coleman won't be, but. All right, Emily, how can we help today?

[Caller]

Okay, so right now I'm a massage therapist. I make about 58,000 annually. But I'm currently $65,000 in debt right now. The last six months we've been staying at my mother in law's house. Just save some money and get caught up. But I just recently found out that there's the house because it's an older house so it's covered in like mold. So we're trying to, we're trying to get out as soon as possible. But my main concern, so in 2018 I went in with my family and we bought a multi generational house. But then of course things ended up badly. So we all like two people are living there currently, but the other we all left. But my main concern is because I was, I brought it up to get refinanced to possibly them buying me out. But they're just not budging at all or even to like if we could sell the home and each split it the three ways. But yeah, they're just not budging at all. So I'm just kind of. I don't know what I can do.

[Rachel Cruz]

Is that the $65,000 in debt is the home situation or is that above?

[Caller]

Yeah, that's a different thing. That. That's my own. Some is in 43, I think is in credit cards, a $9,000 personal loan. And then also I believe it's 13,000 for my car loan.

[Rachel Cruz]

Okay.

[George Kamel]

Was there an agreement when you guys bought this home, how this all works?

[Caller]

Yeah, we didn't sign it on paper, but essentially we're supposed to get the. Get the home. And then the next person was like there was three different families and then the next person. We were going to use the equity for another home. And then that one would build equity and we'd get another. So essentially we thought we were going to have three different homes, but it didn't end up panning out that way.

[George Kamel]

So you guys are just riding on vibes right now. And it's just. Well, we don't want to do that. And we didn't sign anything.

[Caller]

Yes, exactly. And like they won't budge. Like they. It's like I'm trying to get out of it.

[George Kamel]

And just how much do you own of this home? What percentage?

[Caller]

And there's still 250,000 left. The home currently is 425,000.

[Rachel Cruz]

And what's the plan for the people that are living there now? What are they saying?

[Caller]

You're just saying it's mainly my mother. She just doesn't. She thinks it should be a forever home. That all the. Because I have four sisters. So it's like all of us.

[George Kamel]

You ain't living forever in a mold covered home, I'll tell you that much. I mean, it's going to crush her health. Does she not understand that?

[Caller]

No. So it's currently like my mother in law's is the one mother in law has the mold.

[Rachel Cruz]

Yeah, she's. The other home is different. Okay, gotcha. Okay. And you're married. Emily. How much do you guys bring home a month, you and your husband combined?

[Caller]

I make 58. I believe he makes 50 as well. But right now he's like, our finances are separate. He's trying to pay off his stuff while we're at his mother's. And then I'm trying to pay off mine.

[Rachel Cruz]

Okay, how much. What kind of debt does he have?

[Caller]

He also has a car loan himself. And then he also has, I believe, $9,000 in credit card okay, why are

[Rachel Cruz]

you guys doing it separately?

[Caller]

I.

That's always been that way. I don't think we've ever combined money.

[Rachel Cruz]

How long have you guys been married?

[Caller]

We've been married 20, 23, but we've been together for 13 years.

[Rachel Cruz]

Okay, well, what I would probably do if I were you guys, I'm trying to think. Your cars, loans, everything.

[Caller]

What.

[Rachel Cruz]

What did you rack up $43,000 of credit card debt with?

[Caller]

Well, I have two small children, and it was just like, one thing after another. He did lose his job for, like, two years, so I was just trying to.

[Rachel Cruz]

So he lost his job for two years. Your. Your ex husband or your current husband? Husband.

[Caller]

Oh, my current.

[Rachel Cruz]

And you help float his financial life. Yes, but we're not combining finances. Only when he needs help.

[Caller]

Yeah.

[Rachel Cruz]

Okay. So what I would do, Emily, is this is a bigger question. It's more of a shift in the relationship. But what. We find couples who work together and say, hey, this is our household income. Here are our household bills. Your debt is my debt. Like, we're. We're in this financial life together. Together, they win faster, they get out of debt faster, they build wealth faster. When you're trying to do your own thing, it's going to take you both longer. But when you have synergy, not only from a mathematical perspective, but also a teamwork perspective, it does. It just goes so much faster. So that's a really big conversation because you guys have done your own thing for about 15 years with money. But what I would do, I would. I would really. Yeah. I would push you guys to combine and work together, and you guys list out your debts together. You know, like his. His $9,000 in credit card debt, your $9,000 personal loan together. You guys, like, make a plan and say, hey, what if we lived on 60 grand and we had 40, $45,000, you know, this year to pay off debt, you know, what could we knock out? And you start together doing a plan, and you guys could be out of debt in two, two and a half years if you really, really focused on this. But you couldn't do that separately. You would be slowly doing it because you're paying some bills over here. He's paying some.

[George Kamel]

So it's all disjointed right now.

[Rachel Cruz]

Yes. So I would. Yeah, I. I would have a. A relationship conversation and combine your money.

[Caller]

Got it.

[George Kamel]

And what is your share of the house that you co own? How much would you actually get if they bought you out?

[Caller]

I'm really just asking. I'm just a 43,000 for credit card. I own a third of the mortgage and the deed.

[George Kamel]

Yes, you own a third of the house. If they were to buy you out, how much would you net?

[Caller]

I just wanted the 43 is what I just asked for. I don't. I'm not sure.

[George Kamel]

You just want the 43 even though you own more of the it.

[Caller]

Exactly.

[George Kamel]

Okay.

[Caller]

I just want to get out of what.

[George Kamel]

I mean, the one thing you can do is to get a real estate attorney, and you can do something called a partition action where a court can order and force the sale of the home. But you need to kind of get some details down. What's the home actually worth? Get the home appraised, and then what's your share? How much are you wanting? And then present a formal written buyout offer. Because right now, nothing has been written down. It's all just messy, dysfunctional family dynamics.

[Rachel Cruz]

And it'll continue to get messier as time goes on.

[George Kamel]

Honestly, Emily, So organization is your best friend right now. That includes getting on the same page with your husband, combining the finances, attacking your debts as one. That will help all of this.

[Caller]

Well, thank you so much. Thank you.

[George Kamel]

Absolutely.

[Rachel Cruz]

Absolutely. Emily, thanks for the call. Yes, thank you. Yeah, that's. Yeah, hold on the line, too. Emily, if you're still there and we can see if we get you tickets to Phoenix and bring your husband, this

[George Kamel]

would be great way to get on the. You know what? Ask your question. Hey, our finances are still separate. Here's why. And have the jury weigh in.

[Rachel Cruz]

Yeah, and have him there, too. We can all talk it out in the Ramsey show live. That's why we love this event. But it was a. Ken, Jade and

[George Kamel]

Rachel can solve pretty much any quandary.

[Rachel Cruz]

So kind.

[George Kamel]

I believe in you guys, you know,

[Rachel Cruz]

but this is the. This is the warning call of when people commingle from a family perspective. Real estate, they have this dream that, hey, let's buy a piece of land, we'll plot it out, and everyone can build a home. Well, when one person.

[George Kamel]

We'll have seven homes one day.

[Rachel Cruz]

And when one person wants to move out house the of estate because the spouse, you know, got a job and they got to sell the home to a stranger, it messes up the whole thing. Or. Or this. You know, we're all going to go in on a home together, and you can have this equity. I'll have this, and it's going to be great.

[George Kamel]

Will it, though?

[Rachel Cruz]

It does. Yeah.

[George Kamel]

It.

[Rachel Cruz]

It rarely works. You guys.

[George Kamel]

I can count on zero fingers how many calls we've got. And we're like, this was the biggest blessing in my life that I co owned it with my mother in law, my sister.

[Rachel Cruz]

I know.

[George Kamel]

And now three of them want out, one of them doesn't.

[Rachel Cruz]

I mean, it's a nightmare. It's a tangled nightmare. And so, yep, just a, just a warning you guys, for all of that. But George, great show. Thanks to everyone in the booth and thank you everyone for listening. And remember, there's ultimately only one way to financial peace and that's to walk daily with the Prince of peace, Christ Jesus.