Transcript of My Girlfriend’s Pregnant and I’m Scared

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Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network and the Fairwinds Credit Union Studio, this is The Ramsey Show. I'm George Campbell, joined by best-selling author Jade Warshaw. We're taking your calls at 888-825-5225. Don't be scared. Pick up the phone, type in those numbers, and join the conversation. Thomas kicks us off in Oregon. What's up, Thomas? Are you with us?

Yes, I'm here.

Can you hear me? Yes.

Hi. My situation is rather complex. I'm a 24-year-old from Oregon who's doing college, have two years left for a business administration degree. My girlfriend is five weeks pregnant. I found out about it three days ago. And to be honest, we're both rather scared. I have no outstanding debts. I don't know if she has any outstanding debts, but I don't believe so. However, she is not in the best financial situation just overall, because of living expenses and other things. Wow.

Well, that That's scary, dude. You have a right to be rightfully spuked by all this. I'm going to go ahead and assume that you are the father.

Yes, I'm the father.

Okay. How long have you been together?

We've been together around a year. We don't live together, unfortunately. So this is even more scary because we need to find a way to move together if we decide to have a child.

Okay. Let's roll back once one moment before we even think about that part. Was this somebody that you planned to be with, or is this something that's like, Oh, dang, now I definitely feel like I am stuck?

This is someone that I was considering marrying her and I both get along amazingly. We have never had a fight in the entire time we've ever been together.

I mean, it's been twelve months, man. It's not like 30.

We're getting married and everything.

Okay, so it was somebody that you were thinking about a future with?

She is. She's the one that I was thinking about having a future with.

Okay, that is good because that way all of... What I would hate is for you to just be thinking, Oh, I got this girl pregnant, now I'm stuck, and now I have to move in, now I have to get married and be forced into something that you never saw a future with that person. But it's good that you did see a future with her because now she's having your baby. Okay, so you've She got two years left of college. What about her?

She's not in college nor is employed. And that's, I think, the biggest scary thing for me is she's going to have to find a job. I have to grow up really fast now, and I've never worked a full-time job because I've just been so focused on school all my life. You're 24? Really scary.

Yes, 24. Did you take some gap years?

There was one gap here, but it was a lot of jumping around unsure of what career I wanted to go into because of the fact that our world is changing so fast.

Okay, so why business administration?

I chose business because my psychology was that it would be just so generalized and so useful wherever I go that I could use it. And I chose it because of that reason.

Okay, so what's on the other side of this? Let's say you do finish the degree, what job are you looking for?

That's the more difficult thing. I personally am really interested in architecture, And I was also interested in psychology. However, I've had family members push back against that and say, no, you should be doing this or you should be doing that, which is also why I've been so unsure.

Okay. Well, here's the truth. You might need to put a pause on education and just get to work doing anything.

Yes.

And the truth is, you can probably make as much now as you would with a business administration degree on the other side. The degree could help you long term, but in the short term, now we just got to stack cash and get ready her this new life of being a dad. And, does she have insurance? Is she covered through her parents?

I believe so, yes.

That would be one piece of homework to figure out is the medical side. And then child care side, she's unemployed. She's going to need to get to work until she can no longer work and baby's about to be here to try to at least mitigate some of the financial damage here. Then is she going to just stay home with the baby? Then are you going to be near her? How close are you guys right now as far as distance?

We're in three hours.

Three hours? Oh, gosh. Okay, so now I understand a little bit more what you were speaking about. Since she's unattached in the way of school or work, is she able to come closer to where you are? Would she be willing to do that?

She's been currently working towards that. She has been trying to find a way to move out where she currently lives.

Where does she live? Is she with family?

The financial part. She's in a home with other roommates, is what she's living in.

How is she affording it?

I think it's very personal, but I think it's something regarding she's a case manager and that thing.

Okay, so she's just getting government assistance?

Yes, I think so. She's getting quite a bit of assistance.

Okay. How old is she?

She's 21.

Does she have family nearby that you guys could move closer to to have some help, and would they be willing to help? Have you had that conversation?

Her family is not very in her life. My family, unfortunately, is six hours south of me.

Got it. Okay, so thing number one on the list, I think, is you guys need to get together and you need to create a plan for you guys living near each other, especially if you think the plan might be to get married. So that's thing one. Thing two is verifying the whole insurance business, because if she's estranged from her parents, maybe she's not. And if she's getting government assistance, there's a lot there. Then the third thing I would do is once you figure out the living situation, I would start, I would find a local church and I would start premarital counseling just to see if you guys are a fit, if you could do a marriage together, if you could- Yeah, are compatible.

Yes, I understand.

Yeah. I would have a hard time saying, Get married immediately, because I'm not hearing in your voice, and even in your vicinity, that that was the plan, per se. I don't know if right or wrong on that, but I don't want to just say to you, Go get married. Does that make sense? Yeah. Yeah. I understand. Given what you've told us.

And then what is your financial picture? Do you have any savings right now? Do you have any debt?

I have a large college fund that was set up by my family. I come from a rather privileged background. I believe my college fund is technically, it's owned by me. It's around 50 to $70,000, maybe up to $90,000 at the most.

Okay. What about other cash?

Other cash? Not a lot, unfortunately.

Okay. Well, hey, you've got a nine month runway here. And so I would heavily consider pausing school, moving closer together, and you getting to work full-time plus a side job, her taking on a full-time job until baby's close to being here, and then you just save up cash. And then we'll figure out the debt later. But right now, you're in stork mode, stocking up cash and figuring out the life plan. Then we'll figure out the financial plan.

And don't do anything really crazy until the doctor says. A lot of times people don't even tell people that they're pregnant until what, around the 12-week mark. So keep this close to your belt for now.

Statistics show that half of Americans don't have enough life insurance, or they don't have any at all. I don't understand this, John.

Why don't people want to take care of their family?

They think they're going to die or something?

Well, I used to be one of those guys. I didn't even think about it. One of my buddies said, Hey, the only reason to not have life insurance is if you hate your wife and kids. I immediately went and got term life insurance.

That's a gut punch. You're telling me for decades, Dave, I've sat across people who've They've lost a spouse. They've lost somebody important to them. Me too. They don't know what to do next. Me, too. It's terrifying. You're going to have a crisis here. You got two options while you're sitting and talking to a young widow. She's concerned about how she's going to invest all this money properly and not mess this up, or she's concerned how she's going to eat tomorrow. That's exactly right. These are the two options. Take care of your dadgum family, man.

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Sarah is in Washington. Up next, Sarah, welcome to The Ramsey Show.

Hi. Thanks for taking my call.

Absolutely. How can we help?

I'm in a bit of an unusual position where my parents did well in life, and now at the end of their lives, my mom is facing some decisions with life insurance for an estate strategy plan. Okay. Her team wants her to buy She has $500,000 a year in life insurance, and I'm trying to convince her that there are better products available.

Who encourages this?

She has a financial planning team.

Okay. How big is her estate? What is her net worth?

Probably about 60 million. Okay.

Now, at this level, there's life insurance strategies that a lot of advisors use to protect the estate. So I don't want to just go in going, This is a rip off. They're trying to screw her over. That may not be the case here. When we talk about life insurance, we're talking about whole life policies for the average everyday American when they're getting ripped off at 600 bucks a month. So when you have a $60 million estate, there are situations where paying a half a million a year to protect for a 20 million savings could be worth it. So have you got any intel from the advisor?

Or from your parents? Yeah, she's got a couple of policies. She has a 1. 5 million a whole life policy, that's 100K a year, and then two 10 million dollar policies that are each 100K a year, and they want her to buy an additional policy for an additional 300K a year.

Goodness gracious. It just seems- It feels like now they're just grabbing commissions left and right. And so- Right, right. That's where I go. This is not as black and white as it may seem, but if you were getting red flags, I would have the conversation with them. Are they willing to hear you out?

Yes, but when they, for example, I'd like her to get rid of the whole life policy, their argument is that in seven years it pays for itself, so why would she not keep paying for a few more years until it's paying for herself? I don't have a very good argument. How does it pay for itself? Other than the paid up additions essentially get reinvested, and then the investment inside the whole policy pays the premium.

Yikes. Well, that plan can implode pretty quickly with how high these premiums are and how awful the returns are. And so if I'm in your shoes, I would contact a third party advisor on your own and get their take. And then at least you have some to go, Hey, I talked to an advisor. Here's what they said about this. Will you hear them out? And maybe they go, yeah, I understand what they're doing. All good. Or they go, No, here's what I think is happening and here's the tweaks to make.

Okay. I've gone that route, and that has given me some ammo to push back on her team. In a lot of ways, it feels like they're operating on her fear that she's not going to take good care of her heirs, which clearly she's going to, beyond anybody's wildest imaginations. It seems more like a...

Oh, go ahead. I was going to say I would just look into... I'd be really interested in finding out what type of whole life policies those were. There are some instances where if it's a variable life, it could be something that is available to her. I don't know if this many policies would be it, but that's what I'd be looking into if I were you. They can be utilized by ultra wealthy people, folks who have no debt and have really high networths, especially Especially if they've just maxed out all of their other opportunities. So I would really go into this with a spirit of curiosity versus, these people are trying to screw my mom. You might be right, but it also could just be something that's gone outside of your purview of knowledge?

Yeah, definitely is well outside of my knowledge base. And I just feel like it's a... One of the things I love about the Ramsey program is that the goal is to live like no one else. Now they're facing that. Hopefully, they've It develops another segment where people can talk about these kinds of issues because we're hoping that lots and lots of people get to this place, right? I know that's not the reality, and it seems like a really weird problem to have, but I want to look out for my mom.

Absolutely. She's trying to steward this wealth as best as she can and using pros and experts to do it. But there are some people out there who can take advantage of people like this, who have giant estates. They're happily going to write giant checks, which gives them big commissions. That's where I want to know, are these bad apples or are they just doing something that is just an extremely expensive way to transfer the inheritance? That's the big question mark, because a state tax could be 40%. I understand that you don't want to pay 40 % of 60 million when you pass away. I don't want to give the government any more than I already have. Yeah, no, definitely. And so there are things like an irrevocable life insurance trust or ILITs, they're called, where the trust owns the life insurance policy, so the death benefit is not counted as part of your estate. So that's probably what they're trying to do. Is that when she passes, there's millions and millions protected from the government, which means less taxes to pay.

Too powerful.

Okay, thank you very much for taking my call. Yeah, absolutely. You can contact SmartVestor Pro on our website. Just jump on ramsey solutions. Com and say, Hey, I need a consultation. My mom's working with this advisor. Here's the kinds of things they've been telling her. Can you help me understand this more, number one, and then help me understand, is there a better way to do this, and are they taking her to the cleaners or not? Our smart Western pros, they're going to have the heart of a teacher explain it to you, and no BS. They're going to just tell it to you like it is. Thanks for the call. Malcolm is up next in North Carolina. Malcolm, what's going on?

Hey, how's it going? Good. How are you? I'm doing great. I was calling in about a question that I had regarding my income drastically decreasing. I recently joined the military, which has required my wife almost to have to be a stay-home mom. She can no longer really do her job that she was doing before. So our income went from around, I would say, $80,000-ish down to $31,000. Oh, gosh.

Why did you guys make that series of choices?

I wanted to go into the military. My wife has always been very supportive of me, and I recently sold a business, so I was a little lost. So I didn't have anything to do. So I always wanted to join the military, so I took a leap, and my wife joined it. We didn't necessarily think that well through it, I don't think, But I'm in it now. What's the endpoint?

Was there a point where you said, Hey, our income is going to go down for a small period of time, and then XYZ is going to happen? What's the endpoint?

Once I finish my training, which is going to take about two years. I'll receive my reenlistment bonus, which was about $45,000. My income should jump to around $100,000 in the military. And then also, if I choose to reenlist I believe our reenlistment category is around $90,000. So we didn't mention it. I just didn't realize how long the training would last before I started making a better income. Because we don't really We've been very fortunate financially, so we didn't necessarily... I didn't really think about our lifestyle changing significantly.

Are you going to be on base? Are you going to have base housing?

Yeah. So we're going to be on base housing. She will be moving with me within the next month.

Okay, so that helps. You're not going to have that expense. I mean, the way that you live on $31,000 is that you live on $31,000, so you got to get your head around what that means. And that's going to be a humongous shift.

Whatever your life was before is no longer. This new chapter is going to look like your broke college students.

That's the interesting main thing that we're having right now, because we do have a decent amount in investments and savings, especially after selling business. Okay, good. My wife is wanting to live the same lifestyle. The reason this pops up is my wife wants to give me the trip's expenses.

So pittle through your savings? That's not an option. Basically. Well, here's the thing. Here's what I want to tell you before we go to break. Number one, if you have money in retirement, do not touch it. Do not move it. That money is locked in. And if you have savings right now, how much savings do you have? Real quick.

So we do the regular three to six months. Currently, we don't have that much.

Then that's what that's there for. That's only there for emergencies. That is not there to skim off of every single month to have the lifestyle you want. You guys made a very clear choice. Sounds like you didn't think through it very well, but like you said, you're here now, so you've got to live that life and be thankful that you've got 3-6 months of expenses and a little money saved for retirement on down the line. We all want peace, peace with our money, our homes, our schedules. But having peace online is important, too.

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Com/ramsey. Christian is up next in Fort Lauderdale.

What's going on, Christian?

Hi, George. Hi, Jay. Thank you for taking my call.

Absolutely. What's your question today?

So my dad was recently had a surgery that went bad. He had three strokes during surgery. Oh, my goodness. So I now have an hour of attorney over him, and I'm trying to sort out his finances. I just pulled a credit score and I discovered that he's $90,000 in credit card debt and obviously not working. He's now just on workman's comp insurance. So he has limited income that he'll never be able to pay back the $90,000 in credit card debt. And I was calling to get some advice.

Man, Man.

I'm so sorry. That sounds horrible. What's his prognosis?

So he had three strokes. He was blind about a week ago after the strokes, but he's currently able to see and talk but not walk. It looks like he'll be in rehab for about three months minimum. And then we'll see. He's gotten much better in the past week, so we're hopeful. But for now, he's going to be in the hospital for quite some time. Wow.

How old is he?

Sixty-five.

Okay, does he have any other debts outside of the credit cards?

Well, I found about $86,000 in credit card debt and a $5,000 medical debt in collections, along with a mortgage.

Okay, and is anyone living in that house right now?

No, it's an empty condo.

Okay, is it paid? I mean, who's paying the mortgage right now?

So this just happened in the past week. I just took over his finances, so I will be He's paying the mortgage out of the money that he's making from Workman's Comp Insurance.

Okay, that's enough to cover it.

Yeah, it's enough to cover the mortgage, and he's also laid on HOA fees, so they're in the process of suing him. But I was able to make a payment plan with them that they have agreed to. Okay. And you're paying that payment plan out of your money? Currently, I have not made a single payment yet, but I'm intending on paying it out of his money.

Okay. Does he His account is current- Savings, retirement?

No. He might have a 401(k), but he has no money. His account is currently overdrawn by $50, but he has $5,000 a month coming in from Workman's Comp Insurance.

Wow.

So what does he owe on the condo? What's it worth?

It's worth about 200, and he owe it 204.

Oh, boy. Yeah. And what's the plan? What do you foresee the plan? Is it just him? Is he married?

Not married. Single. He has a girlfriend overseas that he sends money to. Oh, boy. But what's the extent of that?

Are you sure this is a real person, Christian? I've heard this story before.

Well, unfortunately or fortunately, yes, she actually is real.

What's the plan when your dad gets out of rehabilitation? Do you foresee him going back to this? Let me put it like this. Do you foresee him living alone, or do you foresee see a situation where you all have to take care of him out of your place?

No, I foresee him living alone. The workman's comp insurance will stop, of course, once he's out of the hospital. And my hope was that he would get some form of settlement from workman's comp because he wasn't injured on the job, which led to this.

And surely he won't be able to go back. I mean, I'm just assuming. You tell me, based on what you said, I can't see this guy going back to work in a couple of weeks.

I don't think so. I don't think he'll ever again.

Okay, right. So then there would be some payout?

Yeah, I would assume so. And then he'll start collecting social security at that time, I would believe.

Okay. Do you have any idea what his social security would be at this point if he started to draw it now?

I don't know. I don't know.

Okay. That'd be some homework that I'd look into, if I were you, to know, is he going to go from 5,000 to 2,500? What's he going to go down to? And then figuring out, is he going to have the ability to stay in this condo situation and really think through what that means for him? What's your financial situation?

I'm single. I make great money. I run a company. I mean, I'm not a millionaire, but I make enough money to live on my own and my family.

And there's no world where he would move in with you or you would become his caretaker?

I sure hope not.

Okay, so you would be Medicare and try to get him care otherwise? Yes. All right. So your homework is to figure out his full expenses and then figure out, does he have enough money monthly to pay for that sustainably? And if not, we need to make some really hard choices here and go, Hey, you need to sell the condo maybe at a loss, because otherwise it's going to get foreclosed on. Yeah. And is he still sending money overseas as we speak?

No, I've got all expenses off 100 %. Okay, good. He has enough money to make the payments that I've arranged for the HOA and pay the mortgage and the electric bill. Okay. And my intention is to stop paying all the credit cards, except for American Express and the small local bank, because I think they'll be the first ones to come after him.

Listen, they could try to sue him, but He has nothing.

He has nothing to give. And it's unsecured debt. And so if he died with this, they just write it off. They're not coming after you.

Nothing's going to happen. Yeah. All right. Literally. I mean, exactly what George said. They can't come after you. And honestly, even for him, He has nothing to give. The only thing would have been that condo, but he's getting ready to sell it, and there's no money that can come from it. So in that way, he's- And they can't take his retirement.

I think at this point, it's just trying to minimize the future damage and make sure the four walls are covered for him. The debt is a far, far away thing that we need to worry about.

You wouldn't file bankruptcy. You would just stop paying everything and then let them come after him?

I would get current on everything you can. We don't want it in collections if we can avoid it. But the credit cards, you might make minimum payments to keep them off your back if he can afford it out of his checks, but there's no way he's going to pay off 90K at this stage of life.

Right. All the credit cards are current. The mortgage and the HOA are behind.

And that's what we need to flip it. We need the mortgage and HOA to be current, and the credit card companies can kick rocks and pound sand. Okay. So that's your focus for him, is making sure that we're current, we're not behind, we're keeping up with the four walls, And let's see what income we can get from where and how long this workman's comp is going to last and then what the next steps are. But it's going to be a day by day thing, man. This is a really difficult thing that you've been thrown into, and you're a good man and a good son for handling it.

And should I try to settle these debts with the credit card companies in a year when they inevitably come after them?

Well, if you stop paying now, the longer you wait, the more they're willing to settle. One year may not be long enough for them to go, Yeah, we'll take 20 grand instead of 90.

Eventually, they will, though. But the truth is, he has zero money to give them, so just let it play out. It's going to be the same. If you were to file bankruptcy, his credit is going to be completely decimated. It already is, I'm sure. And his days of getting a great income and buying a property, it doesn't seem like that's going to be happening. So for him, like George said, four walls, whatever transportation he might need is really going to be what he has.

Okay.

Unfortunately, it's really sad.

This is just decades of compounded terrible financial decisions, and then you have the health situation on top of all of that, which puts all this just straight to a halt. There's nothing that you can do to undo the decades of bad decisions. All you can do is help him take the right next step and make sure that he's got food, shelter, utilities, and transportation.

Yeah. What's his rent and HOA and everything like that cost every month?

The mortgage is 12: 50. The HOA is supposed to be 4: 50, but I've arranged to pay 700 because he's so far behind on that. And then he's also about a year behind on alimony to my mom, which is, it is what it is. He doesn't have the money.

Is there a- He's understanding about that. Is there a living situation in his area that's less than $1,700 a month that you could get him into?

No, no chance. In South Florida, I don't think that would be possible.

Yeah, you're right.

Where are you? Are you in South Florida as well?

I'm in Fort Lauderdale. He's on the West Coast of Florida. Okay.

I'm just wondering, I mean, at this point, does he need to stay there? Can he move somewhere that is more affordable?

I think he's best to stay there. He does have family there, and I'm only three hours. One more question I had, if I have time.

Five seconds.

Oh, okay. Well, I wanted to know if I start working on these credit cards, if I'm You're going to be liable for the debt.

No. None of this is in your name.

It's not under your name. So it's not going to pass to you to deal with. So if they try to scare you into it, say you got to pay, they're lying. That's not how the law works. If the debt's in his name, he's got to pay. If you co-signed or you're on that account, then they can come after you. But otherwise, you're safe, man. Best of luck.

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Restrictions apply. See boostmobil. Com/ramsey for details. Buying or selling your home is a big deal, and you want an expert in your corner fighting for you to find the best deal for the right price. And the Ramsey Trusted program is the only way to find a top agent you can trust who will help make your home a blessing, not a burden. It's easy. You can compare agent profiles, interview them, and choose the right one to work with. You can find a local Ramsey Trusted Real Estate Pro for free at ramseysolutions. Com/agent, or click the link in the description if you're on YouTube or podcast. Kyla is in Texas up next. Kyla, welcome to the show.

Hi, how are you guys today?

We're doing great. What's your question today?

I'm just looking for some guidance on how to, or what the smartest way is to utilize the remaining money that my husband I will have after paying off our debt and putting money into an emergency fund. We're about to receive $200,000 from a trust from my grandparents. We owe about $30,000 on the car, so we were going to pay that off and then put about $30,000 into an emergency fund. So we'll have about $140,000 left over. So we were wondering, should we put that all towards the house? Should we invest some of that? A quick little add-on is we don't know that we want to stay in this house long term. So we're just trying to get the best way to move forward with that leftover money. Yeah.

Well, you're speaking very wisely and you're filtering this through the baby steps, which is let's knock out the debt first, let's make sure we have savings, and then we can explore the options from there. Are you guys currently investing?

Yes, went into our retirement for, well, my husband is. He puts about seven % in my end, and his employer match is at three and a half %. I'm currently not, but my employer does contribute 11 % for me.

Okay. So you guys would be in baby step four, five, six. You already have a home, you have a mortgage. What's left on that?

3, 20.

3, 20. All right. So is the trust available now?

No. So we're doing the final paperwork, the rest of the beneficiaries are signing And then once all that paperwork is finished, then the money will be distributed. So that is expected in the next probably month to six weeks.

Okay. And it is a lump sum. There's no restrictions, taxes, timelines, like $200,000 will show up in your account.

Yeah, $200,000. My uncle paid all of the taxes that were owed on it, from the capital gains and the interest, the interest that was all paid already. So, that's the 200,000 that I will be getting is what is mine.

Wow. So tell us a little bit about the home. You said that you're in this house, but you might not stay. Tell us about what your plans are regarding possibly moving and when that would be.

My husband's currently looking at other opportunities in other states that we can move closer to where my father is. And then to the neighborhood is going in a direction that we're not truly happy with.

So What's the timeline for this?

You might want to move. Anywhere from, I'd say, one to three years. It depends on. If my husband were to get a job in six months or a year, we would move. There's also some changes going on to maybe turn the neighborhood back around, but I don't know how long that would take to see if it starts moving in the opposite direction.

I'm I'm also wondering, would you be trying to keep the same level of house? Would you be trying to move up in house if you were to move?

How would you try the same level? I'm happy with this house. It was about 340 when we purchased it. So we're happy with it.

What's your household income?

About 150,000. So we bring I know about 86, 8,700 after taxes and deductions, I think, with health care.

Fantastic.

Real quick, you said you bought the house for 340, and now you owe 3,200? Yes. And you're worried about the neighborhood going down?

Yeah.

I mean, if I were in your shoes, if you really are talking about a year horizon, I'd probably be inclined to just keep it in a high-yield savings account until you want it for a couple of reasons. Number one, if you piled it all into the house and just for some reason the house took a long time to sell or it for some reason went down in value, that might make you feel some type of way. Number two, moving is expensive and it's just nice to have cash on hand to make a move. If I were in your shoes, specifically, if you were on a year horizon, I'd keep it in a high yield and wait for the right opportunity. And then when you move, place this house on the market and you've got your down payment that's readily available for you.

Yeah, that's the nice part. If it's a short time horizon, that 140 becomes your down payment without needing to sell the house first. And so that puts you in a better position as a buyer. But if you're talking three years, put it into the house. The money is not disappearing. It's just a forced savings plan, and it stops you from using that money for other things that might not be as wise. You want to be a good steward of this money, and you guys becoming debt free, mortgage and everything is a great goal to have. And so 40K chunked at that 320, man, the interest savings alone, if you calculate now how much more is going to principal versus interest, it would blow your mind.

Yeah, we did that. It was, I think, upwards to the 60 year mark. So we have no issue with putting it towards the house. We just weren't sure with us potentially moving, should we hold off just for a little bit and then see if we haven't moved by the end of the year, then just dump it all in.

Yeah, I like that plan. Then we move into the house. Yeah, I like that plan. Yeah, I think that's great.

And you can enjoy some of it, too. There's nothing wrong going, Hey, you're debt free with an emergency fund. Maybe use some of it for enjoyment, and you go on a fun trip.

I like to hear you say that because I'm definitely a saver.

Yeah, I think because you're paying off the debt, you're stocking up the emergency fund, it would be good to do something fun with some of this money as well.

Not a huge amount, but you can take a $5,000 awesome trip and still have $135 left, and you can give some of that, and then you can save some of that. That includes paying down the house. That fits in that category. I like this plan overall. I would just keep it loose and put it in a high-yield savings account when you have it and just park it at three and a half % right now. We're not trying to make a bunch of money off of this. We're just buying ourselves some time to make the next decision.

Awesome. Would you guys think about investing any of it into a mutual fund?

I probably wouldn't because you are putting plenty of your paycheck aside Remember, real estate is an investment, too. So don't narrow your mind to think that just because it's not in the stock market, it's not being invested.

If you guys had the house paid off, I'd say, absolutely. That's a baby step seven item is to then invest outside of retirement. And so you guys will get there, no doubt. You'll just use your future income to get there. And this trust is going to help you get rid of that house payment even faster. Then you can invest that amount. Way to go. What a blessing. Awesome, grandparents.

Yeah, that's awesome.

It's That sounds fantastic. I have one more question, if I could. Sure.

We got a minute left.

Okay, so the emergency fund, does that count towards the maintenance of the house, if something were to happen to it? Or is that just simply, if one of us were to lose their job, they were covered until the other person gets another job.

If it's an emergency, it can go towards household items that are emergencies. So if it's something that's urgent, if it's unexpected, and if it's necessary, that's what an emergency is. So for instance, there's a storm and you didn't know it, it blew a tree onto your roof. Now you need roof repair, that would be an emergency.

Dishwasher randomly goes out. But if it's just maintenance, just set up a sinking fund outside of that and just set it aside I wouldn't put it with the emergency fund. It gets too convoluted. You can just set aside $100 a month, $200 a month, whatever. Some people's homes need a lot more work and more maintenance.

Buying new furniture, not an emergency.

Yeah, I would just put it in every dollar. You can Here's what I do. I have a line item, and you can mark it as a fund. That way, I can save $100 a month. At the end of the year, I have $1,200 earmarked for the maintenance and repairs on the house or the car or whatever it may be. That helps me not get spooked when I'm like, Oh, my gosh, What are we going to do? It's $1,000. You go, No, we have it.

I treat the emergency fund like I treat the HSA.

I never touch it. Which is, you just don't want to touch it unless you really have to.

I just don't touch it, man. I will cash flow whatever I can to not touch these monies.

Well, it's amazing. Once you're not broke anymore, you stop having emergencies. That's true. It just becomes inconveniences that you can cash flow instead of, Oh, my gosh, what are we going to do? So it's expensive to be broke. That's for sure. This is The Ramsey Show. This show is sponsored structured by better help. As we head into the new year, I want you to take an inventory of all the stuff you're carrying, all those things you think you have to do, all the past hurts and pains, along with your past guilt and shame.

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You can't feel lighter without leaving behind what's been weighing you down. Go to betterhelp. Com/ramsey to get 10% off your first month. That's betterhelp, H-E-L-P. Com/ramsey. Welcome back to The Ramsey Show in the Fairwinds Credit Union studio. I'm George Campbell, joined by Jade Warshaw. We're taking your calls at 888-825-5225. Emily is up next in Nebraska. What's going on, Emily?

Hi. Thanks for taking my call. I am a stay at home mom, and I'm trying to get out of an abusive marriage, an emotionally abusive marriage. My husband's basically abandoned us. I've got four small children. They're five years old and under, and I'm trying to figure out how to create some margin, hire a lawyer, and I'm just trying to figure out what's the next best move to file bankruptcy or take out a second mortgage on the house or something else. And I've got all my financial information written down if you want that.

Is there any support near you? Family, friends, church?

My family all lives about three hours away, and they're doing what they can to help me. I live in a unique area where there's not like... I can't just sell the house and go rent. There's nothing for rent near me, and jobs are few and far between.

Is your house in your name?

Yes, it's solely in my name. I bought it before we were married.

Okay. How long have you been married?

Since 2018.

Okay.

And what's your And what's his household income?

Right now, I'm a disabled veteran, and I'm receiving disability benefits of about $2,600 a month.

Okay. And then is his income Is he covering any expenses for you guys, or is he cut off access?

I think he's rerouting his paycheck someplace else. He's an over-the-road truck driver. He's an owner-operator. I've done his taxes forever. He'll gross about $225,000 from last year, and I was only able to move over $29,000 to help pay household bills. Out of the last 13 months, I've paid for the entirety of the bills six months out of the year.

Wow. Okay, so he just up and left?

Is that- He, well, being over the road, he's gone a lot, but he's not called me since September. He showed up at the house unannounced a couple of times for a few days at a time, and it's just been weird.

Like just a crash?

Yeah, like over Thanksgiving or Christmas. Otherwise, he usually parks at a friend's house a couple of hours away.

Oh, gosh. I'm sorry that you're going through this. So- Well, thank you. Tell us more about... So You've been covering the bills just out of your money?

Correct.

I received the lump sum. And is there any margin? I received the lump sum. Sorry, say it again.

I received a lump sum back payment from the VA a year ago.

How much was that?

42,000.

Okay. And what did you... Has that allowed you to be current? What did that allow you to do?

I was able to put six months worth of bills and savings. I had a question of six months. Okay.

Emergency fund?

And then I paid off some debt, and I started a business in May, and that's actually been helping a lot.

Okay. So how much debt do you have left?

I owe 34,000 on the house with about 58,000 in equity. I've got 41,000 in student loans, 22,000 in credit cards, and I owe 6,000 on my vehicle.

Okay. And how much is in that emergency fund?

I've got enough to fund February.

How much is that?

I'd have to look. I think it's down to 4,000 right now.

So you burn through the emergency fund. So you got 4,000 left to your name, essentially.

Yes, sir.

Okay. 58,000 dollars of equity, 41,000. Okay. And tell me again, did I hear you say... I wrote down a lot of numbers. Did I hear you say your income at this point, is it 2,600 a month? Is that what I heard you say?

It's 2,600 a month. And then my business, I just started it in May, so the numbers have been different about every month. But right now I'm grossing about 1,600. Good. And nothing about 1,000 to 1,200. And I'm hoping that it just continues to grow, especially as we get into the summer.

Okay, so fair enough, like around 3,600 is what maybe you could count on per month.

Correct. Do you have your own bank account that is not at the same bank your husband has? I do, yes. Okay, good. Is that where you've been routing all of your money?

That's correct.

Good. What do you pay? What's the mortgage every month? What do you pay?

$933.

Good, good. Okay, so tell us right now what's on fire besides your marriage. Financially, what's the thing that you're like, Help me understand this, Jaden and George?

I don't know how to pay bills after February, and I need to hire an attorney.

I think that you can pay the bills after February. Tell us how much the deficit is. When you take your 3,600, you pay the 900 in the mortgage, you pay your debts, you pay for food and transportation. Is there anything left?

I've got life insurance payments, and then... Oh, jeez, what else? Oh, electricity and propane and normal stuff. So it's usually about... My budget's about 4,500 to 5,000 a month.

Okay. And that's in every dollar?

I'm using You need a budget at the moment.

Okay. I want you to pop into every dollar because every dollar is going to help you find margin anywhere possible. You'll be able to tell it about your specific situation, and it's going to work over time to find you money anywhere. So right now, you're a $1,000 deficit every single month, so that's why this is dwindling so quickly, I can see. But there's also a path to get your income up, right? With the business?

Yes, it's been very slow. I mean, it keeps changing, but I see it being capped at some point with the market becoming saturated.

Okay. So what I don't think you should do, and I don't think that you need to sell your house right away. I think you're actually you're paying a little less than $900 a month. I think I heard you say you're in a good equity position with it. You don't owe a ton on it. I don't think you're going to find anywhere cheaper to live for a family of five. Do you agree or disagree? I completely agree. Okay. What I would do is change the locks. Once you file for divorce, I would change the locks so that he's not just coming up in there willy-nilly. Right. Okay. And then, is there anybody in your community who can set you up with a good attorney or who could recommend a good attorney?

I've been shopping for three months now, and we live so rural. I've been told that I live too far away.

What's that mean?

The attorneys don't want to drive to the courthouse in my location if they had to. Got it.

Okay, understood.

And are all the debts in your name solely, or is anything joint, or is anything in his name solely?

The ones that I named are either in my name or are joint. He's got his own mess. He's been opening up credit cards for the last two years and he's got- Have you frozen your credit yet?

Because my fear is he's opening debts in your name.

I have frozen it and I check on it. Okay.

Well, here's the truth. The faster we get through this process of divorce, the faster we can hope for some alimony and child support, which means you can breathe again, and that'll get you to fight another day and hopefully clean up some of these debts. Okay.

Yeah. I wouldn't try to pay anything off just yet. I wouldn't try to sell your house or anything like that just yet, because once this goes to court, who knows how this is going to get split, including the house, unfortunately. I'm not sure what the laws are in your area. He's been living there since 2018, so I'm not sure if any of that will be up for grabs. But yeah, change the locks freeze the credit and file for divorce and figure out how to pay for it because you got to divorce this guy.

Great. I can't imagine. I'm so sorry you're going through this, Emily. This fact that this guy is not even covering the expenses for his own children and just abandoned in the family just breaks my heart. I know you'll get through it. You're a survivor and a warrior, but it's going to be a process to get to the other side of this and see some light. Yeah.

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This is a paid advertisement. Nlls ID-1591. Nlls consumeraccess. Org, Equal Housing Lender. Sarah is up next in New Jersey. Sarah, what's going on? Hi there. How are you? Doing great. What's your question today?

So I am trying to figure out how much I need for retirement. I see where I'm trending right now in terms of my retirement progress, but I feel like it's falling short of what I'll probably need. Okay. So I'm struggling to figure out what I should aim for. I know I watched a segment where someone was at 3. 5 million. I don't know if that's accurate or where it should be and what I would need to adjust to get there.

Okay.

Well, usually when we think about retiring, I'll tell you what's in my head. I'm thinking about my entire nest egg, and I'm thinking, based on my annualized rate of return, which is about 10%, can I live off of 10% of my income, and can it feel like the lifestyle I have now or Does that make sense? Yes.

What do you currently have invested?

So I have... Let me see. In terms of my 401k, I have about 146,000.

Okay.

And then I have a brokerage account with a couple of EFTs, which is about $7,000. I have a separate Roth IRA, which I just opened up that has $1,000. And then the The other money that I have is just an emergency fund.

Okay. Do you have any debt?

I have student loan debt. So I have a student loan debt. It's in forbearance, but every other month I make a $1,000 payment towards that.

Okay, what's left on the balance?

$130,000.

And what's your income?

It's $210,000.

Good income. Is that just you?

Yes, it's just me.

All right, so how much are you currently investing?

So currently I invest via my paycheck, and so about $600 goes into my 401(k), every paycheck, and then my employer matches that.

What's the match?

7 %.

Good. Okay.

So if you follow through- And then, separately, I have $300 that I was putting into, I was putting into like, Qwapital, which is like a money saving app.

I was putting like, $300 every paycheck check, but I just recently moved that into an EFT to start putting that into there.

Okay, and why are you investing outside of the retirement right now into those ETFs, I imagine, is what you were saying.

You know, I don't know. I think it's just an effort to feel like you're doing something. Just to feel like you're doing something. That's very honest. And then also the other thing, too, is that does it make sense to mess out the 401k? I think I've done it in the past, and the thing that I'm most worried about is what are what the tax is going to look like. And so if I can find some other place to do it where the taxes might not be as much, I'm just trying.

Let George and I tell you what we would do. And as we're telling you that, you tell us your objections so we can help you get past it. Would that be all right? So I'm looking at what you're doing, and I hear what you're saying. It sounds like you're just doing everything you can to feel like you're doing something, but I would argue that you're doing too much, and because of it, you're not making the progress that you want to make. The way I would do it, Sarah, is I would focus on clearing out these student loans first so you can have the fullness of your income and so that these things don't follow you into retirement. Because what a pain in the butt to still be paying off student loans when you're retiring. You're not even working anymore. You're not even using the education anymore at that point. I would really focus on that, and that's going to require a mental shift. That's why I asked, Go ahead and tell us your what your reservations are, but let me play out the plan first. So you pay off the student loans. Then instead of thinking about it as, I'm going to max out my 401(k), or I'm going to max out my Roth IRA, we just say, Hey, let's just invest 15% of our income.

Because if you did that, you'd be putting $2,625 into retirement every single month. That's a lot of money. If you did that, let's just pretend, I know that you've got the student loans to pay off, but just let's say you did that for 20 years. At the rate that you have now, you're going to be over $3 million at that point. If we can reverse engineer that to make that happen, it's going to start with, yeah, we got to have the student loans paid off. We've got to have some form of cushion between you and life, some emergency fund. That way we can invest and not worrying about having to pull it out for emergencies again. Now we've created the sustainability. I mean, think about it. Making $210,000 $2,000 a year with just you, how quickly could you pay off the student loans?

I'm sorry. I do have a toddler. I meant that I was unmarried, but I do have a toddler.

You do have a toddler.

It is solely my income.

Well, great. You and your toddler, $210,000 a year, how quickly, if you really got intense, because I think mentally you are intense about being prepared for the future, how quickly could you pay off that debt?

I feel like I could probably pay it off in a few years. I think so.

I think so. Two years. So here's the math on. 130 grand, 24 months. You're talking $5,400 a month. Not a thousand every other month. We're going hard in the pain at this debt. Here's what that does. 24 months from now, you're 50 years old, right? Yes. You've paused investing for those two years, all investing, which scares you. But here's the truth. Now you have freed up so much of your income and focus and energy. Now from 50 to 65, let's say, you invest that 26, 25. That's 15% of your income every month. You're going to have one $8 million sitting in there in that one account. Okay. And that's at 65. If you want to keep working, you ride this out till 67, you got 2. 2 million. And like Jade said, you continue this down the path, you'll have more and more. And so retirement is not an age, it's a financial number. And so we don't just get to retire because, well, we're 65, it's time. A lot of people get there and go, I don't have enough to cover the expenses. And getting into retirement debt-free is your best bet at reducing the amount you need in retirement.

The only other thing, too, is that I've also been looking to purchase a home because I've been not doing. And so trying to factor, I don't want to delay purchasing a home because I'm finally in the I think, a good financial position to do that, but I don't know how that factors into increasing what I'd be contributing to the student loans at this time.

Well, I do love the idea of having that line item on your budget set once you're in retirement. I would hate for you to be renting then. So at that point, the order of steps would be still focusing on getting the debt cleared out first, because, again, we don't want debt, especially that debt, following us into retirement. Then next, you still need some emergency fund, some cash position to keep you between a barrier between you and life. Then from there, now you could start to do both at the same time. You could start investing 15% and start putting aside for down payment. At your age, I would fight in the budget to do both simultaneously rather than put off investing any more years in order to save up for the down payment faster. I would try to do them at the same time.

So you're investing 15 % into retirement, and then any money above that goes into a savings account for that down payment.

Even though that might make it go a little slower than you want, you're going to want the years, you're going to want that time of compound interest growing for you in your retirement accounts.

Okay. I think it sounds solid.

You've got a lot of great goals. We just got to get focused on one thing at a time, and you'll clean this mess up fast. If you keep making $210,000, I have no fear that your life is going to look very different a decade from now.

Yeah. Is your income going up anytime soon?

I hope so.

Good. I would plan for it to go up, right? Why would it go down at this point? You're going into your highest earning potential years. A lot of people in their 50s earn in their highest amount. So really, really good.

I'm proud of you, Sarah.

Yeah, and I think that's been on track. Thank you so much. I appreciate it.

So it's time to ratchet up those student loan payments, because here's the truth. 130 grand, 6 or 7% interest, you're probably, if the balance is moving upward, even as you're making a $1,000 payment every other month, you might be accruing over a thousand in interest every other month.

Absolutely.

So you really got to get ahead of it. And that means throwing huge chunks of money. And we get those calls where people go, Hey, I owed $80, and now I owe because it was in forbearance, and I didn't understand what it meant. I just thought they were helping me out. Now I have an even bigger mountain to climb.

Yeah, for some reason, student loans rest differently in people's minds. If you had $120,000 of debt and it was credit cards, cars, all these other things, you'd think, Oh, my gosh, I have to get a hold of this. But for some reason, when it's just one block of student loans, people tend to push it aside and forget about it.

Well, society told us, It's an investment in your future, and yet you can't bankrupt on the thing. It will just stick around until you decide to get get rid of it.

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Today's question comes from Shannon in Florida.

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Okay dokey. Today's question comes from Shannon in Florida. She says, What's your opinion on how much to help kids financially after they get married? My son and his fiancé are getting married this summer. They're in their early 20s and have a young daughter. They're both in college pursuing degrees. Our plan is for them to live in our basement for free until they graduate and start working full-time. I plan on continuing to pay for my son's college and provide help to his wife as well after they get married. I'm getting mixed opinions about whether I'm helping or hurting them by supporting them after they're married, even if he's married. He's still my son, and I think it's my responsibility my responsibility to help both of them get through college debt-free if I'm able to. Friends and family say they need to be independent once they're married, even if that means going into debt to finish college and pay rent so they can live independently. What are your thoughts? It sounds like they started a little earlier than most as far as having children. Because of that, it's set a course of events into action a little earlier than maybe planned.

So I'm with you, Shannon, on the education part. I think that if it was your plan to pay for college, especially for your son, and he's still willing to go, I think it's great if you're still willing to pay for college. Now, did I read you say that you were paying for hers, too? I think you're just supporting her. I'm fine with you paying for college. I think that's great. Now, the living in the basement until they graduate and start working full If you tell me they're 20 or 21 and they have no money and they have a kid, I think that is okay. There has to be clear guardrails and time frames on this. It can't just be, Oh, live in the basement and I'm supporting you financially until you're ready. And the part of you being ready is just this vague, ambiguous thing.

They're probably not leaving at that point. If mom's still folding my laundry and covering all of the bills. There is that word independent Codependent is the key here.

What does that mean?

If they are codependent and now you're enabling the codependence, that's on you. And so we need to make sure that, number one, we're not artificially propping up their life. If this was a marathon, you don't want to be carrying them over the finish line. Now, if they're running and they're doing a great job and they've trained, it's okay to give them a little boost. And that's what you want to do here as a parent. It's okay to help them financially after they get married. I think that's awesome. If you want to pay for the wedding and you want to help them with a payment and give them some money for that. That's great. But only if they're already employed and working hard and able to take care of the bills on their own.

Yeah, I think they should be paying you. I think you need to sit down and have something very clear here as far as what are they going to pay you in rent? Because if they're just living for free, that's not going to help them. When it does come time for them to go into the world and try to lease a place, they're going to need to show some form of history of paying rent. And so that's good. Even if it's 500 bucks, come up something so they have some skin in the game. Also, set very clearly, how long is this agreement going to last? If he's out of college in two years, is that the cutoff point? Is it two years and six months? Be very specific. What are the parameters while they're there? Must both of them have at least part-time jobs? Must they be paying a certain amount of rent? Make that so, so clear so that there's no question. When the time comes for them to leave the nest, they're not thinking that you're kicking them out. They're going, Oh, yeah, this is exactly what we decided. So whatever you set, make sure you're talking about it early and often, and make sure that you don't get caught up in this as the rescuer and their drama triangle.

If you've never googled a drama triangle, you should.

The triangulation. Yes. All right. Good question, Shannon. Frank is in Boise up next on the line. What's going on, Frank?

Hi, I have a question to ask you. I've been talking to a financial adviser here at Boise, recommended from you guys, and I had three, four, or one Ks because the contractor I work under, they keep changing companies, so it changes to a new 401(k), and they're pretty small. So I think the three, they total around $73,000. Okay. I wanted to know what to do. Should I roll them into the new 401(k) by this April, this month, or should I roll them into a personal IRA, which the financial advisor recommends at? And I brought them up about the large cap, mid-cap, small cap, and international companies that they ran, Ransy recommend. But I'm 57 years old, and they said they need to make a portfolio for me, just for me because of my age, that they would do it differently or something like that.

Yeah, I'm guessing they're saying, hey, you need to start including some bonds and tone down the aggressive investing as you get closer to retirement, which is normal in the financial planning world. You'll hear that a lot.

So that is okay to do that. I don't need to be in large cap, mid-cap, small cap or international companies exactly like that.

We still advise it. Dave Ramsey is a big fan of just keeping it 100 % equities and letting it ride, because over the long haul, you could live to be 97. And so you're talking, you're still got 40 years of that money sitting there. And so they're It's going to be a little bit of a drag when it comes to the bonds starting to enter the picture with much lower returns, but also less volatility. It's a really personal decision for you. You can talk with your advisor on what they recommend for your situation. We don't have all the facts on what your expenses are and what the nest egg is going to be, so they may have their reasons there. But either way, you want to do a direct rollover to the new 401(k) or to the IRA. And so you never should touch the money, and you want to keep it in kind. So if it's traditional 401(k), you want to move it to a traditional 401(k) or traditional IRA instead of Roth, because that will trigger a whole host of penalties and taxes there. So that's what I would do. If you have a strong 401(k), you can just roll it all into there.

My guess is the advisor is saying, Hey, if you roll into the IRA, he can help manage it. They don't have access to help manage your 401(k). And so he's basically saying, Hey, you're on your own in that regard.

Do you feel like you need help?

He said there's more mutual funds in a IRA than versus a 401(k).

You might have 20 options with your work 401(k). In IRA, the world is your oyster. You have access to everything. So there are some pros and cons there. And so you do your own due diligence there. You're still steering the ship when it comes to investing, and you do whatever you think is best for your situation. But there's nothing wrong with doing either. And so don't overthink it. Got you.

Okay, then he says a 1. 5 % Advisory fee, and that off of 73,000, that's about $95 a month. Is that correct?

Yes. I'm doing something wrong. That's normal in the financial planning world. There's something called AUM, Assets Under Management, and that's under management. That's basically how they make their living is managing these portfolios and one to one and a half % is normal in that world. And so you're talking 73,000 if it just sits there and you've got, you're right, $1,095 a a year, divided by twelve. I got you. That's the price you pay for making sure that someone is managing it for you and you have access to them, advice all year long, all of that. You really want to make sure your advisor is looking at a holistic picture, not just a fund picker. I would be utilizing them for way more than just helping you do this roll over.

Okay, I got you. So which thing you recommend it? I mean, if this guy, he's telling me, I do this, do this, and try something and go for it.

If I were in your I looked at my current 401k that's being offered, and I really liked the funds, and they were growing at a rate of return. That's what it should be. You might say, Okay, I'll just roll them over to the new company, 401k, 401k. But if you're looking at the options and you're going, Hey, based on what I'm seeing, this is really not performing well. I need access to the full market, then that totally makes sense to roll them over and let somebody help you pick some better funds.

Sometimes the 401k has fees as well. So you want to look at that and see what that's costing you inside of the account. So a lot of homework and research to do, and it never hurts to have the pro look it over. But again, you're in the driver's seat. And so if you're like, Hey, no, I don't want to give it all to the IRA and have you manage it, that's your decision to make. But I'm proud of you for taking that step. Just don't let the money sit there. You want to move it and have it working for you, invested and not just sitting.

You asked and we listened, guys. The Live Like No One Else Cruise is back by popular demand. This is your moment to celebrate your debt freedom with Dave Ramsey, all of us Ramsey personalities in the Western Caribbean. You can share your story with Dave, swap jokes with me, sing karaoke with Jade. I hope that's happening. Apparently, it is. Although I didn't want to sing next to you because that's a lot of pressure.

I know, but I always put on my fake voice. The love boat. There we go. I don't do my real voice.

You make others look Yeah. That's impressive. Here's who this Cruise is for. It's not for everyone. If you're on Baby Step 4 or higher, meaning you have paid off your consumer debt, you've got the emergency fund, it's time to celebrate. You probably haven't marked the moment. A Cruise is a really awesome way to do that. It's the Ramsey audience plus our team. It was incredible last time we did it. Join us March 14th through the 21st, 2027. We're looking at almost a year out. Very exciting. You can save up to 300 bucks this week only when you book by February first. Cabins are limited. So you can lock in your spot with a $600 deposit. That's all that is due now to just lock in your spot. And then you can budget for the rest and join us for the cruise. You can click the link in the show notes to learn more or go to ramseysolutions. Com/events. Tom is in LA up next. What's going on, Tom?

Hey, how are you guys doing? Great.

What's your question?

I was just calling in. I'm a PhD student over here, and my wife recently lost her job back in July. And I'm just wondering and looking to get some advice on how best to get through this stage of my career and my situation, whether that is pushing harder and just getting out as quickly as possible or trying to work extra jobs. So let me put some advice on that.

What money is coming in with you doing your PhD?

So with being at UCLA, we I have a full stipend. It's about three grand. So in LA, it covers about housing costs and a little bit of food. But beyond that, before I had worked a full-time job as an engineer, and it saved up enough money where I haven't had to cover anything. And so I have this little mess egg that's just dwindling down. How much? There's about $24,000.

Okay.

And you've been basically using that to float the gap for the last six months? Yeah.

What did your wife do?

So she was a IT trainer over at UCLA.

Okay. And so it's been since July? Yeah. Has she gotten any bites? What's up with that, do you think?

She's gotten a few bites. In the tech center, it's just been really quiet for the past few months. And then she recently started working with some family members on starting up, moving a business. They started over in Mexico, over here. And so she's been working hard on that. Is she paid for that? Not paid yet. And so they're just starting it.

And so I'm hoping that- Will she be paid when this is moved, or how does this work? Because we're not doing into your work right now?

Yeah. I think once it gets moved, it would be paid. I'm just not sure about... I've been trying to get a good timeline, but it's very ethereal at this point in time.

Has she looked at just other fields in the IT world that she would be qualified for?

Yeah, so she's been applying around. I think that she's just very much also chasing a bit of a dream of this job and there's entrepreneurial spirit. And I I'm going to appreciate that and also love that because also I'm doing that. And I'm like, that's where I feel.

There's going to be seasons where it's Tom's turn and he's chasing this PhD. Now, I'm hoping this PhD is going to turn into a big pay raise on the other side. What's the goal with the PhD?

So I'm studying bio engineering. So the goal is to hopefully, yes, have a big pay raise and be working for one of the big biotech firms like Neuralink stuff, things along those lines.

We're talking high six-figure salary once we're done with this. So when is the PhD done and how soon would you be working after that?

Yeah, so that's one of the decisions is I can hopefully be done by early fall next year if I really push hard. But the other idea is if I need a float, is if I take some extra time and work as a tutor and take an extra year, but float expenses.

So fall of '27 or tutor, and then it's fall 2008? 2008? Yeah. 28? Yeah. Oh, boy. So, okay. Yeah, let's go back to the wife then, because you were on this path. I think you have to see it through at this point. I think for your wife, she's got to... It's one thing if you want to do a business venture, but you need to have a solid business plan, something that she can look at and then be able to say to you, Here's what's going to happen, and we should be profitable by this date. When we're profitable, this is the salary I should be able to draw so that you guys can make a plan and have a go, no go of, Hey, we thought that we were going to be profitable by this date. We're not. So now, therefore, we're not going to continue on with this. And if she can't provide that, then that means there is no meat on these bones. It's just an experiment. And you guys are not in a time of life just yet where she can totally experiment because you're going to look up and this $24,000 is going to be gone.

What's your burn rate every month?

Burn rate is about $2,000 a month.

Oh, yeah. You're going to look up and be like, In two years, this money is going to be gone, which two years is not bad. I mean, you'll be graduated by then.

Do you guys have debt?

So we do have some debt, just one car loan and then her student loans, which together is about 20,000.

Okay. That's total with the car loan?

I think what's left on the car loan, it might be closer to 25 or 30, but definitely below 30 or above $20.

Do you guys have kids?

No kids.

Okay. So what has she been doing for six months? Because I'd rather her do something, even if it's not in the IT field, just Just to provide some income and some purpose and meaning every day to go out there and do something because it's easy to fall into a low-grade depression just sitting around going, I was laid off, I can't find a job, and you start to question your identity and self-worth.

Just to earn the burn rate. She could experiment, but she got to at least bring in the couple of thousand.

She's too qualified and talented just to be sitting on the sidelines for seven months now.

Yeah, that's what I've been trying to be encouraging as much as possible. I think it's just It's very disheartening for her, the current situation of applying and getting rejected and just feeling that she isn't as talented as I know she is.

That's your job. You are her biggest cheerleader, and you are also her accountability partner going, Hey, you apply for that job? You get that coffee meeting with that person who works in IT. You can help her and support her during this time, but it's time to have the honest conversation of, Hey, we are broke. We won't be in the future, but right now, we're in season where we both need side jobs at night, delivering Uber Eats and DoorDash. That's the reality because we can't burn through the savings and then be going into debt every month living in LA. It's an expensive life, as you know.

Yeah. A piece of homework you guys can do tonight that will feel proactive is if you can both sit down tonight and make a list of everyone you know that might know someone in her space that could be hiring, right? That could put in a word for her. We'll make sure that she has Ken Coleman's career materials so that she can really focus in and figure out how to do that the right way. But just reaching out to your network, because chances are there's somebody that's in your network that holds the key to her next job.

Okay, yeah. Love you. Very good. Thank you.

Yeah. Try to make a list of 10 names.

She has to create some inertia here because an object of rest stays at rest. And so it's hard to even have the self-confidence to have the meeting or do the interview when you feel like, Oh, my gosh, here we go again. It's like dating. You're like, Well, I've had 19 bad dates. What's the point? Love isn't real. It's easy to fall into that hole if you're not careful. But again, this is a season you guys will have an amazing trajectory in the future. Right now, you're going to look back at this time and go, remember when we both had to do DoorDash on the side just to make ends meet. That was crazy. Yes.

This is a very short period of time that most of us go through where it's just you're just broke. You're broke because you're young at that point. Not so much because you've made a bunch of mistakes. You're just young and getting started.

But you stack on high cost of living on top of that. I mean, it's impressive that they've even made it work on what they're bringing in every month, even with the savings and the stipend. Yeah, true. That's still a tough life. So the reality is we got to live like we're broke college students, which means we can't eat out. We're getting the discount groceries and stretching it and meal prepping. It is just rice, chicken, broccoli. Stack them. Go. That's what we're eating every single day for a year. You'll survive. No one's died from than that, as far as I know.

It ain't pretty.

Welcome back to The Ramsey Show in the Fairwinds Credit Union studio. I'm George Campbell here with Jade Warshaw. Taking your calls at 888-825-5225. Ryker is up next in Utah. Ryker, what's going on?

Hi. How are you?

Great. How can Jade and I help?

I'm wondering on how to build a budget with such an inconsistent income that me and my future wife are going to have once we combine finances.

What do you do that's so inconsistent?

So my fiance is a hair stylist, and so it just depends on what client she can get for her income. And then my family I own a fencing business and a ranching business. And during the summer, I can make upwards to $10,000 a month. But during the winter, during ranching, I'm making zero.

Okay. And what about her? What's her swing of income, good to bad?

Right now, she just started three months ago, and she's making about from 1,500 a month to about 2,300 a month.

Okay. Okay. Okay, so maybe say 18 is right there in the middle. Okay, so the way I would do this... When are you guys getting married, by the way? When does this actually start?

June 20th.

Okay, good. So what I would do by then, by June, you're going to see what her averages are. Hopefully, they continue to go up. But you really want to plan your budget based on your worst month. That's what I would do, is I would say, Okay, first off, how much does it take for us to even? What's our bare bones budget? What does it take for us to operate? Keeping the lights on, keeping food on the table, four walls, keeping our insurance, whatever that is. And then on our worst month, how far away from that amount are we? You're filling in the unknowns there. Then from there, I would stock up and say, Okay, let's pretend we find out it takes $3,000 for our household to run, and we bring in on our worst month, 3,200. Well, that's great. That means there's a little bit of margin there. But it also means that you might want to keep an account, take that $200, and over time, stock up an extra month's worth of savings that's there.

To float you in the rough months. We call a peaks and valleys fund. So when you have a really great month, that's the peak. Well, we don't need all of that to cover the expenses, so let's move it over to a savings account so that when you have that zero dollar month, you can get by and not feel like, Oh, my gosh, what are we doing?

And it's not your emergency fund, so don't get it confused. It's completely separate from an emergency fund.

The real question is, what are you doing all winter long?

So I do ranch with my dad all winter. I work probably six hours a day all winter. But I don't get So I don't get paid for the work. I own cows in our herd, and I sell bulls and I sell bees. But instead of me getting paid hourly, I work off feed and hay, so I don't have to pay my dad back for hay, and I just get the money from the animals instead of having to pay him back for all the seed and all the hay.

So what are the What are the zero sum months?

I don't do farm math, so I need to help me understand this.

Which months do you, on paper, earn zero, and which months on paper do you earn the 10,000?

So In about from April to November, I can earn $10,000. And then we sell bowls in April, and that's when I can make money off the ranch. But in between, so Like mid-December to when we start fencing in April, I'm not making any money, but I'm getting ranch money during the summer when I'm working full-time as well.

So really, if you spread it out over 12 months, you're making six and a half thousand dollars a month.

Yeah.

So that's not bad. It's almost like a teacher. You just have to account for the summer months.

Yeah. For you, it's the winter. For you, it's the winter. It's January, April. Can you go do something part-time or even full-time from January through April that actually pays?

I could. We live in a really remote part of Utah. There's only 400 people in my town. And the nearest town, we have to drive an hour to go get groceries.

Not a lot of side hustles out there. Well, do any other places around you need help? I'm guessing those other people are a lot of farming. Is it a farming town?

Yeah. So I could go and pick up a ranch hand job somewhere, just right here locally. Yeah, it seems like- To help a little bit in the winter months.

It seems like in a town, I think you just have to put your thinking cap on and think outside the box because it feels like in a town that small, there's got to be needs that people have because it's pretty remote. You can't get to the things you want. So I just spend some time brainstorming what is it that during the summer months, or I'm sorry, during the winter months, I would need help with It would be nice to have that service, and maybe it's a service that you can provide for the folks who live around you during those months. Makes sense?

Yeah. Is your fiancée in the same town?

Yeah, we live together.

Okay. Well, she's got enough hair appointments with the town of 400 to make this work.

So she drives an hour to go to work.

Goodness gracious. Wow. Every day? An hour each way? Yeah.

Oh, gosh. Yeah, an hour each way, and she's working Monday through She just set the bar, Ryker.

Sounds like you're driving an hour into town for your side hustle. You hop in with her and you go do something nearby. You drop her off and you go DoorDash.

Now you have quality time.

So that's the key. If you want stable income to make this less stressful, go create some stable income during those months. Otherwise, you do the peaks and valley side where you go, Hey, I made 10 grand. We only need five. I'm going to sock away five over here, knowing we might need to float some expenses in the down months.

You're doing good. I mean, you're making 80,000 a year, which is pretty sweet.

Yeah. Yeah. For small town, rural living. I hope you have low expenses.

Yeah, we're only... We have to spend about 2,500 a month.

That's not bad.

So when I'm only 18 and when I'm able to, I'm hoping to get my CDL, and during the winter I was going to snowplow drive.

Hey, there we go.

I love it. There you go. That's a great idea.

Can you start a Christmas tree farm, too? I've seen that in every Hallmark movie ever.

We I really could, to be honest with you.

I like this. I'd get creative. You guys are young. You can take those risks right now, quote unquote. Obviously doing this all with cash. Are you guys completely debt free, both of you?

Yeah, we're completely debt free. We own both of our We have colds and we're paying a thousand bucks a month in rent.

Way to go.

And then just food is the only other extent.

This bodes well, because if you have inconsistent income, you really got to be debt free and have that emergency fund, because life is already a little bit stressful successful when you don't know what's going to come in. I'm proud of you for being a really hard worker at 18. I think this bodes well for your future together, and I wish you guys the best. Yeah.

Knowing what I know about your income, if I were you, every time I got 10,000, I'd keep 6,000 and put the rest away. And that's your winter month store until you can get something off the ground and roll in and just tell yourself that you make $6,000 a month instead of 10.

I learned a lot on that call. This was like settlers of Catan. He was like, I'll trade you a hay for a brick, dad. I'm like, all right, hey, whatever arrangement you guys have, you figure it out. Whoever got the longest road wins. That game hurts my brain. But hey, I'm not a farmer for obvious reasons. I wouldn't survive one hour out there. They'd find my body. You're three feet from the house. Oh, boy. I need my gluten-free snacks.

If you've been paying off debt working the plan, and have reached baby step four or beyond, you've done the hardest part. Now it's time to celebrate. The Live Like No One Else Cruise is March 14 through 21, 2027. Join all the Ramsey personalities and me as we sail to Half Moon Key, Cozumel, Jamaica, and Grand Cayman. Cabins sold out last time, and they will again. Lock in yours with a $600 deposit at ramsey solutions. Com/events. That's ramsey solutions. Com/events.

We're headed to Orlando up next. John joins us there. John, welcome to the show.

Hi, thanks for having me.

Absolutely. What's going on with you?

Yeah, so I currently, as I said, I live in Orlando, and I have a pretty good job, but I have a potential career change and unique job opportunity that would take me out of state, but it would actually be a pay decrease. And another big problem is that I'm severely underwater on my mortgage.

Oh, boy.

Oh. You're not behind on payments? No, no, no. Okay, so how are you underwater?

Like upside down?

Upside down, yes.

Sorry. Owe more than the house is worth?

Yeah, quite a bit.

How did we get here?

Yeah, so I bought this house about two years ago and the market was really high. And I moved to the whole home buying things, so I'll probably overpaid for it. And then, yeah, houses in my area, they're really not selling well. The prices have gone way down since I've bought. Sure.

So you're underwater on paper right now As if if you sold today, you would take a big loss and you need to come up with a difference.

Yes, and that's the problem with this out-of-state job.

Do you have any money? Do you personally have any money saved?

Yes, I have It's quite a bit of savings, but I just don't want to dig into it for this.

How much do you have?

Yeah, so I have stocks that I get from my company. I have about 110,000. And then just liquid cash, I have maybe 12,000.

Okay. Okay. So the good news is, if you did choose to get out of this, because it's 70,000 underwater, is that correct?

That's what I'm expecting it, about 70,000.

The good news is if you had to bring the cash to the table to get out of this house, you could. However, my question is, why are you moving out of state for a pay decrease? Tell us more about the opportunity. That doesn't sound like an opportunity just yet.

Yeah. So to give more background, I'm a software developer currently, and I do really like my job, and the pay is good. So this job would actually be a completely different career change, and it would actually be federal law enforcement.

Oh, wow.

Okay. Yeah. So it's something I've been thinking about doing since I was a kid, and I finally got the opportunity to do it. The process takes a really long time, and very few people make it through the process. So I wasn't really thinking about this the whole time. I was just going through the process.

Got it. What's the difference in pay? What do you make now and what would you make?

Yeah. So my total... So Bayes' dollar right now is around My total pay after stocks and everything ends up being about 210,000, maybe a little bit more. Wow. Because I get $50,000 in stocks. Yeah. And then this new job would start out around high $80,000, but it does go up after each year. But yeah, it would definitely... Even long term, the highest paid people in the new role would make slightly less than I make currently.

Slightly less than the 160 or slightly less than the 210?

Slightly less than the 210. I think the top people, once you make the GS 13 or whatever, I think it ends up being around 190,000.

Okay. And you're single?

Yes, I am. I have a long term girlfriend, but not married.

You said the percentage was low to even get into this. What's the What's the chances that you'll move and actually get into the program or get to take the next steps?

Yeah. So right now, they're wanting to get me set up for training right now. So the So around one % of people who apply actually get selected for training, but I've actually made it all the way through to that stage.

Okay, so you made it under the fence. So what has to happen next? What's the timeline?

So I haven't fully labeled. Training would be about three or four months from now. They have to get me selected for a training class.

Would you have to quit your job to do the training?

I would, yes.

Okay.

And then the training... Oh, go ahead. Sorry.

Well, I'm just thinking through this. So it sounds like this is something you really want to do, right? You've decided you are doing it.

I haven't made up my mind. It would be different if I wasn't happy in my current role, but I do really like my current job. But at the same time, yes, this is the thing I've wanted to do for a long time.

Well, the truth is you can always go back to software developing if this doesn't work out or if it's, I had fun, but I'm ready to go back. So it'll always be there. I'm not mad at the pay cut if it's what you really want to do. You're going to have to just suck it up and go, these stocks are gone. I'm going to use this to get out of this underwater mortgage. You might owe some taxes, and then you're going to move, and that's going to cost money. Just know it's not a financially optimal move, but we know life is bigger than just spreadsheets. Sure. Do you have any debt? Yeah.

No, we got other than mortgage. Okay.

I mean, I think unless you have another reason that you haven't told us about, if the reason for you strictly is a financial one, but I like my job, I I think we've given you an out for both of those. It's just, do you want to go forward or not?

That's true.

In the grand scheme of life, the underwater mortgage is like, okay, that was a stupid tax, something you couldn't super control. Now, you could have put more down and had more equity and got out of it unscathed. But here we are. And you're a smart guy. You make great money. You will recover.

Okay, thank you. So financially, it's not the end of the world. It's just if it's more about my decision on what career I want to do.

Yeah, I mean, I could ask you this question. I mean, there's a chance that if you stuck in this house for a couple more years, maybe you'd see it go right side up. But will this federal law enforcement opportunity be available to you in 2-3 years? We don't know.

Do you know? We don't know. Yeah. So there is an age limit. I'm 32 right now, and you have to enter training before you turn 37. So the window is closing, but it's not closed fully.

I mean, you got five years. So if you said to yourself, I know I can wait three years, and I want to do that, you could wait three years and see if you can get right side up on this. If you know for sure that that opportunity would be available to you, and you wouldn't be the one % that doesn't make it to training, right?

And would you just rent in this new area if you got the job?

Yeah, I would That'd probably be the plan starting out at the new job is to rent for a while. Training itself takes about six months. And then, yeah, your housing is taken care of during that time, but then I would probably rent.

Is the training paid?

Yes, it is.

Okay, and then the last question, I mean, it's not part of the financial discussion, but the relationship. Is it going to survive long distance?

Probably not. That's another. Yeah, that's Another big factor in my decision.

Okay, and you're okay with that, it seems.

Yes. Okay. I think that's just something I'll need to decide. So I'm looking at all the factors So the financial factor and then also the relationship factor, and both of those, I think, are going to influence my decision.

Yeah. Okay. I mean, if she's the one that changes the scenario. But if you're like, Hey, it's been fun, but this career means more to me right now than the relationship, that's the choice you're making, and you just got to make peace with that.

Yeah, that makes sense.

Man, a lot of big decisions, John, but I'm excited for you. It does feel like one of those once in a lifetime opportunities. Now, if he was in crippling debt, didn't have the stocks, he was going to have to do a short sale and wreck his financial life, this would have been a different conversation. That's true. I just want to make that clear that he's in a decent spot, all things considered, outside of being underwater on the mortgage, and that allows him to have this flexibility. And he's single, so I know spouses or children are affected by this move.

That's a crazy change, though, from software developer to federal law enforcement.

I got to know. I mean, if it's... You got to be at... There's age and only this many people get in. Is this like seal team 6? Is it CIA?

I don't know, man. He's going to be knocking on some doors.

I didn't want to ask because I felt like he wouldn't tell me. Whatever it is, none of my business.

I want to know more. It's like a series. It's like Jack Ryan.

He is Jack Ryan. He's not telling us. Welcome to 2026. Last year is officially in the rear view, and you're fired up to finally make some changes with your money. New year, new goals. We love it. But let's be honest, old you said the exact same thing last January and the January before that. And before you know it, those money goals fizzle out faster than the fleeting flavor of La Croix. So here's the truth. New year motivation only gets you so far. You need an actual plan. And the good news is you don't have to figure it out on your own. Every dollar builds a personalized plan based on your goals and your real life. And it actually coaches you to stick with it. Plus, the EveryDollars app will help you find extra money hiding in your budget. And trust me, there's always something hiding. The average person finds $3,015 in the first 15 minutes. That's basically like giving yourself a raise and a much happier New Year. So don't let future you down. Make them proud. Go download the EveryDollar budget app and start for free right now. If you're wondering where all your money went in 2025, that is normal, and normal is broke.

But next year can be different. You can get a head start by downloading EveryDollars. Every Dollar builds you a personalized plan and coaches you to find extra money and then put it to work to beat debt and build wealth. Answer a few questions and you'll find thousands on average in just the first 15 minutes. Every Dollar still has the same great budgeting features to help you tell your money We're ready to go. So don't go another year feeling broke and stressed. Start Every Dollar for free in the App Store or Google Play. Mike and Kim are up next in Kansas. What's going on? Hey, sir. How are you? We're doing great. This is a fun segment. You guys are not just random folks. You are Baby Steps millionaires. Is that correct?

Yes, sir. We really are. And yeah, it's really exciting, actually, that both of us come from a very humble beginnings. When we found your plan many years ago, I'll let the wife explain that. That put us on this path. We can't thank you enough. It's just great.

That's great. Well, hey, I did didly squad over here while you guys did all the hard work, but we're honored to be a part of the story. For the listeners, we like to do these segments to say, Hey, it's possible for you. These are real people, normal people who just worked their tails off over a period of time and invested consistently, and we want to hear how you did it. Let's break this down. What is your net worth as a family?

Well, we're north of 3. 5. And to break that down, we got 2. 7 in 401(k)s IRAs. We got about 100 liquid in brokerage accounts, savings account. Our home That we purchased last year with cash is valued at 700,000.

Good job.

Amazing. How old are you guys?

I am 57, and Mama is pretty close to that.

Fantastic.

Is Mama on the line? I think I hear her back there.

Hi, Kate. I'm here. Yes.

Hi.

Hey. Fantastic. Okay, what was your worst year of income and best year of income in your working careers?

Okay, 1987, my first year in the military, I made $8,694. Wow.

And best year so far?

This year, we'll probably... North of 300. That's with six retirement checks coming in on top of my wages. Way to go.

That's a glow up if I've ever heard of one. Wow. Yeah.

Okay, so what are your careers?

So we are both retired military, and then we both went on to work for the military as civilians. My wife is retired for good now. She's retired twice. And I'm working on my second retirement. I could retire any day. I have the time. I'm enjoying my job. Keep doing. So in the next three to five years, I'm going to walk.

Maybe you'll hit a world record. You'll have three retirements. Just keep it going. It's like that movie where the cop has one more mission in him. He's like, Come on, get out of retirement.

Liam Neeson? Yes. Well, thank you for your service.

Yes, incredible. What were your degrees in if you got them?

I got a two year in general studies, and then I'll let I'm going to take over. I have a four-year degree in criminal justice.

Fantastic. And do you remember your GPAs during that time?

I think mine was 3. 6. Yeah, and mine was about the same. She was being humble. She was about a 3. 8.

I can tell she's the smarts here, and you're the Bronze.

That's awesome. I'm the Sherpa. I'm the Sherpa of the relationship.

So how did you do this? Was this always on the radar, we want to say, for retirement, or did you go through some valleys to finally make it to this being the goal. Tell us a little bit about the journey financially.

So, yeah, like I said earlier, we both came from very humble beginnings, and we knew that we had great families and great values, but we wanted to change the money part. So we searched and searched, trying to find a path. How do we get there? How do we get there? Then from there, I deployed in 2008 for 15 months. While I was gone, I'm going to let Mama take the conversation over, though. We were stationed in Germany, and he deployed to Iraq for 15 months. So it was just myself and my daughter. And a friend of mine told me about Dave Ramsey, and she gave me the book to read it. And when he would call on Sunday, I would ask him, What are Are you watching on TV? Are you listening to any money people? And he was listening to another pretty well-known financial voice at that time. And I told him about Dave Ramsey and how the podcasts were free. It was just so easy to listen and get engaged, and I'd mail him a book. And sure enough, as soon as he heard Dave Ramsey, we both just fell in with both feet and dove into the program.

It was exciting. It was new. It was invigorating. It was a way of money management that we were not familiar with, and it all made perfect sense. And with team effort and just intentional about where every penny went, we were able to become debt-free and then start, obviously, saving money. So because of a good friend and because we both wanted a change for our future, Dave Ramsey really Really turned the switch for us.

Wow. That's awesome. So this was 17-ish years ago. You guys got focused and went, All right, let's get out of debt. Let's start investing.

We did. We went all in. I buy your books by the bundle, and I I asked them out. When I got here, I passed them out to my team that I work with.

That's awesome.

And I said, Hey, guys, just read this book. All I ask is you read it and pay it forward when you're able to one day. We've been to the seminars down in LA. We both talk- We're going to find out for The Cruise. We were signed up for the previous Cruise.

The first one.

Yes, but COVID put a damper on that.

Yes, it would have been great. It was great when we did it again last year.

Yes, and most recently we co-taught, prior to leaving Germany, we got back from Germany last year, we co-taught a financial peace class with our chaplain, and that was great.

That's fantastic. Did you guys inherit any of this 3. 5 million?

Not a penny, sir. No, sir.

Fantastic. And then I got to know, what cars are real-life millionaires driving? Can you tell us the year, make, and model of your vehicles?

I am. The car I drive to work every day is a 2009 Honda Accord.

That is so perfect. That's so spot on. Wow, wow, wow. Okay, and how about Mama?

Mama's got a Honda Pilot in there. That's a '22 that we bought cash. There we go. We were there.

Good man. The wife always drives a nicer car. That is the rule.

That's the rule. Yes, sir. We've only bought three cars. We've been married 31 years this August. We've only bought three brand new cars over those 30 years. Wow.

So we just- Well, pop is due for an upgrade, isn't he?

Well, to be transparent, I got an upgrade last summer. I got a GMC Sierra with the Denali package, but it sits in the garage because I baby it, and I've never had a vehicle like that.

Understood. Okay. Okay. Makes sense.

It's too nice for you to drive. It's too nice. It's just a trophy at this point.

It just sits on the shelf. Exactly.

That's hilarious. I take it to the gas station and then I detail it and back it back in your garage.

So do your neighbors or friends and family know your status and networth and wealth? Because it doesn't seem like you flaunted. If I drove by your house, I would be like, Those guys are probably worth three and a half million.

No, they don't know. And I was telling my wife, I was telling Kim, I was like, This is funny because we don't have to worry about our family listening to this podcast because they don't follow you guys like we do.

That's amazing and sad at the same time. I hope they one day. They goes, Hey, that's Mike and Kim. They didn't change their names. I recognize those voices. Wow. There's nothing to be ashamed of. That's the good news. If they're like, Whoa, I didn't know. Hey, we'll show you the way. There was no magic tricks here. You guys worked really hard. You served your country well. You invested for the future. Was this just in 15 years of solid investing?

Yes, sir. So in 2002, the army came out with the TSP, and you're well familiar with that.

Oh, yeah. So I watched that for about a year.

And then I went all in in January of 2003. And then I kept that while I was in active duty. When I retired, I rolled it into my civilian TSP, and now it's just one big one now that's growing. And my wife, she did, and this is what I tell people, it's never too late. My wife worked 11 years civil service. The last 10 was consecutive. She dumped, she maxed it out every year with catch-up funds as well. And then she retired after 10 years. And now her TSP has grown to over a million dollars in 10 years of investing.

It's crazy what some intentionality does and the alignment. That's the really inspiring part about you guys. I can tell you're in sync. I mean, you're passing the ball to Kim. She's passing it back to you, Ali, you. You guys, that speaks to a great marriage, which then turns into a strong financial future. So thank you for inspiring us and everybody listening. And it's still possible. 57 years old, 56 years old, we're $3. 5 million, $0 in inheritance. He's driving an '09 Accord. She's got the '22 pilot as it should be. I want to be them one day. Okay, picture this. You sit down to do your taxes, but instead of stressing out, you're actually early ahead of the game and filing with an affordable software that makes your computer shoot confetti when you're done. Okay, not that last part. But Ramsey SmartTax does make filing easy and doesn't make your bank account cry. Ramsey SmartTax is a 100% accurate software that's honest about its pricing and is backed by a company who's been in the business for over 50 years. So go to ramseysolutions. Com/smarttax to take advantage of early bird pricing and stress-free filing.

That's ramseysolutions. Com/smarttax.

Our scripture of the day, John 16: 33.

I have told you these things so that in In me, you may have peace. In this world, you will have trouble. But take heart, I have overcome the world. James Clear said, When you can't win by being better, you can win by being different. That's how I've got I am today, Jade.

I knew you were going to make that about you somehow.

I'm not the sharpest in the room, but I'm unique.

You are unique. You're one of a kind. There's only one George Campbell.

There you go. All right. Mindy is in College Station, Texas, up next. What's going on, Mindy? Hey, how are you? Great. How can Jade and I help today?

All right. I have been debt free. I have no student loans. I am a senior in college and looking into moving out within the next year, buying a house, and I have no credit score. And one of my professors got into my head, I'm wondering how to best build a credit score without going into debt.

Great question. And by the way, I'm so proud of you. You know how weird it is that you are debt free and graduate in college with no credit score?

Absolutely.

It's a good thing.

Way to go. So what's your current- I'm very excited about it. What's your current living situation? Are you at your parents? Are you in the dorm? Where are right now?

Yes, I'm living with my parents at home.

Okay. Are you paying them any type of rent or just totally?

No, I looked out. I am living rent-free, able to work only four hours a week at a practically minimum wage job while going through college.

Okay. And what will your job be when you graduate?

I'm looking into government agricultural work.

Okay. And what will that pay?

Somewhere around 70,000 a year.

Okay, cool. So you're not technically ready to buy a house. You're just thinking about what you will need to be ready to buy a house.

Correct. And is that the big reason for wanting a credit score, wanting to build it?

Correct. So I'm in a deed of trust state, which means that no court if I default on a mortgage, and some of the mortgage companies are a bit more harsh. So I am wanting to have a good credit score when I graduate from college.

Got it. But you're not going to be buying a house out of college?

No, not directly.

So you'll be renting for a while. Absolutely. Okay, and you can rent easily without a credit score. If you are employed, pass a background check and you have enough money to cover a potentially higher security deposit, which you'll get back when you move out, they will rent to you. And so don't believe people who are like, why are you going to need a credit score to rent an apartment still? I've rented many an apartment without a credit score. They just want to know, Can you pay? Are you a criminal? And if not, they go, Well, since we don't have the credit score, you'll pay a higher deposit. That way there's a little more skin in the game on your part. So don't worry about that. Okay, good to know.

So then let's talk about the idea, we know you won't need it to rent. Let's talk about shifting you from the whole mindset of, Well, I might need a credit score for something, Jade and George. And we're going to just suggest that you don't need to build a credit score for any reason. Because right Right now, I mean, think about it, you have no debt. There must be a reason that you decided to go through your life with no debt. The only way to build a credit score would be you having to get into debt.

Okay.

When you do get to that point of buying a house and getting a mortgage. There's a process that I've been through called manual underwriting. You may have heard about it. I'll tell you the exact things that are required because I did in-depth research for my book, which I'll send you, Mindy. There's a whole chapter on credit scores and how to live without one, where it's super nerdy, and here's the exact steps. Here's what you will need to get a mortgage without a credit score. You'll need verification of income for the past 12 to 24 months, so your tax returns, which you have been employed at that point for a few years, right? Correct. You'll have rental payment history, 12 months of documented on-time payments. You'll have that. You need 12 month history of your savings and bank statements, which you'll have that. Then one or more regular monthly expenses as an alternative trade line. So think utilities, cell phone bills, anything that you've had to pay monthly, that will count as well.

For anybody listening who's thinking of the same thing, if you are self-employed, you'll probably have to show your tax return history for the previous year.

There's a little more risk there with self-employed folks to make sure their income will stay that way. So, Mindy, that's all you need. You can reach out to our friends at Church Hill Mortgage as you get closer, and they can help you in your area go, Here's exactly what you need. The The truth is, here's what they do. They do manual underwriting, which means no computer runs it. There's no credit score. There's no automated underwriting. And so a real person looks at all this information to grant you the loan and essentially give you a good credit score.

Okay.

So that's what happened to me. As long as you do a 15-year fixed rate mortgage with at least 10 % down, that's the other thing, is you got to do it the Ramsey way, not going, Well, I'm going to put three % down on a USDA loan on a 30-year. You're going to have a harder time that. But if you're a strong borrower, meaning you're 15 year and 10 % down, they go, All right, or 20 % even better. And so that's what I would be focusing on, is just stacking cash, since you're doing so good, instead of worrying about, Do I need to open a credit card and start building my score and keep up with it.

You 100 % do not.

I would spend your energy elsewhere.

Sounds good. Thank you so much.

Yeah, thanks for the call. And hang on the line. Kelly's going to pick up, we'll get you a copy of my book, Breaking Free from Broke, which breaks all that down for you. Hunter is in Arkansas up next. Hunter, what's going on? Hey, man. How are you doing? We're doing great. We're running a little short on time, so get right to the question. Let's see if we can help you.

Yeah, man. So basically, sum it all up, I'm just trying to do better at trying not to live paycheck to Paycheck. We're just going to see maybe if you guys have some tips on that.

Now, the first thing, paycheck to paycheck is usually a symptom of a bigger problem. You're just feeling the effects of something bigger. It's usually a spending problem or an income problem. So tell us a little bit How much does that make you think about your income.

Right. So this past year, I just cleared over 117,000, and my total bills for each month is roughly around 3,000 a month.

Okay.

And so, yeah, I roughly make, after taxes, 1400 a week. So that gives me a little bit of... Once I look at my bills account, I roughly have about 50 to 600 dollars a week after that, and freely.

So you're bringing home 7,000 or so, and your expenses are 36,000 a year. So you should have half your income sitting somewhere. But you're saying it's disappearing and you're not able to cover all the bills?

Well, no, it's not necessarily that I'm not covering bills. I got the bills taken care of. Like I got a whole other account where it automatically direct deposit to my bills account. Those are all on auto pay. It's just more so the free spending money, as well as trying to cut in to me, trying to save some of that as well.

Do you have any debt?

Yes. So I got a truck payment, a side-to-side payment, student loans, and rent.

Student loans?

How much are the student loans?

The balance is right at 11,000, and the payment is $121 a month.

Okay. And what do you owe on the truck, and what do you owe on the side-by-side?

The truck I owe 49,000, and the side-by-side, I owe 23,000.

Goodness gracious. There's your problem right there, my guy.

Ding, ding, ding. We found a winner. Yeah. Did you got $73,000 in toys going down in value? And you make a little over $100,000. It's just simply way too much, which means I think one or both of these things should be sold to free up a whole lot of income. What's the payment on the side-by-side and the truck?

The truck is 1,130, and the side-by-side is $575.

And what's your rent every month?

We split it, so it's 475. So my part is 475.

Goodness, your truck payment is like triple your rent.

Right.

Do you see the problem here? You're going, Hey, I'm living a paycheck to paycheck. It's like, Doctor, what's going on? I don't know why I'm in pain. And we're like, Dude, you got a knife in your back. That's what's going on. It's the truck on the side-by-side.

It's that. And I mean, for a guy who's making, I don't know, what did you tell me, 1400 bucks a week? You're spending on something. Do you have a girlfriend?

Yeah, I do.

Yes, ma'am. All right. Do you have a budget?

No.

It's in my head. It's a mental budget.

Yeah, I think that's your big problem. I mean, don't get me wrong, this truck and this side-by-side are a problem. You need to sell one of them probably instantly, and then do the work to pay off the other. But you got to get on a budget, first and foremost. I think if you get on an every dollar budget, you're going to see where all this money is slipping through the cracks. My guess is it's on social I think you're at that. It's like you get off work, go get a drink with your boys, take your girl out, going out on the weekends, all of those things.

Little DoorDash here, Uber Eats there.

Kelly is going to pick up and make sure you get set up with every dollar so you can get back on track.

We're rooting for you, man. This is a solvable problem. All right, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.