Transcript of Stop Looking for Shortcuts and Make Progress with Your Money

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What's up, America?

America normal is broken. Common sense is weird. So we're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit Union studio, this is The Ramsey Show. John Delony joined by the one and only gangster, George Campbell. Let's go out to York, Pennsylvania and talk to Rhonda. Help me, Rhonda. Help, help me, Rhonda.

What's up? I hope you can help me. How you doing, George and John?

We're doing great.

We're doing great.

What's up?

Um, I'm really struggling, um, and I was wondering if it would benefit me to get a loan to pay off all my debt except for the house in order to give me a little breathing room.

Um, you sound terrified. Are you okay?

Just have a lot going on in my life.

Yeah, you sound like it. Take a deep breath for me.

I'm trying to help my brother take care of my mom. I'm trying to work a full-time job. I get up at 3 o'clock in the morning so that I can be at mom's by 4, so my brother can leave for work, and then I get my mama and take her to daycare, and then I go to work, and I don't get off till 5, 6 o'clock in the evening, and I travel over 65 miles a day to do all this.

So, and let me interrupt you here, okay? Whatever path you're on doing this is noble and pretty amazing, and it's not sustainable. It's not sustainable, right?

How long has this been going on?

Just over a year.

Okay. I always want you to push pause on 'I have to.' I want you to really dig into that. Let's get into your money challenges right now, what you're facing financially, um, and if we have time, we can loop back before the radio break. We can loop back and talk through this idea of 'I have to.' Okay. If you, if you don't, um, my— George and I have a great friend named Will Godera, and he told me this He's a, he's a famous restaurateur, and he said if he, if his staff doesn't spend time to go fill up their pitcher before their shift starts, they have nothing to serve their customers with.

Mm-hmm.

And if you're not taking care of yourself and you end up in the hospital, you end up collapsing, you end up in a wreck at 3:30 in the morning cuz you're exhausted, then you're unable to help yourself. You're unable to help your brother. You're unable to help your mom. Okay. So sometimes the greatest gift we can give other people is to say no. Okay, let's circle back to your money challenges.

So how much debt do you have?

Um, $19,000.

What kind of debt is that? Break it down for me. What are the types and what are the balances?

It's all credit card debt.

So $19,000 is across a couple of credit cards?

Yes. And then I have a house that's $26,362.

Well, the mortgage we'll leave alone for now. Let's focus on the consumer debt by itself. How much are you bringing home every Do I need to—

do I want to count overtime? Because I don't, I don't always have overtime. I've been blessed that I've been able to get a little bit in.

You don't have to count it. We'll go without that for now.

Would be $2,800.

How much of that is the mortgage? What does that cost you?

Um, mortgage is $1,126.

So we're approaching half your income just immediately out the door from that paycheck to the mortgage. And then you've got the credit card bills. What are the minimum payments across all of those?

Um, I I think that is $632.

Wow.

So then you got $1,000 left to do everything else— utility bills, food, groceries, insurance, you name it.

Correct.

So that's part of it. Part of the reason you can't breathe right now is a mathematical equation. There's not enough income coming in to cover the bills and knock out the debt, which is probably why you turned to the credit cards, right? There was a deficit. And the credit card company says, here, Rhonda, here's a $10,000 line of credit. Have at it. We'll help you.

Yeah, it's among about 6 different cards.

Okay. Are you still using those cards every month, or can you make your bills work with your income right now?

It would be 7 different cards, and no, I haven't been using my cards. I've been—

good.

I've been trying to make it on, on just what I have.

That's amazing progress. That's a huge start, because part of the issue of getting out of debt is most people are still going into it while trying to get out. So back to your original question, should I take a loan out to pay off this other loan, this, these credit card debts? I wouldn't do that, because it makes you feel like you've solved the problem when you've just moved it around and potentially made it worse. 'Cause now you've got a debt consolidation loan of just one payment, and now you've got to attack this $19,000 mountain instead of debt snowballing it with the smallest balance. So what's your next smallest balance credit card debt? Um, the smallest card balance is $500.

I was just thinking it would give me a little peace that I only had to write one bill out. Or pay one bill.

Yeah, yeah, it's overwhelming to keep up with 7 different bills, but debt consolidation, um, it, it could make the problem worse in a lot of other ways. So I'd rather you have these on autopay.

I'd be able to get a personal loan, but I wouldn't have to do like that consolidation, and I could get a better rate. But my, my next lowest, I just got 2 paid off. My next loan is $1,300.

$1,300. Okay, great. And that, that's what I think we need right now is a little bit of progress because you've probably felt hopeless for a while now, probably for the last year as you've been just clawing through all of this.

Yeah, before all this happened, I was making really good progress and I had a second job and then all this happened.

Is there a possibility that you can go to making this drive 3 days a week and your brother can pick up the other 2?

I can't because I'm there so he can leave for work. That's the only reason I have to be there at 4 o'clock in the morning, is he's a truck driver, and in order to get his loads and runs in for the day, he has to leave at 4.

What's the long-term plan? To take care of her?

Well, we're on a program where we're supposed to be able to get, uh, assistance, like, to come into the home, but we've only— because of the 4 o'clock in the morning thing, nobody wants to take it.

Is it possible that you can move her into your home for a while, for a season?

I'd still have to run to New Oxford to take her to daycare, or I don't know that she would be— she has dementia, and I don't know that that would be good for her, you know, in her element.

I want you to pursue not just one support program, but I want you to pursue every possible support program. SSI benefits, um, Social Security benefits. I want you to knock on every door because that you're doing is so good and so noble and it's unsustainable. These crazy, insane, maddening rising gas prices are crushing you. The cost of groceries is crushing you on top of just the schedule you're keeping. Gotta take care of yourself so you can take care of those you love.

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Um, the last caller we just took, I want to dig in on two things real quick. Um, cuz I think what the, one of her core questions she asked was, I have to make 7 different credit card payments every month. My life would be easier if I just went and got— it sounds like her credit was good enough to do this. I just want to run down to a credit union and get one loan, cover all this stuff, and I just want to make one payment a month. And I can even make a case mathematically for that to work. She might get a lower interest rate, um, at a credit union than all these different credit cards. It's been my experience that, um, what looks good on paper doesn't always play out in the real world. And what I mean by that is psychologically you can get exhausted. I got so many nickel and dime things to do and it's, it, it's, Every month it's a beating getting out my checkbook or getting online and trying to figure out what's the payment here and what's this one. I just want to make one payment a month.

And I get that, especially if you can make a mathematical case for it. But it's been my experience, and tell me if you're, if I'm wrong, psychologically speaking, what we miss is a whole bunch of little wins that give you a tailwind over time. And so what we're asking people to do often is not, people can beat me up all day for the math. What I'm trying to do is give you a psychological win. So you can get through this thing quicker. Because what I've seen in my own life, in person after person, is they consolidate everything, get one giant mountain, they take 10 steps up that mountain, and they just say, ah, forget it, it's too high now, right? It feel— it feels insurmountable. Or they pay for 5 months and that mountain is still pretty dang big, and they just are like, ah, I'm out. And so there's something about the psychology of a whole bunch of little wins, right?

Yeah, I mean, the debt snowball has been studied. I mean, even Harvard Business Review came out and said, "Dave Ramsey's right. The debt snowball method is the best way to pay off debt because we know it's 80% behavior, it's 20% head knowledge." We all know maybe we shouldn't go into debt at 23% APR with Capital One, and yet millions of Americans do it.

Yeah.

And then we get desperate and so we turn to what? More debt. We don't look in the mirror and say, "Oh, that's the solution. That person, that person's ability to create an income, to get on a budget, to cut the expenses, to sacrifice, that's the solution. Not moving the pile over and then going, "I feel better now." Right. And then next month the payment still comes due and you still can't afford the payment. And that was the problem that Rhonda was experiencing. She barely could afford her bills. And so it feels like that's one piece that could help and it might help a tiny bit, but it's not gonna solve the underlying issue.

And I also wanna call out, she's a perfect example of how the cost of living, this increase in gas prices, this increase in inflation that just keeps sticking around, the increasing cost of groceries. For somebody like her, it's easy for me to get kind of callous and to say, well, you should have planned better, whatever. Here's a woman trying to take care of her mom. Her and her brother are switching night shift to day shift. He's working his butt off too. These are noble people., and she's trying to keep her mom okay until somebody will show up as a part of some government program to help out with a mom who's got dementia. And then everything goes up $20 a week, which turns into $80 a month, which turns into— we don't have that kind of money. Right. And so, man, this inflation's real and the pain people are feeling at home with their groceries, with their— like I went, I went home shopping with a family member recently to, to make their first home purchase. What was going for $355,000, $345,000, $345,000 just a few years ago, I wouldn't have paid $200,000 for. I would've walked out.

And so things have shifted very, very fast and there's a very real weight to this. And so if you're listening to this and you're feeling like you're going crazy, you're not, you're not. These are real expenses. These are real challenges. And, um, at the same time, we need to get involved, right?

And as Dave says, you don't get a pass on math. Like your income is still your income and the bills went up. We have a problem here. And sometimes it's more income is the solution. Sometimes it's cutting some expenses. Sometimes it's drastic sacrifices, moving your entire family, selling the home, whatever it may be. But it's the reality. If you wanna get to where you're going in today's America, you might need to be more drastic than you would have 5 years ago.

And you don't want to, but, We got a math problem and it's a painful, ugly, just a gnarly math problem affecting everybody. Let's go out to Anchorage, Alaska and talk to Christina. Hey Christina, what's going on?

Hello, how are you guys?

Awesome. Running a scam called a podcast. It's the best.

I, um, I'm like a little bit of a fangirl. I listen all the time and husband and I are on baby step number 4. So thank you guys.

I'm a fangirl of George too, so I feel it. I feel it. So what's up? What's your question?

Yep. Let me pop— let me just— so it's kind of a weird one. Um, we're doing well financially. We don't have any debt. We truly live by the Baby Steps. We just never carry debt. Um, the only thing we have debt for is our house. So that's great. We're working, um, towards retirement. My job— I have a job that's an awesome job. I work from home most of the time. I sometimes will go in a few days a week if they need me. I've got an opportunity to perhaps take, um, a promotion, which would be— and in the office. They're— we're still working on that. But anyway, I had mentioned when I was in the office the other day, like, hey, how come we never get annual raises? Like, we almost have to threaten to go somewhere else before they'll give us a raise. And then next thing I know, my boss was calling and saying, hey, I heard you're being recruited, um, I'd like to give you a $30,000—

yeah, how many?

I— she said, I'd like to give you a $30,000 retention bonus for 3 years.

Um, and I know per year, or is that $10K a year for 3 years?

$10K, yeah, $10K a year for 3 years, all at once up front. So probably some pretty high taxes. Um, and I guess my thought process is, well, we don't plan on being in Alaska in 3 years. We plan on retiring. My husband's gonna retire in about 2 and a half years. Um, and I, I don't know if there's a contract that's going to go with this. It hasn't. It was just a phone call that came to me 2 days ago. Um, so I guess my question is, do I— should I counter and go, Hey, why don't you just give me a raise? Like, why are we doing— I mean, I'm not going any— I wasn't going anywhere. I just kind of mentioned that in passing that, because they don't, they don't do annual reviews, you know?

Well, I've got, man, I've got so many questions. Question number one is, if this is such a wonderful job and a wonderful company, have you picked your head up a little bit just to look around and see what your market value is? I don't know hardly any boss that will just pick up a phone and call an employee and say like, hey, you want $30,000? I know that's almost unheard of. That tells me you're worth substantially more than you're being paid.

Okay, thank you. I appreciate that. I, I believe that I am. I actually, I know that I am. I, I, you know, I've been in the business for a long time. Um, I've got knowledge, I've got, you know, and I know that they will, I, they, they would like to keep me. Okay. For all of those reasons.

Do you, um, would, would, is there a number that you would leave for? Or you're this close to retiring, you're just going to ride it out no matter what?

You know, I hadn't really thought— that's a great question I should have thought of. Um, I don't know if there's a number that, that would cause me to leave. There actually was. I did do an interview with the competition about a year and a half ago. I gave them a number, they were like, oh yeah, that's probably more than we'd like to pay, and we kind of left it there. Um, but they continuously like reach out and go, hey, want to go do coffee? And so, um, so yeah, I do have a number, but it's kind of a high number. They didn't want to do it. These Um, just, I guess, heard that somebody was courting me, if you will, and then made a call and offered me $30K.

So what are you making now?

About $80K. Okay. I work from home and I, I mean, I took a huge pay cut, like half pay cut.

And you guys plan on moving, so like, you know, this isn't gonna work if you do this for 3 years. So it's not worth the golden handcuffs. So I think you now have some negotiating power to say, listen, I will do a raise. I don't, I'm not comfortable with the 3-year agreement, but if you're willing to do a $10,000 raise, or we'll do it once, we'll do it annualized.

So let's split it up over 3 years.

Yeah, I think that that's a way better deal too.

I mean, I just, I don't want you to have to pay this back if you leave early. And so I'd be reading the fine print and making sure that this is leaning in your favor instead of theirs. Cause they need you more than you need them. That's the key.

I almost think that they're not gonna give me a contract. I almost think they're just gonna throw $30,000 into the bank account and say, okay, great.

Don't become somebody you don't want to be. True. Like always retain your integrity. And so if you, even if it's a handshake, if you say you're gonna do a thing, then do that thing. And so, yeah, I love the idea of you saying, I appreciate the offer. Let's, let's break this up over 3 years and we'll do it on installments and we'll, we'll renegotiate this every year.

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Man, buying or selling your home is high stakes.

'cause one bad deal could cost you tens of thousands of dollars or more. You don't wanna overpay for your next house or sell your current home for less than it's worth. And like I said in a previous break, I just went home shopping with a family member of mine in another state and—

It's dismal and abysmal.

It's really, really tough.

Like what you can get for your dollar is not great.

Yeah. And, and, and, and dude, I just bought a house not that long ago, like several years ago and it's changed so fast. And I know that intellectually, I read the data. It's something else to walk inside these homes and to just look at, here's much money we have and here's what we're gonna have to give up. Here's what we can't get. This isn't gonna work.

Here's the compromises.

Yeah, it's tough. And listen, this is why Ramsey Trusted connects you with vetted real estate agents who have the experience to guide you step by step to make smart decisions. One thing that's awesome is my family member had an amazing, real estate agent and was not afraid to say, we're walking out the door, not doing this.

Who actually cares about your budget instead of going, well, it's a little bit outside of your budget, but they're—

the real estate agent cared more about my family member than the sale. Mm-hmm. And it, it was evident. It was awesome walking into a house and be like, nope, we're leaving. I'm not even letting you look at this house because they didn't tell the truth on the ad or whatever. It was amazing. Right? Listen, You want a good real estate agent in your corner. Connecting is easy. I want you to compare agent profiles using Ramsey Trusted and interview your top choices and pick the right agent for you. Find a local Ramsey Trusted agent who has your best interest at heart for free at ramseysolutions.com/agent, or click the link in the description if you're listening on YouTube or podcast. Let's roll out to Gulfport, Mississippi, and talk to Amy. What's up, Amy?

Hey, how are you?

We're doing great. How are you?

Doing good. Thanks for taking my question.

You bet. How can we help?

Well, my husband and I are having a disagreement about what costs we're covering for our youngest daughter, and she's in college. So we have 3 kids. Our oldest is completely on her own and employed, and our middle and youngest are both in college. Our youngest chose to go the farthest away, um, to a state university, but it's, uh, one of the more expensive ones in the area. And her tuition is mostly covered with scholarships, and, and we don't really have to worry about that much. But since her second year of school, we've been covering her, um, her living expenses, so her apartment and utilities, that sort of thing.

So what's the fight between you and your husband about?

So, from the beginning with all of our kids, we told them that they need to start planning from a young age how they're going to pay for school, whether they are in the military or get scholarships or play a sport, whatever it is, they will be responsible for their school. And we would help them, but we wouldn't— they're all fairly close in age, so in theory, all of them could have been in college at the same time. So, we said, "Don't plan on mom and dad paying because we probably won't be able to." So, the first two, were good to go. And the youngest one, it seems like she just keeps having more expenses, more expenses. And she calls Daddy and says, Daddy, I can't pay for it. And he always pays for it.

And, um, you know why her expenses— you know why her expenses keep going up? Sorry to cut you off. You know why?

Um, why?

Because they can.

Her line of credit keeps increasing. Yeah, because the bank says, yeah, I got more money.

And, and exactly, and y'all used very vague language with underdeveloped frontal lobes. That was my nerdy way of saying your kids—

living expenses is the most vague term of all time.

Or so is, we'll help, we won't pay for all of it, but we'll help, right? Right. And probably you're in a different financial situation with the youngest one than you were with the oldest one. Is that fair?

Um, the, the two youngest, it's pretty much the same. Okay. Because they're only a year apart.

You and your husband got to get on page, and then y'all have to be radically crystal clear with your daughter.

That's it. And I have been. Um, I think his, his, um, challenge— we both— neither of us when we were their age had much, and, um, we paid, you know, worked like crazy and made our way through college. And he eventually joined the military because, um, he wasn't able to pay for his expenses. So now he doesn't want to see them struggle, and that's why he keeps giving in. So every time we talked about it, I end up being like the, the worst mom in the world and just not being fair.

Let me give you a picture, okay? Um, I think struggle connected to love is one of the greatest gifts we can give our kids. Kids can struggle through a ton of stuff. They just— it doesn't do them good long term to struggle alone. Okay, so here's the picture. I want you to sit down with your husband. The, the world is a weight room, and you're— you and your husband had to walk into this weight room of life alone and figure out how to lift those weights. And the world kept adding plates on there and making it heavier, and y'all had to figure out how to get stronger. What your daughter is experiencing is she walks in there and says, hey, this is really heavy, and your husband's running in there and pushing her off the bench and he's lifting it. That's, that's, that's, that's nice. It is protecting her from harm. It is making sure she's gonna walk out into the world with no strength. Right. So it's a long-term disservice to continue to bottomless, bottomless pit it, bail her out. And it's a disservice for, for y'all to, to not be aligned and not be clear, right?

So that's step one, is both of you need to be aligned, because right now she's going, well, Dad's gonna definitely just call Dad, which then makes you the, the bad guy, right? That's not fun for either of you, and it's going to cause resentment between you and your husband. So here's what I would do. It's also cruel to say we're cutting you off today. This is— this can't go on.

You gotta land the plane.

For— land the plane. So say, hey, starting this fall We're going to change things up. I'm sorry we weren't clear.

Or starting at Christmas, probably.

Here's what we're going to do. We're going to cover your rent, utilities, and meal plan directly. We will not be sending you money. We will pay for those directly. Anything beyond that, you're going to work part-time if you want to afford it. That's not cruel.

And here's what has to happen. She 100% will blow through that, that budget. Why? Because she always has, and y'all have always bailed her out. You have to look across the table and say, We will not bail you out. And then when she calls and says, I need money for, you're gonna have to say, sorry, honey, you have to go get a job. You're gonna have to work more hours. You're gonna have to cut back. You're gonna have to hold the line. Otherwise your boundaries are a waste of breath. Give her whatever she wants. But you, George and I can't decide what your, you and your husband's values are. Pay for everything if you want, just be honest about it, or just pay for rent or just pay for groceries or just pay for car insurance or just pay for the cell phone bill. Every family's different. Every parents have different values, but man, you and your husband got a line here on that deal.

Right, and that's really our main problem. And he doesn't want to pay for everything. When we discuss it, he doesn't want to pay for everything, but he also doesn't wanna tell her that he's not going to because he doesn't want, just doesn't want her to struggle.

I get that, I get that.

That's his own guilt and shame.

Yeah, I'm the dad of a daughter too. I don't, when she comes in this morning, my wife's out of town, she said, "Hey dad, can we have ice cream for breakfast?". And I said, yes. Why? 'Cause I'm a weak coward. I wimped out this morning and my daughter and I had an ice cream cone for breakfast, mainly 'cause I wanted one. And she was a good avenue for that. But, but here's the thing. I, I, I don't want her to struggle. And if I take her struggle from her, I'm robbing her. I'm robbing her of her dignity. I'm robbing her of her ability to get strong. And I'm robbing her of adversity, which she's gonna need in a world that has spun outta control.

Right.

She's not in crisis. She's not about to be on the street. We're not being cruel here. It's just, this is a part of the journey. Everyone in college should have to struggle a little bit.

Just some skin in the game.

It's an awkward, frustrating time. And I worked part-time while I was in college. I survived it. And it gave me a work ethic that I have carried to this day. Right. So this is first, this is a marriage problem more than anything else.

Way more.

I don't blame your daughter for any of this. No. But it's going to be, it might be a rude awakening at first. And later on she's going, you know what? I'm really glad mom and dad did that. I wouldn't be where I am today.

You and your husband come up with a plan for when your daughter calls and says, "But Dad," y'all already agree, we're gonna go out and get ice cream.

You're on speakerphone together from now on.

Yeah, exactly.

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Alright, let's roll out.

To Greensboro, North Carolina, and talk to dear Marie. What's up, Marie?

Hi there.

How are you doing?

I'm good. I hope you guys are.

We're doing great. You staying out of trouble?

Good. Trying to. Good.

Um, so what's up?

Hi, I am calling because, um, we have, uh, lived in our house for about 34 years. We own the house. It's a house and, uh, 1 acre lot. We own the 1.2 acres on the other side of us. We have for 30 years. And just now the lot on the other side of us went up for sale. So, we have been looking at that lot or hoping to buy it for years. It was in a will. It was— the woman who owned it died, and she— and so the heirs own it, and they've just decided to put it up for sale. So we're wondering, I'm wondering, uh, is this something that I could get a— that I could— I'm wondering how to finance it and if I should even buy it. I guess that's my question.

Where are you guys at financially? You have any debt? You have emergency savings?

I have no debt. I have about $12,000 in savings. I've got a $90,000 401. I've got about $155,000 in a brokerage account.

And what's your real estate worth?

Probably $400,000.

And it's all paid for? No mortgages?

Does your husband have his own retirement plan, or is that y'all's combined?

No, I'm a widow. My husband died about 4 years ago. Yeah.

How much is this land?

They are asking $50,000— well, they're actually asking $60,000.

Oh.

But we know we could get it for about $50,000.

And you've got that money in your brokerage account?

I do.

I see here the word "finance" is on the board, and that always gives me a little, you know, Spidey sense tingling.

Yeah, it gives me pause. I haven't had a mortgage for so long that It's just, I'm really— oh, I don't want to borrow money ever.

Well, you don't have to. Why don't you just pay cash?

Well, that's what I wondered. Is that a smart thing to use that money for?

I would do that today if I was in your exact situation. I would do that.

It's not a huge portion of your world. How old are you?

I'm 62, and that's kind of part of the problem.

How do you plan on retiring? What's the game plan?

Um, I'm going to work for probably several more years just because I want to. Okay. Um, and then Social Security. What do you make? I make about $56,000, so I take home about $3,600 a month.

Okay. And what are your expenses every month?

Anywhere between $1,700 and at the very most $2,000.

Great. So you got plenty of margin in the budget. And have you done the research on what the property is going to cost you long-term?

Uh, yes. And property tax-wise, my full property tax right now are about $1,950.

A year?

A year.

People are mad at you across America.

Texans just got their swords out.

I know.

And to me, that's one month for a Texan.

Okay.

The one month, it's $10,000.

Well, let me tell you, it just went up, um, $800. So we had a reassessment. And so You know, $1,900 to me is like, what? Yeah.

What are you going to do with the lot?

Nothing. Not have neighbors.

Just not have— yes. What's the end goal here?

The end goal— well, and the really, really important part of a reason for getting the property is because this area is being developed. It's a road that everybody would love to have, um, and have it be commercial eventually someday. Um, But there's also 57 acres behind me that somebody could buy that property and turn it into a road so they could get access to that property. There's also— I know that the last thing the people that are selling it talked about doing with it was putting a couple trailers on it. I mean, either way, it affects me dramatically, I think.

Yeah. Oh, I think at this price point, the fact that you can pay cash, it's not a huge part of your world. Obviously, we got to catch up on the retirement side, but if you plan on working for the foreseeable future and chunking that margin away into retirement accounts, then I'll give you the green light on this one.

And wow.

Okay. Anytime I find myself in a situation like this, I always wanna throw a couple more variables just, just to make sure I'm doing the right thing. So can I throw one or two at you? Absolutely. Sell everything and go buy a condo closer to town.

Ah, that's what my sons would say.

For, for $300,000, a nice one. And no, don't have any more yard work ever again. Own your place. You'll, you'll probably put what, uh, you'd put 2 plus 50, you'd put $300,000, a quarter million dollars in your cash reserves for your retirement, right? And you walk away from this whole mess. Let them do whatever they want to with it.

Oh gosh, that's, that's so sad to think about, just because I've been here, raised my kids here.

I get that, I get that.

You're— are you alone out there now? How close is family?

Oh, uh, oh, everybody is about, you know, within 5 miles, maybe 20 miles at the most. So I mean, I have everybody right here.

So memories are a big thing, having a place for the kids to go run and play is a big thing, and yeah, thinking about future you. Yeah, I know, thinking about lawn care and mowers and— right, somebody behind you. I just had somebody buy a whole bunch of raw land right behind my place and I'm not super excited about it.

I bet not. I mean, I could easily see a neighborhood back there someday.

That's right. And so it— if the opportunity is, let's just sell it and walk away from the whole thing. And there's developers out there that will overpay for it right now, and they'll be able to— they might be able to buy the whole chunk. They can buy that 60 lot, they can buy your other lot, and plus your house.

Man, somebody would love it.

Yeah, it sounds like a problem for your neighbors. Make them muffins or something. I don't know. I, I want you just to have a conversation. You can write her a letter. You can just have a quiet conversation with 75-year-old you.

Yep, that's a good—

that's a good conversation too, because nobody can take the memories from you that you've had in that house. Nobody can take the love your husband and you shared in that house. Nobody can take the adventures your kids had in that house. And 75-year-old you gets to— I want her to have a voice in what happens next too.

Yeah, that's a good, that's a good thought. It's a great Plan B.

So I'm not, I'm not trying to tell you to do that. I just want to make it uncomfortable for you so you at least think about, hey, I'm not stuck either buying this or not buying this. There's other things I can do too, right?

There just wasn't a whole lot of like vision and intentionality. It was just like, well, it's available now and I've been wanting it and it'll avoid some potential future problems, right?

Yeah, yeah. I just don't want any, you know, you know, I don't want anything to change. I don't want anything, you know, it's changed.

It's already changed.

Yeah. The one constant in your life, the one constant is things are going to change. Yeah. And so as much, as much as you can be in the driver's seat of that change, the better.

Okay.

Because it's going to happen in and around you. If you can get yourself in a great position, that'd be awesome.

Yes. Okay. I hope my boys aren't listening to this call because they're gonna be like, see, we told you.

Yeah. It, it, listen, one of the greatest gifts we all have are people who love us and see our blind spots.

Yeah.

And if you have two young boys, or they're not young boys, they're young men, or they're men now.

Oh God, no, they're, yeah.

Yeah. Um, if they're saying, hey mom, we love you and we think this is best for you long term. At least give them an audience. At least give them an audience. I know that can be humbling to do for aging parents, but unless they're trying to like, I don't know, George, trying to— Connive? Trying to, yeah, yeah.

And John, you love dirt more than most people I know. So the fact that you're telling her to—

I'm just throwing it out there.

Go to the big city.

My, I had neighbors on one side, they had like 25 acres. I tried to get it. I hadn't sold that many books and I'm actively trying to buy a lot next to me now. So like I get that impulse And if I can have some sort of control about who's gonna be around me, I'm all in on that. But I'm also not 62. I'm also not completely alone out in the woods. I know what the maintenance and upkeep of being out in the woods is. Yeah. And it's never-ending.

Well, there's a reason your wife also, you know, wanted a place in society.

Right, yeah. She wants a cell signal and running water all the time.

Oh, so needy.

I know. I married such a modern woman. But yeah.

She keeps you alive.

That's right.

You'd be out in the woods somewhere like a feral animal if it wasn't for her.

Not be here if it wasn't for her. We'll be back. Love you guys.

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Welcome back to the Ramsey Studio in the Fairwinds Credit Union Studio. I'm John Deloney, joined by George, and we are getting high on our own supply. Let's go out to Portsmouth, New Hampshire, and talk to Avery. What's up, Avery?

Hi, John. Hi, George, from Boston.

Great.

Hello.

I apologize for John. It's Portsmouth. He knew that, but he was just being funny.

Wait, what is it?

Portsmouth.

Portsmouth.

Yes.

Yeah. Here's the thing between New Hampshire and Massachusetts, it gets all funky with the sound.

Imagine Ben Affleck saying he's going, I'm from Portsmouth.

Okay, but listen, in Texas we say all the words. So we say, like, if there was a town in Texas, it would be called Lewisville. And when I said the word Lewisville up here in Tennessee, you would have thought, like, it's Louisville.

It's one syllable, Louisville.

And so when I see Portsmouth, I would name my town Portsmouth, but I didn't know it's called—

what's it called?

Portsmouth. Portsmouth.

Just Smith instead of smouth.

That's all.

Neither here nor there. We're here to help Avery.

Yeah, what's up, Avery? Because we're not going to solve this.

Spelling dilemma. It's my OCD.

Yeah, you know me. What's up? All right, rip it, Avery.

My question is, how do I stop letting fear about my financial future consume me as a single Pringle Gen Z person? Here is more of my backstory. I'm 24, debt-free, never had debt. I'm on Baby Step 3B, saving for a home down payment. I'm an accountant making $63,000 a year. I'll have my CPA license by June 2028, and in my family I am the finance nerd to the point where every single day I feel like all I'm doing is working and obsessing over finances. I feel like I just am in my thoughts a lot, very much spiraling. I wonder how am I going to get by the rest of my life continuing to go down this good financial path as a single person because I grew up in a single-parent household. And so I saw a lot of those struggles in our own household. The other day I was wondering, how am I ever going to get by if I don't even know how to ask for raises at work and continue to advocate for myself? So it's a lot of spiraling and anxiety around that, and I just don't know how to, how to solve that.

And I'd love to get your counsel.

Let me jump in here. So I want you to flip this entire script.

Okay.

Okay.

What if And I think this is, is probably true to a large extent. What if your body's right? What if your body has a very real lived experience of growing up in a single-parent home where sometimes the lights might get cut off or get really close, where your mom was always scratching and clawing to keep y'all fed, and now you're a young adult out into a world in a great profession that, by the way, everybody on planet Earth is saying AI is going to take it away. What if your body's alarm system was going off because it was working perfectly? What if you're not crazy, is what I'm trying to say. Then what we have to do is we have to get beneath the spiraling, because the spirals don't help. Rumination is a complete and utter waste of time. And contrary to popular belief and Instagram therapists, you can practice over time to take back control of your thoughts. Okay? And I know this because I've done it. I was a spiraling mess. They used to call me the Spiral because, dude, I'd get going and, man, I could unwind any conversation and everyone walk away being like, oh, it's all coming down now.

You just have to decide what I want to focus my attention on. And you have to ask your body, what are you trying to protect me from? Your body's got a real— like, it's got a lived experience. And let me tell you this, you're doing the right things at 24, some of them. Okay, here's what they are. You're really getting control of your finances. You don't owe anybody any money. That's good. You are working towards credentials so you can help other people, knuckleheads like me and George. We use the same tax guy. You know why? We don't know how to do it. You're going to be there for guys like us. That's awesome. Okay, and not only are you there for guys like us, you're there for our families. That's amazing. Okay, so you're doing the right things there. Let me ask you other questions. Who— what friends do you hang out with regularly?

Um, so I have a lot of Christian Catholic friends up here. I'm part of a really good young adults group. Otherwise, I feel like I keep my distance. I I tend to notice I isolate myself a lot unless there's something that happens to happen. Okay. And I'm like, okay, fine, I'll go.

Let me, let me say this. Your body would be failing you if it let you sleep all night knowing you don't have a gang.

Mm-hmm.

Because you're all you got. And so what, what instead of usually people call on the show and we're telling 'em how to get outta debt. For you, I want you to make a commitment to yourself not to get outta debt. You've already done that hard work. I want you to make a commitment that once a week, twice a week, I'm gonna put something on the calendar where I go put myself in the company of other people. And I'm gonna go practice not wearing a mask. You know why? Because I'm worth being friends with. Because I'm quirky and weird and I'm a numbers nerd. But you know what? There's other folks out there like me. You get what I'm saying?

I do.

And if you're interested in a romantic relationship, which I'm pretty high on them because I'd be a worthless loser without mine. Um, then start saying yes to things, putting— you put yourself out with other people. I tell people under the age of 30, I want you in your apartment or in your home only to sleep.

Okay.

Like get out and see the world and experience the world because all of your ruminating can't do anything about macroeconomic policy.

Can it?

All of your ruminating won't do one thing on some foreign country's crypto policy, will it? All of your anger and rage won't change the gas prices at the pump right now, will it? No. And so let's go, let's go do the things that we can do. How— what's the state of your health?

Um, I'm in good health. I'm not very active and I'd like to be better at it.

There you go.

I feel like I don't have a lot of discipline. Okay, so my life—

so your body would be failing you if it knows we're not on a good trajectory when it comes to movement. So we're not moving our bodies, we're going to move internally. So make a commitment to me and George, I don't know, and a couple million other people listening in: I'm gonna go to the gym 3 days a week. I'm gonna go for a walk in the morning 3 days a week. Okay, you get what I'm saying? And so I'm gonna send you a copy of Building a Non-Anxious Life, um, It's a book I wrote a few years ago about this exact thing. And here's how I know this so intimately. Not only have I sat with a jillion people who experienced exactly what you're experiencing, I've been there. It's a nightmare, okay? When you feel betrayed by your own body, your own mind. And I wanna tell you on the other side of this thing, can you imagine this with me? It takes me about 2 minutes. I think that's my sleep latency, which is nerd talk for, 2 minutes or less for my head to hit the pillow and I'm out. Can you imagine that?

Mm-hmm.

I promise it's, that'd be so nice. I, I know, I know. I promise I used to take medicine to go to sleep, medicine to wake up. I promise that's there for you. Okay. But you gotta do that kind of work and congrats on your finances.

You're crushing it, Avery. Are you, are you doing a written budget? I imagine a spreadsheet every month.

I'm doing a budgeting app. Unfortunately, not every dollar I have, you need a budget.

Oh, that's why you're having anxiety. I'm kidding.

That's the exact, but no, here's my challenge.

Regardless of what app you're using, don't look at it for 30 days. Yes. Try that out. Oh, don't— I'm telling you not to budget for 30 days.

Don't open Excel for 30 days.

I think Avery doesn't trust herself, and I'm going to prove to you that you are trustworthy when it comes to your finances and your future. You're doing so good.

Hang on the line. We're going to get you hooked up with that free book.

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All right, let's go out to not Christopher Columbus, Ohio, and talk to Brian. What's up, Brian? Hi, how we doing, brother?

Good, good. I had a question. Uh, should I lower my 401k contributions to pay off some debt?

Yes. Next question.

Yeah, not lower it, stop it.

Yeah, stop completely. Absolutely. How much credit card debt do you have?

$8,000 right now.

$8,000. Okay. And how much are you contributing to retirement every month?

I just raised it to 20%, but it used to be 10%.

So you're basically willing to borrow against your investments at 22%?

Pretty much.

You wouldn't be in credit card debt that if you had taken that investment contribution and moved it to covering whatever bills needed to be covered, right?

Yeah, um, I guess.

What happened? Like, how'd you end up going into debt?

I bought a condo, uh, at 21, and I've never rented before, and my expenses got high, and I wanted to redo the bathroom. So one of it's like an installment loan for the bathroom for $5,000.

How much do you have in savings right now?

I have $10,000 in my 401, $15,000 in stocks, and a couple hundred bucks in a savings account.

What app are you using to do the stock trading?

It's through Raymond James.

But it's not a retirement account. It's just a brokerage account that you're investing in single stocks?

Yeah.

Okay, so you could cash that out and cover the credit card debt today.

Do it today. Do it today.

That's exactly what I do today. You're 21. You have all the time in the world to let compound growth take over, to invest. We don't have time to be messing around with 22% interest rate credit cards.

And statistically speaking, you're going to lose all that money anyway because day traders lose their butt cheeks, both of them. So yeah, cash it out now and at least pay off your debts.

I just feel bad because I got that money, uh, from my grandma that passed away. Yeah, 5 years ago. So I don't want to— well, I guess it's at $18,000 now. I don't look at it ever.

Why did she give you the money?

She passed away.

So it's just an inheritance from Grandma and she left part of it to you?

That's sweet.

Exactly.

That— do you want to do the same for your grandkids?

Yeah. Oh yeah.

I like that plan. I'm guessing Grandma probably didn't have debt, right? That was a principle she lived by.

Yeah.

That's a pretty cool way to honor her by getting rid of your debt forever and cutting up the cards and saying, "Never again am I going to let this affect my ability to build wealth, the fact that I owe other people money." Okay.

So use that as a learning experience and just pay it all off.

Yeah, we lovingly call it a stupid tax. When you do something dumb— dude, you're 21. I made those mistakes all the way into my 30s. You're way ahead of the curve, brother.

So, and here's where this is all coming from, Brian. We have a framework around here called the Baby Steps. So Baby Step 1 is a $1,000 starter emergency fund. Do you have $1,000 to your name in cash, checking, or savings?

Yes.

Great. So Baby Step 2, we pay off all the consumer debt— that's everything but the mortgage— using the debt snowball method. Do you have any debt outside of the 8K?

No.

Great.

No car loan, nothing No, my car is paid off.

Student loans? No, I didn't go to school.

Homie, you're winning, dude. Congratulations.

If you crush this, and I'm telling you, like, literally cut up the cards. I have not owned a credit card in 13 years, and my life has only been better for it. And I can't go into debt if I tried because I don't have the ability to. I don't have a vehicle to do that, and that's given me the ability to build wealth instead because I use my own money and I feel the pain at purchase. So if I, if I don't have $8,000 to do the renovation, I just have to wait and save up like a grown adult. And that's, that ability is the same muscle that's going to allow you to build wealth for the rest of your life. And I love that you're investing 20%. I think that alone tells me you're going to be just fine on the wealth building side. You go use our investment calculator from 21 to 61, 40 years of investing just 15% of your current income. If you never get a raise, you will be a multimillionaire. And I don't even know your income, but I know that for a fact.

Thank you. Are you sure it's not even worth it? Because I mean, my credit card only has $1,000 on it. And then when I bought this condo, I bought a TV for $2,000. And I've never missed a credit card payment and I get 2% cash back.

Well, in that case, go into as much debt as possible for 2% cash back. You said you have 8 grand total as part of that. What's the other 7 grand?

Wait, one second. Do you think, like, just think about this for a second. Do you think the credit card companies give you 1 or 2% back cuz they're your friend? Or do you think that they have used these incredible, extraordinary AI systems to know exactly how much to give you so you keep using their products and they're gonna make so much money off of you?

You know what? I think you're right. Cause I remember in high school I heard the Apple credit card had 2% and I, that was like my dream. I just like, my only goal was to get that credit card.

Yeah. They're not your friend. They're running a business. And if they're like, hey, we'll give you some money back, wink wink.

What do you make a year, Brian?

I make $70,000, but with overtime, well, $71,000, but overtime I'll make $80,000.

That is amazing. So here's the deal, 2% of that is $1,400. Now you're obviously not spending $70 grand on a credit card, that would be insane, but I'm telling you, you could make 3%, 4% just by saving that amount of your income every month. It's a better equation.

And so you guys, uh, I use the Acorns app and it like, uh, rounds up. Is that something like rounds up my change? Is that something good?

Stop playing games, homie.

I would delete it. It's like going into the like pond at your mall and trying to build wealth by collecting the change in there and thinking that you're building wealth. I met a girl yesterday who said, I was like, I was like, you're investing? She said, yeah, I use the Acorns app. I said, how much you have invested?

$300.

Yeah, by the time you retire, that's going to get you an ice cream cone.

So put that into my stock thing because I'll make more than just delete it.

Just, just, I'm gonna give you the playbook.

Simplify your life, homie.

So in my book Breaking Free from Broke, I want you to read two chapters. Number one, is the credit card chapter. I go through all the different personality archetypes. You're probably at least 3 of them. The perfect spender, the rewards redeemer, all of that. And then read the Wealth is Patience chapter and I will give you the playbook about where to invest, what to invest in to give you confidence. So you're not just floundering because you're a really smart guy. You're doing a lot of things, but you just need a little bit of focus and put the blinders on to not fall for all the traps that 21-year-olds just like you are falling for all over the country. Yeah.

Here's another way to think of it. You're going to the gym every day and you're seeing all of these different, um, uh, weights, all these different, um, like machines, and you're running through and doing one rep on all of them. It's like me at the gym basically, except George has never walked into a gym in his life. But you're running, you pick up one dumbbell and you lift one over your head once, and then you run to the one machine and you do one leg, and then you run to another machine. You're never gonna get in shape that way. You might get tired. You might be really annoying to all the people around you. But you're never gonna build the muscle and the strength and the esthetic you want unless you just do the boring thing over and over again, now and forever.

Focus on one thing, pay off the debt. And by the way, get rid of these all acorns and credit cards and just whatever you need to do.

Yes, man. The last thing you need is another app. What you need right now is just a game plan, a budget, savings in the bank, invest into your employer retirement plan. We did the largest study of millionaires ever done, over 10,000. And nobody was like, dude, 2% cash back is what got me there, bro.

I acorned my way to millions.

They all said, I just put money into my 401k every year. And these were not smart, the smartest people. They were average investors at best. But they said, my wealth is in my paid-for home and my 401k, my employer retirement plan. That's all you need to build wealth.

Are you dating anyone?

Yeah, my girlfriend lives with me.

Okay, spend your energy being a good boyfriend, not scrolling Acorns.

You're right. You're right.

Take her on walks. Y'all go to a museum or something. Go fishing. I don't care what you do. I don't even know if there's water in Columbus, Ohio. Go do fun stuff. Get off these apps. Like, dude, I've never in my life heard a, a young woman or older woman be like, oh, I love him. He's got so many financial hack apps on his phone and he just scrolls them when we're together. I've never heard that ever, ever.

Hang on the line, Brian. We're gonna send you a copy of Breaking Free from Broke. We'll send you the audiobook if you're more of a listener. That's fine too. That's my speed.

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Today's question comes from Veronica in Florida. I'm almost $13,000 in debt between credit cards and a car loan. My gym membership is $50 and I have a personal trainer that charges $120 a week. I understand that I should cancel if I'm not using the gym, but I go 4 times a week. Why should I cancel when it benefits my physical health.

So here's the thing.

What say you, John, as the person who works out?

I'm saying that 14 years ago I got on Craigslist and got a few kettlebells and started in my garage. And I also had a gym membership at the time. And then a couple months later I got a few dumbbells, and a couple months later I bought a squat rack. And over the years I've just continued adding. I still have a lot a lot of the very first gear I got 10 years ago, and now I have a really nice extensive home gym. It's awesome. And I have close personal friends that are very successful personal trainers, and it's awesome. And there's been seasons when I hire trainers for particular purposes, right? But this idea that I'm broke, I'm gonna spend— it looks like about $680.

Yeah, $550 probably a month, right?

Okay.

Well, $120 a week times 4 is what, $480?

Mm-hmm.

Plus the—

plus $50. There you go. Yeah. So $500+ bucks a month.

Plus all the supplements.

Right. Plus supplements. Right. Here's the thing, Veronica, you're broke and you've, you've, you've given yourself a straw man here. I have to spend $500 a month or I can't be physically healthy. That's just nonsense. You can get online and you can go check out my buddies at Mind Pump, dude, and get one a workout program that you do from home for 60 days, 90 days, 120 days while I get your, while you get your financial mess cleaned up. A personal trainer is something you buy that I love. And I actually believe in when you can afford it and you can't afford it, you're broke.

It's a luxury.

It's, it, it, it is some, yeah. It's, it's a thing you get when you have specific goals and you can afford it. Same as buying a Lexus. You know what a Lexus is? An awesome car. A car that will last you till the end of time. And it's a luxury, it's expensive and it should be, cuz it's really nice. And so when you have the money and you can afford it, buy it, right? Like any number of things here, but this idea that I have to have this and I have to have this, I have to have this, or it's gonna be detriment to my physical health. That's a choice you're making. And so yes, as someone who cares about you and your physical health, I would tell you, pause the personal trainer, cancel your gym membership if you can. Some of these gym memberships, um, you're probably locked in this until 2040. Um, Cancel your gym membership.

You have to write a letter with a feather pen and have a carrier pigeon deliver it.

No, you have to have an owl from Hogwarts deliver it.

But signing up, you can do with a text.

Exactly. Yeah, yeah, yeah, yeah. You just, yeah. So insane. Make direct eye contact and you're signed up. To get out of the contract. Um, and then when you're, as soon as you can afford it and you budget for it, then get a great personal trainer. I'm all in on that, but you can't afford it right now.

And, um, It's over $6,000 a year that could be going to crush this debt. And so, yes, you're gonna have to make peace with, I'm gonna pay interest a whole lot longer, I'm gonna stay in debt longer, make these payments longer, and it's going to be harder to get out because we want the debt-free journey to be short. Yes, like pain, but for as little amount of time as possible.

And let's get on Facebook Marketplace and get a couple of dumbbells and a kettlebell, and let's work out in our garage, do some YouTube workouts.

That's right, 6 months, and just knock the debt out. And use this as your why, like, here's why I want to get never again do I want to have to downgrade what I'm doing with my physical health.

And it may happen. What happened to me is when we started paying off debt, I canceled a lot of stuff. I realized, oh man, the 15 minutes it takes me to drive to the gym and the 15 minutes it takes me to drive home to the gym, plus all the walking around and saying hi to everybody. I mean, that's half my workout, if not more, every morning. And so I built it out of my garage and now I love being there and now my kids work out with me. So there may be some benefits there and I'm not running down gyms. I love them. I'm not— I love personal trainers. Veronica, you can't afford it. And here's my promise to you, debt over time will impact your emotional health and your physical health. It will bury you. So put a pin in it and get this financial mess cleared up and then get on with focus on your financial health right now.

Ooh, boom.

Eric, you should be like a, like a rapper or something.

I think that's off the table for me at this point.

I absolutely, for the first time, I agree with you, George. Let's go out to Indianapolis and talk to Kathleen. What up, Kathleen?

Thank you, Jesus. Thank you, Jesus. Thank you, Jesus.

Oh, I'm John. I'm just kidding.

What's up? Hi, Doctor, how are you?

I mean, I could not be doing better. How are you?

Blessed.

Awesome.

We have two debts left. Two. Two. I'm so excited.

How close are you? How much are these debts?

Oh, well, one is the mortgage and the other one is my student loans.

How much are the student loans?

How much do you have in student loans? $90,000.

Dang, Gina, those are expensive student loans.

Yeah.

What do you guys make a year?

I— we bring home $75,000.

Total household income?

Yes.

What was your degree in?

Communications.

What are you doing with it? Like, what's your current role?

You better be communicating a lot.

I was at one of the news stations for 13 years. And then I couldn't take it anymore and I quit. And now I'm a blue-collar factory worker.

Oh, wow. I had a girl. All right. So how can we help?

So I graduated 16 years ago. I have been hustling to pay off the student loan debt. It's not getting me anywhere.

What was the original balance?

$40,000.

So it's grown by $50,000.

Yeah, well, I fell into default because I couldn't find a job for 3 years.

Kathleen, you couldn't find a job for 3 years?

I know, it was 2010 in recession.

Okay, all right, we won't go back there. I don't want to get distracted. All right, so what's your question?

Am I really gonna keep hustling to get it paid off It's gonna be forgiven in 4 years.

By who is it? The forgiveness people?

Yes.

What program are you in that you think it's going to be forgiven in 4 years?

Um, well, it's the one that Biden— so as long as it's not touched.

Are you talking about PSLF, the Public Student Loan Forgiveness program?

Yes.

You're a factory worker, sister. You know, I mean, you're not in that program.

Oh yeah, you have to like enroll and make like 120 consecutive payments and stay in the public sector.

I, I, I did. Yeah, 120.

And did you apply for it after your 120th?

Yeah.

What'd they tell you?

Um, 4 more years.

Why would it take 4 more years if you've made the amount of payments you need 'Cause it's not 20 years.

That's what they told me.

I would be not taking the gamble on this, 'cause that loan's gonna be $120,000 by then, and you're not gonna get approved. That's my fear. I hope it's not true.

It's already doubled on you.

I don't want it to triple. And now you're left holding the bag, extra frustrated, extra hopeless.

And you wanna play a terrible, very unfun, yet fun for me game? Go back in time with me to 2016. Now, you know, let's go back to 2010. 2010. Could anyone on the planet have predicted we'd be living the world we're living right this second?

Oh no, absolutely not.

No, no. Sci-fi writers are like, y'all are doing what?

Right?

Right? And so you have way more faith in what's gonna happen in 4 years than I do. That's at least a presidential election away. Mm-hmm. I, I would way, way more trust the woman in the mirror than I would hang on to anything I think the federal government's gonna do in 4 years.

Okay.

You get what I'm saying? And What should I do?

Keep trying to pay it off?

I would get both of your incomes up and start attacking those loans with a vengeance.

I'd get crazy aggressive. Yeah, with a vengeance is the right word.

All right.

I hate to tell you that, but I don't trust that program to be there in 4 years.

We are absolute joy killers. She started off so excited.

I know, I know.

Left crawling. But it's the truth. That's all we can do.

One of our favorite things is when people share their stories about how they're winning in their financial lives. And we just got this awesome fan review for our EveryDollar budgeting app. It says, EveryDollar is excellent. It really helped me get to get my personal finances in order. Now that I'm married, my wife and I use it together out of our joint checking account. It really helps us maintain a common vision and a set of goals. Boo-yah! It's awesome to hear. Really good things happen when you're intentional with your money. Take control of your money. Change your family tree for free and then live like no one else. Start EveryDollar for free today in the Apple Store or Google Play. Hey, uh, let's, uh, roll back that last call real quick, George. Um, I don't know how this works. And so I'm asking your wisdom here. If you took out $40,000 in loans and then in a, in a federal student loan, and then it doubles over time, can you go back and try to settle Or is that the new balance and that's gonna be the way it is forever and ever, amen?

No, you sign those dotted lines.

You're in debt to the federal government.

The interest is interest legally. And when you, you know, go into deferment or forbearance, I mean, the interest can still accrue. And so I talked to some people when we did the Borrowed Future podcast and I talked to these people and they had their loans for 20 years and they're like, I don't understand. I only took out 40. They're telling me the balance is now 80. Did I get scammed? I go, no, you just never learned how the interest works and what deferment really is. And so it's heartbreaking to see the numbers go up after you've even made your minimum payments. And the way it works is the interest is higher than your minimum payment, ergo the balance goes up instead of down. And to her, so I was confused. I've never heard. So I think she was on the income-driven repayment program.

That's what I think so too.

Which is different. That has a 20-year track. Back. The PSLF, the Public Student Loan Forgiveness program, is 120 qualifying payments. That is the finish line. So I don't even think she knows what she's in, and I don't think she's in a forgiveness program.

Gotcha.

So I'm very scared for her, and the truth is, even if she played the game perfectly, there's still a high chance she would not get approved.

Well, here's what's going to happen, and it's going to have to be palatable to the common voter, or it's gonna have to just be forced on us by a politician, which is either these things are gonna have to get just dismissed and you're gonna have millions of people who paid their loans off enraged, or they're gonna turn into very similar like IRS debt. Like y'all owe us, we're gonna start garnishing your wages and we're gonna tag you 'cause you owe the federal government money. I don't see another path, right?

Yeah.

It's gonna be one or the other.

And then with every administration, the rules will change.

They just change. And it changes and it changes.

Nope.

We got rid of that. Every 4 years it's just gonna restart.

And, and listen, if any politician tells you we're gonna get these student loans are so evil, they're so bad, they're the worst things ever. They're so bad. We're gonna, we're gonna dismiss 'em. They're only telling you the truth if they also say in that same sentence or in the next sentence, and next semester we're not gonna make another loan 'cause they're so bad for you. It's like saying, hey, the food you're eating is so poisonous, we're gonna give you medicine and then we're just gonna sell it right to you tomorrow, right? And so if student loans are so bad, then come up with a long-term plan to stop.

The government needs to not be involved.

Yeah, stop making them.

They're backing them. So the student loan company's like, great, if they don't pay, the government's gonna pay, which is the taxpayer, by the way, 'cause the government doesn't make any money. So that's a problem. And then the private student loans, they can be even scummier, right? They can do what they want. And so there's no good way to take out student loans. The best way is just to avoid student loan debt altogether. And if you have it, aggressively pay it off. Aggressively. No one's coming to save you.

All right, let's go out to Des Moines, to Des Moines, Iowa, and talk to Claire. Hey Claire, what's up?

Hi, how are you?

Good. What's up?

So I'm considering two options. One, I can stay out here in Iowa. I've got a boyfriend here, he farms, um, and I can stay at my my job, which pays me pretty well, um, or I'm looking at returning to Texas and taking over the family business for a pretty significant pay raise. And it's really hard to decide which one's the right choice. I know that a W-2 employee does not have the same kind of long-term earning potential as a business owner, but they don't have the same long-term risk in some cases too, right? That is true. That is true.

But take all that off the table for a second. I've just finished a 2-year project digging into the answering the question, is being married still worth it? Is it still worth it in the modern era? And if so, how in the world are we supposed to do it?

Right?

And one of the data points that I found that surprised me the most was the net financial benefit to a good or great marriage over the long haul. It ROIs in a really extraordinary way, cuz you got two people people who can pick up the slack for each other. Sometimes you both are co-earners. Sometimes one person's able to carry the weight at home, another person's carrying. But it just has a net benefit over time. So, hey, tell me about this knucklehead farmer boy that you're in love with. Is he awesome?

He is pretty awesome. He is pretty awesome. My dad wishes I hadn't been a farmer because he wouldn't be so landlocked, but he is pretty great. Um, he owns his own business. He's also got a family operation that he's working with. Okay. Um, and he understands I leave, he'd understand why.

Okay. So let me ask you a second question. Not one time did you say, I really am invested in this family business. I love this business. I wanna be a part of it. You, you mentioned some money.

Yeah. So I've never been involved, um, in the family business on my side in Texas. Um, it's accounting and finance, which is not what I currently work in, but it's also software. So that is sort of what I work in today. Um, I am passionate about the mission. It does work with not-for-profits. But just like the farmer boyfriend, agriculture has been what I've been chasing since I was 18 years old.

Okay.

So is that your love, your passion? You're like, I don't want to leave agriculture, or do you find to leave that life, potentially end this relationship to make some great money and work in the family business?

Yeah, I'm not sure. I think stability is the most important thing to me. And I certainly want to do my family proud. And if if this legacy is something that they wanna pass on, um, this would actually be a second generation family business, then you, you don't wanna let those people down.

Right.

Well, but that's a lot of pressure now.

Yeah. But, but you're in the driver's seat of your life. How old are you?

In theory? Yes, I should be. I'm 26.

Okay. At some point there's gonna come a day when your dad won't be driving your, the, the car that is your life. And you get to decide when that is.

That is really fair.

Right. And if that means I'm gonna give up my, a passion I've had since I was 18, I'm gonna give up a really stable relationship with a really great guy who has an, who's also a part of a, of a legacy family business. Um, and I'm gonna go literally opposite. I'm gonna go halfway across the United States to do so, then so be it. But go cuz you want to go. And you work in software, you work in technology. Um, ask yourself, what is the, the, the words I'm hearing the most on, on the, the AI disruption is in finance.

Yeah, absolutely. Um, and we are trying to, well, the family business in Texas is trying to account for that and be it, be ahead of it a little bit.

Boo account. I see what you did there. That was a good joke. Um, okay. So I guess I can't help you, George. I don't know if you can—

I'm just wondering, does this have to happen now? What's the urgency?

So I have been given a deadline of about a month.

And if you don't take it, who does?

They will hire somebody to do the job in Texas.

Okay. Are you okay with that?

You know, after this call, I think I might be.

I'm just like, I don't want you to feel this pressure like you're the savior of this whole thing. And if you don't take it, the family name is sullied. It just feels like we're creating too much drama around it when the truth is they're willing to go hire a stranger off the street to do this. You've never been involved in it. You've never raised your hand and said, I'm, I want to go work in this business. And so if it's just for a pay raise, I think you're gonna do astoundingly well on the current career field you're in if you just keep going.

And, and let's flip this other side of this. Um, when Dave started talking to his kids about taking over ownership of Ramsey and working here, he didn't make 'em. In fact, they had to go through the paces to say, no, no, no, no, I really want this. The Daniel who's our current president, he got to start as a teenager painting stairwells and working in shipping and had to work his way up through sales. Like, right. He had to prove to Dave, I want to take this thing on, not you better do it or I'm gonna go hire somebody else to do it. You get what I'm saying?

Yeah, absolutely. I think that's a, I think that's a really good point. And that is how I see my boyfriend's family's business great.

Okay, so I— you've got to, you've got to own the final decision here. So I don't want you to be like, well, these two random B-level podcasters told us I should— like, I want you to own this, um, and make a firm decision. But I want you to imagine yourself in the driver's seat of the car that is your life. Where do you want to go?

Plus, this feels like a Hallmark movie, and I want to see the, the happy ending here.

I do too. Marry the farmer.

Marry the farmer.

Marry the Farmer. Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. Let's go out to Manhattan, Kansas, and talk to Stephanie. What's up, Stephanie?

Hi, how are you guys?

We're doing great. How are you?

I'm doing great. Thanks for taking my call.

You got it.

What's up? Yeah, so, um, my husband and I, we have a rental house. It was my primary house before we got married. Um, and so we're just kind of at a crossroad. We don't know if we want to sell it and kind of cash it out because the equity in it is quite a bit and move on with our lives, or if we want to hold on to it, pay off debt in a couple years, and then have this asset.

Do you like being landlords?

Uh, well, unfortunately, the first time we were landlords was a family situation, so it left a bad taste in our mouth. Um, but we definitely learned what not to do, if that makes sense.

Okay, but that was a great, great way to evade my question. Do you like being a landlord? Um, yes or no? Yes or no? Yes or no?

I'm a no.

Okay, cool. Just let that be. Just let that be.

It's Okay, what is it worth?

So it is worth, uh, between $150,000 to $200,000, and I owe about $12,000 on it.

Oh nice, it's almost paid off. That's fantastic.

Yes.

Okay, so let's, let's flip the script here. If you didn't own this thing, you have your life you have now, would you sink the money to go buy this thing as a rental property?

No.

So why are we hanging on to it?

Because it was your house before you got married.

Yeah, it was my baby, and I, uh, I had a house fire in it, so I kind of built it up from bottom up, kind of, and definitely attached to it. But also, I've gotten advice where it's like, oh no, don't sell, don't sell. I'm like, we were ready to sell it, and now we're like, wait, is that stupid? Is it worth $100,000 more next year? So yeah, we're just really like like not sure what to do. We do want to move on with our life. We're going through infertility, and this would kind of help us go through that process a lot more smoother.

Um, yeah, that's a pretty big why. Yeah, it's a great why to have to get out of debt and get some financial footing.

How much debt do you guys have, uh, including that house and our current house? We're about $64,000.

But no consumer debt? It's just mortgages?

Um, we do have about $6,000 in credit card. That's me. And $8,000 in a car.

Okay, so we have really $14,000 in consumer debt and the rest is mortgages?

Yes.

What's the household income?

Um, he brings about $4,500 a month and I was full-time. I cut back to like super, super part-time when I realized we're going through infertility. So I bring about $800 a month.

Okay, so total currently is $5,300 a month.

Month? About that, yeah.

How much margin do you have at the end of each month? How much is left over that you can use to tackle debt?

Um, we just— this year we've really buckled down on the budget and we realized we could have between, uh, one month we had like $1,000 and then last month we had like $200 because some stuff came up.

Okay, um, so at this rate, best case scenario, it would still take you over a year just to get rid of the consumer debt, the $14,000.

Mm-hmm. Mm-hmm.

That's a long time while you're trying to also deal with the infertility, right?

Right. And we do have about $11,000 in savings, which we've been holding off on if we need to do repairs to the house to sell it, or if we do need to put it into fertility. So we haven't quite snowball affected it and put it towards all the debt yet because we're not sure. Like I had 2 surgeries last year, things like that. It's been really interesting.

What if we flip the script again? Um, how old were you when you bought this house?

I was 23.

Okay, how long did you own it before there was the fire and you rebuilt it?

A year.

Okay, go back and have an imaginary conversation with 24-year-old you and imagine her looking at you.

How old are How old are you now? 30, almost 35.

Almost 35. Imagine 24-year-old you looking at 35-year-old you and 24-year-old you saying the following: I'm gonna buy this house and I'm gonna fix it up when it burns down. I'm gonna do a ton of hard work, a lot of sweat equity, because one day we want to be a mom and one day this is going to be worth a whole lot of money. Money, and it's going to get you and some new knuckleheaded husband that you haven't even met yet— it's going to clear all the debts for y'all, it's going to pay off the house y'all live in, it's going to put some cash in the, in the bank so that y'all can go through this, the harrowing process that is infertility. I want us to have a baby, so I'm gonna do all this work at 24 so that I can hand you this over when you're 35 and you'll be set up. That changes the whole thing, huh?

That's beautiful.

Yeah. So here's the math on that. You net $130,000 from the sale of this place. You pay off your $14,000 in consumer debt. You pay off the other mortgage. Well, now you have $60,000 laying around.

On top of the $11,000 you have laying around.

So now you have a full emergency fund and money to do these fertility treatments without going into debt ever again, with no stress, all peace.

And by the way, you're 35 in a new marriage and you have a paid-for house.

Yes, right.

And so is there a possibility this house goes up in value next year, 5 years from now, 10 years from now?

Yep.

But do you want to be having a conversation with 45-year-old you saying, you know what, we decided to keep borrowing money, we decided to go $100 grand in debt with infertility treatments that may or may not have worked, and we really wanted to have some equity in a home I owned when I was 24 Aren't you proud of us?

Mm-hmm.

Or would you rather talk to 45-year-old you who may be holding a 5-year-old and a 3-year-old or a 5-year-old and a 2-year-old or whatever and say, we don't owe anybody anything and we decided we wanted to have the life that we wanted to have.

I love that.

You get what I'm saying?

Mm-hmm.

I think selling it would be way more life-changing than keeping it. Agreed. That's the simplest way to put it. Put it. And so if I'm in your shoes, based on what you told us, I would sell it today. I'm offloading. I'll do the minimal repairs needed to make it palatable for the market to sell, to get top dollar for it. And if you need a real estate pro, you can jump on to ramseysolutions.com/agent, and they'll get you the best deal they can. Uh, but I would move forward with this because I think your, your why is too strong to be hanging on to this default landlord life.

I agree. Definitely talking about helped a lot, and put it in perspective for sure.

Will you do us a huge favor? When baby number 1 is born, will you call back into the show and let me and George cheer you on?

People love the Where Are They Now. That's one of the best Where Are They Nows I can think of, is you calling back and we hear a baby squealing in the background.

Yeah, it's one of my favorite things in the world. And I, I've been there. Well, it's a harrowing long walk and it's lonely. And, um, yeah, we want to celebrate with you when it, when it, when it happens.

Okay. Thank you. I will do that for sure. Awesome.

We'll be looking forward to it. That'll be fantastic.

John, that call is such a great reminder that the baby steps are not meant to be optimal. The baby steps are meant because life isn't optimal.

Yeah.

That's the craziest part to me is the reason you do it is to have flexibility, options, and margin when life goes sideways. Right. When on paper it didn't, it's gonna go sideways.

And I think the grief you and I take, you take it way more than me, but the grief we take take from internet pot-shotters and social media pot-shotters and other influencers are, yeah, but look at this. Look how much money you're leaving on the table. Look how much money you're just holding onto. Look, you're paying this outta order. There's a reason, and it's because none of these formulas in a spreadsheet account for life happens. And when you talk to thousands of people going through cancer treatment, infertility, job loss, then you realize Guys, margin and psychological wins are way more important than arbitrage.

Leverage.

Yeah.

Hey guys, Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. Help. It's fast, simple, and free to use. Go to RamseySolutions.com and try Ask Ramsey today. That's RamseySolutions.com.

Charleston, South Carolina. Let's talk to Aubrey. What's up, Aubrey?

Hi, how's it going?

Excellent.

How are you, brother?

Doing good.

It's weird.

I can't believe I'm talking to you guys. Listen to you guys for a long time.

We were just talking. We can't believe we're talking to you, man. That's awesome.

What's up? Very cool. Yeah, well, uh, my son Henley, uh, he's 11 years old, and, uh, he opened up a Pokémon pack the other day. It's impossible to get them, but his grandmother bought him a Pokémon pack, and he happened to get a a very valuable card in the pack.

Let's go, Grandpa!

How valuable?

Uh, it was about $1,000— well, probably about $1,400, but we sold it to a local card shop, so we got about $1,000.

Wow, $1,000!

Yeah.

What kind of card was it? Inquiring minds want to know.

It was the Mega Gengar EX, the, uh, the most current release. That's like the chase card that everybody's after.

George has that tattooed on his lower back.

Actually. Oh, that's the card.

Yeah, right above the Aztec sun he has. He got that one tattooed there.

How old is your son?

He's 11.

Okay.

Wow. And did you give him the money?

Yeah, yeah, he's got— we're letting him decide how he wants to do it. So he's a very, very responsible 11-year-old. You're gonna laugh, but I want to let you guys know, he's, he's, uh, listened— he's read The Total Money Makeover, and then he's listened on Audible to EntreLeadership and Smart Money Smart Kids. So he's like, goodness gracious.

So no Legos for this guy.

You need to get him a bunch of toilet paper and teach him how to wrap houses or something. You're, you're in danger of, of creating a nerd bigger than even us.

That's awesome, man.

Way to go. He's a good kid.

All right. So what's your question, man?

Yeah. So he's wondering what he should do with it. Um, he has a plan so far, so I don't know if you want to share what he's thinking so far with you guys.

Sure.

Yeah. We basically, if you know, from the Smart Money Smart Kids, we said there's 3 things you can do with money. You can save it. You can spend it and you can give it. He wants to give $300 to the church. He wants to save $300. He wants to spend $200 and then have the other $200 for gifts for family and friends and buying other people stuff.

How do we clone this kid? This is crazy.

Yeah, is he real?

I literally thought you were going to say he wants to buy $1,000 worth of Pokémon packs to redo this. I'm like, you created a degenerate gambler at this point. That's right. Let's do it again. Again.

I love it. You think so? Yeah, he's just super generous. And we're almost— almost found myself trying to discourage his generosity. I'm like, I don't think that's quite the right move here. So he wanted to get your guys' thoughts on, on that plan.

And yeah, my only concern would be, um, with what you just told me is amazing, and that, that's a direct reflection of the parenting he's receiving. So kudos to you, man. Like, as the father of a 10-year-old, like, well Well done. That's awesome. We need more young people out in the world like him. My only concern would be that there's no sort of, this isn't the right word, but it's close enough, survivor's guilt. I got this money, my grandma bought me something, I end up with $1,000. And so I kind of owe $200 to the side to buy other people's stuff.

Right?

Yeah.

And I would sit down with my, with my son or my daughter at that age. And make sure, like, I, I do believe I have an obligation. I, I owe, if as a tither, I, I have a responsibility to pay back to my local church. 'Cause I know where that money's going. It's going out to the local community. Right. And to, to help the least of these in our community. Like I, that's a, that's a responsibility I have. But if I'm gonna buy gifts for friends, family, I want that to come from a place in his heart of like, 'cause I want to, not 'cause I feel like, uh, I kind of feel bad 'cause I got this thing. So I kind of owe everybody. You get what I'm saying? And it's just a moment to teach teach him about emotions and about the spirit of things and obligation, which that's a tough— those are tough concepts for adults to wrap their head around, much less 11-year-olds. But it could just open up some great conversations with you guys.

Yeah, yeah, I think that's good. And, um, probably be sure to have that conversation and then make sure if he's wanting to give that much, that that's not coming from a place of guilt.

Yeah. And it may just be he saw Grandma's eyes light up and he loves giving stuff away. Um, I remember I used— I mean, I've talked about this a lot on the show, but my son and I for for years went to breakfast once a week at a local Waffle House. And that was a way I taught him, here's what generosity like looks like, right? Um, let's like, let's be ridiculous and tip these waiters. And their response was so extraordinary. We, we developed relationships with the wait staff cuz we went there all the time for years. Um, that I had to teach him, hey, you can't tip all of your money away cuz you gotta pay bills. Like you're gonna have to like have a light bill one day, right? Cause, cause it was so overwhelming. Yeah. The reward was so big. And And so I, I never imagined I'd have to teach a, a 7th grader that lesson. Like, well, you gotta hold onto some of your money. You can't just give it all away. But man, I'd much rather be teaching from that place than the other. Right. Good for you, man.

So yeah, the ratios might be slightly off. You know, guys might decide, hey, let's do $100 to the church. We're gonna do $100 that's spontaneous. So for Al, when we have a great server, you can hand them that $100 bill. We're gonna put a couple hundred bucks in a high yield savings account for short-term goals. I mean, the kid's gonna be driving in 5 years.— and we know how expensive cars are. Yeah. And maybe put some in a long-term plan, like a 529 plan for college, just to show him and get him understanding compound growth.

You wanna get, you, you wanna get, um, use this as an opportunity to really develop y'all's relationship. Teach him about how much you tithe and what percentage you use, and here's why. And so instead of tithing 30%, maybe you say, hey, me and your mom, because of this scripture, because of this teaching, because of whatever, here's how much we tithe. It's your money. You get, you're free to do with what you, what, what you want, but here's what we do and here's why. And you begin to teach him the why underneath some of these exercises. And I think that can be a really powerful, like, um, intimacy. And I like, it's, it's a way to connect with him at a deeper level.

Right? Yeah. Well, and, and with that, like, I mean, we, I don't know your guys' thoughts. We weren't planning to like override his decision on it. I mean, we were thinking too, you know, really it's $1,000, you're gonna come and go, right? Like, this is more of a teaching opportunity for him to even experience handling what's a lot of money for someone his age. I mean, would you guys agree with that, to not kind of override, I guess, unless he was doing something crazy? I think crazy's on here.

Yeah, I get, I get that question a lot. I, when someone's like, hey, my kid just got $50 for raking the neighbor's yard, he wants to blow it on a Lego kit and he's 10, I say let him blow it because they're gonna, that's how they're gonna learn. I'd much rather them do that than get their first raise at 22 like I did and go buy a stupid truck you can't afford.

You want the regret and failure to happen when they're 11 with $1,000 and not 31 with $100,000.

That's right.

So it's a great lesson to learn because nothing's on fire and there's nothing fatal here, but I would let him have the final say. And you as sort of a guide can just offer some recommendations and go, what do you think, bud?

A great, a great sentence starter with an 11-year-old is, all right, teach me about why you want to do this. Teach me about where you came up with the number 300. For and teach me about wanting to put $200 aside. What, like, you want to give away 50%, half of this money? That's amazing. Yeah. Tell me about that. And have him just, just like let him know at, at the age of 11 that he can talk to his dad about stuff, that he can talk to his mom about stuff. 'Cause now you're planting seeds that are gonna pay off 10, 20, 30 years from now, which are amazing.

Yeah, absolutely.

Does Grandma get a commission from the, the winnings?

You bet.

I think we get Grandma a nice gift. I feel like if Grandma bought me a lottery ticket and I hit, I feel like I should get Grandma a little something, some flowers.

Yeah, good idea.

Oh, that's awesome. You guys are so great all around. This is a great, great question.

Quick short follow-up, um, with that, any— we've kind of debating on what is he saving for right now and if that should be in a high yield or if that should be in an investment. My thought was the cars is probably the next thing you're saving for, but Any input from you guys on that?

Put in a high-yield savings account.

Yeah, I mean, car is probably the big one and then college is not too far beyond that. And so I like showing him how short-term savings works for goals and then how long-term investing works. And I like the mix of both because he'll get a handle on both of these things are important. There's not really a priority here. It just depends on when the goal is going to happen.

Okay.

So I like this all around. Teach him a little giving, a little short-term saving, long-term investing, and of course, spending. Yeah, let him enjoy himself.

He's 11.

Yeah.

And you may have to look at him and say, hey, you know this Dave Ramsey guy you love? He spends a lot of time in Cabo. Like, you learn to spend your money too, right? Um, Dave's insanely generous, and Dave has a good time also, right? So you might have to push him a little bit, like, hey, we're gonna go spend some of this money, we're gonna have some fun. Yeah. Um, because we want him to enjoy his life.

Teaching you want someone to be well-rounded and balanced, that's one of the most difficult things you can do because people tend to fall on one side of the teeter-totter or the other. Yeah.

All right, we'll be back soon.

Hey guys, George Campbell here. You ever feel like you make good money and still have nothing to show for it? You run into Target for one thing and somehow walk out $87 later with toothpaste and emotional support candles? Just me?

Okay.

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Ask Ramsey is our free AI tool. It's built and trained on proven Ramsey principles. Today we're going to break down the most asked questions from this past week on Ask Ramsey.

Yeah, we got some questions around budgeting, how to pay off debt, building wealth, but the number one question was around retirement. This is the age-old question: How can I determine if I have enough savings to retire?

Age-old. I see what you did there.

Age-old. See, you like that. Retirement. This comes down to one core idea. You want to have enough saved so that you can live off the growth without depleting the principal. Without getting it down to zero while you're still alive. That's not fun. Your annual retirement expenses, you can divide that by 0.1. That's your retirement nest egg. Goal if you're looking at 10% rate of return annually. So if you need $60 grand a year to live on, you need at least $600,000 invested in good growth stock mutual funds averaging 10% annually. So that $60K comes from growth alone. Your principal stayed intact, the $600 grand, if that happens. So to get your number, ask yourself, where do you want to live in retirement? What does your ideal lifestyle look like? Will you have any other income streams like pension, Social Security, part-time work. That all gets factored in here. And a few important reminders: if you're young especially, I would not fully count on that Social Security number, especially as your primary income.

I would absolutely— I have it be a bonus that may come.

I love it.

Plan for it to not exist.

It's gravy on top. And be completely debt-free before you retire. If you follow the Ramsey plan, you don't have a mortgage payment, you don't owe anyone money, you've got plenty of money in the bank, you've been investing for several decades. And then healthcare costs, that's a big big one. Nobody truly knows what healthcare costs are going to be when you retire, unless you're retiring this year, then you have a pretty good picture. So that's another piece to factor in. And Ask Ramsey can help you get started planning for retirement, and it can connect you to a SmartVestor Pro. So there's the big caveat when it comes to a decision this big with this much riding on it. I'm not just going to go to AI to figure it out. No, it's a good starting point, but getting connected with an actual registered investment professional professional who has the heart of a teacher. That's the key. And we've been connecting listeners to them for over 20 years. SmartVestor Pros can help you create and reach those goals, help you make informed investing decisions. So you can find that at ramsaysolutions.com/smartvestor. And if you want to check out Ask Ramsey, our free AI tool, just jump on to ramsaysolutions.com.

All right, let's roll out to Toronto, Ontario, or as Texans call it, Northern Oklahoma, and talk to Alex.

What's Alex, did we lose him?

Alex, you there?

It's that Canadian phone line stuff, we just can't figure it out. All right, we'll try, we'll try Alex later on.

Uh, let's go to Greg in Charlottesville, Virginia. What's up, Greg?

Hey, John and George, honored to speak with y'all. Huge fans of both your shows.

Thank you, brother. Appreciate you, man. What's up?

Hey, so my wife and I are, uh, have the opportunity to buy the house that we are renting. We've been renting it for 5 years. We love the property. It's a, uh, 2.5-acre property, single-family home. Uh, the reason we have some pause is because I've heard Dave talk a lot about, um, manufactured homes and the way they go down in value. This is a double-wide that is on a permanent foundation, you know, it's got block foundation the whole way around. The title has also been relinquished to the county, so it's a permanent dwelling. Does the rule, quote, that manufactured homes go down in value still apply to this situation versus one that's parked on a rented piece of land with wheels on it. I've not heard Dave talk about that.

I don't know, I just go, if you weren't renting this place, would you guys be on the market going, that's the one?

Probably, because of the market in this area.

What's it cost for a single-family home in your area?

$17 million.

So, so the comps for like a 3-bedroom, 2-bath $1,600 square foot house on 2.5 acres is probably $450 around here.

Okay.

And we have, we have the opportunity to buy this one for $300.

That feels like a lot of money for a house of that type.

Okay, so the landlord, we have a great relationship with him. He's owned it for 15 years and he Bought it for $90,000 and it's now appraised right at $300,000.

Is the home appraising for that or is the land appraising for that?

The whole thing. Yeah. The land itself is almost $200,000.

Yeah. I would imagine the land is what's appreciated around this, especially in Toronto, getting $200,000.

The real asset is the dirt.

I mean, 2.5 acres is the dirt.

Yeah.

What's your financial situation?

It's fine. We have no debt. We're ready to buy.

How much do you have in savings?

We love the— about $50,000.

So you'd be taking on a $250,000 mortgage?

Yeah.

Have you crunched the numbers on a 15-year fixed rate to see what that payment would end up being?

Yeah, it all works fine. We would be fine. We would actually love to buy it. I was just curious if there was any insights on them a double wide. Outside it looks like a ranch house. It has no— I know you couldn't tell it's a double wide from the outside. Inside it still has the paneling on the walls. We've lived here for 5 years. We love it. I was just— wanted to— really wanted to get an opinion on that.

And that's, um, I mean, obviously it's appreciated, but I think that's because of the dirt, not because of the house. So I don't want to— I don't want you to be misled thinking that, well, this house is going to be worth $500,000. It may one day, but that's going to be largely due to the dirt and then that house will be scrapped and they'll put something else on there.

Yeah. Given the way how they've surrendered the title, et cetera, et cetera, I, I can't give you an answer. I don't know.

We'd be lying if we were like, yeah, it absolutely will do this or this. I would just personally, if, if you're not ready to buy a traditional single-family home, then I would just pause and keep renting and wait to get that $400,000 house a year or two from now.

Or at the very, very least, Brother, I know you've lived there for 5 years. I would still go through the entire rigamarole and get a full home inspection on it and talk to an inspector. Even though you've lived there and said, no, we know, we know everything about this house, we've lived there for 5 years. I'd want someone to come through. I'd be worth the money for me to make sure I knew what I was getting into and what it's worth. And you may want to check with a mortgage professional in your area., and check and see if there's lending law differences on mobile homes versus, uh, traditional homes. I just don't have enough, I don't, I don't know enough. Dave might know that off top of his head.

I talked with Churchill and they, uh, they were, we've started the process.

Okay.

Okay. And I trust, I trust them. I mean, I've trusted them multiple times.

And so what do you guys make?

Uh, about 80.

Okay.

I'm just trying to think, how long would it take you guys to save up another another $50,000 or $70,000? Would that be 2, 3 years?

At least, because— so right now we have— we've been married, uh, for the 5 years that we've lived here, uh, and that's— we've saved the $50,000 in 5, but we've been only paying $1,000 in rent. If we move out, which the landlord has said we're either moving out or we're buying, um, anything else in the area is $1,800 to $2,500 in rent. We're renting from my employer actually, so we've been getting a great deal with that. So if we move out, that's kind of one of the other motivations for just buying it because of what rent is gonna be if we just move out.

Yeah, but rent is temporary and this home is a long-term decision, so that's the piece I'm thinking through is 10 years from now, are you gonna be really glad you bought this thing this thing? Or are you gonna go, man, it probably wasn't the smartest decision at the time. We were kind of strong-armed into it with this ultimatum of either go rent for $1,800 or buy it. And so that's the part that I don't like doing this from a place of sort of urgency.

I have to, I gotta keep my boss happy. I've gotta keep my—

yeah, yeah.

But it sounds like you guys, what if we— you've made the decision in your head and you're just like, was this, uh, should we be go—

continue down path?

Yeah.

Yeah.

What if you—

what, what if we bought it thinking we would sell it in 5 to 7 years?

That's what I can't give you an answer on. If it was a traditional mobile home, I would say it's going to go down in value because it's by itself on 2.5 acres. There's a possibility in Toronto that the dirt appreciates pretty significantly.

That's what you're hoping for in that scenario, and that's just—

there's a gamble I can't see a world where the home appreciates, but maybe the dirt will appreciate. But nobody can look in a crystal ball like that.

All right, let's cut to the chase. It's easy to get discouraged about crazy house prices and interest rates, but when you have the right real estate agent to help you buy and sell the right way, you'll have confidence to make smart decisions. Ramsey Trusted Agents aren't just experts who guide you through buying or selling. They're people you can trust to have your back from the first call to closing day. Find a Ramsey Trusted Agent near you at ramsaysolutions.com/agents. Agent. That's ramsysolutions.com.

Today's scripture of the day is 1 Peter 5:8: Be alert and of sober mind. Your enemy the devil prowls around like a roaring lion looking for someone to devour. Jordan Peterson says, don't be a slave to stupid rules. Like your clothes have to match all the time, George.

How'd you know?

Well, I can just see your clothes match.

Fashion has rules.

Mine don't always. They may be stupid rules.

Jordan Peterson famously wears matching suits.

Yeah, his suits are pretty fancy. Yeah. Let's go out to James in Boston. Hey James, what's up, man?

Hey, how's it going?

Doing all right, brother. How are you, man?

Hey, doing pretty good. Um, so me and my fiancée, uh, we're both 20. Uh, we have one kid together right now.

And, uh, did you say you're 20?

Yes. Okay, uh, we both moved out when I was 16. She moved out when she was 17. Neither of us have parents behind us at this point. Um, and we recently found out that I'm terminally ill and I have like 10 to 12 years Uh, that's the kind of estimate. Okay. And so, uh, what's the diagnosis, man? I mean, uh, I would like to keep it private, but it's, um, more having to do with, uh, brain function.

Okay.

And, uh, so, uh, yeah, so I make like about $30 an hour right now. She makes about $25 an hour. And so I guess my question is, we both are going to school right now. I'm going to school to be electrician. She's going to school to be a registered nurse. And with like 10 to 12 years left, I was wondering if it would be better for us to go out and take a loan out to get a house now. That's something that she has for when I'm gone, or wait a couple years until we're both settled in our jobs. And I don't think the size of the house would change much, but, you know, we can do a lot of the work ourselves for fixing it up. Up. But, uh, yeah, I guess that would be my question.

So first off, man, you're pretty sober-minded for a 20-year-old with a, with a young child and a fiancée. And it's like, to just tell you, man, I hate that you're in this position. I hate it for you, man.

Yeah, me too.

Yeah, well, yeah, especially, um, how long you've been wrestling with this diagnosis?

Um, for the past year now.

Okay.

About a year now.

Yeah. So it's, it's set in. This is happening, right?

Yeah. Yeah. No, definitely.

Um, th— this isn't gonna be any help at all, but can I just say this? Um, I have close friends who work in pretty advanced medicine right now, especially with this influx of wild new technology. And for whatever it's worth, it may be worth keeping a light on. The story I'm being told, there's gonna be some earth-shattering transformations in health technology over the next 5 to 6 years. And I'll be praying for you, man. And I hope that some of these discoveries and some of these new interventions may be able to support you and change your life.

Life, man. Yeah, no, definitely. I, I mean, I, I try and live my life like there's going to be a cure and try and live each day to its fullest, you know, all you can do.

Love it. Um, the last thing on earth I would do is sign up for— chain myself to any sort of payment that I'm going to have to make. Because with, with a 10 to 12 year window, they— I'm sure they told you that might be 6 years to 2. Might be 5 years also, right?

Um, no, it's at least 10 years, but yeah, no more than 15, but like, yeah, at least 10 years.

I, I wouldn't recommend that. I love the idea of your wife going to get a, um, or your fiancée about to be your wife. I love the idea of her getting a certification like this that's going to give her a career after you've passed. Um, you entering into being an electrician right now, I mean, that's a 7-year process, isn't it, before you're fully licensed?

Yeah, I have some, um, some scholarships to get some money off of that and also do a like kind of fast-paced course.

How, how quickly could you get out into the field?

Uh, I think 4 years, but I have a friend that's gonna be able to help me get, uh, he has an electrical company and he's gonna help me get in there early and do, uh, work for him.

So here, here's what I, I want you to keep in, in mind. The single most precious resource you have right now is time. Right. And so if I'm looking at a 3-year-old who's about to be a 4-year-old, and I'm looking at 1 to 2 to 3 more years of having to work 5 million hours a week to try to get my journeyman's license to do this, and I'm making $30 an hour right now in my current job, and my wife's about to be a registered nurse, and maybe we could invest in her so that she can go get her nurse practitioner degree, or she can get her bachelor's in nursing. Like, that would be where I begin to look at what's the best thing I can do to provide. Is, is it also going to school just because I have some scholarship opportunities, or am I going to be the greatest foundation and anchor so that she can go build an amazing life? So in the event I'm not here, um, she is so set up to go do whatever she wants to do, right? Yeah. But time—

no, that's really what I want to do for her.

Time is the thing. And so if time means you're going to be at home and you're going to be an anchored presence, you're making $30 an hour, which is a great hourly wage, man. Um, you're, you're, you're not going to, you know, you're not going to go buy a 17,000-square-foot house with $30 an hour, but man, that's a good wage, especially if you can support her. She can go get a nursing degree debt-free. Um, you can spend precious, precious time with this baby that's coming. That's where my head goes. George, what do you think?

Yeah, are you— do you guys have any debt current currently?

No, no debt.

Do you have savings in the bank?

Uh, yeah, about 10 grand.

Awesome. Well, I definitely would not go out and buy a house right now. It's not going to give you the stability you think because that payment's going to stay that payment. And if something were to happen to you, well, now she's on the hook for that payment. Otherwise, she needs to sell this house. And so I would wait until you guys are financially ready to buy this house as if you didn't have this diagnosis and just save up a strong down payment. I mean, I'm from the Boston area. I don't think you can get a house at 20 within a 30-mile radius of the city without—

okay, so I don't live in Boston, but it's in a rural area, so, uh, what is the house gonna cost? Um, you can get some for $225,000 to $300,000 range.

Okay, so it's still even making $100K with rates right now, you might still be looking at, you know, almost a six-figure down payment to do this the right way where it's 25% of your monthly take-home pay, and then I would work to pay this thing off the next 10 to 15 years. And so putting a huge down payment, buying a reasonable home, that's gonna help you knock out the mortgage fast. That's the best thing you can do for her, is leave her with no mortgage payment, no debt, a bunch of money in the bank. In the meantime, invest for the future. Invest for that child for college in a 529 plan. Invest in your own retirement that she will will then inherit one day, and so that you leave her in the best position possible to where she's not scrambling.

So what if in a couple years she's going to be a registered nurse and she's making close to $50 an hour? Um, could I in these next few years be saving— both of us saving up a bunch of cash to put down like whatever, $50 grand or something like that?

Absolutely.

Uh, yeah, that would be my next goal for you guys is every dollar is focused on that down payment fund and we're just putting in a high-yield savings account for the next, let's say, 2 years, how much money could you guys sock away in 2 years doing this?

Um, uh, that's hard to say. I would say $25,000, uh, or maybe $30,000. I would say $30,000 would be—

so $15,000 a year, a little over $1,000 a month is what you guys could do right now?

Yeah, probably.

And also cash flow her nursing school?

Yeah, yeah.

I mean, that's the plan. And if it takes another year or 2 after that to get the down payment once her income's, then I would do that because you're probably going to need at least $50,000, $60,000, $70,000 down on a $230,000 home in order to keep it at that 25% of take-home pay. So that's the, that's the math equation you're trying to solve for here. And so the Baby Steps still apply. The math is the math. Uh, I would have a will in place. I'm assuming you don't have term life insurance at the time of the diagnosis.

Okay. And, and I, I'll tell you this, having sat with—

I have a question.

I have a question about that. Go, go real, real fast. I got test— I got tested without, uh, my legal name. Can I still get life insurance?

I doubt it. With the diagnosis, they're going to look up every single medical record you've ever had, uh, regardless.

Um, there, there would be no medical record.

Well, I mean, but you're going to have to— I mean, you're going to have to purge it. So you'd have to lie.

Yeah, it would be fraud at that point.

So they're going to ask you if you have any diagnosis, whatever.

You can still contact them and see what your options are. There might be like a guaranteed issue policy policy. It's expensive. It helps cover like part of the mortgage, but it's not going to be what you usually could get.

We'll be thinking about you, brother James. Thanks for the call, my man. Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.