Transcript of Fear Doesn't Call The Shots On Your Finances New

This is an ad for BetterHelp. The time to fix your budget is before you're in debt, and the time to deal with stress is before it becomes a crisis. Talking to someone can help you find a path forward. Go to betterhelp.com/ramsey to get 10% off. Brought to you by the EveryDollar app. Start budgeting for free today. Normal is broke and common sense is weird, so we're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit Union studio, this is The Ramsey Show. I'm Dave Ramsey, your host. George Campbell, Ramsey personality, number one bestselling author, he's my co-host today. Gabe is in Salt Lake City. Hey Gabe, what's up in your world?

Gabe, I'm here. That is me. Dave, it's nice to have you talking to me and I really appreciate you taking my call.

Our pleasure.

Um, George too. Um, so random question. Um, so my dad is very kind. Every time my wife and I have a child, he gives us a 1-ounce gold coin. That's the kids, they own it, right? Um, I brought it to his attention. I was like, well, if it's theirs and they can do whatever they want with it, let's invest it for them. So by the time they're 18, you know, they have a substantial amount of money because right now they're between ages 1 and 7. Um, And so he doesn't want us to do that because he wants it to be like an heirloom type thing or some sort of way to remember him, which I get that. But it's also really not doing them any favors having the coins sit in my safe, not doing anything, not gaining any interest. And so I'm wondering, since he gave them the coins and I'm the parent, I have a moral obligation to do as he says and not do anything with it or invest it and wait till they're 18 to give it to them, or if I can go ahead and do what I think is best for my kids and invest the money or the coins.

Cause right now they're worth anywhere between, you know, $4,500 and $5,000 an ounce depending on the day. Yeah.

I mean, you've had a conversation and he told you not to do that, correct?

Yeah. But I just, I don't, I don't agree. So I'm like, well, they're my kids. Technically they're not his. So I'm like, well, I don't, I don't know. It seems like I'm doing them a disservice, if anything. Just having it sit there. So, I don't know.

Yeah. Um, I, I, I, um, I, I would come down personally on the idea that my relationship with my dad is more important than $4,000.

Yeah. Well, I mean, it's not for me.

It's actually— it doesn't matter who it's for. It's for my kids. $4,000 for my kids. And by the way, it's not really a $4,000 discussion we're having. It's whatever it would grow if it were invested versus what gold did, and it would be, you know, it might not be 4 grand.

So, um, is he doing this regularly?

No, one time when they're born.

Uh, one time when they're born. So, you know, we have 6 kids, so we have 6 coins.

All right. Yeah. How old is your dad? How's he feeling?

Variable.

How's How's he getting along?

He's kicking, he's doing good, which hopefully that means something good for me when I get that old.

I personally would just forget that you have the coins and put them in a safe and just not worry about it. And you need to do whatever you need to do for your children's benefit. And then someday that coin will be around.

Are you investing for your kids outside of that for college or anything else?

Uh, no, not— we haven't started doing that yet. We need to, but are you on that Baby Step? Uh, are we on that Baby Step? No, we're not.

Okay, well, you shouldn't be until you get there. But yeah, so finish up getting out of debt, get your emergency fund in place. You guys live your life and take care of your kids, and then this becomes an irrelevant issue because you've taken care of them. Financially. You've prepared for their college financially and whatever.

My guess is once they're adults, they'll choose what they want to do with it.

Yeah, and all kidding aside, when he passes away, I'm cashing them in. But I'm not going to do that. So my grandmother used to give my kids savings bonds every so often, not just at birth. Not substantial amounts of money, but not as much as these coins are worth even. But I never really asked her about them. I didn't say anything about it. I just cashed them in. I didn't even bring it up. But now that you brought it up, you got a problem.

Now everybody knows.

I cashed them in and I put the money in a mutual fund, and when my grandmother asked me how the bonds were doing, I would give her an honest answer and say they're doing very well.

Now that I cashed them in and put them in a mutual fund.

I didn't say that part. But I would not have hurt her feelings or stirred up a relational strife between me and my granny over that amount of money. It wouldn't have been worth it to me.

Yeah, if this is meant to be an heirloom sort of gift from him, it's like getting a, you know, a pair of socks from Grandma. I'm gonna keep them around because Grandma gave them to me.

I got Grandpa's pocket knife too.

Yeah, that's a cool heirloom.

But, you know, it's not—

You're not gonna sell it.

And I'm not gonna sell it, and it's not worth anything except to me. So that's an heirloom. That's what an heirloom is. An heirloom is not an investment. So when you convolute the two, you make a mistake. And so Dad is making a mistake. And the other mistake he's making is he's asking— he's giving a gift and then putting extreme conditions upon it. Conditions upon it. Strings or attachments. Guilt trips upon it.

"If you sell it, they won't have anything to remember me by." Give them something else to remember you by that doesn't involve a liquid asset like that.

How about a fishing trip? Yeah. Teach them to water ski. You know, all my grandkids are going to remember a lot of things about me, you know, but, um, I'll remember that you taught me to water ski. There we go.

So thank you for that. Yeah, drug George around behind the boat until I didn't do as well as the children did, but I hung on for dear life.

I'll tell you, he got up, he got up and rode, man. I'm a good teacher, and George is just persevering.

He's a great coach.

But I mean, that, you know, you remember that more than that gold coin I didn't give you.

The problem is it's worth $4,500. So he's going, that's a lot of money for a child.

Well, times 6.

$25,000, $26,000.

You're not gonna see this money. That's a lot of kids' money laying around. Yeah, it's just, yeah.

But I do think the relationship is on the line. And so is it, that's what you're really betting against.

Yeah, if it was $4 million, I'm probably gonna tell dad, you know, hey, but for 4 grand, I'm not gonna do that. You know, so that's the issue, and that's how we work it out. So good question. So one of the things moms and dads that listen to the show, grandparents that listen to the show, need to think about is what kind of strings are you putting on a gift, and at what point— how many strings does a gift have to have before it's not really a gift? It's just a control feature. So, you know, I've got a friend that gave all of his grown children and their spouses a free house. He paid for it. Wow. And the only string was he had them sign a letter that said they would never borrow money.

I like that.

Now, is that too much control for a free house? No, not— but if a kid said, "Oh no, I might want to borrow money someday, so I'm gonna have to deny that gift," then that would be a fair thing. They could do that. They could say, "I don't agree with you on the debt-free living. I want to go and use leverage and other people's money." "Money, I've been watching real estate TikTok videos, and so I want to get rich quick in real estate, so I'm not going to accept that gift." They could choose to do that, but you can't institute that after you gave the gift.

Yeah, that's a little awkward.

You have to say that on the front end. Communication. This is what we're doing, and then once you've agreed to it, you've agreed to it. And so in a sense, Gabe has accepted the coin, With the terms and conditions. With the terms that he won't sell it because it's an heirloom. And so in that sense, that's the string attached to that coin. Is that too much? No, I don't think it is. I don't think it is. And I think if I was the giver of the— the other thing you could do is switch places. What if you were on the other side and how would you feel?

That's a good point.

Yeah.

The watch I'm wearing was an heirloom gift and they said, just don't sell it. I said, guarantee I will not sell it. I'm going to make Grandpa happy. There you go. So there you go.

Is it Grandpa?

Yeah, my wife's grandpa. Oh, he passed, and so Grandma said the watch is yours, you can fix it up and keep it as long as you don't sell it. And so I will never sell this watch.

That's a fair gift.

I like that.

I like it. Cool watch.

Thank you. Dave, we got a lot of calls on this show where life happens. One day someone's healthy, they're working, providing for their family, and then a curveball hits.

You know, we hear it all the time. Uh, a car accident, a cancer diagnosis, a, uh, heart attack, and suddenly everything changes. Yeah.

And that's why you've always said that having term life insurance from Zander is essential because it protects your family if the worst happens.

Yeah, that's right. You need 10 to 12 times your income in coverage. No gimmicks, No whole life junk, just straightforward term life protection. But there's another piece that people often overlook, and that's long-term disability insurance.

Yeah, it's important to understand the difference between them. Life insurance steps in when you die. Disability insurance steps in while you're alive but can't work, so it replaces a large part of your income so the bills still get paid while you get back on your feet.

Now, if your employer gives you free disability insurance, great, take it. If it's, uh, discounted there at a better price, take it. But if not, Zander can help you you find the right plan. Whether you're single or married, it's not optional. If you're gonna be outta work for a while, then you need to make sure the money's still showing up.

And that's why Zander is our go-to. They make it super simple to get the right coverage at the best price. No pressure, no upselling.

I've trusted Jeff Zander and Zander Insurance for over 25 years, and so has my family.

So don't wait. It's fast, it's easy, and it could make all the difference. Go to zander.com or call 800-356-4282.

Protect yourself, protect your income, protect your family. Greg is with us in Idaho Falls, Idaho. Hi, Greg, how are you?

Doing good. Yourself, Dave?

Better than I deserve. What's up?

So my wife, just to kind of let you know from the beginning, my wife and I started your program back in 2010. My aunt gave me some CDs of yours. And so we've kept to that pretty much our entire marriage of 15 years now, almost 16 years. Um, we are now to the point that over, uh, that time we've had ups and downs in our finances in the sense of, no matter how much we make, but we have always been able to stay debt-free. And back in 2023, we purchased our first home. We could now officially purchase our first home and afford to do it. And, but our children, ages 13 to 9, we've got 4 children, are now, you know, getting into those teenage years where my wife wants to start doing vacations really build memories and different things like that because we've never really had a lot of money to do that. Whereas I want to work on paying off our mortgage faster. Um, we've kind of gone up and down in the sense of paying a few extra $100 here and there on each payment, but she is really fighting against it because she wants to save that money for doing things and creating memories for our kids.

Am I in the wrong here?

Now, this is the stage at which you would do vacations. I'm assuming you're out of debt and have your emergency fund, correct?

Yeah, we've got about $40,000 in our bank account.

Are you putting 15% of your income away for retirement?

Yes. Okay.

Now, are you putting more than that away for retirement?

We are not.

Are you saving any other money?

So we have, no, we are not. We've got, well, we've got a, um, I work for the state of Idaho, so we've got a PERCY, uh, pension fund that we have.

I mean, you don't have $100,000 sitting in cash over to the side just cause you're a saver.

No, no, but we've got, we've got about $40,000 in cash.

Is that your emergency fund?

It is. Portion of it is our emergency fund. The other portion is just regular savings, just, savings, basically your savings in an envelope. We've got, uh, the way our credit union works is we can make digital envelopes and put them in, you know, put some in those.

What are those other savings earmarked for?

Uh, yes we do. We've got one that's basically, uh, miscellaneous that we—

how much is in miscellaneous?

About $10,000 or so.

You have a vacation envelope.

We do.

How much is in that?

About $3,000.

Okay. And, um, what do you owe on your mortgage?

We owe about $377,000.

Okay. And, um, okay. And what's your household income?

Uh, about $105,000. And that's only been within the last 3 years as well. We moved up here due to a job that paid us enough to really do well.

So first I'm going to tell you that both of you, you and your wife, have done a wonderful job. You are really on top of this. I'm so impressed with where you are and how you've gotten there, the journey that you've been on. You have worked the plan that we teach. Thank you for doing that and the success in your finances as a parent. Way to go. Thank you. Now, what comes to mind is a couple things. The answer to your question, sadly, is you're both right.

Nobody wins here.

Yes, we should reduce the mortgage, and yes, we should go on vacation, right? That's— but, and this is the Stage 4, 5, and 6 where you live not intensely but intentionally. And intentionally would be we upgrade Mama's car, we buy a couch, we go on vacation. And we also want to get to Baby Step 6 and pay down this $375,000 because we don't want to just sit there and look at us.

Okay.

Yeah. So I think what we want to talk about is you and her. I would suggest you talk about exact numbers. Yeah. So when you say, Mom, that you want to do some vacations with the kids, let's put a number on that. What, what, what do you mean?

Well, to kind of, to kind of give you a little bit of a history on that, I come from a family that has traveled quite a bit. I mean, my, my parents, we weren't, we weren't ever rich, but my dad worked for the post office for 40 years, so he, you know, he's— and they've been extremely wise with their money, which has always been.

So I mean, what does she mean when she says she wants to travel?

She means she wants to experience the same thing.

What does it cost to do what she wants to do?

It's, uh, say that— I'm sorry, say that.

What does it cost to do what she wants to do.

Is it $4,000, $10,000, or $40,000?

Well, she wants to, you know, she's not the type of person that has to go to the Hilton or the—

Honey, what does it cost to do what she wants to do?

Probably anywhere between $4,000 to $5,000.

Shut up and do it.

You have the money. Use a little bit of that miscellaneous fund.

That's not going to keep you from paying off the mortgage.

And then for the future, just set up that sinking fund. If you guys decide we're doing $6,000 worth of vacations a year— You have $3,000 of the $4,000 in the envelope.

Okay.

And honey, I'm gonna agree to a $4,000 budget, and after that you're gonna let me do what I want to do, which is everything past that we're gonna be chunking onto the mortgage. We both get what we want.

Okay.

Yeah.

So the $4,000 is not prohibitive in the scenario you gave me. You guys have been too good about what you're doing to have $4,000 keep you from getting to Baby Step 7. It won't do it.

Well, and then, and that's not, you know, I mean, we've got a basement we're trying to finish and I guess that's where I was hoping we would be able to put more money towards that and getting the house paid off rather than—

All you got to do is just sit down with these things and go, okay, if we put $4,000 there, what do we put on the basement? Or maybe we hold off on the basement because we're traveling, because I still want to reduce the mortgage. Or maybe I hold off reducing the mortgage to get the basement finished and then I'm going to reduce the mortgage. So all you do is just line these things up and force rank them. But the thing is, I have found with my wife, and I found with everybody I've coached with over the years, the biggest arguments come because no one actually put an actual dollar to this and said, "Okay, does that actually fit in this jigsaw puzzle?" And if you put the actual dollar on it, it's surprisingly easy to pull this off. The first one of those I ever had, my wife was driving one of those horrible tricolored blue Astro vans. Nasty. It smelled like the family dog and goldfish were ground into the carpet. I'm not talking about real goldfish. I'm talking about the crackers, right? And she was— this thing had like 800,000 million miles on it and it smoked like a tar wagon, like it was the Batman smoke mobile.

And she's like, I need a new car. And I'm like, yes, you need a new car. What do you want to spend on a new car? I need a new car. What do you want to spend? I would— what do you want to spend on the car? I'm like, God, yeah, I get it. Okay. And then so we settled on we're going to spend $15,000. Well, that settled it, because I had $30,000 and I was wanting to do some stuff here at the office, some reinvestment. I said, "All right, let's get the car and then I'll do the reinvestment. I can wait a little bit and let's get you a car," because you do need a car. But if you want a $110,000 car, no, we do have something to argue about.

It's unreasonable.

But we're not moving from the goldfish Astro van to $110,000. It wasn't that big a step up, right?

Yeah, the villain here is not vacations, it's the lack of clarity.

Ding, ding, ding, ding, ding, ding, ding.

And so I think you can set up the sinking fund and go, "All right, we're going to put $500 away for vacations and $500 onto the mortgage." If you have $1,000 left over each month, that's an easy way to do it. But the fact of the matter is you're not budgeting.

You're not sitting down going, "Where is every dollar going?" But you can't have these conversations where you roll your eyes and say, "Well, I just wish we could have fun." Well, he said, "I already did all the traveling when I was a kid." What does that mean? "I just wish we could enjoy ourselves." What does that even mean?

Well, I mean, is it in an international cruise?

When you're talking about me paying off the mortgage, I'm having joy, okay? So what are you talking about here? Well, if I could just go out to eat once a month. Well, then shut up, we can do that.

We can budget that.

You don't need to roll your eyes to get that, you need to just give me a dollar amount and I can put it in the budget.

That's all a man wants.

All a man wants is clarity. Yeah, and that really, seriously, this is the argument argument that most people have, put a number to it, and then you might have to argue. But until you put a number to it, you don't have an argument.

It's just feelings and vibes.

Hey guys, healthcare is one of the biggest stress points in your budget. It's confusing, and most of the time it feels completely out of your control. But there is a better way to handle it. Christian Healthcare Ministries isn't health insurance. It's a health cost-sharing ministry where Christians share each other's medical bills. And it's not a new idea. CHM has been around since 1981. It's predictable and proven, and they've shared over $13 billion $1 billion in medical bills for their members. Plus, you get more flexibility. There are no network restrictions, and you don't have to wait for open enrollment. Now let's talk about how CHM helps your budget, because programs start at just $115 a month, and many families save hundreds of dollars a month compared to traditional options. So if you are tired of feeling stuck, check out Christian Healthcare Ministries. Right now, CHM is offering new members a 50% credit towards their first month of membership.. Go to chministries.org/budget and use promo code Ramsey. That's chministries.org/budget and use promo code Ramsey.

So the market was up 17% last year. It's up 11% this year so far. And it was up 23% the year— or 26% the year before. Um, it doesn't always have those kinds of numbers, but it averages about 11% a year. So if it doesn't make any more this year, um, that would be the average. And it does look like it probably will make more than that this year, um, based on what's going on. Sometimes what you need to start investing is just some body to coach you and teach you, someone with the heart of a teacher. So for help with investing, you should get a SmartVestor Pro in your corner. SmartVestor Pros are registered investment professionals who lead with the heart of a teacher. We've been connecting listeners to them for over 20 years. They can help you create a plan and they will teach you, and you will make your investing decisions. They don't make them for you, and Dave doesn't make them for you. But not participating in these wonderful rates of return because you don't know instead of getting a teacher to teach you so you do know? That's silly. So, we'll show you up to 5 SmartVestor Pros in your area that we have vetted and that have that heart of a teacher for free.

Go to RamseySolutions.com/SmartVestor to find an investing pro near you. Or if you're on YouTube or podcast, just click the link in the description. It'll drop you right there. Kim is in North Carolina. Hi Kim, how are you?

Hey, good, good.

What's up?

How can we help?

Um, I sold a property, but I'm the bank and I need to foreclose on it for non-payment for a little over a year.

Wow. Yeah, you do.

I'm having trouble finding a lawyer that will do the work.

Why?

Well, it's either— two people said they were near retirement and they only did traffic court. Other people said they don't do that area. I mean, I don't know if I—

okay, hey, just jump on, jump on. Can you jump on our website? How old are you, Kim? 51. 51.

5-1.

Yes.

Oh, cool. Okay, well jump on our website at RamseySolutions.com and look up the real estate agent in your area, the Ramsey Trusted real estate agent or agents in your area. Pick up the phone and call them and ask them who— tell them you talked to me on the air and I said you— that they would give you a name of a real estate attorney that does foreclosures. Okay, and a real estate agent will know a real estate attorney that does foreclosures. That's what you need. You don't need somebody that did traffic court.

Well, no, I mean, they used to do foreclosures, real estate issues, but then they're near retirement, so they're slowing down.

Yeah, wrong one. We want somebody— you're— you've, you've waited too long to do this. You needed to have done this about 5 or 6 or 7 months ago, and now that it's a year late, and you need to get on this. This week.

Oh, I know.

Yeah, don't, don't sit on this. I want you to find an attorney in the next 7 days and start the foreclosure. You just make that your mission, okay?

Yes.

So yeah, if you'll go to Ramsey Solutions, to Ramsey Trusted, you can do that. George, you got any other suggestions on how to find one?

I mean, that's the best way to do it. ramsaysolutions.com/agent. And every real estate agent knows a good real estate attorney because they've worked with with a bunch of them.

A lot of the title companies that do closings for them also have someone on staff that does foreclosure.

Yeah, every title I've done, every closing I've done, has an attorney there on site.

So, but they don't always— sometimes they just do closings, they don't always do foreclosures. But they will know. And I don't know how the market is set up today. Many years ago when I bought foreclosures for a living, there were about 5 attorneys in Nashville that did probably 90% of the foreclosure business. Yeah. And the big mortgage companies were like, bring them a whole box here, do these 16, right? And that kind of thing. And so it was— Dyke Tatum was one of the guys' names. I haven't talked to Dyke in 25 years. I wonder what Dyke is doing. He's a wonderful guy, but I did a lot of deals with Dyke. I mean, because I was buying the foreclosure and he was the attorney and I had to take him the money to stop the foreclosure.

Yeah.

And so, but those guys—

I wonder if there's less foreclosures now, so less people are No, there's plenty.

There's plenty. They're just not as profitable as they used to be. But yeah, so I would— that's how I would do it. I would find a realtor, someone in the industry, in the real estate industry, that can guide you. Maybe your insurance agent might also know someone, but probably more likely a good real estate agent. And the best way to find one of those is a Ramsey Trusted Agent. And don't take up like 2 hours of their agent's time. Just ask them for the name and the phone number.

The name and the phone number, and just jump on it and call call them right then and get somebody and get her done.

Andrew is in Los Angeles. Hi, Andrew.

Wow, I'm talking to Dave Ramsey. How are you doing?

Better than I deserve. And George Campbell. Can you believe it?

Wow.

So, Dave, my aunt is in her late 60s and she was recently diagnosed with cancer. She's getting her affairs in order and she has an estate worth around $3 million. And she doesn't have any will or trust. And my family's asked me— I'm the attorney in the family— to help her think through options. So this is the situation. She has one child, my cousin, who's in his mid-20s, and she raised him as a single mother, and they've had a difficult relationship for a long time. He had a lot of serious behavioral issues growing up. He, uh, had issues of violence against her. Uh, he dropped out of college. My family worked very hard to get him into college. He dropped out his freshman year. Um, he's, uh, struggled to hold jobs. He's losing touch with her. And at this point, he's eventually cut off all contact with her. He does not know that she had cancer.

Not exactly a redeemable character.

Okay. So far, that's correct. So, um, we know very little about him, but then this is getting the fact she's going to leave everything to him. That's not where the judgment call is. It's a non-negotiable for her. And we just know very little about him. We are not going to be able to make this decision really in touch with him because there is a lot of volatility that comes from opening up that door. What we know about him is that he recently got married. He, he is not invited to the wedding. And we know that he is applying himself for a skilled trade as a, and so Nobody in the family is opposing him getting this money, but the concern is how do we give it to him? Because, I mean, I know from listening to your program long enough that getting $3 million can derail somebody's life. And, you know, the best case scenario for us is for him to apply himself and have a stable, constructive, productive life rather than, you know, accidentally having everything go haywire because he suddenly has $3 million and no ability to deal with it.

Yeah. Do you do estate planning work?

I don't do estate planning. Um, I have general familiarity and I have—

yeah, but I mean, I would call one of your buddies in the legal, you know, another attorney that does estate planning work and try to get some suggestions. The only thing that pops into my mind, um, a couple of thoughts, um, the first one is a trust with some wild, almost bad B-movie-like traits to the trust, like, you know, he has to meet these guidelines to see the money, otherwise after so many years the money goes to a charity. Okay, and what would be the guidelines? That he's not committed violence, that he's, I don't know, in church, I don't know, he's held down a job, he's, I don't know, what measure can she put in a trust of character that a trustee could measure against? You know, an objective, measurable thing that would allow the money to be released. Otherwise, the money is not to be released, because if she gives money to a bad character, it makes him a super bad character, right? She is not helping him when she does that.

She's harming him, and the money will disappear instantly.

Yeah, so you give money to a jerk, they become a colossal jerk.

So you can get really detailed in that trust and decide, hey, at this age he gets this much if he follows these guidelines. At this age he gets a little bit more. The full amount is released at this age.

I personally would encourage her, if she wanted to listen to me, not to give him the money. You said it's a non-negotiable, but I really would not give it to him.

Is that right?

Yeah, I really would. I would give it to someone else or some charity. Something that she cares about, someone that would use it well and appreciate it. And this young man's gonna— has determined to find his own way, and I would let him. If you run a business, you already know this: bad information leads to bad decisions. And right now, AI is everywhere, but AI is only as good as the data behind it. The best AI is built on the best data. That's why I recommend NetSuite. NetSuite is the number one AI cloud ERP, and more than 43,000 businesses run on it, including us here at Ramsey Solutions. Their AI isn't bolted on, it's built in, and it connects everything that runs your business— accounting, inventory, customer data— all in one place. Because when your numbers are connected, AI actually works like it's supposed to. NetSuite's AI helps flag cash flow problems, spot inventory issues, close your books faster, and cut down on manual reporting. If your revenue is at least 7 figures, go to netsuite.com/ramsey for a free product tour. That's netsuite.com/ramsey. Aaron is with us in Baton Rouge. Hi Aaron, how are you?

Hi Dave. Hi, Dave. Hi, George. I'm very happy to get the, uh, the idea dynamic duo.

Appreciate that. I will let John Deloney know.

Well, I, I need some outside the box thinking here, or maybe a gut, a gut check. Um, I don't know if I have a money problem or a relationship vision problem with my wife. Um, so So we have a baby on the way. We're both engineers. Yeah, we're very excited. Come September, October, depending on when it, when it happens. Um, our current expenses a month are about $5,500, but we want to go down to single income. At least that's— my wife is getting really just overwhelmed with her work and being pregnant. And the thought of having a baby with that is too much. And I agree with her. She works at a chemical plant. So those are, Crazy hours, crazy work, but with our mortgage and with everything, it, I see a money problem. We did a mock budget. That's about that, uh, little over $4,000 a month, but I see us being in the red by about $200 or $300 a month if we went down to single income. Did she see that buckling down?

I'm sorry, she saw that.

She wrote it.

Okay.

She put it together. Okay, so obviously that doesn't work. So what do we adjust?

40 grand in savings.

What do— no, 40 grand savings will be gone. You can't have a burn rate on your budget. You need the opposite of a burn rate on your budget. And so no, 40 grand doesn't cover it. Um, is it'll be gone in about 30 seconds.

31.2 years.

I don't know.

I mean, it was going to be a temporary—

something has to adjust. How temporary?

And what's going to happen a year, 1 or 2 years? And then what happens?

She gets— she goes back into work and I'm making more money at my 9 to 5, not to mention I have a hobby job which I could bring in an extra $1,000 to $2,000 a month, but that takes me out of the house. And it's important to her that I'm here too.

Okay, there's no cake and eat it too. We have to be grown-ups, all right? And so we need a plan that includes no red ink. I don't even care what the plan is, but something's going to be uncomfortable. Let's decide in advance what that is. But no, I would not have a burn rate budget. So let's just decide, are we gonna move and get a cheaper house?

You guys are engineers.

Are we gonna sell the car?

Look at the process and go, what are all the variables we can change? What must be true?

What levers can be flipped?

And there's a lot. You have expenses and then you have income. Do we need to downsize in house if this is a sacrifice we want to make long-term? Because I would not assume that she's just gonna automatically want to go back to work after a year.

That's a dumb assumption.

What if she loves being home and decides, no, I don't want to go back to work ever? Well, now we have an immediate problem to solve.

Yeah, there's a high probability that's what's coming. The thing I would think is, I think the easiest lever to flip is go from her unreasonable job to some side hustle for her that she controls the hours. And when the little cherub is asleep, she could work some from home and probably make enough to cover this. With a side hustle. She's a freaking engineer.

She's a great one.

Yeah, but she's got an unreasonable job now from a stress, hours, and so forth standpoint to be a new mommy. I'm not arguing that, you're not arguing that, okay? But that doesn't disqualify her from creating an income completely in order to make, largely, make her dream come true. Or, you know, you go work your side hustle, and she just says, "Okay, the cost of me getting to stay home and not work at all is that my husband's gonna work some until his income comes up on the day job." That's the cost. Or the cost of me staying home. When our children were tiny, we had some friends that we both admired greatly. They had a big, crazy beautiful home, both professionals. They had their first baby, and they felt like no matter what, that she had to be home with the child. It was a decision they made, period. And they sold everything and they moved to a house that was half the cost of the one they had before. And because they said, "What matters to us, what we value more than where we live is that she is at home." That was their value choice, and they were willing to sacrifice to stick with that primary value.

And I'm okay with you guys having that as your primary value, but then decide what has to go for that to work. Something's being deprioritized. It's gotta go.

Yes, sir.

What does it look like to get your core income up by $5,000 or $10,000? Is it a different title? Is it something else, a different company?

I'm only 3— I'm 26. I'm only 3 years into being an engineer. So I don't have the most leveraging power. And the job I'm at is a great, great job for me to learn for the 10-year engineer, you know?

Good, good. So what is your side hustle?

I have a second job of— What's your side hustle? Russell, I, uh, I do live events, so concerts, weddings, festivals, and on some months I can pull an extra couple grand, but I'm working an extra 30 hours on the weekends, so I'm not home and I'm not present. And she's made it apparent, apparent that she needs me. And for me, this is not an emergency because we can forecast it and plan it, and emergency funds are for unexpected. But she told me that she is in an emergency. Me right now.

I'm sorry, bullcrap, bullcrap. Be a grown-up. That's just— that's, that's a guilt trip from hell. No, that is not okay. That's not an okay statement. I'm the emergency. Oh, good Lord. Seriously, be a grown-up, lady. You're a freaking engineer. If you want to stay home with your kid and that's what your calling is as a woman, I got no issue with that. As a matter of fact, I support the decision. But we're not I'm gonna call you in emergency. Wah! I get everything I want. No, you don't. You get to be a grown-up like everybody else, and something's got to give. Bubba husband gonna be working weekends. You gonna pick up a part-time job working from home as your side hustle to cover this difference, or you guys are selling a stinking house and moving to a house you can afford with you staying at home. Make a decision, grown-up girl. That's what has to happen.

If the answer to what sacrifices are we willing to make and the answer is none, then this can't happen.

Yeah, the answer is, "I'm the emergency," that's a 4-year-old child. No, I'm not okay with that answer. And if she called me, I would be just as mean to her in person.

So—

You're an equal opportunity saint.

That's just, you know, no. I mean, because I got— so my wife is this. She's the opposite. She's hardcore, too far the opposite. Okay, so either way on the pendulum, right? But like, you know, we had a baby in April. I filed bankruptcy in September when she had the baby. I went to the hospital, obviously. I took her to the hospital. Rachel is delivered. I'm sitting there holding Rachel. I'd been there about 4 hours. And she says, "You need to go to work. You need to leave the hospital and go to work." Get out of here.

I'm good now.

"Because the lights are going to get cut off if you don't." Wow. You know, I mean, that's the other end of the spectrum. It was actually an accurate statement.

She understood the reality of the situation.

Yeah. And it wasn't like, "I need you. I'm the emergency." Oh, my. She would have strangled that. If one of my daughters had said that, my wife would have strangled them.

I love that about Sharon. She tells it like it is.

You need to go to work. Get up and leave. Leave the hospital. So we had a guy apply for paternity leave. The guy doesn't want to work because they had a baby. And my wife's like, "Fire him." And I'm like, "Oh, no, no, you can't do that. That's illegal." She's like, "I don't care. He's a wuss.

Fire him." No, it's not because of that. It's because he's a wuss, Dave. That's why you need to get rid of this guy.

What kind of guy does that? In her world, a hillbilly world, that does not compute. So I'm like, honey, it's illegal. You can't do that. So we're not gonna be doing that. But instead, we will listen patiently, and then there'll be FMLA.

But yeah.

Oh my God.

Yeah.

So I think we need to have Sharon taking some of these calls.

When you're a grown-up, ladies and gentlemen, you don't get to declare yourself the emergency. Sorry. Let me tell you something I see happen way too often. People fall behind on their bills and they wait. They hope it will work itself out. It won't. That's why I recommend Guardian Litigation Group. Here's the deal: if you've missed payments, collectors are calling, or if you're getting letters threatening legal action, that's not something to ignore. That's the moment to deal with it, because when you do nothing, it escalates. They can take you to court, and if you don't respond, they can win by default, and that gets expensive fast. Guardian Litigation isn't a call center. They're an actual law firm. From day one, you're assigned an attorney to represent you. So if things do escalate, you're not scrambling and you're not hit with surprise legal fees. Guardian Litigation only gets paid when the debt is negotiated and you accept the settlement offer. This isn't about shortcuts. It's about dealing with the problem before it gets worse. Go to guardianlit.com/ramsey today. That's guardianlit.com/ramsey today.

Attorney advertising. Results may vary and no specific outcome is guaranteed.

Welcome back to The Ramsey Show in the Fairwinds Credit Union studio. I'm Dave Ramsey. George Campbell, Ramsey Personality, is my co-host. Amanda is in Houston. Hi, Amanda. How are you?

I'm doing well. How are you today?

Better than I deserve. What's up?

Hi, um, so kind of nervous, and I know this question is very ridiculous, but my husband wants to get a hair transplant, but I'm going to be laid off at the end of this month. Should we pull from our house savings account so that he can do that? It would be roughly $5,000 to $7,000.

You're asking a bald guy and another guy with perfect hair about a transplant. That is kind of funny.

I need to see a picture.

We need Rachel here with the hair extensions to chime in on this.

She just got hers cut off.

They just took the hair extensions out. She's back to short hair, girl.

How long has he been wanting this transplant?

Well, he just really started getting insecure about his hair in maybe like 6 months to a year.

How old is he?

Getting kind of like more and more noticeable. He's 28, and based on what his dad's hairline looks like, it's not looking too good.

He sees the writing on the wall.

The pattern is male pattern baldness.

Oh my God, I'd be pretty insecure about your household income right now over hair.

When are you going to be laid off?

I know, and that's, that's what I'm saying. I'm more worried about that, and he just kind of like He's the more, he's more of the free spirit and it's like, oh, like, you know, like, okay, so what does he make?

What does he make?

He makes, and again, I know this is also going to sound ridiculous, but he makes $120,000 with bonus.

Okay. And what do you make?

Plus bonus.

I right now I make about $83,000.

And what do you do?

I'm in supply chain.

And oh, wonderful. And you know, you're getting laid off at the end of June. Yes. And you've known that for how long?

About a month and a half now.

Why don't you have a new job?

I'm applying to jobs and networking, and I've had only 2 interviews and probably applied to 200-300 jobs at this point.

Yeah, and applying for jobs, as you have found, does not work. No, no— actually connecting to someone inside the organization that knows someone that knows someone that knows you someone gets your name out of the stack. We get 15,000— listen, whoa, whoa, whoa, whoa. We get 15,000 applications a year at Ramsey. We hire a few hundred people. So putting your name in the mix with 15,000 is useless. Don't even waste your time. So you've got to find someone to connect with, with The Proximity Principle, and I'll send you that book, and you should have a job by now because supply chain is a high highly sought-after, wonderful career field that you're in. That's awesome. And how much is in the house savings fund?

$29,000.

Okay.

Do you guys have other savings?

We have a $49,000 emergency fund.

That's good.

And then we have, like, 401s and all that, but we don't count that.

And you guys are how old? You told me this.

I'm 27 and he's 28.

Yeah, you did. Okay, thank you. Alright, you're right, it is kind of a funny question, but it's also not ridiculous. It's something he cares about, and you guys have done very well with money up until you losing your job. His timing for the question is really horrible, and his suggestion to not buy a home instead of— instead, I want some hair— I don't think I'm gonna make that trade, but is it completely Is it really irresponsible to spend $5,000 on this for him? No, not in your situation. So what I would do is say, okay, under these scenarios is where I would get the money. Both of you are now— when you get your new job, you guys save up an extra 5 grand out of your budget, and then he does it. And so it might be Christmas. Merry Christmas.

Yeah, and that's probably when we'd want to go get it done anyway.

Yeah, so just cash flow it with your new job and with as a budget item. But I, there's just something that everyone listening, including me and George and you, it just feels weird to do plastic surgery instead of a down payment on a house.

Yes. When you're in a stressful time on top of that with the layoff.

Well, you don't, yeah, you're not gonna buy a house right now anyway. You got to wait till you get your job.. But I don't think I'm gonna use my down payment for Botox, a boob job, or get hair. I'm just not. I mean, it's my down payment money, you know.

So earmark separate money so that you're not broke.

Those things are all okay if somebody wants to do them. That's what you want to spend your money on, that's okay. I'm not mad about that. And I'm not making any bald jokes. I'm the bald guy, I can't do that. That's completely illegal. It's against federal law.

And Dave can afford a hair transplant. He has chosen not to on his own volition. I've embraced it. It's a good look for him.

But I do remember where he is. I'm laughing to myself. I don't know if I should tell this story or not. So what happens is, and I bet you your husband's the same way, I started losing my hair first in the back. Is that where he's going thin, in the back?

No, he's got a widow's— a really hard widow's peak, and he's losing it all in the front.

Right in the front. Okay, because I was losing mine like back here, you know, in the back. And so I didn't know it.

And no one told you?

Well, that's the problem. So I go play— this is how many thousands of years ago— I go play racquetball, and I got in the shower, and I got out, and I got my hair dryer out, and my buddy starts laughing at me. He's like, "You don't need a hair dryer, Tony." Oh, no. And this is when I realized I was bald. I knew it was getting thin, but I never thought anything about it. But him making fun of me— and I actually know his name, I could say it right now, and I won't— but this guy, he completely shamed me. Me in the locker room with my hair dryer. Last time I ever used a hair dryer in my life, except to dry some clothing one time. But yeah, oh, too funny. No, anyway, yeah, I just embraced it and went on. Of course, I was too broke to do anything about it. You guys aren't.

Well, I know what's coming.

I would not use my down payment money. I would do it if it's something that means something to him, but I would do it as a budget item after you get back to work. What do you think, George?

Yeah, I agree with that. The stipulation would be you're working again and we save up different money outside of this down payment fund or emergency fund.

Yeah.

Then you feel good about it.

I would feel shallow to use my down payment money for a home for my family for my own cosmetic benefit. Yes. I would feel shallow.

It's not like a health situation.

And I think I might even call you shallow if you did that.

So just wear a hat for 6 months. That does the trick too.

I'd still do that.

But I know where this is coming from, Dave. I've seen this. I bet he's being served up all these videos on Instagram and TikTok of these trickster turkeys.

Once you enter in something, you get in the algorithm, then you get sucked into the vortex.

But all these influencers are going to Turkey and getting their hair transplants. And so that's what this is. How do you know this? 100%. If we had her on the line, she'd say, "Yep, he's going to Turkey." It's a special thing. Turkey? Yep. Specific to Turkey.

Every dollar of income in Turkey is $5,800. I'm going there to spend $5,000 on my hair?

I think it's not approved in America or something. I don't know all the details, but I think that's why people go to Turkey. You're going to get Turkish hair?

Hair.

Yep, it's thicker. I don't know how they do it, Dave.

This is too much, George. The things you know about because I'm not on social media and you are blow my mind.

I don't know how it showed up in my feed either, Dave.

Well, you got perfect hair, so they were shopping.

I was just intrigued.

They were shopping. They wanted to look like you.

I do like the before and after. You see those billboards and you're like, that's clearly photoshopped.

Mine's gotten so thin. I used to, for a while there, I kind had that late Sean Connery version for a little while going, but not even that anymore. It's so thin.

You know, can I say, you look younger than you did 25 years ago with the comb over.

Yeah, the little comb over thing didn't— didn't— and the Mr. Magoo glasses, they didn't do it for me.

Yeah, I missed that era of Dave. Hey, George Campbell here. Listen, if you've had your phone 2 or 3 years, your phone can now be unlocked. That means you can switch to Boost Mobile to get unlocked, bring your own device, and keep more of your money where it belongs. Look, the fat cats of big wireless, they are counting on you just staying put put and overpaying every single month. They want you to think switching is complicated, risky, or just not worth it. Meanwhile, your bill keeps climbing like it's training for a triathlon. But Boost Mobile makes switching simple and way less spendy. You bring your phone, keep your number, and get unlimited wireless for just $25 a month. Yeah, $25 a month. Not for 6 months, not for a promotional period, forever. And there's no contract, no hidden fees, and no "we changed your plan because we felt like it" email. So if you're tired of overpaying for something you already own, this is your moment to save money. Go to boostmobile.com/ramsey and get unlocked today. That's boostmobile.com/ramsey. $25 forever requires customers to remain active on Boost Mobile Unlimited Plan.

I don't think I've ever gotten a hair replacement call before. Really?

I might have, but— 35 years.

I don't remember getting one. Anything's possible, but it's not a frequently brought up subject.

It's the first one I've heard.

I'm sure of that. Hey guys, we wish we could get to every call and question here on the show, so if you have a money question and you want an answer for your situation, head on over to our website at ramsaysolutions.com. You can use Ask Ramsey. Ask Ramsey's our free AI tool that is built and trained only on proven Ramsey principles. And if you don't know how AI works, it can only pull its answers from the dataset you give it. And the only answers we gave it, the only dataset we gave it was us on the air, our books, our articles. So there's no crap from TikTok or Reddit mixed into the dataset.

That.

Just real truth from Ramsey. So if you want to know what Ramsey says about something, we've got it, and it's really detailed. It's very good, and it's exploding. Ask Ramsey, it's a free AI tool at RamseySolutions.com, or click the link in the description if you're listening on a podcast or YouTube. Laurie is in Salt Lake City. Hi, Laurie, how are you?

Hi, Dave. Hi, George. I'm fantastic.

Good.

What's What's up? Um, well, I've been a stay-at-home mom for 32 years and my youngest just got married a few years ago and moved out. So we're empty nesters and now my husband thinks it's the perfect time for me to go to work and try and contribute something to our finances. But I honestly, I just don't want to and I have a lot of reasons why I don't want to, but I just don't want to. And I want to know if I'm okay in that opinion.

Hmm. Do you— does the family need the money?

No, I don't feel that we do. Our home is paid off. Um, we don't want for anything from paycheck to paycheck.

You have money going into retirement?

Um, yeah, my husband puts about 35% of his check in retirement. He currently has about $680,000 in retirement and he's He's— we'll have a little over $1 million when he retires in 8 years.

Yeah, and what's your home worth?

Our home and our acreage is about $560,000. We paid it off last year.

We have no consumer debt. So you're worth $1 million to $1.5 million. And he makes what a year?

$118,000.

Okay. What is it that you're unable to do that the income you earn, he thinks is worth it. The family is unable to do X because you don't work, and he wants you to go out.

Yeah, we're not unable to do anything. We go on cruises, we eat out, we buy things when we need them. We don't— we're not missing anything. I think it's more of a, finally I can contribute money where he has paid our way all these years, I guess, financially. But I've raised our 4 kids, and even though they're grown and now they're out of the house, they still live in the same city. And I would like to still be available for— hey, Mom. No, we don't support any of our kids.

Okay, so we would call you a successful mother.

I think I did a good job.

Yeah, they launched and they're not on the dole. That's unusual in America. You're in the top 10% of motherhood.

They're not in your basement or on your payroll. That's a win.

Yeah, I think you've already earned your retirement.

Um, so have you point-blank asked him, what problem does this solve for me to go back to work?

I have. What does he say? What? Well, he goes, it's just extra money.

That's not a problem. The money, that doesn't solve a problem. So is it that he's worried you're not going to have purpose and get stir-crazy and do retail therapy? Like, what is he actually concerned about?

I think he's just hyperfixated on, now I have the ability to, to add to the income of the family. He, he tells me that no amount of money will ever be enough in retirement, and I'm very—

there's a fear behind all this.

Yeah, there's a lack of content. Okay.

He is worried that you guys won't be okay.

Okay. There's two— I don't know how to solve this for you guys as a couple, and you may end up having to sit down with someone, but there's two issues that are at the core of this, and they're both spiritual. Okay. Spiritual issue number one is contentment, and that's a spiritual decision. When is enough enough? And he can't get there, and So he's never going to gain from hitting his money goals any kind of peace because he can't, because he, because he makes statements like and believes things like there's never enough for retirement. And so that's a fear-based thing. You guys are in good shape. You're millionaires and you started from nothing. Congratulations, you're Baby Steps millionaires. You follow the stuff, you did it. So way to go. That's problem number one. And I can't I can't fix that for someone else. I can just point it out and then let them decide if they want to work on it or not. But John Delony always says around here, on issues in your life that are giving you angst, you have to solve for peace. And in this case, solving for peace is sitting down at the foot of Jesus and saying, "All right, Lord, help me find peace about this money stuff." "Because the way I was brought up, my work ethic, something is driving me, this fear-based stuff is driving me, and I can't find contentment." And so I know where to direct him to, but I can't do it for him.

Then the second thing, and this is even more problematic for me, because it's personal, my wife left the workplace when my oldest daughter was born, our first child was born. She's been at home the entire time, and she did not go back to work when the youngest child left home either, which is where you guys are. We were multimillionaires by then, and, you know, we had plenty of money. You've got plenty of money. She did not need to go back to work and Frankly, I did not want her to because I enjoy her being available if I want to go do something and she's not tied down by a boss, you know. And so, and that's, you know, if I wanted to go with me when I'm going to do an event in New York or we're flying up to New York City to do something, she can go with me. I can be on Fox and we can go to a play and go out to eat, but she can't do that if she's got a boss, right? And so I didn't— Didn't want her to. I wanted her— so that's selfish on my part.

But here's the core thing that I want to address that's bothering me, and it— because it's— I've had a hard time convincing my wife of this, and I need to convince your husband of this. One of the reasons that Dave Ramsey is a major national brand and has 35-plus years of successful radio career contiguous without ever leaving the air 8 New York Times bestselling— 8 number 1 bestselling books, 1,000 team members, and hundreds of millions of dollars of revenue is because my wife was a successful mom. If I had to go home and deal with a bunch of crap every day, I couldn't have gotten the things done that I've gotten done down here at the office. If I was having to deal with drama and I was having to deal with neediness, and I was having to deal with high maintenance, and you were none of those. So you performed a very professional, high-end, well-done job of mother and home economist, and he needs to give you credit for that. I'm giving my wife credit for it, and it's not false credit. I promise you, I've seen people, I've seen men and women who were de— their their potential in the marketplace was derailed by a high-maintenance spouse.

Mine was quite the opposite, and your husband's was quite the opposite. Darling, you are the reason that you guys have $1 million, not his piddly little $118,000 job. You are the reason because your children haven't milked you completely dry like a whole bunch of entitled millennial brats have done to their parents, 'cause you raised good kids. You raise people of character. You are the reason that the wealth is there. You've already earned more than he has. You just didn't get economic credit for it in the way our system is set up. So I'm kind of pissed off at him right now.

Okay guys, let me ask you something. What would it take for you to switch your bank? Because if you're still earning next to nothing on your savings, you need to check out Fairwinds credit union. And I know what you're thinking. It might sound like a hassle. Moving your direct deposit, updating bills, getting a new debit card feels like a lot. But here's what most people don't realize. Staying where you are could be costing you hundreds of dollars every year. Y'all, the average savings account pays less than half a percent. So let's say, for example, you've got $20,000 saved. You might earn around $70 a year. But with a Fairwinds High Yield Savings Account earning 3% APY or more, or that same money could earn you over $600. And that's real money that you can use towards the Baby Steps. So, don't let temporary comfort keep you stuck. Check out the Smart Bundle from Fairwinds Credit Union. You get a high-yield savings account, a no-fee checking account, and the Ramsey Be Weird debit card. Go to fairwinds.org/ramsey to learn more and make the switch today. That's fairwinds.org/ramsey, insured by the NCUA.

Renee is in Sacramento. Hi Renee, how are you?

Hi, good afternoon.

Afternoon, what's up?

I am I'm needing to be pointed in a direction. Um, my mother passed away in 2024, and my sister and I have inherited her commercial properties, um, and they have tenants in them currently, so there is rental income coming into the trust. The properties are going to be deeded over to my sister and and I was told that we will likely need to establish an LLC for the rental income to flow into and then expenses to be paid out of. The caveat is, is that my sister has a history of stealing half of $756,000 and not paying her share of our father's income and estate taxes timely. So that led to me being threatened with garnishment from the IRS because I was the only one gainfully employed.

How many, how many, how many properties are involved in this transaction and what are they worth?

One was appraised at $4.2 million and one was appraised at $2.4 million.

Okay.

Um, I don't want to be on a bank account with someone who has stolen money from me.

I don't blame you. Why don't you just sell both properties and you guys go on your way?

Um, that was the original plan. Um, however, the— there's, uh, there is someone interested in purchasing the lesser valued property, but he can't purchase it right now. So he wants to lease it for 5 years.

Well, then he's not your buyer. Why don't you just get somebody else to buy it?

Um, unfortunately the decision is not up to me. My mom left all decisions to be made by a trustee. So, and, and I am a lesser beneficiary. My sister's 60%, I'm 40%. So I don't really have a say.

Is the trustee aware of her behavior?

He is, and personally I think it's a conflict of interest, but he is also my sister's trustee.

Okay, well, you need legal counsel to force the trustee to sell, to liquidate the properties, because you don't need to be in any kind of a deal with her.

Period. Yes.

Okay, because— and so I don't care what we facilitate here. I mean, you could sell the $4 million one and you take $3 million and she takes the other property and $1 million. That's not 50/50, but yeah, whatever, whatever, 60/40 works out. Yeah, yeah. But I mean, you could sell that property and take your share out of that.

It's about $1.68 million.

See, so there's $6 million and you have 40%, so $2.4 is yours, right?

Right.

And the other property, the little property, is worth what?

$2.4.

Oh, why don't you just take that and give her the other one?

Um, I offered to do that and the trustee declined. Why? Because the person who is in the process of purchasing it, um, he really wants to give this person the opportunity, the chance of the opportunity of owning that property.

Why? Who is this person?

Um, this person was a longtime manager for my parents' business.

Is the business operating in that property?

Um, our family business ceased in March of 2024. There is another retail business in there now, and he is managing that business.

I think you and your attorney need to sit down with the trustee in person and explain to them that we're not going to accept a process by which I end up in business with my sister. Sister. If you continue to push that agenda, we're going to sue you.

Okay.

I think that's— you and your attorney need to sit down with your trustee and explain that, because the trustee's job, their fiduciary responsibility, is not for someone that's not a member of the trust to do good for the family general manager. That's not his job. He's violating his fiduciary responsibilities. Fiduciary responsibilities to the beneficiaries of the trust, which is you and your sister. Your sister. So what benefits the two of you? And when you explain to him that you are not going to accept being pushed into business with your sister, that we are going to break this up. As a matter of fact, there's nothing that keeps him from deeding the 2.4 to you and the 4 to your sister, and then you deal with the guy. You don't have to sell the 2.4. You could become the owner of it, and you're waiting on the other guy to take 5 years to buy you out.. You could do that.

We, we could. Um, and I, uh, however, my sister is refusing. My sister wants to make sure that I end up with as little as possible.

Honey, that's not up to your sister. Your sister doesn't have a say in this.

I, I understand. Um, but because she's the bigger beneficiary, the trustee has explained it to me that if he doesn't follow her wishes as the majority beneficiary.

He doesn't follow your wishes, he's gonna get sued. He needs to understand that.

Okay.

Yeah, it's time for you to take the gloves off and punch some people in the nose here, because these people are just— you know, you don't have to be mean about it, but you just gotta be real tough. And just like, guys, I am— let's start with a baseline here. She's a crook, and I'm not gonna be in business with her. So we're not forming an LLC, and we're not gonna own and operate property together. Together. That's not an option. If you continue to push that agenda, I'm going to sue all of you, and we're going to be in court, and I'm going to screw up your lives for the next 5 years, and I'm gonna have to spend $100,000 in legal fees, but I'm gonna do it. Okay, or we can work out something where I get my share of the property and go on my merry way. It's a pretty obvious thing that the 2.4 mathematically lines up with that. And she can have the 4 and I'll have the 2. And Mr. Trustee, God help you, you're out of business. You got nothing to do now.

It's actually a good deal for them because she's legally owed $2.64 million out of her share, and she's gonna take on the $2.4 million property.

So I would take a loss to get rid of this barrel of fishhooks.

Yes. Yeah, I mean, but they're gonna gain $240,000 just by going through with this, by giving her this other property. So it sounds like it's just vengeance.

And then I may or may not deal with this general manager from the former business and all this stuff. I'm I don't— it'll be up to me because now I own that property. You don't have to sell it, and you want to work with a guy, that'd be an added thing to make the deal work, right? But if you don't want to work with a guy, you don't even have to do that. So yeah, I think you need an attorney that has a really titanium backbone that walks in there and just smiles and says, "We're gonna dance." Do you want to dance? We don't have to dance, but if you continue to play the music, we're gonna dance. And you just kind of have to have these discussions and take all their mythology and their feelings off the table, because I'm threatening you. That's what I— you know, that's where— that's where it needs to come down to. I'm coming after you, and because otherwise you're gonna end up getting screwed. Screwed again some more. And you're right, leopards don't change their spots. LLCs don't protect you from people who are irresponsible and crooked. It's just a more fabulous, sophisticated way to get screwed.

If you can't change people, don't do business with them.

Yeah, don't, just don't stay. If you know somebody, crocodiles bite, so don't put your hand in their mouth. Hello, it's not hard.

Laura is in New York City. Hi, Laura, how are you?

Very good, thank you, Dave, and friends, for talking with me.

Sure, what's up?

I'm a 58-year-old, uh, divorced woman with a $1.25 million life insurance policy, whole life insurance policy, that I have let lapse. I can reinstate it. It would be a hardship, and the, the $8,000 premiums going forward still would be a hardship. I guess my question is, I'm on the verge of canceling it, and I will be hit with a $50,000 tax bill, of course. Um, the, um, my accountant confirmed it, and the, um, the insurance guy who sold me the policy 25 years ago also said—

well, that I don't trust him because he sold you crap, right? The, um, so, um, the only way you have a taxable gain on a cash value policy is if your withdrawal amount exceeds the amount you've put into the policy throughout the lifetime of the policy. Every dollar you put into it forms the basis. I cannot believe—

I have some—

you've had a $250,000 gain on this policy. I don't believe it.

I have some figures.

So what is the cash value and how much did you pay in premiums?

Okay. Uh, the cash value is $361K. Uh, the gains is, uh, $169K. So I guess that math, we put in the gains, um, $192K.

How much did you pay in premiums though?

Uh, what we put in, I've, I have the, well, I, I, it was $8,000 a year for about 25, 25 used. That math should be close to $192,000, $190,000.

Yeah, $200,000.

Okay.

And so that gives you the $169,000 gain.

All right. Yes. I'm leaning towards cashing it in.

Yeah, I'm gonna cash it in.

I'm just—

I gotta tell you that I've been doing this for almost 40 years and I've seen like 4 policies that actually had a gain. I mean, I'm aghast that you actually have a gain. And so I'm still stuck there, but I'm glad you have a gain.

He said it did quite well. Yeah, he said it did quite well, I guess.

Well, no, not really.

I mean, maybe compared to Money in the Mattress.

If you had put in $200,000 into a mutual fund, you probably have about 8 times more money. So it didn't do quite well. Yeah, okay, but, um, okay, but it did do quite well compared to the other crappy sales. Yeah, um, okay, wow.

So you need to pay the $8K to reinstate it before you can cash it out?

Keep paying it forever.

Yeah, yeah, right. Yeah, pay it. I, I have to pay the $8 grand to reinstate it, and then I think in August is, is the next $8 grand.

And I, I, yeah, straight borrow And I, I, I think I, I'm coming to the conclusion that the figures you have, I think, are accurate, even though it's very, very rare. Um, but, uh, I want to triple-check the basis numbers and the actual gain, because if they write you a check, the cash surrender value at the time you cancel the policy is $361,000. Is that what you're telling me? They're gonna send you a $361,000 check?

Yes.

Okay, all right, then if $200,000 is the basis, then you have $160,000 gain. And yeah, taxes might be approaching $50,000 depending on your situation on the $160,000 gain. That's possible. But of course you're gonna have $361,000 in your pocket to pay $50,000. You're gonna net— but I think you can take that if you live a few years and invest that money money. And, um, if you put it in a low turnover mutual fund, you would have a lot more money and you would have a lot less taxes on a lot more money if you take that even after the $50,000 hit. So I'm 100% sure I'm doing it anyway, but I do want to triple check the numbers, okay? Because here's the thing, sometimes these whole life companies, because they're so freaking scammy that they will give you a cash value number that's different than the cash surrender value number.

Okay. Oh, so I should double, double?

Yeah. So if you don't get a $361,000 check that you can cash and put that number into your bank account, then these numbers are wrong. Okay. Okay.

If you're saying $360,000.

Yeah. Yeah. So you said $361,000 is your cash value number that you're going to get if you cancel out.

Yes.

Okay. If that's true, then these numbers, then this cash is, then you got a $50,000 tax bill based on the numbers you gave me. I don't disagree. And I would do it anyway and I would cash it out and I would take the remaining $310,000 and after taxes, and I would invest that well, and I would be glad to be rid of these people. But I'm still afraid that they're going to come back and say, "Well, that's your cash value number, but your cash surrender number that we're actually going to send you a check for isn't that much." Isn't far less.

Yeah.

I'm afraid. But I hope I'm wrong. I hope you have to pay taxes because you get $361,000. That would be a better deal for you.

Yeah, this final receipt of this tax bill is just one final nail in the coffin.

So let's, let's recap here. All right, number one, this is a very rare situation. Number two, when you hear people say these dumb things on TikTok in particular, it's come back again that, oh well, cash value is tax-free investing. Did you guys hear tax-free? I didn't hear tax-free. Did you hear tax-free? I didn't hear tax-free.

A lot of taxes.

Did you hear tax-free? I heard lots of tax.

Big taxes. Like, oh, you can borrow against it.

It's genius.

Amazing.

It's what the wealthy people do.

Yeah, well, wealthy people are sitting in New York City calling me saying, I don't want to do this anymore.

I was going to calculate to see if she had just invested that instead of putting in this policy, what it could be worth.

$8,000 a year.

$666 a month for 25 years.

Yeah, let's just see.

Starting from zero.

It's going to be scary.

You're talking on the low end, $800 grand on the— you're talking a million bucks at 11% return.

So she missed out on $640,000 because this is that bad a product.

That's a big ouchie. So when he said—

wait, but when they say there's no taxes, just remember this call, okay? The only way there's no taxes is if you don't make any money.

That's true.

That's the way there's no tax.

Life hack.

Or if you borrow money, because borrowed money is not taxable. You don't get taxed if you go to the bank and borrow $100,000. You don't have to count that as income.

It's borrowed money.

And if you borrow your own money money even, because you borrow against your own cash value, which is borrowing your own money, paying them interest to borrow your own money. Which makes no sense. Then you don't have taxes, but you did pay interest, and you do look kind of stupid.

But then you use after-tax money to pay it back.

Okay. Oh, there's that. Which is kind of like paying taxes.

Ding ding ding.

The $8,000 thing. But you could have had a million. Instead you got $361,000. And oh, by the way, if that was in a good mutual fund, it'd be taxed at capital gains rate, not ordinary income. This is taxed at ordinary income. These people should be ashamed of themselves that sell this stuff.

$8,000 a year for 25 years. That's some brutal math.

It should have been a million and it's $361,000. So can you— You have to realize, James, our calculator, it doesn't run backwards and allow you to calculate the rate of return she got. I think it's about a 3% rate of return.

Oh, I could probably calculate that.

Can you put in the end number?

3% is about $300,000. So 3.5% is $318,000.

I got pretty close. Look at me.

We're at about—

it's closer to 4%. She made 3.5% on her money.

About $4.3 million.

For a 25-year investment, she made 3.5% on her money. So anyone that's in the insurance business that wants to sell you an investment, Tell them to stick to insurance because their investments suck.

Complex does not mean better. It just means a bigger commission for the person selling it.

She made 3.5% on her money.

I wanna know how rich the guy is that sold it to her. Go look at the house he's living in. You paid for it.

Wow.

Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. Erin is with us in Canada. Hi, Erin, how are you?

I'm good. Thank you for taking my call.

Sure.

What's up? I'm calling because my late boyfriend died about 4 years ago, and his family was very supportive, and I wound up inheriting all of his assets. And since then, I have maintained his tradition of gifting each of his nieces and nephews a cash fund for educational experiences every for a year, but I've recently gotten engaged and my new fiancé does not think it is appropriate for me to continue doing this. And I feel stuck with, um, what is the best way to move forward?

How did you end up, uh, inheriting the assets? Where did he have a will?

So he did not have a will. Um, I was listed as his beneficiary on his life insurance, but, uh, we worked together and living— we were together for 8 years, so we did qualify as common law partners.

Partners. And so the courts awarded you the assets then?

The courts awarded me the assets. And I essentially, um, the last 4 years of our relationship, I had been in school and he'd really been financially supporting both of us. So I had gone to his parents and I said, I don't feel entitled.

The whole situation was treated as if you were married.

Yes.

Okay.

Um, but I had gone to his family and I said, I don't feel entitled to all of this. So let's figure out how to share it between siblings and his parents. And they had said, um, no, we feel very strongly that Cameron would want you to have all of it and we're fine and you keep it.

Okay. And how much, how much is all of this?

Uh, between the life insurance and the house and his savings and pension payout, it wound up being about $1.6 million, a little less.

Okay. And how much do you gift to the children?

It's $1,000 a year. Um, and 3 nieces and nephews, but there's a 4th on the way. And my intention, you know, right after Cameron had died was he, he used to give them $300 a year, but I decided I'm going to do $1,000 a year, um, until they're 18. And then, you know, a nice college graduation gift. And then, you know, over 18 years, I'm with the 4, it will come up to about $80,000 total.

Okay. So you inherited a bunch of money. Over $1 million as a common-law wife from your ex, and you were in a relationship with him for 8 years, and so his family is still— you know, you're still emotionally attached to his family, which is logical. If we just pretend— let's just pretend— let's just change the numbers, change the scenario very slightly, and say you were a widow that you were married. Okay, let's just change the discussion and say that, because that's how the law is treating this.

Okay.

And how his family treated it, for that matter. And you said, okay, you know, my husband who passed away 8 years ago has 3 kids, 3 nieces and nephews that meant a lot. He used to give them $300. I give him $1,000. So it's $3,000 or $4,000 with the new baby on the way a year out of $1.6 million. Exactly. Whoopie, who cares?

The interest in the savings account—

why is this inappropriate?

So he— so my new fiancé, um, he comes from a very large family. He is one of 7 kids, and he feels that it's not appropriate for me to prioritize my partner's family over his, so he thinks it is most appropriate for me to stop gifting this money or to gift an even amount to his nieces and nephews.

I don't think it's about fairness. I think he doesn't like the emotional attachment.

If this was a boyfriend you broke up with, I would probably agree with him.

Mm-hmm.

But he died.

Yeah.

Yeah. How old is your fiancée?

32.

It's kind of an immature approach. I mean, why can he not just stand back and say, this lady comes— this lady that I'm dating, that I'm gonna marry, is— comes with— she's a package, and a package includes her past, just like my package includes my past, and her past includes 4,000 out of 1.6 million, which is irrelevant. Yeah, it's a— it's buying up— you're buying a biscuit. I mean, it's not even a— it's not even a— it's not like you're giving a high percentage or something. If you were giving them $100,000 a year or something, I might go, whoa, wait a minute. But I mean, it's an irrelevant amount of money.

And yeah, it's just meant to be summer camp, you know, and dance class. Passes. Um, but I think, like, he's met my late partner's family, and, and he knows I see them every summer, and he's always been very supportive. But I think he comes from a family that does not— $1,000 is realistically kind of a drop in the bucket to my late partner's family, but that amount for his nieces and nephews would be more substantial.

That's irrelevant. For him to ask you to do that is inappropriate. Okay, that's what's inappropriate, not you giving the other kids money. For him to dare to feel entitled for his family because his family's poor, that they should be getting some of your money, that's inappropriate. Yeah, I, I— the way you've presented this, maybe we left something out or maybe we didn't understand something, but the way you presented this does not leave your fiancée in a very good light.

Yeah, I think we need to grow here and get some maturity and go, okay, this money was meant for this. She's carrying out the wishes and tradition over here. This is not clinging to some past. You clearly love him, he loves you.

You know, even if it was just weird or awkward backward. It's not that much money.

It's not $100,000.

I'm not gonna pick a fight with my wife over this. You know, I mean, there's a few things I might pick a fight, you know, over money. Yeah. And it might be over a small amount, but this is— and then the argument is a false narrative that somehow his family is entitled to— is they're not even in this discussion. The $1.6 million is hers. It's not his family's.

I would look at that as a blessing. Like, what a legacy this guy left to my now fiancée.

Yeah.

And how it set her up.

And, you know, you're gonna be marrying a millionaire.

Exactly. So I'm not gonna focus on this little speck over here.

See, him wanting— him being concerned about his extended family, not— he didn't want it for himself. He wasn't being selfish in that regard, is the very reason I talk about having a prenup.

In situations like this.

In situations where there's extreme difference in net worth, like she's got $1.6 million, she needs a prenup so that his family doesn't think, or he doesn't think his family—

They don't come after her.

Exactly.

Saying, well, they deserve a pile of money too.

Yeah, sorry, we have a prenup. Yeah, let's go ahead and state up front, your family gets nothing. Nada. Nothing. And if you leave, you get nothing. This is the prenup. Yeah. So, you know, or if I kick you out, you get nothing, you know? So, yeah, that— because of— it exposes the crazy weirdness. Yeah, the actual inappropriate one is him. That's the strange part of the call. Hmm. Interesting.

Hey, what's up guys? It's Jade Warshaw. Listen, summer spending adds up so fast. Between vacations and road trips and camp fees and events and all the extra gas and grocery runs, money can get tight before you know it. Know it. To really get your money under control and keep it that way, you're gonna need a plan. And that's what you'll get with the EveryDollar budget app. It helps you track your spending, free up cash to put toward debt and savings, and it's the simplest way to make a plan for your money before the month begins. So no more wondering where your money's going. You're telling it where to go. Download EveryDollar in the App Store or Google Play and start for free today.

Our question of the day is brought to you by Why Refi. When people get buried under private student loans that they can't keep up with, they might think there's no way out. Well, Why Refi helps borrowers explore solutions with fixed-rate refinancing. It's a payment plan that's tailored to your situation. Situation. Go to yrefy.com/ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey. Might not be in all states.

Today's question comes from Adam in Minnesota. I have no consumer debt, $125,000 cash and savings, and a paid-off home. Friends have advised me that I need to take out loans and buy real estate in order to have deductibles to reduce my future tax exposure. Is that a wise reason to get into real estate investing. I almost made it through without laughing. No, that is not a wise reason to get into real estate investing. For the deductibles.

Deductions.

Oh gosh, these—

the old deductibles. Yeah, so you want to explain why?

Well, I'm worried your friends have watched too much TikTok. Uh, I don't know what you're talking about with future tax exposure. I mean, you have no You have a paid-off home. And so if they're telling you to try to have more write-offs, essentially, to lower your tax bill, that's a really stupid reason to go into a bunch of debt and leverage yourself.

Yeah, so there's two ways that real estate can create a tax deduction. One is you can depreciate it, the capital asset portion of it, not the dirt, but the improvements can be depreciated. And that just lowers your basis and you get taxed later when you sell the investment property. Property, but you avoid taxes on that. That's good. Nothing wrong with that. I do that. The other way is to do what your friends are suggesting, which is to take out a loan for the write-off. Now, the way a loan works for a write-off is if you pay out in a year $20,000 in interest, you can deduct that interest on a rental property. Property as a business expense. So it lowers your taxable income— is what a tax deduction does— it lowers your taxable income by $20,000, which means you do not pay taxes on $20,000 of your income because you gave the $20,000 to the bank. Now let's net that out though. A $20,000 tax deduction lowers your income. Let's say you made $100,000 $80,000, so now you're only gonna be taxed on $80,000. So what it actually saves you is not $20,000. It actually saves you the taxes on $20,000.

So if you're in a 25% tax bracket, as an example, make the math easy, 25% of $20,000 is $5,000. So a $20,000 tax deduction saves you $5,000 in tax taxes. Now here's the problem. You gave the bank $20,000 to keep from giving the government $5,000.

So we literally— we stepped over a dollar to pick up a quarter.

Exactly. So you don't give the bank $20,000 to keep from giving the government $5,000.

And that's not factoring in all the risk.

That is what your friends are doing.

We haven't even talked about about the leverage, the loan, the risk, the tenants, are they paying, is it more than the mortgage? There's a whole lot of other variables here.

Now there's simply that you're going to trade $20,000 for $5,000 in order to do what your friends are suggesting. So moral of the story is don't take financial advice from your broke friends. They're stupid. That's where this comes from.

That's it.

Jaden is in Miami. Hi, Jaden, how are you?

How you guys doing?

I'm doing well.

Good, how can we help?

Yeah, so I have a question about acquiring a business, and I just want to know if it's a good idea to do it. Okay. So it's a, it's a barber shop, and I'm currently a barber, and I just want to know if it's a good idea to get one. It's an established barber shop, correct?

Okay, and what does it profit What's the net profit on the business?

Um, right now monthly it's about— there's 9 employees and they pay each $1,000, so it's around like $9,000. And there's 4 chairs that are empty, so there's space to put in 13 people full.

Yeah, but they're not there now, so— and they're wanting— I assume they're wanting you to buy this business, correct?

Yes, correct, correct.

What are they asking for it?

Uh, $55,000 or $60,000. I'm leaning more towards $55,000, and he's coming down towards that number.

$55,000?

Yes, yes sir. Okay.

Okay, so it's bringing in a gross revenue of $9,000 a month, correct?

Yes, sir.

It's $108,000 per year, right? And so what is the profit on that? I mean, I assume you have rent.

Yeah, the rent right now with everything included, utilities at the end of it, it's $4,000. So I'll be profiting around $5,000 to say if it's a bit lower, if I added more things like utilities or other things that I'll buy for the bar shop, which would be—

I want to talk about him that's operating it today. Yeah, his expenses are rent. $9,000 minus rent is $5,000, right? What other— that includes his utilities and stuff. What other expenses does he have?

Well, he has the— the— well, I guess he told me the Wi-Fi, which the cable and stuff. He does buy waters, like, uh, little waters or snacks for the vending machine in there. So because the, the rent itself is $3,500, but I put in an extra $1,000, so if it would make $4,000, let's say $4,500 total with including buying the waters, buying extra snacks for the vending machines, and keeping everything in order.

Okay, which would mean that he's got a profit of about $55,000 or $60,000 a year. Does that sound right?

Yeah, yeah, it does.

And he only wants $55,000 or $60,000 for the whole thing.

Yeah, I just, I was just wondering because I do have some, some debts at the moment, and I just was wondering if it would be a good idea because I currently am a barber right now myself.

How much do you make on your own?

I make around like $6,000 a month. Mm-hmm.

Good for you. Okay, are you one of the chairs?

Um, well, right, I, I'm not currently at that barbershop. I'm at a different location. Okay, so I would be buying it from him.

Is he one of the barbers there?

No, he, he is not one of the barbers. Okay. Right now, since he's, he's moving out the country, so he's trying to sell it. And right now he has one of the barbers— well, there's 10 in there, but one of them doesn't pay rent because he's the one managing.

Okay. How much debt do you have?

I have around, uh, $24,000, and that's including— I'm still in school, that's the student loans and stuff stuff.

What are you studying in school?

Um, finance.

What are you going to do with your life?

Well, uh, I want to stay within the barbering industry. That's why I want to kind of acquire this barbershop, because eventually I do want to segue into the finance industry.

But you would just do like he did, then you'd be an absentee owner?

Correct.

How much school do you have left?

Left? Uh, I have about a year and a half left.

Mm-hmm.

When is he moving out of the country? When does this deal need to be done?

Oh no, he, he already is moved out. That's the thing.

Oh, okay. So here's what's running through my mind. The deal is not a bad deal. Number one, you don't have $55,000 cash. That makes the deal difficult. We'd have to figure out a weird way to structure it. We could probably do that for a minute. Okay. But here's the— but it might be a bad deal for you, even though the deal is not a bad deal. And it might be a bad deal for you because it might cause you to take your eye off the ball of what winning really looks like. So 5 years from today, what winning really looks like, as you described it to me, is you graduate and you have a career in finance, and you might invest in a barbershop at that time, but your intention is not to be your primary income and career is not to be the owner or operator or haircutting guy in the barbershop? Correct. You really don't have any intention to do anything with this? This just came upon you because you're doing this right now as a side hustle to get through school?

Well, I would— at first I thought that, but barbering is like a passion of mine, but so is finance. But it's just that—

but I mean, that's my point. See, that's exactly the thing. So what I'm afraid of is, is this it distracts you and it's like a fishing lure and you get hooked and pulled away from what you were supposed to do, which was finance. So I'm afraid it's a distraction even though it's not really a bad deal. If you wanted to do the deal the way you could structure it would be, I'll give you 100% of the net profit for 1 year and I, and I will operate a chair and I get to keep what I make on my and 100% of the net profit will do the books. I'll give you that for 1 year, and then the barbershop is mine. And that way you don't have to come out of any cash, and doesn't affect your get out of debt plan. But I'm afraid it's gonna distract you. If you're a business owner who's serious about growth, you've got to be at EntreLeadership Summit 2027. Summit is our world-class leadership conference where you will learn from the people who have influenced the way we lead at Ramsey. You'll also connect with like-minded business owners who are facing the same challenges as encourage you to get your tickets for May 2027.

Go to entreleadership.com/summit. If you're working the Baby Steps, the best and fastest way to do it is EveryDollar. It's more than just a budgeting app. It is the Ramsey Plan built into the budgeting app. You can track your progress, get a personalized recommendation, even coaching for your situation. It'll help you free up more money and work the plan faster and the Ramsey way. It's like having one of us walk with you every day showing you the next right step and holding you accountable. Start EveryDollar for free by downloading it in the App Store or Google Play. Lisa is with us in Tennessee. Hi Lisa, how are you?

Oh, I'm good, Dave. Thank you. Thanks for taking my call. Sure. Um, I have a dilemma here. I'm wondering if I should give up my late husband's pension from the fire department to get remarried. Um, I'm worried about financial security if it doesn't work out.

Okay. Um, so, uh, how old are you?

We're both 69.

Okay.

And I make about $800 to $900 more a month than he does. My income is—

so what do you make? Oh, not counting, not counting the pension. What do you make?

Social Security, which is $1,000, $1,069.

So you, you haven't worked? You've been living off the pension?

Yes.

Yeah.

How long has he been gone?

2 and a half years.

I'm sorry.

Thank you.

How long you been dating?

Uh, about a year and it's starting to get more serious on my end. He's all, he's been pretty serious, but, um, what does he make? He makes about $4,800 a month. He has like $3,300 from Social Security, $1,500 from his retirement, but he has a truck payment and he owes about $100,000 on his house. I'm debt-free. I own my house, my car. I don't have any credit card bills. I've got money in the bank. I got IRA, a mutual fund.

How much money in the bank? How much IRA and mutual fund? Fund?

Well, not a whole lot. I've got about $40,000 in savings in the bank and $129,000 in an IRA and about $30,000 in a mutual fund.

Okay. How much, how much is the pension?

The gross is $54,000, but the net I take home $4,600.

Wow.

Plus Social Security.

Huge.

Yeah.

Well, I see your pause. I agree with your hesitation. I'm trying to think how to— 100% of the time I'm gonna get married, and money's not gonna keep me from it, okay? But I need to be wise, and I think that's what's giving you pause. I want to— wise means I need to be very, very sure of this guy. Wise means I need to be sure of this guy's plan to quit borrowing money, get out of debt, and build wealth, get out of the debt business, okay, because you're out of it. Wise means maybe even a prenup that says you get something in the event to offset the fact that you gave up up the pension, because, you know, you're married 3 years, you get a divorce, you can't go back and get the pension. So you need to— you need— you would need to take a chunk of his hide with you.

That's true. That's one way of putting it.

Yeah, that's the way.

Otherwise, there's just too much risk.

Yeah, because you're living off $50,000 a year income, which is the equivalent of a half-million-dollar investment that you're giving up. "but I always would tell you to go live your life and be married." And I think your ex, you know, your first husband would probably tell you, "Live your life and be married. Don't let money stand in the way of a high-quality life and relationship," right? I would not, you know, I don't want to have that as my principle or my guiding light. So yeah, I want to do enough pre-marriage counseling and discussion and a length of engagement that I'm 100% comfortable. A. B, that would include us getting on the same page with money, which it means he's getting out of debt. C, I want a million-dollar life insurance policy on him. Okay, doesn't cost that much if he's healthy. Does he smoke? Is he overweight?

No, no, he's very He's very, very healthy.

Okay, then it won't cost a lot even at 59. You'll be surprised. Go to Zander Insurance. You'll be surprised how inexpensive $1 million can be. Buy like a 10-year policy or something. And then C, and this is the, or D, this is the last one, and I don't know how to do this one, but I really would want to come away from a, and maybe a prenup that faded away, that if in year 1 it'd be a lot, you would end up getting his house, year 2 you would end up getting less, year 3 you'd get less, year 4 you get less, and so on, to where after 5 years you maybe didn't get anything, right? But if this thing goes in and you've been scammed somehow and you gave up $50,000 a year, I would want you to come away from it leaving him wishing he didn't do this.

Well, let me ask you this. My house is paid for, and if he moves into my home and he sells his home for, say, $400,000, where does that money go?

That, that, that's the money that could be parked into an investment and have your name on it in the event something goes bad. That could be your prenup thing.

Okay.

Because that— it's not enough, but it's at least enough to somewhat offset this. I don't think we can solve 100% for this. The way you solve for it is the length of engagement to where you get super comfortable, detailed, in-depth premarriage counseling where you get super comfortable, and agreement and alignment on no more debt where you get super comfortable, and then a life insurance policy, and then been kind of a prenup lean on— and I don't usually do this kind of stuff, but I'm worried about you. And I'm trying to think if he called in and said, "Well, my fiancée wants to do this because she's given this up," would I tell him to not marry you if he called in with this? And I might. I'm kind of fighting against myself here a little bit.

It would feel different if it was him calling?

Yeah, if it was going the other way. But if I'm just designing this with you in mind only, which is not a good design, I, you know, I'm gonna tie up something of his, like the equity from this house, in a mutual fund sitting there for the first 5 years of your marriage, and then it's released, or something like that. You see what I'm doing?

Yes. And why the million-dollar life? Just in case he dies and I get the policy?

Exactly. We're gonna put you right back where you were, but a little better.

Better.

Okay. And my daughters are on— after my husband died, my— I put both my daughters— that probably wasn't smart, but on the deed of my house. I thought about putting it in a trust, but so if he moves in here and we're married 10 years, he doesn't get anything? The house goes to my daughters? I'm not even sure how all that works.

It's up to you. You can set it up in a will and a trust, and you need to do that too. So you guys need to sit down with an attorney and have wills drawn and have a prenup drawn on and work through this. And you need to sit down with some pre-marriage counseling. This is complicated. Yeah, but, um, you know, after 10 years, who do you want the house to go to? Your 10-year husband, or do your kids? I don't think either one's evil. I'd hate to throw him in the street so your kids got a house they didn't need, right?

But maybe he could live here until, until he died. I don't know.

Yeah, but if he's healthy, that could be a long relationship.

He's pretty healthy. We both are, actually.

Yeah, I probably wouldn't do that. I'd probably say you get to live here a certain number of years and then you have to move. Okay, so it's not— the rug's not jerked out from under him, so to speak, and your daughters, your daughters don't get all like, yeah, yeah, yeah, you know, kind of thing going.

So, but then his money, the sale from his house, should go—

it should go to him after a period of time. Okay, but if he, if he took off in the first 3 to offset what you're giving up is what I'm trying to figure out, you see?

Yeah, you're giving up a lifeline, so you need to make sure there's another lifeline.

I'm not usually— there's most the time I'm not a prenup guy. Um, I'm not gonna go that way.

Twice on the show you recommended it. Look at that.

Look at me. I'm— well, the one was, was consistent because it's a million six versus nothing, and this one is not that. It's just a— just trying to protect her. Now, what I tell him to do that is You know, he's got to be sure she's worth this.

That's true.

Because he's asking her to give this up, and he's got to pledge some dowry to cover this.

That's what—

compromise. I probably would tell him to do it. Listen, your home is your most expensive asset, and now you're ready to sell fast and for a lot of money. But in this wackadoodle real estate market, one mistake could cost you tens of thousands of dollars. Here's the deal. This ain't amateur hour. You need a pro in your corner, someone who knows how to price your home right, market it well, and negotiate the best deal. That's where a Ramsey trusted real estate agent comes in. To find one near you, go to RamseySolutions.com/agent. Agent. That's ramseysolutions.com/agent. Our scripture of the day is Exodus 15:26. Psalm 115:13: In your unfailing love, you will lead the people you have redeemed. In your strength, you will guide them to your holy dwelling. Simon Sinek said the joy of leadership comes from seeing others achieve more than they thought they were capable of. Beth is in Wilmington, Delaware. Hi Beth, how are you?

I'm good, how are you guys?

Better than I deserve. What's up?

So I'm trying to learn about I'm calling about retirement planning because nobody's ever taught me. I don't really have a mom or a dad, like a personal person to go to. I don't know anything about accounts, investing, long-term savings. I want to make smart financial decisions, but I honestly don't know where to start. I didn't know if maybe you could possibly help me.

Sure.

You called just the show. Well, I'm proud of you for going, "Hey, I'm 38. It's not too late for me to build wealth." wealth. And a part of that is, is setting the foundation. So we teach a process called the Baby Steps, and that involves getting out of debt, having an emergency fund, paying for the past so that you can then build for the future with all this margin. Because that's the main reason people don't invest. Number one, it's they're scared, they don't understand it. And number two is they don't have the money to do it. So where are you at on this financial journey?

Okay, so 3 years ago we filed for a Chapter 13 bankruptcy, so we no longer have any debt. Um, because of my medical, we sold our home. We now no longer have a mortgage. We paid for a brand new— well, not brand new, close to brand new home, so we have no mortgage. Currently I have maybe less than $3,000 in medical debt. It's new since then. Um, we make $157,000 a year. I make about $75,000, he makes about $82,000, $90,000 depending, you know, you know, how much overtime he has. We don't have any credit cards. Um, so that's kind of where we are financially.

You got any money saved at all?

That's the problem. That's where we keep going, where are we going wrong? We have no money saved right now. Currently, if I look at my bank account, we have $48.

That's a budgeting problem. And so we, we have an app called EveryDollar that we will gift to you, the premium version. So you connect your bank accounts You need to start making a plan for every dollar because you guys don't have an income problem. You got a spending problem.

Yeah.

So when you do that budget, it'll show you pretty quick where all your money's going when you start to list out every line item compared to your income. And the goal is to have money left over because you're probably taking home, what, $9,000 at least a month?

Um, yeah, you're about right. And I also get bonuses. I get about $2,000 in bonuses at the end of the month, depends Depending.

So I think you open that app after we get off. We're gonna give it to you, and you sit down with your husband tonight, turn off the television, all distractions, and then say, all right, let's start looking at June. We're right here at the 1st of June. Let's say, all right, June's income is here. What are we gonna do with June's income? And give every one of those dollars a name, an assignment that the two of you agree to. And when every dollar is assigned for $9,000 you're gonna look down and go, where are we spending all this money? Because you don't have trouble finding it all, because there's a lot of waste in disorganization and in impulse. And when you don't have a plan to guide you that you stick to, you have disorganization and impulse. And so, you know, you're gonna look down and see what you spend on Amazon and gag. You're gonna look down and see what you spend on restaurants and go, oh my God, no wonder we have no money. Money, and you're gonna look down and spend on whatever. So you don't have a car payment, you don't have a student loan, you don't have any debt except this little $3,000 debt?

That's the other thing. Okay, so no, I don't have student loans, thank the Lord. Um, I do have a car payment debt, which is $900 a month. Um, it's about $61,000 in total. I have been paying on that since 2023.

That would be a debt.

Yes, yes, that is a debt. I'm sorry, my mom and dad never taught me anything.

Of this.

That's absolutely nothing.

That's all right. But I mean, when you owe somebody a payment, you got debt.

Yeah.

Yep.

So I do have— I have that. And then we do have leasing. We lease the grounds that the home is on, if that makes sense. Um, but it comes with sewer, it comes with trash removal, and a couple of other things. And it's less than $1,000. Our mortgage loan was like $1,200 and climbing because of tax raising.

So, so are you in a mobile home?

A modular, yes, 2016 modular home. So it's newer, it's not old, but yeah.

Did you borrow money to buy that?

No. So here's the catch. The house that we had prior to this, we bought for $194,000. We sat for 5 years, maybe 6. I sold it for $322,000, what netted me over $120,000 about. So we took that After that, after, you know, all the background noise, you know, everybody we had to pay, I had about $116,000 that I could put towards this and I paid it. I have no mortgage now.

Mm-hmm. But it's going down in value.

Pretty much. That's the sucky part about it. But the hooker is, in the next 2 years, I have a decent lump sum that's coming in. We're netting anywhere between $100,000 and $200,000.

That's independent of something going down in value. You get that whether you bought something that goes down in value or not. Yes. Yeah, so we want to limit the time we own this modular home.

That's the other problem. We can't limit it. So we, we can't even climb out of trying to get a credit card or anything at this time. We're year 3, obviously, like I said, on the bankruptcy. So we're trying to build something like a credit, at least my husband.

No, you don't need to build credit right now. You don't need to build credit. You've been through a bankruptcy. You've you— I would start talking about how we sell this, even if we end up renting something. I would rather be a renter than owning a thing that's going down in value that's this large, because this $100,000 is going to turn into $30,000 in about 20 minutes, and I don't want that to happen. So need to start talking about that. We need to start talking about how we're going to get rid of this car debt, like sell it. We need to talk about how we're going to get in control with the money we have coming in, and then And then you're gonna see that you're debt-free except for the home or the rental, and we're gonna build an emergency fund. And then you can start talking about your long-term investing, and we'll walk with you through every bit of that. We can show you how every bit of that. But let's start with the basics, and the basics are let's get out of debt on a plan and build an emergency fund and not own a $100,000 item that's going down in value or a $60,000 item that's going down in value that has debt on it.

That would be the car.

Are.

So these are the things we gotta start— these are big moves. And after all you've been through, you know, you're kind of thrashing about trying to find some footing, and you just grabbed a slippery rock instead of a good one to step on. That's the problem. So hang on, we'll give you every dollar, also send you a copy of the book The Total Money Makeover and a copy of George's book. And between the two of those, the two— you read— both of you read both of those, and you start working this plan, and you just start listening to the show, and you call us anytime, and we'll help guide you through your new financially savvy life.

Yeah, but it's not too late. I just crunched the numbers for her. Even if it takes them a year to figure all this out, from 39 to 64, 25 years of investing 15% of their amazing income, they'd have $3 million. So I think we can retire with that kind of money.

You can still build a house. So the future sounds like this: if in the next 3 years you sell the modular home, rent a little bit, pile up some money, and purchase a home that you then later get paid off. You get rid of all your debt, including your car, and you start living on purpose with your money and build an emergency fund. 3 years from now, you start putting 15% of your income away. Then in just a few years, you're gonna have $3 million in your 60s.

Yeah, the most basic financial literacy— and this is something you've done for 35 years— is this: don't owe people money, increase your income, live on less than you make, and invest the difference. That's it. It's about 3 sentences. If you just do that, you will be unbelievably wealthy and have a great life.

And if you tell people that over and over and over for 35 years, people will call you genius.

You're a genius, Dave.

You're a genius.

Well, the hard part is doing it. It's easy to say it. It's fun. But you always say, you know, personal finance is— it's 80% behavior, it's 20% head knowledge.

You know what to do, but doing it's a pain in the butt.

She could have Googled how to get out of debt. The hard part is doing it. That's the tough one.

And so she might have.

I don't know why I put her on the show, but maybe she found us that way.

Yeah, it could have been.

If our SEO is working well.

I don't think that's a thing anymore, George.

They got rid of that with AI now?

Yeah, I don't think—

New acronyms.

I don't think there's been SEO in a while. How could you be that far behind?

Now I'm the boomer.

Who knew? I can't win. An aging millennial. Oh gosh. Oh my gosh.

I'm getting old.

Yeah.

But we did take two different hair calls on the show today.

I'm glad I was here for it.

Yeah. Me with none and you with perfect. Who knew? That puts this hour of the Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.