From Ramsey Network, this is The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined by best selling author Jade Warshaw, and we're taking your calls at 888-825-518. Com. This is the show where we talk about you right in front of you because we want to help you. And we do that one collar at a time. Our first collar today is Dylan from Pittsburgh, Pennsylvania. Dylan, welcome to The Ramsey Show.

Thanks for How can you explain me, guys.

Sure. How can Jade and I help today?

I recently had to switch from my full-time, or well, I say full-time. It was a commissioned job that I had in sales, and I recently had to switch over to We're basically just doing this here and there because of moral issues. I don't agree anymore with how they do their sales. When I first started, I was very, very careful to do it the right way. Even if they told me to do a different way, I'd go out of my way. I've lost sales because of it.

Give us an example.

Well, there's been instances like... So it's point of sale systems is what it is. It's credit and debit card processing. And my actual boss is amazing, but it's the company above him that really makes this difficult. So they'll tell me Oh, yeah, we integrate with that system that we're going to pitch these people. I'll be like, All right, you sure? And they're like, Yeah, we do. And so we'll pitch it. And then turns out later down the road, we don't integrate. And then the business owner is put into a hassle of having to deal with this. I don't feel morally obligated to do that to a business owner. Yeah, you don't want to lie to them. Exactly. I don't want to do that. So I got on my way for a long time to make sure I would even vet ahead of time, Hey, do we do this? And if I know we didn't, I would just flat out tell the business owner, Hey, by the way, we don't actually integrate with this, even though my sales team wanted me to say we did. So I'm in a place now where I need to find another sales job or I need to find another job, and I'm going to be putting myself in a major financial stress here soon.

They do owe me a little bit of money on sales that are still going through. Still going through, probably roughly six to eight grand. But obviously, none of that's guaranteed because deals can obviously fall through, especially with how flimsy their sales are. But I was the top rep in my company. I I didn't know I was any good at sales until I joined them. I was just a regular red neck from Indiana. Then somehow I got into sales and did really, really well.

What are you making annually? What do you need to replace?

I've been with them for nine months now. Last year, when I first started from August to December, I made about 5,300 bucks a month on average, which for me, that is phenomenal money. I'd never had that money in my life before, and I absolutely blew it all because I didn't have any budgeting. I didn't have anything in You said 5,300 per month?

Yeah. Okay, got it. About 60 grand a year. What are your actual expenses? What do you need to get by from food, utility, shelter, transportation, insurance?

It's not hardly anything at all. Now, I did travel for them, so that upped that a little bit. But when I did the math on it last year with really short distance travel, it was roughly about 1,200 to $1,300.

That includes your rent?

That's everything, yeah. Wow. I pay $500 in rent.

So that becomes our We just need to be able to cover 1,300 bucks to get by until we can replace this income. So you said you're going to be struggling financially. What does that mean? Are you in crippling debt?

No, I'm actually not. I'm in a pretty good situation. I've listened to you guys for the last three weeks now on a roll. I mean, I've read your book when I was 10 years old, 11 years ago. So I went to my mom's room and read it.

Total money makeover?

Total money makeover, yeah.

So give us a snapshot. Tell us what's going on. No debt. Do you have 3-6 months of expenses saved?

I have a little bit of debt. I do have 5,300 in school loans that I'm honestly just paying the minimum on because it's at 3%, and I'm not too concerned with it right now. Then I owe my mom about 2,300 bucks. She started me out whenever I first started with this company because I was in a pinch and I did not have any money to start. Okay, what else? She gave me a little bit of money. She is not in a good financial situation, so I'd like to get her paid back.

I thought you all read Total Money Makeover.

What happened over the last decade, man.

It never really got through my head.

You're over here talking, bragging about your low interest rates.

Okay, keep going. Keep going. We won't beat you up too much. Keep going.

Well, this one you're going to like. No, I'm kidding. You're going to hate this. I have about 1900 bucks that I still owe the IRS. I originally had the money from last year, and I was trying to pay them, but for some reason, maybe I did something wrong online, but it would not go through. I got so fed up with it that my work had not paid me for a couple of months, so I ended up using that as regular everyday expenses.

You've been blowing every paycheck. Can we just say that?

Yeah. Good. George is right. You're blowing every paycheck. But what's really a red flag to me, George, and to you, too, is every debt you listed, it had a caveat. I got 5,300 student loans, but it's a low interest rate, so blah, blah, blah, blah, blah I need it to get started, and I have $1,900 to the IRS, and I try to pay it, but... It's like that same... I think the key to this, yes, you're great at sales. I have no doubt that you're going to go on find another job. You're going to make 60,000 plus, plus, plus, plus. Because you're persuasive. You're persuading yourself that all of these debt situations are fine. You almost sold us, Dylan. And they're small debts. I appreciate that. They're small debts. But that same characteristic that makes you great at sales is also you're pulling the wool over your own eyes here. My own downfall. Exactly. So I just want to call that out.

And then the next thing we need is we need temporary income in the short term, and that might mean side hustles. And then while you're doing that, you need to be aggressively looking for that next sales job, if that's the path for you. I would obviously start with some of these point of sale companies because you have the experience there. But with sales, they just want people who know how to sell and who care. You have that level of service. That's what it comes down to. I would look for any sales job, and if you can find one that's in the point of sale business, that would be even better. I have no doubt you'll be making six figures.

The point of sale companies tend to be a little bit unreliable. There is a couple of them that are, but I'd prefer to get out of that and move on to just a normal sales job if possible.

I mean, you can go into tech sales. I mean, the world's your oyster as far as what sales. But I wouldn't just sit around waiting for some dream sales job to happen. Just get the next thing and the next thing, and the next thing until you get there.

I do think Take advantage of this situation. I mean, you've got $500 rent. I don't know if that's because you have roommates or you're living at home or what that is, but- It's just a cheap place. It's just a cheap place. I love that. Take advantage of that low rent, and this is an opportunity for you to start cleaning up this debt. Because the good news is it's not a ton. It's like these little ankle biters that if you put your head down, you can pay one-off every 2-3 months, right? And so I think that that's the plan. From here on out, do you have any money saved? We didn't ask that.

What do you have in the bank right now?

Down to pretty much nothing. My work has paid me the bare minimum because none of my deals have cashed out in the last couple of months. And so, again, they owe me about six to eight grand as of right now.

But we don't know that you're going to get that.

Not 100 %, but one of them is very, very close to the share.

Let's live our life like that's not going to happen. Let's just go get side hustles and get the bills covered for the next few months when this money comes in from your work. Or if it doesn't, you still need to cover the bills. And then once you have some stable income, then attack those debts. Smallest to largest balance, but the IRS one goes first because they can screw up your life.

Before we hang up, Christian can pick up and let's give you paycheck to purpose. Let's give you Ken's career assessment. Let's make sure you have all the tools because if I'm you, I'm starting the job hunt today. I'm going on all the sites and I'm looking for a new job, and I want you to land something in the next 2-3 months and be out of there and be on to the next thing. But to George's point, until you land the job, any job will do because this job is causing you to be dishonest, and you don't even know if they're going to pay you what they owe you.

About to go Uber, Instacart, Amazon, Flex, DogSit, DogWatch, DogWalk, whatever you got to do to make income happen. I'm also going to send you a copy of my book, Breaking Free from Broke. I hope I convince you that no debt is good, no matter how little, no matter the interest rate, it is holding you back, and you deserve better, Dylan. You're a young dude with a bright future ahead if you stop playing stupid games. So wishing you the best. More of your calls coming up. 888-825-5225. Give us a call. This is The Ramsey Show.

This show is sponsored by Better Health.

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I know how That works. May 31st. That's how you do it right there. Ramsey solutions. Com/store. Beautiful. All right, let's get to the phones. Austin joins us in Chicago. What's going on, Austin?

Hi. I was calling because I have about $40,000 in the bank saved. I do a lot of driving for work. I drive around 60,000 miles a year, which is I know, crazy. It's not normal. I make about $83,000 a year, and I currently have a Toyota Camry that has 100,000 miles on it. And I was just wondering your guys' perspective on if you think I should sell my Toyota Camry, which is worth about $10,000 right now, or $9,000 or $10,000, and get an electric car, like a Model 3 Tesla, which I wouldn't have to pay for gas. I currently pay about $9,000 in gas per year. So I was wondering, do you think it's a better idea to keep my current car and drive that for a few more years or get an electric vehicle like a Model 3 Tesla where I don't have to pay for gas?

Are you debt-free?

Yes.

And you got $40,000 saved.

Does that include your emergency fund?

Yes.

Okay. So let's call your emergency fund, what? $20,000, $25,000?

Yes. So you really have- I had 15, but yeah.

Okay, 15. Let's say you have 25 right now to buy a used vehicle.

Yes. Plus the 10K from the sale of the Camry.

Plus, you'd make 10.

Yeah, so 35. I found a car that was 36,000, so that's what I was calling.

That's a used Model 3?

Yeah, I had 5,000 miles. Was it 2023? 5,000 miles. It had no accidents, nothing like that.

How far are you actually driving in a given work day? In a given work day? Are these local or are you traveling across states?

Like a half tank for a day. I have to fill it every other day.

Okay. I have thoughts on this. Number one, I don't mind you buying a used vehicle as long as everything that you own that has wheels and motors adds up to no more than half of your income. For you, that means 40 grand all in everything you own. I assume you just have one vehicle. You don't have motor cycles, boats, other toys?

No, it's just one vehicle. Okay.

But as far as the thing I do have issue with is that this idea that I'm not going to have to pay for gas. I have an electric vehicle, and it does cost money to charge. Electricity, in fact, cost money.

What does it cost you monthly?

So luckily, I can charge at Ramsey for free. Thanks, Dave. But I often charge at home as well. And it costs about 10 cents a kilowatt here in Nashville. Now, my parents have an electric vehicle up in Boston.

It's triple the cost to charge per kilowatt.

So it adds up for me about 20, 30 bucks a month. Now, I have a five-minute commute. I don't drive much. I can charge at work. So this is different for you, Austin. The other thing to think about is depreciation. You are going to run that Tesla into the ground. It's going to be worth $10,000 within two years, the way you're driving it. I'd rather you drive that Camry from 100,000 to 200,000 because that thing will go upwards of 3, 350 easily.

What is the nature of your job that causes this? Because that's really the question. Is this long term or is this just something you're doing for the next couple of years?

I have a ton of different things I do. I have a bunch of different families I grocery shop for and a personal assistant for. I also use the apps that are extremely… I live in an extremely rich city that tons of people order for groceries and delivery and DoorDash, but I also have about 10 families that I essentially am like their personal assistant.

Got it. You're doing all sorts of things. Is that your long term? If I say, Hey, what do you plan on doing 10 years from now? Are you like, This is it, Jade. I love serving.

I've been doing it for seven years. I haven't planned on changing anything because it's been so good for so long. Okay.

Then I agree with George.

You can do it. I just don't want you to do it under the false premise that you're not going to have to pay something because supercharging is very expensive, way more expensive than just charging at home, even. I don't know about the Chicago area, and there's certain times that are cheaper for charging depending on where you live. I would do some more homework before you make this jump, because I don't want you to think about it in terms of saving money on gas. I want you to think about it in terms of It's costing me an extra 20 or 30 grand to get this car that I will depreciate very quickly. Whereas the cameras already... Most depreciation has already happened on your camera.

Yeah, and you can run that for another 100,000 miles and be good.

I'd rather you buy an even cheaper Model 3 for now that has a lot of miles on it because those things can go upwards of half a million or more. And so that might be a good test run to go get you a $20,000 Tesla versus a $35,000 Tesla and start there.

Okay. You would get the Tesla if it was $20,000, but if it was more than that, you would not.

It's not about the exact dollar amount. I'm just saying because that car you buy is going to depreciate much faster than a traditional car than someone else driving it, because of how many miles you're putting on it. So think about it, two years from now, that Tesla has 120,000 miles on it. So two years from now, you go from a $35,000 car to 20 or less.

Yeah. No, that was all my question was, is do you think I would save more money by getting the car without paying. Currently, I have a friend who has a Tesla charging station, my best friend for years, and he said I could charge it for free. That hit his house. Oh, boy.

Until he gets his electric bill and it doubled.

Here's the thing, though. It's not just about the gas. That's what he said. It's not just about the gas.

Now you got to go to your buddy's house to sit there for hours in charge, whether he likes it or not, whether you like it or not.

Here, my thing on this- He's right down the street, but yeah. You've still got a vehicle that works and is worth something that- Yeah. You have to think about how quickly am I going to recoup the 35,000 that I've spent on this? Because right now, you're driving a paid-for vehicle that's got a lot of, pardon the pun, but a lot of gas left in the tank. You know what I'm saying? You can keep going on this. Honestly, I'm changing my answer. If I were in your shoes, I'd probably drive this thing into the ground. All that time, you're stacking up money, stacking up money. Maybe you get to the point where you drive a beater for your job, and then maybe you have another vehicle that's just a normal, that you're not just destroying every day after day because you're so hard on it.

There's It's an idea.

Just a little thought there.

Okay, thank you. I appreciate it. Thanks for the advice.

Absolutely. Yeah, there's a lot to think about there, especially with a newer vehicle will also cost you more with insurance because it's going to cost more to replace.

Yeah. In so many ways, he's sitting pretty with the situation he's got here.

It's just not as black and white as I think. I'm a fan of electric vehicles since I own one, and I've experienced the joy of not ever having to go to a gas station. But I also know it can be a pain. This dude might be on the road and Oh, there's no chargers nearby, and I'm running this last errand, and I got to run back and charge. Supercharging is very expensive comparatively to normal charging. I just want him to do more homework before he bites the bullet on this.

What's supercharging? Is that fast?

Tesla has their superchargers around the country, and so you can charge much faster. You can get to zero to 100% within 20, 30 minutes.

What could that cost?

That can cost a few bucks per minute. When you're talking about it, it might cost you 20 bucks to fully charge, Which is still better than gas right now. But I think over time, we're going to see things even out where electricity starts to become not on par with gas, but it's not as money-saving as we all would like to think.

I could see that because more and more vehicles are going towards electric.

No matter what you're thinking about buying, upgrading a car, here's what you need to remember. You're doing it with cash, no auto loans. You're doing it once you're debt free with an emergency fund, and you want to make sure that the total of all the things with wheels and motors doesn't add up to more of half of your household income. If you do it that way, you will drive away with so much peace, and you will drive it differently because you own it and it doesn't own you. Those are the principles. Austin is spot on. He's thinking through this wisely. I just want him to pause and do a little bit more homework before he bites the electric bullet, if you will. This is the Ramsey Show. If recent times have shown us anything, it's that the least expected events can and will happen, and we have to deal them. That's why everyone who has a family counting on them needs term life insurance. For over 25 years, the only company I've recommended is Xander Insurance.

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How are you doing, guys? We're doing well.

How are you?

I'm doing well. My question is, I lied to my girlfriend. That's not the question.

That's an admission. That's a confession. We appreciate the honesty here. I'm not a priest, though. I can't help. Maybe we can help financially.

I've been telling her for two years now that I can't afford stuff that I'm broke and that I like staying in. I'm not broke. I can afford pretty much what I want. I'm out of debt 100 %. I own my house.

And she thinks you're broke because for two years, you were like, Hey, listen, I'm strapped for cash.

Yeah, pretty much. And it's not like I've been mooching off her or anything. I pay my way. I'm not trying to be worthless in that matter or anything.

Why then?

I've got a 95 I have Toyota Tacoma. She's always asking me, Why don't I get something else? I always tell her I can't afford it.

Why?

Why not just tell her I'm happy with my truck?

I mean, yeah.

What? Yeah. What's behind all the pathological lies?

Why did I don't lie. It was pretty stupid, wasn't it?

Is it because you just said it, and then once you said it, you were like, I got to stick to it now?

You got to play this weird character?

No.

I mean- What is her financial situation? Is she bad with money? Is that why Are you afraid that if you tell her that you are good with money, that she'll start mooching off you?

That's what I've had happen in the past.

That's what it is. There's some past baggage and trauma, and so you're going, Well, I'm not going to do that again. That hurt.

Yes.

Now I'm going to lie because if she knows I have money, I could get hurt again.

Yes.

Is that a more accurate picture? Because usually, behind every lie, there's a fear. There's a lie that you've told yourself long before you lied to someone else.

Yes. And honestly, I didn't even realize it's been a lie until a couple months ago. And then I'm thinking, I'm wanting to get serious with this girl, and I'm wanting to make things happen. So she's going to have to find out sooner than later.

How long have you been dating?

We've been about two years.

So two years, and you've been saying this from the jump. Here's what I want to know, because I know you're saying that you've been lying. I want to go a little bit deeper on this. So does she think that you have mortgage debt, or you just haven't mentioned it? Does she think that you carry debt?

She knows my house is paid off, actually. Okay. So I was very proud whenever I paid my house off. She was the first one that I'd let know when I paid my house off about six months ago.

But when it comes to doing fun or what you might think of extravagant things, even though you're thinking, Hey, I might enjoy doing that, you're lying and saying, No, I don't want to spend money on that. I just like a simple life, right?

Yes. Is it affecting your relationship? Is she frustrated that you guys can't enjoy experiences and eating out?

She's a very, very simple woman, and that's what's got me scared.

I would just have to come to Jesus' conversation. Take her to a different environment, and maybe a different place, a date, whatever, and say, Listen, I got to come clean because I want this relationship to be built on trust. I've done a poor job of that. Then say, Here's what I did. Here's why I did it, and I am very sorry. Will you forgive me? Can we move forward this relationship with honesty?

Yes. Okay.

That's the only way forward. And her response is now that's up to her how she responds. She might say, Kick rock, pound sand. I'm done with this relationship.

She might. I have a funny thought about this, though. Okay, here's the thing, Eli. Usually, if somebody says they've been lying, I'm ready to go hard in the paint. But I'm listening to you. You have no debt. You have a paid-off mortgage. Part of me is like, How much are you lying? Because I'm like, You seem like you are a simple guy who doesn't want to spend a lot of money because you've done all of these things. So I'm trying to... I need an example of what you said that was a lie, like what you've been saying to her, because I'm like, You sound pretty simple to me.

Basically, the most, the simplest example is I was working on my pickup truck, it's a '95 Toyota, and it's a hunk of junk, but I grew up dirt poor. Okay. And I love that truck. I don't need anything else. I hardly ever drive it. She asked me, Why don't I just get something newer and better? I told her, I can't afford it.

Okay. When really you feel like the reason is I just don't want it.

It's not a priority for you.

Yeah.

Okay. But you felt weird saying that. It was easier for you to have the guise of like, Well, it's too much money for me.

Yes. Then her family went on a cruise a while back, and I didn't go because I couldn't afford it is what I said.

But really what you're feeling is you came from being dirt poor, and it sounds like you're afraid to go back to that. And so certain things that other people might splurge and spend money on, you're like, Listen, I don't feel the need to do that.

Yes, I really don't.

Okay. So maybe it's just a simple thing of changing the language. And next time you talk to her, you're saying, You know what? I've been telling you I can afford things, but I want you to my heart. Technically, I can afford it. I just don't care about spending money on those sorts of things. You know me, I've got a paid-off house. I don't carry debt. And my priorities with money, I feel like sometimes our priorities with money are different. And maybe that's the conversation because you painted yourself to be a liar about it. I don't know. It doesn't feel like- You don't seem like a terrible person.

Yeah, it's not like a terrible- It's the weirdest thing to lie. Most people would say, I lied. I'm actually in crippling debt. Right. And she thinks I'm You're very wealthy. You're the opposite.

Yeah, it's just your motivation. You're not telling her your true motivation.

But I would say I think it's okay to just sit her down and say, I need to be honest with you. I know this is a big deal to me. It may not be to you, but my phrasing and language has not been honest. When I tell you that I'm broke, I don't have the money, really, it's just it's not a priority for me, and I don't care to spend money on those things. But it's my bad for positioning myself like I was some broke person when truly I'm not.

That's right. And maybe even line it up with the next part of that, which you did let us know that you're worried that if she knows that you technically can afford to do these things, you're worried that she's going to try to inflate your lifestyle in a way that you don't necessarily agree with or want to do. I think it's important to have those conversations before you think about things like getting engaged or getting married because you do want to find out. Don't get me wrong, it's okay if she's different from you, but you guys need to start figuring out what that balance looks like. To George's point, you being very honest your communication from here on out is going to be very important.

Okay.

I hope that helps, Eli. That's a very interesting conundrum. Thanks for trusting us with this situation. Yeah. Wow. All right, let's try to take a quick one here from Mike in St. Louis. Up next, What's happening, Mike?

Hey, guys. Thanks for taking my call. Sure.

How can we help?

Hey. I'm wondering if my wife and I can pause Baby Steps 4 and 5 to finish Baby Step 6 in under 24 months. The reason I'm feeling that way is because I'm looking at it the same way you guys look at Baby Step 3B, where you can pause investing for two years or less while you're saving up money for a house. It's just I already have a house. I'm trying to get you guys thoughts on that.

Short answer is I'm always going to tell somebody to walk the baby steps in order. How much do you owe on the house?

What are we talking about? Just check. It's How many kids do you have? Just one.

How old are you guys?

I'm 30, and she's 28.

The child, I imagine, is very young?

Actually, she's 13. She's from previous relationship.

Okay, so we're talking college in five years. Do you have enough covered right now to cover college or to help pay for it?

We have about 30,000, which would cover the first Probably a year or two, depending on where she went.

You're doing no investing right now?

Oh, no. We are doing Baby Steps 4 and 5 right now. We would pause to do this.

I love your your excitement to get the house paid off. I don't think the juice is worth the squeeze on this, to pause the investing, to pause college. I would just keep investing 15%, put some money towards college. The house will get paid off probably a year later. Big what? I don't think you need the gizelle intensity that you currently have. You're moving from intense to intentional in Baby Steps four, five, and six. I'd stay that way. Thanks for the call. This is The Ramsey Show.

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Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw. If you're enjoying the show today or any other day for that matter, do us a quick favor. The The show is free. What I'm asking you to do is free. Just hit the subscribe button, hit the follow button, leave us a kind review, share it with a friend. Maybe it's a clip or a highlight from the show, a full episode. Tell them, Hey, you got to check out this podcast. All of that helps us get higher up on the algorithms, and it's not for our own egos. It's so that we can reach more people who may not know that this show even exists. We're trying to displace all the filth and nonsense out there in this toxic money culture. You guys sharing, you're the best marketing plan we have. So thank you for doing all of those things. Danielle is up next in Houston, Texas. What's going on, Danielle?

Hi. Good afternoon. How are you doing?

We're doing great. How can we help?

Awesome. I'm in a little dilemma that I've almost been dealing with for almost a year with my vehicle. After I sent in to make a repair, I started having the same issue. Now I need a new engine. I still owe about $65,000 on this vehicle vehicle that I've only had for a year and a half.

Sixty-five thousand dollars?

What vehicle is it?

It's $65,000, and it's the Audi Q8 2019. I did buy it used. It was a bad decision. I know now, but I do not know what to do. On top of that, I do have a bit of loan debt about $32,000 and about $2,000 in credit card debt. I'm looking at around $100,000 that I made it. My question is, I don't know what to do with this vehicle. The warranty company only wants to cover about $7,000 for a total repair that cost $20,000, so I would have to come out of pocket. I don't know if I should get rid of this vehicle. I don't know how much they would give me for the vehicle, the dealership. They haven't given me that answer yet, but I don't- I wouldn't give it to the dealership.

What's it worth? If you don't repair it, what's it worth if you were to sell it?

Now it doesn't have an engine, right? I would have to get a new engine. I'm thinking around $30,000. I honestly don't know.

It's going to cost 7,000 out of your pocket, you said, to get it fixed?

No. The warranty company is willing to give me 7,000.

Why are they only willing to cover a third of it?

I have no idea.

Either they cover it or they don't. I'm confused why they go, Well, it's our fault. So guess cover seven grand. Yeah.

They already made a repair. Two weeks later, I get my car back after a few months. Then two weeks later, after I gave my vehicle back, I had the same issue. But Now my engine went out.

I would fight this to where they cover the full 20K. That's personally what I would do is I probably would not sleep, and I would just badger them and wear them down until they go, All right, she's a squeaky wheel. Let's just cover this repair.

Honestly, we've been doing at the Dworx Company since November.

Speak directly on your phone, Danielle. We're having a hard time hearing you.

Sorry. Okay. They pretty much told me that I've been dealing with this since December of 2023. So as you can see, we're- What are you driving now? Audi gave me a loner vehicle. So that's what I've been driving. That you still have? Yes, I still have the loner vehicle.

Do you have any money saved?

I do not have any money saved. Are you single?

Yes. What do you make a year?

A 65K.

Girlfriend, girlfriend, girlfriend.

Oh, my goodness. What were you thinking buying us? How much did this car cost you? 70 grand?

Yeah, around 75 grand.

Oh.

Do you- Yeah. Okay.

What's the payment on this amount? I know.

The payment is high. What is it? So I'm currently... It's about $1,600 a month.

Girlfriend.

1,600? Yes. What's the interest rate?

12 %.

Jane's stretching. She might need to take a walk.

I need to take a walk.

I totally got screwed.

No, you didn't get screwed. You chose this. Let's be honest. You chose it because I just want you to know. I need to be able to sleep tonight. And so I need to understand that had you not had any engine problems, let's just pretend this last year was gravy and you had no engine problems, you're just paying $1,600 a month on a $75,000 vehicle when you make 65,000.

I was hoping you were going to say, Yeah, make 200,000. I was like, Okay, this tracks.

Did you know it Isn't it good? The first two months were you like, damn.

Honestly, at first, I was renting out that vehicle, so I didn't have those payments.

You were renting it out on Turo or something? Yeah. So Who fell for the scheme that I'm going to make money off this and they'll pay the payment for me?

Pretty much. Then my other vehicle that I had, it ended up getting stolen from me. I ended up using the Audi and then Someone stole your vehicle? Yes.

My last vehicle. And they never found it?

They never found it, no.

Here's what I would- Did insurance cover it?

Yes. I got insurance in Gap, so they did cover it.

And what did you do with the insurance money? Yes.

They didn't give me anything because I had to own that vehicle.

Oh, my.

It's not your first rodeo making bad decisions.

Yeah, I know. So this vehicle, I don't know what to do.

So tell me again, you said it before, but I was writing down. Warranty so far is only going to pay 7k. What are you on the hook for?

That would have to pay the difference. They said the total cost would be about 20k just to get a new engine.

Okay, so you're on for 13.

Let's play out both scenarios. Let's say you sold it as is and you get 30k. That's what you told us. That means you're in the hole 35K, where you need to go out and find $35,000, whether it's your own money or getting a loan. You need to go into debt another 35K. The other option is you're in debt 13 extra thousand to cover this engine repair because the warranty company is going to cover seven, right?

Yes.

So on paper, option B is a better option. They're both terrible, but that's a better option right now is that you get the engine repaired. And then you can sell. And then you're able to at least sell it. So that's what I would do if I was in your shoes. Me too. Whatever you need to do to get this engine repaired, do that and then sell the vehicle immediately.

But not to the dealer.

They're going to screw you on this deal because they already did. You'd have to sell a private party to get the most value out of it.

I want you to talk to... I want you to get with somebody on this because cars, I know you've been trying to make it your thing, but I don't think it's your thing. Find the wisest person that you I don't know if that's dad or big brother or a cousin or your best friend's brother, whoever it is, get with that person when it's time to sell this vehicle and when it's time to get this vehicle fixed, because I don't want them taking you for a ride figuratively when it comes to the price anymore on this. I just feel like you've been screwed every way, which way possible. I don't want that to continue for you on the fixing or the sale of this vehicle. From here on out, George, tell her the rule on buying these cars from here on out.

I think you should buy the cheapest car possible, Danielle, at this point. But the parameter, Ramsey, is you pay cash. It's a used car unless you're a millionaire, probably four plus years old, and the value of the vehicle is no more than half of your annual income. The value of all things with wheels and motors. For you, if that's one vehicle, which do you have multiple toys or vehicles? No, it's just my own vehicle. This is it.

It's the only one.

Okay. Right now, that would mean with your $65,000 income, you would buy no more than about a $30,000 car.

When the time comes in cash.

I still think you don't need to worry about that until you're out of debt completely. You get the student loans knocked out, the credit card is knocked out, you have an emergency fund, let's get the income up, then let's save up and pay cash. So this could be years down the road. But for now, We need to figure out a way to get that 13 grand. That might be you go to a credit union if your credit's not shot already and you go, Hey, I need 13 grand to cover the difference to get this engine fixed, to then... Do you have the car loan through someone?

It's through Through Wells Fargo.

You might want to go to them and say, Listen, you got bad collateral on this thing because it's only worth 30 right now. I owe you 65. I want to get this loan paid off. It's impossible right now unless you guys loan me this 13K on a personal loan to get this engine replaced.

Yeah, my current it's good. I don't have an issue with that.

Okay, then let's do it. I made a bad decision.

Yeah. That's what I would do, Danielle, and it's going to hurt. God bless the USA when we can be $100,000 in consumer debt, but we I have great credit by gosh. Look at that, Jade. I got an 850, but I don't have 800 bucks in the bank account, and I'm $100,000 in debt. That is the American way.

I can't even respond. I'm shooketh.

She hath been shooketh. What a way to end this hour of The Ramsey Show. Thank you to my co-host, Jade Warshaw. All the fooks in the both and the booth keeping the show flow, including Kelly Daniel, filling in on the producing who's done a fantastic job. Kelly. Better than James, I might add. We'll be back with you before you know it. From Ramsey Network, this is The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm Ramsey personality, George Campbell, joined by my good friend and colleague, Ms. Jade Warshaw. We are here to take your calls at 888-825-5225. You call us and we'll talk about your life and your money, and we will give you our opinion. Some take it, some leave it. I hope you take it. We think it's in your best interest, but we're biased. Keith joins us up first in San Francisco. What's going on, Keith?

Oh, Ken Kupland. How are you all doing today?

We are doing well. What's your question today?

I'm 37 years old, just recently divorced. I make 96,000 after taxes. That includes 100% disability pay that I have. I'm about 105,000 in debt at the current moment. A large majority of that debt is a 62,000-dollar vehicle that I have. That vehicle is currently at a trading value of $12,000.

Do you roll negative equity? What happened?

It's an electric vehicle. I don't know what happened. I've been trying to get rid of it for the longest time. Even if I sell it to a private party, I will only get about maybe 22.

What car What is this? Just to warn people.

What is it? Ev6. A Kia EV6.

Keia. Okay. You got a Keia? Yes. All right. You bought it for how much?

I bought it for 62.

It's worth 20 now? I'm confused.

Yes. When did you buy it? Well, you can be confused. It's crazy. I bought it back in '22. In two years, the value Yes.

By like 60 something %?

Yes. I'm taking it to about three different dealerships. When they ran it, they were like, How did this happen?

Did you have high mileage on it? Does it have issues, wear and tear?

No, everything is perfectly fine with it. I have about 30,000 miles on it. There's no damage to the vehicle.

There's only 30,000 miles on it?

Yes.

Wow.

I think there's a mix of things happening here, Jay. Number is the EV car market has taken a hit. There's a lot of saturation. There's been people going away from the EV side car manufacturers. There was an overproduction. Then there's the Tesla battle against the other EV cars, and Kia My, my, my. Apparently, it's not up to snuff in the EV world. I'm sorry, Keith, you're going through this. Let's try to figure out a solution here. What other debt do you have?

Another portion of my debt is I did debt consolidation and also a personal loan about probably two years ago. Everything happened two years ago. About two years ago, I did debt consolidation. There's another 30 or 40,000 right there.

Was two years ago the divorce?

Oh, yeah. I love it.

Was this a post-divorce I'm just going to implode my life? Did you cope through spending? No.

I was paying $1,500 per month in child support for about a year and a half.

Okay, but that doesn't Where does the car payment fit into this? When you went and bought this car.

So before the divorce, before everything happened with the child support, I had a bright idea that I would go ahead and sell the vehicle that I currently possess. I sold that vehicle off to try to get out of bed. It did not work out because she was unwilling to work with our agreed parenting schedule, so I had to go out and get a vehicle at that time. I had the bright idea like, Hey, you know what? If I get an electric vehicle, it'll all work out. Everything will be fine. I could pay the vehicle off within three, four years. That didn't happen.

You allowed a good reason to make you make a bad choice. It's a good reason to need a new vehicle, but we go crazy when we say we need a $62,000 new vehicle. You got the $62,000 from the Kia, and then you got the $40,000 that's all rolled together in a consolidation you did. I'm guessing that was what credit cards and other types of things like that, odds and ends?

Correct. My credit card debt that I have is pretty minimal. I believe it's maybe about $5,000 a so.

Okay, so that accounts for the missing five.

Listen, nothing is minimal at this point. Everything has taken my breath away, Keith. Let's try to get you out of this. Sorry. Because I don't want you… There is hope for you yet. You have a great take home pay of $96,000. That's 8,000 a month. What are your total monthly expenses? Just to cover the bills and your minimum payments on your debt.

Okay, so remember, I live in California.

Okay.

I have a two-bed room looking at $2,225 for rent. Electric, we're running about $250 for that. Water, probably $35.

What do you have left when it's all said and done after you've paid for- You make the minimums on your debt, you pay your rent, your utilities, your insurance bills.

How much is left each month or how much should be If I only do necessities, I will have about $1,500 left. Okay, so that's our magic number right now because let me show you the math on this. 1,500, let's say you applied that extra on your smallest balance using the debt snowball, that's $18,000 a month toward your $105, $18,000 a year. Now, basic math says it's going to take you over five years at that point to pay off your debt. Can we agree that sucks?

I do agree that sucks.

So what if we could put $2,000 or $3,000 $4,000 a month toward the debt? $4,000. Now we're talking, right?

Right. I looked at that, too, and I'm going to say a very bad word here, okay?

Uh-oh.

I was looking at filing… I know. I was looking at filing- Don't even say it.

No, you're not going to file bankruptcy.

Okay. Did you say you're 100% disabled?

I'm 100% disabled, so that will give me $3,655 per month to save because they can't put that into the bankruptcy.

No, I'm not talking I'm not talking about with the bankruptcy. I'm talking about your income now. You said that you're receiving that, but you're 100% disabled.

So you can't go out and make more money? Is that what you're getting at?

I can't. No, I'm employable. Okay, you're employable. You're employable. Great.

Can you do something to supplement? My question that I'm trying to get at is, can you do something to supplement this already great $96,000 income?

I have attempted to ever since, I would say, November of last year, with trying to find something that works with the parenting schedule because I can't break away from that, obviously. I'm already facing… It's a whole other story.

I mean, you got this great electric vehicle. What about doing some of these driving apps?

I have Try multiple times. This area is so saturated, no one is hiring right now for it.

That is a problem. Yeah. Wait, wait, wait. Something.

Let's just show you the math on it. If you can get an extra 2,000 bucks in net take home pay, that would mean you could put that 1,500 plus the two grand. That's 3,500 a month. That's 42 grand a year towards your debt. Now we're debt free in two plus years. Now we're talking two and a half years. You're completely debt free. That's what we need to figure out. That's the gap. There's no way around it. You're not going to go into more debt and try to solve this. The only way is more income and less expenses.

Is there any savings anywhere? Did you guys have stock that you can sell off anything?

No. Also, the retirement that I have, it's locked because you can't touch it. So I'm ever saving whatever 401 that I have. I can't even mess with it.

Well, I wouldn't suggest you mess with your 401k. I just didn't know if you had any liquid money anywhere that we could apply towards this.

Yeah, you're underwater in this car by a large portion. We're talking 30 grand potentially. I would still see how much you could get for a private party if you did it the right way, and maybe that would get you closer because getting rid of this car would get rid of half of your debt. So that, I think, is we got to solve for that first. But beyond that, we got to make more and we got to spend less. And so I don't know what you can do in San Francisco to do that. I know it's crazy over there, but you have to find a way. And bankruptcy is not it. There is hope for you yet, Keith. Hang on, we're going to send you Financial Peace University. This is the Ramsey Show. Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw. Open phones at 888-825-5225. Jade, I think it's time for a come to Jesus moment here on the show. A little hard conversation, if you will.

Yeah, a little real talk.

About debt.

Yes.

And the normalization of debt, and how over time it has robbed us of the so-called American dream.

And not just any debt, George. Today, we got to talk specifically about credit card debt. Because I think it really hits people a certain way. If I want to guaranteed lose followers on social media, all I have to do is start talking about credit cards and cutting up your credit cards, and people just scatter.

I've complained about this for a long time because our friend Dr. John Deloney, he'll do a clip on TikTok or Instagram, and it'll be a clip from his show, and he'll just be looking at the camera like, You are not a burden. And it's like 10 million views. Everyone's like, Oh, my gosh, it's what I needed to hear. Then I do a video, and I'm like, Hey, guys, what if we just didn't use credit cards and stuck to debit? And they're like, Kill him. It gets four views, and they're all haters. I don't understand what people's obsession is with credit cards.

I don't either. And so I posted a meme that basically says... Well, I won't tell you what it says. Let's play it, Kelly.

Let's show them if you're watching on YouTube or elsewhere, let's show you the meme, and Jake can give you the caption.

And then I'll talk about it. Basically, it's when someone tells me that they pay off their credit card debt every month. It's all these shady looks from Michael Jackson, Mariah Carey, Alia, Janet Jackson. Prince. Prince. They're just like, Yeah, right. You don't pay off your credit card debt. So I posted that just as- It's a little side-eye, a little snark.

A little shady. A little snark.

Number one, it went viral. But number two, people went bananas. They were mad at me.

Well, just like Janet, sometimes you go viral for the wrong reasons. You go viral.

Listen, I don't go viral for those reasons. But the comments behind this were... I knew I was going to catch shade for it, but I didn't know this work was going to be that heavy. What are some of the comments?

Give us the spark notes here of the sentiment.

Okay, so one person says, I don't spend more than I have, which is a responsible mindset.

We get that one a lot.

Okay. Then there's other people saying things like, Hey, it's possible. It's called budgeting, and after all, we get points.

Oh, okay. So you budget for things that you're not paying for.

That makes sense. All right. This person said, Oh, I faithfully do. I pay back my cash, and I pay it off to get the points. The sentiment here is, Jade, absolutely not. I pay off my credit card every month, to which my comment was, Listen, the country's in over a trillion dollars of credit card debt. Somebody's lying. What are you all? What are you all is lying?

Based on data, about half of the people are lying.

Half the people are lying. And so then- Or we just get the loud half that's apparently doing it quote perfectly. Right. And so then it was like a day later, CNBC came out with this report that said, Average consumer carries $6,218 in credit card debt.

As more borrowers are falling behind on their payments. Yeah.

And we just know, George, this has been crazy economic time with inflation and prices going up, prices of insurance going up, prices of home buying going up, prices on everything going up. We have seen more people default to credit cards, and in many cases, not to just go out and wild out, but to really just to make ends meet. A lot of people feel like, I don't have a choice, Jade.

I got to- They're just putting their expenses on them.

Yeah, I got to lean on credit cards. And so my point is people are going into debt and people are not paying off their credit card balance. And it's just a matter. It's a house of cards. And for a lot of people, Yeah, today you might be paying it off every single month or whatever, but all it takes is for one ball to drop, and suddenly it's like, Oh, crap, I can't pay off my balance. Because when I look at $6,218 in credit card debt, That suspiciously sounds close to somebody's monthly budget that they've just been floating. My point to this is, I don't know if it was you, George, or if I was talking to John, but I was saying how when it comes to debt, we really We pick and choose because if you talk about student loan debt, people are ready to grab pitchforks and like, Yes, I hate student loan debt. It's the worst thing ever.

How could the government do this? The government needs to forgive this.

Yes. People are quick to say how much they have and why it sucks. But some reason, George, when it comes to credit cards, people are like, No, that's good debt. I don't want to talk about it. Don't take my credit card away. And they're very secretive about the fact if they have a balance or if they don't have a balance.

Well, you know what's funny is people brag about their credit card companies. I mean, American Express and Capital One is getting all this free marketing. Nobody's bragging like, Oh, I got that Sally May card. It's titanium. And yet we do that with Apple. It's insane.

Yeah, I don't get it. I'll never understand it.

So this number, I talked about this in my book, Breaking Free from Broke, I devoted a whole chapter to credit cards to try to convince people that there's another way. I even outlined eight different character archetypes. One is called the Perfect Spender. That's the person you just described as, I pay it off every month. Well, here's the problem. Every study shows you spend more when you use someone else's money and pay it back later. That is human nature. Every time. Don't tell me that you've somehow transcended that and become the perfect human. I don't believe it.

No, I don't believe it. We know it's not true. I mean, like you said, there's enough studies that show that when you use cash, it lights up the pain center as you feel it, and then it goes down a step when you use a debit card, and then it goes down another step when you use somebody else's money on credit. We do know that that's the case. But it's just interesting to me. I think that the first step to solving a problem is admitting that you have a problem. Like I said before, if we're willing to say that we know, Okay, car loan debt, that's inconvenient. Student loan debt, that sucks. We also have to accept that credit card debt is also holding us back in the exact same way that those other debts are holding us back. The only difference is we keep choosing to go into credit card debt, and we're really defending the very thing that's attempting to victimize us. We'll defend the creditors, and we'll defend Chase Freedom and American Express till the grave.

Oh, yeah. Here's what's crazy. I don't get it. The delinquencies are up. Yeah. And part of it, we can all point fingers at inflation, all this stuff. But credit cards are one of the most expensive ways to borrow money. The current average APR is 22% now. And then you wonder why you can't get rid of it. I mean, it's a plague once you get into this debt. And the companies, they're going to try to get you to spend more. They're going to try to get you to carry a balance. They're going to try to get you to pay another fee, whether it's the annual fee, the late fee, the interest, you name it. They're going to get you. That's right. It's their whole game. It's why they changed from cashback into points, because now you get 10,000 points and you think you're winning like it's Chuckie Cheese. That's right. Turns out you get a sticky finger on a warhead for 10,000 points. And getting you to Boise for that. So it's a major, major problem that I think we're going to need to have. There's going to be a crisis. And it's not happening at 1.12 trillion, which is the current credit card rate.

It's got to hit a limit where people So enough is enough.

I mean, it started. As a result, credit card delinquency rates are higher across the board. The New York Federal and TransUnion found that over last year, roughly 8.9% of credit card balances transitioned to delinquency. We're starting to see that. We've started to see car loans go into delinquency. People are realizing, Okay, I've been trying to float my lifestyle with options that aren't sustainable. That's why what we teach is so relevant, because at some point, you can't take it any more debt. At some point, you look around, you're like, I can't float this. I've got a million balls that I'm juggling in the air, and that's tiresome. At some point, you go, Okay, I just need to stop. I need to simplify my life. I need to pay off this debt. I need to stack up some savings. If I do come across on a hard month, there's money there waiting for me, and there's a way to live life with more peace. Credit, I think- It's not the answer. It's just not the answer. I've lived on both sides of that coin, and you think that your freedom is in credit, but they could care less about your freedom.

And I was that guy. When I started here in 2013, I had my Mx Delta Sky Miles because I was going to get them and get my free flights. And I had my Discover cashback. I was getting 5% that rotated on restaurants and dining out, and I was broke up to my eyeballs. And here's the thing, that's 6,218. Most people that call in the show, they go, Well, Jade, it's minimal debt. I just have it. It's about 6,000 on credit card debt. And here's the thing. All that takes to get there is $17 a day. It's $518 a month you put on that card. That's what adds up to 6,200. And guess what? You pay the minimum, it's going to be even more. The balance moves up faster because you're making that minimum payment. So here's the key. Debt snowball. Smallest balance to largest. I don't care about your freaking interest rate, whether it's 3% or 22%, pay it off small to largest balance, and then cut up the cards. And if you can't do that yet, just do a pause. 30 days, no credit card challenge. That's right. Put it in the freezer, lock it up in a safe, and use your own money and pay for things now and see if it doesn't cause more pain and see if it doesn't increase the amount of money you have in your budget every month.

That's right. And if you're not the perfect spender, I wasn't the perfect spender, but it caused me to get my income up so I didn't have to rely on credit cards. So that's an option for you as well.

That's right. You get that an urgency fund in place. You don't need Capital One or American Express anymore. You become the bank. You are a very gracious lender.

What's in your wallet?

Freedom, baby. Freedom. This is The Ramsey Show. I'm George Campbell, joined by Jade Warshaw. This is The Ramsey Show. Open phones at 888-825-5225. Well, Jade, it's back by popular demand. Five years after we launched it and then a pandemic happened, the Live Like No One Else Cruise is back. Full throttle. That was pretty good.

Not bad, huh?

You fooled me. I thought we had a sound effects guy in the booth.

I toy with whether to try it or not, but I'm glad I went for it.

It really panned out for you. March 22nd through the 29th of 2025, you've got time to budget for it if you're in Baby Step 4 or above, meaning you're completely debt-free, you have an emergency fund, and you want to celebrate. This is the ultimate debt-free celebration, Cruise. We'll have Dave Ramsey, all of the Ramsey personalities, special guests from musicians to TV chefs to magicians to comedians. We've got it all, and we're going to be taking over the entire cruiseship. That's going to be a spectacle to behold.

Oh, yeah. A spectacle.

About 2,400 Ramsey fans and the personalities crew. We're stopping at some incredible spots, Turks and Caicos, St. Thomas, Puerto Rico, the Bahamas.

George, you get to bring your speedo.

I cannot wait, Jade. It's time. Me and Borat, we've been holding down the fort for too long. It's time. I promise you that won't be happening because people will be getting refunds if that was the case. Listen, here's the deal. This thing sold out back in 2020 in only a couple of weeks. The cabins are booking fast. Vip upgrades are already sold The suites are almost sold out. So go ahead and book your cabin at ramseysolutions. Com/cruise and begin to plan for the ultimate debt-free celebration of a lifetime, March of 2025. That's ramseysolutions. Com/cruise. Can't wait. Love it. I got to work on my base tan before I get out there, Jade. That's right. I'm burn easy. All right. Grant is in Indianapolis up next. Grant, how can we help you today?

Hey, it's an honor to talk to you guys.

You as well. What's going on?

Well, I'll give a little backstory. Just over a year ago, we have three kids within two years of each other. Over a year ago, my wife was pregnant with our third child, and she went into multiple seizures. In her head, her brain stopped sending signals to her legs, and she is still in a wheelchair. It's been over a year. After the baby was... I stopped. I was able to continue working up until October last year, and I was blessed enough to get paid at least half my salary up until the baby was born. Then my wife and I decide she can't really take care of the children because she's still having seizures. She went to work, and I am a stay-home dad. I already had a side gig of mowing lawn. Now we're in season in Indiana, but I can't afford childcare. I literally put on a headlamp and mow commercial properties at I'm just trying to figure out how to up my income or what can I be doing while I'm still home to get ready to go back into the workforce in five years because it's just daycare for three kids within two years of each other.

It's just- Yeah.

So what's the current household income between your wife's income and yours?

My wife brings in 2,800 a month, and I bring in 350 a month with my Okay.

You guys are rock stars, number one. I feel like you just wrapped your arms around the situation and said, This is what it is, and we're going to start solving problems and doing whatever we can with what we have. And so kudos to doing that. Because this is not- You are the boss. Yeah, both of you are. Both of you are. This is amazing.

What is she doing for work?

Right now, she works in customer service, helping people with their 401, their retirement plans.

Okay. And is she doing that how many hours a week?

Forty hours a week.

Okay. And that's her. Is that her take home pay or her gross pay before taxes? That's her take home. Okay, good. So you guys are taking home right now, and you're $3.50. Of course, you got to pay some taxes on that, but that's about 37,000 take home. Yeah. And so you're going, We need more money. Is this enough to cover your expenses right now? Do you guys have any debt? What's your financial picture We have no debt.

My business has a little debt. It has a mower to pay off, which I plan on paying off next month. Sadly, I got the loan right after or right before I took the financial peace class with my wife, but that will be paid off next month.

Do you guys have an emergency fund?

We have 6,500 in our emergency fund. Good.

So are you guys making enough to make ends meet, and you're just trying to increase it, or are you having a hard Our time paying the bills every month?

We are barely making ends meet. We have the every dollar app, and we crunch the numbers as hard as we can. We have combined home and auto. We've found cheaper WiFi because she has to have WiFi for the work because she's able to work from home.

So $500 would change your world, $500 a month?

Yeah, just $500 a month would change her world. She'd be able to save a little bit more.

Are you guys getting a big tax return every year?

We did. Tax refund? Sadly, we did a last year, or this year, based on last year, because my wife had two kids last year in February and December. But we also didn't know if my wife or the Braby was going to make it. So We did no adjustments to our tax. So we got 8,000 back. So we paid off. I had a small school loan, got that paid off, and I would say small as in $1,400.

And then we had a medical bill. Because that 8,000, obviously, you're not going to get that again this year. But even if it was For $6,000, that suspiciously looks like $500 a month that could go back in your paycheck. Okay. And so that's something to look into if you're going to get another big refund. It sounds like you guys are doing all the right things to try to trim down this budget because the only thing you can do is spend less and make more. So there are ways you can make more. How much time can you devote to some of these side hustles?

The hard part is not. I could go get a lot of jobs, but I can't mow during the So I know why.

Well, I'll have to mow it because what are you making per hour?

Yeah, you said you're making $350 a month, right?

Right. Now, that's also the question I had for you guys. So I can grow consistently if I don't have other side husts, because I will do like I do landscape jobs at night and stuff, too, on the side.

What pays the most? Out of all the things that you're doing, what pays the most? The lawns?

Lawn is... Mown lawns is bread and butter, guaranteed $1,000. Landscaping, I can make more if I did more. But the problem is nobody wants me to do their landscaping in the middle of the night. So I can only get away with it because I'm doing it at.

So I think we need to find a different job that has nothing to do with landscaping or mowing, because you need something that works at night. Right. So I would look into your other skillset, even if you don't have a specific skillset, even doing pizza delivery at night or Instacart or Uber or Amazon Flex, some of these other jobs where you can just turn on the app and go at night, which is when people are using them. That's an option. Are you handy? Then you're not limited. Are you handy at all? You sound like you are.

I'm a hard worker. I can work hard.

I'm wondering if you start a little handyman business, and as people are off of work, you charge 50 bucks an hour to change light bulbs and screw some things in and build IKEA furniture and do whatever. Because there's some guys that do that in my neighborhood. They are booked out. I'm like, Hey, can I get some help? They go, Yeah, three weeks.

Yeah. I hire them to come mount the TV on the wall, hire them to come fix whatever. You could literally do that, like George said, from four to- Nights and weekends. Yeah, from four to whatever. Then when it gets late enough to where people don't want you in their house, then you can go and do some of these driving apps.

I've given some of these guys dinner because they're there when I'm at home.

No, I don't want them there past 8:00.

We hang out.

Well, that's the problem. My kids go to bed at 8:00, and I can only really start doing work at 8:00, 9:00, because it's hard. My wife's a boss, but we just haven't I haven't gotten there yet.

Yeah, I understand. Okay. Well, listen, I think you- That's the hard part. I think you keep doing what you're doing, and you're slowly replacing it with what George said, and you're trying to do that handoff to where you're getting more hours back, and you're able to do more with those hours. Just because to George's point, at night, you're very limited with lawn service. Plus, who wants to hear a lawn mower at 9:00 PM?

I'd be reporting that. Grant, here's a resource for you that will help. Number I'm going to send you Ken Coleman's book, From Paycheck to Purpose, and his Get Clear Career Assessment. But I'm also going to give you one thing. In the meantime, go to ramseesolutions. Com/sidehustle. I built a quiz that helped people figure out the right side hustle for them based on how much time they have, what talents they have and their target goals. So anyone listening out there can go use that. Ramseysolutions. Com/sidehustle. It'll start to point you in the right direction of what makes sense for you with your situation. So hope that helps, Grant. You guys are warriors, man. Pulling for you guys. You're willing do whatever it takes, and you got nothing but respect from me. This is The Ramsey Show.

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That's ramseysolutions. Com/checkup.

Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw. Here's your friendly reminder. As we head into summer, come visit us here at the Ramsey Solutions headquarters just south of Nashville, Tennessee. Make us a part of your trip if you're driving or flying somewhere. We love to see folks. We got a beautiful audience here today in the lobby, and most people, Jade, are shocked when they walk in because they think we do this thing out of a double wide somewhere. I don't know. I don't know why. But we created this beautiful headquarters, a fan experience for you guys because we wanted you to celebrate you and your debt-free journeys and as you build wealth. And we made it a great experience with free coffee, free baked goods, a little museum timeline wall and all kinds of goodies. So bring the family on by. The show is free. We're live one to four every day, and you can jump on ramsey solutions. Com and plan your visit there. Nolen is up next in Cedar Rapids. What is going on, Nolen?

Hey there. Hey. I've been a listener for a long time. My parents were Dave Ramsey followers. I'm familiar with the process. However, I've made a series of probably poor, uneducated decisions, and I'm getting married in a little bit less than a year from now. I'm 19 years old, and I I have about $35,000 in debt.

Okay. What debt is this?

That's compromised of… I have a car loan for $23,000. I have student loans, which I'm not paying yet because I'm still in school for about $6,000. I have a consolidated loan, which was a credit card when I first became an adult, and also tuition for my EMT training, and that's about 3,000. Then I have, most recently, a credit card with $1,900 on it because my fiancé and I had a car wreck and had to end up pitching in to help each other out with that.

Do you guys not have insurance?

No, we do. She. So this was her car, so I was mostly helping her because she's having some job trouble right now. But her parents didn't inform her that she is only limited liability. And so when I heard her parents say that on the phone, I was like, oh, crap.

So you stepped in to save the day by going into two grand of credit card debt at 22% APR.

Right. Now, I am on a payment plan because the credit card that I have has like, it's really not that great, but it's like $5 a month flat fee, no interest, paid off in six months. What? For auto-mechanic things over $1,000.

All right. We're not doing any more debt. We got to learn our lesson here. I don't care what they market to you. I don't care what it is.

Are you working right now?

I am, yeah.

How much do you make? What are you making?

I make a base salary of 50,000. Good. Then significant commissions on top of that, depending on the month.

What's a good month look like? What do you take home on a good to normal month?

A month usually looks like 6,000, 7,000 a month.

Where's that money going towards? What's causing you to take out debt at this rate at so young when we were making 6,000 bucks a month?

I just started this job. Before that, I was only making 1,700 a month.

Got it. Okay. I'm in my third month.

And you're in school full-time? I wasn't making that for the beginning. Yes, online.

Okay. And what's your living situation? Are you renting? Tell us more about that. I'm living at home.

Great. While I was about to move out just because everybody was trying to tell me that I should have the experience of living on your own before you get married.

You should. But if I'm you, I'm taking advantage of this moment. You're 19. It's not like you're- He's paying at all. Yeah, you're not 31. So you're 19 years old. I'd stay at home for a while, and I would get this debt cleaned up. And financially, I don't even see you having the money right now to buy an engagement ring to help pay for a wedding. You're 19. I think you've got time to just take a breather and clean up some of this debt before you make that next step. Because once you're engaged, there's more money comes along with that. Are you already engaged?

Yes, we're already engaged.

You already got a ring?

Yeah. We decided on a $500 ring because we decided later when we're in a better financial situation.

The wedding, is the venue already booked, the date's already set, the invitation sent out?

Yes.

Oh, so we're already in it? Yeah.

We going. How long have you guys been together?

A year and a half, two years.

All right. All right. So we're in it now. Who's paying for the wedding?

Both of us. We're both pitching in, and then my parents, they have a little fund that help us out.

What's the budget?

We're doing it small. We're staying below 6,000.

Below 6,000. And how much of that are you on the hook for?

Probably between the two of us, probably 2,000.

So 1,000 from you and 1,000 from her? Yeah. If you were to look at it like that. Okay. Is she bringing any debt into this?

No. Okay. She doesn't have a credit card, which is why I ended up putting it on mine.

Good. I'm glad she doesn't have a credit card.

I also did that because with not living at home right now, I don't have an emergency fund right now. That was my next step with this job was to start building that up.

No, your next My step is to get rid of this debt while you have no bills.

Right. And so that's when I had to fix her car, I was like, Okay, well, I guess instead of setting $2,000 aside this month, I'm just going to have to do that next month.

No, and You didn't have to do anything. You chose to do this.

Well, yes. I stand by my decision.

Here's the way we would teach going forward. I'm going to give you the blueprint going forward because what I want you to accept out of this, and I know you good intentions all the time. I said it earlier this hour. We have a good reason, and we use that good reason to make a bad choice. You had noble intentions, but going into debt, there's always a better way. Going forward, because I think your heart was in the right place, you just made not the best choice.

Well, you also bought a $25,000 car while making 20 grand a year.

Yeah, you're going to debt. That was a poor decision. Yeah. You're turning to debt more in places where you shouldn't have to turn to debt. We're going to teach you to where you're never going to have to turn to debt again. So your first thing's first is you just need a thousand bucks saved. When you get paid your next paycheck, a thousand bucks, set it aside, and then that's your rainy day fund If anything should happen. Right now, your A1 is... Then you got to save up for the wedding, because that's happening come hell or high water.

That's a year from now. You have a year to pay off your debt. Let's call it 35k is your debt, another thousand for the wedding. That's 36 grand total. You need 36 grand of net income on top of your expenses to knock all this out before you get married, right?

Correct. Which is possible. You're living at home.

This is very much possible. Your expenses are what? How much do they add up to a month for everything that you have to cover? Minimum debt payments, your bills.

Give or take, $900 to $1,000.

Okay. Let's say you bring home $6,000, that's $5,000 a month you could throw at the debt. Now, obviously, you take taxes into account. But even $4,000 a month, your debt's cleared in less than a year, and the wedding's paid for. If you can throw all the debt. So that's your A1 goal. You're not spending a dime. We're not going further into debt. We're cutting up the credit cards. Every extra dime we can throw is going toward our smallest debt, regardless of the interest rate.

And if you want to go fast, or pick up a little side hustle.

I do. I do photography. And so I've shot a few weddings, some concerts, stuff like that. Good.

Okay, great. So first up is the credit card, next the consolidation loan, then the student loan, and then the car loan.

But the biggest thing I want you take away from this is you're not going into debt anymore. This turns over a new leaf, right?

I don't care what the intentions are and how good of a person you're trying to be. You do not take on the burden of anyone else, and you don't take on any more burden on yourself. You've made a lot of adult decisions at 19 years old.

Yeah. It's been like a mountain on my chest, and I've always been somebody who thought that I knew what I was doing and didn't seek help from others until this, probably this past year, that started to wake up for me. And so with this being said, I wasn't even going to help my fiance, but I didn't know what to do because her parents wouldn't help her. My parents offered to help a little bit, and they did, which was so them. But she had paid the week before her accident, she had paid $2,000 to fix her car, and then the accident. I was in a scramble to help her because she has rent and all that stuff to pay for herself.

Is she working She is, yeah.

Well, close to full-time, as many jobs, as many hours as they'll give her on a weekly basis.

Good. Well, hey, Nolan, hang on the line as a little pre-wedding gift. I'm going to send you my book, Breaking Free from Broke, and I want you and your fiancé to read it, and you're going to vow to never go into debt again.

Let's give him Financial Peace University, too, as a wedding gift.

Yes, there we go. There's some wedding gifts for you. Coming your way, Nolan. This puts this hour of the Ramsey show in the books. We're back with you before you know it. From Ramsey Network, this is The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm Ramsey personality, George Campbell, joined by Jade Warshaw. Open phones at 888-825-5 You call us, and we will help you take the right next step for your life and your money. Jane is kicking us off in Boston, Massachusetts. Jane, welcome to The Ramsey Show.

Thank you.

How's it going? How can we help?

I was trying to help my husband about, I guess, a year and a half ago, September 2023, basically. I asked if I could borrow from his 401(k) so that I could invest in flips and flipped them and then help pay down the mortgage so he could retire earlier. The first house did not sell, and I was nearing the end of the loan, a hard money loan, so I had to refinance. We refinanced that, so now we're stuck with that house, but the renter is paying for that. It's covering the expenses. I did it again with the hopes of the same goal, and now I'm stuck with a house that is nearing its maturity for the hard money loan to be paid. I'm trying to figure out whether I should Refinance because I'm going to suffer a loss. I can't sell this for some reason. It's the interest rates in the area that we're in. I don't know if I should sell it at a loss or refinance it into a hard, I mean, into a conventional loan again so that I can pay back the hard money lender and just keep the house and rent it for a while to recoup my money back and try to resell it later.

I think we got a sunk cost fallacy here. You keep digging yourself in the hole and you touch the hot stove and then you did it again. I think we need to get out of the real estate game entirely. I don't know that. What's the loss on this that you would take?

It would be at least 12,000.

Okay.

I'm getting out.

Do Do you guys have this money? Do we have it? Do you have any money in the bank?

We have about, let's see, for the...

Like an emergency fund, like 9,001. Okay.

And then in the business account, there's maybe 4,000 or 5,000 in that. And then he has a little more left in his 401(k), like 49,000.

Let's stop Robin the 401(k). How much have you taken out?

Forty.

Forty thousand, and that was a straight-up withdrawal? Yeah. So you paid upwards of what? 35% in taxes and penalties?

Actually, it wasn't even... Yes, that's exactly what happened. I knew that. But yeah.

No, it's not.

That's just what happens when you take it out before 59.5. That's why we tell people not to.

He's actually 68. He's actually 68.

He was 68 when he took it out, but he was trying to put it back in, a little back in. They said he couldn't put it back in because he was over a certain age, if that Does that make sense?

Yeah, it doesn't work like that where you can just put the money back in. You took a withdrawal out of that of 40 grand, which robbed you of all the compound growth that could have happened along with that amount. Now you're out that money. You sold one of the houses. You got out of that flip, right?

I didn't sell. We were renting it. We couldn't sell it because of the area that the interest rate is higher than the- So how many properties do you have? We have the main one we live in, the one that I was trying to help pay down so you could retire, and then the one that we tried to flip the first one, and now that's a conventional loan, and we're renting that. And then we have this one now that we're trying to figure out what to do.

I don't know what to do with it. So three total. So one is being rented and one you can't sell right now. When you're thinking about doing the same thing.

How long has it been on the market, the first one? Tell us more about the efforts.

The real estate person, I'm not sure if she knows a lot about the economic area. She should.

About the area. Who is this person? Is this a trusted real estate agent that you're working with?

Well, yeah. She was referred to me through an agency that I work with. I don't know if I should mention names.

When you get off the phone, I want you to go on to ramsey solutions. Com, and I want you to get hooked up with one of our real estate trusted pros, because whoever it is should know the economics of the area. I don't know, what did you put the house on the market, and after 30 days, if it didn't sell, you pulled it. Tell me more.

When was the hard money loan due?

On the first house you asked me, on the first house, it was on the market for, I say maybe almost four months.

Four months?

Yeah, we didn't get any offers at all.

Was it priced right? No office at all.

Was it priced right? Supposedly, it was priced right. I mean, she supposedly priced right.

What area of Boston is this?

No, this is in Birmingham, Alabama.

Okay. You're buying real estate across the country?

Yeah.

Oh, my goodness. Are both rentals in Birmingham? Say that again. Are both of these properties in Birmingham? Yes. What made you go, We're going to purchase property thousands of miles away and hope for the best? Someone on YouTube. Oh, goodness gracious. They said that they- Unsubscribed. They show what they did.

Yeah. Then the properties were just cheaper. It was just easier to get into the market. You could buy a house. I think I paid 47 in cash for it.

What What do you buy the house for and what are you trying to sell them? Let's talk about flip number one. What do you buy it for and what are you trying to sell it for? Because something tells me it's not priced right.

House number one, I think I pay 64, Okay.

That was what my husband gave me and what we had to go towards it.

Then we took the hard money loan for $1025 to rehab it.

Okay. You've got $168,000 all in on this house, right? Right. And what would it sell for?

We were told it could sell us. Well, we were told it should sell for $2.29, and it did not. It didn't move.

What could it sell for?

That's what she said.

I mean, that's what everyone's saying. Could it sell for $180?

Maybe.

Well, I would sell it and get out of this thing, and you still made a little bit of profit, and you learned a lesson.

The fact that you got zero offers makes me think that it's overpriced.

Are there other houses in the area similar that sold for $2.29?

Yeah. The thing is, I refied. Actually, I would be in it for a little more because my refie costs were like 4,000.

I Okay, so you're in for 172.

I'm saying if you even sold it for... You got 180 after fees, you still can walk away from this.

You can walk away.

I think we don't need to get greedy and try to get 230 out of it. Right now, we shouldn't get out of it. If you can get 12,000 more, then you can cut your losses on the other one and sleep well at night.

I think that's the goal. The goal is to try to clear 12,000 from this and get out of the other loan and then never go into real estate flipping again.

How much have you invested into this third property?

That's the issue. It's 138.5, and that is for all hard money loan money. It's straight hard loan money.

When is it due?

138.5. It was due three months ago, and he I extended it again. Then I had to pay on top of the interest, the monthly interest, I had to pay an extra month of interest to keep going. What's the interest on this? Now, $1,385 only. A month? That's it. Yeah, a month.

Until you do what? Pay it all back?

Until I sell it.

Yeah, until I pay it all back. But the thing is, like now, so this come June, he's going to charge me an additional $1,385. Yeah, he's charging you a solid one % every single month that this thing doesn't sell.

Right. But he's charging me a two % on the third month that it doesn't sell.

You need to get out of this chain, and you need to never touch real estate again. Let's just cut our losses.

Yeah. Sell it at a loss.

I don't care what you have to do. I don't care if you lose 12 grand. That you all are not meant to be real estate moguls and unsubscribed from the freaking YouTube channel. I hope this is a lesson to all of you, America. This is how Dave Ramsey went bankrupt in the '80s. It's the same exact concept. He's been telling you all for 30 years not to do this crap. Here you are, trying to be a money mogul, real estate agent, and it's going to rob you blind. I'm sorry, Jane.

I hate that that happened.

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Welcome back to The Ramsey Show. I'm George Campbell here with Jade Warshaw. Open phones at 888-825-5225. I'm going to be honest, I had to decompress after a previous call we took about real estate and some mistakes that someone made, trying to get into flips and become a real estate mogul.

Borrowing from the 401k to do so.

Working with a terrible real estate agent who doesn't know the economics of the area across the country, trying to do this thing. And let me tell you, there's a right way to do real estate. There's a way to do it, the Ramsey way with peace. And one of the ways you do that is you got to work with a pro. We want you to have the experience where selling or buying the home is a blessing instead of a burden. And the Ramsey Trusted program is the only way to find an agent that you can trust to keep you on track with what we teach here at Ramsey and get the best offer on your house or find the right house for you. So here's how it works. We're going to send you some of the top agents in your area who we trust, and our team vets these people. You get to review their stats, you get to interview them, you decide which one you want to work with. But we've done the hard work of vetting these people down so you have a nice short list of folks in your area who can help with this experience.

These Ramsey trusted agents have years of experience, and they're going to help you make wise decisions when it comes to pricing, marketing, and making or choosing the offer. So do yourself a favor. Find a Ramsey trusted real estate agent for free at ramseysolutions. Com/agent.

I love my Ramsey trusted real estate agent.

When you can say, I'm a big fan of my real estate agent, that tells you something.

Mandi Lynn Festy.

Let's go. There we go. Shout out. Shout out to Mandy.

In the Nashville area. I love it. Come through.

I love it. Let's go to the phone. Sean's up next in Dallas. Sean, welcome to the show. How can we help?

Hey, first of all, thank you for taking my call, and I'm proud to say, because of Ramsey and the organization, I am debt-free.

House and everything? I'm sorry? House and everything, or is this your consumer debt you paid off?

Well, I paid off consumer debt, so- Nice.

Way to go.

That's my question. Currently living in a townhome. I'm recently married, both of our second, and our children are grown and out of the house, so it's just her and I.

I'm scared.

We have some living expenses, but they're minimal. Our combined income is around $250,000 on the low-end annually.

Nice.

I have an emergency savings fund at my credit union, earning a little over 4% of 25,000. Good. I've been saving for... During our dating period, we saved feverishly. I currently have about $225,000, also earning 4% at the credit union.

Wow.

Is that for a down payment?

A year ago, So far, so good, right? So I paid cash for a lot in a new community going in. We intend for this to be our forever home. The plans are done and we are looking at an approximate build cost of a $500,000. I always figured a 10 % window could go to 550. We're prepared for that. Okay. So my question is, and again, following Ramsey, definitely not going to mortgage for longer than 15 I don't have to pay it off in 10 or sooner. Love it. My question is, my current savings for the home, and that could grow between this point in the construction in eight months, but do I put all that down since I have my 25,000 emergency funds separate? Totally separate account. But nonetheless, do I put down as much as possible? That's going to put us down to a smaller amount. But nonetheless, I feel like with the $25,000 in the savings fund. So seeking your advice and perhaps some validation that I've planned this properly just by listening to the show along the way.

I mean, if I were in your shoes and I had $225 to put down, I mean, if you said, Listen, I just want to have a little bit more cushion than $25,000. Is that three or six months of expenses for you?

Easily six months.

That's easily six months. You guys have a great income. You said over $250,000, right? Yes. If I were you with the numbers you gave me, I'd probably go ahead and put it all down on a construction of permanent loan for this house. That way, you're closing one time and you're locking it in, and you know that once the build is done, it's going to convert to your permanent loan, mortgage loan, and you're set to go. You're paying for basically half of this upfront, which is really cool.

How much more can you save between now and eight months from now when you close?

Easily 30 to 40,000. Wow. And that was my next question would be, is that added to the down payment, or is that added to just savings and life expenses and vacations?

I would put as much down as possible. And the only thing you need to think through is, okay, we're going to have some moving expenses, some closing costs outside of the down payment. Right. So as long as you have that piece set aside, yeah, furniture, all of that. So if you want to have 10, 20 grand set aside for all of that stuff, moving, furniture, closing costs, you can do that. But the rest, I would throw all of it. If you can save up 260 and throw it at this on the down payment, I would do it. That's exciting. I tell you, someone who did that, now not on that number, but we bought a townhome. It was 300,000. We put down $145,000, which meant we had $165,000 loan on a 15-year fixed rate mortgage, and we paid it off aggressively. The same thing is going to happen for you, Sean. Making $250,000, you're going to pay that mortgage off. My guess is in three years, that thing's gone.

Yeah, and our cars are paid for. In that regard, the insurance, homeowners insurance and everything is going to be required to go into the escrow fund.

That'll be all built into your monthly payment. But the lower the payment, the more you can put extra on top of the principal, which means the faster you're going to pay it off.

The more things you can do fun around the house. For me, the more you put down, the lower that payment is, that frees up more of your income where you guys can do furniture room by room do it at the speed of cash and do all those little fun things that go along with having a brand new house and a brand new property. If I were in your shoes, I'd put as much as I can towards that.

And stick to that 15-year fixed rate mortgage, and you'll pay it off. Worst case in half the time. But knowing you, you're going to pay it off in three years and you're going to save hundreds of thousands of dollars in interest compared to someone who did the 30-year and just attempted to pay it off in that time frame. So way to go. I'm proud of you, man. That's impressive. Beautiful thing. I needed an inspiring call, Jade, and that was it.

Yeah, we did. We were saying This has been a tough day for calls, George. I needed a win.

I got my win from Sean. All right, let's go to Matthew right down the road in Nashville, Tennessee. What's going on, Matthew? Hello.

Hey, George. Hey, Jade. How are you?

Hey. Doing well. How are you? How can we help?

Doing well, thanks. I was having lunch with a friend of mine today, and my main question is about HSA and investing. My buddy that I was with today, we were talking about HSA in general, and he said that a lot of HSA portfolios will allow you to invest part or all of the funds. That's right. I was unaware of that. I thought, like I always assumed, the HSA was just basically a holding account for medical expenses and everything.

No, it's a great vehicle. Okay, so if you put your money in your HSA, that money is growing tax-free, and you can use it for, obviously, medical purchases, and you don't have to pay taxes on that. But here at Ramsey, we love using it as an investment vehicle. After you've maxed out a Roth IRA, after you've maxed out your 401k, it's great if you have a high deductible insurance plan that you can reach over and start contributing to your HSA. That's what I do, and I invest the money. I think you have to keep $1,000 liquid, and then you can invest the rest.

Above $1,000 threshold, you can invest that into mutual funds. They have options within there that you can invest, and that's exactly what I do.

When you turn 62, you can have access to it.

I think at 65, it turns into a traditional 401(k) account. What's your exact question, Matthew?

I guess my exact question would be, I opened up my health equity app that gives me control and access to my HSA funds and everything. Sure enough, there was an investment tab on there with Smart Investment Pro or something. I can't remember the exact name of it, but it didn't give you a whole lot of options as far as what the portfolio was, what the spread was that it would invest those funds in. I guess my question is twofold. Number one, is it smart to invest in something that you don't know what- No, don't invest in anything that you don't understand.

And if you need more help, you can get with one of our SmartVestor pros to help explain the different ways that you can invest that money. But no, I would not pick funds until I know what I'm investing in.

Sorry, I ran out of time on that one, Matthew, but call us back if we can help again. This is The Ramsey Show.

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Here's another option.

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Learn more at ramseysolutions. Com/smartvester. Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw. We just had a call, Jade, about HSAs, Health Savings Accounts, and we got cut off short. I wanted to do a quick teaching recap for everyone listening to make sure they make the most of an HSA. If you have a high deductible health care plan, you can access an HSA as part of that, a health savings account, which is different than a flexible savings account, the FSA. Yes. The beauty is the HSA money rolls over year over year, so you get to keep it.

That's right. Where the FSA does not, you got to use it within that time frame.

The The beautiful part is, number one, with a high deductible health care plan, you have lower premiums, which help save you money. But number two, the HSAs have a triple tax benefit.

That's right. This is amazing. The money going in is tax-sheltered. So whatever you contribute to it, that lowers your taxable income. And then the growth on that money is tax-free. And if you pull out some of the money and use it on qualified purchases, that money is tax-free as well.

For your medical expenses, it's tax-free. So that's That's an amazing advantage there with a triple advantage. Then, like I mentioned, the HSA rolls over each year. But the really cool part is when it comes to retirement. We mentioned it quickly on air, but let me explain this. As you build money in the HSA, you can invest it. Most thresholds are going to be a thousand bucks. Once you have over a thousand bucks in that HSA, you can invest the money beyond that into mutual funds, just like you would in an IRA or a 401k.

They should have the same options that we teach, the growth, growth, and income, aggressive, growth, and international. You can still choose.

I just checked my account. I'm invested across the four types of mutual funds that we teach, so you have some great options inside of there. But when you turn 65, the HSA turns into a traditional IRA. You can take money out for things that are not medical, but you will pay taxes like you would in a traditional IRA. That's right. It's a really cool option for those that have a high deductible health care plan. Part of it is people say, Well, how does this work with the investment side? You buy mutual funds just like you would inside of an IRA or a 401(k). Then when you want to turn that money back into cash, those investment funds, you could sell the shares, turn it back into cash, and use it. Here's the thing. If you've heard Dave Ramsey talk about this, he says, I would recommend you not using it.

I never touch it. I think that's the whole point, right? Is we have the 3-6 months of emergency funds, and by the time you're even getting into this, all of your debt is paid off. You've built that firm foundation to where truly you really shouldn't need to liquidate any of that money for any reason. I treat it as retirement. Yeah.

Unless there's chronic health issues in the family, you're constantly needing to use this, it can be a really great way to build a tertiary retirement account.

I love it. I mean, we would say start with whatever your Roth option is. Start with your Roth IRA if you can max that out. Maybe if you have a Roth 401k, you max that out, whatever your 401k option is. Then after that, if you're like, Hey, Jade, I still have money to invest, moving over to an HSA if have access to it because everybody doesn't, depending on their medical plan. But if you have access, yeah, I'd max that out. I think for families, it's like 8,300.

8,300 in 2024. For individuals, it's half of that at 4,150. If you're 55 or older, you can have an extra thousand bucks in there to play catch-up, which is amazing. A good goal, if you're wondering, Hey, based on my baby step, how much should I put in there? Well, where you are in your financial journey matters. A good goal is to have enough money to cover your annual deductible each year. That way, or at least covered there. Some employers have a match. We have a match here at Ramsey for the HSA money. If that's a match available to you, that's a great start. That's free money. Once you become debt-free, you have the emergency fund, now you can look at maxing that out on top of your 15%, because another question we get is, does this count toward my 15% because I'm technically investing? It doesn't because this is for medical expenses only. So on top of your 15%, if you want to max out your HSAs once you're in that spot and baby step forward, that's great. But before then, it is wise to just have enough to cover your annual deductible. So there's a lot of information on this.

We're going to link in the show notes and description, the article, How to make the Most of your HSA Investment from the Ramsey Solutions blog. That will be a great resource for you all to learn more about this. But I thought we just needed a recap since we didn't get a whole lot of time with Matthew.

I think people like to know about that.

All right, let's get to our question of the day. It comes from Abigail in Oregon.

Yeah, she says, My 24-year-old son already in credit card debt. My mom made the mistake of telling him that my dad had left him $25,000, which was to be paid out when he turns 25 this year. It's in my account for now. I'd planned to tell him as soon as I thought he could be responsible with the money, but now he expects it to be transferred to him on his birthday. How do I handle this situation? Well, on the one hand, if the money was meant to be given to him when he's 25, there's not really a lot that you can do about that. He's just already blown through it. She doesn't say how much credit card debt that he has.

Is it 2,000 or 50,000? There's a difference.

But I do think that you're his mom, so you get to sit down and say, Here's what I want to make sure you understand. This money is going to go very quickly. Maybe it's already gone. I don't know. Maybe it's already spent. But really sit down and talk to him about this. Now, here's the other thing, George. I I don't know a lot. There's not a lot in this question, but I will say this, especially with older children, it's hard to tell them something if you didn't do it, and it's hard to get them to listen. I don't know. Is her financial situation great? If not, he might not be willing to listen to her. So this is a tough one.

Well, there's some legal questions here. She said it's in my account now. For me, that must mean this wasn't done through a trust or something where There's legal boundaries where legally he gets it at 25. But if grandma already told her grandson, Hey, pop, pop, left you 25 grand. You're getting it on your 25th birthday. Well, now it's going to create a rift in the relationship with mom and son to where she goes, Yeah, I have the money, but you're not getting it because I don't trust you with the money. And so part of it is trying to give them some financial literacy and saying, Hey, grandpa left you this money. I want you to honor his legacy. I want you to use this wisely. And This is how we're going to do that. And we're going to filter through the Ramsey baby steps. We're going to go through Financial Peace University to show him this money is best spent, paying off the debt, getting an emergency fund in place, and then we can enjoy some, give some, save some.

Here's the thing, though. It's not like this kid's 18. He's about to be 25. He's a grown man. Hopefully. Yeah. We always say here that you should talk openly about money, whether it's money set aside for college, money that you're going getting for an inheritance. You don't keep these things a secret so that you can control it and then spring it on them. You talk about it often so that you can control it and so that you can teach while you have the opportunity to teach. I just don't think that this was handled in the best possible way. I don't think that it's too late, but at the same time, he's grown.

If he's not living under your roof and under your rule, I think you just got to go, Here's the money. Here's what I hope you do with it. I hope you honor his legacy. I hope you get rid of this debt and you don't go back in. I hope you use it toward financial goals and get the emergency fund. I think that's the most beautiful way to honor the legacy. Agree. But you're a grown adult, and if you want to go make some mistakes with it, that's going to be your mistakes to clean up.

Yeah, he about to make some big boy mistakes.

It's hard because as a parent, you don't want to see your kid suffer. You don't want to see them financially hurt themselves. But at the same time, if it's just Mom said I had to, then they're never going to grow. They have to mature, and part of maturity is making making those mistakes sometimes. I hope he does the right thing, but I think you just give him the money and have a stern conversation with love.

Yeah, I think so, too.

That's a tough one.

If you were leaving money, there's also part of it. It's like, if you're leaving money, would you just say, Hey, I'm leaving this money, but- You can in a trust.

You can have all kinds of stipulations about what you have to do with that money and- What you can and can't do. What you can and can't do, and you don't get it if X, Y, and Z are the case. There's a lot of things you can do within a trust to make your wishes are carried out.

Do you want to know a crazy story? We have a little bit of time. Tell me. When my husband and I were engaged, he was left a sum of money from his grandfather, but the stipulation was he had to marry someone Jewish.

Which you are not. I'm not. So what happened?

I'm here, aren't I? He didn't take the money? I got the last name. I got the ring.

What did he do with the money?

What happened? He had to stiff arm it.

He stiff arm the money for you. That is true love.

That's true love. Then it turns out a lot of the grandkids also did not marry someone Jewish, so they were able to go. They went around it, and they were still able to get through.

Oh, my goodness.

Isn't that interesting?

That is wild. What you won't do. The things we do for love. I thought you were going meatloaf with that. I would do anything for love, but I won't do that. Sam did it. Sam did it. He did it. Respect to Sam Worshaw. It paid off, man. That's awesome. This is The Ramsey Show. Welcome back to The Ramsey Show, our scripture of the day, 2 Corinthians 12:9. My grace is sufficient for you, for my power is made perfect in weakness. Therefore, I will boast all the more gladly about my weaknesses so that Christ's power may rest on me. In a left turn, JK Rowling once said, Anything's possible if you've got enough nerve. I like that level of persistence.

George, you got some nerve.

That's me getting discounts. That's my version of that. I got enough nerve to ask for the discount.

Listen, I've watched you in these breaks try to get these discounts on these Seinfeld tickets.

That's right. If anyone's got the hookup, I refuse. Jade's like, George, just go. Just pay the hub. I'm like, I'm not going to let the scalpers win. Not on my watch. I'm going to get these tickets at face value if it's the last thing I do.

Waving the white flag.

That's my latest conundrum. If you're wondering what's happening in the world of George.

Trying to get a deal. It's a good problem there. Trying to get a deal.

Yeah. All right. That's fine. Let's go to Joan in Jacksonville, Florida. What's going on, Joan? Make us happy. How can we help?

Well, hi. Thank you for taking my call. I have a situation where I have a couple of options, but I really don't know what to do. I'm 86 years old. I have only Social Security. I own my own home. I own my car, but I have about almost $30,000 credit card debt.

Oh, my goodness.

I know. I am making minimum payments, but I've only left with maybe $100, $200 a month to eat, put gas in the car. Now, I do have help from a daughter I have an ex-husband that feeds me as I need it if I make a suggestion, but it's embarrassing that I don't want to. I think about selling the car. It's 17 years old. I won't buy another one, but I'm pretty much going to be grounded.

What's the car worth?

Well, it's a Crown Victoria. I don't think that's going to make a dent in your credit card debt.

I'd rather you keep the car to get around. I know.

Yeah, true. Or sell the house. That's what I want to know. Oh, boy. And get an apartment.

Well, the problem is right now you have a fixed expense with this paid-for house.

Right.

If you sold it to pay off your credit card debt, that leaves you with an expense that's ongoing and increasing. With your Social Security, I I don't know that you're going to be able to afford the payment of the rent.

How much do you get every month?

11,198. Okay. Almost a thousand.

About 1,200 bucks a month.

Well, yeah.

And what are your monthly expenses right now? You're saying you have a hundred bucks left over, so you need about 1100 bucks to live? All over. A thousand?

No, no. The reason I'm in credit card debt is I always need about $200 more. I use a credit card, and then I'll start paying the minimum payments, and then the interest starts sitting on them and the bill, bill, bill. Now, the last two or three months, I had almost $3,000 in car repair and some other $700 to the dentist. You just have no cushion.

You have no cushion to for anything that comes up beyond your 1,100 bucks a month, right?

Unless I beg it from either a daughter or an ex.

I'm sorry. Oh, my goodness.

I'm so sorry. Well, I know. Joan, this is not a fun place to be. What is your house worth? My health? Your house. What's it worth?

Well, what do you mean by that?

If you sold it today, what could you get for it?

Oh, my house? Yes. Oh, the house is probably worth 195 to maybe 250.

Okay.

That's a big- But on either side, the houses have built around me, and they're worth 600 and 500,000.

Why is yours so low?

No updates?

Is it in rough shape?

No. Mine is just When I came here 21 years ago- Oh, they built a bunch of new houses around you. Yeah, they built everybody around me, and I don't have an HOA and everybody else.

Are you at the point where you could move in with your daughter?

Well, I could, but I'm not too sure about that personalities. I have some health problems, but they're under control.

Well, The problem is, let's say if I stopped my fingers and got you out of credit card debt, you're going to be back in $30,000 of credit card debt because you're using the credit cards to float your life and expenses.

Well, I promised her that from now on, I would ask her after If I have to charge something.

But you're still behind 200 bucks a month, which you're using credit cards for, you told us. So you've got your- I know. That's not going to change anytime soon.

You've got your daughter, and do you have other kids, or is it just her?

Yes, but that wouldn't be possible.

Okay. So your daughter has said, Mom, let me know before you charge this credit card, tell me. I'm going to try to help you out, basically, right?

Yes.

So like you said, it's embarrassing, and it's tough, but your options are you either reach out to your daughter and you say, Hey, you told me that this lifeline is here. And the truth is, I need $200 every month in order to be able to live and not spend any more on this credit That $200 will help me make my minimum payments and not go over. If you said that to her, is she on board to say, Okay, I'm going to help you in that way? Because the other option is we might have to look at this house, which doesn't really make sense because of the cost of living today. There's not really an option. I know.

That's one thing that's made it gone up more. Well, okay.

Your expenses are $1,400 and you're bringing in $1,200. That's the truth at the end of the day, right? Because you're going $200 in a debt on the credit cards.

Yes.

We need to find a way to either lower our expenses somehow or increase our income. I don't know we're going to find a way to increase income.

I wrote down every penny I spent this past month.

Could you downgrade in-house? If you sold it for $250, could you go buy a place for $200?

I'm not sure in Florida right now. I mean- Or even an apartment?

No, it's a house. I'm saying, could you downgrade to an apartment?

Oh, well, I could go. Yeah, I mean, I could, but I'm 86 years old.

I know, but we also didn't set ourselves up for a bright future in retirement. No. So this is part of it, is we got to deal with the ramifications.

I was a single mother since I was I was 19 years old with no child support, and I worked until I was almost 80.

What were you doing for work?

I was a… Maybe I better not say. I worked in a I'm a seat technician.

Okay. Is there something you could do to make a little bit of extra money right now? Are you able to get around and do that?

Oh, yeah. I get around.

I think we might need to find a little part-time job to clean up this debt and increase our income if you're able-bodied. It's not fun, but this might be your only option other than selling the house and downgrading to an apartment that you pay cash for, which allows you to clean up the credit card That's what you're getting at, lowering your monthly expenses.

Right. Well, I have leukemia. I've had it for 21 years. I really don't have a high energy level. I have a dog, and The dog, I was going to tell you the expenses the dog cost. The dog was the biggest thing.

I bet. I know. I got two little French Bulldogs, and they're the biggest line item in my budget right now. Joan, I'm so sorry.

It was $181 for the dog.

Every month?

No, just this month.

Just this month? Okay. Joan, I'm so sorry. You have been through it. I would definitely look at downgrading in house and going to an apartment you pay cash for, getting rid of credit card debt. If you need to rehome the dog, I'd rather you eat before the dog. That's the hard truth. I hope it helps, and I hope your daughter or ex-husband can help. That puts this hour of The Ramsey Show in the Books. Thank you to Jade Warshaw, all the folks in the booth, and you, America. We'll be back before you know it.

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