Live from the headquarters of Ramsey, it's the Ramsey show, where we help people build wealth, do work that they love, and create amazing relationships. I'm Ramsey personality George Camel, joined by my good friend and best selling author, Mister Ken Coleman. And we are taking your calls this hour at AAA 825 225. I'm the money nerd in the group, so I'll be happy to take your money calls and help you take that right next step. And Ken, of course, is going to help you with that shovel. Making more income, getting to work. Maybe it's a job switch. Money. Money. Your new theme. Yeah. Yeah. All right.

You know, Dave says your greatest wealth building tool is your income. And I'm the guy that helps you figure out what that is or how do we get more money? So, yeah, I thought so. I wanted to also test out the falsetto early.

I was impressed. One more note and we would have been taken off the air.

I think so.

It was too good.

I don't think so. I mean, good for the way, George. The lobby is absolutely packed.

You would think Bono is next to me with this kind of electric crowd out there today. And we're going to have a good time. We're going to meet them during the break. So your friendly reminder to come visit us. Let's get to the show. Dan awaits in Gettysburg. What a historic place that is. Dan, how's it going?

Going pretty good. How are you?

Great. How can we help today?

So I had a question. Just wanted to make sure that me and my wife are on the right track with our budget. And we're hitting kind of a snag whether or not we should move because our neighbor is causing us issues with the apartment that we rent.

Wow, that's. That's quite the snag.

I'd like to know more about kiss bother. I like a little drama. What's going on with the neighbor? People want to know.

Well, so we, me and my wife are, as they would say, scorched earth with our budget. And we really started in April, tackling our debt. We have about 48,000 in debt, and our apartment is fairly cheap, but it's connected. And since we're not eating out anymore and we're cooking from home, the smell are bothering the neighbor from cooking. And it's like we're only getting, like, two, 3 hours of sleep at night.

Now, wait a second.

Wait, wait, wait, wait. There's a lot that. Can I unpack, George? All right. You're telling me your neighbor is upset by your cooking smells?

Yeah.

What are you cooking?

Can't breathe.

What are you cooking?

Oh, well, you know, like last, you know, like last night we just did chicken and noodles and that kept her up for about 4 hours.

What time are you cooking?

We talk about, you know, five, six o'clock at night, you know.

So wait a second. So hold on. There's a lot here. So you cook at five or 06:00 and you're cooking pretty basic stuff like chicken and pasta and, and, and the name, is it a woman or a man? The neighbor.

It's a, it's just a single woman.

She's older and she's older and she's saying that it's keeping her up for.

Because of how aggressive the smell is.

Yeah, I mean, we got, we got a text at two in the morning saying she was going to call the fire department on us.

Please, at two in the morning.

I would love to see them show up and say, what's the issue here? Well, first of all, it.

Why are you answering a text at two in the morning? Turn the phones off and put them in another room.

Yeah, no, we're. I'm not answering it. I call the landlord and the landlord wants her out, but he's having trouble getting her out.

I'm guessing this is not her first issue. She sounds like a troublemaker.

No. Yeah, yeah. What's the problem right now? Right now me and my wife are determining, like, should we move to another apartment that. With a higher rent or should we.

Just keep cooking and keep cooking and I would just push her out with, in fact, you guys aren't even cooking. Like, I cook something with a lot of garlic. I'd really double down on waters. Like, how about some fish? Drive the old lady out. The landlord wants her out anyway. Why in the world. And I'm having some fun with this. But, but why in the world would you move to a higher rent just because she's griping over just nonsense?

Yeah, just because. It's just mental wear and tear. Why is it with you?

No.

Okay, what's the mental wear and tear? I don't understand. It's some grumpy old lady. Why don't you just ignore her?

Oh, no. Yeah. Well, no, I mean. Well. Well, because they're conjoined apartments and she.

How conjoined are we talking? Wait.

Like she'll stop around and like scream and yell and we can hear it through the entire apartment and that's what's waiting us up at night.

She's screaming at you? Or is this a different situation?

A couple times. Couple times she.

I think this needs to go to the landlord. If she wants to get the authorities involved, let them, because it sounds like she's about to be moving out.

I think you take it to the landlord and fight instead of giving into this crotchety old lady.

I'm guessing the landlord's on your side with this, saying, yeah, she's a problem. I'm sorry.

Yeah, he's trying to get her.

Can they move you to a different unit for the same price?

No, no. It's a duplex house, okay.

It's not like a complex. Well, how much longer are you going to be here? Is this your long term renting situation?

Well, we don't want it to be. That's why we don't want to go up the higher rent, because we have, like 48,000 in debt. And I have a plan to have all of our debt paid off except for my school bill, which will be 35,000 at the end of the year, and then get that done by in a half of a year. Because we make. Well, we make like 7500 a month. And so we want to eventually work to get a house of our own. You know, I'm going to tell you this.

I'm jumping in, Dan, for a second, because the nature of this call is really not financial. This is an emotional and a mental thing that you're dealing with. And I get how. How much of a pain in the. You know, what it is. But George, unless I'm missing something, this would be a bad financial move for you guys. I would sit down.

This is.

If this is me. But I love confrontation.

All right?

So I understand. Not everybody likes confrontation. I'd sit down with the old lady, I'd record the thing, and I'd go, ma'am, this is what you're doing. You're stomping, you're screaming. We are going to record all this and document it, and we are going to sue you. We are going to drive you out of here if you don't stop this nonsense. So we're recording everything from this moment on. We are not leaving. You are not. Stare the old lady down and just go. We're not going to lose. You are going to lose. And here's how we're going to ensure that. And I would just double down on it. I really would. And get the landlord to kick her out or she stops this nonsense.

That's what.

I would at least try that. You got nothing to lose, George. It's a little bit more confrontational.

Yeah. I mean, first I thought, well, maybe they're in the wrong here, but it doesn't sound like that's the case.

If she did that to me, I'd go get a drum set and I'd play the drums. I'd fight fire with fire. I would. I'd go get a bass drum and beat on that thing.

And. So petty. I'm not. Dan is a nice guy. Dan, you don't want to do any of this.

Yeah, well, I'm a. I work two counseling jobs, and I'm a youth pastor, so bless it.

Maybe you should try to counsel her. Give her some free counseling.

Of course. I'm having fun with this, but, Dan, I wouldn't give in on this. I'd drive her out through the landlord.

Not at the cost of moving costs and moving out the more expensive apartment. I'm going to stick this out and see what happens in the next few months and really put some pressure on the landlord to do something about it.

Yeah, I gave him a deadline last time. Yeah, good for you.

It might escalate before it gets better, but I would not make any moves right now. You guys are on track to get rid of this debt fast. I don't want to derail that because of some cranky old lady. She's got some get off my lawn energy, and we won't stand for that.

Ken, I would try cooking some. The most passive aggressive move is to cook some fish.

Ken's, like, microwave some five day old Salmon. See if that gets her out of there. Just smoke her out of there.

Yes, sir. Let's go.

More of your entertaining and real calls coming up. Triple 8825-5225 this is the Ramsay show.

I saw some recent financial statistics, and there was some pretty troubling news. When families were asked how long it would be before they faced financial hardship if a spouse died, nearly one third said they'd be in trouble immediately. Another 44% said they'd be financially drained within six months. People, it does not have to be this way. Term life insurance plans are just plain cheap, and companies have made it even easier by not requiring exams. In many cases, there really is no excuse to leave your family in this situation by not having life insurance. This is why I talk about Zander insurance every day. They're committed to protecting families with the only products that I recommend, and their team keeps the entire process simple and affordable. Go to zander.com for quick online pricing, or call 803 564282. This has to be a priority. If your family is in this situation, you need to get this done.

Welcome back to the Ramsey show. I'm George Campbell, joined by my good friend Ken Coleman. Open phones at AAA 825,225. If you've been around here long enough, you know about Ken's get clear career assessment. It's helped thousands and thousands of people get a clear picture of the work they do best and that they love the most. And now we're excited to announce that Ken's new book, find the work you're wired to do, which will show you how to use those results to get specific in your job search and find the work you enjoy. You can pre order it right now and get over $25 in free bonus items. And by the way, it includes the assessment in the book. So it's a pretty cool product, Ken. And it's been selling like hotcakes. Excited to see how this helps people. Yeah.

And here's the deal on that pre sale deal. If you get it now, you're getting the ebook and the audiobook along with the hard copy and three different assessment codes.

So it's basically three.

There's no bonus outside of just the book itself. You're getting those two formats. So it's three books, price of one.

And you read the audiobook yourself?

I did, I did.

I'm excited to hear you speak.

My baritone voice on full display, hopefully for your listening.

Any singing?

No singing.

Okay.

But I thought about it. I thought about having a bonus track.

We'll do our duet album soon enough. That'd be great.

That would be great.

We're here for it. Well, hey, this book will help you answer four of life's biggest questions. Who you are, why you're wired that way, what you want to do professionally, and how to get there. So this is your last week to preorder because this thing is launching with or without you. So go get it. Ramsaysolutions.com store while the gettings good. Get all those bonus items while you can. Ramsaysolutions.com store. All right, Nicholas is up next in Michigan. What is going on, Nicholas?

Hey, my name is Nicholas, and at 18 years old, I moved out of my home state of Missouri, where my family owns several companies and businesses. And I went to the collision field, got my associates degree in collision technology, and really hit the ground running. Built a life for myself here in Michigan. And about a year and a half ago, bought my first house, put $25,000 down on $125,000.

Whoa.

At 16?

No, I am currently 25. But when I left Missouri, I was 16.

Okay.

So I, you know, moved out to Michigan and started my life. I was, like I said, my family owns several companies in Missouri. And I always kind of felt not really under their thumb, but just kind of in their shadow a little bit. So I moved out to, like I said, michigan. Started my life in my own industry, the collision industry. And I met a young woman there. We've been together for six years. It's the only relationship I've ever been in. Like I said, about a year ago, I bought my first home. And about six months ago, I was listening to Dave's TikTok, and he told. He said on there that not many people can become, you know, successful or be millionaires while dragging somebody else with them. And that really got me into thinking. She's never worked. She's never gave into our, you know, checking account. She's never really done anything to help us financially. She's really only been a homemaker. And about two weeks ago, I rented my house out, told her that she needed to leave, and I'm planning on moving back to Missouri. And I would just want to know if Dave thinks that that is the right choice or not.

Well, it sounds like it's too late regardless.

Well, yeah, I'm kind of struggling with my decision right now.

You kicked her out because she wasn't working. You said she was. She just wanted to be a homemaker. And you guys were never even engaged.

Yeah.

And you're upset that she wasn't adding to your checking account. I'm confused by your decision to even combine your life with this person before marrying them.

Well, you know, I. For a long time, I was, too. But like I said that this has been my only relationship, and I really wanted it to be my last, if that makes any sense. And I don't. I don't really know. I'm a pretty financially, I feel like, stable person. You know, I drive a 2012 mini Cooper that's paid for. I bought a house well under what I could afford. I make about $90,000 a year. But if you split that in between two people, you know, it's a little over $40,000 each. And I just can't.

You guys weren't married. You're playing house.

You're right. Yeah, I agree.

And hold on, hold on, hold on, hold on, hold on, hold on. This is the gal. You said you wanted to be your only relationship, and you kicked her to the curb because she wasn't really bought in. And does that mean she was anti what we teach or she just wasn't engaged? There's a big difference.

Well, very anti, I would say.

Like she racking up.

She. Exactly. Brand new car, you know, I mean, wanted to just continue.

You had to sign the dotted line on all those loans.

Yeah, she didn't have an income.

So I want to make sure that you understand you are fully responsible.

I know. Yes, sir. So we've been working for the last, I don't know, probably three weeks on getting everything split. Her parents are actually going to be taking over her car loan, and we're getting all of, you know, all of our bills separated off of my checking account and stuff like that. But like I said, I'm really struggling because for the last six years, it's been me trying to get her, like, just, you know, get an income, go just work. If you bring anything into the table, that's enough. Like, I just, I think do it all by myself.

Hey, Nicholas. The more troubling issue is not the income, but just that she is in complete opposition to the way you want to handle money. And so for that reason, I'm. I'm fine with this breakup. I think it's the right move, but I just don't think it's as much about her being a homemaker and not wanting to work. The issue is that she's. She's really opposed to being on the same page with you and got you to do things that, you know, aren't right.

Yeah, I completely agree. And I think so.

I think it's a good move. But now you're regretting it because you miss her.

Yeah, that's where I'm at. Exactly.

I think you broke up with her for the right reasons, George.

Yeah.

I feel like I'm choosing my finances over her.

Well, I do think you have been aggressively focused on building this career and very focused on finances and income, which is good, but you've almost got a flat tire. And my worry is if you continue down this path, you'll be great at saving money, and you will be miserable, and you won't have any healthy relationships. Your spiritual life's going to be in shambles. And I think for a young guy, I love your drive and your hunger, but you, you can't let that be your entire life. And my thing is, if you guys had a kid, would you be okay with her not working and being at home taking care of the kid? Yeah. Are you sure? Yeah.

But you wouldn't be okay with her being on the other side of the page on debt and everything else that, that would be potentially destructive for your marriage. George, do I hear. I think he. I think he should have broke. Broken up.

Oh. I'm not saying it wasn't the right move. I think your regret comes from the fact that you poured in a lot into this relationship. Six years is a large majority of your life when you're 25 years old. Too late.

My concern is you waited too late. You co signed for all this stuff. You hope she plays ball. You hope she goes along with all of this.

Yeah. You guys combined your life before you were even aligned in life. And that, to me, is the big problem here. And that falls on both of you. And so I don't think. I think the regret will pass. You'll meet someone new. But you gotta get Nicholas healthy first so that the next relationship doesn't end the same way. Where you go. What are you bringing to the table financially? That's the wrong way to look at a marriage.

I agree.

Okay.

Thank you.

I'm sorry you regret it. I wouldn't blame Dave. I would blame your lack of getting alignment on vision and values and goals before you structured your life together.

Yes.

Do you have advice how to better do it with my next one, I guess.

Yeah.

How to move on.

Yeah.

Before you get in a serious relationship, you talk about money.

Okay.

You say, what are your values around debt?

I think it's probably a third date conversation.

I really do.

I think it's early on. I'm gonna say third date. You know, it doesn't mean you're talking about combining finances and getting freak in the girl.

You don't need to ask about income and all that, but just talk about.

How do you view money? How do you view debt?

How'd you grow up with money? What were your parents like? Yeah.

You need to find somebody who has got shared values on this issue. Money is as big a cause of marital strife as anything. George.

Yeah. What's the big ones? Money, politics, religion, kids and kids. That's the big one, too.

Yeah.

So I think it's okay, as you get further along in a dating relationship, to start talking about things.

Not further along. I'm sticking with third date.

Third or fourth it is.

Would you. What do you say?

Yeah, I'd say a few months into the relationship.

A few months?

Yeah. You gotta get to know somebody.

That's a lot of time and money invested to find out that you're not alike. There's a lady in the lobby that's going my third day saying, third day. Why waste each other's time? What are we doing?

Wow. What are we doing?

So the other part of my question is I, like I said, I rented my house out. Now I'm in a really good loan place on it. I owe $100,000 on it. It's worth about 170. And I'm thinking about moving home back, and, you know, being around my family. Do you think that that's a good decision?

I don't know why you'd move backwards unless you're financially destitute and needed to. You've already started your life of independence. You've got a good financial spot. I don't see any need to move home. That's, you know, you don't need that landing pad right now. You're gonna be a nor.

Do you wanna be a long distance lamb?

Yeah, I would sell it. If you do plan on moving home and restarting, this is the Ramsay show. This episode is sponsored by Betterhelp.

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Welcome back to the Ramsey show. I'm George Campbell, joined by Ken Coleman. The number to call is 888-825-5225 Brea joins us up next in Seattle, Washington. Brea, welcome to the Ramsey show.

Thank you so much for taking my call.

Absolutely. How can Ken and I help?

Hi. So I've got some medical debt out the wazoo. I've got going all the way back to, I think, about 2018. Most of it has gone to collections. We hired a financial planner recently, and his advice to me, because we had a lot going on in our life right now, is to just ignore the debt. And it'll fall off my credit and just don't pay attention to that right now. I can kind of see where he's coming from, but at the same point, I just feel a little icky not paying attention to the debt. But I'm wondering if he has a valid point.

Well, why did he make that point? Do you have a lot of other debt to focus on? Right now?

We've got some credit card debt, but my husband's salary just tripled and our housing being paid for, so we're knocking it out pretty fast.

So what's your total debt? List them out for me.

So in credit cards, I would say we have about. We have one $5,000 credit card, we have another $2,000 credit card, a $300 credit card. We just paid off our car. And then we've got, I think, another thousand dollar credit card.

What have you been racking up on these credit cards?

So I guess the brutally honest answer is that we've just kind of been irresponsible. My husband did take a sales job last year, and he was commission only, and I started to have seizures, and so he had to take a few months off.

Was that the medical debt from the seizures or what?

Yeah, the medical debt is from the seizures as well as we also stupidly took out credit cards to be able to get by during those time.

Are you guys done with credit cards?

Yeah, I'm done. I don't even have a physical credit card anymore. I've just tossed them.

Well, they're still all tied to your account, so you can go make purchases on them still, right?

Yeah. Yeah.

So we need to cut ties. We need to actually close the accounts, and then we can begin paying them off. Remove all the card info, stick to the debit card. And even then, you got to be on a tight budget because what is your income now that your husband's salary has tripled?

Right now he's making about two to three grand a week. I don't know what that is. Monthly.

It tripled, and now it's two grand a week.

Well, I think I missed his commission for sales. Tripled. So they tripled commission for each sale.

Got it. Okay, so he's making somewhere between eight to ten. Eight and ten grand. Maybe eleven on a great month.

Yeah. Yeah. Eleven grand.

And you're currently not working?

I'm a stay at home mom.

Okay, how many kids you have?

I have. I have a three year old and a one year old.

Okay, and how much medical debt do you have? So you laid out the credit cards. You've got $8,300 in credit card debt. What's left on the debt.

For the medical bills? That's another thing I'm struggling with is I went through my bills and I called each hospital and I asked them to send me their information for collection agencies, where they send their debt to. And I'm in the process of making all those calls. But I would have the collectors not.

Reached out to you?

They have, and I'm ashamed to say that I've ignored their calls. And so this is kind of a panic call, I guess.

Well, the key is you need to start being proactive. You need to be calling them saying, here's the situation, here's where I'm at, here's what I can pay. And because these debts are older, they may be willing to negotiate and settle. The first thing I would do is get itemized bills from each hospital.

Okay.

And if the collectors cannot provide where every single dollar went to, then they legally cannot collect on that. And so you need to look up the fair debt collection act and make sure that they're following it by the book. And then worst case, you might be able to settle on this for, you know, a quarter of what you actually owe. But you have no clue what you owe. How many thousands of dollars?

I know that the bills that I have physically seen show up at my door. I would say at a minimum I owe around like 15, 15,000.

And how much money do you guys have in savings right now?

We only have about 2000 because we paid, we've been paying out of pocket for medical care because we're in between insurance, so we don't have much savings.

Okay. And you guys have insurance in place now?

Yeah, we have a health share.

Okay. Well, my advice, maybe against the financial planners, is to not keep ignoring all of the debt. It's kind of why you guys ended up here. You've had your head buried in the sand, spending as you will, buying whatever you want and then looking up, going la la la. One day we'll deal with this. So you and your husband need to sit down and have a grown up conversation about what? What are all the debts we owed? What is our game plan? I'm going to follow the debt snowball method in the baby steps. That's paying the debt smallest to largest. And let's see if we can settle with the medical debt once we get a clear picture. And you can pull your credit reports to get a clear picture, you can pull them all from each credit bureau. Go to annualcreditreport.com. You can pull all three for free. Okay, so that would be my first.

And Bray. But listen, the collectors are supposed to be mean and scary and rude because that's their job. But you are in control. And if you just remember that, take a deep breath and you control the conversation. You tell them what you can do, then they will start to play ball. But their goal is to scare you and push you into a corner where you do exactly what they want. And once you make it clear to them that you're not going to do what they want but you're willing to do something, then the whole conversation. Conversation changes. So trust us on this. And you hold tight. Hold firm in that conversation. And then they'll start to play ball.

And never give them access to your checking account, ever. Get everything in writing. Whatever they say, say, I'm willing to do this, but you need to get it in writing. You need to email it. You need to snail mail it. I'm not making any moves until I get in writing.

And that's a very good point.

Record the conversations as well.

Record the conversation and tell them if they refuse to give you something in writing, go. You're holding this up. And I'll be happy to talk to your manager and start dropping in the fair debt collection act. Start dropping stuff like that at them and go, I'm not doing anything. You're the one holding this up.

And get names of every single person you talk to. Get down, what day and time you called. You need to document all of this like a detective.

So then, then all of a sudden they realize they can't push you around.

I like that. I will definitely do that.

You see how this is all proactive instead of reactive.

Proactive instead of reactive.

That's what you need to be. Reactive is how we got in this mess. Proactive is how we get out.

Yeah. You happen to the debt collectors, don't let them happen to you. That's what we're saying. Got it.

I love it.

Thank you.

Yeah. Thank you so much.

Be strong.

Don't be afraid to growl out of. You know, I'll throw them off.

Okay.

That might also. Yeah, might scare them. If you start growling on the phone, you can imagine.

That's actually kind of funny.

That's it. I'm not saying it'll work, but it's a strategy.

It's probably not going to work, but I think it could turn the tables a little.

Might get him to laugh. And I'm also going to hook you guys up with every dollar, premium and what you're going to do once you get this tool. You're going to list out all of the income for the month, the husband's every single commission he thinks he's going to get. Let's list it out then all of our expenses. My guess is once you do that budget, you're going to find, oh my gosh, we brought on $11,000 this month. Where is it going? We make great money. And you realize your expenses, your bare bones expenses add up to 4000. Well, there should be $7,000 in these couch cushions if we look closely, that we can throw at the debt. In total, even if you paid off the medical debt as it stands in the credit cards, it's about $23,000. You guys make way more than that. You could kill this debt within a few months if you really grind it. And so I think this is going to be a memory and this is going to be the first day you guys happen to your money instead of it happening to you. So hang on the line.

We're going to send you every dollar premium. Christian and Taylor will pick up and they'll make sure to get you that. And for those of you wondering how to start paying attention, maybe you're, you're like our friend Bria and you're going, everything's been a mess. I don't know where to start. I'm telling you, the budget is the place. I know it's scary to look in that financial mirror and actually go, oh, that's how much debt we have. Oh, that's the interest rate. Oh, here's our. What our paychecks actually add up to instead of just kind of the, you know, thoughts and prayers mentality. Fingers crossed. Let's just hope we have enough money at the end of the month. That's what's caused America to be broke. We're just hoping and reacting instead of being proactive.

Hashtag money and margin.

That's what it's all about.

Hashtag thoughts and prayers.

Because most of the time it's really not an income problem. They're making great money. They're just not doing anything with it other than letting it disappear into the abyss.

Yeah.

So that's what it takes to get control. And it's possible for you. Get started everydollar.com. You can get started budgeting for free and make that intentional spending time plan.

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Welcome back to the Ramsey show. I'm George Campbell, joined by Ken Coleman. Open phones at AAA 825 5225. Well, Ken, it's financial literacy month, and one of the ways that we are celebrating is taking questions from students at high schools that are going through our foundations and personal finance curriculum. And today's question comes from Ava in Illinois.

Considering the whole goal of the baby steps is to never go into debt again, is it advisable to freeze your credit?

That is a mature question from a high schooler. I love that question.

It is.

They're already thinking about credit. Yeah, in a good way, I might add. So, yes, the goal of the baby steps is to never go into debt again. Hopefully you haven't gone into debt if you're 16 or 17. That's what I love about this curriculum, Ken, is students are going through it. They're avoiding the mistakes. I just ran into someone yesterday. I was getting a cookie, and she said, I recognize you. I'm going through the curriculum right now. And I was like, that's amazing. She's going, I'm paying cash for my car. Nice. I'm saving up. I'm not going to go into debt.

Was this at the mall?

This was at a cookie store. It's a new one called Whitney's cookies in downtown Franklin. You should stop by. So you're grabbing a advertising, grabbing a little gluten free cookie at the festival yesterday. Love it. So anyways, yes, it is advisable to freeze your credit. And here's what that looks like. There's three main credit bureaus, and you can go onto their websites or call them and you can freeze your credit. What that means is nobody can create a credit account under your name using your Social Security number. And this is something many people do to it helps you avoid identity theft, and it helps you avoid going into debt because they have to. You have to unfreeze the credit in order to open an account. And so the only time you might need to unfreeze it temporarily is, let's say you're getting pre approved for a mortgage, and that's really the only time. And you can simply unfreeze it. They'll run your credit to make sure that you don't have any delinquencies. Then you can freeze it again. So it's really no big deal. And so I would absolutely recommend freezing your credit and checking your credit report once a year from that website I mentioned earlier in the show, annualcreditreport.com dot.

No affiliation. It's just the actual, you know, it's the one you want to go to. It's free. Don't pay to have this done, to run, to pull your credit. This is different from a credit score. Their credit report is actually showing all of the accounts that you have open and will give you a clear picture and help you avoid fraud. If you see anything weird on there, you can dispute it. So I love the question, Ava. Absolutely. Freeze your credit, and you will avoid a world of hurt and pain. Thank you for that. That gives me a lot of hope in the next generation. All right, let's go to the phones. Adam is in Bozeman, Montana. What's going on, Adam?

Hi, George. Hi, Ken. Thanks for taking my call.

Sure. What's happening?

So I was just calling. I'm getting ready to really start attacking my mortgage. And I got in three years ago with interest rates being extremely low. And I was just wondering if it's more advisable to throw the money at the mortgage account with a low interest rate or if it would be better off in, like, a growth stock mutual fund or a high yield savings account and then pay it all off in one big chunk at the end.

This is the. This is a classic existential question in today's world, Adam, and it's a tough one, truthfully, because we. We get harangued for this in the comment section on the Internet. They're going, you should never pay down your low interest mortgage. Keep it forever. And I'm going, do you guys understand the options you have when you don't have a mortgage payment? You can, like, move if you want to. And what I'm hearing, Ken, is people go, I have a low interest mortgage. I'm handcuffed to it because I can't sell the home, because then I'll have to go get another mortgage that's going to be at a 7% rate. So, number one, Adam, you're choosing freedom. You're solving for freedom when you pay down the mortgage. And we can do the nerdy math and go, here's how much you're paying in your amortization schedule towards interest. Here's how much you could make in a high yield savings. Right now it's about 5%. Is that accurate?

Yeah, 4.7 is what I currently have.

Okay. And your mortgage is at a two something or three?

Three and a quarter.

Okay. So if you actually did the math on what you'd be making, do you actually have enough to pay down the mortgage today in savings?

No, not today. I'm looking at about probably a twelve year schedule.

Okay. So if you wanted to nerd out for a second to do a mathematical equation, you could see how much money you'd be making in that high yield savings account over the next five years. And I can almost guarantee, since you don't have the money in full today, that you'll be better off paying down the mortgage because of how much interest you're paying on the front end. When you look at that amortization schedule, you'll notice that most of it is going towards interest and only a small percent goes to the principal. And as you start paying it down, it starts to switch. And so I would almost guarantee that right now, without even seeing the math, it would be a better bet for you to have that guaranteed interest by paying down the mortgage and building equity versus investing in a high yield savings account. Okay, that's the math side. Yeah. And the emotional side, like I mentioned, I'm a guy who did exactly what I'm telling you to do, which is pay down the mortgage regardless of what the market is doing, what high yield savings are doing, because you also got to remember, high yield savings accounts, we know they're at pretty amazing rates right now, but that could fluctuate.

That's variable. It could go down to four, it could go down to three over the next year or two. Whereas your mortgage, you're always going to pay that 3.25% on a few hundred thousand dollars on that mortgage balance. And I would encourage you to go look at your amortization schedule and everyone out there, if you have a mortgage, go look at what you're actually paying an interest per month and add it up over the course of a year. It will make you want to hurl, it'll make you want to get rid of that mortgage. So that's my, that's my thoughts. Ken, anything to add to that?

Well, I would just say for our money audience, I don't think the Fed's going to do anything on the interest rates anytime soon. You may see something towards the end of the year. But the days of the super low rates are gone. They're not coming back anytime soon. But the flip side of that is, and quite frankly, I'm, I'm okay with it because I want to get more for my savings. So I think, like you were describing, I just would let the audience know that you're getting an elevated interest rate. And I think that while it may fluctuate some, I think it's going to stay higher for those that are savers. So that high yield savings account, that that rate's going to stay at a pretty nice number, I think, for the near future and maybe distant future.

Yeah. And the only time it really works out on paper is if you have the exact amount of your mortgage sitting in savings. Of course, working for you, and most people, they don't. They're not in that situation.

He didn't either. But just a side note, because people are paying attention, they think the fed's going to come rescue them. And right now, the fed's kind of backed into a corner because they can't lower rates right now.

Well, spending is still so hot, they're not really cooling. Inflation.

Here's a fun little term. I know James loves it when I talk economics.

Can I guess, is it stagflation?

We are now officially, we are now officially in stagflation. Most of you don't know what that is. You may remember it from 6th or 7th grade, but that's where the GDP shrunk the last quarter and inflation went up. And so when you see the economy, the GDP, the gross domestic product, when it is shrinking and inflation is increasing, you are officially in stagflation. So the Fed, for those of you that are paying attention to this in an election year, plus the fact that consumer spending is still high, inflation is like, they're really, their hands are tied. So maybe that's a little too nerdy, but I'm telling you, that's where we stand. So now it's good for savers. Debt is bad. It's always bad. It's even more ugly right now.

Well, we always say broke people pay interest, wealthy people earn it. And so that's one of the keys of getting out of debt. And I'll tell you, I have the best mortgage interest rate of all time right now. It's 0%. And the way you get that is by paying off your mortgage. And we found that as people do this, they don't call in and say, ken, I regret it. I could have made more in my savings account. I could have made the spread on the one or 2%. It's simply not worth the mental calories, the emotional weight. And it sounds silly to people who love to do the math, but there is such emotional mental freedom.

Yeah, well, you know, for years, Dave called it financial peace. We still refer to it as financial peace. And while we put the word financial in front of it, it really is peace. It's peace in that I'm not worried. It's peace in that I've got options. You know, people that have a lot of margin and no debt in their life, they can change and make moves anytime they want to.

Switch careers, move different states 100%, sell.

The house, go somewhere. So, you know, if you want to be stable in an unstable economy, then follow what we teach. Because no matter what the Fed's doing, no matter who's president, no matter who controls Congress, you're just pretty much like. You realize how much those people don't matter.

Yeah. You realize how much of a circus it is watching the news, freaking out. They want you to freak out about what's happening in the economy. And so if you're truly freaked out about what's happening, the economy, what could happen then? We would all be paying off our mortgages if we truly believe that.

No, I agree. But why would people do that when Congress is continuing to spend trillions and trillions and trillions of dollars? It's just. It's debt is just okay. It's just a necessary evil to so many people, except for us. And that's sad. And we're converting people.

America's number one in a lot of things. And consumer debt is at the top of that list. We are leading the charge.

All time high, the national deficit all time high.

Beating our own personal best. Ken, it's amazing.

It's really exciting.

There's nothing we can't do.

Well, I tell you what, if it were financial olympics, we'd be winning.

That puts this hour of the Ramsay show in the books. My thanks to Ken Coleman, my co host. Everyone in the booth keeping the show afloat. And you, America, will be back before you know it. Live from the headquarters of Ramsay Solutions, it's the Ramsey show, where we help people build wealth, do work that they love, and create amazing relationships. I'm Ramsey personality George Campbell, joined by best selling author of money's not a math problem, Jade Warshaw. We're taking your calls at triple a, 825 5225. You call in, and we'll help you take the right next step for your life and your money. And remember, it's just our opinion. But we are experts on that at the very least. So let's kick it off with Tim in Los Angeles. What's going on, Tim?

Hey, George and Jade. I appreciate you for having me.

Sure. How can we help?

Yeah, um. Yeah, I. I'm in a weird situation. I used to work with my parents. They started a company eight years ago, and I ran production for them. Every time I asked them for a raise, it was just an excuse and we can't afford it, blah, blah, blah. So I left and I'm working for their biggest competitor right now. Juicy.

Wow.

Yeah, they got really upset about that.

I can imagine.

Did you do that for spite?

Well, whenever I would ask for a raise, if you can't pay me and I'm working my butt off for you, you know, like, I'm just going to.

Adam. Spike. Got it. All right.

Yeah, that's fine.

I own it. Okay.

Yes. So he. Ever since I was ten years old, if my dad doesn't get his way, he calls the cops. And I just turned 28. So this happened last year when I was 27.

Okay.

He called the cop saying that I was gonna go home and unalive myself.

Wow. Yeah.

Because he wanted me to work for him again. They bought a $2 million house, and when I left, they realized they're losing money because they don't know how to run production. And now I'm working for his biggest competitor.

And so he calls the cops and lies to them about saying that you're gonna do something really bad to yourself and that they need to show up.

Yeah. Basically, he realized he was losing money, so he asked me to work for him again.

But how is this solution to, like, make you lose your job or something and then you have to come crawling back to him? Like, what was his strategy here?

And that's what it seems like.

Well, what happened next? When. So the cops come and then what happens?

The cop? Yeah. So he asked me to work for him again. I said no. He calls the cops and they put me into a hospital. I wasn't even there for a day. I told the doctors what was going on, you know, and they let me go. But I have a $16,000 medical bill because of all that.

What's the 16,000? Just you going in the emergency vehicle.

That, and then being in the hospital for almost a day, I guess.

Yeah. And you didn't have health insurance at the time?

No.

Oh, boy.

Oh, boy. Okay. Yeah. Cause that's just riding in an ambulance.

Yeah. And you're wanting him to pay it because he caused this, which, of course, he's not gonna do.

I told him, if you ever want to see me again, you have to have a check. And he said, you're not getting a penny from me.

So.

Wow.

Well, I'm so sorry. This is beyond.

I would call this the last straw, and I'd be done with this relationship. Cause clearly he is. He opted out. I wanna make sure you know that, Tim, because I know there can be a lot of guilt and shame and baggage that comes with a hurt relationship, especially one as close to his father and son. But this is not on you. He opted out of this relationship, and you need to just move on. Mm hmm.

Now, the medical bill might be on you to take care of, because truthfully, as jacked up as many of the things are in this situation, the one thing that is on you is you didn't carry medical insurance. And so it came back to bite you in the butt in a sucky kind of way. But here we are, you know? So I. Unless you're trying to get lawyers involved, which I probably would only option is.

To try to sue him for the 16 grand.

Yeah.

And I don't. I personally doesn't seem like any of this is worth that. Mm hmm.

So what do I do about this? Because I'm the type of person. I'm not in debt. I have no debt.

And.

Just pay it, dude.

You pay. You can see if you. They'll be willing to sell. Do you have that money in savings?

I do, but I feel like I shouldn't even pay it. I'm like, this is.

Listen, this type of situation, I think John might say, like, not by your hand, but in your lap kind of situation. You know, there's a lot of dysfunction here. There's a lot of unhealthiness here with the relationship with your dad. And he chose to do something that he made a decision, but the reaction of it, the consequence of it ended in your lap. And part of that, you know, yeah. You didn't have the insurance to cover it, and you'll learn your lesson from that. But kind of what George was saying, your choices here are you can either go after him legally for that money, but that's not going to end well. Like, it's just going to further deteriorate what's already going on.

It's going to take your mental energy, emotional energy, physical energy, financial energy just to fight this.

And y'all have already gone tit for tat, right? Like, I wanted a raise. They wouldn't give me a raise. So I'm going to, for spite, go work at, you know, their competitor. He's going to do that? Well, I'm going to, you know, call the police on him. So you guys are going back and forth, and somebody's got to stop, like, the crazy cycle. Somebody's got to go, enough is enough. I'm going to be the bigger man and make a choice that the other guy isn't going to expect because he's expecting you to retaliate. Right. And so just be the bigger man and go, okay, if I have the money, I'm paying this, or I'm settling this, and I am dusting the dirt off my feet and I am moving on.

And that's kind of what I was like, do you think I should pay it, then?

It's not in collections, is it? It's just with the hospital still.

Yeah, it's just still with the hospital.

I would contact their. Their financial office and sit down with them and explain to them the situation and see if they'll have some mercy on you and maybe they'll forgive it. Maybe they'll cut it down and you just write them a check and be done with it. But I would at least try to fight in that regard.

Yeah. Especially if you didn't have any real care. Like, you might not like the. The ride in the ambulance. That's like 5G without even thinking. But if you look through that bill, because then, you know, they get asked for an itemized bill and really go through and say, like, did. Did you give me this? Did they do that? And really get on the phone with them and say, listen, here's what happens.

That 16 grand turned into seven once you asked for an itemized bill and go, what did you actually charge me for? And if you can get proof from the police or otherwise, some actual legal proof that this was fraudulent, that he did this out of spite and there was no real merit behind it, they may wipe it for that reason. I don't know, but it's worth at least digging into.

Okay. Okay. Yeah. And looking at that automized bill, because they let me go. I wasn't even there for a day. I know.

Proof. Running, testing, you know, so I would. I mean, we're not lawyers. You may want to contact one just for a consultation to see what your options are to try to get this removed. But, man, the harder part is just realizing that you just lost a relationship with your father.

Yeah.

That's gonna sting more than the 16 grand. We can pay off debt. We can't repair an unrepairable relationship.

Yeah.

And for that, I'm truly sorry. But the good news is you're healthy. You're here. You've got the money to pay it off. I'm gonna just learn from this and move on. And if you have to get a restraining order on this guy and make sure the cops are aware of, hey, if this guy ever calls on me, know that he is just a spiteful, crazy man. But goodness, I cannot imagine being in that situation.

Yeah, the hardest part for him is going to be not to retaliate, because that's. That's the pattern that they have with each other.

Well, that resentfulness, that'll stick with you if you're not careful and you start to drink your own poison, thinking that it's going to hurt the other person.

That's true.

Tim, you might want to just go to counseling and therapy to deal with the loss of your father. In a sense. Because I think that grieving is going to take some time and maybe some professional help. So I'm sorry. Going through it. Glad you're on the other side soon. Hopefully you'll be back to debt free in no time. This is the Ramsey show. Welcome back to the Ramsay show. I'm George Camel, joined by Jade Warshaw. If you're enjoying the show today or any other day, do us a quick favor. The show is free. The favor is free. All you need to do is hit the subscribe button, hit the follow button, leave us a kind review, share it with a friend. You can hit that share button. Maybe it's a clip, maybe it's a full show. Whatever you need to do. Word of mouth is the best marketing engine we have, and you guys are the best marketing. So thank you all for sharing it. It helps with the algorithms and get this word of hope to more and more people. And you guys are a huge, huge part of that. So thank you for doing that.

Madison is up next in Atlanta, Georgia. Madison, welcome to the show.

Thank you so much. And thanks for your time. I appreciate it.

Sure. How can we help?

So I recently found myself unexpectedly and kind of traumatically facing a divorce. I'm 52, and I did not have time to kind of do a long plan. It was matter of safety needed to file for divorce. But my question is, we do not have any retirement, but we do have some rental properties. And I'm trying to figure out the wisest move. If my husband has offered, we could split them up. We could form a company and keep them together. But honestly, that's not going to work with the dynamics. So it's kind of. Is it wiser to hold on to a couple or just liquidate? And I'm trying to get a pulse on what I want so we can move to the next phase of negotiating.

What's the bigger financial picture here? Where are you living? Do you have any debt? Do you have income?

Sure. So. Well, my husband, I have been a stay at home wife and mom for most all of the marriage. So his income is 270,000 a year and then another 26,000 from our rental properties per year.

Okay.

How many rentals are there?

Thank you. So we have right now four.

Are they paid for or they have mortgages on them?

They all have mortgages. And most of them, I do know the cash flow and the equity of them, but they do have mortgages.

Okay. And if you sold all of the rentals and after paying the mortgages and the realtor fees, how much would you net combined as a couple?

Around 800,000.

And you would split that evenly?

It would either be evenly with faith. Yes. It would be 50 50. I, to be honest with you, I'm going to ask for more, but 50 50 is definitely.

Okay. So that's option a is you walk away with about $400,000 that you can then use to invest.

Correct.

Okay. And do you have any other debt other than the rental property mortgages?

We do. So we have one credit card that's 32,001 is 22,000. Now, to be honest with you, it's not a. Negotiations are not done, but his intention at this point is to take on that debt is what he's told me. I don't know that I can 100% count on that. But he plans on.

But this debt is in both of your names? Currently it is. Okay. And what other debt outside of the credit cards?

Outside of the credit cards would be two vehicles. So one is has a payment. It's a jeep of 636.

And what's the full amount you owe?

I believe the full amount we owe on that is 12,000.

Okay.

And the other one?

And then the other one is going to be about 35,000.

Why in tarnation have you guys been racking up all this debt when you've had a household income of 200 7300 thousand at 52 years old?

Well, there's some personality dynamics and a strong personality.

So you were against this?

Pardon?

These were all his decisions?

Yes.

But you co signed on them. Your name is on all the debt?

On most of it, yes.

So you're working with the lawyer. You're working with a lawyer, right? Or are you guys trying to do this amongst each other?

So I have a lawyer and to save on lawyer fees, if we can work out what we can without the lawyers, whatever we can agree on. I'm trying to do that. And then, you know, utilize my lawyer as needed. But it's obviously, he's a high end lawyer and it's expensive and you're going.

To have some serious spousal support after this is all said and done.

I am going to get spousal support. I need to find out what my rights are as far as how much he has offered me. A certain amount.

But what is he offered? Just so we can have something numbers wise?

Yeah, no, I appreciate it. He offered like 4000 a month. I countered with 45, but I think I'm entitled to more based on what he makes, but 4500. And then he said he would pay all the bills, like that would just be.

So all the debt would go to him.

Correct.

Interesting.

I might take more spousal support if he can. If you can get 100 grand a year from his 270, you'd be better off and use the, the proceeds from the rentals to knock out all the debt together. So I would do some serious math before agreeing to it on face value. And I would talk to your lawyer about what makes the most sense financially, because long term, I'd rather have you have a double the income versus going, well, I don't have to deal with the debt.

Right.

Which is a short term problem.

However, the one debt that I would want to be dealt with is these mortgages. Like, if I were in your shoes, I'm cleaning.

Just clean slate.

Yeah.

I would not want to be on any of this property with him. I would not want to set up any sort of business. I would say, let's cut our losses, we sell them, you split the profits, and then that's that on that clean break.

So you have over $100,000 in consumer debt. Are you living in the house that you guys lived in together? And is there a mortgage on that we have?

I'm not. We are not living together. And we sold the home that we were living in together.

What happened to the proceeds of that home?

I have. We split that. And I 5050. I have. So that wasn't a lot because it was only a year old. But that's like 32,000. And I have. It was 60. I have half of that. I have 32,000 of that in my bank account.

Okay.

We're also selling another property.

Not one of the four.

Not one of the four. It was another one we were going to move into. And that one should net about 170,000 in profit. And we safe split is 50 50. That's guaranteed.

You get another 85. Is that all the money to your name? Then the 32 and the 85, nothing in retirement. And that's all everything you have in savings. Okay.

And where are you living now, by the way? What's your living situation?

So I moved out and I'm staying with my adult daughter. So I've been, like, kind of living on a couch and out of a car and trying to figure out, yeah, well, like, my belongings are in storage, but then the things I needed are in the back of my car. So I've really been displaced and just trying to figure out, I don't want to. I want to put down roots somewhere that I know I want to be. And that's going to probably be an out of state move.

Okay.

And it's just been pretty traumatic with, you know, it's kind of a, I would say lifetime movie, but really like a dateline movie.

Yeah.

Because it sounds like you were fleeing something, and I hate that for you.

It was abusive. No. Yeah, it was abusive, and I would have never, ever used that word before, but it was, and it became unsafe, and I had to literally leave when he went out of town within a couple days. I'm proud of you.

I'm proud of you.

That takes a lot of guts.

Thank you so much.

I'm sorry you're going through it, but I know it's the healthiest, best thing for you is as much of a nightmare as the situation is. So let's recap and we'll give you some next steps. I would absolutely sell all of the properties and get as much as you can out of all of that. I would fight to get as much spousal support as you can. And if he wants to take on the debt, that's fine. If you need to split it and you pay half of it, he pays half, and we call it square. You need to just cut all ties with this man other than the spousal support, which is part of it, that's part of the deal. And at that point, you'll be debt free. You'll have a giant pile of money. And at that point, I would contact a smartvestor pro. You can do that@ramsaysolutions.com. And they can help you make a plan for a few hundred thousand you have sitting there. Maybe the part of that is fully funding retirement. Maybe part of it's in a brokerage account outside of retirement, but they can help you with that. And I'm also going to have our team send you this article.

It's on our website. And for those of you that wondering, we'll put it in the show notes, how to survive divorce, protect yourself and your finances. That's on the Ramsey blog. And I'll have our team, Kelly and Christian will pick up. They'll send you a link to that. And we'll also drop in the show notes for anyone watching. I also want to gift you, Madison, a free financial coaching session from one of our trained Ramsey financial coaches. Because there's a lot to unpack here. I want to make sure that we take care of you more than we can in a five minute radio call. So hang on line. We'll gift you that. And everyone else, tune in for that article. This is the Ramsey show. Welcome back to the Ramsey show. I'm George Campbell, joined by Jade Warshaw this hour. And in the lobby of Ramsay solutions on the debt free stage, we've got Steve and Julie here. How are you guys? Good.

How are you?

Good.

Where are you guys from?

South of Raleigh, North Carolina.

Well, thanks for making a trip to celebrate debt freedom with us. This is exciting. How much have you guys paid off?

We paid off $217,000.

Okay. How long did that take?

That took about six and a half years.

Uh oh. I'm sniffing something out here.

This is about to get interesting. And what was your range of income during that time?

We started out making about 200 combined and finished up right around 320.

Amazing. What do you guys do for a living?

Well, I work in oncology research.

I'm an early childhood educator.

Wonderful. Awesome fields. And what type of debt was this? 217.

That was our mortgage.

Bingo. Bongo. There it is. Jade, that's exciting. You were sniffing it out.

I was a bloodhound over here. I'm like, 217,006 and a half years. That's exciting.

Yeah.

Wow. We're looking at weird people here and not. You guys look weird. You look wonderful. But that is a weird thing to do. So let take us back six and a half years ago, you had this mortgage sitting around. What happened?

We actually moved. We actually took a little step back in our journey, took on a little bit more mortgage, moved to be a little closer to our kids school. And through that time period, we just decided we wanted to finish it early. We took out a ten year mortgage instead of 15, but paid off in six and a half a lot of.

People don't know you can even do that legally. They're ten years. So you pre decided that you didn't want this mortgage hanging around?

We did. We didn't know exactly how long it was going to take because we had a lot of other things happening in that six and a half years. We had three kids to go through college. We paid for that. And a wedding.

Cash flowed, all of that.

Wow.

And our daughter's wedding.

Very good.

You guys are impressive.

Thank you.

Okay, so what got you on this Ramsey journey? How'd you hear about us and what influence did we have?

I think the first time we heard you was actually on the radio show. And we were just kind of going about life like people normally do or what we thought anyway. We used credit cards, we had car payments, and one day we just decided we had had enough of that. And that kind of started the journey.

Wow.

Very cool.

And then you do the move and you go, you know what? We don't want this mortgage hanging around. We're going to pay it off early. Let's do a ten year. And you paid it off in six and a half years.

Wow.

So three and a half years ahead of schedule. If you just made normal payments and.

Yeah, we had a low interest rate mortgage and, yeah, I know, we did the wrong thing and paid it off.

Yeah. Wow. And you stand here before us living to tell the tale of paying off the mortgage in light of how much you could have made. Exactly. Did people ever think you were crazy for doing that? As you talk to your friends because you're a smart guy in our oncology research or early childhood, you know, people go like, what are you doing? Or did you not talk about it?

We don't necessarily talk about it with our, like, our parents so much because they are of the mindset of, you should keep your mortgage.

We don't need their opinion. We love them. We don't want their financial advice.

I mean, have we had. People look at us like we had three heads when we talk about it?

Yes, we have. Wow. And look at you now. Totally free.

Yeah.

No regrets.

No regrets.

What's this house worth?

It's worth around 680, I think.

Oh, my goodness.

Very cool.

And what's in retirement? Nest egg? All of that.

Somewhere around 1.5.

Oh, my goodness. So you are. Well, be. You were already baby steps millionaires.

We are.

Long ago. Yeah. But now you don't have a mortgage.

That's right.

That's right.

Wow. Can I ask how old you two are? Because you seem pretty young. You got a lot of life ahead of you with no mortgage.

Thank you, George. I appreciate it.

Maybe not her age, but yours.

I just turned 54.

Okay. I'm 53.

Amazing. Yeah. So what now? What do you do? I mean, you've reached the pinnacle travel steps.

Lots of travel, lots giving. We have a brand new grandbaby.

Oh, that so spoiling the grand number. That's a one.

Yeah.

So what's the first thing you did or will do now that you're completely debt free?

So we actually paid the mortgage off a couple months ago, and that was right after our youngest son finished college. So we just finished with that, and we took a week to Maui.

Oh, my goodness. Just you two?

Just us two.

Just us two.

It's actually our second trip to Hawaii, so we're maybe going a third time.

I know.

Oh, my goodness. That's exciting.

Yeah. Yeah.

Wow. So how does it feel to be completely debt free for people that don't know what that's like?

It's just really hard to describe. When you do your budget every month, you realize you have all this margin that you can give more to people, and, I don't know, it's just really an amazing feeling.

That's fun. Yeah.

It gives us options. We have choices.

Now. You can work because you want to instead of until you have to. That's incredible. And I see there's some people here on the side of the stage. Who are these people that have joined you today to celebrate?

It's our daughter Katie and son in law Joel, and our granddaughter Charlotte.

Oh, my goodness. That's so sweet. I'm glad the granddaughter's here to witness this. She'll go back on YouTube and be like, that's my grandparents. Yes.

She will definitely remember this.

That's incredible. So what do you tell people the key to becoming totally debt free house and everything is?

My answer is, I think the two of us working together, having combined goals, a combined vision, and just executing that plan together. I mean, before we were not aligned, and now we are, and that's been huge.

I will say for a lot of years, I wanted for us to just use debit card only, and we were just doing the points credit card kind of thing. And I just knew the more I pushed, it was not going to help. And finally, he just came to the realization on his own one day, and we just really got on board and dialed down the budget, and just the shared goals really helped.

Wow. Yeah. How do you get there, Steve? Like, one day you just wake up and you go, all right, fine, I'll do it her way.

I'm a little slow, George, but eventually it happens, right?

Eventually, at 54, you might wake up and go, it's time for a change.

It happened a little earlier than that, thank goodness.

Yeah. Well, you guys are inspiring. I hope I'm like you one day. Living and giving generously with a grandbaby. Now, I got an eight month old now. So you start to think about legacy and, you know, what really matters in life and money has went from an obstacle for you guys to a tool. Yes.

Absolutely.

That's the best part of all of this.

And the cool thing is we're able to teach our kids as we went.

They watched this whole process.

So we have changed our family tree with our own children.

We have three children.

Katie and then her two brothers.

Wow. Yeah. Who couldn't be here to join us at a different. They're celebrating online.

Yes, they are.

Well, this is exciting, guys. This is the moment we've all been waiting for. So we've got some gifts for you, some parting gifts. And that's two every dollar premium subscriptions. And you can use those. You can give them away. Maybe to the kids, maybe to friends who thought you were crazy. The ones cheering you on. But this is an exciting moment. So we'll be sure to give you those as you head out today. All right, here we go. It's Steve and Julie. Raleigh, North Carolina. $217,000 paid off in six and a half years. House and everything, making 200 all the way up to 320. Count it down. Let's hear a debt free scream.

Three, two, one.

We're debt free. Baby steps. Millionaires in our midst. Jade, they're all around. And you might not know it, because my guess is Steve and Julie live pretty normal lives if you just saw them walking down the street.

Ten year mortgage, that's all I have to say.

What a flex.

Ten year mortgage paid off in six and a half years.

Y'all out here flexing with your fancy cars with a $1000 payment attached. They're out here flexing with their ten year mortgage. They paid off in six and a half.

I know that's right. They said no flex.

They freed up a few grand. And they're not here to impress anyone. They just want to make an impact. Leave a legacy, go to Maui, enjoy their life. And they did it all with cash. And I love that they gave up the game. They were saying, yeah, we used to be those people. We did it for the points and we had our payments and life was okay. But it wasn't like this.

Yeah, this is different.

They weren't levitating with freedom. And that's what I love, is when you stop playing someone else's game, you zoom out and you go, oh, I was just a rat in the credit card company's maze.

I also love the example of patience. You know, when Julie was like, hey, I could have pushed harder and harder, but I just, I let him come to the conclusion, and he did. I just love that. And then once that happened, it was game on, on the same page.

I'm telling you, shared goals, shared vision. They have a better marriage, they're communicating more, and now they can do whatever they want, which means less money fights. It's amazing how that works. Yeah, probably very now. Now the money fights. Like, well, we went to Maui last time. I want to go to.

That's right.

That's really the arguments. Now is where we're going to go on vacation next. I'm happy to have that be my worst marital problem, folks. I hope that inspired you guys as much as it did us. That is the power of the baby steps. Everyday people living out the principles, becoming debt free, leaving a legacy. That's what this is all about. This is the Ramsey show.

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

This is the Ramsey show. I'm George Campbell, joined by Jade Warshaw. The number to call is 888-25-5225 we've got a lot of events happening around here. One of those is, is a brand new one called Dave Ramsey's investing essentials. And at this event, Dave Ramsey and myself, we're going to deep dive into investing. And for the first time ever, Dave is going to unleash his personal playbook on investing, including how he buys real estate, which is something that he has not done at length, which is really cool. So this is a two night virtual event happening May 21 and 22nd. And because it's online, you can watch from the comfort of your own home. So you don't have to worry about us being in your town, because you get to watch. We're coming to you. And investing is something that you all ask us to dive deeper on all the time. And this event is our response to that. So we're going to start with the basics. Build a foundation and then get into specifics. Some 201 and 301 content mutual funds, real estate investing traps and trends, how to maximize your four hundred one k and a whole lot more.

So join us. Tickets are $249, but you can tune in with your spouse and you don't have to get another ticket. So that's nice. Go to ramsaysolutions.com events and get your virtual pass today and join us May 21 and 22nd. And yes, you can watch the replay. I think we're giving them a week with the standard pass to watch it. So if you miss it, you'll have many, many days to enjoy it and tune back in and catch the replay. Take notes. You're going to want it. Ramsey solutions.com events all right, Tony is in Salem, Oregon. Coming up. What's going on, Tony?

Hi, George and Jade. Pleasure to talk with you.

Yeah.

My beautiful wife and I are on baby steps four, five and six, but we're wondering if we have too much locked up in sinking funds.

Ooh.

Let's talk about it.

How much you got and what's it for?

Yes, we have 42,000. Emergency fund. That's not a sinking fund. $10,000 in travel, 11,000 for taxes, insurance and our kids school, $8,000 for medical, 5000 for home maintenance and 3000 for gifts. Christmas.

Well, let's see. Gift, Christmas, tax, medical, school, travel. There was another one in there that I missed. You went through them pretty quickly, but it sounded like it sounded necessary.

Do you think any of these are overfunded currently?

I like the insurance that if something comes up, because the way our budget is set up, I feel like even though everything's fully funded, we still, month to month gets the end of the month and we're down to nothing.

So are you unable to cover other expenses or goals because of these sinking funds? What is it holding you back from?

Everything's covered. I just feel like we can't budget for some of these things in our current budget out of my paycheck. So this is the peace of mind I've come to.

I think you're choosing one thing over another, and I think it's your choice to make by funding these every single month.

Yeah.

You're taking away some of your monthly cash flow because you're saying, no, we are going to take a trip and you have to probably put some caps on these. I would think, like, is the trip going to be more than ten k? Or is that enough? Like, does that need. Does it need to be something that's continually on there? Same thing with, you know, taxes, school and insurance, only, you know, if you've hit that mark or if you've exceeded it, or if you still have some to go. But. But let's just say where they're at right now. Let's pretend that they're fully funded. Then all of a sudden that money is back in your month to month budget. But if you say, well, some of them are fully funded, some of them are not, then that is a little bit more cash flow. Or if you say, no, no matter what I constantly want to be putting towards these, then you've made the choice that at for comfort. Like, you're forsaking month to month comfort of having extra margin for a year round comfort, of knowing, hey, we can take a vacation at the drop of a hat.

Yes.

It's more the latter. They're fully funded and we like to, just, on a whim, go travel. It's there. We can cover it. Not to think about it then.

I think that that's the choice you've made.

Nothing seems broken here. I would just. It's almost like you're wondering, have I gone overboard? And the truth is, like, for the medical, what is the eight k for? Exactly?

We're on a high vessel plan. And so when I first went to that, my wife was nervous, so I said, I will fund an account just to pay for medical. And we've yet to turn in a receipt over three years. So at some point, that's where I'm.

Like, that might be unnecessary. You have an emergency fund. If there truly was an emergency that went above and beyond, you could either cash flow it or dip into the emergency fund temporarily. And so for some of these, I would just go, are these actual expenses that will be coming up within the next calendar year, or is this just the, like, oh, crap fund? And truly, that's your emergency fund.

I also think there's something to be added to this, whereas you guys kind of just got to baby steps four, five and six. So it's taken some time, and it's taken, clearly, a lot of your budget to make this happen. But to George's point, the deductible fund, it's done. Like, you don't have to keep adding to that. There was another one in there that I feel like it was for five cam.

Like, is home maintenance.

Yeah, home maintenance.

It's like, are you spending five k a year on home maintenance currently? Because if you're not, you might want to scale that back down.

Unless you're saving up for a remodel. But then it's like, okay, if you're saving up for a remodel. So I think it's just.

Or the roof needs to be repaired in two years. Let's save up.

Yeah.

To make sure we have that funded. So I think you're fine. You're probably overthinking it, if anything. And I would make sure you're investing 15%. Do you have kids?

We have one son.

And you're funding some into a college fund?

Everything. Yet we're making actually more in our house payment every year. We're paying for his school. It's private school as well as putting into college.

Good.

And I still, like, I'm at a point where I feel the way at the end of the tunnel, we're 280k away from a debt free screen. It's going to happen.

Awesome. Good. You guys are dialed in, man. And you're just make sure you enjoy life. I love that you have the vacation travel fund because it tells me that you are wanting to enjoy some of this money. And that's how I see it is just make sure you don't get a flat tire. Are we giving enough? Are we spending enough? Are we saving and investing enough? If you got all three of those covered, you've got a rich, healthy life.

Perfect.

So, yeah, thanks for the call. That's a fun, that's a fun question.

It is a fun.

There's no heartbreak here.

Yeah. I think, you know, I think that when you need sinking funds, they're a really great tool. If you like to have the extra for your deductibles, if you want to fund multiple vacations ahead of time, I think it's a great tool.

For those of you that don't know what we're talking about here with sinking fund. Let me clue you in. A sinking fund is simply a way to save up for a bigger purchase over time instead of needing the money that month and not having it ready. If you know you're going to spend $1,200 on Christmas in December and it's January, well, we need to fund $100 a month into a savings account in order to make sure we have that money so on and so forth. And so as you go through, you know, home maintenance, a vacation, you know, you've got the vacation coming up. Let's save over time instead of trying to muscle our way through it within a month or two. And so that's the whole point, is you're being proactive, you're thinking ahead instead of being reactive and hoping.

I think in many cases, though, for a lot of folks, it's a way to make sure that no matter what, they never touch their emergency fund. Like, when you start doing a separate one for, you know, your deductibles and things like that, I think there's part of you there that's like, no matter what, I don't want to touch this emergency fund, which I can 100% understand.

Oh, yes. And most people that do this, they're like, they haven't touched the emergency fund. Cause really what happens is, as you get this financial foundation under you, you sort of get better at things. You buy higher quality items, you do the proper upkeep and maintenance, and then when an emergency does come up, it's usually the ankle biters, and you're able to cash flow it in next month's budget.

Right. Because think. Think about the biggest one. The biggest thing that could happen is, like, your roof, right? I feel like that's, like the big one. Your roof back, maybe. H vac. Yeah. If you live in south Florida, though, a new roof is like $30,000 and so. But usually you can see that coming. And that's my whole point, is usually most emergencies, unless they're medical, you can kind of see it coming. Unless you're a person who, like, sticks their head in the sand. And if you can get ahead of that and start a sinking fund, then it's a great way to not have to touch your emergency fund.

Exactly. So I think a lot of it, when you're broke and trying to follow the steps and get out of debt, it feels like everything, life is just coming at you. And every little hundred dollar emergency or $600 emergency, you're like, this is going to be my whole life. Then once you get above it and get out of debt and get the emergency fund, you sort of have better luck.

That's right.

But it's not really luck. It's just you putting yourself in a better place.

That's right.

So that's what I love about the emergency fund. And it's a good call out that this is different than a sinking fund. The emergency fund you only use if it's urgent, necessary. And what's the last one?

Unexpected.

Unexpected. There it is. I knew it was there. Jade, that was like an alley oop.

It was. I was glad I was ready for the pass. Definitely did not want to fumble.

So that's a big one. So, baby step $1,000 starter emergency fund. And then baby step two, let's knock out all of the debt. Then, baby step three, we can get that fully funded emergency fund and begin to put those sinking funds away. And even if you're in, baby step two, it's wise to have that sinking fund ready to pay the insurance bill at the end of the year that you know is coming.

Yeah, that's true.

And so if that, if that slows down your debt snowball, that's okay. Yeah. We want to make sure we don't go back into debt because we weren't aware of an upcoming expense.

Yeah. Yeah, I'm the, I'm that person, too, that likes those, those deductibles, like, I'll do. Keep the deductible in the HSA. You know, you can invest the rest or whatever. And I just like knowing a financial piece. Yeah. I just like, I like knowing it's there.

Love an out of pocket Max. This is the nerdy conversation you listen to the show for. Where else can you get this kind of content? We get to nerd out only the Ramsey show. Well, that was a fun hour, Jade. Thank you so much. Thank you to all the folks in the booth keeping the show afloat and keeping the audio smooth. And thank you, America, for tuning in. We will be back before you know it. Live from the headquarters of Ramsey Solutions, it's the Ramsey show, where we help people build wealth, do a work that they love, and create amazing relationships. I'm George Campbell, joined by Jade Warshaw. This is your show, so call us up at 888-25-5225 and we'll help you take the right next step for your life and your money. Ann is going to kick us off in Albuquerque, New Mexico. Ann, thanks for taking the time to chat with us. How can we help today?

Hi. Yeah, I was hoping for some guidance on how to navigate a difficult conversation with my husband about finances. I just found out that he has a business credit card with about $10,000 of debt on it. And this is like the third or fourth time that there's been financial deception throughout the course of our marriage.

And so I'm, what were the other times.

After we got married about five months, and I found out he had about $10,000 of credit card debt. And then a few other things, like he borrowed $6,000 from his parents and another 3000.

So how are you, how are you finding out about this is he telling you or you're coming across some information on your own?

This time? He did share with me the business credit card, and that was after we've been working the baby steps for about four months. The other times were his parents mentioned it at Thanksgiving or so.

He was actively trying to hide it.

Yeah, the other times.

So, okay, so you found. He came to you and told you about the ten k that he has on the business card. Now, you said it was. You guys have been actively trying to work the baby steps. My question is, is this old debt or is this debt that he has acquired while you guys have said you're working the baby steps.

The credit card for his business, I think, is about a year old.

Before.

Prior. Yeah, prior. But we went through everything while we're trying to figure out how much debt we were in and trying to get it all work on getting it resolved, and that was something he just didn't share with me then, too.

And when this happens, do you say, hey, why did you hide this from me?

Yeah.

Does he get defensive? Is he open? What's his response?

Kind of a mixed bag. So he'll get defensive, and then it goes to, well, I was really embarrassed and this and this, and I should be handling my business better. And so it's not, you know, with him, like, okay, well, I understand that, but we're also partnership. And how long have you guys been going on to? Nine years.

Okay, so there's been a pattern since you've gotten married that has not really gotten better.

Yeah.

Let me ask you this, Ann. Okay. You said you guys have been married for. For a good little minute. Do you feel like he's in, like, is there goodwill here? Like, is he. Do you think that he's keeping this from you because he's afraid of how you'll react? Is he feeling remorseful? Like, you know, shameful? Or is it, like, I am intentionally trying to do my own thing on the side here? Like, do you feel like he's done with this behavior and it was just one last thing that he was feeling some type of way about telling you, or do you feel like this is going to be behavior that's going to continue?

I would like to say I hope it's over, but I'm a little concerned that, you know, with his track record.

Well, I think it's fair that you don't have full trust and faith in him right now. He hasn't earned that.

Yeah.

And so I think you need to talk to them and say, listen, so far, there's been a lot of financial infidelity in this marriage, and I'm done with it. And we're going to put all the cards on the table and you're going to tell me every single penny. You're going to give me full transparency and accountability into our finances. And by the way, business debt is our finances because he signs the dotted line, not the business. Yeah, it's personal. And so that conversation, you need to have that come to Jesus conversation, and he needs to act like an adult.

If I were you, I would hop on betterhelp and I would look for some couples counseling and I'd bring that to him. I'd say, you know what? I love you. These are the areas like George highlighted. And I'd like for us to go to counseling and just get some clarity, get your root of this and have somebody who's right there in the middle that's not biased so that we can figure this out. What would he say to that?

Broach that subject a few times and it's, well, I don't want to do couples. I'll do individual. And then he doesn't take any steps to find a therapist. And I've offered to help support him, but I also don't want to be his mom and do it for him. And so it's that, like, crushing feeling for me, like, yeah, well, I do think.

I do think that if he won't go with you, I would still go individually, so that you're having a sounding board and you're getting the best next right steps and they can give you.

Some tools to use.

There is something to be said about leading by example. And so maybe I'm not saying that you beat them over the head with it, but if you say, listen, if you won't go to counseling with me and if you won't go to counseling on your own, I'm going to go because I want to work on this marriage. And I know that that starts with working on myself. So I think there's a lot that you can do to lead by example. And then I do think that there's some, some firm language that needs to come up with it where it's like, listen, I need to know that you're invested here and that you're interested in making this marriage better. And I'm interested in seeing actions. And I think that making that very clear, I want to see actions. I want to be able to see with my own eye you doing things differently. And if that involves counseling, if that involves clear communication, whatever that is, I would make that really clear that you're worried.

And have you made it clear that you got, or is he really aligned that he wants to become debt free, aggressively?

Yes, we really do. And it's that every month, looking at every dollar, like, we make way too much money to be in this much debt.

So the next time this happens, you go, you violated our family value and goal. You violated my trust. We said out loud, this is our goal. Here's our values. We want to live a debt free life. And you went backwards behind my back. And that's not okay. And I think it's okay for you to, you know, to share how you really feel. And what he's gonna do is he's gonna get. Feel all the shame. He's gonna sort of cower down and feel bad for a while. But his response, how he reacts is on him. But you need to be very honest. I'm not sure you've really told him how scared you are, how upset this makes you, how frustrated you've been in this marriage, and tell him, I wanna win in this marriage. I wanna see us grow as a couple, and money is just a symptom that's holding us back right now, and we make too much to have money be a problem in our life.

Okay. I like that.

Have you guys been through financial peace university?

I have. He declined.

Oh, that's different. He just said, not interested, I'm good. I'm crushing it.

Yeah, he was too busy.

Wow. That I. That, to me, is a sign of disrespect, because it's something that you care about that you've asked for his participation in. And he said, nah, don't have time for that. I'm going to go get into some business. Credit card debt. Brb.

Do you work? Are you working, Ann?

Yeah, we both work. Make about 150 combined. I bring in, like, 85 of that.

Okay.

Okay.

So I'm just trying. I'm trying to get his mindset. Is he thinking, oh, she's not working. I'm in charge. I don't need her help. I'm just trying to think. I'm trying to put myself in his mindset. I don't like it. I'm not gonna lie. I don't like the way you're being treated. I feel like you're being a little bit belittled in this relationship. He's not done things that have earned trust, and I hate that for you guys. But again, only counseling is gonna help this. George and I, you know, this is something that you and your husband have to dig into if you wanna see your way out to the other side.

When's the last time you went through FPU Anna?

Five months ago.

Okay, well, if you don't have access, hang on line. Our team will make sure that you still have access, and I would do one last plea to go. Please go through this with me. Otherwise, we're gonna have major problems. This is the Ramsey show.

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Welcome back to the Ramsey show. I'm George Campbell, joined by Jade Warshaw. Open phones at 8825 5225. Sarah joins us up next all the way in Sacramento, California. Sarah, welcome to the Ramsey show. How can we help today?

Hi. Thanks for taking my call.

Sure.

So my husband and I are in our mid twenties, and we have a substantial nest egg that is from inheritances. And we're already doing the basics. We have a separate emergency fund. We budget. We don't have any debt. So our question is, how do we maximize this nest egg that we have? Wow.

Okay. How much are we talking?

When we inherited it, it was around 800,000, and it's grown to 1.1 million.

Wow.

When did you inherit it? How did it grow that much?

We inherited it maybe four or five years ago. Well, we each had a bit of inheritance that's now combined, now that we're married. And so I inherited mine maybe eight years ago, and he inherited his maybe five years ago. And, yeah, they're invested, and we also try to add to it as much as we can from our income.

Okay. Is this in a brokerage account? Non retirement, in index funds or mutual funds?

It's mostly in index funds, but we do have some in individual stocks.

Okay. And that's where it's been. It's grown, you know, substantially over the years as it's been sitting there, invested. And you're saying, should we be doing something else with this?

Yeah, I think we're, you know, one option is to just have it sit there, but we also know a lot of people go and, you know, invest in real estate, and it feels like there's so many options of what we could do with it. To maximize it. And I guess we just want to be smart with it as much as we can and have it grow as much as possible.

Yeah. What's your household income?

Combined, we make around 230 grand.

What's your living situation?

We rent currently.

Interesting. Well, I'd definitely be looking into a home ownership situation. I feel like that's something that you guys can afford to do, and whether you decide that you're going to pay cash or you're going to put a hefty down payment. My other question briefly was, how much is in stocks? What percentage would you say is in stocks? Single stocks?

It's hard. We made a few good decisions where now the stocks have grown a lot, where they're maybe larger in our portfolio than we'd like them to be.

Like 25% larger?

More than that. Wow. Okay.

But, yeah, my only thoughts.

Give good. Yeah, go ahead.

My only thought is, if you have a huge portion of this, or even honestly, I wouldn't want more than 5% of this to be in single stocks. I would consider working with someone to reinvest that into mutual funds or index funds, like George said.

Okay.

And I guarantee these single stock companies, they exist in those same index funds.

That's right.

You're just really diversifying and lowering your risk by doing that. And you've done really well. And so it's easy to get StarRY eyed and think, well, we'll just keep it in there. It's done well for us. But I would be sleep at night knowing that, you know, ElON tweets something the wrong way, or x is something the wrong way, and all of a sudden, the stock tanks on tesla, which was our bread and butter. And so that's just too much brain calories for me. I don't need that living in my hand rent free. So I'm with jade. I would look into home ownership as the next step, and I would also move those stocks into index funds and mutual funds for the long haul. And the truth is, nothing says you have to go into real estate investing. I do want you to have a paid for house. I think having that in your early thirties is a huge win for you guys. While making 230 living in California, that's unheard of. And it'll give you more options later on, because truthfully, if you just invest 15% of 230, you're going to be multimillionaires anyways.

This inheritance will be a drop in the bucket compared to what your net worth will be. So then it becomes what is the best short term goal, and to me, that's home ownership in California, which is wildly expensive. This just got you an amazing sort of fast pass to being homeowners in California. And there's nothing that says you have to go put this into real estate. I would right now keep it in index funds until you're ready for that step, because the rule of 72 would say that your investment will double if you get a 10% rate of return. It will double every seven years. If you get a 7% rate of return, it will double in ten years. And so if you just leave it there, you're going to have a huge nest egg that you can use later on in life.

Yeah. So what are your thoughts on this home ownership? If we were to pursue that? I guess I get very. We're both very risk averse, which typically goes well with money.

Well, it shocks me that you have a bunch of single stocks. If you told me your risk averse.

Yeah, those were almost on accident, and some of them were inherited.

Okay.

But I guess for the home ownership piece, I'm nervous about, like, liquidating a lot of it and putting it into a home.

What makes you nervous about that?

Being less diversified, maybe the question is.

Do you plan on staying in Sacramento? Is that something that you guys want to do long term? It's a more expensive area. Is there, are your jobs keeping you there? Or is there a way that maybe down the road you can transfer your skills elsewhere and buy a home that's more affordable? And you're not liquidating as much of this, although, again, you're in your mid twenties, like, to George's point, you have plenty of time with your income, which is only going to go up, by the way, for you guys to build a multi million dollar net worth. So I don't want you looking at this like, oh, this is the only money I'm ever going to get. And even if you guys said, you know, we're only going to put half down on a mortgage, like, that's your choice to make. It's not to say that you must pay 100% cash for your mortgage. That's your choice to make. But I do think that if I were in your shoes, I'd be looking to put at least 50% down on a home.

Okay. Yeah, that's good advice.

As far as risk goes, it makes you feel better. Sarah, real estate is one of the safer assets when you look at just a primary home. Go look at what the real estate prices have been in Sacramento over the last 20 years, and you'll see that it has had an amazing return, even compared to the stock market. And so I wouldn't be scared to put your eggs in that basket. And truthfully, over time, your nest egg will eventually outgrow your home as an asset. And that's where we're at as a family. Whitney and I, we have a paid for house, and right now it takes up a huge chunk of our net worth. And I'm okay with that because our nest egg just hasn't had time to catch up yet. Yeah, because you're going to experience compound growth in that investment account versus the real estate market, which is just based on capital appreciation of the market. So I'm not worried either way. But I do think home ownership is your next best bet because rent is going to be a moving goalpost in Sacramento versus locking in something in your area if you plan on staying there long term.

Yeah. All right. That's good advice. Thank you.

Thank you. Thanks for the call. That's a, that's a fun problem to have.

It really is fun.

I got a million bucks sitting there. What do I do?

It's an emotional thing, though. I mean, she's seen that money grow from 800 to 1.1 million. It's been around, I think she said eight years for her, five years for her husband. So they're used to seeing that. Like, there's a, as weird as it sounds, probably a comfort that they have, seeing that in their account, in their investment accounts. And I imagine it could feel some type of way to say, I'm going to liquidate the majority of this to buy a house, even though we understand, like, this is a great move, that there is an emotional component there, that it's totally fine to feel that way.

So, yeah, there's, well, there's also, there's also the sort of fomo of what if I had done this? And all, there's always the regret over what could have been and what if I had done this. I just don't think it's worth it to live like that. It's just too many brain calories burn when you're doing okay.

Yeah, they're fine.

You know, it's funny, I was, there's some finance youtubers out there, and as I've talked to them and studied them, I found that there's sort of this chasing of the next thing. Like once you get to a million dollar net worth, you're around people potentially who also have a million dollar net worth or a $3 million net worth. And so now you're comparing yourself to how your friends are doing, how your mom and dad are doing, and it's just this endless chase.

There's also an interesting component to it. I mean, they'd run the math out, but if they said, all right, rule of seven, this one point, this 1.1 is going to double in seven years. We also know that the average person who walks the baby steps through has no debt. They pay off their mortgage in seven to ten years. So the funny thing is, is if they use their own income and said, you know, we're just going to use our own income, we're going to buy a house paid off in seven years and let that money sit and double. There's some fun compound interest that's happening.

When you think about if they buy a house in cash and then they can invest 30, 40% of their income into investments, well, that's going to make up for it.

That's true.

That's true. So you're going to be okay either way. But what you don't want to do is sit there and do the math on what could have been. The grass was greener on the other side. Maybe I would just rather have peace. Be content with where you're at. Being in your mid twenties and having a million plus net worth. Just celebrate that.

Yeah. That's excellent.

Live and breathe. Go on a vacation. Enjoy your life and be consistent with your investing. You're gonna be okay. That's what it's all about. You gotta have balance as you live out this plan. This is the Ramsey show. I know you work hard for your money, and the key to keeping more of it in your pocket is by making a plan for your spending with a budget. And everydollar is the budgeting app that I use personally because it's perfect for looking every dollar you make in its little president face and telling it exactly where you want it to go. Just like you told that guy in traffic, exactly where you wanted him to go. And even better, everydollar walks you through the entire budgeting journey. So you always know your next right step. Download everydollar for free in the App Store or Google Play today. Welcome back to the Ramsey show. I'm George Camel, joined by Jade Warshaw. And in the lobby of Ramsay solutions on the debt free stage, we've got a smiling face. We've got Madison here. How are you, Madison?

Good. How are you guys doing?

Great. Where are you from?

I'm from Kansas City or from Chicago, but I live in Kansas City now.

All right. Yeah, you gotta shout out the roots there. That's street cred. All right, so how much debt have you paid off?

$125,000.

Come on.

That's a lot of debt.

It is a lot of debt.

What kind of debt was that? I'm just curious.

I know all school loans.

I knew it.

Yes. Get you every time.

All right. And how long did this take you?

Two years.

Oh, my gosh. Yes. That's amazing. All right. And what was your range of income during the two years?

So it started, I am a nurse, and so I started making, like, 40 grand new grad. I was on days, and then towards the end, nurse has, like, a lot of flexibility, and so I was picking up so many shifts that I was making, like, 120,000.

Awesome. Yeah.

Kind of ended with a lot.

That's amazing. Yes. Well, be proud. You've earned every penny, especially over the last two years. That is impressive. Okay, so you're a nurse. This is all nursing school student loans?

Yes. So I did an undergrad with a health science degree, and then I did an accelerated nursing degree at Mizzou.

Wow. And here you are to tell the tale. So, two years ago, you're the average, you know, nursing school grad. You got a bunch of debt, and you went, I'll pay it off eventually. What made you go, no, I'm gonna get aggressive about this?

Yeah.

So it's kind of crazy, because I didn't know how much debt I was actually in when I was in college. I was like, oh, you know, maybe eventually, like, I'll pay it off, or I just didn't know how much I had. And then after college, I just sat down, and I was like, oh, my goodness, I have $125,000 of debt. My parents sent me down, and I was just started bawling. I'm like, oh, man, this is a lot of money. But I started looking into my faith my freshman year of college, and honestly just started to see it, like, in a biblical lens of why it's biblical to pay off your debt. And that gave me, like, motivation to be like, I have got to take care of this. And so, yeah, it just sent me on this, like, journey of just attacking my debt. So.

So what was your, like, what was. Tell us what your life was like. Like, what was your living situation? What were you spending? Because hardly anything to do this so fast.

Yes. So I did night shift, so I barely got to see a lot of people. So I was living with four other girls, so there's five of us in this house. So trying to live, like, as cheaply as I could in Kansas City. I moved in with my friend and her mom when I first moved there, so try to, like, really not have that much. And then. Yeah, just started. Yeah. Just kept paying it off. So.

So you're like, I started at 40,000. I'm gonna keep living on 40,000?

Yes.

Even though the income is going up. And that's. I mean, that's the hardest part. Right. You see everybody else going out, having a good time with their hard earned.

Money, and you're buying houses, getting nicer cars, going out every weekend, and you're like, nope, I'm gonna keep living like, a broke college.

What's your friends think? The girls you were living with when you told them, what did they say?

They were great. I mean, they were, like, my support system, so they were, like, very encouraging. And just, like, honestly, if I didn't have them, I don't know where I'd be. But my coworks are the most surprising. I just didn't realize how unpopular it is to pay off your debt. They're like, oh, just wait for the government, or you'll be in a different tax bracket, so you don't want to pick up shifts. And I was like, wow, I don't know if that really makes sense to me. So, yeah, it was just crazy different advice that I was good given, like, over the years.

Wow. So what got you connected to Ramsey? Yes.

So, my friend, actually, I started to share my faith, like, my fifth year of college, and just started building relationship with one of my good friends. And so after school, I realized how much that I was in, and so we were talking about it, and her and her family are just Dave Ramsey. Yes. They knew everything. And so they, like, really just took me underneath their wink and was just helping me throughout the whole process, telling me about all the baby steps, sending me all the videos of what I should be doing, which one I should be attacking first. And so, yeah, really, my friend has, like, been the biggest cheerleader for me, so.

You're amazing.

Like, you.

You do understand that plenty of people, I mean, the majority of people, they come out of school with 125 or more of student loans, and they just. They're so overwhelmed by it. They do nothing. And then 20 years goes by, and whoever's in administration doesn't forgive it, and it's just this chain around their neck, and you completely went against the grain. I'm just blown away. That's amazing.

Well, thank you.

And I love the way your faith played a part in this whole thing.

Yes.

That's incredible. What was the hardest part, paying this 125 grand off in two years.

I think, honestly, probably, like, I was working four to five shifts a week. I was. I was living on nights, so, like, I was sleeping all through the day, and so that was, like, there was.

So many, you know, moments physically, mentally exhausting.

And I'm like, man, I want to. You know, I was still trying to make, like, church a priority and wanted to still, like, be involved in, like, serving and stuff, but there was just certain times that, like, I had to, like, just work during the night, and I couldn't physically do it. But I think that was probably the hardest part, is sometimes just feeling a little bit, like, isolated because you're trying to pay off all this debt.

Are you still going this hard? Cause you went from 40 to 120. Have you maintained that now, or are you sort of, like, all right, I'm backing off. I need to rest a little bit.

I feel like I. Oh, sorry, this is gonna. I feel like I honestly started to kind of. I'm, like, working my three shifts good. I'm kind of taking a little bit of aback of just. I don't need to be, like, killing myself anymore. That's right.

Yes.

So.

So what do you tell the people who, like I said, you're not normal. You're different, which I love. What do you tell the folks who are sitting there watching going, ah, you know, I'm gonna wait. Or, you know, maybe when I make a little bit more money, I'll try to tackle it. Or.

Or my least favorite. Easy for her to say. I'm not Madison.

So what do you say to that person?

Yeah, I'm like, man, it just. It's so freeing to finally get here. I felt like just, you truly are a slave to the lender, and I just felt so enslaved, and so I'm like, man, it only starts with, like, one step, and so I knew it's, like, the big number is a lot to think about sometimes, but, man, if you just, like, just that $100, just that one extra loan, like, you can. You can get there. Like, it is possible. And so, yeah, I think that was just, like, the most encouraging thing of, like, it is not my own strength, but it's really, like, God, that is in me. Like, I can do anything, and so, like, man, that's possible for each and every person, too.

I love that. Yeah. Cause it shows you an inner strength that you have. I'm sure that you feel like you can tackle anything now.

There's, like, an invincibility you get when you have agency over your life. When you take control of your money, you go, well, I can take control of this area of my life, too. In this area versus life just happening to you forever.

Yes.

That's huge. I know you have some cheerleaders here who are these nice people?

Yes. So this is my friend. This is weird. Yeah, we met in college and so I started share my faith with her and her and her family are the ones that adopted me and helped me with the Dave Ramsey and.

Yeah, that's a friend for life right there.

Yes, it is. It really is.

That is beautiful. Well, we are so proud of you. You're an inspiration. I feel like your joy and freedom is contagious not only to the people watching right now in the lobby, but to everyone listening and watching online. So thank you for sharing your story.

Yes.

That's huge. Well, we've got some parting gifts for you two. Every dollar, premium subscriptions. Because budgeting is the key, making a plan for every single dollar. And so we want to gift that to you. You're free to use it or gift it to someone else and get them started, because I think that's kind of how this is going to go. There's a ripple effect that has played into your life that will continue to play into other people's lives. And we're honored to have you here to share your story. It is Madison from Kansas City. 125,000 paid off in two years, making 40 to 120 with her whole life ahead of her. To live and give like no one else. Madison, count it down. Let's hear a debt free scream.

Three, two, one.

I'm debt free.

Love it.

That was cool.

And she did a little snoopy dance. A little dance to go with it.

That's what I'm talking about. I think we all should have celebratory. I should not be seen dancing in public, but I think it's fine for people that have the rhythm to have. If you got the snoopy dance, don't hold it in, don't hide it under a bushel. But, man, Madison's one of those people. You're just like, I need people like that in my life.

I know. That's right. Well, you're the some of the people you hang around. And clearly she had some support. The girl she was living with. Understand, her best friend understood the assignment. Thank you. And now we see the result of it.

You get a bunch of naysayers in your life, they just say nay. Why would you do that? Wait on the government? Why pay off your loans and really what it is. They don't think it's possible for them.

That's right.

They don't want it to be possible for you.

Ooh, stealing that hope.

No steelers here. You get around people who are hope givers, who are have the gift of encouragement and support.

That's right.

That's what it's all about. Find you those people, whether that's in an FPU class or in your local community, it really makes all the difference as you follow this plan. This is the Ramsay show. Welcome back to the Ramsay show. Our scripture of the day is psalm 100 424. O Lord, what a variety of things you have made in wisdom. You have made them all. The earth is full of your creatures. Albert Einstein once said, two things are infinite, the universe and human stupidity. And I am not yet completely sure about the universe. Now that one I'll take.

That's a little bit of a.

It's a good.

Well, when you're really smart, you can say things like that, you know? But I think Albert was onto something that was shady.

Albert?

Cuz I think, you know, depending on where you are and where you're looking, you will see an increase in human stupidity sometimes facts.

Yes.

Oh boy. All right, let's get to the phones. Allison joins us in Hartford, Connecticut. Welcome to the show, Allison.

Hi. Thank you guys for having me.

Yeah. How can Jade and I help?

So I am over half a million dollars in debt right now and I have a rental property. And I guess my biggest question right now is whether I should be selling this rental property to start paying off my debt. I just have a really great interest rate and it's income producing, so I don't kind of like weigh the benefits.

I'm going with yes, but let's hear a little bit more. Where are you currently living? What's your personal living situation?

So I'm currently own a place in Connecticut and originally I had bought a place in Boston, so that's where that big, a lot of my debt is coming from. The Boston property mortgage.

Okay, and that's the one you're renting?

Yes.

Okay, so your primary mortgage here in Connecticut, what do you owe on that?

I owe about 200 on that.

And then the one in Boston, what do you owe on that? And if you sold it, what would it bring?

I owe about 300 on it and I could probably sell it for about 400.

2420. Okay.

What's your Connecticut home worth?

It's worth probably like 240.

Okay. And what's this half a million dollars in debt that you have?

So it's the two mortgages that I have. I have about $20,000 in student loans and $12,000 in car loans.

Okay. So it's mostly in mortgages versus consumer.

Mostly, yes.

That gives me some great peace.

I know that's right. What's your income?

I make about 75 at my full time job. And then this rental property gets me about, like, 7000 a year.

Less than a year. Okay. Okay.

I could find that in couch cushions and do an Uber. I don't think this is worth it.

Girlfriend, if I'm you, don't think so? If I'm you, I'm selling this Boston residence. I'm getting the 420 after fees, however.

Much it may be, probably end up with about 100.

Well, you said you'd profit. Did you say you'd profit? 420? Or did you say that's what you.

That's what I could sell it for?

Oh, oh, sell for 420. You have 300 left to pay. So you'd probably walk away with about 100 or a little less, which helps you knock out the student loan and car loans and leave you about 60, 70 grand, which becomes your emergency fund. Plus.

Plus.

Yes. I think this is the plan.

Easy. Easy peasy.

It's not worth all the risk income.

Producing, and it's made a year.

There was a kid in my neighborhood running a lemonade stand that made more than seven grand. So I don't think this is. And I know you got a low interest mortgage, but this is a lot of risk, and a lot of that.

It doesn't. You're not making any money. Listen, I said this the other day, George. I think you and I were on the show together. I think that real estate people get this idea. It's almost like they just like being able to say, I have an income property. When I'm like, think about the risk that you're carrying for $7,000 a year that. I mean, it's not even a month. That's not even an Uber side hustle. You know what I'm saying? Like, that's not even a side hustle.

If I tasked you with making five, $600 a month, you could go do that pretty easily with a side hustle. So you're taking on a lot of risk, and a lot of you have $500,000 in debt, and you're calling because you're stressed about it. And so we're giving you a way out with really no harm to your life. And you can always go get a rental later, but I think it should be after you have your primary home paid off. We save up and pay cash, and we get your income up because making 75 and paying mortgages on half a million bucks, that would scare me to death. Because one thing goes wrong with this tenant and you're long distance, number one. And so you got a property management team. I'm guessing you're paying right now to deal with that.

No, I'm actually doing it on my own.

Oh, dear.

So you're traveling, you're going over there.

This is not worth the hassle. Okay. I think we put the real estate guru dream down for now, and let's focus on getting our income up and getting our primary mortgage paid off and getting the consumer debt paid off. Mm hmm. Because I'm guessing you've gone through your whole adult life with all this debt.

Yeah. I mean, I'm only 24, but I got a long way to go.

Even more reason to get this cleaned up. Fresh, light, because you have so much time to build wealth the right way. And this was just a quick little drop in the bucket that it was a detour in the wrong direction. But you've got your whole life to, to go on the right path and honestly become a multi millionaire. Whether that becomes you buying real estate in cash or it's just you investing in your four hundred one k. The boring way.

And between your consumer debt interest and your mortgage interest, you're paying more than seven grand in interest right now. And so I want to see all that go away so you can start earning the interest and doing this with way more cash flow. And so the good news is you're in a great spot. I mean, you're going to be totally debt free with a whole bunch of money in the bank and ready that you can even attack your own mortgage with some of that money left over.

Yeah. Yeah. That's a good plan.

And you'll be there in no time. And you're only 24, like you said. And so who knows? Maybe by 30 you've got enough to pay cash for rental property. Or 35. That's okay. But I like this plan a whole lot. Way less stress, way more peace.

George, I feel like real estate is like the, it's the person that you date. They're good looking and on paper it seems right, but then you get in the relationship. It's just not, it's just not hitting right. They're not, you know, you know, it's not going in the direction of marriage, but you stick with them because it's, the idea was there and it's, well.

It'S the like, well, he comes from a good family. Yeah. That's not enough to say they're good marriage material. He's got a stable job.

Yeah. But you know, you know good and well, that's not the right person for you. I feel like real estate people get into it because it looks good on paper and it's. Everyone is saying, like, this is the thing for you. And meanwhile, people are losing money, barely making any money, and they're carrying all of this risk and they're tied to it for years and years for what?

Yeah. That's a lot of mental and emotional weight. All right, let's try to take one last quick call from Jennifer in Los Angeles. Jennifer, what's your question today?

Hi. I'm wondering if I should use money in a 403 b for my previous employer to pay off credit card debt.

How old are you?

40.

Ooh.

How much credit card debt is it?

It's about 19,600. And then I have student loan also.

How much is the student loan?

43,000.

What's your income a month?

About 4570. Take home.

Okay.

Is it just you or you have family? Kids?

I have two kids. Single mother.

Okay. So you're bringing home about fifty five k and you have about 63,000 in consumer debt?

Yes.

So I would not use your four three b. I wouldn't touch it because you're essentially. It would be like taking out a loan at 30 something percent interest because of the penalties and fees you'll pay because you're not of retirement age yet. And so they like to ding you for that. And I know it sounds like a smart shortcut because you can get rid of your debt faster, but I would look at literally any other way to pay off this debt. Savings side hustles, selling stuff that you have. But do not touch the 403 b.

Okay. That was a simple answer.

Are the credit cards out of your life? You cut them up?

Yes, they're gone.

Good.

So making 55,000. Have you done a monthly budget yet to see how much you'd have left over if you were paying attention?

Yeah, yeah, I have. I have like a good amount aside. I guess my other question is, you know, I did all the stupid refinance things with the student loan and it's giving me a zero dollar minimum balance.

Oh, boy.

But I should not be doing that. Right.

Right.

That means you're racking up interest was before.

Yeah. Yeah. Because the interest is still accruing.

You want to pay as much as possible, not as little as possible. That's how you know you're making progress.

Thank you. That was my second question was like, I don't think I should be doing zero because I was wondering if I should put that minimum balance toward my snowball, but I should just keep the.

Snowball at what it keeps the snowball moving. Separate all the debts, smallest to largest balance. Ignore the interest rates and you might need a side job in order to get the income up because 43k making 55, that's take home, which is great, but you need to be throwing I want this debt gone in two years or less, which means about twenty k a year going towards this. And so you can start to reverse engineer that as to how much margin you need every month to attack that goal and that will help you stay on the path. Say I'm going to put two grand a month on top of this debt and if that means a side job, I'm going to do it. And those kids will be watching mom be a hero the whole time. That puts this hour of the Ramsay show in the books. She's Jade Warshaw. I'm George Camel. Thank you to all the folks in the booth keeping the show afloat. And you, America, will be back before you know it.

Hey folks, Dave here. You want to hear even more life changing content from Ramsey? Download the Ramsey Network app so you can catch all your favorite shows all in one place, like the Ramsey show, smart money, happy hour, and the doctor John Deloney show. You'll get real talk about life, relationships, money, and your career. Plus, the Ramsdy app lets you browse by topic like debt, business, or selling your home. Get the content you want whenever and wherever you want to listen. Download the Ramsey Network app today.