Transcript of Life Is Unpredictable, Money Doesn’t Have To Be

Normal is broke, and common sense is weird. So we're here to help you transform your life. From the Ramsey Network and the Fairways Credit Union studio, this is The Ramsey Show. I'm George Campbell, my co-host today, Jade Warshaw, and we're taking your calls at 888-825-5225. Join the conversation with your questions about life and money. Stacey is in Sacramento to kick us off. What's going on, Stacey?

Hi, Stacey. Oh, sorry, hi.

You're Stacey.

Oh, I'm Stacey. I'm sorry.

That's all good.

Hey, so here's my question. I am newly remarried. I am also married to a divorced man. We live in two separate states at the moment, um, due to custody reasons for 50%. We each have custody of our kids, but we see each other half of the month. I go there for half the month. He comes to see me for half the month.

Wow.

So we see each other a lot. But we're wondering how to co-mingle our finances, because we still need two separate bank accounts. We still live in two separate states. We need to file separately in two separate states. And I get child support that I don't necessarily want to co-mingle with his funds so that we can keep that separate for my kids. But you guys always talk about how when you're married, you should have a joint checking account.

When, when the custody stuff is cleared, uh, will your kids live in the household with the two of you, or will they what will be their end result with the children?

So what's going to happen is my son will graduate in five years, and so then I will move with him permanently.

Oh, so this is going to go on for five years.

Yes, it is.

Then you would move to be near him.

Yes.

Okay.

Yes.

So, whoo, and does he he has children as well?

He does have children as well.

Okay. And is he in a custody battle too, or he's just that's just where he lives?

That's where he lives, but he also has 50% custody of his kids.

Got you. Okay.

My.

And those variables will not change for the next five years.

No, they will not. They will not.

How much child support do you get?

I get right now 1,200 a month.

Okay.

Okay.

So if let's just play this out. You guys combine into one joint checking account, even though you've got double the bills, essentially, right? He's got to cover his household bills.

Yeah.

You cover yours.

Yeah.

Couldn't you just put that in an EveryDollar budget, and you have a line item, $1,200 child support, and or you have them all listed out for all the things the kids need?

Yes. It does change about every year, though. Um, so that's something we have to factor in. But also, like, taxes. How would we do taxes since we technically live in two separate states?

Well, that's something.

I own a home in my state. He owns a house in his state.

They're still married, so that's still something I would sort out with your tax pro on how best to do that.

Okay.

But the budget is actually simpler than it seems, because it still is.

Okay.

You guys taking that one sum of money, which is your two incomes combined, and figuring out the best split amongst all of your expenses.

Okay.

And if you if you really want to make sure that all $1,200 are kind of going towards your household, so to speak, I think that's actually.

Okay.

Really easy, because obviously your entire rent or whatever your mortgage is, I mean, that alone is helping to take care of the kids. So, you know, grocery budget, all that stuff is helping to take care of the kids. I wouldn't necessarily, um, whittle that down to, like, a direct thing. Like, they're a kid's field trip. They're backpacks, right?

Mm-hmm.

Just your whole lifestyle, having money going towards your entire lifestyle is funding the kid's lifestyle as well.

Okay. Okay. Okay. So.

So as far as taxes go, you're you combining accounts wouldn't affect taxes. What's going to affect your taxes is how you guys decide to file. If it's married, filing jointly. If it's separate.

Okay.

If it's head of household. And then you'd file for the income that you created in that state.

That's right.

So.

Okay.

That you can work out with a CPA or a good tax pro. You can jump on ramseysolutions.com and find one in your area. But I still think it's worth this is a very interesting scenario. We can call out this is strange.

Yeah.

This is not the norm.

100%.

And so I love that you guys are even considering combining finances.

Yeah, we're just trying to figure out, do we have, like, a combined finances, which is kind of like our play money, and then we each because I can be self-supportive of just my income, and he can be self-supportive of just his household. And then do we have a joint checking for when we see each other?

What bills do you actually split right now? Like, what is actually.

Nothing.

You're both carrying.

We split we're both yeah, I support my household. He supports his household.

Well, the reason I still like, uh, combining it is because there's going to be margin left over, and you guys are going to have shared goals together.

Yeah.

Whether it's a savings goal.

Yeah.

An investing goal, uh, a vacation goal, all those things, um, that you want to do with that extra money. And so I do like it being housed under one area, because then you've got the transparency.

Okay.

You can just see it in a way that I think is going to set you up in five years when you are under the same household versus having to kind of, like.

Okay.

Shift that entire mentality of, "I've just been taking care of myself with my money." Um, so.

Okay.

I'm also thinking long-term as well.

Yeah.

Do you guys have any debt.

Yeah.

Either of you?

No.

Oh, amazing.

That's great.

And you both have emergency savings?

Um, yes.

Fantastic.

Mine is much smaller than his.

Do you want it to be bigger?

But yeah. Um, I would, but for the time being, I'm okay with it.

Are you both investing?

Um, he is, and he the prenup is that he will, um, put into my 401(k) every year. That is part of our prenup.

Oh. Okay. So his income is going to your 401(k)?

Yeah.

How does that work?

So he'll just he's self-employed.

Okay.

Um, so he'll just put a portion of his income into we've made a 401(k) for me, so he'll put a portion into his and then max out mine every year.

Oh, do you work for him, or are you also self-employed?

Um, I'm also self-employed.

Okay.

Yeah.

Got it. Okay.

Interesting. Okay.

So it's not a traditional employer 401(k)?

No.

You are the employer.

No.

Wonderful.

Yeah, I'm the employer. So which makes it that we can move back and forth. So I see him about 10 days out of the month. He sees me about 10 days a month, and we flop back and forth.

Yeah. I mean, again, I still am a proponent for the one account that's shared, because then there's the expense of you guys going to see each other and traveling.

Yeah.

And again, having that on one budget with a shared income. And then you guys can make the decision together what makes sense, you know?

Yeah.

Spending X amount on flights or, you know, all those little, you know, nuanced things that go into planning a trip.

Okay.

Especially. Five years is a long time. You can build some serious wealth in five years if you both were aligned and got serious and combined the finances. So that's my greater fear is that you just kind of both get a little bit in your own worlds.

Yeah.

A little bit lazy, and instead of going, "Hey, we have this shared goal. What if we could save up this much? What if we could invest this much?"

Well, so I have a question. He just bought another property, another investment property. Do I put my name on that mortgage was my other question.

I mean, I would. I'm viewing this marriage as a normal marriage.

It's very.

In every fashion, except the fact that you guys have kind of this custody thing going where you're going to have to travel.

Yeah.

Other than that, I'm going to view it the same, which is we everything we do from here on out is a joint venture. We.

Yeah, so we see a house.

If we buy a house, we do a house together. If we buy property, we buy property together. XYZ.

Okay.

Was this a joint decision to buy the investment property?

Yeah. Yes, it was.

Okay. I think it's fair to have your name on the deed.

Let's put both of your names on it.

The mortgage is less important if you want to put your name on there, because you have to refinance into it.

Yeah.

But putting having your name on the deed will make it actually feel like it's yours.

Yeah.

Because then legally it is.

Yeah.

So that would be wise.

Yeah, we're trying to and that is our joint income together.

Great.

Moving forward.

Fantastic. And now we can both attack this mortgage together, knock it out together. I think all of that will create a better marriage and cleaner finances for the time being.

Carlos is in Eugene, Oregon up next. Carlos, welcome to The Ramsey Show.

Hey, thank you so much for having me. It's an honor.

We're happy to speak with you. What's going on?

So my name is Carlos, and I'm actually I live in Medford, Oregon, and I work I work for the City of Medford. And me and my wife, a fiancée, soon-to-be wife, I just I'm trying to look for ways how to basically put money to the side, or even if it's $20 out of my paycheck every month or $40. I'm trying to figure out, you know, I'm doing all the right things. I feel like that's right. It's like not eating out, making dinner at home.

So there's no margin. After you've paid everything, you've handled all your business, there's just nothing left.

Yes. And but this is the crazy part, because I've been watching Dave Ramsey since I was, like, 13 or 14, and I'm 26 now.

Wow.

And I have been noticing, little by little and I'm sorry if I get too specific or talk too long. I'm just very honored and just very shocked right now that I'm even talking to you guys. Um, I'm I've been noticing I've been having, you know, like $200 left to $400 left. And now right now, every, you know, paycheck that I'm getting, I pay everything else. Me and my wife or fiancée, you do split the mortgage, and I do take on a lot more of the, you know, debt that we have and all the big old.

So how much margin do you have today?

Margin as in I'm sorry, can you spell.

What's left over today?

Oh, left over today is $800.

That's great.

Okay.

And so.

And you have debt still? Yes, I do have debt. I do have a '06 Chevy Silverado. It's I owe about $4,500 left on that.

Okay.

Had it for two years. And then I have my fiancée's 2013 Chevy Tahoe that I bought her. I owe '19 on it, and now I owe '13.

Okay.

And.

And you guys are.

So I owe on those.

You're fully combined finances at this point.

Yes.

Okay. We can talk about that, but keep listing the debt.

So you got $4,500 on one, $13,000 on the other. What else? And then I have just one credit card. I believe it's my Capital One. All I owe is I mean, it's not that much. I owe left, like, $200 left on there, because I've been paying it down little by little.

Okay.

I used to owe $1,300 on it, but now I only owe $200.

Okay.

And then so here comes the issue. I back in the past, when my fiancée was pregnant, I did have a 2014 Dodge Ram. I believe it was a 2014. I just for some reason, the insurance and the it was financing, but the insurance kind of got messed up with the bank, and I had to pay like it was $1,000 a month for car insurance, and it was just very hard to look for any insuring.

Is that still the case?

That's right.

Nobody's paying 12 grand a year for car insurance.

Yeah, it's not.

For one vehicle.

Is that still the case?

What was that?

Is that still the case? Are you still paying $1,200 a year to this day?

No, no. To this day, no.

Okay.

It stopped about two years ago because I just couldn't.

Great.

You know, do it anymore. It was just very expensive.

But let's talk about.

Let's help you today, Carlos.

Let's focus on right now.

Let's focus on even though Carlos has been listening for 13 years, and it went out the other ear, because you've been going into debt over those years.

Okay.

So let's are you ready to actually get on the plan? You ready to actually listen?

Yes.

Okay. What do you make a month?

I make about $3,800 a month.

Good.

Does your fiancée work, or is she home with the boys?

She does work part-time. She is in school right now to become a nurse.

What's she bring home every month?

Probably about $2,900.

Okay, good. Now, we're going to give you every dollar so that you know these numbers like the back of your hand. You'll be able to plug both of your income in there. You'll be able to notice trends with your money. But more importantly, you'll be able to focus your margin, which is the extra money after you've covered all of your expenses. You'll be able to focus that margin on your top goal. And George and I are telling you right now, your number one goal is what?

Pay off that debt.

It's a.

How much do you have in savings?

Yeah, pay off that debt. Right now, I have about let's see, $6,000.

Okay.

You got $6,000 in savings?

Okay, Carlos. Why don't you reach over and pay off that $4,500 loan and the credit card?

Which, yes, that would be very smart.

No, I want an answer. Why? Not which, yes. Why aren't you paying it off today? You're telling us you're struggling with margin. We just showed you how to free up two payments yesterday.

And you've been listening since you were 13 years old.

Are we a wee boy? And you make $6,700 a month.

Yeah.

So you're telling me your expenses are about $6,000 a month just to cover the bare bones bills without even eating out.

Yes.

There was some hesitation there, Carlos.

Yeah.

I think it's time to do a budget. And we're picking on you because we love you, and you've been listening a long time.

Yeah, we've earned the right.

No, no.

So your homework tonight.

I feel like I've had yes, I feel like I've had just a hard time, you know, over the years, you know, from really small.

You have.

I mean.

You've had a hard time, but today again, focused on today, which is today, I'm seeing an income of, gosh, over $6,000 a month and not a ton of debt, to your point. It could be much worse and a lot of margin, but it could be more margin. With the amount of money that you're bringing in, I think you could probably be putting $1,000 or more towards debt every single month, along with this $6,000, so that we can knock out not only the car, but really get moving on this Tahoe, and you guys are free in no time. And then, yeah, now you can save up three to six months of expenses.

Honestly, that yeah, that's actually now when you're, you know, saying it that way and hearing it from someone else's point of view, it's wow.

Yeah, I think you're just caught up on the past. I think that you got to.

And a lot of life has happened.

Get the dirt off your shoulders and move forward and go, "Here we are today. We've got these boys. I've got my fiancée. We're getting married soon."

And when is the wedding, by the way?

I've got money. Let's clear the path.

You guys got a wedding date? Is the wedding paid for?

We don't have a wedding date yet. We were just we were going to get married this year, but we wanted to wait until, you know, she finishes school, because she's getting luckily.

Why?

She's getting all her school.

What's that got to do with what school got to do with getting married? You're already living together. You already got kids. You may as well make it legal.

Right? No, you do have a good point, but.

Right.

It's just she's getting all her school and, like, everything financially paid for already, so we just didn't want to, like, ruin that if we were to get married, because basically.

Because she has financial aid?

Yes.

Okay. There's a real answer.

And so.

Appreciate it. Thank you.

Yeah, so basically, she gets all her schooling paid for, so we would hate to, like, you know, mess that up or interfere with that, because obviously, when you get married correct me if I'm wrong. They probably.

It's going to.

Pay, like, one income for both of you, you know?

It's going to reflect differently. I understand what you're saying. I don't agree with what you're saying, but I understand what you're saying.

Okay. So the good news is, Carlos, you can free up two of your debts today. The credit card and that small car loan are gone. Right?

Okay.

Now you're left with $13,000.

Yeah.

And you freed up that car payment, which is how much per month?

I only pay $182.

Okay. So you just freed up that plus the credit card. So that's another $200 on top of your $800 you said you had at the beginning of the call. Now you got $1,000 extra to throw at that $13,000. So worst case, if you did nothing after this call and just took the $1,000 toward it, you'd be done in about a year, completely debt-free.

Okay.

And I think if you did an every-dollar budget, you'd find even more margin, and I think you'd probably be done in, like, 8 to 10 months.

I'm going 6, Carlos.

Wow.

You think you can do it in 6 months? Can you throw 2 grand a month at this thing? Out of the $6,700?

Let's go with 6. Let's go with 6 months.

I like that.

Let's light a fire under you.

Hey.

And know that we're watching, Carlos.

Call us back in 6 months when it's done. That's your challenge.

We won't.

We won't.

Where are they now?

Oh, I will.

Because it took you I mean, you've been listening 13 years, so I think it's time we try out the plan, see if it actually works.

Yes. And honestly, I've have gotten so much better, I feel like, you know, saving money and actually, like, spending money wisely and forgetting all these little things, purchasing these little things. Like.

That's good. You know what, Carlos?

I don't know.

I'd also work on your career, because I think you're a sharp guy, and I think this government job has got you pretty comfortable. I think making more plus spending less will create some unstoppable momentum with your margin and your budget. So I'm rooting for you to do it all, man. Get married, improve the career, get out of debt. Life is so much better on the other side of that freedom.

If you're new to the Ramsey Show, you'll hear us talk about the baby steps a lot, and that's because they are the framework we use to answer every single money question. It's the filter we use. So if you want to learn more, we've got a link in the description of the episode, wherever you're watching or listening. Jim is in Topeka, Kansas, up next. Jim, what's going on?

So. My question's on investments. I've been a Ramsey person since 2009. Helped me get out of debt, kind of slow to start investing. I really started investing slowly and then better at first, and about 13 years ago, over several jobs. A 403(b) I work in education, so I'm able to as I move one job to another, I just roll the accounts into the next account. My question is, I've been tracking how much I've totally put in, kind of setting it and forgetting it, and I've put in about $250,000 over the last 13 years, obviously starting at zero, and right now it's about $400,000.

Have you looked under the hood to see what's actually being invested?

Yeah, I looked at the accounts, and I told the broker, Aggressive, when I started several years ago, I don't live in the same city anymore, and I just kept it with the same money, man. So it's just mutual funds. It's just a variety of mutual funds.

So you got a guy.

Yes.

And you're not able to look and kind of see what the annualized rate of return has been on those investments over the course of the 12 years? You should be able to see that.

The problem is, is when I try to look at the over the years, it's because I've rolled into other accounts, so it only shows the most recent. So I started my most recent job five years ago.

What's the most recent? Over the last five years, what have you averaged?

So the last five years, it looks like it was about 10 to 12.

Okay.

But then when I look at the total, I would think if I had invested $250,000, I feel like I should have more than $400,000 at this point.

I mean, it is to your point, since you've been rolling it over and maybe those investments, what you've had invested in, has changed slightly, it's very possible that in the earlier years, maybe the rate of return wasn't so great. But it sounds like where they are now, 10 to 12% is okay. I mean, that's kind of the target that we talk about all the time.

I just I'm 45, and, you know, I don't want to set it for 15 more years and then look back and have been losing percentage over.

Which brings us to the bigger part of this conversation. The bigger part of this conversation is you can't just give it to a guy and hope that they've got it unlocked. You've got to understand what it's invested in, and you have eyes on it. You're watching it. You're making sure. It can't be 12 years later now I look at it and go, "Hmm, that doesn't seem right." That's a lot of time lost that maybe you could have made adjustments. So let's not do that going forward, is what I'm saying.

So how do you do I just call them and say, "I want to better understand, like, each one of the " you know, it's in, like, seven or eight different mutual funds, and I just I don't know what any of them I have never invested. I never read for this.

Well, all you need to do is map it against the Ramsey principle, which is four types of mutual funds. Essentially, you're looking at large-cap funds, which are the largest companies, mid-cap, small-cap, which is more of your aggressive growth, and then international. So 25% across, all four, is what you're looking for.

And when you select those funds, you can look and see what their track history has been.

You can see the expense ratio, what the 10-year return is. You can see any other fees that are involved, the fund management team, if there's been change in that. But what you want to look at is just make sure that you're not in any bonds or target-date funds, because sometimes they'll put you in those because they're going, "Well, you're 45. Well, you got to start slowing his roll here. He's not a young man anymore."

Or, "You're a first-time investor. We don't want to scare you away. He probably has low risk tolerance," something like that.

So you just need to tell them, "Hey, I want to be in 100% equities. I want to be all stocks inside of mutual funds that are diversified across these four types." And.

Because that'd be appropriate for my age. I mean, I'm not a young man.

It's appropriate for my age.

Yeah.

Even when I retire, I'm going to stay in 100% stocks, because I might live to be 95. So I'll have cash on the side to live on if the market, you know, takes a big dip temporarily, but in the long term, I want to stay in 100% stocks.

And I'll be honest with you, Jim, you know, I'm a big and I think you're doing that now. You're listening to this show. You're calling in. But that personal buy-in of making sure you understand things, you're taking time to research, what does it mean? What did George mean when he said large-cap fund? What did he mean when he said diversification? You really taking the time to dig into that is good, because it's your money. It's the biggest asset that you have. And so all of that is going to help you when you go into those conversations with your smart investor or with your investment, you know, professional, to understand what they're saying, and then you're not going to feel like you're bothering them when you're asking questions, because it's going to feel more like a conversation.

Yeah, because, you know, it was someone I knew. It was someone I was friendly with, and he sold it to me when I was still teaching. And, you know, you trust these people, and then I didn't I didn't do my diligence. So if I find that I'm not getting is there a way to move off of the to move away from someone if you don't feel like I'm getting any advice?

Oh, I'll fire. Yeah, you can fire them and say, "Hey, thank you for the last however many years, but I need to move on. Thank you for your services."

Okay. That's really good to know, and I will take all that in there. I got some Googling to do and do some research on my own.

Yeah, we'll help you out, too. There's a great investing guide we have. It's totally free if you jump on ramseysolutions.com/guide, and we'll drop a link in this show description for anyone else that wants to access that. But that's a great primer for understanding what are we talking about when we say investing and diversification and large-cap, and what should we expect, and how do we not lose our money like it's a vending machine. So those are all good questions to be asking, and I'm glad you're finally going to get in the driver's seat, Jim. That's an exciting moment. All right, Martha is up next in Houston, Texas. What's going on, Martha?

Yes, hi. I'm excited to be on, and I am glad that Dave is not on the call with me, because I know he doesn't like Teslas.

Oh, there we go. You're right. He would not like this call at all. But I'm happy to take it.

Thank you. My question is, I am happy my husband and I, we just wrote the last check to pay off our 2023 Tesla yesterday.

Nice.

And, yeah, so my question is, should we plan, I say long term, maybe three to five years to just save between now and then for a used battery, a refurbished battery, or a new battery, or should we just plan to you know, knowing the battery is going to eventually go out, right? Should we just start planning to save for a used car when the battery goes out?

What makes you think the battery is going to go out?

Yeah, what's the average time on those?

It's a long time, but there's no guarantee it's just going to go kaput. So I'll give you this example, Martha. My first Tesla, I bought, I think, 2022, and it was a 2013 with six figures of miles, 166,000 miles, and I sold that thing to another team member just last year, and it's still running great. It's at, you know, 75% battery capacity. And so I don't believe in this, like, "Well, every 10 years the battery is going to die." So what I would do in your shoes is just start a sinking fund for car, and one day, if that does happen, you guys can decide, "Hey, is it worth just replacing the battery, or should we just get a different car at that point?"

What's it cost? I'm just curious. What's it cost to replace a battery?

Probably $15,000 or so. It's not cheap for the actual battery that holds, you know, the charge. Now, there's a 12-volt battery that's, like, $200. So you might have to replace that. That's not a big deal. It's the big one under the car that you want to be more worried about. But truthfully, I think it's paranoia more than reality that the battery is just going to die on you, especially for a newer one.

Yeah, yeah. Okay, well, that is what I needed to know. And, by the way, I love y'all's TikToks. I'm a huge fan, and, you know.

Thank you, Martha, for being on TikTok.

I see all the haters on there. They just don't know what's good.

I want Martha in the comments section on TikTok letting them know what's up.

I know. That's right.

That's fantastic. Well, from one Tesla driver to another, thank you for the call, Martha. That's fantastic. Just save up, you know, because the thing is, now cars are becoming like iPhones. It's just going to become obsolete technology, which is crazy to think about.

I know. That's terrible.

That's just the way the world is going, Jade. So at some point, you may want to go, "You know what? I got an iPhone 8. It's time to upgrade to the 16."

I've had this iPhone.

It's been a decade.

I don't even know which one it is. You know, I keep my stuff till the wheels fall off.

Well, you know what I respect? We get people that visit us from all over the country in the lobby, and we take pictures. And when I see a single lens.

Oh, that's somebody who's serious.

I'm like, "Man, that's someone who knows rice and beans."

Serious.

That's someone who knows sacrifice, suffering.

To a.

A single lens holding it down.

It's almost unhinged. It's extreme.

It's an iPhone 3G still holding up in 2026. It's impressive. It really is.

Hey, thanks for having me, guys.

Absolutely.

I'm going to give you a beef little background here. I'm 29 years old. I've had a pretty volatile, crazy, hectic, up-and-down roller coaster of a life since graduating high school. I have no debt through it all. I have a bachelor's degree, almost a master's degree. I've done a lot of crap. I've done a lot of stuff. I'm finally kind of getting my footing here. I work as a door-to-door salesman.

Wow. What do you sell?

And I just started I feel like I'm outing myself and the outfit that I kind of created, but I sell roofs, and I sell solar.

Okay.

Okay.

I just started working two years ago. Before that, I was a bit of a bum. I was a nomad. I lived in the back of a on a motorcycle, working odd jobs throughout North and South America. I worked as a commercial fisherman, bartender, bouncer.

You have lived multiple lives.

Yeah, as a teacher. Yeah.

Okay.

What's wrong with that? That's cool. You've done a lot.

You've experienced more than most will experience in their lifetime.

Yeah. That's what I'm told. And coming back here, I came back and started donating plasma, borrowing my grandma's car, and living in her attic. That was two years ago, two years ago, three months ago.

Wow. So this is a brand-new life for you, a guy making 330,000.

Is this utilizing your master's degree? Is that why you were able to kind of hit the ground running?

No. No, no. It's no, not at all. I got a master's in education. I got my bachelor's in management information systems. Never used it for a single day.

So how can we help you today?

Yeah, the question for you guys is, I still feel pretty empty, and I still feel pretty I'm trying to figure out, is it a me problem that I'm just destined to kind of just be a bum?

Well, I was going to ask you.

I'm a bum with money, I guess.

I was going to ask you how you're doing, because when you were listing out all of the things that you've done, it let me know I was thinking to myself, "Wow, this guy is adventurous. He really just likes to experience whatever life is putting in front of him." That was the narrative that I created. I wasn't thinking, "Oh, this guy is a lazy bum." Now, if you were, only you know that for sure, but that's not what George and I were thinking. And I was actually going to ask you when you said.

You've got a stacked resume and more skills than I ever hoped to have, so.

Yeah, when you said you were doing sales for two years, I was going to ask you, how have you done with that? Because that feels pretty stationary based on what you've been doing.

Yeah. Well, it's door-to-door sales, so it's like the front lines. It's like the no man's land of any company is knocking on a door and getting someone who had no idea what the product was to commit to a contract that's worth tens of thousands of dollars.

But you're good at it. You're good at it.

I'm good at it.

Are you living in a house now? Are you renting somewhere?

I own two duplexes. I bought three houses last year. I didn't know what to do with the money. I don't know what to do with all I really don't. I wear the same clothes every year.

You're not motivated by money.

I have an iPhone.

Are you single?

No, I'm not.

That's okay.

Yeah, I am. I don't have any family members. My mom passed away when I was a kid. My dad disappeared, and my brothers are all elsewhere. And I'm just feeling like, is there something wrong with me?

I don't think so.

Or is there something wrong with the place I'm living in?

I don't think so. I think you're a person.

I live in North America.

I think you're a person who is not motivated by money, and that's totally fine. Some people are not. So there's nothing wrong with that. And you're clearly a people person because you're able to win friends easily because you're able to do sales really well. I just think you need to transfer that and find some community to get around you, because when you have person-to-person relationships that are lasting, it does add a lot of meaning to your life. It adds meaning to your money. It adds meaning to why you get up in the morning and do what you do, even just having a couple of really great friends.

I'm almost on this quest of making money and making as much as I possibly can in the shortest amount of time.

But why?

I guess it's stressful. It's exciting, and I'm addicted to the adrenaline of it.

Oh, okay.

I do kind of like it. But also, it feels like we're in a very unstable time in American history with the dollar, with the debt, and with wars going on.

What does that have to do with you, Tom?

Well, it just feels like I'm preparing for I could make a million dollars a year, and I'm not going to feel stable enough to have a community. I'm not going to feel stable enough to have a community.

This has nothing to do with stability. I think you're going to realize you can make a million dollars a year and still not like the guy in the mirror and still have no purpose and still have no community.

And there's always going to be things in life that you can control, and there's going to be things in life that you can't control. But I wouldn't be spending my and don't get me wrong. This is a lot easier said than done, and it depends on your personality type. You're clearly the type that's having some anxiety over the state of the world. But my advice remains the same, which is.

Sure.

Focus on the things that you can control. Focus on the things that give you joy. Focus on the things that are going to build the life that you ultimately want to build. And I go back to the community piece because you do need people around you. Otherwise, the more you're kind of left to your own devices, the more you're kind of ruminating on this stuff over and over and over. And I kind of think that's what's happening here.

It's going to be Tom Hanks in the volleyball, man. That's going to be you on the shore going crazy in isolation.

Wilson.

So I think there's a couple of homework assignments for you, because you've already realized, "What do I do with all this money?" I don't even have so my question for you is, then what? Those three words are really powerful to ask yourself whenever you have any goal in life. And then what? "Oh, I want a Lamborghini." And then what? "Then I'll be super happy. Then I'll be successful." I want you to complete that sentence for anything you want to do in your life. And I think part of it is needing that community, needing that purpose. I think also, I don't know where you are in your faith journey, but I think getting connected to a local church and exploring that would be very fulfilling for you and a great way to meet people.

That's true.

It's nothing else. And there's a great book. Our friend, Dr. Arthur Brooks, just released this one called The Meaning of Your Life: Finding Purpose in the Age of Emptiness. I feel like it's going to hit you square in the face. It's going to be the perfect book for you. And he explores all of these things. And I've talked to him at a degree of what money can and can't do. And he tells us, "Hey, money really can't buy happiness." Now, buying experiences with people you love is one of the best uses of money, so we know that. And we know that just spending it on stuff doesn't bring happiness.

It can make you feel secure.

And so I think they're all wise things. And it's a good reminder. There's only three things you can do with money: give it, save it, and spend it. And I think you've realized, "I can spend it and have a good time for a short amount of time. I can invest it and save it." That's an adrenaline rush. But I think the giving side might be something to explore. And not just giving with your money, but what can you really sink your teeth into career-wise that would light you up, even if it made $60,000 a year instead of 300?

That was my next question for you, is if I'm going to start my own I already have I own a little team out here that does this kind of work. I own a real estate company now that it's all started happening this past two years, and I've just been investing in this and buying real estate now. And I'm trying to figure out, do I start my own company? And I don't really love selling solar. I'm just being honest with you. I'm good at it. I like making people laugh and telling stories and hearing stories, but really, I don't love the idea of solar.

What would the company do if you started your own company?

Let's go back to our sentence. And then what? You start a company, and then what?

Yeah.

We'll give you the book. We'll give you King Coleman's book, Find the Work You're Wired to Do. I think that will help you get some clarity around at least the career aspect of this. And I agree with George wholeheartedly. Man, step foot in a local church. I think you'll find a lot more than what you bargained for. I think you'll find the community. I think you'll find some sense of purpose. And I think you'll even the more you get around people, you'll start to figure out what your path is. And I think that you will be able to thrive from that. Being alone, it's not good for a man to be alone.

Sure.

Yeah, relationship helps too.

I don't want to take up too much time of you guys. I'm just not a religious guy. I can't fake you can't fake faith. You can't.

I wouldn't fake it.

You can't.

No, I wouldn't either. But you said you're an adventurous guy. You've tried everything. I would just try it. You got nothing to lose. You might make a friend or two, regardless if you have a spiritual transformation. And so I would try all of those things. I think you've got a great path ahead of you. You're a really sharp guy. You're only 29. Most people don't even start asking these questions until they're in their 40s and 50s and 60s. So you're early, man. You got so much time. So give yourself some grace.

Welcome back to the Ramsey Show in the Fairwin's Credit Union studio. I'm George Camel here with Jade Warshaw, taking your calls at 888-825-5225. Brandon is in Denver, Colorado up next. What's going on, Brandon?

Hey, guys. Thanks so much for taking my call.

Sure. How can we help?

So my question is about baby step three. So technically, I'm still in baby step two, but I'm going to make my last debt payment as soon as I get off of this call.

Fantastic. Way to go, man.

Yeah, I have a $1,000 car payment left on my car.

Wow.

And I'm ready to pay that off right after I'm done.

And how much will you have paid off in total?

13,000. It was a really dumb mistake I made straight out of high school. I bought a car, a brand new car, 22% interest rate, but that's completely done with now.

Wow, way to go. How old are you now?

So I'm super relieved. I'm 24 now. So it took four years to do, but here I am now. So now that I'm on baby step three, my question is, how much should I save? How do you know? Three months or six months or in between?

I love that question. I think it's a common question, and it's a good question to ask. So I look at a couple of things. I look at, are there dual incomes? And if there's not dual incomes, are there multiple streams of income for one individual? That would be something that I'm looking at. Obviously, if there's more streams, then maybe going down to three months is okay because there's just a little bit more security in the income. I'm looking at health. If you're a person who is in good health versus a person who maybe is having chronic health things going on and you're in and out of the doctor and there's things that have the ability to affect the amount that you're able to work, obviously, if that's the case, then get me to six months, right?

Yep, I'm single.

Okay. And one income stream, just one job?

Yeah, I have one job, one income. I make about 3,000 a month.

Okay. Then if I were you, I would aim for six months for that reason. Another factor I might look at is your age. If you're a little bit older and you're getting a late start at investing, I'd be okay with somebody saving three months so they can get started on investing a little bit sooner. And then maybe with whatever margins left, they can build that six months over time. So those are the types of things that would play into that decision. But for you, I think six months is great.

How much would that be? Do you know your actual monthly expenses right now?

Yeah, so my rent right now is pretty high. Like I said, I take 3,000 a month, and my rent is 980 a month. So it's almost a third of my take-home.

Okay. What do you do for work?

After that, I'm so I do construction, and I make about right now, I'm at 23 an hour. I've been there for four years, so hopefully, I'll go up a little bit here soon.

All right. So your rent is 980. And so can 3,000 cover all of your bills?

Yeah, I actually have about 700 in margin each month.

Okay, good. And so, I mean, on that margin, how quickly could you get that saved up? I mean, there's nothing stopping you also from getting a side hustle if you wanted to speed up the process.

Right.

Because think about this. $15,000, that'd be about five months for you if 3,000 bucks is what it takes. So at 1,000 bucks a month, if you were socking that away, it would take you 15 months to save it up. So if you want to speed that up and say, "Man, I'd love to have it in less than 12 months," well, now we need to find a little bit more margin to accomplish that. And that would be my goal for you.

Right now, I have 4,000 saved, and that's with my last car payment being debt-free.

Okay, great.

I still have 4,000 left.

You're a third of the way there, which means.

11 to go.

11 to go. And I still hold fast to, if you can add more to it by side hustling or picking up extra work at your job, I would do that. Because remember, when we're talking about baby steps one through three, for anybody listening, the key is going quickly. You want to be very, very quickly, gazelle intense. Those ones, you want to go as fast as possible. And then when you get to four, five, and six, then you can kind of lay it back and be a little bit more intentional. It's not about speed as much.

Great question, Brandon. Thank you. Charles is in St. Louis up next. What's going on, Charles?

Good afternoon. Thank you for taking my call.

Absolutely. What's going on?

Perfect. So me and my wife are considering selling both of our high-mileage vehicles due to current repairs that are needed for both and just buying one slightly used car. Would you recommend selling both of those and going down to one vehicle? And if so, how much should we spend?

Well, what's your family dynamic like? Do you guys need two cars? Would it be a real hassle to go down to one?

It wouldn't be a hassle. Right now, I'm working from home, and my wife goes into the office. No kids right now, but planning for one in the next year.

I'll be straight up with you, Charles. I love the idea of doing this, especially if the whole point is to get out of debt faster. How much debt do you have?

Currently, I have no debt, and the only thing we have is a mortgage.

Okay, so the point is to pay the mortgage off quickly? Is that the big goal?

Not really. We're also a military family, so planning hopefully to with the PCS cycle, maybe in the next three years, we're going somewhere else, so maybe renting it out after three years.

So what's the big goal for the money saved on doing this?

Not really a goal that we have.

It's just we don't need it.

You just want a more reliable vehicle? Is that what it is?

Yeah, mainly just to get a more reliable vehicle since we do have some repairs coming up.

Okay, so let's say, are you going to do the repairs and then sell, or just sell as-is with the repairs needed?

Thinking selling as-needed right now.

How much could you get for both of them by doing that?

We could get about 4,000.

Okay. And how much do you have saved for this upgrade car on top of that?

We could do about 40,000.

Whoa. What's your household income?

Household income after taxes is about 160.

Okay, fantastic income. That's going to be the nicest car you've ever had, probably, right?

Yeah.

And you have 40K sitting there ready to go outside of your emergency fund?

Outside of our emergency fund, yes, sir.

Way to go. Good job, guys.

I like this plan.

Yeah.

It's not too much your world. We always say, make sure your vehicles and things with motors and wheels add up to no more than half your annual income. Now, that doesn't mean you need to go get an $80,000 car because you make 160. But I think it's a reasonable car for your world as long as that income is sustainable. What kind of car are you thinking about?

Right now, we're looking at the Subaru Ascent, seven-passenger, just for future needs. You never know because you don't have to buy a vehicle in the future.

You're really planning ahead. Let's keep this thing for a decade.

Yep.

While we have three, four kids. That's fun, man.

That is.

You guys have the ability to do it. You've created the margin. You don't have any debt. You've saved up. You're paying cash. It's all green checkboxes here.

Perfect. Or should we just get the cars fixed and keep them?

Well, that was my other thing. I was like, if it's too grand to keep the cars, it's not like they go bad after 100,000 miles. They're just some more maintenance and repairs. You guys can afford to do it. So if you're happy with the cars, you enjoy them, just do the repairs and keep your 40 saved for that rainy day and for that future car fun when you do have a kid and life changes more dramatically. So neither here nor there, or you could just fix them and then you'll hopefully get that out when you sell them either way. So you've got a couple of options here. All of them are good because you're doing it the smart way. Thanks for the call.

Andy is up next in Baltimore. Andy, welcome to the show.

Hey, thank you guys for taking my call.

Absolutely.

Hey, how can we help? I just need some financial advice, really. I was in a well, I'll get to the point real quick. I was in a major motorcycle accident three years ago that left me and my wife both disabled. I'm in a wheelchair. Wife has a traumatic brain injury. And not to mention, before all this, I used to work at the Port of Baltimore, making around 120,000 a year. Now we're both on disability, bringing in around 70,000 a year.

Wow.

Okay.

I'm so sorry, Andy. That's quite the uprooting of your life. How have you guys been making it these last three years? How has that journey been?

It's definitely been really, really tough. But we spent six months after the accident in the hospital. And what's kind of crazy about all of it is I was in a coma for six weeks after the accident. Wife was in a coma for five weeks. Wake up out of the coma to find out not only am I paralyzed, but my wife's actually she has the brain injury and also she's pregnant.

Oh my gosh.

Wow. Yes, two weeks pregnant. And mind you, we stayed in the hospital six months. My first son got delivered healthy as could be. Nothing wrong with him.

That's a blessing.

And then I tried to also to when we got out of the hospital, we had a little bit of family help up here, helping us out with the kids and all. But of course, they can't stay forever, so everybody had to go back to their regular lives and everything like that. And so now it's just me and my wife in a three-story townhome with three kids, and the port will not let me come back because I'm in a wheelchair. And the work I used to do before this was all physical.

Yeah. What are the ages of the three kids now?

13, 7, and 2.

Okay, 13, 7, and 2. And obviously, your wife has the TBI. You're in a wheelchair. You can't go back to work at the port, but is there another type of work that you could do from your chair that would allow you to bring in some income to supplement the 70K?

Yes, and I'm available to all open options. The only issue is I don't have a background as far as a college background. So any job I get, I'm going to start, I don't know, $20 an hour, right? And then as soon as I start making that, then disability will drop.

What's the limit that you can earn before your disability drops?

1,600 gross a month.

1,600 gross per month?

Yep. And I said, "Anything over that," they said they start cutting. I think the kids are the first to go.

Okay, so what if you started there and what if you just said, "Hey, we're making 70K. We've had a complete life upside down moment, and if we can bring in an extra $1,600 a month to supplement our income, that would allow us to do X, Y, Z," and you guys fill in the blank. And if it allows you to do what you need to do, maybe you hold off there for a while. And then maybe there comes a period of time when you go, "You know what? I think we've adjusted to this new lifestyle. I actually have my eyes on a career path that I think could earn me more than $70,000 a year.

You've got a guaranteed cushion right now, which is nice as you try to launch into the next thing. So tell me about the 70K. Is that all SSDI?

Yeah, so we get SSI for the kids. I think they get like 900 a month apiece for the kids. And then I think I get 1,900 and my wife gets 1,200.

Okay. And that makes up your 70K for the year?

Yes. And then also too, I was just going to throw in there that I do have I got 50K in the bank and I do have 50 grand in annuity at the port. The problem is at the port, if I touch that, they want 18%.

You're saying if you cash it out?

Yeah. And I've tried my butt off with trying to get down there and get back to work. I don't want anything.

How is the annuity structured?

I'm not too sure about that.

Okay.

Yeah, I'm not sure. I mean, I know when I was working, so the way it got accumulated like that is every hour I work, the company will put $5 in your retirement, and then you would put $5 into it to match it.

But you can't take that and roll it over into an IRA without it triggering penalties, is what you're saying?

I'm not sure.

It sounds like it'll take an 18% haircut if you try to withdraw the whole thing.

Right.

I mean, you could definitely you could sit down with the SmartVestor Pro just to double-check it and make sure that that's actually the case. What I really want to know from you today is, what's you guys' budget look like with this money coming in from SSI and SSDI? Is there any margin left at the end of the month?

Yeah. So our monthly expenses are around about 45 to 4,700. And mind you, the disability a month puts us right over 5 grand, I feel like. And we got a little bit of leeway, but I mean, you don't see it that much every month. I feel like the bank account, honestly, stays around about the same.

So it's around 3 or 400 a month. Is that fair?

Yeah. Yeah. Yeah. Around something like that. Yeah.

Okay. So what I would suggest, and I don't know if you have this already, do you guys happen to have an EveryDollar budget?

No, we don't.

Okay. We're going to give you that for free. We'll give you a year's subscription for sure for free. And I think if you guys sit down tonight and you plug in all the numbers, again, the 1,900, the 1,200, the $900, and then all the expenses that you guys spend money on. And something that will help is go back and look at last month's bank statements, and that'll give you a real clear picture on this is what we spend on groceries. This is what we spend on picking up food. This is what we spend on all the different things. Fill those numbers in the budget, and I think you're going to understand and see, "Okay, that 3 to 400 dollars in margin, this is kind of how it's been getting eaten up."

Yes. We have 18,000 left in the card to pay off, and then I have 3,000 on a 25,000 credit card, and that's it.

Okay, good. I'm so glad.

And a house too. I do have a house. I paid 265 for it. I owe 230 on it now. I probably could sell it for 300.

Well, I don't think we need to sell anything just yet. How much is your mortgage payment?

1,698 a month. So like 1,700.

Okay. So I would just chill on the house right now. Again, you guys have had a lot of changes happening.

It's a reasonable part of your take-home pay, so nothing's on fire there. And it sounds like you've got your expenses under control. The key for you guys is making sure that you can live off the 70K with room left over to still live life, save for the future, all of that. And it sounds like you can pay off all of your consumer debts today with what you have in savings, right?

Yes, I can. I just didn't know if that was the right thing to do. I get nervous about taking a lump sum of money and just dropping it on something. That's all.

Well, the good news is it's not all of it. You've got 50,000 in the bank and you've got $21,000 of debt here. So you'll still have a nice cushion.

30K left over.

And with the 3 to 400 dollars in margin, you could build that up to six months. And I think if you do that, you'll really feel a sense of security. And like I said, there's still an opportunity for you to go out, pick up a little side hustle. Maybe it's a customer service gig or something and pull in another 15, 1,600 bucks a month. And that would really feel good, I think. Now you've got some money you can start to invest.

And you free up all those payments on the debts, which is also nice. So I would definitely pay it off.

That would be a big chunk.

You're not going to be in a lurch. You guys have margin left over. You'll rebuild the savings. I mean, it sounds like 30K is plenty for your emergency fund anyways. So that's a good spot to be. But I'm so sorry about your situation, Andy. That's heartbreaking.

I mean, if he could start to pick up a side job, I mean, they've been living off the 3 or 400 dollars of margin. Let's pretend he gets a side hustle for 1,500. He starts investing 1,000 of that into a Roth IRA. I mean, that's a great goal to have and to just keep working forward.

Still create a nest egg. Yeah. And the truth is, I just pulled up the stat, Jade. One in four people will become disabled before retirement. So a lot of people, we talk about term life all the time. If you were to pass away, what's going to happen? And so we talk about having that in place. But long-term disability is crucial. And luckily, Ramsey covers team members here with long-term disability insurance. But if you don't have it, reach out to Zander today because this is not a situation you want to be in where you're hoping to get SSDI because that can be slow, can be hard to get. 65% of the initial claims were denied in 2009.

Taylor is in St. Louis up next. Taylor, welcome to the show.

Hi. Thanks for taking my call.

Sure. How can Jade and I help?

So a little background. Me and my husband have been budgeting with the EveryDollar app for about a year now.

Awesome.

Actually, yeah, we just renewed our subscription. But last year, he was traveling. We do live off of his income specifically. And actually, last year, I was babysitting at home. So we were having a little bit of supplemental income, and we were making a significant amount of money that we were able to obviously pay off two of our debts in the process and really trim down some others. But this year, we've made a big adjustment because he's no longer traveling, and now I am going to school and not babysitting.

How much is it?

So my question is.

What's a low month? What's a great month?

A great month is probably around 8,000.

What's a bad month?

A bad month would be like 3 to 4.

Okay. And when you do your EveryDollar budget, how much do you guys need to have to just kind of keep the ship rolling? Not all the bells and whistles, just what's that bare minimum number?

I would say a good week because he gets paid weekly. A good weekly income to be able to pay all the bills, including gas and groceries, would be about 1,000.

So $4,000 a month is what you need to make your budget run?

Yeah. Yeah.

So even on a low month, you could scrape by?

Yes. We do not live on any sort of credit cards. We definitely make ends meet.

Good.

Do you guys have any debts left?

We also have three children.

Well, that's why I asked about what it actually takes to make your budget run. Because if you tell me, "Hey, it takes $4,000 that covers rent, groceries, gas, all this, all that." Now, we may not be going to the movies that month, but that's what it takes for us to do what we need to do. That's pretty great. The bigger question then becomes, how often does he see a month that's above 4,000? Because then it's like, "We got to see margin sometimes. Otherwise, we're not going to be able to accomplish any other money goals."

Yes. So summertime is obviously we've had a great year this year, not a ton of rain out days. But as winter is approaching with this new job, he's made me aware that this specific company is known to sit their men pretty frequently if it's even just a little bit of bad weather.

So could he do something else that day, for example? Side hustle?

I do have an uncle that he has his own electrical business that he has offered to let him obviously help him on those days. But it's definitely not enough money to be able to make up for the day that he's missing.

What's the type of work he's doing specifically, your husband?

He's a heavy machinery operator.

Is there another company? Is there someplace else where he could do that type of work where it's a little more steady?

I mean, there's a ton of companies, but he works for the union. So he can basically hop company to company. But we prefer him to stay union just based on the fact that as a family of five, we don't even have to consider paying for insurance because it's completely paid for.

True. And I'm just floating out ideas. If there was another opportunity that was non-union and it paid more, it was more stable.

Let's say a 8 grand a month guaranteed.

Yes.

Now you could budget for the health insurance or that's maybe subsidized from the employer. So it just might be worth looking at the options for the long term if this is going to be a stressful way to live. But the simplest way to budget when you have a regular income is to have a peaks and valley fund where on a great month, you know you don't need it all. So let's set some aside over here in savings, and then we can pull from that when we have a really low month.

Yes. And that's what we've been doing. I guess I'm just getting a little nervous for the winter time.

Well, if you've got that money there, I mean, that's going to make you feel a lot better. The next question I have for you is your schooling. At what point will you be finished and what will you be doing and what will you be earning?

I'll be finished in about two years. I'm actually doing nursing, and so I'll be making anywhere between 70 and 120.

Okay, great. So we've got two years of kind of grinding it out.

It's not forever.

It's not forever. If you do what George said, it's tough. I'm not going to lie. I've always been on an irregular income, and it does have its challenges to it. You have to be on top of it, maybe a little bit more than someone who has kind of that steady 9:00 to 5:00 paycheck. But I think if you do all of this, it's going to work out. And in the months where it's tough, just do that prioritized budget where it's four walls first. Maybe you have a month where there's only 3,000, and you're like, "Man, I really don't want to pull from that peaks and valleys." Priorities first. And if there's a couple of things that you can cut out a little bit more to not have to dip from that peaks and valleys, then that's even better.

I'm so proud of you guys for making this work. That's a hard challenge to still do a budget because a lot of people think, "Well, my income's not consistent, so budgets aren't going to work for me."

No, you need to budget even more in that case.

No, it's been a challenge, especially well, his parents are very frugal, and they also make a significant amount of money. And so they really like to involve us in things that require a higher income. So a lot of times we have to say no.

Yeah, that doesn't sound very frugal.

That's maybe for them.

Well, yeah, for them. Yeah, it is.

Well, thanks for the call, Taylor. I'm proud of you guys for sticking to that budget, and you'll get the hang of it. It takes a little bit, a couple of months. You guys have been doing this a year now, so you clearly know your numbers. That's half the battle. Jalen is up next in Atlanta. Jalen, welcome to the show.

Hi. Nice to be here. How are you?

We're doing great. What's going on?

Hi. I'm Jalen Martinez. I'm 27 years old, and I live in Atlanta, Georgia. And three years ago, I made a big mistake. I bought a car, a 2023 Toyota Camry at a 19% interest rate and a $814 car payment.

How much was the total cost of the car?

The total cost of the car was $61,000.

Oh, I'm hurting.

They make $61,000 Camrys?

I didn't know that was a thing.

Yes.

And the bigger mistake was not the $61,000. It was the $61,000 on a Camry.

That's pretty wild, man. Okay. So it's been three years. Where is it at now? What's left on the loan?

So I paid 28K on it, and I still owe 27.

All right. How much do you make?

I make $5,700 a month.

Good. All right. And what's your question?

Well, I've been watching the show recently, and I want to get out of debt, but I don't have any other means of transportation. I do believe that I will be okay without a car for a while. I am a truck driver, so I'm not home very often. And the reason that this question has sparked my interest is because I recently had a dealer offer me 23K for it when I was doing my oil change.

You owe 27. If a dealer would offer you 23, I wonder if you could private sale it for the exact cost that you owe.

Have you looked into private sale? See what it would be worth?

I haven't looked into private sale yet, but I did ask some other dealerships, and the 23K was the highest offer I got.

Okay. Have you done the Carvana, CarMax, all of those as well?

Oh, no, I haven't done those.

I'd get offers from everywhere, and that'll give you at least you'll know your sort of floor of, "At least I can get this." Then go see what your car is worth on Kelly Blue Book for private party value, and you might find you could sell it on Facebook Marketplace for 26 and only be 1,000 bucks underwater. Do you have the difference in cash?

I do have a difference in cash, yes.

Great. I like this plan. I would sell that thing. It's just too much of your world. For a guy making 68 to have a car that you bought for 61 is wild.

But then when he has the payment freed up, he can save up very quickly to get a $5,000, $6,000 beater that you can drive in the meantime when you're not on the road.

Sock away 1,000 bucks a month. You got 12,000 bucks in a year. It's awesome, man. Way to go, undoing the mistake.

George, how you doing, man?

I'm doing great. Thanks for the excitement. Woke me up.

Awesome. Awesome. That's what I'm talking about this afternoon. Look, I got a big question for you. I completed all the seven baby steps. My wife and I, we worked really hard for 10, 11 years on this bad boy.

Wow. Way to go.

We were finally able to get debt-free at the beginning of this year. So I finally do my debt-free screen.

We'd love that.

I didn't call back then. So I'm debt-free. Woo woo.

Here's your mini one for now.

But the second part of this one here is, unfortunately, a month ago, I lost my job. And the craziest thing about this is how much peace I have over the whole ordeal. But I've been in traveling sales for the last click here. And my biggest question is, I was making about 120 a year, and we were doing pretty good. We're living off about half of that.

So you were making 120. You lost the job. Was that the only income source for the household?

Yes. Yep.

Okay.

Yep. And so our house, we paid that off earlier this year, and it's probably worth about 450.

That's great.

We have about 300 invested across different 401(k)s, a couple of different brokerages, but. And we got about 20,000 in our son's college fund, and then about 60,000 in our emergency fund.

Good.

And so my biggest question here is, after losing this job, I mean, I have so much peace over the deal. I've been praying for a long time that the Lord would kind of help me out and find something where I could stay local instead of travel. I used to travel the whole East Coast here as a traveling salesman.

What were you selling?

Ag chemicals. Yep. Yep. So the ag scene is kind of tough right now, and just with some terrorist situations, and the ag economy is a little bit undergone.

But do you want to stay in sales?

Well, no. That's what I'm calling to kind of see if it's all right to transition into something. I have career passions other than agriculture. I mean, I do love agriculture, but.

What do you want to do?

I want to jump into the healthcare scene. So some of my education has been towards that. And with about maybe three or four months of clinical work, I can jump into a healthcare field that allows me to offer hope and healing to people. But the catch is, it doesn't pay a whole lot to start out with. It's kind of one of those things where you got to jump into it, and maybe after a couple of years, you might be up to 80 or 90.

What kind of role is this? What would your title be?

It would be a medical lab technician is the role. And then so you can kind of jump up with the degrees I have into a medical lab scientist after a couple of years of work here.

Is there any other education that's required?

No. I know. I've been taking classes. I mean, I graduated from NC State 15 years ago and had a strong career in agriculture, but I'm kind of jumping into this healthcare profession. But I've taken classes all along just because I enjoy taking classes, and it's kind of been always something that I've been interested in. Just for personal health, I mean, I'm really into personal health, but I just want to help people, man. That's at the end of the day.

Well, you guys were used to when you were making 120, you said you were living on half that. So you're used to living on 60. And the good news is you've set yourself up beautifully. I mean, you have no debt. Your home is paid off. So is 80,000 the highest end that this pays, or?

Yeah. I mean, it's probably 80 to 100, somewhere in there. I mean, it's never going to be something what I'm used to.

I mean, I don't think that's a horrible thing. You'd be in a career field that hopefully you enjoy and that you love. You're making 80 to 100 thousand dollars a year with no home payment, nothing else going on.

The key is, do you have enough margin after covering household bills that you still can fund college, fund retirement, save for the vacation, upgrade the car, and have a great life? So if you can do that, making 60K as a lab tech, that's great. And then try to increase your income and grow your career from there. But I mean, you guys have created a situation where you've earned the right to do what you want and try it out. Now, the key is, what are you going to do in the meantime? Are you going to go get another sales job?

Oh, no, that was kind of the question.

Can you go get a lab tech job tomorrow?

So I do have a little bit of a severance where I can do the severance or do the clinicals while I'm taking or grabbing the severance.

How much is the severance?

It was about four months. So the timeframe, the Lord is really working these things. And that's.

So four months.

So that's 20,000.

You can finish your clinicals and get a job.

Yes.

Cool. That's not a bad plan. I mean, I just would try to not touch the emergency fund. But if you're saying you can live off the severance, cover all the household bills and more while doing the clinicals and cash flow, all of that, and land a job four months from now, go for it.

Yeah.

That's great.

Awesome. That's what I feel like, and I feel like that's what the Lord's steering me towards. But some days, I kind of get a little disheartened when you kind of just think about the financial situation as far as we were pumping the savings pretty hard. And that kind of did feel good at the end of the day. And when you listen to Dave Ramsey, when I listen to Dave Ramsey all the time, it's all about living and giving one day like no one else. And I just feel concerned some days like, well, I'm not going to be able to be as generous to certain things that I have in the past.

Yeah. You're going to be a present dad. I mean, you've been on the road. So this is going to be a great life change, even if this is for five years. And maybe you go, "All right, I did that. That was great. I want to try something else." You're young. You got time. You've got margin. Those are the key ingredients here. And so I would definitely pursue this with the hopes of, I think you can make 120 again. And it might be there might be a different career path there. But healthcare, the sky's the limit. So I would go for it, man. Way to go. Thank you for that call. That's a tough one, Jade, because a lot of people we took a call earlier from a guy making $330,000 doing door-to-door roof and solar sales.

There's more to life than your income, and your income is certainly not your value, and it doesn't denote. We always say your net worth is not your.

Self-worth.

Self-worth. And so I think this is one of those things where you said it beautifully. When you've worked hard, you've paid off the mortgage, you've invested the money, you've done all of those things that make you a financially responsible adult, you've earned the right to do the thing that maybe earns you a little less in life, but you're a lot happier person because of it.

Yeah. And maybe once the kids are out of the house, the wife goes back to work. And now you've increased your income on the second half of your life, and you're able to do all the things that you wanted to do and give like you want to give.

Yeah. Absolutely.

So it's all about your budget, your lifestyle. And if you can keep that low like he did, you're going, "Oh, we don't need 120." Now, if you make yourself live on 120 and you increase your lifestyle, it's going to be really hard to go down to 60. It's real hard to go backwards with your lifestyle. So that's my caution to anyone out there. As you make more money, try not to just go spend it all. Now, you can enjoy some, save some, give some. But if you're always riding the line of, "We spend exactly how much we make," it's going to be a tough life, no matter where you end up.

Welcome back to The Ramsey Show in the Fairways Credit Union studio. I'm George Campbell here with Jade Warshaw. Open phones at 888-825-5225. Melissa is in Phoenix up next. Melissa, welcome to The Ramsey Show.

Hey. I'm so grateful you guys took my call. I have a quick question about the baby steps. I've recently completed baby step two and was preparing for baby step three. Had a little discussion with my family, and my brother reminded me that I had co-signed a solar loan for him several years ago.

Oh, boy.

So my question is.

You had to forget about that.

And why is he reminding you? That's even scarier.

I know. So my question is, he says that there's about $30,000 left on it. Do I now just start paying off that loan because I've co-signed on it? I have no.

Is he not paying?

Belief that he is. He is absolutely making the payments. He's current on it and everything.

Okay.

Do you have an emergency.

So do I let him? I do not have an emergency.

You're starting baby step three. You did say that.

Yes.

I wouldn't start paying it. Now, know that it is your debt, and in the case that he does stop paying, it's going to be on you. But at this point, he can continue paying it, and he can refinance it and get your name off of it, can't he? How bad is his credit?

I honestly have no idea. I did not even think about that. That's a great idea.

Look into that and look into a co-signer release as well. I don't know if he's doing better financially now. The fact that it required a co-signer tells me something at the time. But you said this was years ago?

Yeah. It was about seven years ago. And as a matter of fact, the company he had installed is no longer in business, but the finance company is.

Yeah. They're going to collect.

Well, I was going to say, if for some reason he's not able to refinance and you're not able to get off this, I would make sure that when you save up that emergency fund, I didn't make sure there's at least 30,000 in there. So if for some reason it doesn't sound like you see this happening, but if for some reason he stops paying, it becomes a problem, you could reach over there and pay it off and clear your name out of this.

And then just go back to baby step three.

Yeah. It would temporarily put you back into baby step two if something were to happen with this co-signed loan. What's been the conversation lately around this? Why did he bring it up?

Oh, so we had a discussion. I was like, "Oh, I'm going to be debt-free in November. Woo." And he said, "Oh, I'm already debt-free. Whatever, whatever." And I said, "Oh, that's crazy." Because you already paid off your solar? It was like $90,000. And he's like, "Oh, no. I didn't." So that's kind of how it came up. And then I said, "Oh, yeah, we need to look into that because I think I co-signed on that." But I knew I co-signed on it, but I wanted to be gentle about it.

So he doesn't have debt except the solar loan. Is he making extra payments toward it to get rid of it faster?

I don't know. I didn't ask him yet.

Are you a homeowner?

I am.

Okay. I mean, obviously, as long as there's if you've paid off all of your debt, your credit score is not going to roll to zero because this is an open line of credit. And so just know that's going to affect you and the things that you're going to want to do going forward because now you've got a credit score and there's this thing on your credit score that it's not even fully in your name, but it is affecting you. So that's kind of the bigger that's the bigger part of this. And that's probably the part that I'd bring to him and say, "Hey, I'm really trying to do this no credit score thing. If you can get me off this loan, I'd really appreciate it.

Also, just side note, what the flip is going on with people paying $90,000 for freaking solar?

I don't know. But our guy from the other hour was the one selling it to him.

That guy making 330 grand, he's making money off of that.

I'm sure he is.

ROI 15 years later once you break even on your electric bill. Insanity. Okay. Andre's up next in Harrisburg, Pennsylvania. What's going on, Andre?

Hey, guys. Thanks for having me.

Sure.

Yeah. So a quick one here. So my wife and I were 28 years old. But outside of our house, the only debt that we still have is around about $30,000 towards our student loans. I say ours, my student loans. At the same time, so I realize I did your steps a little bit in backwards order. We have an emergency fund already of about $15,000 and another 30 in an investment account, so another 30,000 that we've had that for a little bit over a decade now. And that's on average brought in about 10% every year.

I mean, well, I definitely would not touch the invested money.

Is that retirement or is that just taxable brokerage account?

And it's broken up into a couple of different things. It was something that was set up whenever my wife's father passed away, like I said, over a decade ago. And it started out as a small amount and has just done well.

But what type of account is it?

Around 30,000.

Yeah. Are they IRAs? What is it?

I think some of it is IRAs. I'd have to look at the breakdown of it. All I know is that in the breakdown, it's down about 9.8% on average each year.

You're very caught up on these interest rates and on these compounding rates. If there's any money that's in a brokerage, if there's any money that's single stocks, any money that's not tied to retirement, honestly, that money's up for grabs. The 15,000, I would touch that money to start paying this debt off. I keep 1,000 there. The way we teach Andre is to make sure that you have $1,000 saved. That's baby step one. And then baby step two is to pay off all of your consumer debt first, and then you turn around on baby step three and save three to six months of expenses.

Gotcha. So dig into our emergency fund, leaving at least a grand in there. And then also, if there's stuff in the investment account that isn't tied to retirement, you say that's up for grabs?

Yeah. That's up for grabs. I mean, obviously, there's probably going to be some taxes on it. So account for that. It'll be minimal, though.

If you pulled out 15 and it's long-term capital gains, it's going to be 0 to 15 percent on that amount. So we're talking hundreds, maybe a thousand or two on that. So I wouldn't worry about that. But I would definitely do it to become debt-free today and then rebuild your emergency fund with all this newfound margin. You freed up the student loan payments, at the very least. Are you guys currently investing?

Like our 401(k)s? No.

How come?

So originally, my first job, we were investing towards it. I was matching up with it. Once we started getting a little bit more intentional about saving towards knocking off our debt, I stopped contributing towards my 401(k).

Okay. We're kind of doing the Ramsey plan.

Okay. Cool. Well, that's good to hear.

Yeah. So once you guys are debt-free, so if you follow through the steps, baby step two, knock out consumer debt with the debt snowball method. Baby step three, fully funded emergency fund. Now we can go back and do it in order, three to six months expenses. Then once you have that, start investing 15% of your household income, which is what? What's that number for the year?

Let's see. After taxes, we'd probably bring in around 90K.

So before taxes, it's going to be six figures. So we're talking over $15,000 a year invested for the rest of your life. You are going to be a multi-millionaire, and you're not going to be trying to arbitrage against interest rates from student loans and investment accounts.

All righty. Today's question comes from Jordan in Rhode Island. He says, "My wife and I have been following the baby steps and have questions regarding investing in baby step four. Is it better for us to contribute each time we get paid or save up to do the max contribution at tax time?" I mean, I'll tell you, I am a fan all day long of every single month taking 15% of that gross, setting it and forgetting it. So if you work for an employer and they have a 401(k), you just set it up with HR. It's happening automatically.

Earmarked is for investing, but now the car could use a repair, the home renovation. So I do like the idea of having that discipline to just do it every single paycheck, no matter what. And you're right, the employer side, I think, is the most powerful because it gets taken out of your paycheck to where you can do nothing about it. You set it at 15%, it's gone. You got to live off the 85 now.

Yeah. And you get used to like, "This is my paycheck." You're not hunting around for the rest of it like, "Oh, gosh, I really feel that."

You remove the room for human error of going, "Well, maybe we'll invest, maybe we won't." And the sooner you invest, mathematically, and research will show, you're going to have a bigger number at the end the sooner you get that money into the market versus waiting and stair-stepping it. So great question, Jordan.

Yeah, it is.

All right. Lindsay is up next in Charlotte. What's going on, Lindsay?

Hey, guys. How's it going?

We're just hanging out, having a great time. Excited to talk to Lindsay.

Thank you so much. Thanks for taking my call. I'm a longtime listener, first-time caller. And my husband and I went through FPU six years ago.

Awesome.

Totally changed our lives. We were able to pay off $180,000 of debt. We're now debt-free, going into baby step four. We're actually leading FPU at our church now. It's changed our lives so much. And now I'm a little I'm feeling a little conflicted about baby step four. So I'm just looking for some guidance.

Okay. What's the conflict?

Okay. So I was in the military for about 12 years. And during that time, I was always contributing. They did a 5% match. So right now, we have about $130,000 in our off-CSP. And when we're kind of looking at how much we want to save for retirement, we know the rules say 15%. I'm very much of a rule follower. So that's kind of what I think I should be doing. But at the same time, if we put the full 15%, it kind of slows down some other projects and stuff we want to do around our house.

Well, let's run some numbers. So how old are you guys?

34.

You're 34. And let's just pretend. I mean, for you, what would be an ideal age to retire?

Between 60 and 65.

Okay. So I'll put 60 on here. And what would you say is 15%? What's 15% of your gross income today?

We make about 200,000, so it would be about 30,000 a year.

Okay. So 30,000 a year. What I'm basically going to do, and I've got the Ramsey Solutions calculator pulled up. And what I'm going to do, so that's 2,500 a month, plugging that in, and 11% rate of return. And so that gives us $6.6 million. So what we're looking at here is we go, "Hey, let's pretend that rate of return continues somewhere between 10 and 11 percent." So that's $660,000 that you could ideally pull off of that nest egg. That feels like a lot of money.

Agree.

That's 60,000. And I mean, this is napkin math that you could pull off it. The nest egg doesn't change. So there's part of that where you go, "That's exactly what I want. I want to be able to leave a legacy. I want to be able to do that." But then the other part that you're saying is, "Well, when is enough enough?" $6 million probably sounds like plenty to you. Is that the question?

Yeah. I never imagined having that much money in my life. Yeah.

Now picture what inflation will be.

Yes. Now there's.

26 years from now and what life is going to cost and what your retirement dreams are going to be and what you can and can't do based on how much money you have. And so there's a part of me that goes, "We can look at the history of the stock market and go, 'Okay, 10 or 12 percent is what we'll get.'" What we don't know is what life is going to cost, what healthcare looks like, what our careers look like. Can we work until this age? What if we want to retire early? And so having options is always going to set you up for the best life. And for that reason, plus the discipline of just having the muscle built of we invest 15% of whatever income comes our way, that's where I go, "How can we accomplish these home renovations without messing with baby step four?"

Yeah. I just want to reiterate. George couldn't have said that better because we love the calculator to project out and give us hope and go, "Okay, there's hope for the future." But the truth is, you don't know what's going to happen next week. And so doing that today to set yourself up for the future is so, so important.

So what are these renovations going to cost?

The main thing is we live in a home with an unfinished basement, and we have two kids and one on the way. And our older kids are four and six. And so we would love to be able to finish out the basement, make it a family space, have more room for hosting when our house is kind of like the gathering point for family for Christmas and holidays. And so just wanting them to be able to have a space for their friends to come over and kind of being that house. So it would probably cost between 70 and 80 thousand dollars to fully finish out the basement because there's nothing done with it right now.

Well, don't feel shamed. It's not meant to be legalistic. It's meant to create this parameter and create a baseline because we know that if people invest 15% and they're in their 20s, 30s, 40s, they're likely going to be multi-millionaires and retire with dignity. So you could. I mean, there's no law saying you can't invest less or go down to zero for a short period of time. My challenge to you would be, "How do we come up with 70 grand in the next 12 months without touching that?" And now it becomes a new problem. We can kind of reverse engineer it. So how much do you have saved currently for this project?

Nothing because we are just now entering into baby step four. So we don't have any yeah. Emergency fund is fully funded. And now we're kind of on that teetering line of how much do we put into retirement versus save for this project.

Yeah. How much margin is there? Let's pretend you have put 15% aside. How much margin do you have left over to do what you want with?

If we put 2,500 a month towards retirement, we'd probably have an extra maybe 1,500 a month in margin.

Okay. So based on that, and let's say it does cost 70 grand, 1,500 bucks, it would take you four years to save up. So even without investing, let's say you were able to do let's say you went down to you said 10%? So 20 grand a year instead of 30.

Yes.

Okay. So that would give you an extra 833 bucks a month, right, on top of your 1,500. So that means you could save up in a year 28 grand. So it's still going to take you a couple of years. So either way, it's not like this investing or not investing is the make or break of you guys doing this project in the next year or not. It's still going to take a while to save up that amount of money. So what is the urgency? Is it we need it by next Christmas? Or is it, "Hey, this can wait. It's just going to be a little bit tight for the next couple of years in the house"?

Yeah. There's no urgency. I think we would love to have it done while, again, while the kids are in the house and while the whole family can enjoy it. My goal would be in the next five years. So if we could do it in the next five years, I think that would be great.

Then I would make a stretch goal and say, "Let's say based on our math, it would take you less than four years to do it while investing 15%. What if you said, 'Hey, we're going to do it in three years.'" And that means our income's going to need to go up. Our expenses might need to slim down. But let's set a three-year goal to save 70 grand. Say, "Let's 25 grand a year. It's 2 grand a month we need to find in our budget to throw towards this high-yield savings account for this goal." That's the stuff I like to do to make it real to me. And once you guys align on that, it's going to show up in the budget. You'll be amazed at how you find the money when it matters to you and make it a priority.

Hi. Thanks for having me.

Sure. How can Jade and I help?

Well, briefly, I've depleted my retirement fund and my savings fund over the past two years while I was out of work being a full-time caretaker to my mother. And I'm just returning to the workforce. And I really could use some pointers on how to quickly rebuild my retirement and savings so that I don't have to work until I'm like 80 or 90.

Wow. How old are you?

43.

Okay. Good. You got plenty of time. That's some good news. You're not in retirement right now with no retirement. So how much did you deplete over those two years? What was the amount?

Around 35,000. So not an enormous amount, but.

Was that 401(k)s, IRAs?

401(k) and a little bit of savings.

Is there any left in there?

Maybe 1,000 at the most.

Across all of them?

Yes, ma'am.

Do you have any debt?

I do. A total of about 28,000 in debt.

Okay. And now that you're back to work, what are you doing and what are you earning every month?

I'm an information systems analyst for.

Sorry. You broke up on us, Maddie.

What's the call?

Say that again.

Sorry. I'm an information systems analyst for a local technical college.

What do you make?

And 65K a year.

Great. Okay. What kind of debt's the 28,000?

Car. My car loan is about 11,000 of that. And the credit card is about the other 17,000.

Is that across multiple credit cards?

No. It's just one card.

One card at 17. Okay. So your car loan is your next smallest debt.

Yes, sir.

Well, when is your first paycheck?

Today, actually.

Oh, congratulations.

That's exciting.

How does it feel?

Overwhelmingly just relieving to have income again.

And you're single?

I'm married with a small child.

Okay. So that adds some income to this and also adds another layer to this. What's he earn?

About 100K a year.

Well, that changes the game. Are you on your own financially? What's going on here? You guys have separate finances?

We do. He takes care of the household bills, but we don't have joint savings or joint retirement or anything of that nature.

Does he have his own debt?

Not much. He doesn't really believe in credit or debt if you know.

Does he have retirement funds? Do you know how much?

Last conversation we had, he has not started saving for retirement. He's a veteran. So I think he's been kind of focused more on that taking care of him if anything were to occur.

So out of his 100K, I'm guessing he has plenty of money left over, right?

I would think so.

Where's that going?

Personal account, I'm assuming.

So let's say he has 30,000 extra dollars just sitting in savings for fun. You're saying he wouldn't reach over and go, "You know what? Why don't we just pay off your debts?" That's not going to happen?

I don't believe so. I think he would help, but I think it'd be more of he'd want to see me take on the boat.

Or what if let me ask this question. What if you said, "Hey, let's pretend you pay off your debt and you start to save for retirement and you're putting aside 815 bucks, 15% of your income." And you said, "Hey, I'm putting away 15% of mine. Can we put away 15% of yours too, another 1,250? And then we can have this big lump sum for us to retire together and make sure that we're secure." What would he say to that?

I think he'd be open to that. Yeah. As long as I could show him the numbers.

We'll do the wins together, but we won't take the losses together.

Unfortunately, yeah.

Okay. Well, listen, at least you know where you stand.

I'm just looking for all the variables here because you could be debt-free so much faster if you guys aligned on your money goals and decided, "We make $165,000 together." You know how quickly you could pay off 28 grand? Months. You know how long it's going to take you? A couple of years. And so listen, you got a roommate at this point, financially speaking. And so I would have a come-to-Jesus moment saying, "Hey, I'm back in the workforce now. I'm looking at my finances. I have all this debt over here.

I think if I could show if I would take the initiative and start showing, "Here's my finances. Here's how much I'm putting aside," I think he'd be willing to at least try to match that.

That's a start.

Yeah. That's a start.

But I mean, he also makes almost double what you do.

Does that bother you at all?

That how much he makes?

No, no, no. That you guys are kind of totally separate and kind of like what I laid out earlier, which is we can maybe build wealth together, but we can't clean up a mess together. Does that bother you at all? If it doesn't, you can say, "Nah, it doesn't bother me."

It does, but I can't really do much about it at the moment other than just try to prepare and do the best I can with what I have.

I mean, I think you should. I think you should do the best you can with what you have. But I would also encourage you to voice your opinion and say, "Hey, I'm not happy with the way this arrangement is. And it's not because I have debt. It's just because it doesn't make me feel like we're as close as I'd want to be." And I'd just ask him if he'd be willing to sit with a counselor and try to sort through that a little bit and get to a better place. It can't hurt.

I think that would be beneficial, definitely.

Plus, I mean, you're coming off of a gosh, if you were being a caregiver for somebody, you're coming off a really hard time. And just having that full support and knowing that you're 100% partnered up, that's going to help both of you to feel secure.

Yes, ma'am.

So how much margin do you have right now based on what you know about your paychecks? After you covered your bills or your half of the bills, however you guys do it, how much is left to throw extra at the debt?

So I should have about 2,400 a month left over after paying what's necessary.

Okay. So that would take you a year to pay off your debt at that point. If you're just throwing your 2,400 at it and you got 28 grand, that would be a year. Now, let's say he was able to throw an extra 3,000 at it. Is that reasonable based on his income?

Yes.

Okay. So that would up it to 5,400. You're done in five months. You see the difference?

Yes, sir.

Now you guys are in the same boat rowing together instead of in two different canoes. Because what's going to happen? You guys will end up in different places in those canoes. By the time you get to retirement, you're not going to know each other. And he's going to have $2 million. You're going to have 300,000. And you're going to go, "Wait, can I also live retirement with you?" And he's going, "Well, I saved my money." Or, "I didn't save any money, and I want to live off your retirement."

I mean, it's laughable, but it's an interesting thing to play out, Maddie. And that might be something that I would spend some time thinking about. Let's pretend you never called in the show. Or let's pretend, for whatever reason, you enter retirement and you have $0. He enters retirement and he's got his pension and maybe some nest egg that you don't know about. Are you telling me he's not going to reach over and say, "This is enough for both of us? I got you"?

I think he would make sure that the house and everything else flows. But as far as extra income just for me.

He's eating steak and you're eating taco meat.

Ramen?

Ground beef. But do you see what I'm saying? I mean, we're laughing at it, but it's an interesting mental exercise to kind of think, "Gosh, where is the line? Where's the boundary? What is it that we really have set up? Is it serving us? Is it good for the relationship?" is really the question. And so I think George laid out a really great financial plan for you, and I agree. You should go after and achieve what you can on your own. But in the meantime, I would really push on this because this is such a huge part of your marriage and creating that life that you want together.

And if you invest that 15% of your income once you're debt-free with an emergency fund, you're going to be okay. You're going to have a nice little nest egg. If you continue that on for the rest of your career and retire at 67, you can retire with dignity. But you've got a marriage issue on top of a retirement issue right now.

Our producer just shared the news. At 86 years old, one of the great actors of our time. Rest in peace, Patrick. But here's the quote. "If someone says, 'Give me one word of advice,' I say, 'Be fearless.' And knowing without any shadow of a doubt that what they have to give, who they are, is totally unique and not shared by anybody else."

I like that.

Beautiful words.

I like Tim in Star Trek: The Next Generation.

Oh, that's right. And X-Men. I mean, there's so much.

He's so lukewarm.

So many great.

Yeah. What a guy.

Emily is in Nashville up next. Emily, welcome to the show.

Hi. Thanks for having me on. I've wanted to call in for so many years now, and I finally have decided to do it.

You worked up the courage and you made it through the phone lines. Congrats.

I'll try and keep my question brief. But me and my husband, we bought a house about two years ago, and we've been paying extra towards the house every month to try and have the house paid off. Right now, we're on track to pay it off in six years.

Awesome.

Our house is our own debt. And then we also have a car as well that my company, they pay the car payments for. So I don't necessarily count that too much as debt. But my question is, we've had a lot of people that have told us that, "Oh, you're doing it the wrong way. You guys would be set up so much more financially better if you invested in stocks and you didn't pay down the house." I would like to know from you guys, would you continue to try to pay off the house, or would you split it up and do both?

I listen to everything my friends say. I do whatever they say. I trust them inherently. No, first of all, I just don't tell my friends.

Yeah. Why do they know all this?

I just don't talk about money with them. Unless they're soliciting advice from me, I'm not sharing my journey financially with them. And I mean, it's me. I do this for a living, and I barely talk about it with my friends. So who are these friends? And did you ask for advice?

So there are more. I said friends in the question because it's more of mentors that I have in my career and stuff. And some of them are very far along in their careers, so I've asked about finances with them. And when I've asked my mentors, who are very well-off financially, they've told me that we shouldn't pay so much down towards our house and maybe invest it because right now we put about $3,600 extra a month towards the principal of the house. And we do 401(k)s, but that's it. We don't really invest too much outside of our 401(k). And I don't really know how to run the numbers to understand if it actually does benefit us more to split it up or if we should just try to keep being debt-free with the house.

Well, let me ask you this question before we even get into that. When you said, "I want to pay my house off. That's important to me, and we're going to start doing that with Intensity and with Gusto," what were you hoping to achieve? Was the number one thing the equity in the home, whatever your home is worth? I just want that to be fully to my name. Or was it a peace factor?

I think it's more so peace factor so that we can be aggressive once the house payment is settled and all that. That way we can have a little bit more freedom to maybe take more risks financially elsewhere, whether that be investing or whatever else, businesses, who knows.

And that makes total sense.

I'm more motivated by peace.

And that makes total sense. That is a fair placeholder to have for that. That would be my motivation. That's our motivation. That's why we teach that because there is a measure of peace that you get when you can say, "I don't owe anybody anything." And it's not like you're not investing. You're still investing 15% of your income. And once the mortgage is done in six years, well, now, gosh, you can go crazy on your investing and just blow it through the roof if you want to. But to your point, you laid out a strategy that you had, and it makes complete sense.

It's not like you can't build wealth if you do it their way. I mean, they've done very well. But our method is more about behavior and peace and your life than it is arbitrage and math. And what they're saying is, "Hey, your mortgage is 3 or 4 percent. You can make 10 or 12 percent in the market." They're right. On paper, you could have made more. But to you, to Jade's point, it was never about that.

It's kind of the same mindset when a stay-at-home mom says, "I know I could go out in the workforce and earn these dollars, but it's a value for me to be at home with these kids." For you, it's a value to have the peace of a paid-off home. And that's really what's driving that situation. It's not always mathematical first.

Okay. That's helpful. Thank you.

Absolutely. That was a great question. Great call.

I like it.

And it's not the first time we've heard something like this.

It's a fair argument.

My financial advisor or my friend told me it's stupid to pay off a 3% mortgage. It's a once-in-a-generation mortgage. And I'm going, "You got golden handcuffs. You couldn't move if you want to because of your precious mortgage. I got a 0% mortgage with $0 payment. I'll take that every day." And so you got options at that point. And it's more about that than it is the math on it. So great one. Zachary is in Des Moines up next. Zachary, what's going on? You with us?

Uh-oh.

We're so close.

I'm sorry. I had my phone muted.

I was going to say I thought you went to get your food out of the microwave. We're here.

That was so my bad. I was worried I was interrupting another call if it wasn't muted.

That's so thoughtful of you.

So no, thank you for taking the call. I just wanted to call you guys. It's about an all-in-one loan that we're being offered. So my wife and I are very fortunate. We bought our house at a great time at a 2.3% interest rate. And we're saving a ton of money right now with what our house payment is. It's only $1,400 a month. We've had some kids. We've kind of outgrown our house, unfortunately. And the market is kind of tough looking at interest rates.

Okay. So what I'm hearing is you guys need to move for space for the kids and for schools. That's the most important pieces.

Yep.

What is that new house going to cost you?

They're asking 595. They might come down to like 578.

And this is an existing single-family home in Des Moines area?

Yes.

Okay. And what would the mortgage payment be? Let's say you sold your current home. You took all the equity plus any savings you had outside of an emergency fund, threw it at the new house. Have you factored in what your mortgage payment would be on a conventional fixed-rate loan?

On a conventional fixed rate, around the 7% range, it's coming out to be around 3,700 bucks a month, 35 to 3,700 bucks, depending on the down payment.

And what's your monthly after-tax income?

After taxes, my wife and I are putting away $9,000 before expenses.

Is that after healthcare premiums and 401(k)?

Yep. Those are deposits.

Okay. So that means your 25% perimeter would actually be higher than that. It's probably more like 10 or 11 if it's just after taxes but before other deductions. Would that be fair?

Yeah.

Okay. So at that point, you're looking at about a third of your income going towards housing, which is more than the 25%. Nothing's on fire there. Is there any way you could wait on this, or we have to do this right now? What's the level of urgency?

We can wait. Yeah, we can wait. And that's kind of what I'm debating. I think the house that we found, it's the perfect house. We love the house. And I think the sellers are urgently trying to sell it, and they haven't had any buyers. And I think we're just in a strong position. So a house that might be worth 650 to 700 for 570.

Can they throw in some credits in there and really sweeten the deal?

They're willing to do a buydown on a fixed interest rate to get to like a 6 and a quarter. But that's still about $3,500 a month in a payment. And after we've got $1,600 in daycare coming up here in January. And I mean, we've got $4,600 in just expenses, just gas, groceries, electric, all that stuff.

I'd take a look at the budget, do a mock budget with this house, and see what that would actually look like and feel like. And I would definitely not do this all-in-one loan. What they're trying to sell you is a HELOC. So you got a variable rate. Your home is the collateral. It's a 30-year home equity line of credit. That rate is going to be moving. I would definitely not do that under any circumstances. It's kind of what's called velocity banking, where you run all of your life and expenses through this. All right. That puts the sour of the Ramsey Show in the books. Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.