Transcript of Staying Steady Is Still Financial Progress

Normal is broken, common sense is weird, so we're here to help you transform your life and your money. Here from the Ramsey Network in the Fairways Credit Union studio, this is The Ramsey Show. I'm Jade Warshaw, and next to me, Dr. John Deloney, taking calls for the next couple hours or so. 888-825-5225 is how you're going to get involved in the show today. Nicole is in Miami, Florida. Hey, Nicole, welcome to the show.

Hi, thank you for having me. How are you guys?

Doing all right. How can we help today?

So I am, um, in a lot of debt. Over the last year and a half, I've been trying to grow spiritually. I think I've hit a wall because I don't know which way I should go. So, backstory: my debt is about $110,000. Most of it is student loans, which I'm trying to do one of the— I have to sign up for, like, a new plan or something like that. Over the past year, I've become very, I guess, kind of bitter towards my husband.

All righty. Let's head back to those phone lines where we have Terry, who's in Tampa, Florida. Hey, Terry. How can John and I help today?

Yes, thank you. I've gone through all the Dave Ramsey's baby steps, and I'm trying to complete step 6, to buy and pay for a home outright.

Wow.

But I don't know if it's a smart decision at my age.

Okay. How old are you?

I'm 69 and a half.

Okay. 69 and a half. And tell us, you know, what your financial situation is looking like. You've been through the baby steps. What's your net worth? What do you have saved?

Well, I'm completely retired, and I have in my 401(k) traditional IRA $775,000.

Terry! Look at you.

Wait, what?

That's amazing.

Oh. Okay. Well, I've tried to live frugally.

You've done a good job.

And work with what I spend the money on.

Well, that's incredible.

I have.

Hey, that's incredible, Terry. I'm proud of you.

Thank you. I have $62,000 in cash.

Okay.

And I have a mobile home right now that I probably could sell for $24,000.

Okay.

But that's where I'm at right now in a mobile home. I had to retire early. I didn't have to. I chose to.

Okay.

To take care of ailing parents until they all pass.

Okay. And it's just you? No spouse?

No.

Okay.

I was a single mom, and thanks to baby steps, I was able to get him through school and not have any debt worth that all.

Well, I love that. Well, you're amazing, Terry. I'm proud of you. And you've got Social Security, I'm guessing?

Yes, I do.

What do you make?

And that's.

What does that bring you?

I think that's like $23,800 a year.

Okay. What's it amount to every month? About.

17.

17? Okay.

Something.

Okay. Now the question is, are you drawing anything off of that 401(k) or does the $1,750 meet your needs?

No, it doesn't meet my needs. I've been using savings accounts.

Okay. So you've been dwindling that $62,000 down?

Well, no. That's what I'm down to now. I'm getting ready to— I talked with a financial advisor about trying to roll over money out of the traditional into a Roth and also take a draw each once or twice a year.

Okay. Good. And what is he saying? What are— how much are you looking to draw off of?

Well, I'm looking to draw just $12,000 a year to start with.

Just $12,000 a year? Okay. Just an extra thousand?

Yeah.

Okay. Fair enough. All right. I anticipate him saying, "Fine. That sounds like a great idea." So that's— that'll bring you up to $2,750 a month, and then that'll be plenty for you to sustain your life as it is. The question is, buying a home. I mean, what are you looking to purchase? What would it cost you?

Well, I don't want— I set a budget of $350, and that would be for probably a home in Tennessee somewhere or a villa here. And most of the villas around here, you'd have an HOA anywhere from $300 to $600 a month fees.

Which means you'd have to draw more from your.

And stay where I'm at and in a mobile home.

Okay. So I'll be honest with you. It's a— it's a little tight. It doesn't make me feel wonderful for you to basically cut your retirement in half, even though you're only drawing $1,000 basically a month off of it. If you were to buy a home, we are adding, obviously, some expense there. You mentioned the $600 a month for HOA fees. I would love for you to sit down.

If I buy a villa, yeah.

Yeah. I would love for you to sit down with a SmartVestor Pro and have them run numbers for you and see if this is a fair game for you. I don't want to say over the— I don't want to say in this quick amount of time, yes or no, because I actually think it's really tight for you.

No.

But for your needs, they might say it's okay. I think it's a little risky for you to spend $350. I wonder if you could do something for $250? A condo?

In this market, probably not.

Well, and it might be.

But I think we're looking to have a yard, a little yard of some kind.

It might be that we can do this in a couple of years when this nest egg has grown a little bit more. That might feel a little bit better. But again, I would sit down with a SmartVestor Pro and let them.

Where I'm at?

Say again?

I was looking to buy a newer mobile home in where I'm at, and then my rent lot will go up to $1,200.

I would not do that. I would not, because that mobile home is going down in value. There's a couple of variables that you said that would want— that I would want you to sit down with someone, because number one, you also said you're thinking about doing a Roth conversion, and there's going to be some tax implication there. So I just don't want you to bite off more than you can chew. I think you've done a really great job. You've got $775,000 in this nest egg, and I think it's good, but it's tight. So I would sit down. You can go to ramseysolutions.com/smartvestor, and they can help you look at this and make sure that there's enough money for you to draw what you need.

For health issues that pop up.

For health issues. Exactly. So it's tight for you. I would love nothing more than for you to get out of that mobile home, but for today, hop on there, and they're going to be able to give you some really detailed information to make sure that dollar amount is there for you.

And I would also get two things. One is I would get a— get an actual— and you can get this at the Ramsey Solutions site also. Get a trusted real estate pro to actually go look at the market.

Yes. Good idea.

Because there's— I mean, the home sellers are cutting prices now, and it might surprise you what you could get into for $200,000 or $250,000. It's not going to be fancy pants, but man. And I want to double-click on what you said. If my mom is 70— she's older than that now— but I can think of nothing more that would give me peace to know she's got her house taken care of.

Yes.

And so you— the first question you ask is, "Am I too old to buy a home?" The answer is no, no, no, no, no, no. It's not an age issue. It's just a dollar amount issue. And I don't want you to cut your nest egg in half and also increase your monthly expenses by 60% and then have a medical emergency, and suddenly you've got $100,000 left to last you maybe 20 or 30 more years. And so, yeah, get with a SmartVestor Pro and a real estate pro. Get actual, real numbers in front of you. But man, if you can take rent off the table for the rest of your life, that would be incredible.

Yeah. And I do want to highlight something she said, because it could be confusing for a listener. Baby step 6 is not the baby step that we purchase a house. Actually, home purchase lies further in the front of the baby steps. It's actually part of baby step 3. So baby step 3A, technically, is get 3 to 6 months of expenses saved. Baby step 3B, and we don't always say it this way, is that's when you save up a down payment for the house. And so you do that, then you start baby step 4, which now you're investing, and you go on through.

Then you're set.

Living your life like it's golden.

But rents are— just the report I read today was that home prices are— sellers are actually cutting the prices. There's something on the market.

Yep.

Interest rates are still incredibly high. But also, rents are going up. And so.

Rents are going up.

The thought of, man, in 20 or 30 years, what are rents going to be? It might be astronomical.

Yeah. I mean, rents alone, most people, if they're paying rent, they are paying 30% of their take-home pay into their rent. And that's already 5% more than what we would say for a home purchase. So that's true. For most people, it's the biggest line item on their budget. And so if you can stabilize that by getting into a home that's your own, we definitely recommend that.

Okay. So the first call that we called in, the lady that called in, she was having trouble paying off the debt. She was needing to get her spouse on board. And at the end of the call, I gave her every dollar for free. And I did that because every dollar is the best way to get eyeballs on your finances so you can actually see what's going on. It's not just numbers floating around in your head. You can put them into a budget. You can actually load in your income. You can actually load in your transactions. You can load in your expenses.

Well, and even beyond that, I'm an Excel guy, and I like writing stuff out and making my own little top secret things. But there's something about when I buy something and it pops up on my wife's shared account.

Okay. She sees it.

It's like same team, right?

Yes.

And then I might— or early on, I'd get a text like, "Hey, what is this?"

Yeah. "Where'd you go? What was that?" And so I love that. It helps.

It just brings you to— it forces you to have the conversations that are hard to have.

It helps you communicate with your spouse. It helps you do the math. It's less mistakes, less errors. And I'm going to say right now, if you want to accomplish a goal, you're going to do it. I'm going to go with four times faster than you would if you were trying to do it on pen and paper.

At least. And let me say this. This is something that used to haunt my former life working at universities, which is the way budgets were sometimes created, not at my last university, but in several that I worked at, was, "What's all the stuff you want to do? That's going to be the budget, and so we need to make that much money."

No.

Right?

Yeah.

And this allows you to say, "How much do you want to pay off?" That's goal number one. And then you get to look at, "All right, here's what I want to spend on food." All right. Well, now I can tinker that down. I can tinker that down. Because my goal is not to live luxuriously every month for the first year or two, but it's to get that number to zero, the debt number down.

Yes.

And so it helps you actually create a life that meets your goals, not tries to force this end goal into this life you want to live, right?

Exactly.

And that's just about how it helps you reverse engineer sacrifice, which is hard to do, but it's so good.

Yeah. And I mean, that works with debt. That works with saving up for a car. That works with saving up a vacation. Whatever that goal is, you plug that in, it's going to help you find the margin. And instead of kind of that extra money just floating off into space, you actually know where it's gone, and you can decide what to do with it next. So if you don't have EveryDollar, I think you should get it. Start it for free today. You can literally just do it for free today. So go download it in the App Store or Google Play and get yourself started. We've got Stella, who's in Providence, Rhode Island. Hey, Stella. How can we help today?

Hi. Hi. I'm so excited to talk to you guys. So my question is, I'm losing my job in January.

Hey, do me a favor, Stella. Can you talk directly into your phone?

Yep. Can you hear me now?

All right. Go for it. A little bit better. Yes, ma'am. Go for it.

Okay.

Much better. That's great. That sounds perfect.

Excellent. So my job is coming to an end in January, on the 15th. And right now, I have— my biggest question is, should I continue? I'm going to be done with baby step 3 on Friday, basically.

Oh, good.

And so I'm trying to figure out, should I continue just banking everything that I have into baby step 3, or should I use my margin to fund what's left of my 401(k)? Not what's left of it, but to fund my 401(k) before I have to roll it over after I lose my job.

Okay. Let's get some more thoughts around this. So how much more of your 401(k) is there left to go? I'm just curious.

Oh, the max amount.

Were you maxing it out, or?

No, no. I was barely— I only have about 20,000 in there right now.

Okay. Were you trying to get the match for the new year? Tell me what your goal was on that.

Honestly, I haven't started on it yet. I've just been focused on baby step 3 and getting my six-month emergency fund up.

Okay. Got it.

So now I'm wondering, should I take advantage of that match right now and just go in 50% and get the match?

I wouldn't. You're in a storm mode. You know that there's a storm coming, and it's coming really fast. And unless between now and when that January 15th job loss happens, you secure another job, and there's no gap. If there's no gap, sure, start investing. But if there is a gap, and if it remains a big question mark like it is now, I would say, "Hey, there's a storm going on, and I'm battening down the hatches." Is that what it is? Batten down the hatches?

There you go.

I don't know what that means, but I'm going to batten down the hatches, and I'm going to save up every dime into that emergency fund. And then when everything clears and you start getting a new job and everything's looking good, anything that's beyond that six-month mark, you can apply to your next goal. You can apply it to paying down the house, and you can start investing.

Tell me your job situation. What's going on January 15th?

So the company I work for is relocating out of state, and I can't afford to move with it. And there's no remote opportunity. It's just my job won't exist when the company moves, so.

Gotcha. What kind of work do you do?

It's a retail position.

Retail. So if I'm in your situation, I would continue to work through as long as you can. And that's you showing up as a person of dignity, right? Not compromising your values because you know your job's coming to an end. Because it's going to be tempting to slack and all that kind of stuff, just kind of phone it in. But I want you to look yourself in the mirror and say, "I'm going to be a person of integrity, and I'm going to show up." If I'm going to take their money for the next three months, I'm going to show up and continue to work hard. But also, I want your number one priority to be finding new work, right?

I love that goal. And to help you, our colleague, Ken Coleman, has some really great resources out there. We'll give you From Paycheck to Purpose. We'll give you—let's give it all. Let's give them Proximity Principle. We'll give you that, Stella. We'll also give you Find the Work Your Wire to do. I'm assuming that this can be helpful because inside of there, it's going to be an assessment for you to figure out how to use your different skills. Because who knows? Maybe you'll do retail, but maybe you'll move on to a different field. And the career assessment that's inside Find the Work Your Wire to do will help you figure out what skills are transferable and what other things that you can do in the market.

But I don't want you sitting around waiting until January 15th to start looking.

That's the part.

They've notified you. We're letting you go. And so if you're going to keep showing up, show up with dignity, but keep your integrity, but make it number one priority. I got to have something on or before January 15th. And if you get it starting January 1 or January 2, great. Put in your two-week notice and get on out of there.

So this call brings up something that I think it's important to highlight. Whenever we teach the baby steps, which is seven steps to finding financial peace, building wealth, there's two times that we talk about that. It's really important to note. There's really only two clear moments that we say, "Hey, pause the baby steps if this happens." And that's storm mode, which is what I just called it. Storm mode is like you lose your job. Maybe there's some sort of medical emergency. Maybe there's just family crisis going on. That's way more important for you to focus on and solve than trying to do whatever the next baby step is.

Love it. Love it.

So that's that. All right. Let's go to a quick social question here. Nicole says, "Where is the best place to put savings for our kids, such as birthday money? A portion of what they get paid for a portion of what they get paid for chores." Okay. I don't know what that part meant. But if you have kids that have money that is saved, Nicole, the best place to just throw that is in a high-yield savings account because chances are they're going to want that money soon to buy their first car. Maybe you can help them out with that or something along the way.

All right. Let's go to Matt, who's in Burlington, Vermont. Hey, Matt. How can we help today?

Hello. Thanks for having me, guys. I'm a big fan. This is super cool to be here with you guys.

Awesome. Glad you're here. How can we help?

So I've been a long-time listener, and I know you guys generally don't stray from the baby steps too often. But I'm wondering if my situation would be one of the rare instances where you might. Basically, I'm hearing—

I love a good exception, Matt.

I don't think I've ever heard one. So let's see if yours is the first.

I'm going to cross—I'm hoping it's you. I'm hoping it's you, brother.

Oh, interesting. I feel like—oh, okay. Maybe I'm mistaken. I thought there's been a couple here and there, but basically, I'm wondering if it would be actually wise to pay my mortgage down before I pay my auto debt down. I only have the two loans. No student debt or credit card debt, anything like that.

Okay. What makes it so pressing?

Well, the mortgage is just a significantly higher interest rate. The auto loan, they're obviously looking to move cars. So they give—it's like 3% versus 6.3 something. It's like twice the interest rate on my auto.

How much is this car loan?

About 25,000.

And how much is left on the mortgage?

About 350.

I mean, it's kind of a no-brainer. I mean, obviously, if you paid the mortgage first, you would be well done with the car by the time—I mean, I'm guessing. I don't know what your income is, but I'm guessing it's going to take several years to pay off this 350. And by then, I would think that that auto loan would be long gone, right?

Yeah. What do you make, brother?

Four years?

Make around 85, but also I have probably around a quarter million of stocks and Bitcoin.

Oh, so you were going to use that. So why not just do all of it?

Not all at once, but over the next year, a couple of years, just rotating some from that and then derisking by paying off debt.

How much stock and crypto do you have?

Like a quarter million.

A quarter million. You said that. Okay. Now, here's the thing. Like I said, if you did your plan, you paid off the mortgage first, let's pretend you cash-flowed some of it, and for some of it, you dipped into the crypto. That car loan is still going to be—it's still going to be there. And my thing is, why not just knock that out first? Surely you're paying a monthly fee on it. How much are you paying a month on that?

I think 470.

Yeah. Why wouldn't you reach—why wouldn't you reach in, pull out the 25,000 from the stock and crypto, pay that off immediately? Now you've got 450 left, and you can start to use that to chuck away at the house, and you can drain the rest of the crypto and coins to do that.

And that way, you're not paying a monthly payment of $475 on a depreciating asset. It goes down in value every day it sits in your driveway.

And keeping it around for four and five years.

Yeah. Yeah. It's a pretty new car. Yeah. I'm hoping to hang on to this car for more like 10 to 15 years.

Then you'll beat the depreciation over time. Pay it off right now and don't pay another penny in interest.

Yeah.

The part of—

Yeah. I'm just—

I get you're looking at the number they want you to look at.

The interest.

Which is the interest rate. What is the interest rate? What is the interest rate? And what is the monthly payment? And the spirit underneath the baby steps is to stop looking at those things. They're all big. Look over here. Look over here. And how much is this payment? Can I afford this payment? Yes. How low is this interest rate? Great. You feel like I'm winning somehow. But the point is you still have a—your payment will never change. So if your income goes down, if suddenly there's a job loss, whatever, that 470 will still be there no matter what. And the thing that it's leveraged against is a depreciating asset.

Yeah. No, definitely.

It's a lot of—it's like running on a treadmill really, really fast. It's awesome, and it's a workout, but you never get anywhere.

Yeah. No, I respect your guys' philosophy on it very much. But at the same time, it's like a lot of the reason I'm in the position I'm in is because I've been a risk taker with respect to investments, and it's worked out well.

In what has been one of the wildest bear market runs in human history.

Well, even if it hasn't been, I do want to respect what you're saying, which is the truth is there's plenty of people who are successful with their money, and they don't do it the Ramsey way. That's true. There's people who will call in, and they've bought real estate, and they've not done it in cash, and they've done things that we would not suggest, and they've been successful. And I think that's fair to point out. But the difference between us and them, and even us and some of the things that you're saying, is we are very motivated by peace here. We're very, very motivated by that.

Freedom.

Freedom and just the simple borrower-slave to the lender mindset. And I think that for folks around here and people who kind of drink our Kool-Aid, that does something to them on the inside. They feel that. They like that feeling of not owing anybody anything. And so that's what our teaching is surrounding: people who want to be completely autonomous, people who want to feel like they're completely in control of their life, and people who ultimately want to reduce risk and increase peace in their life. And those are the folks who choose this way, and they go, "That feels right for me."

And I will say this. I've got no data to back this up, but I'm hearing more and more folks who were in high school or potentially in college during '08 and '09 who have entered the workforce and have played crypto games, played single stock, and have done well. Those who lived through '08 and '09 with skin in the game, with money in the market, or who had a house payment that suddenly their house was worth half, they tend to hear the message of peace more because they've lived what happens on the other side of this teeter-totter.

Yeah.

And so it's easy. Similarly, it's easy to be like, "Yeah, look at how good I'm doing." If everything's up and to the right, you can get a false sense of, "Look how good I am at playing single stocks and rolling stuff over and moving stuff around." It can feel all good. Talk to folks who went through '08 and '09 about what it's like to be on the other side of that teeter-totter, right?

Yeah. It's scary.

Yeah. It's such a frantic feeling inside of me still that I don't ever want to go back to that.

I mean, gosh. Now I got to pull the thread. '08, '09. So Sam and I got married in '07.

And it was raining money and credit in '07.

Raining money and credit. I thought we were going to buy a $500,000 house in '07.

You know why? Because they would have given it to you.

They would have. And then when '08 hit, which was a year into our marriage, that's when everything—I mean, it was like overnight. Everything started to crumble. People around us that we knew, they were so upside down in their house. They were, I mean, just losing everything. And I remember in our neighborhood, we were trying to move out of our little subdivision, townhouse neighborhood, and there were literally 19 other houses for sale that were just like ours. And I was like, "Oh my gosh, we're never going to—" The fact that we got an offer on our house was the grace of God. But that was the year that I realized, "Oh my gosh, we're on $460,000 of debt."

It was Madhouse.

Unbelievable. And I think about that a lot.

It's like being chained to the Titanic as it's going down, and you can't get in a life raft because you got that 470 no matter what. And that debt and my six-figure student loans, that was not dischargeable.

No.

So that rock is chained to my ankle. I will go to the bottom of the ocean on this one.

Yeah. And I mean, that informs so much. I think you're exactly right. That informs so much of how our generation views how they want money to feel. It's like, "I never want to feel that again." And I remember hearing Dave Ramsey on the radio, and he was like, "Oh, for me, this is great. I'm buying up real estate left and right." He's over here thriving. And I remember thinking in that moment, "I never want to be here again. I want what that guy has. I want that sense of peace. I want to be able to look out and go, 'Oh, there's an opportunity here for me.'" And ever since then, John, that's what turned the key for Sam and I is, "I never want to be here again."

Solve for peace.

It's on.

Welcome back to The Ramsey Show here in the Fairwinds Credit Union studio. Back to the phone lines. We go. We got Lauren, who's in Fayetteville, Arkansas, up next. Hey, Lauren. Welcome to the show.

Hi. Thank you guys so much for taking my call. I appreciate it.

For sure. How can we help?

So we are exhausted going gazelle intense for so long. Should we sell our house to finish paying off our debt and immediately build our emergency funds?

Whoa. That is a huge sacrifice.

You're done, huh, Lauren?

That's right. That's absolutely. But we have a lot of equity in our home, so we would be able to pay off our debt, build our emergency fund, and still have enough left over for a down payment on a new house.

All right. How long have you been doing this, and how much have you paid off?

We've been going year and a half, two years. It took us a long time to really learn how to follow the budget and to sacrifice enough. And it's hard to say exactly. Probably close to 30,000, but we've had so many emergencies. Almost every month, we were killing that $1,000 emergency fund, using it for something almost every month. It's slowed us down so much.

Okay. And what do you guys earn?

About 115,000 gross.

Can I reframe something for you?

Oh, please.

Imagine your world making on six figures in Fayetteville. Imagine your world where you didn't have that. How much deeper your hole would be. And so I know it feels like every month y'all would scratch and claw and get 1,000 bucks, and then something would happen. But I want to flip that around and say, "Thank God y'all were doing this," so you met the need every month.

Yeah.

You get what I'm saying?

That's true.

I'm proud of y'all for continuing to get back on the horse and get back on the horse and get back on the horse because that's life, right? But you've kept doing it. And it doesn't feel like you've made progress, but sometimes not going backwards is progress, right?

Yes. Yes.

Yeah. Yeah.

So well done on that.

I appreciate that.

I love that. So two years, 30K doesn't feel you're feeling it at this point. You're like, "What can I do?" Tell us how much equity is in the home if you were to sell it.

Probably about 140 or 150.

And that's after fees? You kind of accounted for fees and things like that?

Yeah, roughly. We've made a lot of improvements to it with debt. And that's part of where the debt comes from. So I'm not 100% sure on the exact worth. And the market changed so much since we bought it.

How much debt do you have left?

It's a rough estimate. We have about 17,000 in credit cards, 10,000 in a key lock, and 8,000 in medical debt.

Okay. Then my next question for you is, let's pretend there was no debt at all, and you were just chilling in that house. Would you be looking at the house going, "You know what? This is not the house for us. Let's sell it and move and move up"? Would you still be saying that?

Yes. Kind of our goal, our plan is to, after paying off the debt, we were then going to sell the house and move. That's kind of a goal, I guess. But we're.

To big or smaller?

Maybe we should sell it.

To downsize it?

Bigger.

To bigger?

No.

I lost you. Come back to me.

Are you still there, Lauren?

I think you're off. Lauren, I think your phone moved from wherever it was to another room in the house. So in the meantime, until you figure that out, I think I'm not opposed to this. The fact that you were looking at selling the house before lets me know, "Okay, you're not just—" yeah, you're back. "You're not just doing this to get rid of the debt. There's real reasoning to it." So for that reason, I can be on board with it. But just know, I mean, this is the part I caution everybody. And I'm not saying that you have to suffer, but there is something that happens in that.

In the grind.

Suffering, in that grind of paying off debt that is good for the soul. It's good for the habits. It's good for remembering that I never want to be in this situation again. I think you had two years of that, though. And so I think that for you guys, I would go ahead, and I'd make that move and move on with your life.

Very cool.

Thanks for the call. Let's go to Katie, who's in Tyler, Texas. Hey, Katie. How can we help today?

Hey. Thanks for taking my call.

What's up?

My question is, so my husband and I—my husband's active duty military, and he's going to get out in about 18 months. We're going to relocate back to our hometown. And about a year after that, I'm hoping to be going into a graduate program for CRNA school. So that program requires me to be out of work for three years. And we're aggressively saving for the program. They're very pricey. But I wanted to know what y'all would recommend as far as investing in retirement while we're aggressively saving for this program.

Tell me about this program because I know there are—by the way, I applaud you to the moon and back on this particular program. Awesome. That's going to be an incredible credential for you. And I love that you're going to do this. And I'm also very pro graduate school, so I'm all on board with this. My question is, often we say, "I want to live in this particular town," and the only option here is a private school or a flagship state school.

Yeah, I hear you. I'm really looking at most schools in Texas because we are from Texas hoping to move back. We're not currently living there. And so the cheapest program that I've seen is about $70,000. And then the other ones range from 100 to 150.

Okay. And so you can almost double the amount of tuition cost, right?

100%.

Okay. But also, it's 70,000 over three years. So it breaks down to approximately, what, 23 and a half per year? And so is there a world where you save up year one and maybe year two, even half a year two, and your husband works to help cash flow the other one?

Yes. So that's the current plan. So right now, we have incredible margin. We take home about $11,000 a month, and we're saving three, and we're going to be saving more each month. So projected in the next 18 months, with saving 3,000 a month, plus the bonus that I know I'm going to get in March, and with our current savings, I would have 97,000.

Nice.

At the time we would move. My question is, we do have margin, about 5,000 a month, and we've been kind of—we became debt-free. We have an emergency fund. My husband is very into—he's an outdoorsman, so we've been doing hobbies and having fun and things. But do I need to be investing 15%, or do both of us need to be investing 15% into retirement while we're also aggressively saving?

Well, here's the thing.

I don't know where I want to land on that.

Well, I'd like it if you could. The only question I have is, when he's out of the military, what will he be doing? Because you said you won't be able to work. So the money you've saved is really just for tuition. How will you guys—how will you live and eat?

Yeah. So that plan is two years from now, we'll get out. We'll have a one-year transition where I'll just go work as a nurse in our hometown while he's planning on going to be a fireman.

And you're stacking that cash?

Get a job. And yeah, we'll have the cash stacked away. We'll live on one income.

Well, what I would do.

But he will work.

What I would do.

At this time in Walgreens.

What I would do is I would make sure that you guys sit down and do a budget and know the exact amount because this is a lot of different savings buckets that you guys are going to need to have. And I actually would pause investing. I think it's okay if you pause for a year or maybe two just to get this done.

All right. Today's question comes from Amber in Michigan. Amber writes, "My dad built a house for me before I got engaged." Very cool. "My fiance wants me to put his name on the house eventually. I'm hesitant to do this since there is a sentimental aspect to the house. I don't have any reservations about marrying my fiance, but this seems like a strange request. Is this a normal practice, and should I put his name on the house after we get married?" That's actually something I covered in my new book, Building the Marriage You Want. The answer is yes.

Yeah. I'd be asking myself the question, "Why wouldn't I want to let my future husband in on that sentimentality to share it?"

Yeah. It invites a richness to everything. So yes. Everybody's name needs to be on everything. And I'll tell you this, Jade. I learned this, not the hard way. That sounds dramatic, but I learned it. I was like, "Oh, man." I had a truck, an old banged-up truck, and then I surprised my wife and got her car. I didn't buy it. I put on payments or whatever, but I got her a car. And about three or four months later, when the title came in and all the stuff was there, she just casually said, and wasn't causing a scene or anything like that, just said, "Hey, just so you know, both of our cars are in your name only.

Yeah. And if you have a mortgage and maybe one of you only has your name on the mortgage, you can put their name on the deed. That way, they have ownership, and it's just paperwork to fill out. You don't have to refinance to do that. All right. Let's go to Steven, who's in Amarillo, Texas. Hey, Steven. What's up? How can we help?

Hey, y'all. Just saying, first of all, big fan of the show. Love everything you guys do. It's very meaningful, impactful work. So thank you for all that.

Thank you.

So my question today is, how do I know when to close down my business and get a job or keep trying, keep trying to make it work?

Lay it out.

Yeah. I've been in a management position as a 1099 contractor for the last four years. And year after year, I've been barely breaking even. There's been one or two years where I was actually negative. And two of my roommates actually introduced them to the Ramsey Show, so they're never going to believe that I'm talking to you guys right now. But they tell me, they say, "Hey, man, you have good skills. If you just got it, you could get a good job paying good money." And they're supportive and encouraging of me in that way.

So can I tell you something that it's a piece of advice. It's from a book by Dr. Henry Cloud. It's called Necessary Endings. And there's a question in that book that is such an amazing takeaway. And the question is, "What reason do I have to believe that tomorrow will look different from today?" And that's the question you need to be asking yourself because that's kind of where the hope lies, right? Let's pretend there was some work coming around the corner, and you knew it. Your buddy has got this big thing, and it's going to infuse your business. That would be a reason that tomorrow might look different from today.

Yeah, that's good.

I have it's kind of barbelled, right? There's a really good and a really bad. But I'm going to take it as really good that you've got some roommates that have known you for a while. I'm guessing y'all probably met in college. They've known you for a long time. They've seen you grinding and pushing. Sometimes the greatest gift you have, and I'm a direct beneficiary of a couple of men out in your part of the country who have said, "Hey, it's time to do something different." And whether that's professionally or whether that was me, I need to go see a counselor, right?

Just be turning the pages and turning to another chapter.

Just move into you found out you don't like this restaurant. Cool. I'm going to go to the next restaurant. And so I want you not to judge yourself because it sounds like you're the only one in your life putting this judgment and this pressure on yourself. And then go do the next right thing, which might be folding up shop. You've lost money for four straight years. That's a good data signal, right? And if there's no hope that tomorrow's going to be different, if you're going to still be driving out to Canyon for a bathroom job and you don't get the bid, and you've been doing that for four years, man, it's time to wrap it up and go join somebody's company and make six figures by this time next year.

I mean, do you see anything, Steven, that might be on the horizon that would cause you to have some hope that it would look different?

I can't be specific on that. I'd say there's always projections of if you just did this and developed one more person and built your staff better, then the business is totally different. But I've kind of been trying that for.

You've tried all that.

Three or four years now. And I read a lot of Maxwell. I've read some Ramsey books, Zig Ziglar. I try to do this thing the right way. And I just.

Pick up Dr. Cloud's book, Necessary Endings. To me, it's the single greatest business book ever written.

It's fabulous. What do you think you'd do next? Let's pretend you do get the signal and you're like, "Hey, I'm moving on." What comes next?

Honestly, I'm not sure. I love working with people. I love helping people as much as I can. I would probably connect with somebody in my church. I go to a great church out here in Amarillo, and that's where I met my roommates now. And I would just get connected with somebody out there and just try and serve where I can.

Have you read Proximity, Principle by Ken Coleman?

I have not.

Okay. We'll send you that. You sound like an avid reader. You sound like a person who would actually take the knowledge and do it. We'll give you that. We'll also give you his career assessment, Find the Work You're Wired to Do. And I think all those things together, those three books. I wish I could give you Henry Cloud's, but we don't give that book away. But do pop on his website and pick that one up. And I think all of that together is going to give you some clarity. If you're into reading books or listening to books, another good one is Jump and Find Joy by Hoda Kotby. It's just really inspiring. So I think that'll give you the information that you need, Steven.

It's time. It is. It's time. Can I give you this isn't in any of those books, but right now, you may not need a home run swing while you're having cups of coffee with folks in your church and your local community trying to figure out what's next. You need a bunch of little wins. And so if you go take a job at a distribution center, you go take a job at one of these big AI centers they're throwing up in your neck of the woods, or you take a job at Walmart for two months, three months, six months, that's not a step back. That's actually a step forward in getting some little wins, getting a job, clocking in, clocking out, and actually having some real money in your checking account.

Well, today, John, we are doing probably what is my favorite segment of all time, and that is when people travel from far and wide to join us in studio, in the lobby on our debt-free stage. I mean, if you've paid off debt and you've done it the Ramsey way, give us a call and schedule it because there's really no better moment than this. And we have one today with Brian and Julie, who are here all the way from Sellersburg, Indiana. Guys, welcome to the debt-free stage.

Hi.

Hi. Glad you're here.

Thanks.

We are too. Awesome. So give us the scoop. How much debt did you pay off?

We paid off 157,500 in about six and a half years.

Six and a half years. Oh, my goodness. And making what kind of income?

We started at about 90,000, and then we ended at about 130,000.

130,000. Okay. So what kind of debt was this?

This was our mortgage.

I knew it. I knew it. When you said six years, I was like, "This could only mean one thing." Oh, my gosh. So tell us the story. How did the journey start six years ago? To paying off your mortgage.

Well, about, I don't know, 10 years ago, we did our student loans and took care of that. And then we were going to have a baby. And we were like, "You know what? Let's knock out our mortgage. We've done the student loans before, so we know what it's going to take." And me and her both are fortunate enough to work from home. And I would work first shift, and then she would work second shift, and then my job started offering overtime. So I took advantage of that and started doing I think I started off doing like 20 hours of overtime a week.

Wow. Wow.

So you guys almost treated this almost back to babysit too. We're going to just.

Intense.

We're just going to get after this thing.

Yeah. And the work-from-home thing really did help. We ended up selling one of our cars and went down to one car. And so we alternated with the girls. She would watch them while I was working, and then I would watch them while she was working. And then once we put the baby to bed, the oldest one was old enough to kind of take care of herself. And I'd get back in there and start working.

Isn't it crazy how we tell people all the time, intensity, gazelle intense, this sort of thing. And a lot of people can't really understand what that means or they can't imagine themselves working that much. And I always say, "You'll adapt to it. You would be surprised at what you can adapt to." I mean, how long did you go that you were working basically 60 and 70-hour weeks?

It was about two and a half years that he did that.

Oh, my gosh.

Are you still tired?

Yeah. Actually, I'm still doing a little bit of overtime even now, but not that much.

Yeah. Did you have any cheerleaders? Did anybody know that you guys were kind of in this journey?

Oh, everybody knew. We were telling everybody that we were paying off our house and that he was working so much overtime.

And were they for you or were they like, "You guys are weird"?

No, they were excited.

Yeah. My brother had done it like a year before we did because he does the same job I do. So he paid his house off, and then we paid ours off. And we have some other friends that have done the same thing, followed the Ramsey program and paid off their houses.

That's amazing.

I love it.

Okay. So, Julie, can I ask you a personal question?

Sure.

You may or may not be right in front of your husband when I ask this. So we took a call earlier in an earlier hour. A woman was married to a guy, and he lost his job. And he ended up not working for five months, just waiting for the next right, waiting for the big one, right? What is it like being married to somebody who's willing to because you saw how tired he was on certain mornings, and you saw how hard it was for him to get out of bed, and you saw him trying to bring a smile to his face with your girls, right?

It feels really good. It didn't feel always great while it was happening because I felt so bad because he was so tired. But I knew that he was trying to do what was right for our family so that we would have peace and pay off our house and not owe anybody anything.

Yeah. How long ago did you pay your house off?

It was in August. It was still fresh.

What is it like that next month when you both of your checks deposit and you have no payments?

It was kind of surreal. I didn't expect the money to stay in there because everything is taken out automatically. I just kept thinking, "Okay, it's the first. It's going to be taken out." And then I went, "Oh, wait. No, it's not."

It's still there. It's still cooking. So the question becomes, what's next? I mean, surely you're going to celebrate in some major way. What's that look like for you guys?

Well, the first thing was coming here and doing that. And then we want to save up and do some renovations to the house and take some vacations.

I love that. Where are you thinking about going?

Probably Virginia Beach. We really like Virginia Beach.

Love that.

Brian, what does it look like for you to slow down a notch now?

Oh, it's wonderful. Yeah. I was telling her just a couple of weeks ago, I'm like, "I actually can go out and walk and do stuff now where I'm not just constantly put the baby to bed and then 30 seconds later, jump in there and start working." And now I also get to spend a lot more time with my oldest. She helped out a ton with the toddler and everything. So I get to spend a lot I get to spend more time with her, and I feel like I can breathe.

So what do you think fueled that intensity? Because we usually teach people baby steps one through three. That's the intense one. And then four, five, and six where you're paying off the mortgage. That's the one where you can just take your foot off the gas, ease up a little bit, and just be intentional about making extra payments here and there. And if you do that, you will pay off the mortgage faster. What was it in you all's mind? What did you see? What was the vision that made you guys go, "You know what? This is worth some major sacrifice in order to get this done fast"?

We had done this with the student loans, and we were like, "It's a short period of time if we just suck it up and do it." And so when we were having the other baby, the new one, she looked at me. She's like, "We could get this house paid off if we did this much overtime and if you did this, and it would be a short amount of time. And it's worth doing."

Short-term sacrifice, long-term.

Yeah. But in a culture where short-term discomfort can be no more than nine minutes, y'all did it for years, right?

Yeah. Yeah. Yeah. It wasn't easy, but it's worth it. And just keep doing the Ramsey plan. And sometimes it's boring and tedious, but like I said, it works.

I'm just curious, what role did a budget play for you guys? Or did it play a role?

Oh, we budgeted every month, and we used every dollar. And it helped me, especially since I'm the spender, to be able to know exactly how much I was able to spend and how much exactly we were able to put towards the house and actually see it happening instead of just guessing.

Yeah. Well, it works.

Do you have any tips for folks who struggle - and I may be asking for a friend here or myself - that struggle with tedious? You used that word. I had a buddy recently tell me for getting in shape, for workouts, for diet, for money, the most important thing is consistency over time. And that's also the hardest thing, right, in such a distracted world. How did y'all navigate tedious? Just the day in and day out, living on a budget, sending all the money to the house. How did y'all navigate that?

Me, sometimes I just I'm sitting there, and it takes forever because we had a little chart we'd mark off. And just seeing that, but we just keep doing it and look at our girls, and this is a short period of time, and we can do this. We've done it before with the student loans. We can do it again, and we'll be better off for it in the long run. We give ourselves little wins here and there and do things. We just take little trips here and there, but yeah, we cut back a lot.

Just trust in the process. It sounds like you had a lot of trust in the process. I mean, you've got the 10 years of experience from when you were paying off the consumer debt, and then you come into here. And I mean, I got to believe you were listening to the show, hearing other people's stories, and that counts for something.

Oh, yeah. Definitely.

All right, guys.

Congratulations. This is amazing.

Yeah. Let's get ready to hear your debt-free scream. We've got Brian and Julie from Sellersburg, Indiana. They paid off $157,500. That was the house. They did it in six years, making $90,000 to $130,000. Count it down. Let's hear your debt-free scream.

Okay. Three, two, one.

Three, two, one. We're debt-free!

That's what I'm talking about. That's what I'm talking about, John.

He was super chill the whole call, and then he brought the thunder.

I mean, it's always the super chill people. It's always the people in the lobby. They walk up to us and they whisper, "I paid my house off. I'm a millionaire. I'm debt-free."

You want to scream it?

Yeah.

Yeah. Come scream it.

Yeah. It's awesome.

Congratulations, guys.

Yeah. I love it. It just goes to show, guys, anybody can do this. The baby steps work if you work them. It doesn't matter who you are, where you're from, what age you are. Get into the action. I'm telling you.

John, you have on the desk what I think is maybe my favorite thing that we've ever offered here at Ramsey Solutions.

It's a brand new world here.

Yeah. It's a new world. And listen, this is your brainchild, so.

All right. So here's the story. Here's the story. Don't hit the little fast-forward button. Don't skip this. Listen. This is important. I'm about to change your household. So four years ago on the Dr. John Delony show, I was talking with a couple about the things that me and my wife do throughout a year that we had to do to rebuild our marriage from scratch. And I just popped off and said, "Hey, if anyone's interested in me coming up with a calendar, like an annual calendar that we use that would show you the same things me and my wife do."

To help coordinate the year.

To help, please. And so I went to the team and said, "Hey, I want to make this calendar." And we got in a room. We worked on this thing for over three and a half years. And we went way beyond calendar as Ramsey's want to do. We did it big and right. This is for the first time ever, I'm calling it the marriage kit. This is your marriage in a year.

Yeah. Let's see what's inside.

And I'm opening it up here. And here's what it is. It starts with right here, the annual planning retreat. This is based off the one that me and my wife started doing. And it walks you through how to look at last year when it comes to your relationship with your money, how did you show up as a spouse, as a parent, and more importantly, who do we want to be this year? And you begin to put things down on paper. And you hear me say the words all the time, reverse engineer. Then the rest of the year is how to build in these practices. And so I've got date nights for you for the year.

Can you share one of them or no?

I can just say, "Oh, yeah." Like, "Hey, we don't mess around with these things. They're fantastic."

I love it.

And I even have an envelope in here called in case of emergency. So I know that throughout a year, people suffer job losses. They get a phone call from a parent saying somebody's sick. And so I actually walk you through if the worst thing happens this year, we can tear it off and you can dig into it. Have a special exclusive marriage kit only questions for humans deck for you and your spouse.

Is it naughty time? Is it naughty? Or is it like deep tell me about your childhood?

It's more the former.

Got you. All right. Sign me up.

It's excellente. Muy excellente, as my friend said.

I love these journals. These are really nice. I'm feeling the embossing on there.

And every month, we turned it over to the video team. And so every month, there's a QR code, and it's got videos of me teaching you how this thing works. And so this marriage kit is me walking alongside you and your spouse for a year. And here's the deal. We priced it at $84.99. That's about $7, $7.50 a month. That's one fancy cup of coffee a month for the whole year. Killer gift if you were like, "I don't know what to give my spouse."

That's the hardest part.

I mean, just like, "Hey, what are we going to do?" I got you.

I love that.

And the date nights are set up to do on the back porch if you're in baby step two, and I've been there. Or if you are in baby step seven, and if you are a newlywed or you've been married 50 years and you're like, "Hey, let's be intentional about the fourth quarter of our life." Wherever you happen to be, marriage kit by Delony and gang, I'm super excited about this. And here's the last key thing. We only made a few of them.

How many? Do you know?

Yeah. Just a few thousand of them. And 100%, they will sell out. And so get them while you can. Click the link in the show notes here. I'm super excited. Or you can go to ramseysolutions.com/store.

You know what I think? I think we ought to give one to the couple that just did their debt-free scream. I think that they would love to have one. So we'll give one to Brian and Julie. You guys deserve it. You guys worked hard. Yes.

And hey, they won't even give me one because we have such limited inventory. They won't even give me one. So awesome. Awesome.

Congratulations, guys.

Congratulations, guys.

Yeah. Enjoy that. John, I got to say, I love this. And I wasn't just making that up when I said, "I think this is my favorite thing that you guys have to do."

No, you actually texted me the other day, and that meant a lot to me after we explained it to the team here. I was like, "Oh, this is pretty cool."

Yeah. I will be getting one. Save one for me.

I am excited about this as anything I've ever been a part of.

And I will pay full price, sir.

You know a guy, and we'll get you hooked up.

No, no, no. I'm telling you. Don't hook me up. Let me buy one. I support this. This is really, really great. I think that people need this. And when you said the date nights, I was like, "That's the hardest part." You always end up at dinner.

Just talking about your kids or sitting on the back porch like, "All right, you want to talk about the budget?"

Yes. Or you watch a Netflix show and you think that that was a date. That's not a date.

That's exactly right. So taking a cool challenge and some intentionality. And this thing is we'll walk you through the things to do on a daily, a weekly, a monthly, and an annual basis to totally transform your marriage. And what I believe right now the world needs is anchored families, anchored marriages inside of homes that can come back together and create something amazing. And then that will impact their neighborhood and impact their cities and beyond. And so the rebuild of this country is going to start inside individual homes, and married couples can unite here.

Listen, John, I think you have provided the people what they need. I'll just say this and get a little sappy. I think that this is so important, and I think you have a unique contribution here that's really going to help a lot of people. When you first started here at Ramsey, I didn't work here yet. I wasn't even a glint in these people's eyes. I started listening to your show, and there were a couple of things that I picked up into this day I do differently and Sam does differently, and our marriage is better because of it. And I will say, I looked at my husband the other day.

Did he melt?

Yes.

I bet he climbed up and started roofing the house.

Listen, I can melt that man in two seconds with the things that you've taught me. So I'm a buyer. I'm a believer. Well done, John.

Thank you. Thank you. Thank you. Go pick it up at ramseysolutions.com/store or click the link in the show notes.

So good. Let's go to Peyton, who's in Albany, New York. What's going on, Peyton? How can we help?

So I am 19 years old, and I am currently going to college, but I have no rent, no college tuition payment. It's all paid for by work or other things that I've done. At the end of next semester, I will be leaving college, and my free housing ends, but I will end up staying here for work. I'm looking into buying a house. So I can afford about a $2,500 monthly payment on the house, and I know that sounds like a lot.

I'm glad you called, man.

How much is the house that you want to buy?

They're asking 270, but the house is in very rough shape, and I was going to offer 200 about because I'm very capable of doing the work on it. I want to do the work on it.

Do you have cash to put down?

I have about $12,000, and I use every dollar I currently save about $2,500 a month.

And do you have an emergency fund beyond the 12,000?

Not yet.

Okay. So that's the biggest part here. I see a couple of things that I want to call out. I love that you want to buy a house. I love that you want to have that stability. I think that's really, really good. The glaring issue here, though, is we need to have an emergency fund set up first. If you don't have an emergency fund before you buy a house, I mean, it's inevitable the things that can go wrong. Anything from the AC going out to.

To the roof going out, everything.

You just need it. Otherwise, without it, you're looking at debt, and you're calling us going, "What can I do? I've taken out a credit card to pay for these things." So you got to have three to six months of expenses. For you specifically, I would suggest six months because it's just you, and you're just getting started, and you're a first-time home buyer. I want you to have that cushion. And then beyond there, I want you to jump on ramseysolutions.com and use our mortgage calculator and figure out how much you need to put down on a $270,000 house to make sure that that mortgage payment is in that 25% range that's comfortable.

Hey, thanks for taking my call. I'm calling with, I guess, not a bad situation. My wife and I run a business for the last 18 years. The last 10 has been very successful.

Awesome.

We are debt-free, consumer debt-free, mortgage-free. We have two adult children. We want to help them, I guess the term I've heard used on your show. We want to help launch them into adulthood. Our concerns are, are we going to help them too much? Are we going to spoil them? I don't know if there's such a thing. They grew up knowing the value of money. We didn't have a lot of money. We started to really snowball and be successful as they were in their 20s and gone off to school.

What do you mean by.

I love your spirit, man. Yeah.

Yeah. What do you mean by they see it differently?

Well, my younger daughter has a full-time job. She's a teacher. She's successful. She's driven. We help them. We've helped them both and continue to help them a little bit. The older one is in between careers. She's struggling a little bit with direction and what she wants to do for a living. And I think that the comfort of mom and dad and some of the assistance we give them puts her in a comfortable position to do that.

I like the idea in your situation of helping with a thing, not a perpetual subsidy.

Yeah. No allowance.

So if you surprised your daughter, who's a teacher, with half of her house down payment or something like that, she would still have skin in the game, and you would give her a tremendous boost, right? But that would be for a thing. Or if she's never taken a vacation and you and your wife want to surprise her with a thing like that. Or when she has her first kid, here's a I don't know what the retirement vehicles are in Canada, but here's a college tuition for your kid. I like aiming towards a thing.

Yeah. I like that idea.

But that means you have to also let them crash and burn sometimes too.

Well, and there's part of that too. I agree with what John said about saving up for a thing or helping them with a thing versus an allowance. But if you're looking to make it fair or not feel like, "Well, I'm helping this daughter, but I'm not helping the other daughter because she's kind of struggling a little bit," I think if you can match it, right? And that way, there's incentive, and there's something to look back and say, "Whoever, whatever the daughter was, saved a certain amount, and we matched it." That way, if the other daughter is like, "Well, how come I haven't gotten this yet?"

And this is tricky as a parent, right? I've got two kids also, and fair is different than equal. So if my son decides to not go to college and be a mechanic, and my daughter decides to go to med school, and I said, "Hey, I'm helping y'all both with school, post-secondary education," my son can't come back and say, "Hey, you owe me 200 grand because you helped sister go to grad school." And so I don't think they're it's apples to apples, right?

But if you say, "Hey, everybody, I'm going to pay for your down payments," then it's kind of like, "Okay, well, the daughter who feels a little bit like she's searching, it's like, 'Okay, well, let's do that today.'

Let's do it right now. Yeah, yeah, yeah.

Versus, "I'll help you. I'll pay half of your down payment." And then it's, "Well, whatever your down payment is, it's half." To your point, you can't go searching for the rest if that was all you needed.

And James, this is going to require you to have some sort of resetting conversation with them, which will just be hard. I had it a few years ago when my son was young. My first few years here at Ramsey, I just had a complete transformation of our household income, and I went crazy at Christmas. Just lost my mind. And I was trying to re I grew up pretty money-insecure, and so I was trying to live my childhood at the expense of my kids.

Right. Okay. Yeah. No, I appreciate the advice. Looking at them getting an inheritance, we had them so young, they'll be 75 by the time they get access to the estate. So we want to try to do what we can now because we'll have more in retirement than we had our entire lives. But I do like the angles and the advice you've given.

So what are you thinking? Is it down payments? What do you think you're going to go towards?

Well, to be honest, I mean, they're 31 and 28. We've already helped them both with a down payment. The one has since turned that into a rental income and started on her second home with her partner. And the older one has sold her home and has put the money into investments while she rents in a new city and is trying to really find her way in terms of what she wants to do as a career. I mean, there's no issues with drugs or alcohol or anything.

Absolutely. But I'll tell you, if you come in right now and rescue her from this discomfort, the signal you'll be telling her is, "I don't think you can handle this. I don't think you're tough enough or smart enough or strong enough to deal with this discomfort, whether it's six months or a year, or are you scratch and claw and find a new career?" And that's the meta signal you'll send her. And so calling her every week, letting her know you're thinking about her, she's always welcome to come home, all that kind of stuff. Encouragement's great. Writing her a letter would be awesome. But that doesn't mean don't go in there and bail her out of this.

Yeah. Because then she can figure out what's right for her. She can take this and learn from it, and it's a tool in her bag going forward as something she's learned, not something that was snatched from her to learn.

Hey, guys. If you've been listening to the show, if you enjoy the show, whether you listen on podcast, watch on YouTube, however you enjoy the show, make sure to jump into the comments, especially if you're over there on Spotify or YouTube. We want to know what you're saying, and we want to stay connected with you. So if you haven't done that, start doing it. It'll be fun for all of us. All right. Let's go to Daniel, who's in Rochester, Minnesota. Hey, Daniel. You're on the line. Welcome to the show.

Thank you.

Absolutely. What's going on?

So I have a credit card debt from a few years ago. I'm a single dad, and the debt represents a time when I was fighting for custody of my son. We were just putting groceries and other things from poor budgeting, but on a credit card, and I really didn't know when or how I would pay it off. I'm just trying to stay ahead of the legal fees. So the debt that they're coming after now is a credit card. It was sold. It's a little over $12,000. I was served a summons and petition at my home 20 days ago, so I have two more days in Minnesota to respond.

I would say to call them and offer 3,000 for it and see if they'll go away. How old is it?

Like three years. I actually did get a callback from them today and offered 2 because that's literally what I had. And they said they'd only take 70 to 80 percent.

Okay. Then I'd keep trying because if you don't have any money, you don't have anything to give them. When's the court date?

So I don't have a court date, but I have to respond by tomorrow just with the initial response.

Okay. Yeah. I mean, if this continues down the road, I'm going to try harder and harder to settle it. And in the meantime, I'm going to stack up some cash in order to settle it because the truth is, it is your debt. It's not a you're not disputing it. You do owe the money. So I'd be stacking up in the meantime as much as I can. And if they end up if it ends up going to court, if it ends up the next step, I believe, is you'll show up and they'll say, "Do you owe the debt?" And you'll say, "Yes, I do." And then at some point, it'll go before a judge, and they'll either come up with a payment plan or an amount you owe, right?

If it's six months or so, I probably could get that much, maybe a little less time than that.

Yeah. Then I would do that.

And I would respond and put in your response, "I am in contact with the owner of this debt to come up with a settlement," and let that be your response. Because what you and Jay's right. If this goes before a judge, the judge may say, "Is this your debt?" "Yep." "Okay. Then you owe $12,000." Bam. And that's going to be what you owe. And so however you can get this thing settled, it's better.

And if I were you, I would reach out to our friends at Guardian Litigation. They can help you navigate this and help you decide what the next best steps are. I would certainly do that. Thank you for the call. Next up, we have George, who's in Albany, New York. Hey, George. Welcome to the show.

Hey. How are you doing?

What's up, brother?

I'm doing good. So I'm newly retired. I'm 60 years old. I own three properties, two of them two properties have houses, and the other property is just land. They're all paid off. I have no debt whatsoever other than insurance and taxes.

Nice.

So it took forever to get here, right? So what I'm thinking about is I have an annuity that I don't see me really needing because I have three pensions.

Okay. Gosh. You got a lot going on.

Yeah.

What do the three pensions amount to every month for you? Plenty?

Probably somewhere in about $5,200 a month.

Okay. And then how much is the annuity?

The annuity right now, I have about $750,000 in it.

And is it paying you out?

No, no, no. I'm not touching it.

Say that again?

I'm just trying to keep rolling. I actually have it set to my kid's timeline.

Okay. Have you ever considered about.

I've been worrying about these RMAs, and they talk about how they're going to take my son would only have roughly 10 years to burn through this money.

The annuity?

With the tax on it. Yes, if he inherited it.

Yeah. I was going to ask you, have you considered taking that annuity, taking it out of an annuity and rolling it to something else, maybe a Roth IRA, if you can?

I haven't been down that path yet.

Or if you roll it to a traditional investment vehicle and then back to a Roth, that investment vehicle, you'll have to pay taxes on it now, but then he has no required distributions. He'll have nothing. He'll just inherit it because you've already paid the taxes on it.

So you're suggesting just to put it into a Roth, then.

I'm suggesting.

It's way more than a Roth. You'd have to do a backdoor of it.

What I would suggest is because you're going to have to pay taxes on that, so I would sit down and figure out what that is. And if you want to space that out at all, you can start by rolling it into an IRA. And then if you want to space that and then take that money and convert it to Roth funds over time, you can do that, or if you want to do it all at once. But I would sit down with a tax pro to figure out what the best strategy is so that you can have the best tax benefit for you. That being said, I would not keep it in the annuity because you are sacrificing major gains keeping it there.

Well, like I said, I have it based on my kid's timeline, all right? So I'm very aggressive, right? I'm aggressively investing it because, again, I don't feel that I'm going to really we're going to need it. However, instead of it sitting there, one of these properties that I have is just land, like I had mentioned. And would it be better if I took that money and.

Yeah. George, we're having a hard time hearing you, bud.

I'm sorry.

There you go.

Can I take that money and invest it into that property, that land that I have?

Take the money from the annuity and invest it into the land?

Correct.

In what way?

Build something. Build a home. So this property, it doesn't have a house or anything on it. It's down in the Islands.

Who would it be for? It's down where?

It's down in the Islands in the Caribbean.

Okay. Are you thinking this is a rental? Is it a VRBO? What would be the purpose of the house?

Well, just trying to create cash flow.

I understand. But is that the purpose? You would make it a VRBO or an Airbnb?

Sure.

I mean, I think that that is have you ever done that before?

I wouldn't do that, brother.

Okay. I don't think I would do that. I certainly don't think I would start it for the first time in another country.

Yeah. I mean, you're talking about a multinational landlord. I wouldn't do that.

I think there are people who do that, and they make it work, but I think there are people who have stairstepped into it and they've learned that world. I feel like for you, it would just be an experiment, and it would be a lot of money to experiment with. You know what I'm saying? I probably would not do that. What's the purpose? What are you trying to do here? Just create more wealth for your children?

Yeah. Yeah. And try to not have them get taxed to death when they go to make up the money.

Listen. The strategy that John and I gave you, I think, is the best way to do that because that money, if it's invested, it's going to continue to grow. And if it's traditional money, it's going to continue to grow with required minimum distributions. And when that money's pulled out, there's going to be a tax bill attached. If you really want to help your legacy out, like John and I said, I would suggest learning the best way to convert that into Roth funds. I'd probably do it spaced out over a reasonable amount of time, but immediately, almost immediately, I would move it from that annuity and move it at least into an IRA and then start that conversion.

Thank you. All right. Let's go to Ashley. Can I just say nobody else was going to do that with that announcement? Let's go to Ashley, who is in Houston, Texas. Hey, Ashley. What's up?

Hi, everyone. I'm calling in because I have a little disagreement with my husband.

Yes. We'll solve it for you, Ashley. We're going to solve it.

We love getting involved in marriages.

Yes. All right. What's the dispute?

Okay. So we did this stupid thing, and we bought a house for my daughter while she was a college student. And we bought it, and then we were like, "Oh, we can rent it to her roommates," and that way, it would be cheaper on us, quote-unquote. Anyway, long story short, Dave's right. Our daughter didn't do well in school, so now she's back home. And my husband was a little too late getting in contact with our realtor to put it on the market earlier or to get new renters in.

You have to sell it for established market value.

Yeah. Neither of you should be piping in on this. Let the real estate agent tell you what the value of the house is in that local area.

I mean, I see what's happening. You're like, "We can't keep paying two mortgages," because I'm guessing you're paying your primary mortgage plus this. It's eating your lunch, and you're like, "Just get the thing out of here." But you got to be careful that you don't solve a mistake with another mistake. And so you admit it was a mistake to buy the house. It would be another mistake to just get rid of this thing and lose any money. I mean, if there's fair amounts of money on the table, you also don't want to lose that. So let's talk about the numbers. What's the mortgage on the college house?

The mortgage on the college house, do you want it including the tax and.

Yep. What you have to pay every month.

Okay. So $1,000 a month.

Okay. And then what about are you guys floating that, or is it causing you to have to take out debt? What's happening when you add that to your personal budget?

Well, we can cover it, but we're also trying to pay off debt. So I'm like, "We don't need this extra 1,000. Would be really nice to just not have and pay towards our debt faster."

It would. But if you're trying to pay off debt, if you have equity in that house, then you need that equity, right? Because that'll help you pay off the debt. So have you talked to a realtor yet?

Yeah. We already have a realtor, and he put it on the market back in June.

For how much?

And it still hasn't for 125.

Okay. And you say you still haven't gotten any bites since June?

No. We've had a lot of people looking, but nobody's ready to take the plunge.

And what does he say is the reason for that? I mean, college students were living in it. Does it need work? Is it in an area that nobody wants to buy because there's college students all around? What do you think is the reason for that?

No. I just think that it's a really small town, and so I don't think there's just a lot of people ready to buy homes there.

What does the realtor say? I know that's what you say, but what's the realtor say?

Yeah. He says he's had a lot of activity on it. The house is in really good shape. He hasn't said because I've asked that question, or I had my husband ask him that question because I was like, "Why is it not selling?"

Yeah. Because median days on market let me just say, for Houston, Texas, and I'm guessing surrounding area, median days on market is 53 days. You've been on since June. So I'd either be pressing him for real answers because anybody who's like, "I sell houses. I know what's up," they're not going to just let this thing sit. And then when you ask, "Hey, what can I do? What do you think we can do?" "Well, everything looks good. I mean, we're having traffic." I think you might need a new realtor.

What town are you in?

So we're in Houston, but the house that we bought is in Lubbock.

A house for 125K in Lubbock, Texas. I moved here from Lubbock.

Even less days on market.

I lived there for a while. There's something up because that house should move.

That's what I was thinking too. So maybe we do need a new.

Yes. I've got friends with real estate in Lubbock, Texas. I've got my closest friends on the planet are in Lubbock. I was just there a few weeks ago. A $125,000 house in that community should go in a blink of an eye.

Yeah. Hop on ramseysolutions.com/realestate and look for one of our vetted real estate pros because I'm telling you, this aggression shall not stand.

Yeah. Or something's up, right? And so you need to get some information on why this house, whether it's there's someone on the registry down the street or it's.

Something's going on.

Something's going on in the neighborhood. Something is up because there's so many investors that come into towns like Lubbock, which it's circled up, right? And it's a college town, so they know they've got built-in renters there. That doesn't.

Yeah. We're seven minutes from the school.

Yeah. That's not passing my smell test. There's something else that's up.

Yeah. I would do that. And for that reason, yeah, just kind of hold steady, keep holding the line. And I know you're trying to pay off debt, but if there's money, how much equity do you think let me say this. At 125, how much would you come home from that sale with?

After paying part of the closing and all that stuff, probably like 15,000.

15,000. Okay. So there's some room to move and not you lose everything. But who knows? If you talk to that Ramsey real estate pro, they might say, "Hey, gosh, this house never should have been listed at 125. It's at 100, and that's the problem." So I would just have that pro give you the answer, and I think that you'll be square.

Yeah. And you may have signed a contract with this other realtor, and you may have to just let this thing ride until it's over, and then don't re-up with them and get a new realtor. But call a Ramsey real estate pro because that's not passing my smell test. Something else is going on in that particular market.

Yeah. That's something, right? All right. Let's go to a Ramsey Baby Steps community question. I like these questions. All right. Samantha from the Ramsey Baby Steps community, that's on Facebook, by the way, she says, "I'm a stay-at-home mom, and I just came back from a trip with friends. When I got home, my husband said, 'We need to get life insurance on you because I can't do this by myself.' That is wild." He was like, "I can't wait for you to get home. What amount should I get since I don't even have an income?"

My wife stays at home, and I got a chunk of insurance on her because she does everything.

If you got a half-a-million-dollar policy on a stay-at-home mom, you should be good to go in today's life.

For a minute.

A million?

No. For a minute.

Oh. Just one.

Our Ramsey show scripture and quote of the day, Proverbs 18:4. "The words of the mouth are deep waters, but the fountain of wisdom is a rushing stream." Andrew Carnegie said, "As I grow older, I pay less attention to what men say. I just watch what they do." Don't talk about it. Be about it. That's what I'm talking about, Carnegie. All right. Let's go to Priscilla in El Paso, Texas. What's up, Priscilla? Welcome to the show.

Hey. Thank you so much for having me on.

Yes, ma'am.

So I'm 34. I'm single, debt-free, followed the baby steps, and I currently have $48,000 in savings and about $30,000 in retirement. I lost my job at the end of May. I was working in insurance as a claims adjuster, but it wasn't a career that I enjoyed. My degree is in marketing, and I've been trying to transition into that field while looking for work, but I haven't received employment yet. So I'm currently receiving unemployment, but my benefits end in January.

Okay. I like this. I have one question. The land and the RV, was that always your dream scenario, or did you settle for that because you're like, "Hey, I'm not making much money right now, and I don't know when my next big job is going to come, so I'll do the land and RV deal"? Or tell me about that.

Sure. I settled for that because I think home prices are just way too expensive right now. Average cost of a home is 300,000. It just seems like something I can't afford. I was making about $60,000 a year in my previous position.

Okay. Okay. So thanks for that information. I think we can use that to help you out here.

Priscilla, can I say this just directly, but you know that I'm on your team?

Yes.

I think the thing you need more than anything else is to go get any job, any job that you got to clock in every day and go be a part of something. I mean, you've been out of work since May, and that just beats your soul down. And I know you have dreams of getting into marketing, but marketing is often about a Rolodex more so than it is about some sort of entry-level I mean, you might have entry-level. You're talking about that, but you're 34 years old.

What do you think about that?

Yeah. I think that's a good point. I felt overwhelmed recently. That's why I feel like I lost my job was because I was overwhelmed by all the stresses at work. And so I'm just trying to build a life of freedom, and I don't know how. I feel like I'm figuring it out.

Here's the thing. The thing about fear is now taking away true fear. I'll use the word anxiety. The thing about anxiety is when you're anxious about a thing and you avoid that thing, it's got a whole biomechanical mechanism in your brain, but it actually makes the anxiety on that thing stronger. And so the only way through that overwhelm, quite honestly, is through it. And so I'm going to get you three months for free with our friends at BetterHelp, and you can do that virtually, okay?

Okay. Yeah. That makes sense. I guess the other thing is my concern is, for example, you said Walmart or fast food. The reason I feel like I kind of left I didn't leave my job, but I got laid off, but I felt like at the end of it, it was kind of my fault that I got laid off. And so part of that was because I was like, "All right. I'm going to try to go into marketing, into the career that I got my degree in, that I wanted to do since I was young."

It does something to your pride.

Yeah. Yeah. You're going to have big feelings about it, and those feelings are going to be right. And feelings aren't designed to tell you the truth. They're designed to keep you safe. And so if you've got big feelings that are telling you, "It's not what we planned. This is not what we designed. This is not going to be enough money long-term to retire," all those feelings will be right, but their job isn't to direct your path. They're to keep you safe. And so you're going to feel those big feelings, and then you're going to get up and you're going to go work.

And it's going to help you as you're interviewing for the roles that you want because you are going to walk in far more confident as someone who did a job the other day and did their very best at it versus a person who's been sitting around for a couple of months, a couple of weeks, hasn't had a bite, starting to feel a little unconfident, starting to feel right. You want to feel that confidence of, "I've contributed today. I still see my worth." And my guess is that if you end up in Walmart stock and shelves, you're going to realize really quick, "I'm so much more capable than this.

And marketing is a skill that you don't it's kind of like getting trained as a counselor. If you're a trained marketer, that skill will serve you in any job you do, even if that job doesn't have the title of marketer on it, right? Because if you're working in retail, you're telling a story about why this particular product can help you have a better day or help solve a problem for you. If you're working as if you start a landscaping company, and you're going to be marketing your small business. And so marketing is a skill that you don't have to have the title marketer over your little nameplate on your business card to do marketing.

And I would also say during this time, listen, you don't have to go it doesn't have to be Walmart or Amazon, right? But open up your career search. If you're only limiting your career search right now, open it up. There's a whole country out there. Maybe it's not in El Paso, Texas.

That's exactly right.

Maybe it's not in the El Paso area. Maybe it requires you to go to Missouri or Denver or someplace else. So just open up your scope a little bit. Again, for the third time today, I will give you Ken's suite of books. I'll give you Proximity Principle. I'll give you Find the Work Your Wire to Do, and I'll give you From Paycheck to Purpose. I'm going to give you all of that. Do the career assessment first because that's really going to help you out. And going back to the very first question you had, which was the real estate, real estate is so expensive.