Transcript of "We're In $580k Of Debt At This Point"

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Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network and the Fairwinds Credit Union Studio, this is The Ramsey Show. And I'm Rachael Cruz, hosting this hour with my good friend and co-host of Smart Money Happy We're George Campbell. We'll be answering your calls, so give us a call at 888-825-5225. We'll be talking about your life and your money. First up, we have Jimmy in Los Angeles. Hi, Jimmy. Welcome to the show.

Hey, Rachel. Hey, George. Big fan of yours. Thank you so much for what you do. I really appreciate everything that you guys do. I've gained a lot of knowledge these past few weeks, learning more about what you guys do and how to financially plan my future. But I've gotten myself into a sticky situation, and I'm just trying to see if I can maybe get some guidance on trying to find a way out.

Sure. So what's going on?

So late 2024, I retired from the military. I served for 22 years. And earlier that year, I decided to open up a shop, and Where we just do detail services, paint protection, film, wraps, things like that. And it actually cost me a lot of money throughout that year.

I'm sure. How much?

To the point... Well, we're at a point now where we're $580,000 in debt at this point. Okay. That first year, we took a $220,000 loss. Admittedly, I think I hired too many people full-time. Went in too fast and too hard on that. It really hurt me. So I had to take an SBA loan to get caught up and used a bunch of credit cards. And then the year after, we netded. So just last year, we netded about 35 % net loss. So we had another net loss, but it It was a better net loss. And you're still throwing money at this thing. I'm still throwing money at this thing. Why? It seems like we're making a way Out of that.

What's the stop loss here? A million dollars in debt, and then we'll call it quits? I mean, at some point you just got to go, This ain't it. I would rather pack it up now versus try to... It's like a gambler where they lost a bunch of money in Vegas and they go back to Well, now I got to win even bigger to get out of this mess.

Right. That's what I was afraid of. And through this process, I've been in free labor. So I haven't been getting paid by my business.

On top of that, how are you paying your bills? Through more debt? Do you have a retirement through military?

I do. Okay.

What's that per month?

My wife works, too. I pull in about 5,500 take home per month for my military retirement. And then what does she make? And then what does she make? She makes about take home 4,500-ish per month. Okay.

So 10 grand a month is what we're taking home. And that's the hard truth, is that's the number we need to actually pay down this over half a million dollars in debt.

Right.

What does the trajectory look like for revenue?

It's looking It's a positive because last year, like I said, even though we had a net loss, it was a smaller net loss. And I think this year we'll be in the positive. But I'm struggling because I've been working for free for two years, essentially, in this business.

And digging deeper in debt. I mean, 35 % loss. I mean, this is just a very expensive hobby at this point. This isn't a business.

Even if it breaks even, this isn't worth it. No.

Right.

. Yeah. Jimmy, when you project out, with all these loans, is it half a million now or how much debt in general? I'm trying to project out, I don't know, in the next month or two, how much total debt are you guys in?

So I've written everything down. So as it stands right now, on the business side, We're at $580,000 in debt. I know I have a PhD in being a bozo.

How much of that is credit card? How much of that is small business loans?

So 165,000 of that is credit, and then the rest is split up between the SBA, working capital, and a line of credit. Okay.

Because I'm just thinking the credit cards, if you get behind, those will be easy easier to settle than some of these loans directly- The SBA loan. From the bank.

What does your wife think about this? What does she think you should do?

She's not very happy with it, but she's been very supportive and very understanding throughout the process. An absolute blessing to me. Definitely not an added stressor. She's been an anchor for me, for sure.

Yeah, I mean, a little bit, Jimmy, but a part of me also is like, you guys aren't living in reality. She should be flipping out. Do you know what I mean? I'm I understand the anchor of feeling supportive, but you're feeling supported in doing something that's continually getting you guys deeper and deeper into a problem versus saying, Stop, stop where we are and we're done. Because we can't just keep doing this. And the problem, too, is that the guesswork for what you're possibly going to do this year, you know what I mean? It's like you can't predict it. And so you guys either have to say, We're going to try to stick this out for a year with no more debt, no more debt. And if that means we have to close up parts of the business in order to do that, okay, to see if we can get some revenue in here. But you guys can't just keep digging yourselves in a hole and expect just to come out the other side.

Right.

So I would sit down and you guys... I mean, you either need to make a decision. If you were to stop this completely, do you guys have things that you can sell off in the business? Is there any way that you could gain any of this money back if you were to close shop today? From a real estate perspective or you know what I mean?

Equipment you have in the business?

Yeah, I have about $50,000 worth of equipment, but I think that's tied up in the SBA loan. I'd have to get permission to sell that off, to pay that loan down. Yeah. And that's why I was like, Worst case. I really want to avoid bankruptcy. It's definitely not my first choice. And I even thought about getting a job so I can just get some income and then using that job to pay down this debt. But since it's a business, I don't really want to create murky waters with me paying off business debt with my own personal income.

It's all tied to you anyways, Jimmy.

Go back to the papers. Look who signed it.

It's you. Yeah, yeah, yeah. I mean, they're all going to come for you.

It's not like car detail or LLC, well, they owe the money, not Jimmy. It's guaranteed by you. And so that's the hard news, is you have to now picture this like it's just consumer debt that you took on. And so you're going to begin the business of cleaning it up. And I hope that you can find a new job that can create a better income that will allow you to clean this up faster. But if you just even sell a 50 grand worth of equipment, that's 10 % of your debt you just knocked out. And so you got to start making progress. I would not sink more money into this thing just to be 600,000 in debt, 650, and hope we have less of a net loss. I'm heartbroken for you, man. Thank you for your service, too. In two years. That's incredible. I hope you guys can climb out of this.

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Up next, we have Caroline in Detroit. Hi, Caroline. Welcome to the show. Hi.

Thank you for taking my call.

Absolutely. How can we help today?

Well, so I recently found out that my husband's been misusing his fund money to pay for communicating with a prison pen pal.

Oh. Sorry, did you say a prison pen pal?

Yes.

Like, is that a lady in prison? Exactly. Did he know her before she was in prison?

No. I guess it was like some ads that popped up. He on a site. So he got in this cycle and he stopped. But I'm wondering, how do I move on from this financial and emotional infidelity now and trust?

Yeah.

Oh, gosh. Did he come forward with it or did you catch him? Where is he at with this?

So I caught him because I found some suspicious numbers on our phone bill. But he had been broke all the time, just waiting for... Couldn't wait for that next fund money to come, but I had nothing to show for it, so I couldn't figure things out. But I guess it's a thing that people do. He was trapped in it because I didn't know, so he couldn't tell me. He couldn't do his phone number.

I mean, he just- No, he wasn't trapped. He was willfully doing this on his own volition.

Yeah, you You're right.

Nobody was forcing him to continue this weird prison pen pal relationship.

How long was the relationship for?

I'm embarrassed to say I didn't figure it out for three years.

Okay. And it was the same woman?

Is this a scam or is this a real thing? Because it feels like a scam.

So it actually is a real thing that people are doing. I guess the purpose of it is to get people to get out and communicate.

You know? So who's making the money? The prisoner?

You have companies paying.

Exactly. So then they use the money to put on their records or to buy things in their commissary, or who knows what else. I'm not really sure, but it like funds their money while they're in prison.

Like commissary money?

Yeah.

That is wild.

Okay. Well, yes. Okay, so So from the financial standpoint, Caroline, are you guys... Well, sorry. Let me just back up for a second. When you found out, when did you confront him about this? How long ago was it?

It's been probably in the past, I would say four months.

Okay. Are you guys working on your marriage actively right now? Are you seeing someone? Are you going to therapy? What are you guys doing?

So I I was going to therapy, and we also had the complication that we had a tree fall on our house. So we were dealing with a hole in our marriage, a hole in our house. So even if we wanted to get divorced, sell the house, we couldn't because we have this massive hole going on. I was talking to somebody in counseling, and he did. I was ready to get divorced, and I just said, Hey, would you be interested in going to church with me sometime? And it was only because of his reaction of how excited he was to try to go to church and know that maybe there was a way that I was willing to reconcile.

To reconcile. Is he doing work on his own, individually?

Just through the church, and I know we're going to do a marriage retreat soon. I talked to him about counseling. He's willing, but he's just like, It's just so dark. And I told him, I need this in order to- He said it's just so dark?

Is that what you said? I'm sorry? He said, What was his response when you said that he needs to go to counseling?

Oh, he's like, It won't be good. It's just so dark.

His story, what's in his head? All of that?

I think just maybe of the whole truth coming out. I maybe only know a portion of it because I wanted to know, what did this person go to prison for? In my face, how long are they in prison for?

They might come out- If you guys are going to move forward, everything needs to come into the light.

Yes. Yeah. That's the only way. It's a full disclosure situation that you guys need to sit down with a counselor to even move forward. There's no way you can move forward with half the truth with your marriage. George and I are not marriage experts. If Dr. John Zaloni were here, I think he would completely agree with us on that. This is a rebuilding because of how deeply cut the trust has been in the marriage, right? I mean, for three years. In any given period of time, right? When a spouse steps outside the marriage, that is painful. And that is something to really, really be working on for both of you and the individual work for both of you, you having to learn to trust yourself again for him to face some of his demons and to understand what work he needs to be doing. I mean, yeah, there's a lot of repair that has to happen regardless of if the marriage survives. So I'm just individually, to be two healthy people, that's what you guys need. And then moving forward out of that, if you get the whole truth and you still decide, yes, I want to be in this marriage, then yes, then there's all the repair work within the marriage.

But from an emotional side, it's definitely going to take some individual work. And then I would say from the financial, I would definitely have a... I would be separating finances. Does he work and do you work? Do you both bring in a paycheck?

Yes.

Okay. And were you all sharing an account at the time when this happened?

We were, but because we were working the baby steps, he was doing it with his fund money. So he just was going and putting- But where was the- But the fund money, is the fund money in your checking account? Well, we would take it out cash.

Okay.

So right now, we're at the point that I'm like, In order for me to trust, your fund money is going to have to be- Tracked.

Tracked, exactly. 100 %, yes. Oh, I think that's totally fair.

I would also pull his credit report and then freeze his credit on top of that. So we want to pull the credit report to make sure there's no outstanding debts that maybe you don't know about, and to get a clear picture of what's out there, and then freeze his credit so he can't open any new accounts. And that's just one stop gap to make sure that there's no more financial infidelity outside of what's even in your checking account. But I would have transaction alerts set up so you get a text message every time a cent comes out of that bank account, you get a transaction alert, even if it's just his account right now, if you separate.

Yeah, because There has to be some steps, some visible evidence for trust to be rebuilt in the situation, Caroline. So that's not you being over-controlling or being his mom. Some marriages can function so dysfunctionally with money, where one person just has all the control and has to see everything, and the other one doesn't know any passwords, all that. I'm not talking about that. There was broken trust within the marriage. Money was involved in it, as it usually is. And because of that, in order to rebuild trust, I have to know exactly where the money is going. I need every account. Just like his phone records. I need every account of your phone records. There has to be a level of knowledge for you to keep moving forward in this marriage when it comes to building trust.

Okay.

And I know I'm really tempted. I know he didn't steal money from you guys and all of that because it was allocated to him. But there's almost a part of me, until you know that marriage is going to survive this, I almost would just have my own checking account, Caroline. But he has to be showing you his transactions out of his. But I'm just scared that something else is going to come up and you're going to find whether there's more on the infidelity side with the relationship or even more financially uncovering some stuff.

Because you caught him and he still is not telling you the whole truth. And that's the scary part is we just don't know how much more damage there is. And so because of that, I would just be on the cautious defensive side right now to protect yourself. Okay. And then action plus time plus counseling plus God, that's going to be the only solution to rebuild this trust and restore this marriage.

Okay.

Yeah. I'm so sorry, Caroline. It's so heartbreaking. So heartbreaking. And what's wild are these calls, George. We get pretty consistently differently, whether it's a marriage that one of the two have made poor choices, but even from the financial infidelity side of taking money and doing things that the spouse didn't know about. It's becoming more and more common. So again, the best line of defense, Caroline, is you work on you, he needs to work on him, and you guys moving forward with all the truth out, decide what are we going to do.

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Okay, I am 53-year-old. I'm retired. I am debt-free on my own home. And then, of course, my wife, she's got about 20 acres that we own. We don't owe for anything.

Good for you guys.

And I have a large sum of money. I have never invested in anything all my life except my 10 % to the Lord. So I don't know what to do with this money I got. It's just sitting in a plain old savings account.

Okay. How much money is it, William?

It's a little over 400,000.

400,000. Okay. And is that what you're living off of month to month, or do you guys have good retirement or Social Security?

No, I have a pension that comes in every month, which covers pretty much all my expenses, which my wife still works, and she makes a good salary.

So you guys are living off of what's coming in. You're not having to touch this $400,000.

That's right. It's just been set in a year after year after year after year, which now my pension check is going into my savings, and it's been I've been doing that for four years, and I've never touched it. So that's why it just keeps building and building and building. And I don't know what to do with it.

Are you calling us because you're ready to invest now? It seems like there was maybe a fear or a hesitance to do that in the past.

Well, when you come up poor, you just always fear about taking big risks. But I had talked to the bank about maybe doing a CD, and then they talked about, Well, maybe you can go another way and put it in an annuity.

I wouldn't do that. That's just a more expensive product that gives them more commissions in their pocket. That's the truth.

Well, right. And that was my concern because that ties it up for three years.

Well, there's a way you can invest this money and have it grow for you, because the truth is there is more risk of it just sitting in a checking account than there is if it's invested wisely. Because right now, inflation has been eating up that 400 grand for years now.

Yeah, you're probably haven't kept up with inflation with a savings account, because what you're making on that is what? Less than one %, sometimes, in some savings accounts? Yeah. Yeah. So it's not even keeping up with them. So your money is actually technically in value. It has gone down. You're losing buying power. Yeah, it's gone down in a sense. So investing, I understand, William. It feels risky. I think there's ways that you can invest that is risky, and then there's ways that are very wise, and the risk is just not there. If you're talking about single stocks, if you're talking about something like cryptocurrency or whatever, there's some more definitely risky type ways that you can put this money. But also there's a lot that is actually very safe because you can look at the history of the fund and be able to somewhat predict, okay, if the US economy continues to do well. Again, some years is down, some years is up, but it's not this like, drastic change over time. You really can look at the pattern over time and say, okay, this one feels right. If the US economy all crashes and burns and you lose all the money, I think there's probably more problems that we're going to have than just thinking about that money in the account.

William, the first thing I would do is talk an investment professional because what they can do is educate you and guide you. You can do that at ramsey solutions. Com. Click on Start Investing on our website, and that will connect you with someone who can help you manage this money wisely. You ever read the parable of the Talents? What is that? In the Bible, the parable of the Talents. It's a great read. I highly recommend it. Go check it out after this. I hope it encourages you to steward this money in a way that helps it to grow so that you can retire with dignity, leave a legacy, and even create generational wealth. Because if you just leave this money in an average mutual fund or index fund, it would double in seven years. So on your 70th birthday, there's 800 grand sitting there, and you did didly. You didn't touch the money, you just left it.

And William, I'll say this, too. We talked to a lady, this was a few months ago. She was in her 90s, and she was just scared to death to invest her money. I mean, it would keep her up at night. And I'm like, You know what? You're 90 years old. Solve for If that stresses you out, you're fine. You know what I mean? But you're 63, William. You got a long life to live. You could easily be living another 30 years. So I would, yes, be very much considering investing and go talk to someone that has the heart of a teacher, one of our smart investor pros, because genuinely, and I want you to feel comfortable with it, okay? But I do want you to learn something new for how this money can actually, like George said, double in size, continue to grow so that you can leave an even bigger legacy, versus living in this fear of the unknown. All right, let's go to... Is it Esmeralda? Beautiful name. Sacramento. Welcome to the show.

Hi. Thank you so much for having me.

You're so welcome. How can we help?

So I am a first-time mom. My daughter is going to be turning one on February 23rd, and I am planning to go to Miami for her birthday celebration because all my family lives there, and my husband, he doesn't have family out here in California. It's just us. So I figured, why don't we go to Miami to celebrate since my family out there haven't really had time to spend with her? The only thing I'm wondering now is, is it too much money? Is it even worth it with how much money we're making and how much money we have saved? And would it be too late to cancel?

Okay. How much is the trip going to be, total?

So for the flight, I'm looking... We already paid for the flight, but we did get refundable tickets, and that came out to a total of 637. 92.

Okay. And where are you guys at financially?

I have... I mean, We have $7,700 saved. Right now in my checking account, in our checking account, we have $1,300.

Okay. How much debt do you guys have?

Right now, it's only $200. It's from a T-Mobile payment that my friend at the time opened the account under my name. And we don't talk anymore, but it's just that bill, $200. We took care of the credit card debt when my husband started listening to Dave Ramsey.

Good. So no car loan, no lease, no student loan, none of that?

No. I didn't go to college, neither did he, and he paid his car off with cash.

Good for you guys. How much you guys make a year?

A year? Let me see.

Just ballpark.

45,000.

45,000 a year? Okay. Is he just working? Are you home?

Yeah, I'm going to stay at home while he's working. Okay.

Esmeralda, yeah. I mean, it doesn't bother... No. I mean, because that's all you guys are... You're basically doing flights. You're going to stay with family, right? You're not going to have hotel costs or anything.

No, we're staying with family.

Yeah.

What is the birthday consist of?

Right now, we're paying a car rental.

Okay.

And I was going to purchase I don't have any bounce house for her with the ball pit and cars parking. So when we drive to the airport, we can leave the car park there because we don't have family out here that could drive us.

Sure, sure. Yeah, I mean, I would- And that came up to $1,000. Okay, so I would put this in the umbrella of like, We're going to go see family, versus making it a first birthday thing, because that almost is going to add more expenses from the emotional side.

This could easily climb to two grand out of just, Well, let's just have fun and let's get the bounce house.

I would just say we want to visit our family. So either you can do that now with these plane tickets. You've bought them already. And so go enjoy yourselves, stay on a strict budget, or just say, Let's pause and maybe go this summer when we feel like we have more savings in the bank.

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Today's question comes from Kathy in Utah. I'm 70 years old and considering buying a house with a 15-year loan. If I pass away before the term of the loan is completed, what happens to the debt? I'm not married and don't have kids. Why shouldn't I borrow $500,000 knowing I may die before it's paid off? That's the spirit, Kathy. I mean, one, just integrity, I guess. That's a good start, character. But the point of your question, if I pass away before the term is completed, what happens to the debt? Well, your estate, quote, unquote, would pay for it, which is any assets that you own, the lender would go after those first to try to pay down the debt as much as they could. And then I guess they would just take on the debt and And move on.

Yeah, they just- Yeah, they just- move on. Because that is the understanding that when you die, your debt does not necessarily die with you to a point it does, but they will, yes, factor in all the assets you have. So if you did die with credit card debt, car loan, all the things, then you technically have owed that money. So if you have any money to your name or any assets, yes, they are going to deplete those in order to pay the debt, and then whatever's remaining will go to family of your estate. But again, you're not married.

But at that point, the bank owns the house, so they'll sell the house for what they can get for it, use that money to pay off the mortgage. And so- That's what they would do. The bank just got a free house, so I think they might have got the better end of the deal.

Yeah. But also, Kathy, what if you keep living?

I mean, you're renting at 70. I don't know anything else about your financial situation. Do you have a million dollars in cash? Are you broke? We have no idea. But buying a house knowing that you could live another 20 or 30 years is a good bet. And so if you are in a financial spot to do it, I would do it.

All right, let's head to Dorothy in Manchester, New Hampshire. Hi, Dorothy. Hi, how are you? Hi, we're doing great. How can we help today?

I need to know if I should do an additional $20,000 on a heat lock to pay off my car which is at 12 %, and I owe 23,000, and I have one credit card at $1,800 at 18%, but my heat lock is currently... I have $20,000 out on it because I had to have an emergency furnace, and it's only 6 %. But long story short, I went through a bad divorce. It was homeless.

Oh my gosh, I'm sorry.

Lost everything. My ex stole all of our joint bank account, left me with $3, and I worked for the government for 20 years, and I had to retire, move out of town. But the new job that I have is lower pay. But since 2019, I've been trying to rebuild. And like I said, I got a house Well, I bought a condo before the housing market. I have $100,000 in equity. I bought it for 162. It's worth now over 262.

Okay. How much are you making now, Dorothy, with your job?

$27 an hour.

Okay. And what does that come out to? Per month, what are you bringing home?

Only like 4,200.

Only like 4,200?

Okay. 4,200? Yeah. Okay.

Yeah. That's great.

And that's enough to cover all your bills and cover the minimum debt payments?

What I have is my loan is 1,223. My HOA is 300. My car payment is 464. Insurance is 250. My lights are 100, heat, 100. Tv, internet, 128. And my phone is 45.

So what margin do you have left after all of that?

I've been making all my payments, and I've been also making my $157 heat lock And I've been putting $30 a week toward my principal of my mortgage every week because 30 bucks is a cup of coffee or whatever. And that's All that I have is just that credit card and my car payment. Okay.

So what I would say, Dorothy, the secret of getting out of debt is not moving debt around and trying to get a better interest rate. The secret is you. So honestly, you getting into to this next gear, which you've already made incredible progress. Like the story you told us at the beginning of the call of being homeless. I mean, like, man- The fact that you're still standing with shelters is a miracle. Yes. You have made huge strides. So no, I would not take- I was driving four hours to work and back. Yeah, that's a long time. So what I would say is the magic of getting out of debt, if there is, quote, unquote, it's you. So you deciding, Hey, I'm going to cut where I can. I may even take on an It's your job. You have the work ethic, and I'm going to clean this debt up. When you move it around interest rate-wise, over the long term... If you had this for 15, 16 years, then we could probably talk about it. But you can actually... The short term life of this debt because you're going to pay it off so quickly, I wouldn't fool with it.

I wouldn't fool moving it around. I think it gives this false sense of security of, Oh, gosh, it just feels better that all my debt's in one place or that it's a better interest right here and there. But again, that's not going to solve you getting out of debt. It's going to be you.

It didn't change any of the behavior. We just moved it around and put it in a different junk closet. The other thing is you're moving from unsecured debt to a secured debt. That home is collateral, so it puts you at even further risk. Like As I said, the solution is you, and that means we got to get on a written plan, we got to get on a budget, we're going to save up a $1,000 starter emergency fund to stop those ankle-biter emergencies. You have that in place. Do you have any other savings?

No.

Okay. What is the car You owe 23 on it.

It's brand new. It's a 2025.

Wow. Well, that might be something you could sell for a pretty penny. Yes, 100 %. Could you sell it for almost what you got for it?

Actually, I got it three months ago. So, yeah, I probably could.

Because what I'm seeing is that clears your debt journey in half.

Yeah, because see, then I could put everything of that car payment and- That's right. So forth toward the emergency of the heat lock from my furnace and stuff.

But I mean, other than that- You'll still need another car to drive.

That's the job that I have.

So you'll need to save up a little bit of money.

Actually, the new job that I have, I live two minutes away versus four hours because, like I said, I was driving from Vermont to Portland, Maine every single day, working my eight hours and going back home.

Gosh, well, that's not a sustainable I'm so glad that it's close.

Are you saying you could go without a car for a short season?

I could actually go with... I don't even feel my car maybe once a month, maybe once and a half, and I'm not seeing it at all.

I'm just curious, Dorothy, what caused you to buy it?

Because of fact, Jessie wanted to have a forever car where I pay this off and that would be it. Got you. Because I don't believe in leasing or anything like that, and where I only I had just my credit card, but then that was it. The furnace had to go up.

Well, let me tell you, an eight-year-old, 10-year-old Honda Civic, that'll last you another 10 years while you save on the side, and then you could upgrade that. That's a real forever car. I think that last you. I wouldn't put the pressure on your next car to be a forever car. I really wouldn't. I think that causes this debt in this $500 payment a month.

It's easy to justify when you go, Well, I'm going to pay it off and I'll have it forever. That's how we make bad decisions financially.

Then when you're in the tactical side of your month and you're like, Oh, crap, look at all this money going and look at how much debt now I've accumulated. So, yeah, I would try to get out of this car, Dorothy, for sure. And it's bumping up against... We have a rule that your car should not be more than half of your annual take home pay. And yours is there.

You got a $25,000 car making 50 grand.

Yeah. That's tight. Yeah, you're right on that edge. So if I were you, I would... Oh, yeah. I'd get rid of it. Go buy something new, used if you need it. But maybe for a season, like you said, if you really can go without it for a few months, save that car payment.

You free up 500 bucks, throw another thousand on top of that. You'll be debt-free in 18 months.

100 %, yeah. There's some moves you can make here, Dorothy, to really change it. But I wouldn't move the debt around in the heelock. I would make some big changes like what you're talking about. And I know you can because you have in your life and you're incredible. So we are cheering you on.

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Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. I'm Rachael Cruz, hosting this hour with best-selling author and my co-host of Smart Money Happy Hour, George Campbell. Honored to be here. We are here to take your calls. It's a little different than Smart Money Happy Hour.

Different vibe. Yeah. We don't take calls on Smart Money. I know. This is the vibe. The vibe is generally a little more positive and upbeat because people aren't going through crisis on that show.

I know. But that's why we're here, though, for this show to help you with your problems, to celebrate the victories. So give us a call at 888-825. 5, 5, 2, 2, 5. All right, to kick us off this hour in Salt Lake City, we have Phil. Hi, Phil. Welcome to the show. Hi. Thanks for having me. Absolutely. How can we help today?

Well, it's recently come to my attention that my oldest brother has been stealing money from my parents. What started off as borrowing gas money has turned into lying his way into a massive car loan in my mom's name, stealing credit cards without my parents knowledge. And so my parents have more than $100,000 in debt now, and that's not even including their mortgage. They're both almost in their 70s. My mom's on disability. My dad has $40,000 in his 401(k), and they think that's a lot. And I just don't see a way that he's ever going to be able to retire. And I understand that me and my wife are not financially responsible for them, but I'm trying to walk through this with them. But I'm no expert. And every time I learn more about their financial situation, I see less and less of a solution other than bankruptcy. And so what should I tell him to do?

Yeah, so two different paths. I mean, if you're going to go full on, he has stolen. Did he forge signatures for the car loan? How did that happen?

So from what I could gather, it seems like he's lying to my mom on what she is signing and then gets her to sign something without her reading what it actually is.

Well, crap. Because I was going to say- So if they took this to court, they'd be like, Ma'am, that's your signature, right?

And she's like, Yeah.

But I just didn't read the document, and that's her fault. I mean, to a degree. I know. I mean, do you know what I'm saying? There's a level of responsibility that she did not take.

I mean, it's really elder abuse is what this is. That's probably your best case. Exactly. Is fraud and elder abuse.

That's what I'm trying to. Yeah. If they would take legal action, that's what it would be. But I'm scared for a court. I don't know. Yeah.

I mean, first, I would freeze their credit yesterday so that no more accounts can be up. I already did all that. I would also contact every lender on that credit report and say, Hey, this was fraud. This is elder abuse. This guy took out all these loans without the permission. He basically coaxed them into it. And so then we go from there. I mean, do they still have contact with this brother? Do they know about this?

They know about it. My mom just had a stroke last week, so this is all adding to it.

Oh, my God, Phil.

This dude is like the scum burger of all scumb burgers. Do to his own parents.

Yeah, and we're trying to find him right now. He's been on crystal meth before, so I'm not shocked that this is having that involved again. So we're trying to find him and figure that out because he has the truck. There's also an RV that has $250,000 on it that I think is in his dad's name. It's a whole ordeal. And I'm worried that my parents aren't going to file any charges. Yeah, they may not. It's hard to How do you do that to your first born son? I get that.

Well, I think they need to understand if they don't pursue this, then they might just be on the hook with us for the rest of their life.

Yeah.

That's the scary part.

And it's a loan, Phil, right? So the problem is, too. Yeah, it's a loan. So if he stops paying, and that truck gets repowed, and all that's in your mom's name. I mean, it'll all be on her. They're going to come after her for it.

Is he even making the payments?

He has not made a single payment, no.

So, I mean, have they repowed this? I guess you don't even know.

He does still have the truck. Not for long. I actually- Not for long. I mean, yeah, I don't know how long he's going to have it for, but I'm on it.

I'd call the repo man myself.

Yeah. If you can find him. So he disappeared?

Well, he turned off all of his location services once he figured out that I- You knew.

You're onto him. We caught onto him. Exactly. Have you filed a police report?

I believe I've told my mom that she needs to. I don't know that she has yet. I actually found his location this morning through his daughter, and so I'm trying to figure out what I feel what I need to do.

Okay, so the hard position you're in, and correct me if I'm wrong, it sounds like you are doing all the proactive work in this situation. You're worrying about your parents, you're trying to find your brother, you're telling your parents what they should do. You're the one heading up all of this, and none of this is your issue. I understand it's your parents, and you love them. So I'm just saying from a top-tier perspective, the hard place that's going to happen for you, Phil, is you're going to have a wonderful, logical game plan because you're a smart, reasonable person, and you're going to say, Mom and dad, you need to do A, B, C, and D. Brother, they're coming after you for these charges, and this, and this, and this is going to happen. You're going to have a plan laid out of what should be happening. And in any Any common sense scenario. And the problem is, if they choose not to move forward, that's their fault. That's their decision. It's not yours. And you can't make them do something or even convince them to change their minds. I think it's going to be a discouraging situation for you, Phil, here in the next few months, because I think you're going to realize my parents are probably naive because he's been on drugs and still they're signing papers for him.

I would be going through, oh my gosh. So detailed, if that was me.

They need to be as angry as we are.

And they're not.

And they're just like, Well, I guess it is what it is. What is their response right now? What's their attitude?

Well, I mean, my mom feels horrible that she didn't see this coming thing, but she doesn't really have the health to take this on. And my dad has not done anything financial in their entire marriage. He just doesn't know anything about it. He doesn't want to know anything about it. And I'm like, I know that I'm going to have to... Eventually, most of the time, they sign off their finances to their children to take care of them. But I'm like, They haven't done that for me yet, so I can't do anything about it. Right.

So your dad is just sitting there while all this is being- I don't know that my dad even knows to the extent of how much debt he has.

He just goes to work, makes a paycheck, and comes home. That's all he ever does. My mom has always handled the finances, and now she's learned about some of this stuff in the past and hasn't told my dad about it, and now it's blown up to way more than I thought it would ever be.

Yeah. How much debt are they in, personally, besides all the stuff that your brother brought in?

I would say not including their mortgage. They probably have anywhere from 15 to 20,000. And that's a car loan and various credit cards.

Okay. And how much are they making a year?

I don't I don't know exactly. But my guess would be anywhere from 60 to 70,000 because it's just my dad. My mom is on disability. Doesn't get much from that.

If you're going to be involved, you're going to have to get financial power of attorney to actually make any moves. And that might be wise, based on how things have been going with your dad not being involved, mom had the stroke. I think now is the time to have some really hard conversations about the future.

Yeah. So I think, Phil, I feel that burden in the sense of you see what's going on, and they don't. So I almost would just have a meeting, sit them both down and tell them, Hey, this is exactly what the situation is. I need to know numbers. I want to be able to help you, and let's make a game plan. And then it would be up to them to be the ones executing it unless they want your help in doing so. But I would give a last-ditch effort to try to do what I can to help them see and know what's going on. But unless they give you the power to do something, they're going to have to be the ones that make those decisions. And I don't know if they will, and that's hard. It's very, very hard.

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All right, let's head to Dave in Charlotte, North Carolina. Hi, Dave. Welcome to the show.

Hi.

Thanks for taking my call.

Yes, absolutely. How can we help today?

So my wife and I are planning on to retiring between three and five years, and I just feel with our total portfolio that we're house-heavy. We always had planned on downsizing once we retired, but I'm wondering if you think we should do that now and then invest that extra money.

Okay. Yeah. How much How much is the house worth?

650.

Okay. And how much mortgage you have left on it? It's paid off. It's paid off. Okay. And how much do you guys have in retirement?

Well, it's 650 right now.

650. Okay. And how old will you guys be in five years?

I will be 67. She'll be 65. Okay.

What's your game plan currently to retire? Because the house obviously is not going to produce income in It's great to have it paid off, and I'm proud of you guys for doing that. But what's your current game plan, regardless of what happens with the house?

Where we're going to get our funds from?

Yeah.

Well, from the 650, which will grow, plus I have a small pension and then our Social Security.

Okay, so between pension, Social Security, and then on top of that, you'll dip whatever else you need. You can dip into that retirement nest egg. Right. Okay. And you're saying, do you have too much tied up in the house? Are you guys wanting to downsize anyways?

Yeah, we always planned on downsizing, and then maybe we could clear 600 on this. And I know I can find something for 400. So that gives us 200,000.

To throw in there.

That would give me some cushion. And so I would be doing that if you're going, Hey, I don't know that we can make it for the rest of our life with this nest egg plus the pension and Social Security. I think it would be wise to sell they'll use any profits to invest to then create a little mini nest egg on its own.

Do it now versus wait until we retire.

You can wait. Either way, the house is appreciating, right? As time goes on, your nest egg is appreciating. And so it's okay to wait. I wouldn't say this is on fire, but the sooner you do it, the more, less variables you'll have. You'll have more on paper to know when you can retire.

Sure. Okay, great. That makes sense.

Dave, how much will you guys be getting in a month with your pension and Social Security?

At that point, 4, 52, 62, about 7,000.

Okay. And how much do you guys need to live off of per month?

I think we figured 84, so that would be about that.

Okay. Yeah, yeah, yeah. Well, that's great. Yeah, I was going to say, because when you do just the quick math, let's say you added 200,000 to that, that would be $850,000. And you just think every seven years it doubles if you don't touch it, which you guys will be retiring in five years. So it's a little less than that. But I mean, you'll have upwards over a million for sure by the time you guys hit retirement age. And that in a paid-off house- So if you're If you're taking out your 18 grand a year to float the difference, you're talking 1% of your nest egg.

And so it's going to grow in perpetuity. The balance will continue to grow.

Yeah, you guys will be good.

I'm not concerned about that at all with your current plan.

Right.

And if you love the house, you could probably stay in it and still make this work. There just might be a few sacrifices down the line, but I think you guys will figure that out. The pension and Social Security, that's awesome.

For sure. Absolutely. Thanks, Dave, for the call. And well done. Well done. I mean, yeah, right there. Baby Steps Millionaires. They did it.

You can retire. It's awesome. With a paid-for house and some money in the bank.

Great. All right, let's head to Isabel in Spokane, Washington. Hi, Isabel. Hi, guys. Hello. How can we help today?

So my question for you guys is, I'm on Baby Step number 2, and I have about $6,900 in credit card debt and 9K on my car loan. And I'm wondering if I should take all of my investments in stocks, which total to be about 6,800 dollars, and pay off my credit card, knowing that I don't have any retirement at this moment.

What are the stocks? Are Are they in a 401k or your Roth, or is it just single stocks out there, the 6,800?

Just single stocks that total up to 6,800. Okay.

Yes, I would. I would cash those out because... How old are you?

I'm 25.

Okay. Yeah, you have plenty of time for retirement, and the 6,800 is going to be better spent value-wise by getting you out of a hole financially and helping pay off this debt. And then you'll be building up an emergency fund. And then, Isabelle, you'll start investing 15 % of your income, which I think you're going to be able to do here in the next 18 months, two years.

What's left on the car loan?

Just under 9,000.

Okay. What do you make? Yes, you got 16,000.

I make roughly 63,000 a year.

Amazing. Yeah, so after you cash it out, you'll have to pay some taxes on some of it. But let's say you could pay it off and you're around 10 grand. You can make it a goal to pay off that 10 grand in, golly, five months? Yeah. You know? Four months? Get aggressive. Get aggressive, get an extra job, pay it off, then build up an emergency fund. Are you single? I am. Okay, yeah. So I would just do a three-month emergency fund. Whatever your expenses are, just multiply it by three and just say, Yep, that's my emergency fund. And then when you start investing, Isabelle, if you start investing by the time you're 27, 28, it's going to be unbelievable. Let's say Let's pretend that George is getting his calculator for us. So let's just say you stayed at $63,000 a year, Isabelle, which you won't. Your income will grow over time, so you're making an amazing income right now. That's going to be, what is it?

$9,400 a year, $787 per month is what you would be investing. Let's say by Christmas, if you can get through this plan, get rid of all the debt, get the emergency fund, then you can begin investing. You have zero in retirement, right?

Correct. All right. Get ready for this. Let's go.

Should we go 26 to 60? When do you turn 26?

In August.

Perfect. Okay, so you'll be 26. So 26 to 66, you would have $5 million. And that's based on a 10 % return, which is what we've seen in the stock market for the last several decades.

Okay.

That's the problem. So you'll have five million bucks, Isabelle. You'll be great.

And if you want to retire at 62, you'll have 3. 3 million.

Okay.

And that's if your income doesn't go up.

That's if you never get a raise your whole life. That's crazy.

That's so wild. And then you're going to maybe meet someone, you're going to double the income. You know what I mean? You just keep it going. As life goes. It's awesome.

Get a house, get the house paid off, invest even more. So you're going to be a multimillionaire if you stop playing the game of a broken financial system, which is, I got to get a credit card to get a credit score. Whoops, I carried a credit card balance. Well, I guess I need a nice car. I have a big girl job now. I got a payment to go along with If you can just put blinders on and not care what anyone else thinks about your financial plan, you will be unbelievably wealthy.

Awesome.

Well, thank you guys. Absolutely. Well done. Yeah, that's always an encouragement call. When you get someone in there early 20s and you're like, Look.

You still have so much time.

You have so much time. I mean, seriously, it is wild. And not that those of you in your 60s and 70s, start now, right? If you've not started. There's always the point to start. But Especially young people out there in your 20s, man, the idea of compound interest is insane. The amount of money that actually went to principal. Does it say that, George?

Oh, it shows you how much she contributed. We'll go with our example, 26 to 66. So a 40-year period of you investing that's 787 a month. In that, she would contribute 377,000. That's how much of her own dollars went in there. And the growth was 4. 6 million on top of that.

So that's what's crazy. So the earlier you start, I mean, honestly, it is wild, but it does- Over 90 % of that nest egg was her just investing and leaving it alone.

Yes.

And, George, you know what? It's the consistency month after month, regardless we are doing this. We're not letting up. It is just a rhythm of life now when you get to that point. It's just part of it. You don't stop. And you don't get caught up. I don't think in all the lifestyle creep and all the things, you know what I mean? There's so many things that can take you off this plan that look shiny and fun and exciting. And you can still have a great life while doing this. But it's just having the maturity to say, you know what? I'm going to put some things in place to assure that when I am in my 60s, I'm taken care of. And by me, not by the government or waiting on something else that you do it. And you have the power. Everyone out there, you have the power to do it.

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The fun of doing a live show is your co-host may spontaneously jump in the control room and make faces and all of it. And then you say, You know what? Actually, get in the studio, Ken Coleman.

Oh, you're telling my secret. Welcome. Our special guest and correspondent, Ken Coleman.

Yes, to be here for this segment. It's actually a perfect segment for you because something hit the news recently that we were going to talk about. In the news. Yes. Cbsnews. Com reports that Trump has floated a 10% credit card interest rate cap. Here's what this could mean for consumers. Trump came out and basically was like, Hey- On Truth Social.

So this was not like an executive order. This is just him on social media making the post.

He's saying credit card companies should just max their interest rates at 10%, because now it can go as high as 36%, right? It's in the 20s. I think the average is 25% APR right now. Yeah, so it is pretty wild where it is. All right.

Here's what this could do. Vanderbilt research found that a 10% cap would save Americans $100 billion a year in interest. I mean, think about that. The nation is $1. 2 trillion in credit card debt. That's wild. So 10% means the credit card companies will only make $120 million off consumers this year from the interest alone. That's not swipe fees, that's not annual fees. So let's do the math. You got a $5,000 balance. You'd pay about $42 a month in interest at 10%, but at 24%, which is close to the average, $100 a month. That really would help a lot of Americans who are struggling with this credit card debt.

Yeah, but the reality is- Let's go to reality now. But the reality is, he can't do that.

You can't just truth it into existence. Nor should he. When presidents decide in free market economies to start doing things like this and forcing free markets to do things, you get Venezuela, you get Cuba. Everybody just needs to understand this all sounds good until you look at the constitutionality of it. Is it a free market policy? That's first point. But I'll tell you what came to mind when I first saw this. As you guys know, I play a lot of pickleball, play for three hours tonight. Thankfully, my knees are in good shape. But The knee analogy came to mind when I heard this. If someone has a torn meniscus, you can get away with not having surgery, and you might put a knee brace on. The knee brace is somewhat helpful. George, you just laid out beautifully how 10% at a cap would be very helpful. I don't want to gloss over people that are hurting right now. I don't want to be insensitive. It's like a knee brace. But here's the thing. The meniscus isn't going to heal. The knee brace just helps a little bit. It doesn't solve the problem. And this doesn't solve the problem, which is Americans have a taste for debt, and it's not going to solve the problems.

The debt snowball solves the problem. The baby steps solve the problem. Lowering your interest rate doesn't solve the problem. How many times we get a call? Should I move my debt around? So for that reason, this feels like politics to me. And he has every right to tweet or truth or whatever he wants to do. I think it's posturing, and I did this when Biden was President. I don't care who the party is. I'm going to call strikes. I'm going to call balls. This isn't going to solve the credit debt problem. It's just not. That's a good reminder. This is for one year. So this cat It's going to exist for one year. So then what? It's not law. It's not even executive order. He can't do that. It would have to be Congress rewriting federal law. There has to be a bill in place. Everyone has to agree. Which I'm for that if Congress does it.

And we're talking about banks which make billions and billions of dollars. They're going to find a way to get their money.

Well, what they'll do is raise annual fee. They will fee you to death, and they'll make their money elsewhere.

Banks are not like, Oh, you're right. You know what? That would help people 10%. We didn't even think about that. Thank you, Trump. You're so right, Rachel.

No, they make so much money. They have the best lobbyists in the world. Do you think that legislation is going to pass? No. No chance. And of course, here's the best part. J. P. Morgan, CFO, is saying, This is going to hurt people, guys. We can't do this. It's going to hurt people who need credit the most. Because what this means is tighter lending. These credit card companies aren't going to lend to the subprime borrowers. And so he's saying it's going to actually hurt everyone. Oh, you two are going to love this one. You're going to love this one. I saw this on Twitter. Yeah. By the way, I refuse to call it X. Thank you. But somebody came out the day that this came out. I saw this. They were like, well, what people don't realize is if they lower that interest rate, where do you think all the points come from? It comes, which is right, by the way. Yes.

The points system is built on people- And the airline miles, all of it.

Who aren't paying their debt off, and every month they're paying 22%, and that's where the miles and the points and all the things. What's going to happen? They're going to slash rewards, devalue your points. Guys, the banks are smarter than you. There's no free lunch. You've ever heard that phrase? Yes. There's no free lunch. The The only way to make this better is to pay off the debt, like we preach.

Is to get rid of it.

It's so true. Here's a fun fact. Credit card rates are protected under federal law. It's called National Bank Act. It's locked in by a Supreme Court ruling from 1978. What this does, the ruling, this is crazy, it lets banks charge whatever rate is allowed in the state they're based in. So guess where credit card companies go? Delaware and South Dakota, where there are no rate caps.

So they can just go.

It's like a loophole where they go, We can charge 36 So Delaware and South Dakota are the only two states in the country where there are no caps. No rate caps. And that's where all of the credit cards- And the President can't override that without Congress rewriting federal law. And so there's no bill right now, which means it's just a thought.

And the reason that passed in the '70s was what? To give the free market and the banks to be able to have a free market economy?

Do you know what he means? I do know what you mean. The reason I'm pausing is I don't want to misspeak because I'd have to see- We'll have to look in- The historian.

I always He's first of them. I always assume Ken honestly has any answer to any history. He's always been very about that. Any legislation. I appreciate that.

In theory, I can say that this is where lobbying comes in. And the big banks convinced Congress. I mean, that's why we call it lobby.

Okay, so here's another dumb question. If that is just platforming, if Trump really cannot do that by law to go in and do, what causes him to come into the headlines and to throw it out there just to stir the pot?

The same thing when he says and winks, winks and says he might run for a third term. He says whatever he wants to say.

Well, I know, but I'm just saying- He's a showman, and so that's part of it. Yeah, but I'm just saying, was there something else stirring that he's like- Yeah, the midterms. Going to be going to be going to go in for the votes.

Okay, let me tell you this. The number one buzzword in politics in America today, you guys know what it is?

Tell us, Ken.

Affordability. Oh, yeah. Both sides of the aisle, it is going to be the issue in the midterms. And so presidents do this. I don't begrudge him for it, but that's why he did it. Sure. By the way, it was probably 3: 00 in the morning. He probably just had a Filet-O-Fish sandwich brought to me by secret service. The guy never sleeps. You know what I mean? He's a night owl.

I've heard that.

And so he just gets on truth, and he's like, Oh, this is a good idea. Let's stir some things up.

Let's just see what happens.

What should be?

And he went, This sounds good. Yeah. And I will say from my seat, the banks do screw people. But also, we have chosen as a country, as a consumer base, to get into this amount of debt, right? You're right. Nobody tortures you and forces you to sign for the car loan or the credit card or whatever. We as adults, if you're over 18, have chosen to put your signature on something to borrow. That's true.

I don't begrudge the banks. You know why? The banks are just like the guy in the kiosk in the mall, where I'm walking by with my wife. He's like, Hey, hey, hey. Try this. Try this. And you have every right to just pass by. And I can ignore him, or I can stop and get sucked into it, and then let the whole spiel sell me on whatever it is he's selling. Now, Ken's got a new face lotion all of a sudden. All right. There you go. I'm going to say this. I'm with you.

A new keychain.

But I'm validating your point. Banks aren't bad. Banks are in the business of making money.

Yeah, but they do prie on people. They know the tactics.

I agree, but I'm saying we, let's get some personal responsibility.

Right. Which is what I was saying.

By the way, Trump threw out the 50-year mortgage, too. So he's just throwing stuff out there. Just to see what sticks.

What was the math on that one that you did? It would be like a million dollars in interest or something.

What was it crazy? You essentially never pay it off. The principle doesn't go down until you're 41 years into the mortgage.

You're just paying interest.

That's when more is going to principle an interest. 41 years into a 50-year mortgage. It's crazy. Wild.

So, yeah, folks, I would say don't get your financial advice from presidents and/or banks.

Take away, I would pay my credit cards off today and cut them up, versus waiting and hoping that maybe the rates will go down. And so I'll, Hang on. The banks, they don't care about your financial piece. No. And that's fine. The politicians, they're not going to solve your debt problem. And the system is designed to keep you dependent on lenders and on lawmakers. So the best part is you don't have to be dependent. You can break free from the system and just say, I'm going to use my own money. What's in your wallet, George? A debit card. I thought you were going to say my license. I thought you were going to say cash. It won't fit.

Ken, thanks for jumping in last minute. Always fun. So you guys are the best. Thanks. If you missed open enrollment, don't panic. Most health plans lock you out for the year if you didn't sign up by December. But Christian Health Care Ministries lets you join anytime. Chm offers a simple, flexible, and budget friendly alternative to health insurance, and you can join anytime. That's right. No open enrollment deadlines. Chm is perfect if you're self employed, starting a business or in between jobs because it gives you options without those out of control Cobra costs. And CHM is an insurance. It's a community of believers coming together to share medical bills and pray for one another. That's real peace of mind. You're not just sharing costs, you are sharing community. And families have trusted CHM since 1981 with billions of dollars in medical bills shared. You can see any doctor or hospital you want with no network restrictions. And members say that they often save hundreds of dollars a month compared to traditional insurance. So make a change that fits your budget and your values. Check out chministries. Org/budget to learn more. That's chministries. Org/budget. Buying or selling your home is a big deal, and you want an expert in your corner fighting for you to find the best deal for the right price.

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A little Sharon Ramsey snuck out there. I don't know why.

I don't know why. Help you. Rachel. Just a little help. Oh, you can take the accent out of the girl. You just can't take... Well, or the girl...

How does that work?

Whatever they That's what it's saying. Yeah, whatever that saying is. All right, let's head to... Is it Ali? Would you go Ali? Or Ali. Or Ali. In New York, New York. Yes. Hi, Ali. Welcome to the show.

Thank you. Thank you for taking my call.

Absolutely. Absolutely. How can we help today?

I just have a simple question. I run a limousine company here in New York, and I have a lot of independent contractors. They work with me. They have their own vehicles. So I have right now only one driver that drives my car, which lowers my expenses. But the question I wanted to ask is, if it's okay for me to buy another vehicle and hire another driver, which is going to obviously add another car payment and the insurance and the driver's pay on my payroll. So that's the question I'm going to ask is, should I keep using the independent contractors or buy another vehicle and hire my own driver?

Yeah, well, if you're going to go through the avenue of debt, I would say, no. I would say you're not financially ready to do that because from a financial perspective, even with small business, we always say, move at the speed of cash. If you have the cash in order to do it, if you have enough revenue, profits coming in that you know, okay, yes, I have the ability to pay someone full-time, save up for a car, all of this is going to be streamlined, then yes, I would. Until then, I would not. But I think that could be a great next milestone for you? Because I do know the car service world in New York, I know there's a lot of need out there. There's a lot of people that use car services. So I do think that your ability to make money is there. And I just wonder if make it more of a goal than an urgent implementing something quickly.

Because I was doing the math, it's going to add at least 10 grand on my monthly, including the driver's pay and the car payment and the insurance. So $10,000 monthly is going to add- That's the expense for you? For one adding... Yeah, because the vehicles we use is a Cadillac Escalade SUV. We drive a lot of high-end business executives. And we did around 1. 1 million last year.

Is that top line? Gross?

Yeah, that was the top.

What do you take home from the business?

Approximately 350 to 400.

Oh, amazing. Okay, Ollie, hit me straight. Couldn't you save up and buy one of these in cash? Maybe buy one used, get a deal, and then it's pure cash flow?

Yeah, I mean, the one thing I think the only option I'm going to have to go to, as you just said, maybe I have to save money to buy the car, because if I buy a used vehicle, what's going to happen is they won't give us the warranty, which is 150,000-mile warranty we normally get when we get a new vehicle. Because we run these cars for a long time. We put a lot of mileage on it. So if I buy a used one, it's not going to have that warranty.

Sure. But you could self-insure at this point with the business. I mean, you can create your own warranty fund and put 500 bucks a month into a pot and go, All right, we're going to cover maintenance and repairs with this money, instead of paying the fees for the warranty. Because what you're doing is you're destroying these vehicles by using them for business, which means you're likely underwater on that car pretty quickly. You owe 60 grand, the car is now worth 40 because you already have 100,000 miles on it, whatever it is. It's actually putting you at more risk by buying those cars with a loan. I would encourage you, get a deal, buy one used. They're still nice cars. Even a five-year-old Escalade, I'm not going to go, Well, it's not a 2025, so I'm not going to ride in this vehicle. It's about the service you provide.

It's clean, it smells good, right? I mean, it's all that.

If you run this, do you have any debt tied to the business right now?

Yeah, right now, the only debt I have is, we have two brand new vehicles. It's close to Okay.

How quickly could you pay that off?

I can pay that off, I would say, within six or eight months.

Cool. Amazing.

Think about that, though. If you got rid of all the debt, and then you began to cash flow any future vehicles, run the numbers on that. And not only will I think you're going to go, Oh, my gosh, this is amazing. Yes, it's going to take a little bit of delayed gratification right now and sacrifice. But the long term is, you survive in this business 10 years from now because everyone else is over underwater on their car loans, and you're going, sweet. I got six escalades paid for in cash. Yeah.

And what's crazy, Ollie, is George and I, we were in New York City, March of 2020, literally the day they were shutting down Broadway, all of it, because we were there for a media thing right when COVID hit. So my thing is, too, whether it's something like that, who knows what could happen where everything just stops, right? Business for you guys in 2020 through '21 probably just ended, right? I mean, it just was done. And so there's still a level of risk that you carry when you carry debt, and especially since yours is so dependent upon other people. I don't know if it's just execs that you guys do this car service for or other people. But there's something to be said that if for some reason business just stops when you don't have debt, you have a lot of peace. A lot of peace. Thanks for the call, Ollie. I hope that helps. All right, let's head to Ethan in Columbia, South Carolina. Hi, Ethan. Welcome to the show. Hi, guys. How's it going? We're doing well. How can we help today?

Well, it's a compound question, but I'll keep it brief. My fiancé and I are going to get married in June.

Yay. Congratulations.

Thank you. It's been a long time coming, about a two-year engagement.

Oh, good.

Yeah. So we have our wedding been paid for. We have our wedding paid for. Just a couple of expenses here and there. But we're wondering, should we rent first? Should we buy first? We have an opportunity to live with family, but I'll explain more on that in a bit.

Okay. Yeah, my go-to answer, usually, Ethan, is if you guys are not... Neither of you are homeowners right now, is that right? Correct. Okay. So, yeah, starting off like that, I would definitely just rent. Rent for a year, Get settled, get an apartment, just have that, save some money. And then when you look up and say, Okay, we do have enough to put a down payment, which is 5% for first-time home buyers, is what we recommend on a 15-year fixed rate. Mortgage, it may take you longer than a year to save, depending on where you guys are financially, what you guys can put away. So I would not buy a home until you have that, until you're financially ready. So in the meantime, I would be renting. But even if you were financially ready, there is still part of me, George, that I'm like, you know- Still wise. Yeah, just rent for a year.

I'm curious, Ethan. I see the word debt on my screen. How much debt do you guys have?

I did the math while I was on hold. It spread at $89,000.

Oh, I didn't realize that.

Thirty-six of that is student loans for me, 30 is student loans for her, and then $23,000 on a vehicle I used.

Okay, what's going to be your household income once you guys are married?

For a month or total?

Total per year.

Total per year. I currently bring home around 70. She's about to graduate from nursing school, so it's hard to guess, but I'd say probably around 60 to 70.

Okay. Good. We all make it a good income. Yep.

You have a great while you're renting, which is clean up the mess and aggressively pay off your consumer debt, which means we're not going to do any investing. We're not going to live the crazy newlywed life and go get a bunch of stuff and go on all these crazy trips.

No, we're living on $40,000 a year. Tell yourself that and then throw that $100 at this debt and get it paid off. You guys could clean this up in one year, Ethan, which is so amazing. And then beyond that, building up an emergency fund and then saving up for that down payment, which, again, you guys have a great income, so you're going to be able to do that.

Don't get tempted because everyone goes, Well, you're married now. You need a house. You need a house. Go buy a house. They don't pay your bills. They don't know your stress levels, and it's going to add anxiety and stress to a newlyweds life if you do it before you're ready.

Welcome back to The Ramsey Show in the Fairwinds Credit Union Studio. I am Rachael Cruz, hosting this hour with my good friend, best selling author, George Campbell. And we co-host another podcast, Ramsey Network show, called Smart Money Happy Hours. So make sure to check it out. All right, give us a call at 888-825-5225, and we're here to answer your money questions and any questions about life. Sometimes money definitely is integrated into our relationships and our jobs and careers and all the things. So we are here for you. All right, let's go to the phones. We're going to go to Chicago, starting us off, and Brooklyn is on the line. Hi, Brooklyn.

Hi. Thank you so much for taking my call.

Absolutely. How can we help today?

So my husband and I found ourselves in a unique situation last year. He had just graduated from dental school, and we moved to a small town in South Carolina, where he worked as an associate dentist at a practice that essentially was committing insurance fraud, drilling on things that didn't need to be done. So after about a month or two there, we reassessed our options and realized the best bet was to move back to Chicago, where I'm from, to live with my parents while we finished out our lease on our townhome there. So the original goal when moving here was to try to pay off as much as our student loans as possible. I'm a physical therapist. He's a dentist. We both combined have about 600,000 student loans. Over the past year. Wow. Yes, that's correct.

Oh, my gosh. Okay.

So over the past year, we were able to pay off, I think moving here, I think I had We have approximately 140,000 in student loans. We were able to wipe that out. So now it's been a year living here. We've been with my parents. He still has his 420,000 in student loans. And so I guess the next step, I'm just calling in to get some wisdom on, we've stayed, we're still in a good relationship with my parents, but should we continue to live with them, saving up for potentially a down payment on a home? Should we be looking more into renting for the time being?

How How much are you guys making a year?

So he's a percentage of production. So his is approximately, I would say, probably 140,000. 140? Since he's an associate dentist.

Yeah. Okay. And what about you?

And I make approximately 90.

Okay. And do you think- The one that hits... Oh, sorry. Well, yeah. So you guys living with your parents, you basically, if you lived on nothing, then you should be able to pay off this in two Correct.

Okay. You mean for his two loans?

Well, yeah. You guys are, yeah. I mean, at 250, if you guys each lived... If you lived on 50,000 a year, which is plenty because you don't have rent or you're not paying utilities and stuff, I'm assuming. You got $200,000.

Do you still have debt on top of his 420?

So next month, we will have paid off my estate loans.

Okay, so yours is done. So the 420 is left. Yeah. So if you guys You had two years where you put $200,000 a year. That's $400,000. And then you're working a side gig or whatever. You guys are making $20,000 extra in those two years. You guys could have this paid off.

I would be busting it. I would make it my goal to get out of there as soon as possible. I'll say it that way. Don't let this be a hammock where you go, Well, we're comfortable. Let's go on a vacation. Let's get a nice car. We have no expenses. This is great. Oh, God, no. You see where I'm going with this? Because that's the real situations we hear from when people go, I'm living with... This really happened. They were living with parents to pay off their $10,000 in debt. I asked them, How much debt do you have now? $40,000 in debt. They went into debt while living with family because they got comfortable.

Mike, I guess we're trying to move out, I guess, as soon as possible. We're looking maybe in the next few months here to try to move out.

And what is rent cost in your area?

About $3,000 a month. Okay.

So you'll be $40,000.

It will slow you down by 36 grand a year, essentially.

It would. And he accumulates about 2,500 to 3,000 a month in interest on his loans as well.

Oh, my God. That's your rent right there.

So that's worth noting. Yeah.

I would be busting it to make $300,000 this year and throw every penny at the debt. And maybe you guys get on a game plan with your family and go, Hey, here's our timeline. Here's what we're doing. Keep us accountable. Check in with us.

There's a part of me, Brooklyn, too, that for the good of just you guys in general, I I do think there's a gift in living with them right now while you're paying it off. But I think having an end date that makes you uncomfortable and forces you guys out. So this sounds crazy, but what if you did November of this year, right? And you got pretty much a good calendar year, and you're throwing so much at the debt, but then you're saying, You know what? A year from now, we're going to be living in our own place. We're going to finish paying off this debt. It may take us an extra couple of months because we're living on our own, but there's something about that growing up and being out on your own married couple. I don't know. I think it's good. There's something about having an end date for me would be really helpful. So it's not this ongoing idea that you're living there. And I would, again, I think I would, and I would shorten the timeline in a sense just to get You guys out, right? You're both adults. You both are smart people.

You're a physical therapist. He's a dentist, right? You are capable adults, and you'll be able to pay this off. And there's something about two capable adults not living at home. That's good for you guys. But for a season, I think it's okay right now. I just have an end date. Does that make sense?

Yeah. So if we set an end date, let's say, of November, do you think it's important to... Because what we've been doing for the past year is doing that, putting all our money towards my student loans. We knocked them out. That's great. But now we have Nothing to shift for other than no debt on my part. Is it smart to be saving money on the side as well, just so that way, if by November, we're looking to buy a home? No.

I need you to put the idea of buying a home on on hard pause right now. We have a huge mountain in front of us. You guys will be homeowners, and you will retire multimillionaires. But right now, for the next probably two or three or four years- You have a mortgage right now.

It's creating a foundation. Of $220,000.

The amount of interest All the interest you pay is more than most people's mortgage. So let's focus on knocking out all debt.

Yes, all focused on this.

Then you get an emergency fund of six months. Then we begin saving up the down payment. And so you might crunch the numbers and go, Okay, in Chicago, that's a $700,000 We might need to downgrade to a townhome that's $600,000 in the suburbs, whatever. You guys can figure out the plan, but do not let this home get in the way of this financial foundation that you're building.

Yeah. How old are you guys, Brooklyn? Twenty-seventh. Twenty-seventh, okay. Yeah. So if you guys are debt-free by 30, you do some saving, and you guys are homeowners by 32, that's a great plan. And you have plenty of time. You guys have time, and you make an incredible income. You're going to be able to make some big strides. And that's if all of your income stays the same for the next five years, which it's not. It's going to go up over time. So it's going to fast forward your plan. I think you're going to get to all these things faster, but you have to do it in the right order, which is the baby step. So you want a $1,000 emergency fund, go ahead and get out of all your consumer debt, build up that emergency fund, and then be saving up for that down payment. Have you guys read the Total Money Makeover?

My husband has. He's having me reading it right now.

Oh, well, there you go. I was going to give you a copy, but you don't need it. Good man. Let me give you George's. George's book, Breaking Free of Broke. That's fun.

Breaking Free of Broke. There's more jokes in there. I think you'll enjoy it.

Yeah, it's a great one.

And read the Student Loans chapter. It'll light a fire.

Yeah, and it just solidifies broke Just the way our generation does money, it just pokes a hole in all these industries to show you that you don't have to be normal. You don't have to be normal. So I want it to solidify where you guys are. I don't want you going backwards in your progress. Continue to move forward. You have a You guys are smart, but get rid of this $420,000 loan in two years. Do it. Make a crazy goal. Do it.

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Up next, we have Samantha in Phoenix, Arizona. Hi, Samantha. Welcome to the show.

Hi, thank you for taking the time to speak with me.

Yes, absolutely. How can we help?

So my husband and I are on maybe step seven, and we're trying to figure out what to do next. So we are a lot of debt. We've got 3,000 in savings. We're contributing to our 401(k) in our Rothire way, and so we're just... And we own a home.

That's amazing. What's your house worth?

When we bought it, we bought it for 150, and right now it's worth about 400.

Oh my gosh. And it's paid off?

Yeah, we pay it off.

How old are you guys?

I'm 28 and 29.

Oh my gosh, Samantha.

Who raised you? This is crazy.

I grew up listening to Dave Ramsey on the car ride home.

Financial peace, baby. And you guys were like, All right, let's just live this out. So you guys got married, you were debt free or close to it. You were able to get a house faster and pay it off fast.

What do you guys make a year?

Between the two of us, we make about 200 before taxes.

Okay, good for you guys.

You said you owed how much in savings? Thirty thousand. Thirty thousand. Okay, awesome. And you're asking what's next?

Yeah. I also have a secondary question that might play into this. I have a house I inherited as well on top of this. And so we're debating selling it and investing it in another house to rent our current house and invest in a nicer house to live in, versus sell it, sit on the money, put it into stocks or something. We're not really sure what to do with it at this point.

When do you guys want to upgrade houses? Do you know?

We're looking to do it sooner than later. We are putting that home on the market because it's not making us anything, and we're unable to rent it comfortably due to the location and manage it well. So we want to have a rental in the same city that we're in so we can manage it.

What do you think you would net from that?

Probably $400,000 as well.

Wow, that's incredible. So you would take that $400,000 and get a different house in cash, and then you would keep your current one to rent it? Yes. Is that feasible? Yeah. You can get the house you want for that $400,000 in your area Our dream house would probably be a little more, so we'd have a mortgage about $200, and then we pay that off in about a year to two years.

That's our goal. Okay.

Yeah. Well, I think that's... So you ask what's next. I think that be the next step, right? So for the next 2-3 years when it comes from everything from selling the houses, closing, finding the new one, all that. So I'd see you guys have a house goal here for the next three years of buying something. And if you take a small mortgage, paying it off quickly, all of it.

So that would be- You'll be back in baby step six for a bit, and then back to seven, and then you reassess your goals. And that's really when the world's your oyster and you guys get to dream. Do we want to get another home? Do we want to get into real estate? Do we want to give more? Go on these trips. It just scales up everything. It scales up your spending, it scales up your giving, and it scales up your investing.

Yeah. So to George's point, too, doing all of those things is going to be really important, Samantha. When you guys are in baby 7: 00, and you're going to be settled there for a while once you have this new home, and it's paid off, is to up your giving and find some things that you guys are excited about. And I think this is one area that Winston and I really had on autopilot for a few years, and probably because we were having babies and all of that. I don't know. We were giving and doing, mathematically, what we were supposed to, but it just didn't get as exciting. And so we've switched up even how we give. And it is so fun. It has brought the joy back for me in the last year or two of like, Oh my gosh. So get creative in your giving. Find things that you really are passionate about. Do some fun stuff with that money. I mean, genuinely, it is some of the most fun you can have with money. And we say it all the time, but it really is true. And then be saving, continuing to invest, and even maybe have some big savings goals for things that maybe you want, and then enjoy some of it.

And so doing the giving-saving spending formula, all three things need to be happening. And that's what's crazy, is like, there's not... A lot of people say this when they finish the baby steps, they're like- They want baby step eight.

Okay, what's next?

What do I keep doing?

I'm like, You tell me. I don't get to decide your life for you.

Yeah, we've done some travel and we've done some things, so we could have more saved, but we've been enjoying life a little, and now we're excited to stuff. You guys have kids? No, we don't. We don't want a bigger place before we do that.

Okay, cool. Well, here's what I'll tell you.

No, go now, Samantha. Have kids. Yeah, don't wait for the big house. What I want to tell you is that- Babies are small.

It's okay for your dreams to change. They don't take a lot. You may go, You know what? I want to stay home. And you guys have the flexibility to do that without it adding any financial stress to your life. And so I would sit down to a dream date with your husband this weekend and go, Hey, let's both put a goal for each category on paper of what we want to do next year. Here's my giving goal, here's my investing-saving goal, here's my spending thing I want to do.

Rachel's boat is have babies earlier.

And we're having kids next year. It's going to be awesome.

You never regret it.

One of us is going to be a stay at home with the kids, so we want to be comfortable with that, like when it comes.

Yeah, I think you guys are great, right? I mean, you have no debt. You're choosing the house thing. I'll say that. If If the getting into this new house- That's the caveat, is does that put a damper on your plan for one of you to stay home?

I don't want you to be like, Well, once that house is paid off, then maybe we'll start thinking about having kids. I would put the kids as the priority before upgrading the home. The child will survive in this home that you have now.

That's true. Okay. Then if we were to, say, sell this house in the next month, and then we decide not to buy a home, would you guys let that money sit in a high yield interest account, or would you invest, or how much of that would you save on that?

I would go high yield because you're talking about a one or two year goal, right? This money is not going to sit there for more than one or two years. And that's where I go, Hey, the market, it's been great the last few years. Who knows what 2026 or '27 is going to bring if it's negative 20 %, and now you're on the cusp of trying to buy this home. And so the high yield savings account just gives you some stability. It'll grow at three and a half % right now, but that's more guaranteed than the market, which is going to fluctuate more drastically. If I had a one or two year goal, I'm going to park it in high yield savings. If you want a great option, you can check out Fairwinds. You can go to fairwinds. Org/ramsey. They have an awesome smart bundle for you.

Up next, we have James in Ohio. Hi, James.

Hi, guys. Thank you for taking my call.

Absolutely. How can we help?

So my wife and I just last year purchased our first home, and it's a little bit of a fixer are well within what we can afford. But I did jump the gun a little bit, and looking back in hindsight, I regret it, just because we still have a little bit of debt, just a little under $20,000 total.

Okay.

$12,000 of that is on my wife's car, $5,000 in a student loan of hers, and just under two grand in credit card debt. Okay.

How much did you guys make a year?

Last year, I grossed about 80, and her about 20.

Okay, perfect. All right. Well, why don't you all just pay this off in five months?

That's the goal, ultimately. But essentially, my question was, is I'm driving a car that I bought for $5,000 cash, and we still owe about 12 on hers. And I know it's well under 50 % of our income, wheels and motors. But what What I wanted to do was sell the car and get another cheap car just to pay that debt off because I'm so tired of making that payment. But she disagrees with it. She thinks we should just keep it and pay it off.

What's the car worth?

Probably about one or two less than I owe on it.

And how much do you have in savings?

So I pause on the baby's test because my house is in desperate need of a roof. So I have $10,000 in savings earmarked for that. Now, I think that my dad and I, because I'm going to do it myself, can probably do it for about six. But I don't know what we're going to uncover when we rip the shingles off, open Pandora's box, and whether it's going to need to be replaced or anything.

I'm not looking to sell her car right now. I know. We're on her team. I think you guys will pay it off. If you can pay it off in five months, it's not worth selling because now you got to turn around and use savings to buy a $5,000 car, $3,000 car, which could lead to more issues.

Which you're going to upgrade sooner anyway. So no, I think it's doable.

It's not that desperate.

Yeah, and I think you guys need to tighten this up, James. I understand that the whole house situation has put you guys in a different position, but get back on track, and you guys can get all this cleaned up really fast, really, really fast. Just be on the same team with it, but no, we would probably not sell your wife's car.

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If you ever hear a money question and you want some guidance like you would on the show, then we have a spot for you. I feel like this show, George, it's sometimes hard to get on the line. It's always all the lines are usually always booked up. So if you're like, Man, I really wanted to ask this question, well, we've got a free tool for you. Here's your chance. Yes. If you go on our website, you can ask your money question and get an answer to your situation.

24/7.

It's pretty crazy. So AI, love it, hate it. Well, we're using it for our advantage. So we actually, our Ramsey team went in and did all their magic, and the Ramsey AI is here.

It's built on the Ramsey principles, custom-built, so it stays in the guardrails.

It's not random financial advice. It really is through Ramsey Solutions and what we teach. You can ask your question at ramseysolutions. Com, or if you're watching on YouTube or podcast, you can click the link in the description. So you guys check that out.

I dare you all to go test it out right now and see how close it is to what we would say in the show. That'll be a fun experiment. It's great.

Yeah, we're trying to help as many people as possible. If you can't get on the show or slide into our DMs with your question, we don't get back to you, whatever the thing is. You have the ability to ask a question about your money, and we want to help you do that. All right, let's go to Kurt in Calgary, Canada.

Hey, Kurt. How fun.

Hello. Hello. Welcome to the show. We love to bring on people who have absolutely killed it when it comes to money, just to hear their story and honestly, to set up the idea like this What can happen? You can actually- It's possible. Start with nothing- It's possible. Here's what it looks like. Yes, and build a positive networth in over a million dollars. So, Kirt, thank you again for coming on. And what is your networth?

Just north of 2 million Canadian.

Wow. And how old are you?

I just turned 45, not too long ago.

Well, that's wild. Are you married?

I am.

Fantastic. Okay, tell us the mix of this 2 Million. Break it down for us.

Oh, goodness. Probably a quarter of it is retirement. 10 % is my kid's college fund. I've got about a quarter of it in corporate assets for the businesses that my wife and I run, and some cash on hand, some, probably a third of it is my house, our house. Yeah, just in a bunch of places. That's incredible.

I love it. And you You guys have been following this plan for how long now?

So you'll have to forgive me. I didn't know Ramsey and the Baby Steps existed until maybe four or five years ago.

You were smart before you found us. I did great. That's impressive.

Smart and stupid. I won't lie, we took on what I would call a soul-crushing amount of debt, but we worked our way most of the way through it, and all we have left is the mortgage.

Wow. What's your household income?

Just right around $200,000.

Okay, what was your best year and worst year of income during this journey?

Oh, well, the worst year would have been when we first got married. I was still a university student, and my wife made 33,000 dollars. But once I graduated, our household income started around 70 or 80,000. We averaged around 100, 110 most of the time. Only in the last few years has it really moved upward.

That's awesome. And did you guys inherit any of this 2 million?

You know, my wife's mother gave her part of her... When my wife's grandmother passed away, my mother-in-law gave us $5,000 to go on a trip for money.

But that didn't- So safe to say it did not mathematically cause you to become millionaires? No. Because that's a big myth we hear all the time. Well, you got to inherit money to be a millionaire. Must be nice. No, not at all. That's not your story. And what are your careers?

So So my wife is a bookkeeper, and I'm an engineer.

Oh, yes. Fantastic. Which? That's about right up the alley of our study on millionaires.

Number one career choice in the Millionaire study, over 10,000 of them, was engineer. What do you attribute that to, Kurt? Is that you're a process-driven guy, and you just went, Okay, I'll just follow the process?

I attribute it to my wife, as any sane man should. No, It was always we live within our means. And apart from a few decisions along the way, you don't buy something if you can't pay for it.

Okay. So you all have always been very averse to debt, you would say?

Well, yes and no. My mentor retired earlier than planned, and he sold the business to myself and my current business partner. And we weren't quite ready to purchase that Right. And so we had to finance the purchase of the company.

Oh, that's right. That part. But consumer debt, when it comes to clothes and vacation. Cars.

We financed one, and I hated it. After about two years, I just couldn't stomach it anymore. And so we got rid of that as soon as we could.

Wow. What are you guys driving today as real-life millionaires? Give me a year, make, model.

My My car is a 2013 Volvo C30, just a little hatchback with over 100,000 miles on it. My wife, she gets the new car. We bought her a new car just a couple of years ago. As it should be. A tree fell on our last one. Oh, my goodness. Yeah, it was just unfortunate timing. But no, she has a 2023 Volkswagen Tiguan.

Nice.

Very great.

And paid for in cash.

Paid for. No, nothing.

That's amazing. So she's got a three-year-old car, you've got a twelve-year-old car. We found in the Millionaire study, the average millionaire drives a four-year-old car with 41,000 miles on it, and the top brands were Toyota and Honda. Yeah. Which is pretty wild. So you guys are square in the middle of that. You guys have four year degrees, both of you or more?

Both of us, yeah.

Okay. Were you guys super smart? What were your GPAs? Do you remember?

I'll just say I finished my degree with a GPA of around 3. 7. My wife's was higher. She's a smart cookie.

This is impressive.

I know. That is impressive. That's amazing. Well, Kire, what would you say to someone that's listening? Maybe it's a newlywed couple. When I'm still in school, maybe they're starting off just like you and your wife did. How would you say, what are the principles that you would tell people, this is what you have to do if you want to start building real wealth?

Live on less than you make. If you need make it do, use it up, do without. Those were the guiding principles that we lived by.

Wait, say it again. Use it up. What'd you say? Use it up.

If you've got something, use it.

Don't waste.

Yeah, don't be wasteful. Do without, meaning that if it's not absolutely necessary, don't do it. And yeah, what is it? Use it up, do without, and make it do. So repair as needed and make what you have last. Take care of what you so that you don't have to keep going and buying new things.

Yes. That's old school. That's definitely like a grandma and grandpa principle right there, coming out of a great depression. We're not going to get new stuff. That's crazy. This works just fine. We'll fix it up.

Well, I love it because you can get in the habit if something just One of his off a little bit. We'll just get a new one. We'll just get a new one.

Get one on Amazon. It'll be here in two hours. Yeah.

And you end up spending so much doing that. Okay, so, Kirt, would you say now where you guys are, are you enjoying your money? Do you feel like you guys are having fun?

Not yet because we still have a mortgage. And so the fund is coming when that's done and gone. But right now we're still working the process. But for me, it's the It's the peace that comes from... It's like we've got six months of an emergency fund so that if... Because we're both self-employed, if our income is variable, it's like, You know what? That's okay. We've got comfort and peace.

Yes, absolutely. Yeah, that padding is very real between you and life. I mean, there is something that does give a lot of, Oh, you can sleep at night. The stress is down because if something happens, we're going to be okay. We have this money set aside. So how much longer until the house is paid off?

Five years.

Okay, yeah.

The goal is debt-free by 50.

The ripe age of 50. And by then, you'll probably be worth closer to 3 million, maybe closer to 3. 5.

If things keep trending the way they are, yeah, maybe I could see that happening.

Well done, Kurt.

Thanks for the inspiration.

Yeah, you guys are awesome. Thanks for calling in. Always your stories. Yeah, definitely give a boost to people out there to see real-life people doing real-life stuff. So thanks.

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Our scripture of the day is from first Timothy 6: 5-7. This is one of my favorites, George. But Godliness with contentment is great gain, for we have brought nothing into the world and we can take nothing out of it. Bob Marley said, Spend life with who makes you happy, not who you want to have to impress. It's pretty good. But yeah, the godliness with contentment is great gain. That's big. You brought nothing into the world. I saw someone... I couldn't quite live with this philosophy because it's a little bit too Yolo for me, but it was on Instagram was a meme, and it There was this woman, she was at the beach, had a drink or something. She was basically like, In the graveyard. You don't care if you're the tannest or have the best skin, skinniest, biggest bank account. She listed all these things that we worry about. She's like, Go enjoy your life. Eat the pizza, take the trip, do the thing. I thought, it's a little bit of that.

And you are very experiences over things person. Yes. Which is wise. The data bears this out. It's one of the best ways to spend money is on experiences with people you love.

You love. Yes, we've heard that. Arthur Brooks talks about that a lot. And there is something to that.

Rachel is using that to justify every next trip. She's like, Winston, it's science. We have to go.

We have to go. This is where we should spend our money. I'm telling you, it's what everyone remembers. It's the fun big meal. It's the whole... You know, at my house, we had all the personalities and her spouse. It's a great memory.

We had the best time. You guys were so generous.

You have a great dinner. I don't know, all of it. There's something about, yeah, living.

You could have bought a purse, but instead you said, You know what? Let's have a great meal with friends.

I can't take the purse with me into the next life. You could. But I'll take the memories. You could.

It could be in your Costco casket in there with you. What good is that going to do?

It's not going to do good for anyone. So I love it. Yeah, godliness with contentment. Great gain. You didn't bring anything to the world. You can't take anything out. All right, let's go to the phones, and we're going to go to Hunter in Fresno, California. Hi, Hunter. Hi. Hello, hello. Welcome to the show. How can we help today?

So my wife and I, we are a little bit of We just got married about a year ago. We started off really good financially. We're making a little over 100,000. We So we racked up some debt. We bought a new truck, so now we have about $50,000 on that. And then we also bought a- That's a nice truck. It It is a nice truck. But we also got a camper.

Oh, how much is that, Hunter?

We're about $20,000 what we still owe on it.

Okay.

What other debt? So other than that, the only other debt is we just bought a house about a month ago. And so now we added that $2,800 payment onto our monthly payments.

And what's your monthly take home pay?

Monthly take home pay, it ranges. It ranges anywhere from, it can be anywhere from 5,000 to roughly about, I would say about 9, 10,000. Whoa.

Okay, well, that would be more than 100,000 if you're fairly consistently getting, 8, 9 grand a month take home.

Well, yeah. I mean, this past two months, we've only been taking in about 5,000. But a couple of months prior, we were...

How are you guys Yeah, your mortgage is over half your take home pay in many months. Yeah, I was going to say it's that. And you got a camper loan or payment in the truck. What's the truck payment?

So the truck payment is 1,300.

Oh, my gosh. And what's the camper payment?

A thousand.

So you got 2,300 going to toys that are going down in value every day.

Yes.

Okay, but my thing is, if you make 5,000 a month, that's $5,100 just in payments. How are you guys making your light bill and food? Do you guys have savings?

We do. We have roughly about $20,000 in our savings account.

Okay. And you're just going to be draining that a little bit at a time to live off of.

Right. Well, so that's right now, the reason that fluctuates is I'm currently in school. And so with my construction business, sometimes I I'll get a job and I can work around school, and I do great. And then there's other times, school gets caught up and I don't have as much time to work.

Yeah, but you bought a camper.

Yeah, it feels like a bad time to buy a $50,000 truck.

And a camper.

And a camper that you probably don't have time to use.

Hunter, do you just feel like, What did we do?

What does your wife think about all this?

Is she like, Hey, we got to get out of this situation, or is she like, It's fine.

He's got it under control?

Both, I guess. You could tell she gets nervous or frustrated every now and then from it. But she realizes that we're not at the end of the road yet. We can still come out of this. And so she's a little bit more comfortable with that. Okay. So, yeah, we're definitely working on trying to get it off.

I mean, you're probably nine to 10 months away of having nothing, though. Do you know what I mean? I think I don't feel an urgency necessarily. And so that $20,000 is going to go really quick because the months you do make the $5,000, you're already $100 underwater, right? So you take that $100, and then you guys are probably going out to eat. You're stressed with school, so you're doing this. I mean, you guys probably are not on a very strict budget, are you?

Right now, we actually... The past couple of months, we have gone to a strict budget. We don't really eat out maybe once every couple of months.

Oh, Hunter. But recently, we have not been able. Oh, Hunter. Really?

If I looked at your bank account statement- Over two months, over 60 days, you don't eat out except for once.

Out of 60 days. Yes, ma'am. Yes, ma'am. All right, I'm going to take your word for it, Hunter. I feel like you're an honest man.

I will tell I'll tell you what I would do if I was in your shoes as a newlywet.

I just feel like a Starbucks run is probably in there somewhere.

Maybe for her, at least.

She needs one. Quick Chick-fil-A nugget.

You guys need some vices right now. This is crazy. Okay.

Okay, let's make a plan. Make a plan for Hunter.

Luckily, Chick-fil-A is like 30 minutes away from me.

Okay, that works. Okay, fine.

That's fine. So I'm Hunter. I'm a newlywet. I've been married a year. I have a cool, great income.

What are you going to do, George?

I am selling the truck and camper tomorrow. I'm taking pictures tonight. I'm listing it tomorrow.

And your construction ego just plummets in front of everyone.

And any amount you're underwater on, you're going to use that $20,000 in savings to cover it and get yourself a beater car.

Oh, okay. It's working. Now, and then what's freed up, George?

How much money you got- You just got a $2,300 a month raise, my man.

Those $5,000 months turned in to $7,200. Now we can breathe. Oh, my gosh, George. What a plan. All right.

This is great.

This is a solvable problem. Then what are we going to do?

Then we need an emergency fund because you likely will deplete that $20,000 to cover the underwater difference, plus getting you a beater car. And so now Our job is to really build some financial stability once we don't have debt, to get 3-6 months of expenses.

How does that sound, Hunter?

Yeah, it'll make it sound a lot easier than what it is.

I feel like you're not willing to sell this truck or the camper. Tell me why.

The camper, I would get rid of it in a heartbeat. But? I talked to my wife about selling it. What was that?

Yeah, I said, And they can be tough to sell.

Well, they're tough to sell, and it actually came from her parents. And so she's a little bit more stuck to it than I am.

What? Don't have like, attachments to campers. We got to get attachments to healthy financial foundations. That's what we're looking for here. Or Hunter, you guys, here's the deal. You called the show. I feel like we're given a little tough love. But the truth is, you can stay in this cycle. You guys can stay with campers and trucks and payments.

You can live in a truck and a camper, which will be your future.

No, but this is normal, Hunter. This is normal. And you guys could go on for Years and years and years. And then what's going to happen is you're going to have a baby, something's going to happen. One of you is going to want to stay home. You guys are going to be in your early 30s. The roof is going to be leaking, and you have no money. And you look back and think, what have we been doing? We've been working our butts off for seven years, and We can't even do what we want with our life. Why? Because in our early 20s, our mid-20s, we didn't make decisions. These aren't hard decisions. It's hard for the ego. The ego hates it. But I'm telling you that you guys can stay normal. But you called the show, and the show is far from normal. We are all about getting out of debt, making deep, deep sacrifices, Hunter, in order for you guys to get ahead. In the future, you guys can get a great truck and a camper. But when you can afford it, you can't afford it. You don't have the money for this stuff, and then you rush into a house and all of it.

Say it out loud, own it, and go, Hey, babe, I'm sorry, I screwed up.

Yep. All right. What a great show, you guys. Thanks to everyone in the booth. Thank you, George. And remember, there's ultimately one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.