You Can’t Outearn Your Stupidity

Summary

The Ramsey Show – "You Can’t Outearn Your Stupidity"

Date: October 22, 2025
Host: George Campbell (with Rachel Cruze)
Focus: Real talk on why wealth isn’t just about making more, but making smart choices. Listeners call in with money mistakes and tough decisions, and the Ramsey team answers with honesty, humor, and clear action steps.

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Episode Overview

This episode hammers home the central Ramsey Network belief: No matter your income, you can’t out-earn bad financial decisions. Through live calls, George Campbell and Rachel Cruze respond to real-life financial dilemmas—emphasizing the importance of behavior over salary, urgent debt payoff, spending discipline, and setting aside emotion and “normal” habits to build real wealth.

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Key Discussion Points & Insights

1. Credit Card Rewards: More Harm Than Good?

[00:45-08:57]

• Caller (Miguel, Dallas): Paid off credit cards monthly for years, uses them for travel points, took $4,000 in "free" flights after heavy use.
• George’s Take:
  • "Is there a better way? Could you optimize if you used your own money instead of someone else's…?" [02:10]
  • Points out you have to spend "a couple hundred grand" for $4,000 of points—subtle overspending sneaks in.
• Rachel’s Insight:
  • "When you use a credit card, there is zero emotional connection to your money…subconsciously, you end up spending more." [04:38]
  • Raises moral concern: points and "free" rewards are funded by people trapped in debt; opting out of this system is a higher-value choice.
• Memorable Moment:
  • Rachel: "There's just something so freeing about it. When I see banks and all the things, just know too much." [06:41]
• Conclusion:
  • Try a "debit card-only" experiment for a year—see if you actually spend less and "reward" yourself with real savings.

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2. Career Anxiety and Emergency Funds

[10:43-19:42]

• Caller (Andrew, Cleveland): Unhappy in corporate finance, fears getting fired, wants to become a nurse but can't start school soon.
• Rachel’s Coaching:
  • Be proactive with your current employer; seek a role change rather than waiting for a pink slip.
  • "Can you just do us a favor and be happy? Like, bet on yourself right now…" [16:49]
• George’s Guidance:
  • Don't fall into self-fulfilling prophecy—if you believe you're about to lose your job, it can become true.
  • Use current salary to stack up emergency savings before making a big career leap.
  • Use the upcoming transition as motivation: “Let the nursing school dream fuel you to get good at your job for the next few months…” [17:00]
• Free Resource: Ken Coleman’s Find the Work You're Wired to Do offered.

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3. Young Couples and Living Together

[21:48-28:45]

• Caller (Matthew, Louisville): Wants to move into own apartment with girlfriend (both 19, limited support systems).
• Rachel’s Advice:
  • Advocates for the old-fashioned sequence: engagement → marriage → move in together, based on research and observed outcomes.
  • "You add in all these elements of life when you're dating that almost feel like you're playing house…" [25:05]
  • Pump the brakes: independence, building community, and clear relationships are linked to longer-term stability.
  • Suggest roommates for both to foster independence, not codependence.

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4. 529 Plans vs. Mutual Funds for Kids’ College

[28:46-31:20]

• Caller (Tammy, Detroit): Unsure whether to use only 529 plans for kids’ college savings.
• Rachel:
  • Split strategy is understandable, college is changing; can adjust contributions later based on kids’ paths.
• George:
  • New Secure Act 2.0 lets you roll up to $35k from 529 into a Roth IRA for your child if unused.

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5. "Stupid Tax": Escaping Upside Down Car Loans

[33:26-42:26]

• Caller (Cole, Waco): $33k in debt, $29k upside down on a car, only makes $33k/yr, no savings.
• Rachel:
  • “I’d be in a little bit of panic mode to get rid of that car.” [37:47]
  • Recommends private sale, credit union loan for gap, buy a cheap beater car.
• George:
  • Urges to max out side hustles (detailing cars), tap local networks, and cut expenses to the bone.
  • “Start detailing so much you have to quit your job because you’re making too much.” [42:05]

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6. Should I Rent My House to Pay Off My Mortgage Faster?

[44:19-52:00]

• Caller (Andy, Nashville): Considering moving into his shop house and renting main home to pay off mortgage faster.
• George/Rachel:
  • Not urgent or necessary; with $130k income and $1,500/mo mortgage, he’s not under pressure.
  • Cautions about hassle of being a landlord and relational risks with girlfriend who doesn’t want to move.
  • Suggests instead make extra payments on the mortgage and revisit after life circumstances stabilize.

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7. Joining Finances Before Marriage

[54:40-60:44]

• Caller (Jack, Dallas): Engaged, both have debts (car loan, law school), prepping for financial merge.
• Rachel:
  • Keep finances and debts separate until wedding.
  • Pushes to pay down car loan aggressively before marriage.
• George:
  • “The goal should be not go into any more debt—no debt for wedding or honeymoon.” [56:37]
  • After marriage, combine finances, use debt snowball, and knock out debt as a team.

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8. UTMA/UGMA vs. 529 for Kids' Savings

[60:44-64:02]

• Caller (Emily, Atlanta): Should she use a UTMA/UGMA account for her four-month-old?
• George:
  • Cautions against UTMA/UGMA—child gains full control at 18; prefers parents maintain control with brokerage for other goals, and 529 for college.
• Rachel:
  • Suggests Roth IRA once the child has earned income, or simply cash-flow cars/gifts later.

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9. Business Failure or Keep Grinding?

[77:15-85:37]

• Caller (Sam): Construction business $70k in business debt + $40k personal debt, struggling to grow, wife earns $120k.
• George:
  • “You can always start a business later… There’s nothing wrong in hanging up the hat right now to do what’s right for your family…”
  • If you stick with business, absolutely, positively stop taking on more debt. Go scorched earth on personal spending—live like you make $50k.
• Rachel:
  • “If you want to keep the business, cut up the credit cards, be done with the debt when it comes to the business.” [85:44]

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10. Can’t Get Ahead on $75k in Hawaii – Move or Fight?

[87:15-94:28]

• Caller (Samantha, Honolulu): $75k income, one-bedroom home, food stamps, $2k/month on childcare and private school, pondering a move to the mainland.
• George:
  • “There has to be some give and take… You’re going to feel bad living in a one-bedroom apartment, living on food stamps. So we have to make some sacrifices now.”
  • Pushes to boost income, possibly moving, if local income isn’t enough.
• Rachel:
  • “Rent’s not the problem. It’s $2,000 a month going to kids so you can work part time; if you upped your income, maybe commensurately.”

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11. Doctor Family Overwhelmed by $1M in Debt

[117:32-123:44]

• Caller (Jenna, Orlando): Over $1 million in debt (half mortgage, half med school loan), trying to balance saving and debt payments.
• Rachel:
  • “In five years, you could have no debt, but you have to do it.” [123:32]
  • Pay off the car and credit card tonight with savings; use remaining savings for student loans; stop all saving/investing, live on $70-100k/year and plow rest into loans and mortgage.
• George:
  • Highlights the power of focus: you’re trying to make progress on too many good things at once—go all in on the snowball, not just minimums.

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12. Is a 30-Year Mortgage Ever Justified? (Especially in Expensive Markets)

[66:19-75:18]

• Caller (Patrick, San Diego): Struggling to buy with a 15-year, wants to do a 30-year due to high prices.
• George/Rachel:
  • The math and discipline don’t change with geography. If you get a 30-year, odds are very slim you’ll actually pay it off early. Stick with 25% after-tax on a 15-year if at all possible. Renting can still make sense.
• Quote:
  • Rachel: “You’re not exempt from math just because of where you live.” [67:07]

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13. Marriage, Divorce & Equity Buyouts

[100:40-106:21]

• Caller (Ryan, Charlotte): Facing a separation, wife wants $150k for her share of home equity.
• George:
  • Cautions against cashing out IRA to pay ex; prefer selling property or structured buyout.

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14. Midlife Career Change—Is it Worth the Cost?

[107:57-115:58]

• Caller (Jim, Denver): Wife is considering quitting $85k PM job to become a midwife (school costs, lost income).
• Rachel:
  • “The only thing I don’t like about the equation is just that she’s running from something she doesn’t like to something new… Unless it’s a die-hard passion, I would stick to project management.” [111:46]

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Notable Quotes & Moments

• Rachel on Credit Cards:

  "I don’t want a free flight off the backs of people who are struggling and hurting." [05:41]

• George on Self-Fulfilling Prophecy:

  "It sort of makes the relationship go down, doesn’t it? It’s a self-fulfilling prophecy." [18:04]

• Rachel on Doctor/Med School Debt:

  "If you want a different outcome, you have to do something different." [123:44]

• George on Multitasking Finances:

  "You’re attempting to do a lot of good things all at once, instead of just putting all of your focus and intensity toward those debts using the debt snowball." [122:24]

• Rachel on Moving in Before Marriage:

  "Couples that go in an order that’s a little bit old school actually have higher levels of success… There’s a weird commitment thing that happens when you live with someone you’re not married to." [25:05]

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Timestamps for Key Segments

• Credit cards vs. debit discipline: 00:45–08:57
• Career anxiety & emergency funds: 10:43–19:42
• Young couples & cohabitation: 21:48–28:45
• College savings (529 vs. mutual): 28:46–31:20
• Upside-down car loans: 33:26–42:26
• Renting home to pay off mortgage: 44:19–52:00
• Engaged couples & merging finances: 54:40–60:44
• Kids’ investment accounts: 60:44–64:02
• Business, debt, and relationships: 77:15–85:37
• Affordability in Hawaii: 87:15–94:28
• $1M debt (doctor couple): 117:32–123:44

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Episode Tone & Takeaways

• Tone: Encouraging, firm, practical, often humorous—never sugarcoated
• Message: You can’t fix money problems by making more money—you have to make better decisions. Real financial peace requires discipline, living counter-cultural, and focusing on what’s within your control.
• Action Steps:
  • Use debit, not credit, to connect emotionally with your money
  • Attack debt with urgency
  • Delay gratification for long-term wealth
  • Make career and housing decisions with clarity, not just comfort or panic
  • Communicate deeply with your partner before combining finances or making major moves

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Closing Thoughts

This episode of The Ramsey Show reinforces that “normal is broke,” and extraordinary financial results demand extraordinary (sometimes very uncomfortable) choices. No amount of income can erase the impact of undisciplined spending, debt, or ignoring tough realities.

Transcript

[Sponsor/Announcer]

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

[George Campbell]

Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey network and the Fairwinds credit union studio, this is the Ramsey Show. I'm George Camel, joined by my pal and co host on Smart Money Happy Hour, Another great show on the Ramsey Network. Rachel Cruz is here with us as well. We're here to answer your calls about life and money. The number is 888-825-5225. Miguel kicks us off in Dallas, Texas. What's going on, Miguel?

[Caller]

Hey, George. How you doing?

[George Campbell]

Doing great. How can we help today?

[Caller]

Yeah. Hey, so, you know, I've been following you guys for quite a bit sometime now. Kind of wish I'd started earlier like most people, but 100% same. Here we are. You know, I'm working, thankfully. But I do have a question because I listen to Dave say all the time how credit cards are the devil and they are the worst thing that one person can use. And I agree with all of that. Except. So a really long time ago, kind of like Dave, at a very young age, I did bankruptcy. And since then, I learned to live within my means. But I've had a lot of credit cards since then. I just paid them off at the end of the month. I don't have any credit card debt I haven't had for over 10, 15 years now.

[George Campbell]

Good.

[Caller]

So my question is, you know, if I pay off my credit cards at the end of the month and I am using them a lot so that I can get, like, you know, free tickets to travel with my family and stuff like that, would you still recommend that I don't do that? If so, why? Or is it okay for me to continue using my credit cards as long as I pay them off?

[George Campbell]

Well, as of this recording, it's still a free country. So you are free to do as you wish, Miguel. And so is it okay? Sure, if it's working for you, go for it. But the reason you called in, there's something inside of you that maybe is thinking, is there a better way? Could I be doing better? Could I optimize if I use my own money instead of using someone else's and paying it back every month later on? Sure, you could make the argument in hypotheticals all day long, but the. The real thing here is you're using it to get free travel, correct? Did I hear that right?

[Caller]

Yeah, correct.

[George Campbell]

And so have you actually added up what it would have cost you if you had Paid cash. Done your own research, Found the right flights that work for your family. Like, okay, I got. I got $600 in value out of this, and it cost me 200 for the card for the year. Have you done the math on that?

[Caller]

Yeah, I mean, it definitely pays off. Like, for example, last year I took my family to Europe and I completely paid for our flight tickets. It was $4,000 worth, just with points. I had to pay a little bit off.

[George Campbell]

How much did you spend? Oh, you said you had to pay it off the balance the next month.

[Caller]

No, no, that. That was just paid off with points.

[George Campbell]

Okay, you said you owed a little bit still for the flights is what you meant.

[Caller]

Okay, well, yeah, they make you pay, like, some taxes, but it was like $200 or something like that.

[George Campbell]

And then how much did you have to spend in order to earn that many rewards, that many points? This sounds like it was a few years of spending.

[Caller]

Yeah, I haven't done the math, but it's probably a couple hundred grand or something like that.

[George Campbell]

There we go. Ding, ding, ding. So, Miguel, the truth is you could have saved up four grand out of a few hundred grand that slipped through your hands. Am I wrong?

[Caller]

Well, okay, so here's the thing. I use my credit cards for everything. I pay my bills. I pay, you know, everything that doesn't charge me a fee for using a credit card.

[George Campbell]

Yeah, a lot of those bills will charge you 3, 4% for just running that charge me.

[Caller]

If they charge me even a penny, I won't use my credit card. So I don't pay my mortgage or anything like that with my credit cards. But there are actually a lot of things that I can pay with my credit card. I do my groc with my credit card, all of my regular spending. And that adds up to quite a bit. You know, throughout the years, you've impressed Rachel.

[George Campbell]

Rachel, if you could see her face, she is so impressed. No, she's not.

[Rachel Cruz]

I'm just sighing. Well, here's the thing, Miguel. A couple of things. Number one, sure, studies have been done and it has been proven mathematically that you do actually end up spending more when you're spending it with a credit card. And it may just be groceries and all the things, but because there is zero emotional connection to your money, subconsciously, naturally, without you even realizing it, you end up spending more. So even with groceries, for instance, we've talked to people on the show, and they say, oh, I just would use my credit card for the things that we needed. You know, the bills and groceries and gas and then we have heard countless times, haven't we, George? People say, actually we ended up going without a credit card for six months to see if we could save money. And we actually ended up spending less. We don't even know how that happened. And I'm like, well. Cause I know. Because there's no emotional. So you don't even realize the amount of money that you're out actually overspending. So over years of spending hundreds of thousands of dollars on this credit card to get $4,000 of flights, what could have been saved actually may have been even more than 4,000 with the subconscious spending that you're doing and not even realizing it. So that's one thing. And then number two, Miguel, like. And again, this is a personal kind of conviction for me. And it may not be for you. I'm not saying it has to be for everyone. But what is. What's so frustrating to me. And I think because we're in this line of work and George and I talk to people every single day who do have credit card debt. And these banks and this whole debt industry has screwed American people. They have. They have not helped people, they have hurt people. That's why we have a job. And because of that, the people that are hurting, the single moms that are calling in that have $11,000 in credit card debt and they're trying to get out, or it's the families who lost, like, people that are struggling and they are in credit card debt and they're the ones paying the fees, they're the ones paying the interest. They're the ones making the bank rich to get people like you to get free points and free flights. So off the. I mean, it kind of feels like off the backs of people who are struggling and hurting. I don't want a free flight out of that. I have the ability to save up, work hard myself, and not have to deal with this industry at all. And there's. And I have no bill at the end of the month. You know what I mean? Like, I pay for my groceries. Sometimes I do instacart and have them delivered.

[Caller]

And then it's done.

[Rachel Cruz]

And then I'm done. And I'm like, I don't have to. I don't have to play this game with them. And so there's just something so freeing about it. And again, that may not be everyone's conviction, but when I see mass, I see banks and I see their bill. All the things just know too much.

[George Campbell]

Yeah.

[Rachel Cruz]

And I'm just like, man, they have y' all have screwed over people. And people are giving their hard earned income to these places, to these industries, and they're not allowing to be able to help themselves, you know, and so I'm like, I don't. I don't want it. I don't want it. I will save up. I'm booking a girls trip, actually, today. I was telling George I was gonna buy some tickets, and I'm like, I will go on Southwest and buy my. I think it's $196 one way, you know, to get. And I'm like, I will budget for that, like all day, every day, and I don't have to worry about it. So there. I don't know, Miguel. It's.

[George Campbell]

Here's the experiment. This is fun. So let's say you spent $200,000 to get 4, right? That's 2% CA. Cash back fair. Here's the experiment. Use your debit card for a year and see if you spent 190 grand instead of 200. Well, that just saved you 10 grand. So you just gave yourself $10,000 in rewards by not spending more. So that's. That's the, the thing that I can't help you figure out on paper. That's something that you need to explore for yourself. And again, there's the. The moral side. I cover eight objections of why people won't stop using their cards in my book, Breaking Free from Broke. So how about this? I'll send you a copy, you read the chapter and then call a fun discussion.

[Caller]

Yeah, no, look. And I totally agree with you guys as far as.

[George Campbell]

Hello.

[Rachel Cruz]

I know you don't. Miguel.

[George Campbell]

Rachel was laughing because you don't agree.

[Rachel Cruz]

You don't agree. You're charging those credit cards up. No, no, we are great.

[George Campbell]

We're great.

[Caller]

Especially with the part that, you know, there's, you know, you don't feel the money coming out of you, you know, when you're using a credit card. So my question is, I wish we.

[George Campbell]

Had time for more. Miguel, you burnt out the clock telling us about all the rewards you got going to Europe, my friend. But hey, call us back and hang on the line. I'll send you a copy of Breaking Free from Broke. I think it will enlighten you with all the stats.

[Sponsor/Announcer]

Foreign.

[George Campbell]

This show is sponsored by BetterHelp. I have awesome friends, I got a great faith, and I have an amazing wife and family. I've also got two PhDs worth of information about how to be well. And yet the times that I've spent with great therapists over the years have made all the difference for me. The right therapist can change everything about your mental, emotional, and relational health. And this month, my friends at Better Help are shining the spotlight on the therapists, the people who truly make world a better place. With over 30,000 therapists, BetterHelp is the largest online therapy provider in the world. And BetterHelp works. They have an average rating of 4.9 out of 5. They work. Plus, BetterHelp is totally online, so it's easy to fit into your schedule. To get started, just answer a few simple questions, and BetterHelp will connect you with a licensed therapist. And if it's not the right fit, you can switch at any time for no extra cost. This month, we celebrate the therapists who've helped millions of people take the next right step. If you're ready to find the right therapist for you, BetterHelp can help you start that journey. Visit betterhelp.com Ramsey to get 10% off your first month. That's BetterHelp. H-E-L-P.com Ramsey Andrew's up next in Cleveland. What's going on, Andrew?

[Caller]

Hey. How are you?

[George Campbell]

Good.

[Caller]

So my question is, what should I prioritize? I'm currently employed. I work in corporate finance, but the job's unstable. I. I've been in the field for a few years now and just come to realize it's not the career for me and I need to make a change. I was thinking about going into nursing, but I wouldn't be able to start a program probably till summer. So given the unstable job situation, I'm not sure if I should prioritize building my emergency fund to cover the unemployment period or having to work at a severely reduced income or. I still have $8,000 on my car I need to payoff over the next few years.

[Rachel Cruz]

Okay, what. What's causing it to be unstable?

[Caller]

I'm just not very good at it.

[Rachel Cruz]

And, you know, oh, you're scared you may get, like. You may get like a. I hear you. I hear you. Have you had some, like, formal discussions with your leaders and stuff, like, written up and that kind of thing, if that, you know, it's probably coming, but.

[Caller]

I feel like it's coming.

[Rachel Cruz]

Okay, okay. That's fair.

[George Campbell]

What kind of work is it?

[Caller]

You know, corporate budgeting, forecasting? I used to have been in it for a few years. Used to be good at it, but I guess the last two years. Covid, I've not become good at it or I've just reached roles that are too senior for my Skillset and you.

[George Campbell]

Don'T enjoy it either, which means you're really not going to try to get better at it when you hate it. Okay. Is there something else in that field?

[Caller]

I do my best and I put in a ton of hours, but it just doesn't seem to help.

[Rachel Cruz]

What are you making right now, Andrew? Doing that?

[Caller]

Yeah, like 110.

[Rachel Cruz]

Okay. Is there a role you could take? I don't know if you want to stay at that company or a different company that at least is a little bit more enjoyable. You may take a little bit of a pay cut if it's less of a senior role just to get you in a place where at least you're making in an income you can save for nursing school and, like, can actually float you through some of the things you want to do in the future.

[Caller]

Yeah, I would like to be able to do that. I just don't know if it's going to be an option, you know, if this role doesn't work out, if they'll let me take something more junior at the current company where they'll just, you know, cut me off and then I'll have to, you know, try to just find something in the open job market. I have been looking, but had a couple interviews, but no offers.

[Rachel Cruz]

Okay. How old are you?

[Caller]

39.

[Rachel Cruz]

39. Okay. And how long have you been doing this?

[Caller]

Like seven years.

[Rachel Cruz]

Okay.

[George Campbell]

Are you married?

[Caller]

You soon enjoy it? No. Single, no children.

[George Campbell]

Okay.

[Caller]

I'd like to do those things, which is why I'm trying to figure out a way to reset my career so I can get back on track in life.

[George Campbell]

Yeah. It sounds like there's a lot behind this. It sounds like you're like Eeyore is your spirit animal right now, and you're just down and out. I mean, you got a bunch of debt. You don't like the job. Does it just feel like you're ready for a life change?

[Caller]

Yeah, you know, other than the car, I just have a mortgage payment which is like 1400amonth. And, you know, luckily, living in the Midwest, it's a little cheaper than the coast.

[George Campbell]

Yeah. So all you have is the 8,000 on the car loan and you have What's. What's left on the car loan. You have 8,000 in savings?

[Caller]

Yeah, 8,000. 8,000. And I currently have 23k saved.

[George Campbell]

Oh, wonderful.

[Rachel Cruz]

That's great. Okay. How much is nursing school? Andrew, how much is nursing school?

[Caller]

I think it's about 20k a year. I do have 11 months left on my GI bill. That would Cover half of it. And most programs are just under two years, so wouldn't cover all of it, but.

[George Campbell]

So 20k is what you need, 70% of it.

[Rachel Cruz]

Yeah.

[Caller]

You know, like I said, I wouldn't be able to start the nursing program probably till the summer.

[Rachel Cruz]

Why, why not January?

[Caller]

You have to pass an exam and I have to do some prereqs and it's just not enough time.

[Rachel Cruz]

Okay. So. Yeah, you've done your research. I mean, at least you kind of know a pathway. So the GI bill could still kick in and it would take. You said it would pay for almost half of it.

[Caller]

Yeah. So that's. Once I get in the program, I'm more worried about, like, how I cover my living expenses or prioritize things between possibly losing my job, probably like December ish. To starting school in May or June.

[Rachel Cruz]

Yeah, I mean, I don't know if nursing school, you're probably going to have to have classes during the day. I mean, I have a feeling it's going to be pretty time consuming.

[Caller]

Yeah, it's a little full time.

[George Campbell]

Could you work part time?

[Rachel Cruz]

Work part time somewhere. Work full time. Find a position. Position and then see if you can scale back when you start school.

[Caller]

Okay. Yeah, I can work part time or.

[Rachel Cruz]

Even in the medical field. Andrew, is there anything from like an administrative standpoint with forecasting budgets and helping students? Yeah, something just to at least kind of get your foot in the door.

[Caller]

I was gonna. I've been looking for project management jobs because I have that certification and I thought HR would be lower. Stressful. Interesting. Even though pay is not amazing, but that's kind of where I've been looking so far. Just like I said, I've had some interviews, but no offers.

[George Campbell]

Well, I would get some facts because right now it's a lot of unknowns and it feels like, man, why even go down this road? I would at least start the conversation with my leaders and say, hey, is there a different role here that would be better suited for before they start knocking on your door saying, hey, man, you got to get out of here. So I would start being a little more proactive about it. I would pay off the car today and then stack up that emergency fund back up and then start saving up for nursing school in the meantime while you have this great income.

[Rachel Cruz]

You know, that's a good point, George, because I do wonder if you can get a different role and at least have again, some level of high income. I mean, even if you go down to 90 to at least be working until the summer, you Know what I mean? And be making that great of an income. You could save up so much money. That could help at least cash flow while you're working part time during nursing. But being proactive may be great and you may kind of hate it, but you also know it's, you're going to be, you're going to leave in the summer. So you're like, okay, it's temporary. Yes, that's, it's 10 months, nine months, eight months.

[Caller]

Yeah, I'm just, I'm just worried I'm not going to make it to like the summer. So my company at your one year mark, you can switch roles. And I reached that in February.

[Rachel Cruz]

I know, but be proactive. Be proactive.

[George Campbell]

Can you just do us a favor and be happy like bed on yourself.

[Rachel Cruz]

Right now that you want to earn a great income and you want to serve and help because in your head, you know, it's getting me to nursing school, what I really want to do.

[George Campbell]

Yes, that's what I'm thinking. Let the nursing school dream fuel you to get good at your job for the next few months so that you can keep it until the summer. Do you see where we're going with this fair? It's just a temporary sacrifice to fake it, put a smile on and go, I know what I'm doing. And then all of a sudden they go, man, Andrew really knows what he's doing over there. He's having fun.

[Rachel Cruz]

Andrew, do you have like hobbies that you love? Good. Do you have good guy friends around you?

[Caller]

Yeah, I play in a couple local men's adult hockey leagues. I'm an avid runner. I ski.

[Rachel Cruz]

Oh, great.

[George Campbell]

Well rounded guy.

[Rachel Cruz]

Yeah, love that. I'm glad that, yeah, there's like a thing to be doing that's fun for you and gives you life and joy. Love it. Okay, perfect.

[George Campbell]

I think we have a game plan here.

[Rachel Cruz]

That's what I would do if I were you, Andrew. I'd be proactive. And remember, you gotta just get through the nine months.

[George Campbell]

We don't want a gap in income. And you gotta figure out how you're.

[Rachel Cruz]

Gonna have a good job. And you have your, your foot's in the door. I mean you. And it's a great income. I mean average salary in America is like 68,000. So you're well above that. So you're doing good.

[Caller]

Better than most people.

[Rachel Cruz]

Yeah. So. So stick with it.

[Caller]

Try not to lose it.

[George Campbell]

Yeah, but it's kind of like in a relationship if you kind of have this attitude like it's all going to go down. It sort of makes the relationship go down, doesn't it? It's a self fulfilling prophecy.

[Caller]

Yeah.

[George Campbell]

And that's what I'm worried about with your job. How much of this is in your head. And they go, man, it seems like Andrew's heart's really not in it. Should probably get rid of that guy. Versus a guy who shows up, does his work well, has a smile on his face. And again you clock out at you know, 5:00pm and go home and go to hockey. You can still live your life and enjoy it, but I think that's going to help your. It's going to, if you fake it, it'll sort of make you have a better attitude towards all of this. Especially when you know this dream is right on the other side.

[Caller]

It's not like I haven't been trying to do well but I've been getting feedback.

I haven't.

It's just not been formally documented. But yeah, I've been working like 1012 hour days the last few months.

[George Campbell]

Goodness. Is that normal around there or is this you trying to keep up?

[Caller]

It's me trying to keep up. And it's our budgeting season so everyone's having to put in longer hours. Yeah, kind of both.

[Rachel Cruz]

Yeah. And I think if you raise your hand with some like, of that self awareness of like, hey, I realize I'm not cut, I'm not cutting it. Which is it, which is a shot to the ego. Like that's not fun. You know. No one likes to hear that when you don't feel like you're winning in a role. So finding something that you can win at, at least you may not love it, it may not be your life's passion, but at least you have the skill set and the talent around it. I. Andrew, if you hold on the line, I do want to give you Ken Coleman's book Find the Work youk're Wired to do. Because I know your, your direction towards nursing, which I think is awesome. But even this quiz may kind of, you know, trigger something in you to realize like, oh my gosh, I could be doing this type of role in this company still. Maybe, yeah, maybe it's in the medical.

[George Campbell]

Field, but it's not as a nurse. It could be something completely different. Yeah, we don't want you to waste any time. We want you to get real clear and Ken's material will help you with that. So hang on the line, man. We rooting for you for just total life change across the board. I hope you call us back. You know, six months from now, 12 months from now, and you're like, I'm in a new season of life and I'm loving it. Thanks for the call. Andrew. If you ever googled yourself, here's the two worst things you can find. Photo evidence of your worst haircut and your personal data floating around on some sketchy website. I mean, the bangs were regrettable, but your info being bought, sold and reposted all over the world wide web even worse. And trust me, it happens all the time. And that's why I use Delete me. You guys, over 20 billion records have been leaked in recent years. And that info gets pulled into these people search sites. So stuff like your name, number, address, even your kids names is out there for anyone to see. But if you're trying to clean up your personal data yourself, good luck. It can be a part time job just submitting these opt out requests. So if you don't want your personal info out there, you should be using DeleteMe too. DeleteMe has real people who track down your data, remove it from these shady sites and make sure it stays removed. Plus you get a report from Deleteme showing exactly what was found and what's been deleted. So take back your privacy with Deleteme right now. Ramsey listeners get 20% [e-mail] Ramsey with code Ramsey at checkout. So do that today. Joinedeleteme.com Ramsey code Ramsey. Matthew is in Louisville, Kentucky. What's going on, Matthew?

[Caller]

What's going on man?

[George Campbell]

We're just hanging out, having a good time. What's your question today?

[Caller]

All right man, I'm wondering, should I start thinking about getting me and my girlfriend apartment and saving more for the future?

[George Campbell]

While we're really getting ahead of ourselves here. How long you guys been dating?

[Caller]

We're going on eight months now.

[George Campbell]

Well, might as well be eight years. You like this galaxy?

[Caller]

She's pretty. All right.

[George Campbell]

Whose idea was it that we should live together?

[Caller]

Sort of my idea because she already lives with me, my grand and my grandparents.

[George Campbell]

She's living with you?

[Rachel Cruz]

How old are you guys, Matthew?

[Caller]

I'm 19 and she's 19.

[Rachel Cruz]

Okay, are you guys working in school? What's your status?

[Caller]

I'm. I'm currently working for a blasting company and she's currently working for Walmart.

[Rachel Cruz]

Okay, good for you guys. And she's living with your grandmother and you. Is that what you said your grandparents knew?

[Caller]

Yes.

[Rachel Cruz]

And because it's too expensive for her to live on her own. Like give me or is it relational? You guys just want to be together.

[Caller]

It was. It was between her and her dad. Her dad wasn't really the best guy and she wanted to leave him.

[Rachel Cruz]

Okay.

[Caller]

So I gave her an out.

[Rachel Cruz]

Okay.

[George Campbell]

So it was a bad situation. You said, hey, come, come hang at Grandma and Grandpa's. They're cool with it.

[Caller]

Yeah.

[George Campbell]

Okay. How do Grandma and Grandpa feel about all this?

[Caller]

They love her. They. To be honest with you, she does more on the house than their own children do. So I believe that they love her.

[Rachel Cruz]

Yeah.

[George Campbell]

Okay. And your plan is, hey, I want to live on my own, but she's got to come with me because she can't afford a place for herself. What's the reasoning behind this?

[Caller]

More or less, we just want to get a head start on life itself. She wants to get out of the house because there's also nine people in the same house. Ish. There's on the property my grandparents live at. There's two buildings in the backyard that's holding their kids.

[Rachel Cruz]

Okay. So, yeah, there's a lot happening. Okay. Yeah. So, Matthew. But I would, what I would tell you is what we've seen on the show and just in life, that the couples that actually go in an order that's a little bit old school, you could say, actually have higher levels of success within their relationship from a commitment standpoint. And so if this is someone that you're thinking, really could be, you could get married to her, I would encourage you guys that maybe she goes and finds an apartment on her own and maybe you still stay with the grandparents for a little bit while you save some money. But this whole kind of out of order living together before get married, all the things we just found from a relational standpoint, there are higher levels of success with couples that literally do an order of they get engaged, they get married, they move in, they have kids, like that natural progression. Because there's, I mean, again, there's been so many, like, psychologists and therapists and stuff that come out because there's a weird commitment thing that happens when you live with someone that you're not married to because there's always the exits. There's always a door. Now, granted, when you're married, you can always get divorced, but there's a lot of bigger implications, bigger implications when it comes to that. So, yeah, I would just say from, if you really love her and you guys are thinking like, hey, this could be the thing, which maybe, you know, then I would pump the brakes on living together. And as you guys get down through this relationship not living together, there's probably it sounds terrible, but it's true. There's an easier out if you need to end the relationship. I mean, you guys are both 19, and I got married young. I was 21. So I think it can happen. I'm not against getting married young by any means. But you also lock yourself into a situation with splitting rent. You add in all these elements of life when you're dating that almost feel like you're playing house, you almost feel like you're playing married, but there's not the commitment of it, if you will. Um, so that's what I would just say as like a big sister to you, Matthew, if I was sitting down with you, that's what I would encourage you. Just from a life.

[Caller]

That sounds really logical from a life perspective.

[Rachel Cruz]

But, you know, you guys are resilient. I'm like, she comes from a hard. A hard place like that. That's a. That's a tough situation. I couldn't imagine being 19 and having, you know, to make a choice of, like, I have to go out on my own. And she's work. She has a job. She's working, which we get calls on the show. People that are 35 and haven't had a job for nine months.

[Sponsor/Announcer]

See what I mean?

[George Campbell]

Your work ethic is a great sign. Success in your relationship.

[Rachel Cruz]

Yeah, for sure. So I think you guys have a lot going for you. I probably would just slow it down a little bit and be still thinking and dreaming about the future together, 100%. But I would probably. I would not.

[George Campbell]

Yeah, I would not. Let's try out some alternatives. She has some girlfriends.

[Caller]

Not really. No.

[George Campbell]

No. Community. You're the only person she has in her world.

[Caller]

Yeah. Me and my family. Yeah, man.

[Rachel Cruz]

Did she. Did you guys, like, go to high school together?

[Caller]

No, we went to same county, different high school.

[Rachel Cruz]

Okay, okay, okay.

[George Campbell]

Because my suggestion is. And they don't have to be BFFs, but just get a couple of roommates and you might need to do the same, depending on your situation. At 19, that's just roommate territory. I had roommates all the way up until I was married. And I think it's a very healthy thing to step toward that independence without having it all fall on you. Because my fear is she's working at Walmart and you're making more than her, and you go, well, I'll foot the rent, and you just cover some groceries. And all of a sudden it becomes this financial imbalance as well. There becomes some entitlements. If you're going to pay my bills and I don't have to really go beyond this stage of my career. So I'd love to see you both go, hey, what do we want to be doing five years from now? We'd love to be married. We'd love to have more stable jobs. We'd love to be doing work that we enjoy. And so you can help her figure that stuff out now while you're dating to help her get a head start. But I wouldn't do that by getting an apartment together.

[Caller]

All right, thank you.

[George Campbell]

Just one man's opinion, but I think you've got a great heart and there's some. You both have been through some things. The fact that you're living with your grandparents at 19 tells me that there's been other family dynamics and dysfunction probably in your life, too, right?

[Caller]

Something like that, yeah.

[George Campbell]

And so I just don't want you. I want you guys to make these decisions from a place of strength. And right now it seems like we're just running from the thing that we're in and we're going from one bad situation to a slightly less bad situation. So I'm hoping for your independence and I hope that this relationship progresses and one day you put a ring on it and get married and then get a place together. And I think you will find that it was well worth the struggle and the patience and the sacrifice. So thank you for that. Tammy is up next in Detroit. What's going on, Tammy? How can we help today?

[Caller]

Hi, thanks for taking my call. I have a question in regards to kids after they graduate so they turn 18. My husband and I are in steps four, five and six. We've been kind of saving for the kids college fund for the past probably three to six months. So we do have some funds right now in those accounts. I have an 8 year old and a 5 year old. We did start a 529 for our 8 year old. But kind of looking at the way we're investing, I would kind of like to like, hone in on what we're doing and what our plan is. My question is if we should fully invest everything in a 529. Because our fear is that we do that and one or both of the kids end up not wanting to go to college or wanting to do something else. And then we have all of that money tied up in a 529 that we're going to get penalized for taking it out outside of a college plan. The only thought was if we did half in a 529 for each of them and then half in a mutual fund, even though I know those are going to be like the mutual fund is going to be taxed.

[Rachel Cruz]

Yeah.

[Caller]

If we, you know, take that out later on.

[Rachel Cruz]

Yeah.

[Caller]

It's kind of like a safe bet, though, to not put all of our eggs in one basket.

[Rachel Cruz]

Totally. No, I hear you. And we, you know, I would say my husband and I were, we have the same discussion.

[George Campbell]

You know what I mean?

[Rachel Cruz]

Because you're like, college has shifted so much even since COVID You're like, oh, my gosh. And the fact that tuition's, I don't know, it's just, it's an interesting time. And when our kids go to school, I mean, that's in a decade or more. So it's kind of that big question mark. And so I'll tell you what we're doing, Tammy, that very similarly. Yeah. We're still funding the 529 because our plan is that they, I want them to go to college. And if we're able to pay for that, that's a gift to them. Starting off, because I just think from 18 to 21, you know, and all the personalities have a little bit of a different opinion about the college thing. Ken Coleman has kind of a different one. But I just think it's a great, great step. I really do. If you're able to, because I think you learn a lot about yourself. I think that you getting a degree makes you marketable all the things if you're able to pay for it. I mean, really. But if that fear is still there, you, if you want to, you could slow down the 529, depend on a mutual fund, but just know you're going to be paying those taxes, it does not have as good of a benefit. But if you guys get five years down the line and you're like, oh, wow, we probably. They are going to go to school. You can throw more in.

[George Campbell]

Yeah. And you can roll over, you know, up to 35k with the new Secure Act 2.0 from that 529 over to a Roth IRA over a period of time. So you're not out of luck in their name.

[Rachel Cruz]

Yep.

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[George Campbell]

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[Caller]

Hi. So I have a little bit of a stupid tax that I have to pay.

[Rachel Cruz]

Oh no, we've all been there. What happened?

[Caller]

So I bought a car. To preface, the plan was to work my butt off for a couple years, pay this car off and go into automotive engineering school with an awesome paid off project car with about a 20k flush fund so I could work part time and all that. Well, the 20k of that I was given a coin that got stolen from me and long story short, short plan changed. I kind of fell into a depression for like eight months or so and I'm coming out of that.

[Rachel Cruz]

Wait, got. Wait, it got stolen?

[George Campbell]

Wait, you said a coin?

[Caller]

Yeah. So I was getting crypto coin. No, it was a 1995 West Point Silver Eagle Proof State 70 a physical coin.

[Rachel Cruz]

Coin that you paid 20,000 for.

[Caller]

I didn't pay for this coin. My uncle bought it back in 1995. It kind of hung around and he gave it to me and said that he would hold on to it and he didn't. He sold it and took that money for himself.

[Rachel Cruz]

But you didn't have. So you never, you never had the money?

[Caller]

I never physically had it, but it was promised.

[Rachel Cruz]

It was promised to you. I hear you. Okay.

[George Campbell]

And he didn't keep his word and he went and sold it and used the money.

[Rachel Cruz]

Okay.

[Caller]

Yes.

[George Campbell]

Okay. And that relationship is long done, it sounds like.

[Caller]

Yes, for the most part. I saw the deal with them, but I don't talk to him.

[George Campbell]

Okay, where do we stand today? How much debt do you have?

[Caller]

So I have roughly $33,000 in debt for that is credit cards. 29. 3 is my car. I'm roughly a little less than $10,000 upside down on it. I have no savings or anything like that.

[George Campbell]

So it's worth about 19 and you owe 29.

[Caller]

Yeah, it's really roughly worth about 21 at the moment.

[George Campbell]

Okay.

[Rachel Cruz]

Is that for private sale?

[Caller]

Wholesale. That's wholesale.

[Rachel Cruz]

Okay.

[Caller]

I might be able to get a little bit more out of it.

[Rachel Cruz]

Oh, yeah, you will.

[George Campbell]

Yeah, yeah.

[Rachel Cruz]

You probably get 25 if it's like an individual, so.

[Caller]

Okay. I just don't know how to get out of this car quickly because also I'm 22 and insurance on it is.

[Rachel Cruz]

Yeah.

[Caller]

More than the payment on the car.

[George Campbell]

Yikes.

[Rachel Cruz]

Okay.

[George Campbell]

What do you make?

[Caller]

I was. Whenever I purchased the car, I was making 50k a year. Now I'm making roughly 33.

[Rachel Cruz]

Oh, no.

[George Campbell]

Yikes. All right.

[Rachel Cruz]

Yeah, yeah.

[Caller]

Do you have anything in savings, month span?

[Rachel Cruz]

No, he don't have anything.

[George Campbell]

Zero.

[Caller]

Zero. I have about 11k and a 401k. That's it.

[Sponsor/Announcer]

Yeah.

[George Campbell]

No, touch that.

[Rachel Cruz]

What do you do for a living? What do you. What are you doing for work?

[Caller]

Right now I'm detailing cars. I could, you know, do it on the side and stuff. I just haven't really.

[George Campbell]

So you work for a detailer?

[Caller]

Yeah, I work at a dealership at the moment.

[Rachel Cruz]

Okay, okay. Okay.

[George Campbell]

You make 33k doing that and you're allowed to do it on the side on your own?

[Caller]

Yes.

[George Campbell]

On nights and weekends? Yes.

[Rachel Cruz]

Okay. And what were you doing when you were making 50k?

[Caller]

Selling cars.

[Rachel Cruz]

Selling cars. Gotcha. Gotcha. Okay. Yeah. I mean, I would be making a career change and selling this car. That. Those would be my two biggest moves right now. And if you can do the detailing on the side all day, I mean, I would be doing that.

[George Campbell]

Could you do like five cars a weekend at 200 a pound hop?

[Caller]

If I. It would be finding the customers to do that. I could do that. Like time wise and physicality wise. It's just finding the customers.

[George Campbell]

That's easy. That's the easy part. You go into any local Facebook group, neighborhood group. You just do One good job. And they'll tell people and say, hey.

[Rachel Cruz]

Or go to a company. I. I drive through our parking lot and I'll see two or three details.

[George Campbell]

They're mobile people.

[Rachel Cruz]

Yes.

[George Campbell]

I mean, you start posting everywhere, and you're reliable, and you show up and you're professional. Dude, you will have customers out the door and you can have recurring. Hey, would you sign up for, you know, next month if I gave you a. Cut you a deal. And they'll go, sure, come back next month.

[Rachel Cruz]

Yeah, so. And you know, Cole, what I would probably do, too, to get out. I mean, this car, what you owe, is almost what you make in a year. And so our rule of thumb is always about that 50% mark. So you are way over that. So I would be in a little bit of panic mode just to get rid of it. So I wonder if you could go down to your local credit union and see if they'll give you like a $8,000 loan or something. Take four of it, pay off the difference of the car after you sell it for 25 to an individual, and then you'll have 4,000 to buy a really crappy car.

[George Campbell]

Will the dealership give you, like, the worst car on the lot?

[Caller]

Most of the cars that we sell here are over $10,000. I would say. That's what I've been thinking is going to my credit union and asking them for an amount and getting a car. And so that is a viable option in this situation is trying to talk to my credit union.

[George Campbell]

Yeah.

[Rachel Cruz]

Yeah. So, I mean, I would, though, because I would much rather you have $8,000 that you owe versus $30,000 that you.

[George Campbell]

Owe, and then you'll, you know, you won't have that payment anymore. You won't have insurance.

[Rachel Cruz]

What's the payment right now?

[Caller]

So I have a pretty decent payment for at the moment. It's 570.

[George Campbell]

You decently large. And then the insurance is over.

[Caller]

Yes.

[Rachel Cruz]

And how much is the insurance?

[Caller]

So the insurance was larger than that. For a majority of it it was like 600, but I gotten it down to like 350 and some change.

[Rachel Cruz]

Okay.

[George Campbell]

What do you mean, got it down? Did you remove some things from your policy?

[Caller]

No, I. I found an insurance guy that shops my insurance around and Good broker.

[George Campbell]

All right, that makes me feel better.

[Rachel Cruz]

But that frees. I mean, that frees you up. God, close to $1,000, Cole, a month. If you can get this. I mean, Grant, you'll have the payment to the credit union, but, dude, I'd.

[George Campbell]

Be putting business cards in Every single person's car ID tail.

[Rachel Cruz]

Yes.

[George Campbell]

And say, hey, I do this on the side. Would be honored to help you out if you ever need detailing.

[Rachel Cruz]

Yeah. Are there nice, upscale neighborhoods close to you?

[Caller]

Yeah, there's plenty of upscale.

[Rachel Cruz]

That's what I would do, too. I would be, oh, my gosh. Yes. All day. We always say rich people are scared of leaves.

[George Campbell]

So scared of dirt on the cars.

[Rachel Cruz]

They don't like dirt, so go clean their cars. I mean, I'm not kidding. There is so. There is so much. So much you could do because you have the talent for it. You know what you're doing. Do you know what I mean? You're not just, like, making this up. Anyone could go do it.

[George Campbell]

You do it professionally, but you're like.

[Rachel Cruz]

You'Re good at this. And then are you able to step back in and sell cars and get some income back up?

[Caller]

I thought about it, but honestly, selling cars, I. I don't like, you know, the. The idea of putting people in the situation that I'm in.

[Rachel Cruz]

Okay, that's fair. You know, that's fair. Yeah, yeah, yeah, I hear that. Okay, well, we got to do something. We got to do something.

[Caller]

That was. That was the reason that I kind of left is because I didn't have that point that I was going towards, and the work that I was doing wasn't my favorite. But I think I'm going to jump into the detailing thing. Another thing was that my girlfriend and I are planning to move to a different city in roughly a year or less. And that's kind of why I'm really like, okay, I need to figure this out.

[Rachel Cruz]

Why are y' all moving?

[Caller]

She is planning on getting a full time job in San Antonio, and I really don't have anything left here that holds me here. And I thought maybe the opportunities in San Antonio would be just as good, if not better than here.

[Rachel Cruz]

Yeah. I actually just met a couple from San Antonio.

[Caller]

It seems like a good plan to kind of see, take our relationship to the next level also.

[George Campbell]

And it definitely put some pressure on you. Move out there with her. This thing better work out.

[Caller]

Yeah, for sure.

[George Campbell]

So good luck. And also remember this. You go with you. So don't think that your life is magically going to change just because you entered a different city. The person you are now is going to go with you. So make the changes now before you move. Get yourself in a position that when you land in San Antonio, you're a different guy than you are today.

[Caller]

I already hit the ground running. Appreciate that.

[George Campbell]

Dude. I would go full and I would start detailing so much that I have to quit my job because I'm making too much doing it online own. That's what I personally would do. These guys are making six figures that are doing it full time. They're crushing it.

[Rachel Cruz]

Yeah, yeah. Go all in there.

[George Campbell]

You break out into, you know, clay bar and ceramic coating and like you start getting to some fancy stuff. You can charge hundreds and hundreds of dollars per job.

[Rachel Cruz]

And I think you have their cars, they'll pay for it too.

[George Campbell]

That's right. Not me, but Rachel would pay for.

[Sponsor/Announcer]

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[George Campbell]

Welcome back to the Ramsey Show. In the Fairwinds Credit Union studio, I'm George Campbell joined by my friend, my friend Rachel, Rachel Cruz. This hour, 888-255-2225 is the number to call to join the conversation. Andy is down the road in Nashville. What's going on, Andy?

[Caller]

Hey. Not a whole lot. How are you guys doing today?

[George Campbell]

Doing great. What's your question today?

[Caller]

Awesome. So my question is I recently purchased a home and I've accumulated quite a bit in debt, which I know you guys practice again. So to try and mitigate this debt, I'm thinking what I'll do is I've got a house on the property and a shop house on the property. What I'm really looking to do is to move into the shop house and rent out the bigger house. But seems like Some of the people I've got that are close to me have. Have advised against this. And, you know, I'm just. I wanted to ask the pros, and they listen to the show, so I'm excited to hear what you guys have to say.

[Rachel Cruz]

Okay, so give us some. Some numbers. Andy, how much are you in debt?

[Caller]

I bought the house for 250,000.

[Rachel Cruz]

Okay.

[Caller]

About 30,000 down. So I've got about 220,000, roughly.

[Rachel Cruz]

Is that your only debt is just the house?

[George Campbell]

Yeah.

[Caller]

So actually, I sold both vehicles that I had at the time, and now I'm driving around in beaters. So, yeah, that's my only debt.

[Rachel Cruz]

Okay.

[George Campbell]

It sounded like you had, like, racked up some consumer debt, but it's just the mortgage.

[Caller]

It's just my mortgage, yes.

[Rachel Cruz]

Okay. And how much do you make a year?

[Caller]

Roughly 130,000 a year.

[Rachel Cruz]

Okay. And is the mortgage payment overwhelming to you, or you're just wanting to do this just to get. To get the house paid off as quickly as possible?

[Caller]

So I make the house payment in. In less than a week. But the. The main motivator for why I'm doing what I'm doing or thinking of doing what I'm doing is because I'm a truck driver, and I just don't make it home a lot. I'm only home about two days a week, so I'm trying to. Oh, yeah. I've comped some similar properties in the area that are being rented. Rented. And, you know, I could. I could basically come out. Even if I rented that and stayed in the shop house, I could have my bills paid for for free, basically.

[George Campbell]

How much.

[Rachel Cruz]

How much is your payment a month?

[Caller]

It's around 1500amonth.

[Rachel Cruz]

Okay. G. Are you married?

[Caller]

I'm not. We're getting there.

[Rachel Cruz]

Okay. Does she want to live in the house once you get there?

[Caller]

She. So we live in the house currently, and she doesn't want to move out into the shop house. Even though I think it's nice enough for us. I don't think that it's up to her standards necessarily.

[George Campbell]

Yeah, I mean, you're not making it sound super enticing. I'll say that. You say shop house. It doesn't sound like a place where a person should live so.

[Caller]

Well, it's like an apartment, if you could imagine, a little studio apartment. It's something of the nature of that, but it's. It's beyond livable. It's nice, in my opinion. It's just a lot.

[Rachel Cruz]

Well, and she's the girlfriend. She's living there for free, I'm assuming.

[Caller]

Yes, ma'.

[George Campbell]

Am.

[Rachel Cruz]

Okay, so I wouldn't want to live in the shop house. So if my, if I was living with my boyfriend and he's like, you gotta go to the shop house. Cause I'm renting this out, I'd probably be like, great, I'm gonna go rent an apartment. And Right. Like she, she needs to do what she needs to do.

[George Campbell]

There's some relational risk.

[Rachel Cruz]

I don't want to make the decision based on the girlfriend. If it was your wife, I'd be like, andy, Andy, Andy. But it's a girlfriend. Like she doesn't have any skin in the game.

[George Campbell]

It just feels like this is not worth the juice, isn't worth the squeeze on this. You don't need to do it. Nothing's on fire. You have a great income and a very reasonable mortgage. Why not just continue on? Well, what's the actual financial problem?

[Caller]

Problem? Well, as far as the, as far as the financial problem goes, it's just the fact that I've signed a 30 year note on this house and I'm thinking of all the interest that I'm going to pay. So pay it off and I could be. Well, I thought about doubling up the payments when I live in the shop house and then we could see each other more as well because I'm only home two days a week right now and you know, so could you double.

[George Campbell]

The payments now while still living in the main house?

[Caller]

I probably could, yeah.

[Rachel Cruz]

The only downside, I would think is that if. Are you wanting this house long term, Andy? Like, do you see, like it'll probably be with you for a while. I just, I always. It feels a little weird to have people living in a house for two, you know, two or three different families or people, and then you go back and move back into it. Does that make sense? Like, I don't know, it's.

[Caller]

Just.

[George Campbell]

Doesn't feel like any of this was intentional. It's just sort of like, well, I could do this. And your family's steering you against it. Why? What is their big qualm with this move?

[Caller]

They're steering me against it because they know that I can afford it as is and no one in my family has ever rented out a property before. But the way I look at it from a financial standpoint is if I live in the shop house, double or triple up on payments. I can have a, I can turn a 30 year mortgage into a, you know, a three or four or five year mortgage.

[Rachel Cruz]

Sure.

[Caller]

And, and then I Can be off the road at that point as well. So for me, it's making sense from a lot of different angles.

[Rachel Cruz]

Yeah. I'm not mad at it. I mean, I don't think it's necessary. I don't think like what George said, I don't think this is an urgent move. That if you had called and I would have been like, oh, you have a shop house, great. You should live in that to rent out your main house. That would not have been my advice to you anyways. But if you want to do it, that's. I mean, that's up to you. And you'll make extra payments and. But you're just got people living in there and then the. Something's going to leak and break and they're gonna be calling you on the road. You're gonna have to, you know, figure out, okay, I gotta get a plumber down. I mean, there's legit.

[George Campbell]

It's not hassle free. Yeah. You know, it's not just easy money.

[Rachel Cruz]

Right. And I think a lot of people think having a rental, there's like. It's passive income is what everyone says. And it's, it's. There's a level of a responsibility you have that you have to be on call, you have to be willing to work with these people, whoever's gonna live in there. But one thing I do like, Andy, is that you're not desperate. Cause then you can actually probably go through an actual.

[George Campbell]

You'll take worse tenants, make worse decisions.

[Rachel Cruz]

Process and get some good tenants. And you know what I mean? Like, you're not in a rush, so I would never suggest you do it. I don't think you need to. But if you want to, then do it.

[George Campbell]

And then I don't think it's gonna break you. But I don't think it's gonna be the sweet, sweet free money that you're envisioning either.

[Caller]

Either. Okay.

[George Campbell]

Do you have savings in the bank? You have an emergency fund?

[Caller]

Yep. Yes, sir.

[George Campbell]

How much?

[Caller]

I've got roughly 35,000.

[George Campbell]

Good. You've done really well.

[Rachel Cruz]

Yeah, Andy, well done.

[George Campbell]

I'm proud of you, man.

[Rachel Cruz]

Seriously.

[Caller]

Thank you.

[George Campbell]

I. I just think I would set a goal for myself where I still get to live in my own house. And then I make extra payments. And so figure out a way to do that. And I think you'll cut your mortgage in half or more just on your own volition without ever becoming a landlord.

[Caller]

Okay.

[George Campbell]

That would be my goal.

[Rachel Cruz]

That's great.

[George Campbell]

And once you're married, if she's Working. She'll add to it, too. She'll help knock down that mortgage. If you guys are both working, I.

[Caller]

Don'T know how she's gonna like that.

[George Campbell]

Idea of her working in the future.

[Rachel Cruz]

Is she working now?

[Caller]

She is. She is a gym coach for little girls, and they actually went to the. The Junior Olympics this year, so that's sweet. Really nice. So I love for her to follow her dream.

[George Campbell]

Do you think I can make the team?

[Caller]

Well, you could try. I think she'd be happy to work with you. She likes anybody. She's good with people.

[George Campbell]

That's sweet. She sounds like a keeper, man. Best of luck to you with this decision. It's not an easy one. I wouldn't take it lightly. But I think you have a good game plan here of just figuring out how to do this without becoming a landlord. Lord. For now, good luck.

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[George Campbell]

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

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[George Campbell]

Jack is in Dallas up Next. Jack. Welcome to the Ramsey Show.

[Caller]

Hi. How are you guys doing?

[George Campbell]

Great. How can we help today?

[Caller]

I'm wondering how to pay off debt with my fiance.

[George Campbell]

That sounds dicey. Whose debt is it?

[Caller]

Yes. Well, a little bit of mine and a little bit of hers. I have a car loan and she has student loans. She'll be graduating from law school in May of 2026.

[Rachel Cruz]

How much is that going to be?

[Caller]

I think about 60,000. See, part of the thing is I don't know exact amounts. I have rough ideas and I've seen it in the past, but we haven't actually sat down and talked about it since we've been engaged.

[George Campbell]

Okay. When's the wedding?

[Caller]

March 21st. And we're actually in premarital counseling with our church right now and we're doing the finances topic this Sunday.

[George Campbell]

Awesome.

[Rachel Cruz]

Well, there you go. So fun. Okay, so hers. You don't know how much she'll owe in law school Debt. Exactly.

[George Campbell]

Yeah.

[Caller]

I imagine it's going to be around 60,000.

[Rachel Cruz]

Are you saying 50 or 60?

[Caller]

Sorry, 60.

[Rachel Cruz]

60. Okay. Okay. And yours is how much?

[Caller]

32. On a car?

[Rachel Cruz]

On a car. Okay, perfect. How much are you making right now? Income wise?

[Caller]

About 110,000.

[Rachel Cruz]

All right, and when she gets out of. I'm assuming she's not working right now?

[Caller]

No, she has a part time job, but just pay like grocery and gas.

[Rachel Cruz]

And she will graduate, you said? Sorry, May.

[Caller]

Yes, next May.

[Rachel Cruz]

Okay, so she'll be in school for like two months while you guys are married. Married, graduate, and then she will. How much do you think she'll make coming right out? Does she have any idea ballpark?

[Caller]

We're not sure. I've been ballparking like 70,000 or so.

[Rachel Cruz]

Okay. Yep. That's great. Well, I mean, the answer is really easy. As of right now, you just be paying on your debt and try to get your car paid off. It'd be a fun game to try to get it paid off by the time you guys get married.

[George Campbell]

And the goal should be not go into any more debt. Debt.

[Rachel Cruz]

Yes. So no debt for the wedding, no debt for honeymoon, all of that. But yeah, you. You just keep everything separate until you officially get married. And then when you guys have the wedding in March, come back from the honeymoon, then you guys can attack this as a couple.

[George Campbell]

Combine bank accounts, combined incomes, combine the debts, do the debt snowball method. So just whatever the smallest balance is left, we're going to attack that and make minimum payments on the rest. And you guys will plow through this with her New income and your fantastic income and under 100,000 of debt to pay off. You'll get through this in six months.

[Caller]

Got it. Do you think I should deploy? I have a little bit of a cushion. Should I deploy any of my excess savings into the car right now? I guess just pay as much as I can.

[George Campbell]

Yeah. How much do you have that you could liquidate?

[Caller]

Let's see, I've got 37k in retirement, 8 of that is in a Roth. And then I have like 12k in various cash savings right now.

[George Campbell]

Okay, so we won't touch retirement, but anything that's cash or non retirement, you could.

[Rachel Cruz]

Hold on. How's. How's the honeymoon and the wedding getting paid?

[George Campbell]

That's a good question.

[Caller]

Well, so her parents are paying for the wedding, I am paying for the honeymoon. And so some of that savings will be going towards the honeymoon. So I guess really I have like 5k in savings. I am also living rent free with my grandparents right now.

[George Campbell]

Oh, nice. Right, so you could really stack away cash fast.

[Caller]

That's what I'm thinking.

[George Campbell]

Could you pay off this car before the wedding? You got intense.

[Caller]

I don't think I could get all the way there, but I could probably get it down to like 15 or less, I would imagine.

[George Campbell]

I mean, you're making like what, 7K.

[Caller]

A month take home basically 67, 68. Yeah.

[George Campbell]

Okay. And you don't have any rent, so like, could you throw 5k a month at the car and be done in 6 months?

[Caller]

If I tried really hard, yeah. I struggled with lifestyle inflation once I got the job because I've been making since I've got.

[George Campbell]

Okay, that's what I was getting at, Jack. I find that when people are living rent free, they tend to get comfortable and their spending tends to go up, not down. So you just trade what you would have paid in rent and it disappears into doordash and whatever else.

[Rachel Cruz]

Yeah.

[George Campbell]

So I would implore you, like your life and marriage is on the line, to attack this car loan so that when you guys are married, you have freed up that car payment, which is how much am I month?

[Caller]

559.

[George Campbell]

Boom. So now we have an extra 600 bucks of horsepower to throw at these student loans on top of our now dual income. Come for sure.

[Rachel Cruz]

For sure.

[George Campbell]

Yeah.

[Rachel Cruz]

Get aggressive with it, Jack. I mean, honestly, because y' all are going to be living that same lifestyle besides just rent, because I'm sure you guys will rent somewhere to pay off these student loans. So you kind of getting in the habit of being disciplined and learning to say no. And all the things will go right into marriage. And you guys together, you kind of live on. We say rice and beans. And rice. Rice and beans. And then get the student loans paid off. And then you guys. Yeah. Are making almost 200k a year. My gosh, think about that. With no debt, you know, and then.

[George Campbell]

Her 60k of student loans is knocked out super fast.

[Rachel Cruz]

And it's gonna be easier to sacrifice right now, Jack. It really is. When you guys get back from the honeymoon and your friend, you guys are. It's just gonna be this whole new exciting part of life. Like right now is when I would do it. It as much as possible.

[George Campbell]

The stakes. This is as low as the stakes are going to be. Life is only going to get more expensive. So while you're still quote, unquote single, I would use this time you have while she's in law school. Super busy. You get busy too. Paying off that car loan, my friend.

[Rachel Cruz]

Get an extra job. I mean, yeah, y' all just go crazy and get it paid off. You can do it.

[George Campbell]

How old are you?

[Caller]

24.

[George Campbell]

Oh my goodness.

[Rachel Cruz]

And then, Jack. Yeah. You said you probably will have around 5,000 in savings. That's not going to the honeymoon. Throw that at it. Just get that.

[George Campbell]

This momentum going, that knocks it down to 27. And now we start throwing 5k a month. You're done before the wedding, my friend. While still having enough to cover the honeymoon. This is a best case scenario.

[Caller]

All right, thank you, guys.

[George Campbell]

Boom.

[Rachel Cruz]

Congratulations.

[George Campbell]

So exciting.

[Rachel Cruz]

Excited about March. What a great month. What a great month to get married.

[George Campbell]

Is that when you guys are married?

[Rachel Cruz]

No. December.

[George Campbell]

Okay, that's what I thought.

[Rachel Cruz]

It just feels springy and new. I don't know. Yeah, it's great.

[George Campbell]

Rebirth. Beautiful. All right, Emily's up next in Atlanta, Georgia. What's going on in Emily? Emily? Uh oh, your phone's all busted. Emily, can we hear you?

[Caller]

I can hear you.

[George Campbell]

There we go.

[Caller]

Can you hear me?

[George Campbell]

Yeah, we're good now.

[Caller]

I'm so sorry. Thank you so much for taking my call.

[George Campbell]

Sure. What's your question?

[Caller]

I have a four month old son that we have started a 529 plan for. But I was speaking with my financial advisor a little bit ago and she recommended a UTMA or UGMA account. I was just wondering what your thoughts were on possibly putting in a UTMA account to pay for maybe their first car or something like that. Or if I just should put all that money towards 529.

[George Campbell]

Awesome question. How old are the kids?

[Caller]

I just have a four month old son.

[George Campbell]

Oh, sweet. Okay, so we got plenty of time. This is the best time to open up an investment account. Here's my thing. And this is not a knock against your financial advisor. I'm personally not a fan of the UTMA and UGMA accounts because that money is legally that child's money. So you lose control completely.

[Caller]

Okay.

[George Campbell]

And there's no way to restrict. Yeah. Once they turn 18 or 21, depending.

[Rachel Cruz]

On the state law, it's basically like opening an investment account in their name. But the utma's, the umbrella that covers it, shields it from them until they're 18. So what George is saying is if you start investing, investing can be crazy over 18 years. If you start throwing like 100, 200 bucks in a month, I mean that stuff can just. It could be a lot of money for an 18 year old. So George is just saying caution because you could be handing over, I mean, tens, hundreds, thousands of dollars. Yeah. Depending on how much you put in.

[George Campbell]

There and how much growth.

[Rachel Cruz]

Yeah. So for a car and stuff, I probably wouldn't honestly now mom and dad, they did for us, we started when we started working and actually could file a tax return and all of that. They opened up a Roth ira.

[George Campbell]

Once you have earned income, it's great.

[Rachel Cruz]

Yeah. And that was more when we were teenagers. But that kind of thing is so helpful because it's crazy. Even just that me opening that as a teenager versus even my husband when he opened his, when he was like 23, you know, starting to work, like even that year of difference. So there's ways to definitely set them up well to get some things going like a roth or the 529 as well. But things. Yeah. For them purchases like a car and that kind of thing, Emily, honestly, I would probably have them involved in it. I would just have a high yield savings account and you guys just kind of cash flow it when the time comes.

[George Campbell]

What I would do and what I am doing, Emily, for my kids is I'm going to do a 529 plan for each kid, invest there and then if I want money beyond that for let's say a wedding one day, a house down payment to give to them. I'm just going to do that in a non retirement brokerage account that I have control over. That makes me feel a whole lot better than handing it to.

[Rachel Cruz]

Then you can just gift it if it's not beyond the gift tag, right? Yeah, you can gift it to them.

[George Campbell]

Yeah.

[Rachel Cruz]

And it's not under their name.

[George Campbell]

At 18, so that's a safer bet. I like the plan of 529 for college. Let's make sure we get that.

[Rachel Cruz]

Are you prepared for Mia and Henry to just be crazy hellions that you're like, I can't give you any money. I don't trust you 18 year olds. Is that what your fear?

[George Campbell]

What kind of kids will I raise?

[Rachel Cruz]

What are you going to raise, George?

[George Campbell]

Likely they'll be so frugal. They'll be like, dad, that's so much money. I'm like, I raised you right, kid. I raised you right.

[Rachel Cruz]

It's a great question though. Emily. You're a good mom to be asking for a four month old.

[George Campbell]

Especially for a four month old. That kid's going to be unbelievably wealthy. That's changing your family.

[Rachel Cruz]

Well done.

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[George Campbell]

Ramsey paid endorsement attorney advertising Guardian Litigation Group LLP not available in Minnesota and Oregon. Results vary and no specific outcome is guaranteed. That settlement may negatively affect credit. And not all creditors will negotiate or settle. Savings vary and may be taxable. Please review our website terms for more information. Patrick is up next in San Diego. What's going on, Patrick? How can we help today?

[Caller]

Hey guys. How's it going?

[George Campbell]

Great. How are you?

[Caller]

Good. Sort of simple question, but I'm assuming there will be more probing necessary. I live in a county where the housing costs are pretty high. My wife and I have 20 to closer actually to 25% saved up for a down payment. But if that was to happen, it would have to be a 30 year instead of a 15. I know the show enough to know. So, you know, 15 is going to be what we're directed toward. But I'm wondering how hard and fast is that rule thinking of certain areas where a 30 might be more practical, especially to get into the housing market?

[Rachel Cruz]

Well, I'll start off with this. What we always tell people, and you're from California and we usually end up saying it to people from California that you're not exempt from math. It is what it is. So, like, it doesn't, you know, from a philosophy standpoint, our advice does not change because of where you live it. You know, the math is the math. So the 15 year to the 30 year, it is what it is. So I would say, yeah, I mean, we will always stick to that 15 year just to lock you into a system that's going to get you out of debt as soon as possible. Now, does everyone follow that? Patrick? No, they don't, but. But I would not steer you any other way. But again, is it something that people do but follow?

[George Campbell]

Ramsey There are sins like, I don't think it's gonna ruin your financial life to get a 30 year. But again, the amount of people who I find who actually pay their 30 year off like a 10, very slim. The people who get a 15 year and paid off in 15, 100% of the time, they at least do that, if not way earlier. In our millionaire study, we found that the average millionaire pays off their home in 10 years. That wasn't necessarily their first home, but they paid it off in 10 years. And the average baby stepper pays it off in a little over seven years. And so there's just this discipline and intensity going. I'm just going to do it in a way that limits how long I'm in debt against my human psychology, which says just lower the payment, make it easier on me. So my encouragement to you would be how much more would it take for you to do 30% down to get that payment reasonable on a 15 year? Have you done the math on that?

[Caller]

Yeah, close to. I think so. The majority of it is coming from IRA that we wouldn't be penalized taking it out other than like capital gains taxes if we just let it sit for a little bit more. I could imagine doing that, but yeah. And it would lower the monthly. That is correct. But it spikes up such that that, I don't know, the 15 year just sort of freaks me out. I'm content renting for the rest of my life. And in this county, that's not Necessarily a given. It's just, I feel like a lot of people.

[Rachel Cruz]

No, it is expensive. I mean, yeah, you're in.

[George Campbell]

Well, in this market it makes a lot of sense to rent right now comparatively to buying a home. And so I think that's what you're experiencing. But you're saying, is it your wife that's like, hey, I really want my own home. I want some stability here?

[Caller]

Yeah, I think so. Well, I should know. So, yes, it is.

[George Campbell]

Okay. And the other thing I want, I want to make sure that we have the parameter down. Our teaching is 25% of after tax income, but that's before other deductibles like your health care premiums, your 401k contributions. And so that might help your math out in a good way. If you just take, hey, here's our gross income, then here's our net income after taxes and then you can subtract out any other premiums that come out.

[Caller]

Yeah, that makes sense. We just went through a potential purchase that fell through for HOA reasons. And I think I found that we probably could afford a little bit more than I thought. It just sort of, I don't know, big purchases scare me. We're just about done being completely out of debt. We just have a car and we have enough in the savings to buy out the car. We're moving right now to an apartment because the housing opportunity fell through. And so I just want to keep the cash just until we move for any unforeseen.

[George Campbell]

So what's left on the car loan?

[Caller]

19,5. And we've got about 35 in savings.

[George Campbell]

But that 35 you're saying is your down payment fund or is that separate?

[Caller]

No, that's completely separate. That's all liquid. Just between the money market and our own. Just sort of not accruing any interest. Savings account.

[George Campbell]

Account. Got it. So if you paid off the car today, that would leave you with 15k for your emergency fund and you could beef that back up over the next few months.

[Caller]

Yeah, correct.

[George Campbell]

I would do that. I like that plan.

[Caller]

Yeah.

My only concern is, is I just, I would like to have it once and we're looking to move in like two weeks. I would like to have it and then once we move and get settled in, then pay it off right away. I'm looking to pay it off, you know, probably within like three or four weeks. I just want to make sure that it's there while we're moving. Is that like, I don't know, is that over concern or is probably what's.

[Rachel Cruz]

Going to cost you $30,000 during a move to an apartment?

[Caller]

Well, I mean, they are running credit checks and things like that. So that's one of the things. We're in the application process right now. So I wonder if it would look a little bit.

[Rachel Cruz]

If you want to make sure you have enough. Well, usually it's first month's rent, last month's rent, and security deposit for most places, which is plenty.

[George Campbell]

They're not going to surprise you and be like, JK, you owe us $20,000 today. It's just not going to happen. So I think a lot of this is a little bit in your head, a little bit of like I feel this sort of false sense of security, having this pile of money over here.

[Rachel Cruz]

And again, just like the 15, like if you want to wait four weeks to pay off the car, that's fine. I think the, the idea is that we're moving forward, but also I don't want you to get stuck in a reality that's not reality, even. So just. Yeah, I would just kind of challenge a little bit of that. But I think you guys, you guys are on the right track. You're doing fantastic. Yeah. With all the money saved from down payments.

[George Campbell]

Yeah. How much is saved in the down payment fund.

[Caller]

Right now? So the inner workings of it is it's an inherited being transferred into an ira. So before I sort of promote myself as really diligent, a lot of that was helpful out. Okay. Yeah. So in terms, how much will you.

[George Campbell]

Net from that once you cash it out? After taxes.

[Caller]

Yeah. And after sort of, we're doing the slow transition so that, you know, it doesn't change taxes, stuff like that. Probably within seven years or so there will be, my guess is around between 5 and 5:50 into the non inherited IRA.

[George Campbell]

Okay. But you're moving it slowly to avoid getting hit with huge taxes.

[Caller]

Yeah.

And we don't need any of it right now, so this seems like the best option.

[George Campbell]

Well, you need it for down payment. So how much are you going to be able to put down if you bought a house within the year?

[Caller]

That, I mean, that's the thing for me too. I'm like, man, I would just love to get as close to paying cash for a home as I can. We're already investing in retirement as well. So who we. If we completely empty it out, we'll still have retirement left over that we're continually building and then we'll have the home.

[Rachel Cruz]

Yeah. Okay, I'm confused. You have your savings of 35,000 and then you have this inheritance that's coming. It's not here yet. So what we all going to purchase the home with? 2 weeks ago that fell through.

[Caller]

We were going to purchase that. Yeah. So I'm probably not being super clear. The inherited is currently in process and has been of moving to a Roth.

[Rachel Cruz]

So how much is it right now.

[Caller]

To avoid the tax in the inherited or in the Roth, the one that.

[George Campbell]

You would have access to to put a down payment?

[Caller]

Yeah, yeah, 140.

[George Campbell]

So that was going to be your down payment.

[Caller]

Correct.

[Rachel Cruz]

Gotcha, gotcha.

[George Campbell]

That makes more sense. What is the house going to cost that you're looking at? What kind of budget?

[Caller]

Yeah, yeah, probably My, my ceiling is 750, but it's anywhere around there. My. I mean, my hope would be somewhere around like 550 to 6. But it's just, it's tricky in this county.

[Rachel Cruz]

Yeah. And I'll say, you know, I mean, real estate looks a little different everywhere, but for the most part, it's a great time to buy. I'm like, from a, from a buyer's perspective, it's more of a buyer's market right now than a seller. So even Patrick, if you guys pump the brakes for another year, 18 months and got more of that inheritance, you know, like all of that to give you some cushion, I wouldn't be in a rush to buy a house, but I, I would be more on your wife's side that you want to be a homeowner. I think that's part of your financial plan overall. And if right now is the best time to get in, if you're going to get in. So if you're into the market.

[George Campbell]

So yeah, I wouldn't do it tomorrow and I wouldn't wait six years either.

[Rachel Cruz]

No.

[George Campbell]

So I'd find a game plan that works for both of you and just go hard at it and I would follow the baby steps. Right now it's a little bit all over the place. I'm doing four and then I still have two, but I kind of have three already. And so I would just follow it through all the way, man. It's going to give you a lot of peace. Pay it off today. You can do it. Buying or selling your home is a big deal. With all the clickbait headlines and conflicting data out there, it's hard to know what's really happening in the house market. So we're here to make the latest trends easy to understand. Median home prices, that's the middle, dipped a bit last month to about $426,000. A typical season shift as we head into fall and buyers have more options and negotiating power while sellers face some more competition and houses are sitting out there a little bit longer. Mortgage rates dipped slightly to five and a half percent in September, which gave buyers some breathing room. But since rates are unpredictable, the best time to buy is when you're financially ready, not when rates drop. Just like we say, hey, don't time the in, you know, stock market, don't try to time the housing market because you just don't know what's going to happen. So to learn more about the housing market trends and get free tools to help you buy or sell with confidence, go to ramseysolutions.com market or click the link in the show notes if you're listening on podcast or watching on YouTube, Sam is in Atlanta. Up next, what's going on? Sam?

[Caller]

Hey, good afternoon. I appreciate you guys taking my call. Quick thing. Well, I started a construction company about a year and a half ago and it's been rough going. And since I've running that company through bad business partners, I found the business about $70,000 in debt and I carry on top of the $70,000, another $40,000 in debt. The business is bringing in about $10,000 a month. For that 10,000. I'm using about 5 to 6,000 per month to try to pass on this credit card debt that I've incurred with the business. And I'm at a point now because I had a work truck that paid off but it just, you know, took a crap. So I'm at this point now where I need to buy myself a new vehicle to try to keep this business going, to try to pay off this debt. Or do I just close on the business is get a job working construction with my experience where I can make maybe 120k a year and then just use that to pay off my personal debt over $40,000.

[Rachel Cruz]

Well, that sounds good.

[George Campbell]

How easy is that to just go get a job in construction, make 120k?

[Caller]

With my experience, it's quite easy. You see, there's a lot of fields that are lacking. Construction is just very big needs and construction for talented individuals. And I have been in the industry myself for about 17 years.

[George Campbell]

Cool. And is there any hope for this business to be making 20k a month in the next few months?

[Caller]

In order for me to make 20k a month, I would need to hire some, I would need to hire on some other individuals to help me carry on the road.

[George Campbell]

So I guess why is the business struggling right now? What's the cause of that? That.

[Caller]

The cause of that is I. During the last year and a half of me owning the company, with being a novice to owning a business, I got bullied by some big general contractors. And what I know now is that they breached their contract and made me take about a $70,000 loss over the course of seven projects.

[George Campbell]

So you got hosed on these deals.

[Caller]

Yes.

[George Campbell]

All right. And is that going to happen in the future? I guess I'm wondering is it time to close up shop because you're just tired of it and it's stressful and you'd rather just work for someone else and collect a check because that's great. Or is there room for this business to actually scale and grow and help you clean up the debt faster?

[Caller]

There's a lot of room for the business to grow. I think I'm. Well, I say, I think I know I'm much more well adapted today than I was when I first started the company. It's just this type is kind of gnawing at the, you know, the back of my neck because my wife and I, we've been debt for years up until having this company.

[George Campbell]

Okay. So, yeah, you're in a tough spot right now and it's hard to see your way out.

[Rachel Cruz]

Yeah. And the business is bringing in 10k right now. So basically you would be. You're bringing in 120, you'd be making 120. But when you own the business, you have other expenses. You got your, you got taxes you got to be thinking through. You got to have the supplies and all of it.

[George Campbell]

Like, are you getting 10k gross from the business? Is that what you're paying yourself?

[Caller]

That's correct, yes.

[George Campbell]

Okay. That's the profit that you take home. Yeah. Okay. I would be applying and seeing what's out there. See if you can actually get that six figure construction job before I close it down, just so there's not a gap in income.

[Rachel Cruz]

Yeah. What do you, what do you want to do? What sounds enjoyable? What sounds hopeful to you? Is it. Is it an easier mental load to say, oh, yeah, I could just go get a job and grind it out and pay this off? Or is it more? Does it feel better to still own the business and have a little bit more control over your destiny?

[Caller]

I would really love to run my company.

[Rachel Cruz]

Yeah.

[Caller]

It has less to do with the mental road. I just feel like I'm at a bit of a pinch point point because the money I'm bringing in with the business just about, if not more Than half of it goes directly to trying to pay off this credit card debt.

[George Campbell]

Well, the thing is that's not going to change. If you go get another job tomorrow and you make 10k a month, you're still going to need to throw 5,6k a month at the debt. So how much of this is going to change? If you were to close the business tomorrow, would you be able to sell assets tied to the business? Sell, you know, client list, anything like that that would help you out?

[Caller]

Yeah. Yeah.

[George Campbell]

Okay, so how much could you sell? Like what could you net after selling all the stuff, the pieces of the business, whether they're physical or otherwise?

[Caller]

I can net around 40,000.

[Rachel Cruz]

Okay, well that's good.

[George Campbell]

So that gets you a ways into this debt payoff journey. So that changes it for me. I'm going. All right, well you can always start a business later on in life, can't you?

[Caller]

Yeah.

[George Campbell]

And closing this is fairly simple. Like are there people working for you full time or is a lot of just 1099 contract work?

[Caller]

It's only me.

[George Campbell]

Okay. Yeah. I think here's the thing. I don't want you to look at this like, well, I failed. I'll never try again. Because we believe in small business and we believe in people like you. But there's also nothing wrong in hanging up the hat right now to do what's right for your family and clean up a mess and then restart just with cash debt free emergency fund and move slow into that next business.

[Sponsor/Announcer]

Yeah.

[Rachel Cruz]

And cash flow it as you go. If you, if you go back and restart it. What does your wife say, Sam? What does she think?

[Caller]

She wants me to stick with the company.

[Rachel Cruz]

She does. Yeah.

[George Campbell]

What's her reasoning? Yeah.

[Caller]

We're both pretty determined individuals. We're both the oldest child and so we've always just, we've never really had a network of people to support us. We find ourselves being very, very self reliant. And just because things. Her mentality or our mentality is just because things are hard right now doesn't mean that they'll be hard forever.

[Rachel Cruz]

I agree with that. I have a question. When you said you were throwing 6k of what you're bringing home at the credit cards, is the credit cards part of the 70,000 or is that part of the 40,000 of other debt?

[Caller]

That's a good question. The 70,000 is the business debt under the business credit cards and then $40,000 for the. That is my personal debt from the credit cards that we've used to try to pay groceries, pay gas as.

[Rachel Cruz]

Are you guys able to keep your household afloat with 4k a month? Yes, you can. Okay. Okay.

[George Campbell]

And another question is, are you going to go into debt next month to keep this business running?

[Caller]

I don't think so.

[George Campbell]

Because so far it sounds like you've been using credit cards to keep your personal life afloat and keep the business afloat. So have you stopped using the cards?

[Caller]

Yes. What happened there is. We were. I was running these jobs and things were going smoothly and we were paying off the cards as we're going along. And then when everything went south, that's when we kind of got stuck.

[Rachel Cruz]

Yeah.

[Caller]

With the debt.

[Rachel Cruz]

Sam, does your wife work at all? Is she bringing home any money?

[Caller]

She does. She's a director for a marketing agency.

[Rachel Cruz]

How much does she bring up?

[Caller]

About 120.

[Rachel Cruz]

Oh, my gosh. Okay.

[George Campbell]

You buried the lead there. So you guys are making.

[Rachel Cruz]

Yeah, well, a part of me would.

[George Campbell]

Say, Sam, 200 plus thousand.

[Rachel Cruz]

You guys want to stick with the business, but you have to. You have to have some hard values around it that even if you have to go get a truck. You said we're not going into debt for the truck. We're going to figure out a way to save up and pay for the truck. But if you're throwing 6k at this, I'm like, you guys can be out of the business. Debt, debt, and oh my, you know, 11, 12 months in a year, and then throw a bunch of her money at the personal 40,000. You guys could be debt free in two years. Okay, where's her 120 going? What are you guys doing with that income.

[Caller]

That goes to just pay our I out at the.

[Rachel Cruz]

I'd figure out how to live on 4k and I'd take $120,000 salary, throw it at this debt, and then an extra 6,000 that you're bringing in if you guys tighten some stuff.

[George Campbell]

You guys need to get on budget. I think you guys have been spending like, you make $240,000. Start acting like you make $50,000.

[Rachel Cruz]

Yeah. And then you can keep the business, but cut up the credit cards, be done with the debt when it comes to the business. Sam.

[George Campbell]

Hey, what's up, guys? It's Jade. You know that moment when you check.

[Rachel Cruz]

Your bank account and think, wait a.

[George Campbell]

Minute, how is my paycheck gone already? Yeah. Not cool. You work way too hard to feel broke like that. And the truth is, you deserve better than just not feeling broke. You need more margin. Margin, more breathing room. And that's what our everydollar Budget app helps you find most people free up an average of $3015 in just the first 15 minutes in the app. Just imagine how much you could find to pay off debt, stack savings and just breathe easier. With that money stress gone, things might seem tight.

[Rachel Cruz]

I get it.

[George Campbell]

But I promise you, you've got way more margin than you think. And with every dollar, you'll find it. Download it for free today in the App Store or Google Play today day. Welcome back to the Ramsey show in the Fair Winds Credit Union studio. I'm George Camel joined by bestselling author Rachel Cruz. The number to call is 888-255-2225. Samantha is in Hawk, Honolulu, Hawaii. What's going on? Samantha? Hi.

[Caller]

Thank you so much for taking my call.

[George Campbell]

Absolutely. What's your question today?

[Caller]

My question is that me and my husband, we completed FCU last year. We're currently debt free. We don't own a home. We rent here in our home state and we have two little kids. Combined between both of us, we make about like 70, 75k a year. But every month, we're currently on baby step every month. We kind of are only living with like $600 left and we currently have like food stamps, we have wic. And we are just kind of debating like if it's better to move to the mainland to try to, you know, buy a house, get more income or if we should try to just suffer it out here because this is where we're from and where our family's from and we don't want to take our kids away from this. But at the same time we're like, what kind of life are we like living if we're like struggling, you know?

[Rachel Cruz]

Yeah. So where's all your money going every month? How much is your mortgage?

[Caller]

Oh, so we rent here in Hawaii, but it's fifteen hundred dollars a month. We are in a one bedroom. We all like room share.

[Rachel Cruz]

Hey Samantha, do you care? Can you, can you adjust your phone? It's kind of popping. Are you able to take it off speaker? Maybe speak a little bit? Bit.

[George Campbell]

Change it up for us.

[Caller]

Okay. There. Is this better?

[George Campbell]

Not quite, but we'll, we'll try it out. So you 1,500 in rent where. What's your other big expenses? If you had to list out in priority of like here's the biggest one. Here's the next biggest one.

[Caller]

So our daughter goes to private school. That's 1100amonth. We also pay $900 a month for babysitting and we own our car. So we don't have a car payment or anything like that, but yeah, that's pretty much it. Maybe just like food and a little bit of lifestyle, but for the most part, Rapid Beach. So a lot of this is free.

[George Campbell]

Wow, so you're on food stamps, but you got a kid in private school. That's pretty wild.

[Caller]

Yeah. Just because the education here isn't the best and because of her age, she doesn't quite qualify for kindergarten yet. So for her to be in school, she had to go go into private school. Unless we were gonna have her at a babysitter.

[George Campbell]

Like a daycare.

[Caller]

Oh, yeah, sorry. Like a daycare.

[George Campbell]

Okay, so the. And your other kids in daycare. And so all together it's two grand. Wow. What would daycare cost?

[Caller]

Honestly, I'm, I'm not sure. I didn't look into that.

[George Campbell]

And then what do you, what are each of you making? Because it feels like you're in a very high cost of living area. There should be more than 75k if both of you are working full time.

[Caller]

Well, I work part time as a flight attendant and then my husband works full time.

[George Campbell]

Okay, and what's causing the part time flight attendant? Are you at home with the kids part of the time? What's going on there?

[Caller]

Yeah, I mean, I try to be home as much as I can. So I don't work as much as I could just because I feel like I, I feel bad if I'm gone, you know, for like more than a couple of days, like more than two or three nights a week.

[George Campbell]

Well, I think we're gonna have to make some hard choices here because you're gonna feel bad living in a one bedroom apartment, living on food stamps. So we have to make some, there has to be some give and take here. So if that means you guys have to move and you can keep your income and move to a lower cost of living area and you. Hawaii is.

[Rachel Cruz]

Yeah, and Hawaii is one of the most expensive areas. But to George's point, usually if you offset that, I mean you think of New York, the Bay Area, Southern California, like usually incomes for the most part.

[George Campbell]

You know, for a family you're going.

[Rachel Cruz]

To make more naturally in that job market. And so what, what does your husband do?

[Caller]

So he's a furniture installer. Like technically it's like windows and glass furniture. Just. Yeah, like he works for like a small company, like a small private company. So he's applied to change his career and but we just. At the current moment he really hasn't gotten anything back because he doesn't have too many, like, like no trade, like certifications or licensing. So yeah, he's listening to some of the, like, trade schools here.

[Rachel Cruz]

Okay, how much, how much hits your check?

[George Campbell]

Sorry, it's getting real bad here real quick.

[Rachel Cruz]

How much hits your checking account every month, Samantha?

[Caller]

Roughly about like 5,500.

[Rachel Cruz]

5,500. Okay, well, you know what I would tell you guys is what you gave us was about 3,500. So you guys have $2,000 to spare and that's to pay insurance, food, everything. Yes, everything. So something's got to give. Samantha. You guys can't. Like you said, you're not making any progress. And so your rent's not completely out of control though.

[George Campbell]

I'm like, yeah, the rent's not the problem.

[Rachel Cruz]

No. And, and it's the mix of the.

[George Campbell]

2000 bucks going to the kids to get them in school and daycare and part time work and the part time work. Because if we could up the income, we can solve some of this problem. I don't know that we have much of a solution here for the kids because they're going to be in daycare if you're working, working. So I think we got to get you working full time in order to solve.

[Caller]

Do you bring home a month like right under 3, 3000, like 2700.

[George Campbell]

Okay.

[Rachel Cruz]

Okay. Well, because I mean, you're still more than 2007 by 700 bucks. Yeah, but I.

[George Campbell]

Where would you guys move if you were to move tomorrow?

[Caller]

Probably to the only other state we have family in is Colorado. And I think too, because we're from this state, we don't know too much about like the seasons. And so I think that's probably been our biggest barrier or like our fear about moving, like driving in the snow or something like that. But no, I get what you're saying. I think it's just upping the income to kind of like make the sacrifice or to try to move.

[George Campbell]

Yeah, I don't. There's no magic wands I can think of here to go. Well, this is the problem. I mean, the kids are young. They need to, you know, be in a daycare situation unless you decide to stay home. But again, that doesn't solve the main problem here. You're still going to have a few hundred bucks left over if you're lucky. So I think we also need to look at the lifestyle choices and make some sacrifices now until husband can get a better job, maybe you get a better part time job or start working full time job time, then you'll Start to get some breathing room.

[Rachel Cruz]

Yeah. Because if you're paying $2,000 for child care full time, but you're only working part time, like is there some shifts there just to save some money, just to get any level of traction. But yeah, from a being where you guys are, from a high cost of living perspective, I think the number one thing is going to be income, Samantha, for you guys and you know, and it's easy for us to be like, yeah, just go ahead and move. But you both are from there, which I guess assumes all your family's there. Like I get that's a big deal, you know what I mean?

[George Campbell]

And so quiet of Colorado. It's a pretty drastic change. And moving isn't free. That's going to cost you just to make that giant move. And you need to make sure you have the income to support Colorado, which not a cheap state to live in if you live in one of the major cities.

[Rachel Cruz]

I was going to say Denver's expensive.

[George Campbell]

So Salt Lake City is expensive.

[Rachel Cruz]

Yeah, that's in Utah.

[George Campbell]

I know the whole area. It's like anywhere you go out there, these major cities, you think, well, it's the Midwest. Those areas are wild.

[Rachel Cruz]

Yeah, no, a hundred percent, 100%. But yeah, that $2,000 dollars, the extra that you guys have. And when I say extra, there's still stuff to, to be paid with it. But I would just, I mean, hunger down as much as you guys can. You know what I mean? Like, where can you cut cost and live in the reality of the numbers that you're in? I think that's the biggest thing and you guys are doing that. But it still sounds like you're struggling, which means to me a lot of it is either some of this 2000, who knows, you know where it's going. But the biggest, the biggest, biggest gap to me is income. If you're both working, I mean full time and a part time, I would be maybe looking for something else.

[Sponsor/Announcer]

When you're tired of feeling stuck with money, there's just one solution. To get different results, you have to do something different. No one accidentally wins with money. You have to have a game plan. And that begins with our get started assessment. Go to ramseysolutions.com start, answer some questions and we'll show you what steps to take next. Don't stay stuck. Take control of your money. Starting Today, go with ramseysolutions.com start.

[George Campbell]

Today's question of the day is brought to you by why refi if your private student loans are in default and you feel Stuck. You're not out of options. Why? Refi specializes in helping borrowers like you find real solutions with low fixed rate refinancing. Go to yrefi.com Ramsey that's the letter y r e f y.com Ramsey not available in all states.

[Rachel Cruz]

Today's question comes from Kelsey in Georgia. My mother in law gifted silver coins to my husband and I several times over the last few years. We sold the first batches to pay off our debt debts. She made us promise to keep the last and final batch for when the. Sounds like me. For when the dollar has lost its value in a post optalyptic world.

[Sponsor/Announcer]

Wow.

[Rachel Cruz]

Currently silver spot prices are doing very well and I've been pushing my husband to sell so that we can fully fund our big emergency fund and start investing. He does not want to disobey his mother, but he also is extremely worried about our retirement years. We are in our last late 40s and have less than $100,000 in $100,000 in retirement. What should we do?

[George Campbell]

Well, I'll tell you this. There is a much higher chance you will retire broke than there is. You're going to need to cash in your silver in the apocalypse. So that's just one man's opinion. I can't prove that to you. I think Meemaw was very sweet to gift you these silver coins, but you're grown adults. You get to choose what you do with the money. And at the heart of this, she's trying to help you guys. That's the heart of it. She wants to make sure that you're taken care of, that you've got the money you need when you need it and right now you need it. This is going to help you to start investing so that you can build exponential wealth with compound growth instead of hanging on to your debts not having an emergency fund. So if it's me, I'm yeah, I'm gonna say sorry mother.

[Rachel Cruz]

Well, and I would say if she's, I don't know if she's given them to you yet because you said she gives them to you every several years that maybe if she says don't you. If I give these to you, you cannot sell them. And I would probably just out of respect say, well if this is a gift, we may choose to do what's best for our family if we need to. So just like do you know what you mean? Like maybe there's like a nod to or I don't know if you owe someone that I don't know.

[George Campbell]

I don't Know what denomination they grew up in and what they think's gonna happen post apocalypse. That's a whole nother story, you know? Where are they at? On the left behind spectrum?

[Rachel Cruz]

Preach.

[George Campbell]

Trip.

[Rachel Cruz]

Post trip, where are you? Yeah, no, I mean, yeah, I think you're an adult and I don't like a gift with strings attached. Do you know what I'm saying? Like, it just feels weird that she's, like, still controlling the gift after it's been given.

[George Campbell]

We don't know how much this is, and she did say it sounds like they have the final batch. They just don't want to sell it because they promised her they wouldn't do it until the end of the world, which, at that point. How good is your silver coins, you know? What's that going to do for you?

[Rachel Cruz]

It's always that. That's what I always feel like with gold people.

[George Campbell]

It's like fuel and ammo and food.

[Rachel Cruz]

Yeah. Yes. You're, like, gonna go for supplies and actual things, not like little bags of coin. I'd be like a deer.

[George Campbell]

She needs to watch more movies.

[Rachel Cruz]

Shoot a deer. So we can eat. So we can eat.

[George Campbell]

Get some deer meat in a deep freezer with a generator. You'll be way better off than silver coins. Where's Deloney when you need him? He would crush this.

[Rachel Cruz]

He would love it.

[George Campbell]

Love it. He'd be like, I'm with mother in law.

[Rachel Cruz]

I always think if you had to have, like, a small group of people to survive something, if it was like, end of the world, who. Who would you have? Because they have to contribute.

[George Campbell]

Oh, yeah.

[Rachel Cruz]

Do you know what I'm saying?

[George Campbell]

Yeah. So you're saying I'm useless?

[Rachel Cruz]

I would say you and I are useless, George.

[George Campbell]

I don't know. Does entertainment value camaraderie? Does that mean nothing to you guys?

[Rachel Cruz]

Just a good community. Just like, keep the. Keep the vibe good.

[George Campbell]

Keep the morale up. That's a big deal. Deloney brings the deer meat.

[Rachel Cruz]

Yeah.

[George Campbell]

Ken will play pickleball. I think Jade and Deloney would be our savings.

[Rachel Cruz]

I think they would help.

[George Campbell]

Oh, man. Thanks for the question. Ryan is in Charlotte up next. What's going on, Ryan? How can we help? Ryan, are you with us?

[Caller]

Yes. Can you hear me now?

[George Campbell]

Yeah. What's your question?

[Caller]

Okay. Awesome. Well, I appreciate you taking my call. I hope you guys are doing well today. Do you want me to get straight to the question, or do you want a little bit of a backstory that leads up to the question?

[Rachel Cruz]

What's your question? Question. Let's just hear that first and foremost.

[Caller]

I am about to be going through a separation.

[Rachel Cruz]

Sorry.

[Caller]

Yeah, I appreciate it. My, My wife doesn't want anything to do with my business. She wants a payout of 150,000 to walk away. And I have a couple different options. I'm not sure which. What's the best. I can give her all of my ira, which will cover most of it, and then I can refi the.

[Rachel Cruz]

How did she get to 150,000? Was that, was that within. I mean, have you guys gone through lawyers and attorneys and that's what you. After the assets are divided, like what. How. Where is this number coming from?

[Caller]

We have. Yes. That's basically half the equity in our home and property.

[Rachel Cruz]

Okay, gotcha.

[Caller]

She started out at wanting 60, and then she wanted 80 and then she wanted 100 and then, you know, which is fine. I mean, you know, we're married. She's entitled to half, you know, regardless of the situation.

[George Campbell]

But who's keeping the house?

[Caller]

I am trying my best to. Because it. The land was given to us by some of my family in which we turned around the following year and we built a. Built a house on it.

[Rachel Cruz]

So to get her out. Like the 150 is the equity, her remaining half of the equity in the home.

[Caller]

That's correct. That's correct, yes. Yes. And of course the land ties on to the rest of our family's property. Property. So sure, I don't want to sell it, but I'm afraid I may have to if I don't give her my full ira.

[Rachel Cruz]

Which could you take you. Is the house. How much is left on the house to pay off?

[Caller]

Like 145.

[Rachel Cruz]

Okay.

[George Campbell]

Have you considered a cash out refi on the house to give her the money?

[Caller]

I have. The only issue with that is I have recently sold a company that I started back in 2019 and I've started a new company. And I don't. From what I've been hearing, I'm gonna have a hard time getting. Getting a big refi because I don't.

[George Campbell]

Have proof of income for a long enough period of time.

[Rachel Cruz]

Yeah.

[George Campbell]

How much cash do you have? Like if you liquidated anything non retirement, how much could you come up with?

[Caller]

Um, I mean, I've got a couple pieces of equipment. Um, I. Without touching our savings, which she also wants half of that. Um, I could probably come up with 45, 50,000, but then that's gonna, that's gonna hurt me from a continuing. Continuing. Continuing on business with. Right. Yeah, yeah.

[George Campbell]

I mean it. Just to see even if you don't have fees with this IRA transfer. If you do a direct IRA transfer transfer, that's going to be way better than just, you know, withdrawing that money.

[Caller]

Yeah.

[George Campbell]

So she's wanting straight cash. Don't do that for your retirement.

[Caller]

Yes. You want straight cash. You don't really want it any other.

[George Campbell]

Way because that's going to crush you. That's like taking out a loan at, you know, 35%.

[Caller]

Exactly.

[Sponsor/Announcer]

Yeah.

[Caller]

I've got, I've got 113,000 in my RA. I know it's not much, but after everything, she'll be getting like 72.

[George Campbell]

But then you're restarting from zero and losing all of that growth on 100. If you plug that into a investment calculator over the next 20 years, you're not giving her 113 grand. You're giving her a million plus.

[Caller]

Yeah, my, my guy says in 30 years, by the time I'm, I'm 66, it'll be roughly about 2.3 or something.

[George Campbell]

Exactly. And so I would, I would be working with, with your attorney to fight against this and make sure that we do this in a smart way that doesn't destroy you for the rest of your life. Because that's what it sounds like she's trying to do. I don't know.

[Caller]

No, she's not being of it, you know. Yeah, yeah, yeah. She's not, she's not being mean about it or anything. She just wants half of, you know, half of the.

[Rachel Cruz]

Right. I mean, that's, that is the case.

[George Campbell]

I would sell the house. I know it hurts.

[Rachel Cruz]

No, Ryan, I'm so sorry.

[George Campbell]

Yeah. Financially, on. Mathematically, it makes way more sense to let go of the, of the house.

[Rachel Cruz]

Sentimental values. Tougher for sure.

[Caller]

Yeah.

[George Campbell]

Yeah, it is.

[Caller]

And I mean, I've, I've definitely thought about that. And I'm, I'm, I'm not 100% against it. I just know that when I do sell that property.

[Rachel Cruz]

How much do you make a year?

[Caller]

With the new business, which, which I've only been doing for a few months, I've been adding like 10,000amonth.

[George Campbell]

Okay. I would also see if you could work out, like a structured payout.

[Rachel Cruz]

Yeah, that's what I was going to say. You don't want to, you don't want to go on forever and ever paying her, but I wonder if there's ways that you can liquidate some stuff, give her a little bit of a lump sum and then be paying her some. You know what I mean? To be able to do both if you can. But I would sell the house before cashing out the ira. Just from a mathematical standpoint, but that's really hard, Ryan. I'm sorry. Oh, that's the heartbreak of divorce. It's a. It's a relational. Obviously, complete turns into a messy business transaction. Yes. And then all of it. So, so sorry you guys are going through this.

[George Campbell]

Hey, guys. George Camel here. Do you ever feel like insurance companies only care about your money and not what you actually need? Well, there's a better way. When you go to Ramsey's insurance resource Hub, you'll start feeling confident that you're getting the right coverage that's truly best for you. You'll find helpful info on everything from life insurance, health insurance, identity theft, protection, and. And when you're ready to get the coverage you need, you can connect with a Ramsey trusted insurance pro who will only get you what you need at the best price. Go to ramseysolutions.com insurance ramseysolutions.com insurance Here are the top questions people have about online wills. Number one, how do I know if I need a trust or if my estate is too complicated for an online will? Well, in general terms, if your estate is worth less than a million bucks, getting a will online is probably a great option for you. What do I need to start my will? Well, you got to figure out who do you want to get your stuff? Who do you want to take care of your minor children? Who do you want to make decisions for you if you're incapacitated? Number three, is an online will legal evaluation valid? Yes, but it's gotta be state specific to match the laws of your state. And finally, why would I want an online will versus going traditional, you know, with a lawyer in person? Well, it's less expensive, more convenient. Takes less time to set up than a traditional will. So go to ramseysolutions.com willsquiz to find out if an online will is right for you. Jim is in Denver up next. Jim, welcome to the show.

[Caller]

Thanks for taking my call. So my wife is considering a career change, but we've been trying to decide if it makes sense and if it's it worth worth it. She makes about $85,000 now working in project management for philanthropy, and she's interested in going into midwifery. It would mean her potentially not being able to work for a couple of years, so lost income, but she potentially would make more on the other side of that.

[George Campbell]

Where are you guys at financially? What do you make?

[Caller]

I make about $205,000 a year. Awesome. We're in baby step four, five and six. So we have six months saved and we don't have any debt. We just bought a house about a year ago. So we don't have a huge amount of equity in our house. So it does feel like we need to. It would be a stretch to make it on one income for that time and tightening the budget and I need to sell some stock and things to be able to cash flow it. But it does seem possible. It just feels like something where giving up that income over that two and a half to three years and then, you know, but potentially making 60,000 more a year on the other side of that is kind of what we're trying to weigh.

[Rachel Cruz]

So I'm not sure I don't know the answer to this. That's why I'm asking you. When she goes to school for that to be a midwife, is it from a schedule perspective she can't work at all?

[Caller]

Probably for part of it she'd be able to work, but for some of it probably she'd not be able to work. It's full time for at least I think for maybe the first year of it she could probably work work but there'd be like a two year gap or so where she wouldn't be able to work to my understanding so far.

[Rachel Cruz]

Okay. Because she probably has to do to get the certification, I guess is, is what she's going for, right?

[Caller]

The heavy, heavy study load and labs and spending time in the clinic and that sort of thing.

[George Campbell]

What's this going to cost?

[Caller]

So right now it looks like the program itself is like about 50,000 and then there'd be some prereq she would have to do. So I think all told, like conservatively we're thinking like 70,000. So it's 70,000 and then plus the lost earnings for at least probably about two years.

[Rachel Cruz]

And you guys can cash flow that I believe.

[Caller]

So I think it'd be tight, but I think we can cash flow it and I think we, we have some, I have some stock I have through work that I think I can sell as I go that I think I could use to pay for it.

[Rachel Cruz]

Okay.

[Caller]

So it's like there's the trade off of like that could also be going towards wealth building and she could just keep her current job. But I think this is something where.

[Rachel Cruz]

She wants to do this.

[George Campbell]

Well, she just done with project management, her heart's not in it.

[Caller]

I think she, if she found a different job she could still enjoy it. Her current job she's really not enjoying right now.

[Rachel Cruz]

Yeah.

[Caller]

And so it's really. She's kind of said, I know I want to leave the job I'm in right now. Maybe I'd go someplace else and I'd make more money and enjoy it more and be fine and don't need to do this. But this does feel like, like maybe it's a good time to reconsider career options and think about it.

[Rachel Cruz]

Okay, well, the only thing I don't like about the equation is just that she's running from something she doesn't like to something new. Versus if. Because you, from what you just said, and again, correct me, because if this is her passion and this is what she wants to do is help deliver babies, then I would say this is why you guys do the baby steps. You know what I mean? You get to like, you get to make calls in your life and you get to change things. And that's amazing. So that's just her dying passion. But what you just said kind of was. I was like, oh, where she's like, no, I still like project management. I just don't like my current job. So if I changed jobs, I probably may not want to be a midwife. So I'm like, okay, in my head, it kind of would make sense to just try that first and see if that scratches the itch because you're at least getting away from what you don't like. Like, versus having to go through a two and a half year. And to your point, you know, all of it. But again, I say that with a caveat. Unless she says, no, I want to be a midwife, this is what I want to do. It's my passion, it's my love. Then I would say go for it. And you guys, it's going to be, you know, a tight two years. But like, I think that's great because she's doing what she loves, but she also loves project management, so.

[George Campbell]

And you may not be able to roi all the math on paper. I can tell you're an analytical kind of nerdier guy like me. And you're like, well, I want to make it make sense on paper, right?

[Caller]

Yes. I've been trying to roi this out and it's one of those where it pays off. If she stayed in her current job at her current earnings, it can pay off, but it would take like six or eight years or something. And then there's risk with any new study and all that. But I get the point you're making, which is stop trying to overanalyze so.

[George Campbell]

Add into your equation her joy and see where that takes. Right? Because then it just breaks the math and you go, well, okay, I guess through my math we're just going to have her do this. And the good news is you make $200,000 plus and you're debt free. And so I'm not worried about the finances. Now the mortgage side, if you could sell your stocks, maybe you do a lump sum payment and recast the mortgage. If the actual monthly payment is, is stretching you guys, that might help you out mathematically to stomach this in your budget because what's your mortgage payment right now?

[Caller]

It's about 5.

[George Campbell]

5,000 on your take home. If just your take home is what?

[Caller]

Just my take home is 10 and a half to 11.

[George Campbell]

That's the part that scares me because then your, your mortgage payment is eating up about half of your take home pay. Now that's without, you know, you're investing in health care premiums and other things.

[Rachel Cruz]

And it's for a pure. It's only for a two year period.

[George Campbell]

Yes.

[Rachel Cruz]

Yeah.

[George Campbell]

To your point, can we stomach half our mortgage, you know, take home pay being swallowed up by the mortgage? Mortgage maybe. I also think the recast could help you there where you take a lump sum of, you know, 40,000 from the stocks you sell, apply it to your principal, recast it. Now your payment is three grand a month. Yeah, 3,500amonth.

[Rachel Cruz]

And I'll say it again, because it's in my head, I'm like, this is a lot of things changing and moving for the fact that she just doesn't like her current job. So.

[Caller]

Right.

[Rachel Cruz]

Again, I would have that conversation with her for sure. Just that, I mean, honestly, if she's as happy at both, it's just easier to go find another project manager job. And she's still happy. You know what I mean?

[George Campbell]

There's project managers making $150,000. And so if the money is the thing that's alluring of like, well, I could make more, I'd feel more valued. Let's at least explore that.

[Rachel Cruz]

Yeah, yeah.

[George Campbell]

But if it's just, hey, you could pay me a half a million in project management would not be it. Well then we know.

[Rachel Cruz]

Yeah, but that's not it though, because I think.

[George Campbell]

Yeah, so that's what I'm saying. If it's just not it, no matter what the money is or what the company is.

[Rachel Cruz]

Yeah, but no, but she's saying she enjoys project management. She just doesn't like her current job.

[George Campbell]

There's 17 things I can Enjoy. So it's just like we can't just flippantly jump from thing to thing.

[Rachel Cruz]

That's what I'm saying. Yeah.

[George Campbell]

Make it a hobby. Maybe she becomes a doula on the side and it's not going to pay as much, but she still gets to be a part of the process and support, you know, moms and that could be a cool thing. So maybe there's other avenues to do this.

[Rachel Cruz]

Yeah. Yeah. So unless it's like a die hard passion. I would do it for her. Yes. And I would make all these changes and all of what we're talking about. It's just a lot of work and time. If it's not the thing that she's just dying to do, if she would still be content intent doing project management with another company. So I would push on that, make.

[Caller]

Sure it's the dream and brings the joy before going in on the adventure.

[Rachel Cruz]

100. That's a great way to do that.

[George Campbell]

And then stop doing the math because you probably won't work it out. Yeah.

[Rachel Cruz]

How old are you guys? Jim?

[Caller]

We're both 37.

[Rachel Cruz]

Okay. Yeah, perfect.

[George Campbell]

So she even waits a year. But all the time she's 40, 41. She still gets to do this.

[Rachel Cruz]

That's why I'm a little bit tempted for her to just find something else and see if she still enjoys project management at somewhere else. Because she may. May love a company and, and that be fulfilling to her and that she's great and content. You know what I mean?

[Caller]

Right.

[Rachel Cruz]

So I don't know.

[George Campbell]

Either way, I think we're on our Eat Pray love journey here trying to find the next thing for her. And I'm very hopeful she'll find it. She's got a great husband who's very supportive. You've got a great career. You guys have done a great job financially to set yourself up to have this kind of flexibility to have the options to do something that it doesn't make sense on paper. Mathematics, dramatically. And yet you can still go, yes, we're doing this.

[Rachel Cruz]

Yep.

[George Campbell]

That's financial peace.

[Rachel Cruz]

Yep. I think whatever she's feeling the most where she wants to be.

[George Campbell]

So, Rachel, if you were gonna, you know, drop this gig and go do something else. Meteorologist, what would you be doing?

[Rachel Cruz]

I would be a political correspondent for a. Oh, that's solid. Yeah. What about you?

[George Campbell]

Anything that doesn't require me to go back to school, that is, I think.

[Rachel Cruz]

I just, I'm not, I'm not doing it again.

[George Campbell]

I will not purchase a textbook for some insane price. I Will not sit in a classroom.

[Rachel Cruz]

I'm with you.

[George Campbell]

I don't want to turn in a paper.

[Rachel Cruz]

Nothing wants me to be like, I want to go back and get a mba. I'm like, I'm good.

[George Campbell]

Our scripture of the day, Proverbs 13:11. Dishonest money dwindles away. But whoever gathers money, little by little makes it grow. One of my favorites, Milton Friedman said, nobody spends somebody else's money as carefully as he spends his own. That'll preach, Milton.

[Rachel Cruz]

Well said, Milton.

[George Campbell]

Jenna is up next in Orlando, Florida. Jenna, how can we help today?

[Caller]

Yes, hi, good afternoon. Thank you guys for all you do. So my husband and I are pretty new in discovering the Dave Ramsey way and learning about paying off debt. So we have quite a large amount of debt. We processed it. We've gone through the emotions as far as having that much debt and probably mistakes that we have made. We have, between mortgage, student loans, cars, we have over a million dollars. So really what we've been currently doing is just trying to.

[Rachel Cruz]

Would you say a million, Jenna? Did you say a million?

[Caller]

Over a billion, yes. The mortgage, student loan.

[Rachel Cruz]

Okay.

[Caller]

Cars, everything. So what we've been doing is we would been doing like $500 a week into our high yield savings account, just really trying to save while trying to pay off bills that we just don't know. I guess we're not sure what to do as far as how.

[Rachel Cruz]

Okay, can you. Can you. How much is the mortgage of the million?

[Caller]

It is 525.

[Rachel Cruz]

525. So it's half of it. Okay, so what's the rest? The rest is consumer. So half a million in consumer debt. What does that consist of?

[Caller]

So for 475 is my husband's student loan.

[Sponsor/Announcer]

Whoa.

[Rachel Cruz]

Doctor, lawyer.

[Caller]

Yes, yes. He is a physician.

[Rachel Cruz]

Physician. How much does he make a year?

[Caller]

But he currently makes two fish.

[Rachel Cruz]

Okay, how much do you make?

[Caller]

I make 70.

[Rachel Cruz]

Okay. Is his income pretty steady there? Is he. See, like how. How long has he been out of medical school?

[Caller]

He has been out of medical school 10 years now. So we've made the mistakes, big purchases, things like that. So we've practiced that. So now we're trying to see kind of how to tackle everything.

[Rachel Cruz]

Okay, well, so it's. It's basically a student loan and a mortgage is what you're saying?

[Caller]

Yes. Oh, he also. We have 26 left on his car.

[Rachel Cruz]

And then a car. Okay.

[Caller]

And then we've been working on getting the credit card down. So we may have a thousand to two thousand on the credit card. So that could easily be done here shortly. So that's really not the concern.

[George Campbell]

Where's your savings at? You said you've been putting 500amonth towards high yield savings. How much do you have in there?

[Caller]

Yes. So we are currently at 74,000 in our high yield.

[George Campbell]

74,000.

[Rachel Cruz]

Good job. Okay, well, great. Well that's gonna be cleaning up all this stuff. So tonight I would pay off the credit card in the car with that.

[George Campbell]

Are you gonna do that, Jenna, or is he gonna do that?

[Caller]

Yeah, we are. I mean we weren't sure to just completely deplete that. Pay off the debt. Yeah.

[George Campbell]

Since you're new to this, let's just recap so we're, we're clear on, on understanding the baby step. So baby step one is a thousand dollar starter emergency fund. You guys have long surpassed that, which is great. And then baby step two is to attack all of your consumer debt using the debt snowball method. So smallest to largest balance, ignore the interest rates, just attack the little one with a vengeance. Make minimum payments on the rest. So that means liquidating any non retirement assets we have, including savings outside of the thousand and throwing it at the debt. Okay, but the good news is that clears a bunch of debts and a bunch of payments for you guys.

[Caller]

Right? The next question is because my husband, he's kind of on the opinion just let's just throw everything into savings and do minimum on the student loans and the mortgage because I guess that's just overwhelming at those numbers. Or do we stop the savings and.

[George Campbell]

Just stop all savings? You'd even stop all investing. So if he has, if you're, either of you have a company retirement account you're putting money into, even for a match, just pause, go all the way down to zero for the time.

[Rachel Cruz]

So here's what, here's what's crazy, Jenna. So here, I just want to give you a little picture. Okay. If you guys went all in and actually did the baby steps the way we teach you, do exactly what we say. Okay. That means from what I'm gathering from the car and the credit card, it's 28,000 for what you guys have saved, basically. If you, you'll have 45,000 left in savings. You throw that at the student loan, you'll have 4,435,000 left of the student loan. What you guys make 340 a year if you guys lived. And I'm going to give you a kush number, and I don't even want it to be this much. If you lived on 100,000 a year, which I want you to live on even less, Then that means you guys could. Could literally put $240,000 towards the student loan every single year. You guys could have this paid off in two years. Two. Two years, Jenna. Year and a half. If you actually lived on, like, 70,000. Do what?

[Caller]

If we get overwhelmed? We run the numbers ourselves. So, yeah, the problem is you guys.

[George Campbell]

Are attempting to do a lot of good things all at once instead of just putting all of your focus and intensity toward those debts using the debt snowball. And Rachel's right. I mean, we're talking 24, maybe. Maybe two and a half years max. You're done totally with me.

[Rachel Cruz]

And then the other crazy thing, which, again, I want you to still, after that, I want you to build up an emergency fund and invest in all of it. But, I mean, if you guys lived on $100,000, you guys could have your house paid off in another three years. I mean, like, it's just wild to think in five years you guys could have no debt in five years, but you have to do it. And you guys have been living the doctor Wonderful lifestyle, nice house, nice car. Yeah. Everything's been great. And if you want to keep. Yeah, and if you want to keep. To keep paying minimum payments on the student loans and all of that stuff, you will be exactly where you are in five years. Nothing will have changed. Nothing will have changed. So unless you want a different outcome, you have to do something different. And so, I mean, man, if I was y'. All. In a heartbeat. In a heartbeat, I would do this. Utilize that income, and I'm giving you 100 grand to live on. So.

[George Campbell]

Very generous. Very generous.

[Rachel Cruz]

I would even go less. I would. I would try to do 70 or whatever, right? So, I mean, seriously, if you guys go scorched earth, you could have. You could be completely debt free in four and a half, five years.

[George Campbell]

I love this plan. There's a lot of hope in this situation if you follow the baby steps.

[Rachel Cruz]

Yes, absolutely.

[George Campbell]

All right, let's squeeze one more in here from David in Salt Lake City. David, get right to the question, if you could.

[Caller]

Hey, guys, thanks for taking my call. I appreciate it. I just had a quick question. We've got 69,000 left on our home that we purchased in 2017, and we have the cash to pay this now, but my question is, should we pay it now? I understand, like, I want the piece from having it paid, but from a tax perspective, we're kind of in this tax game of, like, trying to Avoid paying a bunch of taxes this year because the business did really well. So I'm wondering if I should pay this now or wait until like the beginning of the new tax year and if that would be advantageous.

[George Campbell]

Call me stupid, but I don't understand what the tax purpose is of waiting to pay off your home.

[Caller]

So if we, if we spend that or put that 69,000, it's counted as taxable income. If I'm not correct. Whereas the money that in like a 401k or something that way it's not tax, it's tax deferred.

[George Campbell]

Is this money in savings right now?

[Caller]

Yeah, it's just in a checking. So we have a high yield savings and then we have a checking where it's just sitting.

[George Campbell]

You're not going to be taxed on.

[Rachel Cruz]

You'Re taxed in a high yield. But that's, I mean if you were.

[George Campbell]

Like selling off an asset and you had capital gains, there would be taxes. But if you're saying this money is already liquid in a checking or savings account, pay off the house today, it's not going to affect your taxes.

[Caller]

Sorry, it's in my business checking. So it's not like, like taxable income yet. I guess.

[George Campbell]

I mean if that money sitting, you're checking tax, I mean are you going to itemize deductions? It, I don't think this is going to affect your taxes. You can talk to a tax pro to double check. But I don't understand how using money from business checking, it's still your money.

[Rachel Cruz]

Are you saying it's technically like you're going to be, it's going to be earned income.

[Caller]

I'm saying on paper it's like, yeah, it would like you've made extra 70,000 more.

[Rachel Cruz]

You've made an extra 70,000 and so you would technically.

[Caller]

Whereas if we put 70,000 in a, in our 401k or we have like a independent 401k so we can put in a larger amount that way it's tax deferred. But yeah, I just, I don't know.

[Rachel Cruz]

Well, for the taxes, I mean it'd be what, like, I mean if you were to pay taxes on that 70.

[George Campbell]

On that extra income.

[Rachel Cruz]

Yeah, I mean it'd be like six.

[George Campbell]

I mean, yeah, I think we're, this is a lot of, a lot of gyration. I would just pay it off and yeah, you might have some extra tax taxes on that extra income, but I don't think it's worth just waiting till the new year. And I mean it feels like a some tax hacks you're working on here. I think the peace of mind in a freed up payment will do you way better. So that's what I would personally do. I don't worry about making too much money. I would just call it income, pay off the mortgage, move on with my life, my friend. Way to go.