From Ramsey Network. It's the Ramsey show, where we help people build wealth, do work that they love, and create actual amazing relationships. I'm your host, Jade Warshaw, joined by George Camel, both bestselling authors. Look at that, George.

Look at that.

Would you look at that? We're hosting the show for you guys for the next couple of hours. Calls about your life and your money. So chime in, give us a call. The number is 888-825-5225 and we'll get you on the line. Who's on the line? Now? We got John from Long Island, New York. What's going on, John? What's going on, John?

John, are you with us? We're having an issue here. There we go. Hey, John, how are you?

Hi.

Hi.

Good afternoon. Can you hear me?

Okay, now we can. It was on us, not on you, dude.

Okay. My question is, I made a mistake, and I wanted to not make another mistake, so I wanted to make sure. I want to use my Roth 401K in order to pay off a very high interest heloc. And the situation is, I'm not going to be able to afford both my primary mortgage and my heloc. So that's going to put me in a bigger position. And basically, I ended up using my heLoc, unfortunately, in an investment scam. It was a pump and dump type thing, and I basically lost $150,000.

Oh, my gosh. So let me get this straight. You took out a Heloc of $150,000 to invest in some online scam?

Well, when you look at it that way, what happened was it was an online investment club that I. And they were teaching me things and giving me different advice, and I was making money along the way, and I used what investment money I had. Then I was lured into using my emergency fund, and I was still making some money. I mean, talking about five to 8% a week. And then there was supposed to be this big vip tip before they wanted me to become a paid subscriber. So I was encouraged and I got greedy, and I said, this could solve a lot of my problems. And, yeah, then I invested that. So, all in all, I had $250,000.

Invested in them, and now it's zero. Did they take your money or did you lose it on a risky investment?

I lost it on a risky investment that I invested through my own brokerage.

Oh, wow.

But they advised you to do this?

This is correct.

Does this company still exist?

Nope. They're gone. Can't find them, can't contact them. They're they're not a brick and mortar place. They were an online.

Oh, gosh. I'm so sorry, John. Let this be a lesson to everyone listening. If it has the word investment and club after it just run far, far away.

100%.

So you've got this $150,000 heloc. How much is in the 401k that you're talking about tapping?

I've got a total of $400,000 in my 401k, but 120 of it is in a Roth component of it, which I can now remove. Tax free, penalty free.

Your contributions.

Yeah. And I just want to say, a.

401K or an IRA?

A Roth. 400k.

It's a Roth. Four hundred one k. I don't think.

You'Re gonna be able to get this money out tax free.

Oh, no, I. Well, I'm. I'm. I'm 63 years old.

Okay.

And it's been there for the accounts man, open for 30 years.

Is this all of your nest egg? This four hundred k?

The four hundred k, yes. But I do have an $800,000 house that's gonna be paid off in three years.

Okay. And you're saying, can you use your future income because you're saying you can't afford the HeLOC payment and your mortgage payment, what does that add up to?

I earn $125,000 a year. My current mortgage with taxes and insurance is 3400. And the HeLOC alone is going to be $1,200 in interest payments alone. And then in two years, it's going to convert to a payback.

Oh, gosh.

I don't know what that payback is going to be like.

A lump sum payback.

Well, it's going to be a 20 year payback on a 30 year type rate.

Okay. So your payment all in, what does that add up to? Interest. And the principal in the car.

With the current interest the way it is right now?

Yes.

Your interest only, it would end up being, well, like, $4,600 a month.

Okay.

That's what I've got.

And you're bringing in how much? Eight grand a month.

I'm bringing in. Well, I'm netting. I'm netting $1,500 a week.

Okay, so why are you only netting six k a month? But you make 125. That's 72.

Are you still investing?

I know. Well, I'm only putting $50 a week in.

Well, you're only taking home 57% of your gross income. That's what I'm confused about. So let's. We need to pause investing. Number one, every single cent you've been investing. Stop it. We got to get rid of this debt and get to some foundation. Do you have any money in savings? That's liquid.

I've got 20,000 in liquid.

Okay. What's left on the mortgage?

80,000 at a three and a quarter percent. It'll be done in three and a half years.

Okay. And are you single?

I am single.

No dependence?

No dependence.

Hmm. Well, I just. You're gonna rob your, your nest egg by almost half.

I worry with that.

Which means how are you gonna retire?

Well, I agree with that. And the way I was looking at it was as like a three three pal system where one would be the other to be my home, which I'm going to sell and downsize when I retire. And the other would be Social Security. Social Security. I've got about 3600 a month expected. Coming in. The home is 800,000, which will be paid off when I retire.

Well, if you're going to sell it anyways and downsize, can you do that now and use proceeds?

What are you going to make when you sell the house?

Well, it'd be the whole 800,000 minus.

The 80 that you owe. If you sold today, you'd probably walk away with 600, 8700, something like that.

Again, we all have our own situation. I have an elderly mom who's living with me and, you know, it's got to take care of her, too. And, you know, to just say, turn around and move.

But you said you're going to move.

When you retire because then I won't have a job then my job is here. You know, the downsides on Long island is, you know, you sell high. To buy high, I need to go to a lower cost area of living and that I can't do until I retire.

Got it, because your employer is there.

Yes, I see.

Oh, man, this is a rock and a hard place, John.

You're right, you're right. And the way I was looking at it was, well, you know, and then the alternative then is after I pay it, pay the 120, I just still 30,000 left over, which I wanted to then take a 401k loan.

No, we're not going to.

You called in and said, I don't want to make another mistake. And most of the solutions you've been laying out sound like another mistake.

Okay, may I just explain what my thinking was? And then because the interest I would be paying back would be paying back to myself rather than being paying it to the bank life hack.

But you're still robbing all of the future growth of that money, which you're already robbing because you're trying to pay off the HELOC with it.

Right.

So your first. Your first mortgage is when we're looking at it as a whole, your first mortgage is $3,400 a month. And then the HELOC portion of it right now is 1200 per month, right?

Correct.

What would happen if you paid off the 80,000 in a lump sum and then all you're paying is the.

Basically the freeze up, your 3400. I like that plan. That's a better plan.

Well. Well, because I'm giving up a three and a quarter percent.

You're not giving up anything, John. It's paid off. Who cares?

It's gone. And now you're at a place where you can breathe with your money financially, month to month, and continue to make some progress.

Okay, I'd still be paying $1,700 for taxes and insurance.

Yes, but that's a lot of money.

You're always gonna pay that.

Yeah, that's not going away.

Anyway, freeing up $3,400 means you can stay in the house and pay off the heloc without murdering your nest egg.

That's what I do if I ruin your shoes. This is the Ramsay show.

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You're listening to the Ramsay show. I'm Jade Warshaw, joined by George Campbell. And we're gonna be your host today, taking your calls about your life and money. Give us a call. The numbers triple 8888-825-5225 and George, my favorite announcement that we've been doing the Ramsey live like no one else. Cruise. It's here. There you go.

I'm working on my ship horn. It's not as good as Jade's.

It was a little light.

It was a little flimsy.

You need a little.

Mine was more of a dinghy. Yours was actual cruise ship.

Yours was the lifeboat. So don't miss your chance to join us. Like I said, it's called the live like no one else cruise. This is a celebration. Right. We're going to do one of the biggest debt free screams ever because the folks on this cruise have accomplished something. These are folks who are past baby step two and baby step three, cruising with us on a seven day cruise through the Caribbean.

It's worth it just for the amazing cruise. Even if we weren't there.

I want a vacation.

The stops are amazing. Tell them where we're going.

Turks and Caicos, St. Thomas, Puerto Rico, the Bahamas. And here's the thing, like, I know a lot of you are like, what do we have to do, Jade? How do we get signed up? The good news is all you need to do is a $600 deposit. $600.

You don't have to pay for the whole cruise upfront right now.

No, no. You do this in installing like.

Jade, you're telling us the budget. Yeah, if it's in the budget.

That's right.

Put the deposit down and pay the rest as we go, as we get closer to the cruise.

And you've got a lot of time. The cruise sets sail March 22 through the 29th of 2025. So put your dollar 600 deposit down today, and then you got all this time to save up for the rest of it. And all of us are going to be there, Dave, all the personalities, including myself, George Campbell, John Deloney, Rachel Cruz, Ken Coleman. We're all going to be special guests.

And Dave's got some pretty famous cool friends, and we're going to have magicians and musicians and celebrity chefs and all kinds of experiences. And of course, the normal entertainment on the cruise excursion. So it's going to be well worth your time.

The ultimate debt free celebration. So you've worked hard, you've lived like no one else, and now it's time to celebrate. So make sure you book your cabin now before we sell out, because these are going fast, I can tell you that. Book yours at Ramsey. Salute. There we go. Ooh, I can't wait.

I'd have some fomo if I wasn't already going. The love boat.

Remember that?

Oh, yeah. That's before my time, but I appreciate the reference.

Yeah, you know, it was kind of.

Is that before your time, too? You're not that much older than me.

Let's not talk about that, George. Let's take a call. All right. We got Andrew in Jackson, Mississippi. What's going on, Andrew?

Hey, guys. So I'm just trying to call. So I don't really consider myself a business person. So this is probably why asking the question. But I. My full time job as a automation engineer. Controls. Engineer so I do, like, manufacturing automation for a DoD contractor.

Okay.

And so that's my full time gig. I make about one hundred k a year on that. And so I started doing some side work as doing the same thing, but literally just drove down the street and knocked on the door of another manufacturer and said, hey, you don't need any help like this. So kind of started doing controls work on the side. Netted like eight k last year. And then this year I'm expecting to net somewhere around 30k. So it's kind of growing a little faster than I thought. So kind of the main question is, when do I know, like, when to take that full time? Because mainly my concern is, you know, I have a new baby. She's seven months old, got another kid who's about two. My wife is a physical trainer, so she does that kind of just very part time, but is mostly a mom, which is great. And she sacrifices a lot for me to do this. But my main concern is just like, how can I keep it going? I guess I'm really worried that if I did take it full time, it wouldn't be as secure as my full time.

Why?

I don't know right now. I mean, I don't expect to do it, like, full time very soon. Just because you're saying 30 days is all at one client. Yeah, yeah, it's still at 30,000. It's still on one client. But, you know, I've got a lot of, you know, interest in leads out there and quotes out there. I'm expecting to hear good things about and expand that, but, yeah, I think you're on the right track. Do you have any debt transition? Yeah. So I've got a car loan that's about. But the contract I'm actually working with aside for that one customer should just pay that off completely. So that should probably be next month.

Okay. Anything else?

Yeah, and then about 17k in student loans, which would probably be paid off either by the end of the year. Next year.

Well, the good news is right now that $30,000 side hustle is allowing you to move faster on the debt. And if I were you, I think you're on the right track as far as trying to diversify the clients that you have because you don't want all of your eggs in one basket, especially when you're out there on your own. It is nice to say I work with this client. This client, you know, have a long list of wells to draw from, but in your case, I'd be looking to replace my current income. If you're at 100,000 now, that would be the goal. And I mean, you went from 8000 to 30,000. Maybe next year you hit 70,000. So maybe this is like a two, two, three year play, and by then you're kind of able to jump ship and go over, you know, into your own ship there. And so that's, that's what I'd be looking for to replace that one hundred k and know that it's steady.

How many hours are you putting in to make the 30k on the side hustle?

I would say that I try and limit myself to 15, but to try and get the work done is probably more like 20 hours a week. And then plus the, it's kind of a manufacturing environment, so you kind of never know with my full time job, but it's anywhere from like 40 to 60 hours a week with a full time job. So you're working?

Yeah. I'm wondering what your capacity is to scale the business because you can't just go, well, I'm going to have nine clients and work 90 hours a week. So you got to figure out how to scale it to where it's not taking more of your time to take on many more clients. But once you can kind of do the math and go, all right, I'm putting in 20 hours a week and I'm making 50 a year. Well, if I did 40 hours a week, I can make 100 if I got two more clients. So start doing some math. While you're doing that, aggressively pay down the debt, get six months saved in an emergency fund and probably a few months of just cushion save to launch the business.

Yeah.

So once you get the boat that.

Close to the dog, my main question is like the emergency fund, if it's six months is enough or do you think it needs to be more just.

To cushion, I would do six months in the emergency fund, but then have a separate savings account where you stock up maybe three months of expenses to float to kind of get this thing launched to get your feet under you.

What's it cost you to do your work? Like, are you putting out a lot of money in order to make this 30,000?

No, I'm kind of pulling a startup move and really just running out of my garage right now. So taking advantage of all the free software licenses I can, but I'm probably, I'm probably under, I mean, two k overhead because of software, but most of the time the customer pays for it, so it cash flow pretty well.

I'm with George if, you know, there's the three to six months of expenses on your personal side, but if you can kind of create that same thing and retain in retained earnings on your business side, that just gives you that feeling of, okay, I know I've got the money to do the things I need to do. And if you have a slower month, like you've just got that cushion there on both ends, which I like. Very good question.

He's pretty close to this. I would say in another year, maybe two years, there's the financial part, which is get debt free, get the emergency fund, get the retained earnings, and there's the business side of, can I scale this up to where I'm not relying on one client because I had a friend do that, and it's scary because they lost that one client and there went their business.

Oh, yeah.

And so you want to have some diversification, just like we talk about with investing. Smart to do that with business, too.

Yeah. Really important. When Sam and I first started working in the cruise industry, our only client was carnival cruise line. They're a big, big fish, but it's just like this feeling of, okay, I'm dependent on them. If they for some reason decide, we don't want to work with you anymore.

If a pandemic happens and no one can cruise anymore, there goes our entertainment.

Well, listen, that happened anyway. That happened anyway. Even though we, at that time, we were working with all the cruise lines. But cruising in general. Yeah, we don't, it wasn't what happened then. It wasn't personal, but it did come back. So that's good.

But in general, you know, when it comes to this side hustle small business, should I go full time? You want to make sure it's earning money number one.

Consistently.

Consistently. And you want to make sure it'll scale to where, if you were doing this at a normal, you know, 40 hours rate, you could actually create the same full time income and replace that. And once your side hustle small business revenue exceeds your monthly expenses, well, that's a ding ding. Let's. So the lower you get your expenses, the faster you can launch. Which is why we tell you, don't launch a business while you're struggling with debt and you're trying to jump ship. Don't do that. It's way too much risk.

Well, George, you also made a good point about the fact that because he is working so many hours now, he's probably in the current state not going to realize the full potential of his, the business side hustle income, because there's only so many hours in the day. So there is a moment where you have to kind of sit down and do the math, and there's that kind of leap moment where you're like, okay, I gotta make a leap. It's a calculated leap. It's not. You just, all right, I'm, you know, jumping off a cliff. Let's hope I land on my feet. Yeah.

I can't jump very far. I gotta get the boat close to the docks where I can just step in.

That's right. That's right.

That's the goal.

A calculated risk is what we're talking about here. And I think that our guy is very close to taking that. So if you have a business venture, you can check out our entree leadership podcast. It's a very, very good one to listen to. Dave Ramsey's the host. This is the Ramsey show.

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You're listening to the Ramsay show. I'm Jade Warshaw, and I get the privilege of sitting next to a best selling author, George Campbell.

The privilege is all mine.

Really?

Yeah.

But you wrote breaking free from broke.

Oh, okay. That's fair.

See, there we go. George, you're trying to confuse the people.

I'm sorry.

We're taking calls all afternoon long. Give us a call. Triple 888-25-5225 will discuss all of the things going on within your life and your money, even get into some career stuff. And. But right now, George, there's a lot popping off when it comes to how people are managing their money. We know things are tight right now. There's a lot of factors out there. There's inflation, and there's the housing market and insurance costs are going up. And the truth is, Americans are feeling it and they're trying to find ways to squeeze in their budget and make, make things work.

Because this article is how the middle class stays middle class. Here's the headline from money wise. Why it's a big problem that 46% of the US middle class are now slashing or completely cutting out contributions to their retirement funds. Yikes.

So the survey found that nearly 46% of middle income families, they're cutting back on retirement contributions and they're doing it because of stubbornly high inflation. That's the major culprit that they're saying here.

And they're even saying they're pausing them indefinitely. That's either cutting back or pausing indefinitely, which is a weird thing to say. It is never contributing again.

Well, I know that people probably listening are like, wait a minute, you guys at Ramsey, you're always telling people to pause their retirement. Like, why are you so upset about this? And the difference is we never tell people to pause their retirement indefinitely. We want you to be millionaires. We don't want that, you know, indefinitely. We tell people, George, to pause their investing for a short period of time while they're in baby step two and three, so that they can pay off their consumer debt, not their mortgage debt, just their consumer debt, and save up three to six months of expenses. So that, and that way they're protecting their investments so that if there's an emergency, they're not dipping into that emergency fund. Or, I'm sorry, they're not dipping into those investments to cover everyday emergencies.

The truth is, people just don't become debt free when they're trying to do 17 things at once. So you need that focus, intensity to get there. And as of April 2024, the consumer price index, which measures the changes in the cost of consumer services and goods, had risen 3.4% on an annual basis. Within that index, food costs were up 2.2%. Shelter was up 5.5%. They're saying all of this is putting a strain on american households in that middle income range, 67% of whom say their income is falling behind the cost of living. And they're saying things are so bad that 36% of those surveyed are using credit cards more frequently to keep up with expenses. And that tracks. I found that on the Ramsey show. As we've been taking calls, more and more people are turning to credit cards as their emergency savior blankie to get them through, which is a terrible plan.

Here's the thing, though. Inflation is still high, but it has gone down. And we're seeing it slowly but surely go down, but it's still higher than it would be or should be. So I do want people to kind of. There's a big part of this, George, that it's like if we keep saying everything's on fire, people are like, ah. And they're, like, running around. But there's part of it where we have to go, okay, things are actually getting better. You know, interest rates are still high. Inflation is starting to come down. So there kind of needs to be that feeling of, okay, we are going to come out of this at some point, and we don't want to go to these crazy extremes. Right? And so there's part of this, George, where I look at these people and I think, yes, if things are too expensive, you're busting your budget. You don't want to use credit cards. I like the fact that they're saying, what can I cut out? I think the problem here is just some people might be cutting out the wrong thing, especially if they're not in debt. If you're not in debt, now is not the time to be pausing retirement.

Now's the time to. To prioritize retirement and maybe cut some other things in your budget if it's feeling tight for some reason.

And let me show you with some math why this will cost you millions if you follow the middle class plan of just let me. I got to keep up my lifestyle. I'm unwilling to sacrifice, and therefore I'm going to stop retirement contributions. Let's say you're 35 years old, you have nothing in retirement, and you're part of this group who says, you know what? I'm going to not put anything in retirement. I'm going to stop indefinitely. Well, at 65 years old, if you just invest $300 a month, that's what most people are probably doing. It's a little bit. Get the match.

Get the match.

That's all I'm going to do. Just that. $300 turns into $678,000, George.

Not enough money to do anything with.

I'll take 678,000. If you're offering Jade.

And here's like, it's nothing. I'm like, this is something.

Let's say you're 45, and you say, I'm going to pause. Well, pausing. That $300 monthly investment from 45 to 65 would still cost you $227,000. And this is not a lot of money that you're actually contributing. Jade, it says the contributions were 72 grand.

Wow.

So you can see the more contributions, the longer the time span, the bigger and scarier this number gets of what you're missing out on.

That's a really good point, George, but let's even talk about it in terms of what we choose to cut out of our budget. So let's pretend you're just kind of the average, your average american. You're making $67,000 a year, you know, household income, and you're. You're really feeling it. You've. You're the average person that's maybe got a couple of car loans.

You know, you probably underwater on those.

Underwater on your cars. Maybe you've got, you know, some credit cards that you're, you know, leaning on here and there. I'm not saying you're balling out with credit cards. I'm saying you might be using them to get gas and things like that. What would it look like to trade in those card notes instead of being so focused on the retirement edge, which, again, if you're in debt, we do want you to pause retirement. But what would it look like for you to kind of change your mindset and go, what's really the thing that I need to cut out of my budget that's going to make a big difference. And for a lot of Americans, it is their car payment. You know, whether you're making a lot of money or a little bit of money, if you're feeling tight, it's probably because you're spending $500, $600, $800 a month on vehicles. And if you can get that under control, then you can pay off your debt quickly. You can pause it while that retirement is paused, you're paying off debt quickly so that then you can come back with a vengeance. You can invest 15%. You've got that money cleared up again.

And so it's one of the only.

Types of debt that's somewhat reversible because you do have an asset attached with the liability. So you can sell that car, hopefully get a good portion of that money back, get out of this thing, save up a little bit more, and purchase a used cash car to get around. And that's a big part. And then there's just lifestyle.

That's right.

And I get, housing is expensive, and we get calls where people's mortgages, 50, 60% of their take home pay. And I'm going, and you wonder why you have no margin in your life.

It's big.

And so you got to make different decisions when it comes to housing.

And that might be a big one that a lot of people are facing right now. I mean, we're coming off of a crazy. The housing market is still crazy, but there was a time where people were paying so much more than value, right? And they overbought. And now people are kind of feeling that. It's like, oh, man, my mortgage is 40% of my take home pay. And for those people, you might have to look at figuring out what's a better option for you moving forward. Because if you can't see, if you can't see on the horizon, you earning more money to close that gap, you're going to be living like this. Yeah, that's.

And they have golden handcuffs, Jade, because they'll call in and say, well, Jade, I have a 3% mortgage interest rate. Why? I can't let that go. And they're just stuck in that position because they're unwilling to let go and rent for a while. They're going to have to jump to a much higher interest rate. And so these are real problems. On top of, of course, the groceries and eating out and your lifestyle and the subscriptions and all the luxuries that you've come to, to enjoy that are hard to get rid of because it's hard to cut down your lifestyle. But if you can do this for a season, you never have to worry about cutting out your retirement contributions, which is the last thing you should go to cut out on after you're debt free. So I hope these people are in the camp of, listen, I'm just broke and I got a lot of payments here and there, and that's why I'm cutting back on retirement. That makes sense.

That makes sense. But as long as they're doing it with the intention to go hard on paying off the debt, because, again, this is not an indefinite choice that we want you to make. Otherwise, you're going to retire with nothing. And that's definitely. Then you'll be calling the show saying, I'm 67 years old and I don't have anything in retirement. Can you help me?

We call it social insecurity for a reason.

That's right.

These payments will get you at the poverty line, if you're lucky, 100%. For most people, they're going, well, I make $1,500 in Social Security, and you're like, okay, if you made $1,500 at your job, you would be in the poverty line.

Yeah, I mean, what is it, 40% of your income is what you hope.

To get, you get a portion of your income back. And depending on your life, how long you've been contributing, what your income was, it's not enough to survive on. And so you've got to develop a plan. And I'm telling you, in the millionaire study, we did 80%, said the 401K was my ticket to millionaire status.

That's right.

That and a paid for home. And so this is not the spot you want to pause on. 15%. Once you're out of debt consistently, you will become a baby steps millionaire.

Absolutely. And if you're looking, if you're like Jade, I don't know where to start. All I know is it's hard for us. We're living paycheck to paycheck. A good place to start is with a good budget. You know, we all the time, we talk about every dollar budgets because it's the best way to really see what's going on with your money. It's a monthly habit. You're doing it every single month. Before the month begins, you're creating and sticking to a plan. And everydollar makes it really simple. You can plan spending. You can track transactions. You can save for honestly what matters most to you. And all of this is in an easy to use app. It fits into your lifestyle. And this is what we need. This is how we make progress. And when you look at your everydollar budget, you can see what you're spending money on and pick the right things to cut back on, not the things that are going to be valuable for you moving forward. So download it everydollar.com everydollar for free at the app store or Google Play. Today.

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You're listening to the Ramsey show. Thanks for listening. I'm your host, Jade Warshaw, joined by your other host, George Camel. We're chopping it up all hour long. Hey, if you watch this show, you love this show. Thank you so much. Honestly, without you guys, we wouldn't have jobs.

There would be no show.

There would be no show, and we would not be hosts. So thank you so much for watching. Thanks for listening. Thank you for sharing it. Matter of fact, if you want to support this show, something that you can do that's very easy, not very time consuming, is you can share the show. You can like it on whatever platform you listen to it. You can subscribe it. Subscribe to it. If you watch it on YouTube, whether it's the Ramsay show, even a show like the George camel YouTube channel, that would be a great one to subscribe.

To while you're at it. And it's gonna show up in your feed anyways.

That's right.

Because the algorithm knows this is what the people need.

So there's, like, that convenience factor, which is nice, because when I go on YouTube, I don't want to search. Like, I don't want to have to type it in. I want it to just bing pop up. And so when you subscribe, it does that, and then, of course, share it with a friend. You know, if you hear us talking about something and you're like, oh, Barbara could really use that. Just send it to Barbara. You know, so that's why you gotta.

Throw Barb under the bus.

You know, Barbara, she takes out helocs.

That is true.

She does.

She sounds like someone who would be like, it's a good idea, and use my equity.

That's right. So share it with someone who needs it. That helps us out. It helps everybody else out. And it really does help to kind of spread this life change all over the world. And that's what we want. All right, George, straight to the phone lines. We got Jake in Montgomery, Alabama. What's going on, Jake?

Hey, Jade. Hey, George. How are y'all?

We're doing great.

Okay, so right into my question. So I got married last year. I'm 25. My wife is 23. She just finished her first year of medical school last month. And I am taking on the challenge of trying to cash flow it. So, yeah, luckily, in March, we were able to pay off her first year before she finished.

Amazing.

And luckily, we almost have enough to pay off her second year.

How much did that cost? Can I ask for your one?

Because of. Yeah. So because of scholarships. And her parents had paid into something when she was little. And so about 10,000 goes towards that a year.

Okay.

But it was still between 26 and 27,000. So it's still, you know, a good amount.

So you guys paid, you know, almost half.

Yeah.

Okay. Wow.

So. But my wife is miserable with it because med school is hard enough. But she feels like, you know, at the stage of life wherein she feels like, you know, we never get to do anything, you know, she gets to see all of her friends doing all these fun trips, and she doesn't have.

Time to do things.

You're right.

Alone, the money.

You're right. But any free weekend that she does get, I think it just sort of reminds her that we don't get to do as much because of, you know. And I think she sort of feels responsible for that, which, you know, it's just the stage of life that we're in. And I'm fully on board on doing whatever we can to, you know, to get her ahead.

What kind of doctor is she studying to be? Like? What kind of. What's the end game?

So she would love to be a pediatric pulmonologist or a rheumatologist or anything like that. But, you know, right now, it's. It's just so stressful that, you know, as long as it has doctor in front of it, it's always the joke that I make. She would be happy. She just wants to help people.

Well, I asked that because most people kind of go into that profession knowing it's a lot of school. Like you, you're gonna be learning from.

They know they're not gonna have a life for the next six to eight.

Years, and she's only one year in, and, you know. So what does that mean? Tell me how we help you.

Yeah, so really, I'm trying to figure out right now, I'm contributing about 12% of my income to a Roth. And although currently, I think we can still do both, contribute to the Rothschild and have her med school fund. But, you know, in order to have the med school amount at the, you know, come August, like, you know, everything sort of has to go perfectly. Well, life isn't perfect. And so I'm trying to decide, do I still contribute to my roth while I have this fund in place, or, you know, like, at what time can I sort of, you know, relax the strings a little bit? Because my wife, you know, she's pretty tired of being on rice and beans, even though.

Well, do you guys have any life? Tell us more.

We do not.

So you have an emergency fund?

Well, we have a mortgage, so we have a $200,000 mortgage. We have about 100,000 equity in our house. We bought it last year. I paid off my truck in December. So we have no consumer debt.

Do you have savings?

Yes. So I have an emergency fund of about 30,000. I think it's a little over where it needs to be.

Okay, that's fine. What do you guys make?

So I make right now, maybe 125 or so, and I expect it, you know, I'll have yearly raises.

Good. That'll probably help with cash flowing.

So, yeah, assuming nothing changes, I think we're okay. But, you know, I'm just trying to decide if I, you know, if I quit contributing to my roth temporarily, I wouldn't. Is it worth it?

Technically, at this phase, you would want to try to get as close to 15% as you can. For you, it's almost like school is taking the place of, like, a baby step three b or something, where somebody might be saving a down payment for a home. And so, for me, honestly, out of all the things that you said, the bigger question is, what's your wife want to do? Because you guys are sitting around funding, you know, $10,000 or more a year for something that it sounds like she's already burnt out on and there's a long road ahead. I mean, I know that you're the one saying, I don't care what it is, it just needs to end in doctor. But, I mean. George, what do you think?

Yeah. She needs to create a life that's sustainable. And that doesn't mean she needs to go on crazy vacations every year, but she can find some fun things to do on the weekends that don't cost a whole lot of money. So I don't know what friends she's watching, where they're going. She needs to realize her life looks different in this season, and that season might be five or six years of schooling and fun might look like. We go for walks, we go on bike rides, we find free activities in Montgomery, we do the free concerts, whatever it is. And maybe you include a little bit of fun money. Let's put $200 in the fun money line item, and that's what we have. And get creative with how we use it. And so if I was in your shoes, you know, if you were down to the wire and you're like, oh, my gosh, we're not going to be able to fund this year's school because I'm investing. That's when I would go, okay, let's pause for the next three months and make sure we're back on track. Restart. And if your emergency fund is over funded, you could always bring that down, you know, to, let's say, three months, in order to use some of that to cover the remaining expense, remaining expenses for school.

I actually. I actually wanted to take a moment and interview you a little bit, Jake, because we have people all the time. You call in about med school, and it's like there's no way to pay for it. I want to know more about how this is working. Tell me what the school costs a year. Tell me where she's going. I feel like people would want to hear that.

So everything together is about 36,000 a year. So luckily, with the scholarships and what her parents had paid in when she was younger, you know, we only have to pay 27, which I say only, but luckily, I've always been a saver. So when we got married, I had about 80,000 in savings. And so we found a great deal on a house. We found something off market. So whenever we got in, whenever we purchased the house, I put about 50 something down and it lucked out that we ended up getting about 40 something thousand in equity. You know, even before we put anything down, because the people really, I'm talking.

About with this, with this school, I want to hang out on that because people don't know.

There's even med schools that are 36 grand a year.

Right. And your parents are only contributing 10,000 a year for this. And then between scholarships and cash flowing, you guys are doing the rest. What college is she and what school is she at?

So she's at the University of Mississippi. So it's.

Is that online?

We're from. So we're from Montgomery is what. Is why I said that.

Okay, but you guys are living in Mississippi currently.

Yes.

And so she can take that degree and go into rheumatology, she can go into pediatrics. All the things that she was wanting to do. And it's costing you guys, like a.

Residency fellowship, all that type of thing.

And how long is this program?

So she's there for four years. And then depending on what she goes into, that's where, you know, it's sort of unknown is how much, you know, depending on what program she gets into is how much longer after four years.

Makes sense.

And what do you think that'll cost? Sorry, George.

So once she gets through the four years, to my understanding, she starts getting paid a little bit, but it shouldn't cost us anything extra.

Oh, good.

So just the first four years. So, you know, we're looking at a hundred, hundred something thousand total. We've already paid 27. So I'm just trying to figure out, you know, what point do I need to, you know, after we pay for this year? Because in her med school fund, I've got currently around 20,000 in it and then 5000 in our checking.

I think what you're, what you're doing here is exactly right. You guys are planning ahead. You're trying to get that money saved up so that you're already ahead when the year comes. You've got a little bit from the parents, I think. You keep walking down this road, you've made smart choices by paying off debt. And I think that she's going to graduate completely debt free.

Yeah. Call us back with the update and make sure you're parking that money in a high yield savings account and let it grow a little bit for you along the way.

I love that medical school with no debt. Only on the Ramsey show. From the Ramsey network, you're listening to the Ramsey show. I am Jade Warshaw, one of your co hosts today, joined by best selling author George Camel. We're going to be chopping it up with you all hour long, so give us a call. The number is triple 8825-5225 bring us your toughest money questions.

Don't go too hard on us, Jade. Come on, now.

George, I was depending on you. I was. I was going to say George can help you out.

He's sometimes just want a soft toss, you know, give me an easy win.

Yeah, a little. No, no curveballs. But truly, if you have. Listen, we'll try it. Throw some curveballs. We'll see if we can answer it. Give us a call. So let's go to Billings, Montana, where Sean is on the line. What's going on, Sean? Sean, are you there?

Yes, I am leaving you. Hey, thanks for taking my call, Jade. And, George, I have a question for you. I'm wondering, what do I do if my wife is going behind my back, spending money, making bad money choices, without talking to people beforehand, it's really hurting us. And I just don't know how to, like, get her on board to stop doing this kind of behavior.

What kind of behind the back? Like, give us a little bit more detail.

Like, let's say she'll sign my daughter up for some kind of dancing that's very expensive. Without talking to me beforehand. Or she'll borrow money from her mom. Thousands of dollars, without talking to me beforehand, and then I'm stuck with footing the bill. You know, it just comes up out of nowhere.

What happens when you confront her about this?

Well, I've tried everything. I've tried, like, being really kind of angry about it and confronting her harshly, and that doesn't work. She shuts down. She thinks I'm a bad guy. She says, this is why I don't talk to you. So I've tried the opposite. I've tried being very soft and understanding and try to, like, let her know she can talk to me. That doesn't work. Everything kind of backfires on me. So I'm looking to you guys for some guidance.

Has this always been going on? How long have you guys been married?

I'm sorry, you're breaking up. Can you repeat the question?

Sure. How long have you guys been married?

No. Still losing you.

I'm sorry.

You're in those mountains in Montana.

I'm in the middle of, you know, nowhere, kind of. I thought I had good service. Now I can hear you.

I was asking, how long have you guys been married?

We'll try to get them back. We can answer it in a general way right now without having more details.

Here's what I'm getting at. I was asking him, George, how long they've been married. Because what I wanted to get to is, has this been a occurrence that's.

Been going on just ten years of this behavior and pattern? Or are they newlyweds and they're figuring it out?

But what I was thinking, George, is I detected that they've got some animosity between each other that may have nothing to do with the money, simply because of the way he said he confronted her about it and the things that she said in return. This is why I don't trust you, or this is why. So in many ways, I almost wonder if this behavior is a lashing out of sorts from another something that. Other issues. And so that's based off that little bit that we heard from Shawn. I kind of think that that might be it.

I mean, the first step, I think you guys need marriage counseling. This is beyond a money thing. She shuts down, doesn't want to talk about this. There's no trust. There's no communication here. This isn't a healthy marriage by. By any standard. And so that's step one is while financially, we need to get some, some headway, we need marriage counseling to get to the root of the problem, whether that's this marriage or past trauma, or the way she grew up or the way she thinks the money should be handled. We need to just. We need a third party here, because the third party can help. When one person shuts down, you need that person who's not the spouse to try to resurrect the situation 100%.

Because, I mean, I know if I say something, if Sam says to me, hey, Jade, I wish you wouldn't do XYZ. And my response is, see, this is why I never tell you anything, or this is why I don't talk to you. That is an indicator. I've got a lot of beef, you know, beneath the surface that needs to be cooked up. And so, yeah, I agree, but it.

Sounds like he's at least trying to communicate in different ways and not just come at her harshly every time and go, hey, listen, you borrowed money from the mom. And I don't know how honest he's being with how it makes him feel. And I don't know how much of a vote she lets him have in this marriage. It sounds like he doesn't have much say. Yeah, and so he has a right to be angry 100%. I didn't get to hear her side. Maybe she's got another side to this.

But sounds like there's something. So, yeah, I agree with you, George. Counseling is the way to go. This is what we would call financial infidelity.

It's one thing to make a small purchase that wasn't in the budget. Hey, groceries went over. It's another to buy. You know, I signed her up for a $1000 dance class. And it's even worse if there's a spectrum here of I'm gonna go into debt behind your back, borrowing money. Yes. And he said he's footing the bill, which makes me think their money is not together. Another, they've been disjointed and separate probably from the start.

Yes.

And so at some point, even with separate finances where it's supposed to work out perfectly, you gotta come together and go, that wasn't cool. Cause that affects me too.

Yeah, that's a good clue, George. Something. If she's feeling the need to reach out and borrow thousands from a family member, then my mind, I would have asked him next. I would have said, well, tell me about the budget. Is she the type that you handle the money and she gets an allowance because that doesn't work. So I wish we could have gotten into more, but, Sean, call us back another time and we'll dig.

If I ever said to my wife, yeah, I gotta foot the bill for Whitney, I would. I wouldn't be alive to tell the tale.

No, you wouldn't.

If I said that I had to foot the bill for something my wife did, so that's.

You'd be on the moon.

I would not. And my wife stays at home now, so she doesn't bring in income. You know what I mean? Like in the traditional sense. But it's still our money. She gets just as much of a value as I do. And I think that's the most important part. And especially for stay at home spouses, it puts them in a real precarious situation. There's a lot of shame and guilt when they go, well, I don't want to spend this money because I don't bring any money into the house, and I want to go provide. I'm like, moms, do you understand? Or dads. Whoever stays at home, you would need to hire Mary Poppins to keep the house afloat. When I get home, I am thankful that I got to be here with adults and go to the bathroom when I want to and eat when I want to, because my wife is just. It's chaos sometimes. And so bless, bless all the stay at home spouses doing the Lord's work out there. You are worth every penny and more.

And there's a way to avoid that power struggle of one person is working out in the marketplace, and one person's doing work at home, one person's bringing in, you know, income from that job, the other person's, you know, providing a lot of value at home. When you have a budget that you're working with together and you guys are deciding those line items together, right? I know on our budget, there's a Sam's fun money. There's a jade's fun money. There is, you know, all these categories where it's like, I know that at any point in time, I can go into the budget and use money on XYZ because it's planned for. I don't have to say, sam, can I have $50 to get my nails done? I still have the autonomy there, but at the same time, there's. The communication is open to see, hey, I see that this money is available for Jade to spend how she wants. This money is available for Sam to spend how he wants. And there's really no, it's autonomy with.

Guardrails and communication accountability. And if you don't want that, please don't get married because you're going to just hurt the other person and hurt yourself in the process when you go, I just want to live exactly how I want to live without anyone telling you. Got to have someone else speaking into it, too.

Yeah. I think my feelings would be hurt if Sam was like, you know, I just want my own account over here just to. Just to do the things that I want to do. I think my question would be like, well, why don't you want me to know about it? Because I'm not going to keep you from doing anything. So I think these are the conversations that we have to have. John Deloney and I were hosting the other day, and we were kind of poking fun at when couples don't share their money, and so they're venmoing each other back and forth. Oh, my gosh. And so many people were saying, jade, you know, it's, it's whatever works for the couple. And I'm like, I get that. But there is some, there are things that slowly eat away at a relationship over time. Even if you think, yeah, this is working for us, there's a bit of trust that's being deteriorated every time you make a separation. You know what I'm saying?

Yeah.

And so that's kind of where, save.

The Venmo for your friends, not your spouse, please.

I agree with that, George.

You want a good marriage?

Yeah. Share the bank accounts. This is the Ramsay show.

This show is sponsored by Betterhelp. Hey, it's Deloney, and you gotta be kidding me. 2024 is flying by. So let me ask you, what's something you're proud of so far this year, and what's something you wish you could just stop and collaborate and listen and change direction on? It's important to take a moment to celebrate your wins, and it's also important to make adjustments and make changes when necessary. Therapy can help you take stock of your progress and set achievable goals for the next six months, nine months and beyond, therapy is a safe, effective place to learn how to say hard things out loud and to make realistic plans for moving into an unknown future. Personally, ive been blessed to have a great therapist, and you can be blessed with a great therapist, too. If youre thinking of starting therapy, give betterhelp a try. Its entirely online, its convenient, its flexible, and its suited to fit your schedule. You just fill out a brief questionnaire to get matched with a licensed therapist, and you can switch therapist at any time for no extra money. Take a moment and be intentional for the rest of 2024 with better help, visit betterhelp.com Deloney today to get 10% off your first month.

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This is the Ramsey show on Ramsey Network. By the way, you can watch the show on YouTube. If you've never done that, maybe you've just been a podcast person. I think it adds a little extra value when you watch it on, on YouTube. It's just like, you can see what's going on.

Yeah. You know, people have been clamoring. They're like, I just want to watch George's face.

Yeah. While I listen, facial expressions. Or you could check out the Ramsey network app. That's another place where there's some fun stuff going on. You can view the show and some other things as well. In the meantime, we got Ramsay's show, question of the day. Today's question comes from Jim in Oregon.

He says, I'm trying to take the lead in my family and get the burden of keeping up with the finances off of my wife. I've messed up and let her down a lot, and we've gotten in debt. Now we are stuck in the revolving paying credit card off every month. She doesn't believe in debit cards. It's not Santa Claus, okay? She doesn't believe in debit cards, which makes it too easy to get money out of the bank, so she refuses to get a debit card. I know that I've let her down, and I'm trying to fix it, but every time I try and discuss it, she's tired or not feeling well. How do I get her to understand that the credit card is part of the problem?

Hmm.

Well, I don't know that she's gonna listen to you, Jim, considering that you've made your own money mistakes, or she's gone, what makes you king of the hill over here telling me what we're gonna do with our money?

Yeah, this sounds like a conversation that's been worn out in their house.

Yeah. No one's gonna win this argument. You're both. You're both losing right now. And part of it is you're not aligned with the foundation of money, the principles, the values. That's part of it. Because then the game plan that's carried out from your values and principles is gonna go in different directions. You're trying to do this with a debit card. She's trying to do with a credit card. You probably have different views on debt, so that's part of the issue I'm seeing here.

Yeah. If I were them, I'd probably, if you can get her to, you might even frame it up and act like it wasn't even your idea and just say, someone told me about this thing, financial peace university. I'm going to watch it. Would you like to watch it with me? And that way, you know, you kind of get to be the. You guys get to. We get to be the bad guy, right. And we get to be the one that's telling you, here's the best way to handle your money, and I might try to start there, if she'll even sit down and watch it with you.

And if not, that's a red flag. If she's unwilling to even move forward in this money journey with you. And I think for a season, you co lead right now. I don't think either of you should be like, I'm taking the reins. Just trust me. That's a terrible financial plan. In any marriage. There needs to be communication, accountability, and alignment. That's where financial peace university is a great tool. And, you know, when it comes to this, the credit card, the debit card, it's too easy to get money out of the bank. I'm like, do you know where credit card debt has to get paid from your bank?

Yeah.

So this idea that a debit card, it's too easy for the money to leave. Well, that's a human problem that we need to fix.

Yeah.

Versus just dealing with some symptom.

Well, and then there's. There's clearly an emotional side of this. And, you know, I feel like, you know, we say this a lot, but counseling, if she. Right here, you're saying, I know I've let her down a lot. I'm trying to fix it. I'm trying to take the lead. I've messed up, and I've let her down. You said that, but three different times in this letter, this short little paragraph letter that, for me, is an indicator that there's some healing that needs to take place. And so counseling is a great place. And by the way, I think that counseling all the time, you know, on kind of a regular, like, we just.

Go and have a check in, just maintenance.

Yeah. It's so good. It helps your communication. It helps you talk through things that really are issues, and it prepares you for when an issue does pop up, like how to talk about it and how to make the most of it.

Yeah, that's good. Well, thank you for the question, Jim. That's a tough one. I think a lot of people relate, whether or not they're the exact same situation, there's generally some disagreement about how we handle the money. And so I like the idea of you saying, hey, I'm not. Forget my plan. Clearly, I've screwed it up. I don't have all the answers. What if we try this proven plan? I heard about financial peace university. Would you be willing to try someone else's plan, not Jim's plan. I think that might open her up a little bit.

I think so, too. I think he's trying to get a little baby bird to come to him, you know, like this. And there's been a lot of false starts, so hopefully that helps him out. All right, let's let's head over to Chicago, Illinois, where we've got Jacob on the line. What's going on, Jacob?

Hi. Can you guys hear me?

Yeah, we can.

So, I am 22 years old, and I'm about $90,000 in debt. A large portion of that, about 45,000 of it, is from my car loan.

Wow.

I made about 85,000 last year. I want to say maybe closer to 90,000. I'm a realtor and a part time server.

Okay.

And then my credit card debt adds up to around 30 grand.

What are you spending this money on?

I do go out to eat a lot. I also spend a lot of money on marketing stuff and paying office dues and fees and stuff like that. And then I also gamble a little bit.

What's a little bit?

Well, a little bit more than I should. I probably lost about 15 or 20,000 in just that. I self evicted myself from the casino.

Okay, what about your phone?

So how about my. I'm on my parents phone bill.

Still no, I mean the gambling apps on your phone.

Oh, no, I can't do that. Since it's, like, statewide, it does not allow me to.

Okay, when's the last time you gambled at all?

On a vacation? On a cruise? It was about a month ago.

Okay.

Okay. So that's part of the problem here, because you're not going to make much financial headway when you've got an addiction in place. So I would handle that first before we do anything else. And this car needs to go. It is way too much of your world. At 22 years old.

What's it worth?

Yeah. My biggest problem with that is the trade in value is dropped significantly. I paid well.

Trade in value always sucked. Since the beginning of time, trade in value sucked. So, not trading, what's the private part of it?

I was looking at the used models, and they were selling more than the new ones, so I thought that maybe that would happen to me.

But if you were to check KBB, what would it say that, you know, if you do a private sale, what could you sell it for?

The last time I did it on KBB, it was showing around 30,000 that I would get for it.

What car is this?

It's a Kia EV six.

Oh, there we go. I was hoping it wasn't a Kia. I'm telling you, every call we've had with a Kia. Evie.

Yeah?

This value has dropped so insanely fast, it hurts my brain.

Who. So have any money laying around? Do you have any money saved anywhere?

I have a Roth IRA with about 3500 in it that I can't touch. Yeah, I put dollar 100 into it per month.

Let's stop that. Can you promise me you're going to pause investing until we get this debt cleaned up?

Yes.

That hundred dollars is much better spent getting some financial foundation for you right now. And you'll get back to investing. You're 22, you got plenty of time to invest. If we can get out of debt over the next two years, then from 24 to 64 you have all the margin to invest for 40 years.

Do you have any other liquid or non retirement money?

No.

Okay.

Are you living at home?

I am.

That's the good news.

So you have very little bills and expenses?

Correct.

So you're making 85,000. How much is the car payment?

The car payment is 975 a month.

Wow, that's something.

How quickly could you save up the difference that you're underwater on to save 15 grand? Are you making five or six grand a month?

It depends on how many houses I sell because I'm commission based. I mean, I make around like 600 to 1000 per week in the restaurant. I work three days a week there.

On a normal month. What are you seeing? What's the average amount that you would take home on a normal month?

Probably anywhere from around three to 7000.

Okay, so let's say that normal for you is around 4500 that you're taking home. 975 car payment. What are you paying each month toward the credit cards?

I'm paying the minimum balance is due. So minimum payments are with each one of them. I have a couple different credit cards so it would probably add up to around over 1000 a month in minimum payment.

Okay, so we'll say 1100 to the credit cards. So right now, yeah, you're, you're spending a little over $2,000 just on this debt. But the good news is you've got that much free and margin to really make this happen. If I'm you, I am amping up the server work that I'm doing. I'm amping up in the real estate side. I'm trying to get as much money as possible because, because the first thing here is let's clear that $15,000 underwater difference so that you can get out of this Kia EV because it is whooping your behind. And then let's save up as much as we can, $5,000, get you a cash car and then we're going to start attacking these credit cards. But hey, again, this is the theme I want you in counseling. We need to figure out what's behind the gambling. We need to figure out what's behind you kind of propping up this lifestyle at 22. What's causing you to go into debt and overspend at such a high rate at such a young age? Because I want you to get that under control before it starts controlling you. This is the Ramsay show.

You are listening to the Ramsey show. And, hey, I just want to remind you, this is your chance. If you've had a question about money, if there's been a question that you've had, but maybe think it's a silly question or a dumb question or something, you should know by now. There's no dumb questions in personal finance. It's all about learning and getting the information and putting it into action. So myself, Jade Warshaw, and George Camel, your other host today, we're going to help walk you through it again, no question is too silly. Matter of fact, you could just say, hey, I'm asking for a friend. And that way we can.

I've always said, jay, there's no dumb questions, only stupid people. And I stand by. Don't blame the question. That's just words, George. I'm kidding.

You're not making these people feel any better.

I'm having fun with it. I'm joking. I've asked a lot of dumb questions in my day.

Oh, man. I remember.

I still do.

Well, you know, that's in the eye of the beholder, the person who's being asked. But I remember, you know, when it comes to personal finance, it is one of those things where there's a lot of lingo, there's a lot of jargon, there's a lot of words that maybe you've heard before, and you feel like you should know what that is, but you don't know what that is.

You feel like, well, I'm just not the type of person who should be investing in a Roth 401K.

Yeah.

I don't fully understand it. And guess what? There's a knowledge gap that you can fill.

Yes, you can.

And you gotta be dangerous. It's dangerous with who you fill with, because some dudes on social media, some guru selling you on some investment club, not. Not the vibe.

That's very good. That is very good. You need to be careful of where you take your information from. Luckily, here at Ramsey, we've got over 30 years of experience and backing. Everything that we teach here has been proven over a 30 year track record. And we know that it works.

We're getting rich slow. And if it sounds like get rid slow, it's probably the right path. And if it sounds like, bro, we're gonna ten x your money, it's probably not the right move.

Real.

You're about to get screwed.

Yes. Big facts. So, so true. So if you're looking for something to get involved in, you could follow any of our personalities on Instagram. George Camel, Rachel Cruz, Doctor John Deloney, Ken Coleman, myself. We're all giving you information that you can value and trust. Okay. Off my soapbox, I just kind of wanted to talk about that a little bit.

Appreciate that.

You know, it can be intimidating. Let's talk to Gina. She's in Orlando, Florida. My neck of the woods, Florida. What's going on, Gina?

Hello. Hi, guys. How are you today?

We're great. Good to talk to you. How can we help?

So great to talk to you guys. Okay, so I'm going to get right to the point. So I work for a very large company in Orlando, a very large unionized company.

Okay.

And I started in January, and I got my offer letter in December. They offered me $18 an hour. And I signed it, emailed it back, went along with my paperwork. Started in January. Now it is now June. And I know that's a long time from January, but just recently, I had to refile for my benefits, and they required some of my pay stubs. So I'm looking through my pay stubs, and I notice for my hourly pay, it says 17 an hour. And I'm like, well, that must just be one of these pay stubs. So I'm going through all of them, and they all say 17 an hour. And I'm like, I'm really confused at this point. So I give my manager a call. I let them know, and they're like, oh, all right. I send them an email of my offer letter that shows exactly what they offered me. It's shown there twice. And I email it to them, and, you know, I kind of just wait a day to see what happens. So from then until now, I have been getting nothing but the runaround from this company. I have called HR. I've been in contact with payroll.

I've been back and forth with some of my top managers, some of my regular managers.

And is this just to get the retroactive pay, or have they at least changed your pay going forward?

They don't want to do anything, Jade. They don't want to do anything. They are literally saying, because they are a unionized company, that they are. That is the rate for that role. And I'm like, I understand that is the rate for that role. But that is not what you offer to me, and that's not what I signed for.

And it's a sign they're contractually obligated to pay you that amount.

And I know that. And that's what I've been saying. And my managers have been talking to HR, they've been talking to the union and saying, hey, this is what her offer said. You know, can she. Can she at least get, you know, some. Some back pay? And they are giving me a no, like a flat no answer for.

Do you have any friends that are lawyers or a friend who knows a lawyer, somebody who can just. You can run this by and they're not going to charge you?

I do not. But I may. My mother in law may know some. Somebody I don't know off the top of my head.

Ask around a little bit. Ask around a little bit. Because that's what I would do if somebody came to me and said, jade, say again?

I said, this isn't. This isn't right. Right.

If you're telling me that you have in your hand a signed letter of saying, this is what you'll be paid and you've signed it and the company assigned it 100%, it's not right. They're breaking. They're breaking a contract that they have with you.

And that's what I'm saying. So it's like any other document that I signed with them. Is that too void? Are none of my documents that I signed with this company? Are they. Are they all void as well?

Well, did you sign anything that says 17 an hour? Are you having documents that some say this and some say that?

No, my offer clearly said. It said, you know, congratulations, you know, for XYZ, you're going to be offered 18. And then you open up a link at the bottom and it shows your role and it shows you everything that, you know, what you're obligated to do for the company.

Yeah.

And again, and it's a rate 18. And I signed that and it says my name. It says my.

Let's decide how much. Let's decide how worth it. This is.

Yeah. Can I do the math for, you know.

Yeah, do the math.

That's my main question. Should I let this go or is this worth pursuing?

I mean, I think both. I think. I don't want this to consume your life. Gina, Gina, stay with me. Listen.

Yeah.

We're arguing over a $1,000. That's the amount of back pay your owed January to June. An extra dollar an hour. That's $1,000. So know that going in. Don't go spend $6,000 on a lawyer to make a $1,000. Don't let this consume your life to where you. I know it's frustrating because of the principal and you feel wronged. And you're worth. You're worth more than 18 an hour. You're priceless, right? Number one, you don't want to work for this employer, so you need to go find a new job and jump ship when you do. Number two, you can do your due diligence. Look into Florida labor laws. Look into the Fair Labor Standards act. There's some other resources I have here. Department of labor. You can file a complaint with them. You can look into mediation, legal action. You can look at the Florida Department of Economic Opportunity. They have resources for you, the US Department of Labor wage, and our division. So there's a lot of things you can do. But again, what is worth Gina's time? If I'm you, I'm going screw them. I'm worth more than this. They treated me wrong. I don't want to work for an employer like this.

Go find a new job. We're not talking about $300,000 a year here.

That's right.

And so you can go find a job making $18 an hour elsewhere. What. What job is this? What kind of role are you in?

It's. It's. It's. It's for a pretty big company here. I don't want to know.

What's the role? You don't need to name drop the role. Like what skills.

Okay, so the role I am, I work in a club level lounge.

Okay?

It's not like. Yeah, it's. It's a lounge position.

Okay. Can you find another. Can you find more work like that that pays similar or more.

Absolutely.

Absolutely.

You know, and my whole thing is, I just wanted to know if this was worth it or not. Am I stressing myself out over. Really?

They did you wrong, but you're, to George's point, they did you wrong, but you're spending more mental calories on it. They're somewhere eating a sandwich. They are sitting somewhere with their feet up. They could care less what Gina is talking about. And you're the only one over here that's stressed out, to George's point, only, you know, over a. So don't give them that power in your life, you know, you're giving them too much power.

So you're going to be drinking your own poison soon with just all the resentment you've built up toward this company and the people you've dealt with, and I just think you're worth more than $1,000. I just want you to move on with your life and go, never again. And I'm going to make sure, I'm going to check that first pay stub. And as soon as I see an issue, I'm going to say, nope, this is what we agreed on.

Yeah.

And so you've learned, you know, you've learned the lesson here, and it's not on you, but you just need to move on. And I personally, I wouldn't go hire, you know, an attorney over this.

No.

I would fight on my own for a few more hours and a few more emails, and then I'm just gonna move on.

Yeah, I agree.

I'm sorry that happened, though. That sucks.

Yeah. Definitely put no money into this. I think she can go somewhere, George, and I think she can earn a lot more money.

Her next job, she's gonna be getting paid $25 an hour ago. How was I so stressed out and.

Like, the company at the same time? Yeah, there's always, there's always. Sometimes you think you're between a rock and a hard place, but there's a lot of other directions that you can go, and that's what's going on with Gina. This is the Ramsay show.

Hey, folks. There's a lot of half baked investing advice out there, but here's what you can do to get more confident about this stuff. Check out the Smartvestor program. Smartvestor connects you with local financial advisors who have the heart of a teacher. They'll help you level up your knowledge and build a retirement plan based on your goals, not theirs. Go to ramsaysolutions.com smartvestor to get connected and get more confident about your plan. That's ramseysolutions.com smartvestor.

Ramsey Solutions is a paid, non client.

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You are listening to the Ramsey show on the Ramsey Network. I'm Jade Warshaw. Next to me is George Camel. We're taking your calls all hour long. Triple 888-825-5225 and if you didn't know it, you know, maybe you just watched the show and you just think, we're two folks in a studio. Actually, it's two very large buildings that we work from, and it's a lot of people in here. I think there's, like, over a thousand of us.

That's right.

Working in here day in and day out, lots of different resources that we offer here. Ramsey education, Ramsey trusted services, just to name a few. Then there's all the stuff, like every dollar and everything like that. And one of our favorite, Ramsey trusted. They're here to help you guys, okay? You need help with things like real estate, and we're here to help. So selling a house the Ramsey way, it's really what makes homeownership a blessing instead of a burden. And we've got the right tools for you. Our Ramsay trusted program is really the only way for you to find an agent that you can trust. This person is going to keep you on track with the things that we teach here at Ramsey, which is so important. You're going to get the best offer on your house, and you're going to find the right house for you. If you're looking to purchase a house. This is so important, George, because it's a jungle out there, right? And people will do anything, especially with this market. If you're trying to buy a house, people are doing bridge loans. People are doing zero down loans for.

Sale by owner trying to save a buck.

Oh, gosh.

Now's not the time to do amateur hour.

I know. And you don't want an agent who's so desperate to make a dollar that they'll kind of suggest things to you that are not good for you.

Oh, well, if you want, if you.

Need to get your loan approved, just, just do this. You don't want that. You want somebody.

What if you did a heloc? And that way you could know our Ramsey trusted pros. They're not going to steer you wrong. They're not going to give you advice that goes against the Ramsey principles, which are meant to help you live with more peace, less stress, and get the house paid off. Remember, that's the goal.

That's what you want. So we're going to send you some of the top agents in your area. These are people that we trust. You're going to get to review their stats. You're going to get to interview them and decide which one of them that you want to work with, because you're going to choose one of them. And these Ramsey trusted agents, they've got years of experience, okay? They're going to help you make the wise decisions when it comes to pricing, when it comes to marketing, and they're going to help you choose the right offer. So find a Ramsey trusted real estate agent for free. Did I mention that it's free at Ramsey solutions.com agent? So that's what we're looking for. I love my Ramsey trusted pro that has helped us with our houses. She's great.

You come, like, lifelong friends with some of these folks. They're amazing.

Mandy Lynfesty shout out. Shout out in the. In the middle Tennessee area, Williamson county.

She'll appreciate that.

I know she will. All right, let's go to the phone lines. We got Elizabeth in Austin, Texas. What's going on, Elizabeth?

Hi. How are you doing?

Good. How are you?

Good. Sorry. I just wanted to make sure you could hear me at first. So just to kind of get to the point, my stepmom and I don't have a really good relationship. I recently found out that she has absolutely no retirement funds or plans, and there's just no way my husband or I could even think about helping her. And so I just. I'm not quite sure what to do in this situation or, like, how to avoid feeling guilty that I can't help.

Is she asking for help?

No, not yet. But her and my dad aren't very financially responsible, so it's.

How old are they?

I'm worried that if some. She's 56.

Okay. Okay. How old is your dad? Same age.

He's 53.

Okay.

Are they both working?

They are right now.

Okay. And where does your dad come into play? Because you're talking a lot about stepmom here.

He doesn't work. He works, but he doesn't work at home. So he has a job as a truck driver and. But he. He has, like, a pension that he's vested into, but that's only, like, $500 a month for when he retires.

Have they told you about their financial situation?

My dad has. He's been very vocal about that.

Is he worried about it when he tells you?

A little bit, yeah. Just because that's not a lot of money to live off of.

Sure. What's your financial situation?

So my husband and I are currently in baby step two. We make 90,000 a year, and we're scheduled to have. If everything goes perfectly, we're scheduled to have 50,000 paid off by March of 2026.

And that's the full amount?

That's the full amount minus our mortgage.

Okay, great. Yeah. That's excellent. Okay. So I sympathize with what you're saying, because I, you know, they're your parents. You love them. You see them drowning, and you want to save them. Right. But at the same time, you've got to get yourself into the raft first and save yourself so that you can pull them into somewhere safe. So there's all of that there. It sounds like your dad. At the very least, it sounds like he's willing to talk to you somewhat about this. One thing that you can try is to say, hey, you know, dad, some of the things that you're saying, I have felt that, too. You know, we been worried about the future for ourselves, and I found this plan. You know, it's called financial peace University. We started working it, and it's working for us. It's a lot of work, but it's helping us. You know, I'll send you a copy of it. And maybe you do it like that, as opposed to. Because you're not. Here's the thing. You can't save them, and you're not.

Responsible for their life and their decisions.

Yeah.

As much as you might have empathy for their situation, and we know that you can't change people. We've tried. I wish I could. You know, you can't. Your personal trainer can't care more about you losing weight than you. Yeah, it just. It doesn't work.

You can hold up the oxygen. They don't have to inhale.

And so part of this is having the hard conversation and saying, listen, I can't take care of you guys if you don't take care of yourselves. I'm not. We're not gonna be able to have you, you know, move in with us and have us float you if you didn't prepare. Now, the good thing is they're not that old.

No, they're not.

They're gonna. They're probably, you know, if they work really hard for the next 1015 years, they can have a decent little nest egg and retire with some peace. Would you agree? Why are they. Why is there no hope for them at this point?

Well, it's not so much that there's. There's no hope for my dad. It's just my stepmom really loves to shop, and so.

And she going into debt for this?

Yeah, she has in the past. It's caused them to go through bankruptcy twice.

Now this is even more so. This is becoming an issue you can't solve, because these are marital issues. They're financial issues that you're seeing. You're seeing the symptoms on the outside in a financially speaking. But these are marital issues that you. I mean, you're only seeing the tip of the iceberg on this.

And with any kind of misbehavior, if you throw money at it, you're just gonna be enabling more of the same misbehavior. She's not just gonna change her habits because you gave her $5,000. She's gonna go, whoo. Shopping spree.

How long have they been married? How long has she been your stepmom?

Um, 16 years now.

Okay, so this is locked in.

What's your relationship with her?

Um, it's really terrible. Um, she was physically and verbally abusive when I was little.

Oh, my.

Sorry. So, yeah, so I'm not trying to put words in your mouth. You're looking at this, and you're going, this woman is dragging my dad down.

A little bit. Yeah.

And so, yeah, you're. You're mad.

Have you brought this to your dad? Have you shared your honest feelings with your dad about how she's treated you and her financial situation and how it affects him, his retirement?

Yeah, I have. For father's day, I got him total money makeover, and he. He started reading it, and he, like, wants to get on the right track now, but it's just.

It's on him to get her on board. And you're going to have a much harder time doing that with your position. And so I think the more you can encourage him, get him on the plane, get him fired up, that will then hopefully be contagious to her, or at least he gets some boundaries and goes, listen, you can't spend like this anymore. I'm taking away access to this card because you're putting our family in danger, Zachary.

And the way that you motivate him is by sharing your journey. Like, share when you're winning, when you guys do your debt free scream. Share that. Share how it feels to have this piece. Talk about the conversations that you're having with your spouse. Hey, you know, we've been. It was tough at first, but we keep opening up, up the lines of communication. Just be open and share. You can't make them do anything. All you can do is tell them about it. And then you kind of just have to step away and really just leave it in God's hands at that point, which is tough to do, George. It is not easy. We want to control the people that we love. Let's just be honest about that. But we can't. Doesn't work that way. This is the Ramsay show from the Ramsey network, it is the Ramsay show. I'm Jade Warshaw, joined by George Camel. We're taking calls about your life and your money so you can call in. This is a live show. It's calls from everybody around the country, and you can get in on that action. The number is triple 8825-5225 again, this is a live show, so if you want us to take your call, call in now.

Triple 888-825-5225. Let's go straight to the phone lines. We've got Casey, who's in Sacramento, California. What's going on, Casey?

Hi there. How's it going?

Going good, how about you?

Very well. Thank you for taking my call. You bet. So, basically, my partner and I have been together for forever. We have separate accounts, but all of our finances are combined and shared for all intents and purposes.

Okay.

I am currently switching careers, going back to school to get my teaching credential, and we're thinking we can make that happen without taking out any loans or debt. So that's good news. My partner made a bad car decision in his early twenties, which shot his credit score. He hasn't done anything to remedy it, but he also doesn't have any debt.

Okay.

I, on the other hand, have about $10,000 in credit card debt. We've been throwing money at it, you know, minimum payments, everything extra that we can, but obviously, with interest, we're not making any headway.

We both are putting money towards it.

Yes, absolutely. It's combined debt. We're working the steps, and we're really trying to get past baby step two so we can start saving for our first home. So my question being, I know you guys are not proponents of calculating your way out of debt and whatnot, but why? Or if? Is it a bad idea for us to take a personal loan out in his name so we can pay off the credit cards, get that consolidated fixed rate monthly interest, pay that off early, throw all of our extra money at it, so my credit score goes up, and once we pay the fixed rate off, his credit score will be in a better position once it comes time to buy a home.

It's $10,000 in credit card debt, is that what you said?

Yes, ma'am.

Is it one card, or is it a bunch of little ones?

So it's two cards. We've already paid off the smaller cards.

So what's left? What's on one card? One and card two.

4006 thousand.

Okay, so you got a. What do you guys bring in? Combined income?

Combined, he's got about five grand a month, and I just took a serving job, so I'm not totally sure what that's gonna look like moving forward, but that'll probably add up to about five grand a month, hopefully.

Okay, any kids?

No kids.

So you guys are baby making 10,000 a month. Tell us about your renting or your mortgage, what are you paying every month? Trying to figure out where this money's.

Yeah. So my income with the career change, I have not had more than $400 monthly income for the last, like five months.

Got it.

So he's really been floating that boat majority, and we're still making the payments, but we're just not making headway.

Right.

This is just kicking us.

But now you have the job, so we should be making headway. I mean, if you're both bringing in $5,000 a month, I mean, that's very good.

So there's no need to play the whack a mole debt game by using more debt to pay off the other debt so we can stay in debt. And so the, the goal here is how do we use your future income to knock out this debt? And so what's your minimum payment on card one?

It's like 130, but it, it varies based on if I can throw any extra money on it.

Right.

But the minimum is 130. So what were you saying? You're throwing at it? Are you throwing $300 extra at it? 500.

Sometimes it's just the minimum. Sometimes it's like 50 to 200 extra.

Well, that's why you're going to make some serious headway and you're going to get ahead of the interest if you start throwing 501,000, 2000 at it. So that's the problem is you're just sprinkling some extra money on it. We need to just shovel it onto there.

And here's. You guys have been living on $5,000 a month. You've been living on your husband's or your partner's income, and now you're going to be making another $5,000 a month, which means we've proven that you can live on 5000. So this other 5000 coming in, that's.

Your shovel at the credit card. Think about that. You'd be debt free in two months if you pretended like this money was not a raise to increase your lifestyle, but instead this is just money to pay off the debt. Could you be debt free in a few months?

Absolutely. But I was also thinking with the personal loan, right. It would be a good vehicle to get his credit score back. Without taking a credit card through the.

Credit score, what good is that to get another car loan?

No. So come time to buy a house.

Well, you guys are going to be debt free. When you're debt free, his. At least if he's debt free now, pretty soon his credit score is going to disappear. That's what happens when you're. When you stop borrowing money, your credit score over time, usually six months to a year, it becomes indeterminable, which is basically what we would call maybe a zero credit score. And that's not bad. That's actually better than a good credit score when you think about it in the market. And so if that happens, you pay off this debt, he pays off, he remains debt free. Both of you are going to see that happen. And when it comes time to buy a house, you'll still be able to do it. You'll just do it with manual underwriting.

And the house dream. This is a few years away because we still have to get an emergency fund once we're out of debt, we still then need to save up a good down payment. So we're talking probably two or three years, right?

Yeah, that was actually going to be a question. So you do still save the emergency fund prior to the down payment savings?

That's right.

So, baby, step two, pay off all consumer debt using that debt snowball method. Smallest, largest balance, minimum payments on the rest. But that little one, we're going to attack with a vengeance, throw as much extra as we can, maybe step three is save three to six months of expenses in a fully funded emergency fund, which for you guys might be, what, 15 grand? What's three to six months of expenses? Okay, so once you have 15 grand there, let's create a different high yield savings account to start making that down payment fund happen. And then that could be, you know, 60 grand in there. So that could take a year or two. Three.

Yeah.

Casey, does it make sense to you why we're telling you to do it in that order?

Yes. Yeah, it does.

Yeah. I think it is kind of tough to hear, like, oh, man, I got to save up this money before I save up the down payment. But it really is so that you can go into that home with peace, because going into a. No, a new home and buying a home is not cheap. Not for the faint of heart, it's definitely not. And, you know, you go in and then all of a sudden it's like, oh, we do need a new couch. And we do need. It's like it's. It just becomes an expensive endeavor. And just knowing that the money is in place, you can use more of your cash flow to do the things you want to do. And then if something comes up that's unexpected in a new house, you've got money there that's earmarked for emergencies, in that case. So that's the way to do it. I think that in this case, sometimes consolidation can feel like the solution is like, okay, we took two things and we turned it down to one.

Just transferring from one place to another using different types of debt. It sounds good on paper. And then the same people will call us back and say, hey, I did a 0% transfer balance on the credit card to this one. I did a personal loan. I did a heloc. Because the interest rate. And that's never the solution. We have to get at the real heart of the issue.

Yeah.

Which is the person in the mirror.

Yeah.

Not the interest rate.

That's right. And I think there's a psychological component to that. It's like, let's say you had five different debts, and you consolidate them down to one part of you feels like you've done something, and I have less, quote, unquote, less debt now. It's like, oh, this is easy. This is one easy, convenient payment, as opposed to the five I was paying before, even though it's probably the same. And so in many ways, you kind of feel like, oh, I can. I can go into debt again. I only have one. Right. And so I think you really have to guard against things.

It's like having different. You know, I got a 25 pound weight here, a 25 pound weight here. What if instead, I put them together? Well, now I can't lift it. It's just too heavy to do all at once. And I'm a little guy, Jade, so.

It'S more difficult amongst the bicycles.

Is she still in line? Okay, Casey, I'm gonna send you a copy of my book, breaking free from bro, because in there, I lay out the entire process for how to buy a house without a credit. This is how I did it, how we paid it off early. And I hope you follow suit, and that becomes you guys one day.

Absolutely.

So hang on the line, and Kelly's gonna pick up. We'll send you a copy of that book.

Love it. Thank you, George. That was very generous.

I'm trying to be nicer these days, Jade. I've been known to be a little cruel.

That's okay. Breaking free from broke is the book. This is the Ramsay show.

Are you planning to sail with us on the live like no one else cruise? Then you better book your cabin before they're sold out. If you're on baby step four and above, come aboard March 22 through the 29th of 2025, as we set sail for Turks and Caicos, St. Thomas, San Juan, and the Bahamas. Join me, the Ramsey personalities, and a ton of special guests, for the ultimate debt free celebration, book your cabin because they are going fast. Head to ramsaysolutions.com cruise today.

This is the Ramsay show. I'm Jade Borshaw. Next to me is George Camel. We're taking your calls. You can call in triple 8825-5225 the only caveat has got to be about your life and your money. Okay?

So now it's good caveat.

It's a good disclaimer. You know, there's a lot of podcasts out there. This is a financial podcast. It's for personal finance. Okay, so let's go to the phone lines. We've got Michael, who is in Chicago, Illinois. What's going on, Michael?

Hi. How are you guys doing?

We're great. What about you?

I'm doing all right. So I have a situation going on right now. But just to kind of cut to the chase, my main question is whether or not I should be withdrawing more money from an index 500 fund to put towards paying off debt, specifically from student loans that belong to my. Well, that come from my wife belong to us. And then some credit cards between the both of us as well.

How much are the student loans?

The student loans are $3,458.54.

And how much are the credit cards?

One is $2,382, and the other is seven and so. Right. Just short of $7,000 for all of them.

Okay. And what's in this? Is this like a taxable brokerage account for general investing?

I believe so, yes.

It's not retirement?

No. No. It's not retirement. No. It was actually. It was originally a. I don't know what they're called, but my grandfather, before he passed away, was saving it up for me.

That's awesome.

Once I turned 18, what I got.

How much is in there?

Originally, there was 20. And so this is where the situation gets kind of weird. So I'm currently undergoing a switch in districts. I'm a teacher for the visually impaired. I teach blind kids.

Okay.

So I'm moving from one district to another. But I've had a weird situation where normally a teacher's contract starts and ends in August, but for some reason, in this original district, it ends in July. So I'll be technically. Originally, I was planning on going through July and possibly even August without pay or insurance coverage. Fortunately, the new district is willing to at least cover part of the insurance as long as I contribute my half. I asked them whether or not they'd be willing to start, like, an early contract or something like that, and they still want to look into it. Especially since, according to a form that they gave me recently, my pay wouldn't start in their district until September 10. That'd be going from July to September 10 without any pay from my side, which would be about $3,000 a month. That's fine, considering that already withdrew $7,000 from my index fund to try and put towards the debt.

Okay, so you've already played this game. You've already withdrawn some money. So how much. How much left you have in the index fund?

About like 1500, I think. Originally it was 22. I went through 7000 when I checked. Actually, I just wrote it down. Let me go and look at it.

You said 1500 shouldn't be 15,000.

Right, sorry, 15,000. Okay, 15,000. Is it still in the. $15,440.15 is still in the index fund.

And then you got the $7,000 of debt.

So that leaves you with 8000 in the index fund. Plus you freed up your debt payments, which you can now use to save and float you for those two months if you need it.

Yes. And so the reason why I really ask is because when I brought up this idea in conversation with my wife during our monthly meeting, financial meeting that we have, she was concerned about what that would look like in regards to taxes if I withdrew essentially $14,000 from the index fund.

Okay, that's a calculation you can make, and you can withdraw a little more to pay the taxes if you need to, but that's going to come tax time. Right. So we got time to figure out what the taxes are, save up for that, and make sure that we have the money allocated for that.

What's your wife earn?

She earns about, you know, she doesn't earn like, a consistent salary like I do, but she makes, I'd say about like 15,000 or. Sorry, not 15,000. About 1500 a month.

1500 a month. What is she doing?

So she works as an orthodontist assistant. She makes about 850 doing that. And then she also works at a pizza location and makes just on weekends. It's something she's been doing since high school.

Do you guys have kids?

About 175 a month? We do. We have one.

Okay.

What's the childcare situation? Is there one or is they older?

We have been blessed with a really, really good childcare situation where we have her parents next door neighbor, who they're really close with, watches her for like $20 a day.

Great.

So that's been really fortunate.

I mean, how old are you guys?

I'm 27. My wife is 25.

All right. I love that you guys are paying off this debt. It sounded like you were. It sounded like because of the gap in pay, that you were thinking of reaching into this again for the gap in pay. I really want to stop that habit that's kind of been. I have this money, you know, once you. Once you've invested money in a brokerage, and I understand it was a gift, but the intent is for that to sit there and stay there. And so I really want you guys working the baby steps in order, which really, the next thing for you guys, you need to get $1,000 saved, and I want you to really lean into this and do it the right way. And you've got childcare. Your wife's got to work more.

You said, if I may, we actually also. We haven't combined our finances yet just because we went straight from being married to buying a house to having a kid. So it's something on my docket. She's actually kind of against it. I've been kind of slowly.

Why is she against it, you guys?

Recently, she doesn't like looking at the money coming out of her account. And since I pay a majority of the bills, she would feel like if she looks at it, she doesn't like it.

No one likes money coming out of the account.

That's part of being an adult.

And so my proposal to her was, you know, that's. I mean, I totally understand that. Like you guys said, nobody likes that. So I told her I'd be more than willing to take care of that myself because I'm kind of a nerd. I like numbers. I like that concept. So I'll be idea. She just didn't look at it.

The idea is that you guys go together. You say, where do we want to do our banking? Okay, let's go open up an account, and I'm going to change, you know, the direct deposit at my work to go into this account, and you change the direct deposit at your job to go into this account. And then we sit down together, we open up our budget. In this case, I would suggest every dollar, and we decide, okay, you're bringing in this, I'm bringing in that. How do we want to spend our money? And I think that, you know, it's one of those things where you can say a word and everybody has a different definition of what that means. And I have a feeling that when it comes to money and you say, let's share our money, everybody pops up with the definition that they grew up with or had in their last relationship or heard somebody else say. And I think when it comes to that in your life, you've got to define for you guys exactly what that means. So there's no gray area. There's no room for someone to insert, you know, insert bad situation here.

Right. It's like you've got to clear that up. And I think if you sit down with her and say, listen, things are all over the place right now. I'm about to have two months where there's no salary, you know, thank you for the money that you're bringing in, but if there's a way to get it up. But I really want us to work together and here's what that means for me. I don't, you know, I know that you have worries and doubts and fears, but I'm not going to be the person that tries to control this. I want us to both look at it together, 50 50. When somebody comes to you and says 50 50, that's pretty much, you know, bang on. It is like, yeah, 50 50. I love that. So I think that's the conversation you need to have.

What I was going to say also is that we actually both have our own current savings accounts, too. So last I heard from her, she has like another 3000 and another savings account. I have about 2500, I want to say in another savings account. So we still have that.

You could almost pay off your debt without even touching the index fund, right?

Yeah, that's true. That's true.

So that's part of combining all this and you can even use the same checking account you have. This is what I did with my wife and I go to the bank and say, I want to turn this into a joint checking account and add my wife. Once that's set up, we transfer her money into there, we shut down her account. Now we have full accountability and transparency of where the money's going.

Going, yeah. Keep $1,000 of that aside and then you're putting four and a half thousand onto this debt. And I would really, you know, and the index fund is a brokerage account. Yes. We would tell people all the time to drain those accounts in order to pay off debt. So there's nothing wrong with that.

Now you're just withdrawing $2,500 from the index fund to pay the rest of the debt off, which is going to be very minimal in taxes. When you look at what the actual long term capital gains are on that. And then we move on. Now you can enter this new season with way less stress freed up payments. And during those two months, you're unemployed. You're going to go to work, do side hustles, go find some gig work, and, you know, instead of having to dip into an emergency fund or index fund to float that, those two months. So just plan for that. You know what's coming.

That's what I would do. And both of them, I mean, you guys are in your early twenties. I really want to plan more. So for your wife, it felt like she was floating a little bit. So I want to make sure that she's really locked in. It doesn't seem like. Like childcare is the barrier to entry there. So I want to make sure she gets locked in. And I want you guys bringing home solid income from now on.

I saw this quote, Jade. This woman said, I don't look at my bank account. I don't need that kind of negative energy in my life. And I'm like, that's how she's feeling right now.

Listen, let that motivate you. The proverbial fire under your butt is what you need. Some of y'all do need to log in and look at your bank account. This is the Ramsay 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 every dollar for free in the app store or google Play today.

This is the Ramsey show. Hey, thanks for hanging out with us. I'm Jade Warshaw. Next to me is George Camel. We are taking your calls. This is a live show, so you call in. The number is triple 8825-5225 a nice young lady will pick up on the line. Screen your call, and the next thing you know, you're on the line with George Camel in the flesh.

Can I just say, God bless the phone screeners. It's Kelly. Today I tried it, jade. For a second, I was like, hey, let me just take the, like, raw call coming through the line, y'all. It is a wild ride.

It's a wild ride.

It's a wild ride.

I mean, Kelly helps you kind of get your thoughts together, right? And kind of streamline it all down.

Into and she's so nice.

Yeah, she's kind. She's kind.

We've had a lot of Kelly's phone screening, and this Kelly is the nicest we've had so far. That's all I'm gonna say.

That's great. That's great. She's happy that you said that. We can see her. There's glass there, and we can see her through the glass. There's a lot of people back there that make this show run. Will rudder, I'm talking to you.

That's right. He's running the board, the audio, the faders, all that stuff, the bumps, the music, of course, producer James Chong. I think we got Andrew, Nathan, zack back there running all the video, and they're switching in the lower thirds and zoom, y'all. And we're just. We get the easy puppets.

This is a puppet regime. We're just here to look good.

Who's pulling the strings? You tell me, James.

I can tell you who's pulling the strings. All right, I'm going to pull a string here and go out to Lauren, who's in Des Moines, Iowa. What's going on, Lauren?

Hi, guys. So I was wondering what your thoughts were on signing over a vehicle title to an ex business partner.

Tell us more.

History here. Is there a good relationship with this ex business partner?

I mean, it's. They didn't leave on really great terms, but they're still working through issues, and this is one of them. It's a. Like a somewhat newish mountaineer. And, you know, those can get kind of. Oh, no. Wagoneer.

Ooh, those are expensive.

Pricey. Yeah. So the partner. The ex partner used, like, 60,000 to put a down payment on it. And then the rest, 35,000, I think, is left. But the original loan was for 40,000, and it's in the business's name. And the partner has since left, and he's asking for the title to be signed over for 35,000, which I think is the remainder of the loan. And I just don't see. Yeah. What do you think?

Well, let me just make sure I understand. So you guys own the business. This was a person that was a partner with you. He said, I need the. A new vehicle for work. So I'm going to do this through the business. Money spent, $40,000 on a Wagoneer. Now he's no longer part of the company, and he's like, I want to keep the Wagoneer, basicaLly. So can. Can you guys just.

It's like a buy.

Turn the title over to me, and I'll just keep the car and pay the payments.

Yeah. That's what he's saying. Yeah. He had. He used 60,000 of the company money.

Just out of the company money and not their income.

I see.

Yeah. It was just company money that was in the company bank account that he used to put a down payment on the vehicle, and then they find and he financed 40,000.

So it was about $100,000 all in, 60 in down payment, $40,000 on the loan remaining. So it's 100,000 is what it costs. What is it worth today?

Yes. I don't know what it's worth. I haven't ran that. That I don't know, but I could find out.

So if you said. If you essentially. If you said, yeah, we'll sign the title over to you, but you owe me $60,000.

Uh huh.

Would they take that deal?

I mean, that would be ideal.

Yeah.

I don't think they're gonna do that, because they're gonna say, well, the value of the car is only 60,000, so I can go out and buy a better car for 60,000 if I was gonna use my own money. Right. Technically, the business owns it, and you are the business right now.

Right. I mean, we hold the title, but.

They have the loan and their personal name.

No, they don't. It's in the business. And that's why I was like, this doesn't sound right.

This guy has no money. He has none of his own money into this. I mean, right now, technically, he's on the hook for the 40,000, but.

Right.

Yeah, but not really, because if he doesn't pay it, it's on you.

If he doesn't pay it, it's on us. And I think in the transfer of this loan. Yeah. He wants the title signed over.

I'm not doing any of that. I wouldn't do it. I would make this super clean. How. How long ago did he buy the car? Let's figure out how much of his own money he's put into this. How long ago did he buy it?

It was two years ago, and it was out of the company bank account.

Oh, okay. So has he made any payments with his own money towards this?

No, they. They stopped payment. They. They're pausing it till this transfer thing goes through, so. Well, who's paying the hasn't made his own money. The company's still paying, which is you.

Is it just you two, or. There are more people involved here?

It's my husband. It's my husband and then this other partner, and then I'm just finding out about stuff.

Well, that. Stop saying the company is paying for it. Your husband is paying the payments on this?

Yeah.

Pretty. Yeah.

You guys own the car. This guy is no longer working with you. He doesn't get to keep the car.

Riddle me this. Why don't you guys just sell this vehicle and get out from under this car? You don't want it, you don't need it.

Yeah. So we just need to get it in our possession then? Is that what. He's in Minnesota.

Oh, yeah.

He's still driving a car.

He is.

That's under the. This is a liability waiting to happen.

Wow.

You need to get back that car. They have no right to this vehicle.

Yeah.

Okay.

It's under the business name and they are not part of the business, so legally. No, it's your. It's your car.

This guy said, don't mind if I do, and he took that one.

This is. I'm like. I'm having heart palpitations right now.

Wow. He's like, I got a hundred thousand dollar car. No one is stopping.

Can they legally even be driving this car right now?

I don't know.

I would. I would do some due diligence and homework and maybe even talk to an attorney to figure out what the right way to go about this is, because I feel like you guys are in a precarious situation and I'm not in on all the details and I am not a legal expert, but, yes. This sounds like a nightmare. If you don't get out of this.

ASAP, is he the kind of guy that'll figure out that you want the car back so he'll, like, crash it on purpose or, like, do something to it to try to get back at you?

Oh. I mean, you never know when people are desperate, I suppose.

I hope not. Yeah.

It doesn't sound like they have the money to even buy you out of this thing.

No, I think he's struggling.

I think you need to say, listen, we are selling it for the market value, and if you want to be that person, to buy it at market value, then you're welcome to it. And if they become a general person, like anyone else, that would buy the car from you. So I would go check the Kelley blue book value private party. And you list that car. My guess is you're probably underwater on it.

Yeah, I'm guessing, too, because it was just a couple years ago, which is.

What'S left on the loan right now.

35.

35. So if the car is worth more than 35. You guys will make some money on this deal.

Okay?

So I hope it's worth 50 or 60 when it's a nice car, is two years old. I hope it hasn't depreciated from 100 down to 35 in two years.

That would be.

I know, depending on the mileage and the condition. But, you know, those luxury cars, they can depreciate real fast. And when people want a wagoneer, they want a brand new wagoneer, because a used wagoneer, no one wants to sign up for that money pit.

Yeah. Yes.

Yeah. Yes.

So I would not keep this car. I wouldn't let them keep driving it. I would sell it ASAP and get out from under it.

Yeah. When she was talking about transferring the title, I thought that he put 60,000 down of his own money.

It's the business money from the company account.

And then when she said, he's paying payments, he was paying payments from the company account.

I guarantee you he saw some stupid instagram that was like, bro, if you get the wagoneer, technically, because of the weight, you can depreciate it 100%, and you can actually make money. And it's a tax hack. I want to slap every guru on the Internet that has said stupid crap like that.

I just think that he thought you.

Should finance $100,000 car for your business because it's a tax hack. Yeah, you're the hack, bro. Don't fall for this. Oh, my goodness. And I guarantee you some accountant told them to do it. Oh, bro, this is the move. You can depreciate. You'll save money on. You're basically making money right now.

Well, who told him he could just drive off with a car he didn't own? Who told him that?

Well, part of it is on them, because if I'm the. If I'm the partner, I'm going. No, we are not financing $100,000 car through the business.

Yeah, that's unnecessary. We never found out what kind of business they are, but I can't see why this was necessary.

And it's one more reason we say partnerships rarely make sense. They're very risky, and they're the only types of ships that are liable to sink.

That's right.

It's the Titanic in the business world.

Yeah. Hopefully, they can make some money. You know, new cars, when they drive off the lottery, you know, they're losing money instantly. But in the first four to five years, they're losing 40.

They're losing so much money, especially those types of vehicles. Those, you know, Range Rovers. Land Rovers. The ones that are a money pit. When something goes wrong, nobody wants to sign up for that money pit.

I know. That's right. We're seeing this happen with a lot of the electric vehicles. Buyer beware is all we're telling you guys. This is the Ramsay show. You're listening to the Ramsay show. Our scripture in quote of the day, Isaiah 66 nine says, I will not cause pain without allowing something new to be born. Says the Lord. Love that promise, love that. Albert Einstein said, a person who never made a mistake, never tried anything new. Boo. Yeah. That's what I'm talking about. Alright. That's what the people need to hear. All right.

That's wisdom.

That is wisdom. All right, guys, if you want to give us a call, you still have time. The number is triple 888-25-5225 George and I will chop it up with you. That's what we're going to do with Eric, who's in Milwaukee, Wisconsin. What's going on, Eric?

So my wife and I are considering to purchase my dream, kind of owning a lake house. And it feels like our income is good enough to do it, but our net worth is maybe not there quite yet. Just wanted to get you guys thought.

But, yeah, lay it out for us.

Yeah. So our income is about 625,000 per year household income. And our net worth is about 1.4 million. Now, about 750. That is in stock. 225 is retirement. 250 is kind of in high yield savings. And then we own some land where we potentially build this lake house. That's worth about 175.

Well done. So Lake house is worth 175. Did I hear you say 250? And just like liquid savings.

Yeah, the land is worth 175 where we might build this leg house.

And then.

Yeah, 250 in liquid savings, some high yield savings accounts and kind of different bonds.

And what about your house? Did I miss this?

We rent. So we rent an apartment that costs about 3500 per month.

Okay.

That's well done.

That's awesome.

Holy moly.

How old are you guys are crushing it.

We're 34 and 33.

What do you do for a living? Because everyone's wondering how you make 625,000.

A year, both in technology jobs. So we're kind of riding that wave. At least until AI takes our jobs.

There we go. That's the spirit. I feel like you guys built AI. If you're making that kind of money in tech, you're behind.

Unfortunately, we're just consumers of it all.

So the goal is for the lake house to be your primary residence?

No, it would be a secondary. So we'd still keep the apartment and then have that as a secondary kind of seasonal use only. So it's like, it really wouldn't save us money. And we still might buy a primary home in the next few years, too, although no immediate needs there. So this is kind of like a. It's a very expensive. Yeah.

You guys are. You're debt free.

Yep.

With an emergency fund. You have all this money in the bank, and what's it going to cost to build the lake house?

We think about 400.

Okay, so all in, you're talking land. Plus this lake house is 575?

Yeah, yeah, something like that.

I think for a couple making 625, that's very reasonable. This is a green light all the way around.

How much are you trying to put down?

We pay it in cash.

All in cash. Okay. So is the plan to. Tell me. Tell me more about that plan long term, is it. You're taking from this 250,000? Tell me what. What the plan is in your mind.

Yeah, we would liquidate most of that 250,000. You know, just keep, you know, six months emergency expense there and then. Yeah. Sell some of the stocks as well.

Yeah.

These stocks are just like company stocks in a general investing account.

Yeah, just ETF and mutual funds, primarily.

Okay. None of those are retirement?

No, the retirement is separate. We have probably about 225 in retirement.

Right.

And you guys, here's the thing. With the net worth side, you have plenty of time to catch up on the wealth building side. I mean, you could save up a million bucks in two years if you're completely debt free, making 625. It wouldn't take much if you don't increase your lifestyle by a ton to just save up a million bucks and retire early. And so I'm less concerned on the wealth side and the net worth side. You guys have done such a great job managing this money, not inflating your lifestyle, paying cash for things, still being very reasonable for the amazing income you have. So, yeah, I like the idea of having a primary home. I don't want you guys renting long term. And so I might get a primary home first paid for, then do the lake house. But I don't think the order matters much. Cause you're gonna do it all so fast.

Yeah, I agree. I love this. I think you have a great plan. I think you guys have been really smart, and it shows. And so, kudos to you. Very good.

Thank you for calling $25,000 riding that wave debt free, which means it's not all going out to payments every month.

That's right. Wow. Killing it. Killing it.

You gotta go into tech, Jade. What are we doing here?

I know. Well, we need to help these.

I'm not that smart. That's why I'm.

That's a lie, George. All right, let's take another call. We got Monica. She's in Greenville, South Carolina. What's going on, Monica?

Hi. How are you guys doing today?

We're great. How can we help?

Yes. Yes. All right. So my mom passed away and she left me a little bit of money, about 20,000. I used some of that to help with the burial, and then I used the rest to purchase a duplex. I stay in one half and I rent out the other. I got so used to all this cash that I was getting, and my job pays me about fifty five k a year and my rental income brings me about eleven four a year. I got too happy because they kept dangling credit cards in front of my face and I took it and now I'm like 13, $500 in debt.

Oh, no.

I have absolutely no emergency savings. I have like dollar 300 in a 401k from a previous job. I was thinking about maybe rolling over to a vanguard emergency fund. So my credit cards I pay every month is about $730.

Oh, gosh. I mean, the 401k. Yeah, you need to roll it over, but you'd roll it over into an IRA.

Do a direct rollover IRA.

Not to. Not to a brokerage or not try to get your hands on it because it's still retirement funds and so we want to keep.

And you said it's $300, right?

Yeah.

Okay.

This is chump change as far as retirement savings go. So just roll it over to an IRA because the penalties and fees you're going to pay, it's going to turn into basically nothing if you actually withdraw that money and use it. So. Okay, let's figure this out. What is the, what's your mortgage every month that you got to pay?

It's 1429.

And what's your take home pay every month?

Take home pay is about. I can give you exact numbers.

It's like four grand a month, 3500 a month.

Are we just, just from work or are we including just work? Okay. It is 32, 24.

Okay. And then do, what do you get from the rental? How much do you charge that person a month? 900, 5950. Okay. All right. So things are a little bit tight.

Oh, and I do get like additional $300 from my mom's, like, death pension. She had remainder, so I get like $300 for the rest of my life.

Okay. Okay. So we're, like, a little over. We're, like, $4,400 a month that you're taking in, and the only debt are.

You investing right now I'm confused as to how you're paying 30% every month, every paycheck in taxes and whatever else.

No, I don't. I don't have any additional investments.

Do you get a big tax return.

I always have to pay.

Huh. Okay. I'd look into that as part of your home. Figure out why you're not taking home as much as you should be. I don't know what the tax. I don't think South Carolina has crazy, you know, income tax or anything like that. But figure out why you're, you know, look at every single thing coming out, all the deductions. There might be some healthcare, 401K. You'll see Medicare, Fica, whatever. But figure out why you're not taking home more than that. Because we needed the income to get up. And as you can tell, this rental income, it's not solving the actual problem, which is the spending. It sounds like you were kind of living. You were propping up a lifestyle that was unsustainable for a while.

Yep.

What were you spending the money on?

Oh, my gosh. And I don't even buy stuff from me. I like to spend money on my nieces and my nephews. My brother recently passed away, so I like to buy stuff for them. I actually do a lot of stuff in the community. Like, I'll buy, like, lunch meats and stuff. And I'll pack it up and I'll pass out the homeless. I do buy some stuff for me, of course. But honestly, I just. I was just buying. I can't even recall what I was buying because it's nothing tangible. And that's the sad part.

I think you just need a budget. Like, I think, for you in order to be able to do the lifestyle that you want and go, not go over to the extent that it's making you lash over into credit cards. I think you just need a really good plan for your money. Have you worked a budget?

Yep. I actually downloaded the budget sheet from everydollar.

Okay.

And I sifted that out. Like, I put all my information in there. So. Yeah.

Okay, good. I want you working on that. Because at the end of the day, that's the only place you're gonna find.

Your margin and cut up these credit cards. Can you promise me you're gonna cut them up?

I am.

And that means we're gonna use Monica's money from her bank. And guess what? You don't have the money, which means we're not gonna spend money we don't have. That's the new rule.

That is. So list those credit cards out from smallest to largest, and you might cut back on some of the. I mean, you're gonna have to cut back on some of the things that you were spending money on in order to make headway on this credit card.

And get a side hustle, probably just to knock this out faster.

Yeah. Cause it'll eat up those minimum payments quick like. So a side hustle is definitely on the menu for you. This is the Ramsey show.

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