Transcript of When Money Feels Confusing, Clarity Matters Most New

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Normal is broken, common sense is weird, so we're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit Union studio, this is The Ramsey Show. 888-825-5225 is the phone number. I'm Ken Coleman, joined by joined by the incomparable George Campbell. No bomber jacket today, just a jacket, and he's looking—

I didn't want to outdo you, Ken.

You're looking as dapper as ever.

Thank you.

We're ready to go. Let's start it off with Zay in Austin, Texas. Zay, how can we help?

Hi, I was just calling in, just want to say I love the show, and I'm new to Ramsey, but I'm really throwing myself into, you know, everything that y'all teach. I've already completed Baby Step 1, and I just wanted some direction on how to get through Step 2.

Well, welcome aboard, Zayn.

Baptism by fire.

Let's go. Proud of you. So what's the picture? Give us the financial picture in Baby Step 2. What are we working on?

We're working through about $53,000 in debt.

You said $53,000?

Including buy now, yes, sir, $53,000.

All right, break it down for us.

And it's gonna be about $3,287 in buy now, pay later debt. Uh, $785 in personal loan debt, $39,380 in, uh, car debt. And I have 5 credit cards: one with Kay Jewelers for $1,415, one with Navy Federal for $4,300, one with Capital One for $1,500, one with Discover for $1,250, and another one with Chase for $1,000. And all those are maxed out except for the car— the card for the The ring.

I'm exhausted hearing about this. I can't imagine how you're feeling carrying it.

Yeah, it's a lot.

At least you know your numbers. That's honestly the— that tells me you're actually going to get out of this thing because most people have no clue what's going on. They don't want to know. And Zay, you've made a bold choice to go, I'm going to stare this thing right in the face and tackle it.

Love it. Absolutely. Yeah, it's a lot.

Tell us your income.

So I actually just got promoted to full-time from part-time, so now I make $55,000 a year, and my husband's in the military and he makes $30,000 a year.

Okay, so we're looking at $85,000. You guys are joint finances, I hope?

Yes, sir.

Okay, great.

And is he on board with this Baby Steps stuff and this Ramsey stuff? Is he on board, or is he freaking out thinking that you got abducted by aliens? What's going on? Where's he at?

Definitely abducted by aliens because I was like, hey man, we're getting— we're doing all this stuff, man. I'm paying— we paying off all these credit cards and then we're closing them. He said closing them. I said closing them. And he was like, uh, we'll come back to it. I was like, okay.

I knew it was—

I knew it was one or the other, right? We've just taken too many calls. So that's a— that, George, that's now an interesting wrinkle in this process.

Yeah.

I want to know whose car this is.

The car is in my name. It's mine. I had it before we got married.

What's it worth?

It's only worth $25,000.

Mm-hmm.

What's the payment on it?

$800 a month. Woo!

Yikes.

Yeah.

Where's my Pepto-Bismol, George? Do you have it?

I don't. I think we ran out. You used the supply last week.

Little indigestion on that one, that $800 a month car payment. Poof.

Now, did you roll over negative equity? What happened here?

Yes, I rolled over negative equity. I had a Chevrolet, which I didn't know those— obviously all of them depreciate, Apparently those super depreciate. And the only reason I wanted a different car is because I commute to work an hour every day and the car that I had wasn't going to suit the drive gas mileage-wise. So I got a 2025 Toyota Camry.

That's the only car that could get you an hour each way. That makes sense.

Yeah, I was trying to do it.

It was a joke. You don't need a 2025 car to get you anywhere. Okay. Just say you wanted a brand new shiny car.

Stop shouting, George.

I'm just, you're getting a little tired. It was a test. Let me ask a real quick question.

What do you do for a living?

I'm a bank teller.

Okay. Is there— and I'm just asking, this is not the primary focus of your call, nor should it be our coaching, but I wonder if you could get a job in the near future doing bank telling or something similar for the same pay that doesn't require you to drive an hour each way.

I actually did try to find a job in my area. We live right next to a base, so the area is— You know, usually not the best around it. And the pay, the pay, I make $24 here. And when I started job hunting, the most they would offer was $12 to $14 over there.

All right. Very good.

And why is your husband only making $30?

He's pretty low rank. He's only an E-3.

But that still feels, I mean, that's close to minimum wage at this point.

Yeah. I mean, they give us BAH and everything, but we don't see it because we live in base housing. So our roof over our head is taken care of. Well, that means your expenses are set.

So do you have any money left over at this point to throw at the debt?

So no, I, last year I quit my job for 2 months and that was not the best choice. And we've been kind of drowning, just kind of treading water ever since, just trying to like make sure things get paid at the very least.

So you have $1,000 in savings and nothing else to your name?

No. Yeah, everything else is flying to bills pretty much every check.

Have you done a budget to where you can answer the question of, how much margin do you have that you could throw at this debt? And what I mean by margin is after we've paid the basics, right? So you don't have housing. So I'm assuming you don't have utilities or any of that stuff. So your basic bills, above and beyond that, do you know how much you could throw at this debt every month?

Well, what we wanted to do is try to start using only my, the money I make now, and then just surviving on his paycheck, it just seems kind of hard with the $800 car note.

I agree.

Trying to make that work.

Staying in debt's going to be even harder. So we've got a hard choice to make here, which is we're going to have to get out of this car debt. And the only way to do that is to come up with the difference that we're underwater on. So you said it's worth $25,000. Was that private party value or was that a trade-in value?

I looked on Kelley Blue Book.

For private party?

Yes, sir.

Okay. So that means you're $14,000 underwater on this thing. So that's the number we need to come up with. Now, do you have another vehicle you could use in the meantime?

No, sir. We're a single— we're a single vehicle family.

So that's the one. So we need to also come up with a little bit more money to get you a different car that is used in cash, probably $5,000.

Okay.

So once you add the $14,000 plus, let's say, the $5,000, that's about $20,000 that you need to come up with in order to get out of the $40,000. Do you see how that's a good deal?

I do, yes. That's what I was saying. We want to end up— he's going to be getting moved soon and we want to go overseas, so that's why we were really like, okay, we need to start going hard because we want to either get rid of the car or something like that. We want to go over there with like no debt whatsoever.

What does going overseas do for you guys financially?

Uh, financially, we'll be going down to a single income, so we're hoping he'll get a little bit more rank and we just Wanna, you know, have a different living experience on base and stuff.

I think this is a fantasy right now. You guys can't live off two incomes with the debt you have, and so this idea of going overseas is gonna have to wait until you guys are completely debt-free.

Absolutely.

So here's the math. You got $53,000. Usually it takes people 18 to 24 months to pay off their consumer debt if they go hard using our plan. That means you got to be throwing $26,500 a year at this debt. That's about $2,200 a month. So that's the real napkin math of what it's going to take. And freeing up that $800 payment is your ticket, which means we got to save up $19,000, $20,000 fast by selling stuff, working extra, living on nothing. Then we can finally get some breathing room and crush the rest of our $14K in debt.

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That's betterhelp.com/ramsey. All right, next is Rose. Rose is joining us in St. Louis. Rose, how can we help today?

Hello, gentlemen. Um, the reason that I'm calling is because, um, I am, um, I was the sole beneficiary of a life insurance policy, and I am completely illiterate when it comes to finances. And, um, I've never seen this much. I've never dealt with this much money. I mean, it's not like a gazillion dollars or anything, but it's substantial. And, um, I'm $51,000 in debt. I had a huge back surgery 3 years ago and I'm still catching up from that. And, um, it's a truck payment, it's, um, a personal loan, a title loan, and it's credit cards and medical, um, medical bills. That's what I owe. Um, I'm receiving $125,000, and so your steps are going to be wiped out. And, well, I mean 1, 2, and 3, and 4 maybe, um, are going to be wiped out. But I don't know what to do with the rest of the money. Or, and should I pay it all? Should I pay all of my debt at once? What should I do after I pay it? Okay, let's go back.

Quick review. I want to— gotcha, we got you. Let me— quick review. Is the total debt, everything you listed out, is the total debt equaling to $51,000, or is it $51,000 plus?

That's total debt.

So your total debt is $51,000, correct? Okay. Do you have any other money in savings?

We have no savings.

You have zero savings. And is the $125,000, is that net to you or is that before tax?

That's net to me. I'm, uh, there's no tax in Missouri, or I don't know, I don't know the specifics, but I know I don't pay tax on life insurance.

Okay, all right, George, take over, buddy.

So Baby Step 1 is a $1,000 starter emergency fund. You're right, that's taken care of. Baby Step 2, we're going to wipe out all the consumer debt, all 51. That's taken care of. And then you're going to build your 3 to 6 months of expenses in an emergency fund, and we're going to park that in a savings account. A high-yield savings account is even better because at least it'll grow a little bit and grow with inflation.

High yield, what's that mean?

That's just a type of savings account. They're usually tied to a lot of online banks. We've got a great one with Fairwinds Credit Union, who's a sponsor of this show, and they created a bundle just for our fans like you, and they've got it. And so you can go to fairwinds.org/ramsey, open up one of those, and that's a great place to just sock away money and not do anything with it right now. That's what I'm encouraging you to do.

6 months.

So what's 6 months of expenses for you guys to cover all of your bills? Oh, without your debt payments, that's going to be nice.

Yeah.

$1,500.

Wow.

We bring home $8,000 a month. I work for the Postal Service and my husband is a truck driver and we, we make decent money, but we've been robbing Peter to pay Paul. When I was out of work, I lost $52,000 the year I had my back surgery and it crippled us. And I paid for funerals of my family. I've always taken care of everybody else in my whole life. And I've never been able to save for me because I've always felt guilt because I've had more money than other people in my family have. So I buried my parents, I buried my brothers, and I paid for all of that that goes with it. And I don't have any family left. And it's just my husband and I. And I don't want anybody to know about this because I don't want to be taking it.

We won't tell a soul, Rose. It's just between you and a couple million listeners.

Yeah.

Nobody knows. Nobody knows.

But I think you've been helping everyone your whole life. It's time to help, Rose. Good for you.

Who was—

who passed away?

My ex-husband.

Hmm.

I'm sorry for your loss, but the legacy here is Rose is set free from the bondage of her debts.

Yeah. So what do I do? Well, what do I do with the extra income?

Well, we're going to tell you.

Well, let me, let me lay out the math for you. $125,000 minus the $51,000 in debt. That leaves you with $74,000. You tracking?

Okay. Yeah.

Let's set aside $24,000 in a high yield savings account. And that's going to be your emergency fund plus, because you have been living a life of scarcity. It's time for a little abundance. This is your never go into debt again insurance plan. You understand?

I could cry.

Well, it's okay.

You've never had $24,000 ready to protect you.

This is huge.

It is emotional.

It's a restart.

Yeah.

Yeah, it's great.

Imagine that. No debt payments and $24,000 sitting in the bank, and you still have $50,000 left.

Listen to this part, Rose. This is where it gets fun. George, tell her what she's won.

You've won a lifetime without stress, Rose! So that $50,000 now can be used to do a couple of things. We can invest some of it. We can max out a retirement account, a Roth IRA, for example. We can invest outside of retirement if you have near-term goals. And you can use that to give and spend. When's the last time you spent money on yourself?

I want to buy a house, and I've never bought a house. So where does that go into all of that?

Well, that becomes your starter down payment. So now we have $50 grand as a down payment. So what kind of house are you looking for? What's that gonna cost you in your area for a reasonable home?

I don't want no more than a $200,000 house.

That sounds reasonable.

Maybe. And we want a pool, a jacuzzi, a yard for our dog.

Now we're talking.

I want to buy my dog. That's all I want. I don't want nothing luxurious.

That's all George wants. Your list is the same as his. He wants a backyard, a jacuzzi, he's got two dogs.

I want a jacuzzi for the dog. That'd be ideal. You would do that. I'm sure it's a thing. So Rose, that's going to become your down payment money then. So you got your $24K emergency fund, $50K for your down payment, and then keep adding to it. Because guess what? You make $8,000, you spend $1,500. You can sock away $6,500 a month toward that down payment fund.

That's right.

And earmark it. And in Fairwinds, you can actually earmark the different savings accounts. So mark one for emergencies, mark the other one for down payment, and just start adding money to that every single month.

Okay.

And with the nice income, George, that they've got, they should be able to get right into Baby Step 4 immediately with 15% when they're on every dollar.

So every month—

Now that's where I'm gonna need to reach out to somebody. I bought the $79 thing. What's the $79 thing?

Oh, every dollar.

Easy money.

Yes. So that is gonna be the foundation of your financial world because you're gonna be budgeting for every one of those dollars coming in so that they don't slip away into the abyss because Rose found a new opportunity to do something over here. And so that's gonna help you make a plan for all those $8,000. And I'm gonna hook you up with a dream team. Number one is a trusted real estate pro. Okay, you need someone in your corner who can help you shop within your budget, who knows Rose's goals, who understands the Ramsey way to help you do this smart. So ramseysolutions.com is the place to go.

I know Dave said that the credit cards aren't the end-all be-all. You shouldn't have to, you know, have a credit card to be anybody special. And Where do I— do you have someone within your team that'll help me navigate on that app? Because I have our income in there, but I have no— I haven't done anything with it since I bought it. I have no idea what I'm doing.

So it has a coaching function in it.

Yeah. Click on coaching within the menu and you can actually get a 10-minute session with someone from our team, an EveryDollar pro who can help you get unstuck. And on top of that, there's a ton of group coaching, ongoing coaching you can jump into. I encourage you to do that. And then on the investment side, if you're like, hey, You said, "I'm illiterate when it comes to investing. I don't want to screw this up." Oh, I am, 100%. We got you there too. You can reach out to a SmartVestor Pro on our website and they will help you navigate this newfound wealth that you're about to be building with your husband.

So exciting. Rose, have you seen the movie Titanic?

I have.

When was the last time you watched it?

Um, it's a favorite.

Yeah, I would cue it up after you do everything that George said, because, you know, Rose is the name of the title character. And I think this is like you and your husband after you clear all these steps, it's Your Heart Will Go On. Maybe, maybe you go—

my next step is to be a millionaire.

Maybe you go get a boat on the nearest lake and you don't buy one, we're gonna rent one just for the day, we're gonna pay cash, and you're gonna get out there and he's gonna be behind you and you're gonna do the whole My Heart Will Go On and you're free.

And we'll let that be the end of the movie. We're not going to continue in the plot.

Yes, no more, just that part. Just the good part, just the free— the debt-free part, right? That's what we're talking about. That's what life is gonna feel like on the other side of this. Pardon the cheesy metaphor, but it may be one of the greatest movies of all time.

George, this is an amazing launchpad for you, Rose. I'm so proud of you. And you are very wise to be self-aware and a little paranoid and go, I don't trust people with this. I don't know what to do with this. I'm so glad you called us. We are here for you if you need anything else. RamseySolutions.com. Click on Smart Investor Pro. Click on Real Estate Pro. They will guide you in this and our EveryDollar team will help you out.

Get in there on the coaching side of it. Click the coaching button. EveryDollar is with you the whole way. You know, you won't be alone, Rose. We're so proud of you. You were a blast of fresh air today. Thank you for calling us.

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Let's go to Jackie next in Philadelphia. Jackie, how can we help today?

Thanks for taking my call. Um, I, I have a situation. Um, my daughter is getting ready to graduate from high school. Um, she has, uh, an educational IRA that, um, grandparents have been giving her money ever since she was a baby. So we have that. We have about $30,000 in that. Um, she was also gifted some, about $15,000, um, about 4 years ago. And I'm not exactly sure when, but her dad encouraged her to invest some, take some of that money and invest it in silver. He is under the impression that it is gonna go to $300 an ounce.

What kind of insider knowledge does he have? I think only God himself knows that information.

Yeah, I keep asking those questions and it's maybe conspiracy theory type stuff. He is very confident in his assertions. And hence my, um, struggle with trying to get her to say, well, yeah, you probably have made some money recently in silver, but it's time to pull it out and put it into something less volatile. Like, take advantage of what you've earned and, like, put it into something that you're not going to lose on. And he wants her to hold it on, hold on to it for the big win. And I'm seeing like it could also be the big lose. So I'm so sad. I would be sad for her to lose any gains that she's had. And I'm not confident in like going up against all his knowledge. And I wouldn't call it knowledge.

I think that's a very generous word you used for his—

Yeah, it's a strong opinion. I may be hearing something and I may not. Are you two married?

We're in the middle of divorce.

Okay. The way you were talking about it.

Okay.

That makes sense. Number one. And so that makes this trickier because now it's a splintered situation. Who knows what she's feeling? I don't know if she's taking sides. So this is a little trickier, George.

Yeah, there's a lot of emotion and baggage behind it. 'Cause if she takes his side, it feels like, oh, you're choosing now one parent over the other. 'Cause you have different advice. And because you're not the quote unquote financial guru, you feel like you don't even have a voice in this conversation.

Pretty much, right?

Yes.

Which I'm, I'm gonna go out on a limb here, part of all of this is probably why this marriage is being dissolved.

Yes.

And so there's some really hard conversations you're gonna have with your daughter where you're not gonna make him look bad, but you're gonna share a different perspective and do it in a calm way that isn't conspiratorial or fearmongering, which is probably what she's hearing right now.

Yes.

So, how old is she, you said?

She's 18.

OK. She's 18 years old. And how much does she have total? Is it $15,000 total, and she purchased some silver out of that?

Yes.

OK. So, how much silver does she actually have?

I asked her that, and she's not exactly sure. Her dad told her that it may be up to $30,000 right now, but he's given her the impression that that's a static number, like, "You've got that." And it's only on paper, kind of thing. I'm not sure of her original investment. I'm not sure what her net number is.

And this is physical silver that was purchased?

Yes.

OK. Well, I can tell you the less stressful way to go about this is to just park that money in a tax-advantaged retirement account or even non-retirement account. It really doesn't matter. But the idea here is, if this was working for her in the stock market from the age of 18 to, let's say, 58— let's give it a 40-year run. And let's say she did all $15,000 over there. Is that fair as well?

I don't think she did all $15,000, but—

OK. Let's call it $10,000?

Yeah.

OK. $10,000, 18 to 58. She never adds another dollar. Do you understand that she just parks $10K, lets it grow in the stock market?

Yeah.

At a 10% rate of return, which they're going to come at me, that's just the data. If you look back, in fact, from 1950 to now, it's more like 11.8%. So if you just let it ride, she'd have over half a million dollars.

Yeah.

And that's without her worrying about it, without her losing her physical silver, without worrying about what the economy is doing. And the truth is, silver and gold have gone up in value in times where the economy is shaky, and they go back down in value as the stock market picks back up. But over time, if you actually look at the full picture, you will see the stock market has far outperformed any of these commodities and assets. So I'm on team Jackie. I don't know how to convince your husband in the middle of that or convince your daughter while going through all of this. But the truth is nothing is urgent.

Yeah.

What did you—

She does have school, like she's got college to pay for.

So is that—

So is this her college money?

Will this pay for her school completely?

Depends on what school she goes to.

Well, so you've given us a lot of variables. What is the, how can we help you the most? Now that we got a full picture, is there something we didn't address?

No, what you're saying is if we do cash it out, which is what I want her to do, so I'm gonna, you know, you think that's a good idea, take the whatever gains, and so you're saying it should be put in like another IRA? Or, because she's gonna need to take it out in a year or so.

Well, in that case, I would just cash it out and leave it in a high-yield savings account so that it's liquid for her to pay for college. 'Cause what's gonna happen is she's gonna go deeply into debt for college, 'cause I guarantee you, unless she goes to the community college down the road, $10,000 ain't getting you very far. And there's no other money, you're saying?

No, she has $30,000 in an educational IRA. She has $30,000 educational, and then this silver money is on top of it.

Got it. So that's an education savings account, ESA, is that what you're talking about?

Yes.

OK, so that might get her through one year, potentially, depending on where she goes, but we've got to think about the next three. So that's where, I mean, let's keep it liquid. I don't think you're going to see a lot of growth in the next one year, two year, three year. In fact, that money could go down, so you want to keep it more liquid. Because we need this for short-term goals.

And I would just add this, Jackie, she's 18 years old. You already know there's very little control you have over a lot of the things she's doing now, what she will be doing when she goes to college. You've got an ex, soon-to-be ex-husband who is gonna be telling her, hold it because I'm brilliant and I know this is gonna pay off. And then you're given the exact opposite advice. So I'm just trying to encourage you as her mother, this is not about winning the argument. I think you just have to say, can I give you another school of thought and do what George did with you? Show her how that money should be used in your opinion. And then you gotta let it ride because you're just in a tough situation where you got two parents. She's the one that's the victim in this deal. And so we don't know the dynamics of who she's choosing, what she's feeling, who does she listen to more on money? Does she listen to her dad or you? So there's so much there. I'm just trying to make what's this is already a very tough situation for you, hopefully as stress-free as possible, that you gotta explain it and let it go.

That's all you can do. You know what I'm saying, George? Like, it's just—

Well, and hearing that she's needing to go to college and pay for it, I go, it's not an argument about where to invest this money. It's we need to invest in her right now and her current education, not what could happen in the future. If she does this right and graduates debt-free, we're not gonna have to worry about her investing for the future. She'll be just fine.

That's exactly right. I want to stay where you were, where you just gave such a really nice little masterclass on what $10,000 one time, right, turns into over half a million dollars. I don't think the average family with parents are saying, you know what, I may be struggling with debt, I may be trying to get out of this, but I've got a 15-year-old or 14-year-old. And if I can start telling them this now and they go get just a summer job at 15, 16, 17. You know, it's not as difficult as we might think.

Yeah.

For a young person to come up with 10 grand over the course of 3 or 4 summers, right?

Well, investing in general has been democratized. It really has. In the last even decade to where now it's easy to open a Roth IRA and any child is actually excited about it 'cause they saw a TikTok about it. And so financial literacy is all around you. The problem is there's so much noise that no one ends up doing any of it. They just go, "That's a cool, I'm gonna save that for later." And yet no one's investing. And so if you can convince your kid that it's the old, what is it, the marshmallow test. You give a kid, "Hey, you can have one marshmallow now or you can have two in an hour." Most of the kids are gonna go, "I'll take the marshmallow right now." And what this is, it's a lesson in delayed gratification. And at 15, your brain can't fully comprehend that. You wanna go to the mall with your friends. You don't wanna park in a retirement account. But you use our investment calculator at ramseysolutions.com, they're gonna go, hold on, Mom, I'm confused. $10,000 turned into $500,000? Explain that to me. Now you've got an in to talk about compound growth and the power of delayed gratification.

And get in that calculator at ramseysolutions.com and punch in different numbers. I did this the other day, George, you'd have been very happy with my son. So proud of you. My son Chase and one of his buddies, we were talking about it. I said, all right, let me get my laptop out. So I go downstairs, bring it back up, And I said, "All right guys, give me some numbers after I explain it." They were losing their minds.

They thought you were a mathematical genius.

No, no, no.

They just saw that and they were like, "That's real." Versus me telling them versus showing them. It's good stuff.

Calculator can't lie.

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Hey, if you're working the baby steps, the best and fastest way to do it, George, is by using EveryDollar. It's more now than just a budgeting app. The plan is built into EveryDollar. In other words, you can track your progress, get personalized recommendations and coaching for your particular situation. And it's like having one of us walking around with you. Could you imagine having George on your phone all day long? I think that would be quite something.

I think you'd turn your phone off eventually.

No.

I would— I'm sick of this guy.

I want to know if I could get you to record all the basic responses that Siri does for me and it would be your voice.

A little snark in there.

Yeah.

Yeah. Especially before you make a purchase. I think I could talk you off a lot of ledges.

That's what we need. George as your conscience.

Or I'm like, hey, Google a promo code first.

That's good.

That's a good idea.

Hey, you can start EveryDollar for free right now by downloading it in the App Store or Google Play. Shannon's up next in Washington, D.C. Shannon, how can we help?

Hello. So I'm calling because I'm new to the Snowball method. So, you know, I'm just trying to gather everything and get that done. Down on paper. I want— I need to get a new car because currently I am pregnant, and my car that I currently have right now, it's been broken into a couple of times. There's like issues with it, so I just kind of don't feel safe having a baby in that car at the moment. The issue is that my car loan still has about $15,000 on it, and I wanted to— I called the contact, the car company, and they don't refinance, so I would have to either have a new car loan with a new company for the new car and this current car loan, or I would have to find a car loan company that would take care of this current car and then also add a new car payment on top of that. And I just don't know, um, really where to start on that, or if I should just wait until after I have the baby and like save and try to get like a car from like an auction or something, because Well, let's play that one out.

So that's, that's our, the other two options weren't, aren't possible and aren't something that we're going to agree to.

You gave us this solution sucks and this one sucks even more. And therefore we're going to find an option C for you that doesn't involve you going into more debt.

So you, you were thinking I could work, I could save. What does that look like? How, how long would it take you to save up enough money to get something dependable?

Um, well, currently right now, um, I do work full-time. I make about $65,000 a year. Um, Um, but unfortunately my check right now is being garnished due to the, the double of the credit cards.

Um, so you had a judgment against you from unpaid credit cards?

Correct. Yes.

What other debts do you have?

I have outside of the car, um, student loans, about $12K on that. Um, and Uh, that's about it. Again, I'm still new on finding all of my debts and pulling credit reports and stuff like that. So those are like the two biggest ones that I have.

Okay.

And you're married?

No, not currently.

Okay. Is the father in the picture?

Yes, he is.

Is he supportive?

He works full-time as well. Mm-hmm.

Yeah. What do the finances look like for the family?

Well, he works, um, he has two jobs. He works part-time and then he has his own business. Um, so the part-time, I would say probably about $3,000 to like $4,000 a month, no, probably like $3,000 a month. And then his other business is a transport service. So it kind of varies depending on the job that he gets.

So likely is that 40, $60,000 plus a year?

Correct, probably.

Okay, are you guys planning on getting married?

Um, eventually. But, um, yeah, I was definitely surprised to be pregnant, but, um, but yeah, eventually.

Well, what is eventually? Do you have an idea? If you were— I'm not holding you to this, but what do you—

we're trying to get to the financial facts here, and it changes it drastically if you make $100,000 versus $60,000.

So what is eventually, you think? If he was sitting here with George and I, we're just having a fun conversation, not putting you on the spot, and we go, what's eventually look like? When when was you guys thinking that you guys were going to get married? What would you— what would he say? What would you say?

I would probably say in like 2 years.

Goodness gracious. Why, Shannon? Is, is he the one, or is he just the dad? You can be honest, because I'm not going to force you to get married to someone you don't want to be married to, right?

Yeah, I mean, as it stands right now, he is just the dad. Um, we do live together and, you know, we've been in this relationship, but as far as like it progressing, I mean, I'm not, I'm not like 100% sure if it's going to be.

So you're going to continue to play married couple but not combine finances, have zero support, and just basically do all this on your own while being a new mom?

I mean, I never thought I'd be in this situation, but—

Right, I know. I have so much empathy for you, 'cause I'm going, this sucks so badly that if I was this person in your life, the father of your child, I'm gonna go, well, time to put my big boy pants on and step up and provide for my wife who's in crippling debt while being pregnant. 'Cause the stress of that is not good. Not good for you mentally, physically, emotionally. So the key to get out of this, back to your question is, We're not going to go into debt. We're going to save up with our income to get a different car. Now, how much is the car actually worth if you were to sell it?

Um, it has a lot of problems with it because again, somebody tried to steal it a couple of times. So when I did like the Kelley Blue Book, it's probably only worth like $5,000 at the most.

Did you file any insurance claims?

I didn't have insurance at the time.

Oh boy, do you have insurance now?

For that car? No.

Shannon, you are putting yourself at huge risk. I would cut everything down to the bone before I went without insurance.

Yeah.

This is bad. You make $65,000. Is there not a dollar left at the end of the month?

No, well, I mean, there is, but I had really bad payday loans, and so that was taking a lot of my money at one time. And I mean, there's still some of them that are due, but I'm—

so we're adding— you told me you had a car loan, student loans, and credit card judgment, but not payday loans. How much is on the payday loans?

Um, well, I had I'd probably say in total, probably like $7,000.

Okay, let's get real clear on that credit report. Let's lay them out smallest to largest, and then you're going to make a budget for the first time. I'm going to gift you EveryDollar, our premium budgeting app, so that you can make a plan on purpose with this app and then stick to it so that if you get $4,000 or $5,000 in a month, you're going to know where every single dollar is going. And all you're going to do is cover your four walls right now: food, utilities, shelter, transportation, and insurance. You're going to get car insurance today. You're going to go to RamseySolutions.com and our team can help you find the coverage that you need in your budget. That's your number one piece of homework. And then after that, it's that EveryDollar budget. Set it up. Our team will walk you through it. You can set up a free coaching call right there in the app to jump on a call with someone from our team if you get stuck. And then it becomes a game of how much can I save? How quickly can I save? Because we have have some urgency here with this baby on the way.

When is the baby due?

In August.

So we only have a couple of months to do this, which means in the meantime the baby might need to survive in this vehicle. And the good news is you're not going to leave that baby alone in the car. The car's not getting broken into while you're in it, right?

Right. Yeah.

And so as long as it's not dangerous, it's not overheating on the highway You're going to have to drive this car for a season until you have enough to get a different car.

Yeah. And Shayna, listen, you're going to talk to other people that are going to tell you that we're crazy and that you need a safe, brand new car and you'll just figure it out. But I'm going to tell you something. How would you describe your stress on a scale of 1 to 10 related to money right now?

I don't know, like a 12.

12.

Okay.

Do you think that's good for your little baby and your body?

No.

And do you think taking on another car payment that's even bigger is going to help in any way, shape, or form to help you get out of this mess? No, no, no. We might be the only people telling you the truth.

That's exactly right. And you can do this, by the way.

We're rooting for you. We're not trying to be harsh on you. We're trying to give you the reality so you can face the facts and then take the proper next steps. So jump on ramseysolutions.com, get that auto insurance will help you get that EveryDollar budget set up, and you will feel so much better just being able to look at the numbers in reality. Hey guys, George Campbell here. Listen, we need to talk about your phone plan because for a lot of you, it's like a bad roommate. You know the one. Unpredictable moods, always asking for money, hard to get rid of, and they never do the dishes. And that's what the so-called big wireless carriers are like. They're counting on you overpaying forever. But Boost Mobile flipped the script. You can unlock up to $600 in savings per year over the big guys when you switch to Boost Mobile on their unlimited plan. There's no contracts, no hidden fees, and no surprise emails saying, hey, your bill went up because reasons. You see, with Boost Mobile, you bring your phone, keep your number, and pay just $25 a month. $25, and that price is locked in forever.

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Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. I'm Ken Coleman. George Campbell is alongside. We're here for you today. 888-825-5225 is the number to jump in. Chase joins us in Grand Rapids, Michigan. Chase, how can we help today?

Well, hi sir. Um, like you already know, my name is Chase. I'm 20 years old. I currently work as an auto body technician, which means, um, as a flat rate employee, my, my income is quite variable. With that being said, I'm about $30,000 in debt spread across the $16,000 my poor decision toolbox, um, about $11,000, a little more, to my grandparents interest-free, and the rest is all on credit cards and whatnot. My main question is, is I have a horrible issue with the spending problem. Whenever I'm doing good at work, and if I were to get stressed out, I just go and blow my money in retail therapy. And what I can pay off in debt, by the time I end up having a slow period in work like now around spring break, nobody's getting their cars fixed, I, uh, I end up underwater and barely able to make my bills.

Um, well, the first thing I want to say to you is good on you for calling us and calling out what's going on. I mean, that's the self-awareness is awesome, Chase. And I think that's the first step to you winning You know, I just want to applaud you because you know there's something going on inside of you that when something goes wrong, stress, whatever, you immediately go buy something to make yourself feel better. That's a big deal. And I encourage you to keep digging into that and come up with tools, whether that's to go see a therapist or just do some hard work to go, you know what, I'm going to create some accountability in my life. I'm going to have somebody that I can call. And that can talk me off the, the, uh, retail therapy ledge. Okay, I just wanted to encourage you on that because that's half the battle. Okay, um, so let's, let's get into this debt. Did you— let's, let's talk about— lay it out, give us, uh, the smallest to largest.

Smallest to largest, um, the, the smallest are some payment plans like Chase Pay in 4 and Cash App Borrow. I use on the slow weeks when I don't have enough to cover my bills, that I have to tap into those to buy food.

I got a great solution for that. Can you delete those apps?

Um, I— well, the Chase is my Chase banking app, so I—

Stop banking with Chase.

Stop banking with Chase. Yeah.

Switch banks.

Okay. And the Cash App, is that— that's how I pay my grandparents.

Use Venmo.

Use Zelle. Use Venmo.

Think about it. If this was a casino, you'd be like, well, I should probably make it really difficult for me to go into the casino again.

What kind of stuff are you buying?

Um, really, it's anything. I mean, it used to be, uh, it used to be tools through Snap-on and all the other tool brands, but I've gotten myself away from that. And what do you just turn them— what are you buying?

Give me a quick— give me a quick list. There's a reason I'm asking this.

Yeah, clothes, video games.

Uh, I'd sell it. Yeah, I think you need a behavior— George is locking in on something. He inspired me to ask that question. You've got to make some changes. That's why I said change the bank, delete the apps. Uh, you've got to make some changes to try to put up some hurdles because you're just so quickly salving your wounds by spending. So I was hoping you had some tools. I was thinking a guy in your line of work had some really expensive tools that we could sell, and even if it's 80% of what you bought it for, that's real cash to create some initial momentum. And actually, I think it's ritual. I'm a big fan of rituals at times when the rituals are tied to change in emotion. And I think you need to go sell some stuff, even if it's clothes. Even if you gotta go take it to a secondhand store and get 50% of what it was or whatever that is, I have no idea, but I—

There's like Poshmark and all kinds of apps you can use to sell stuff. So I would only download an app if it's gonna make you money, not cost you money. That's your new filter and value.

That's good.

And then I'm confused, Chase, because I know we got a lot of great auto body shops around here. I can't get a car in there. They're like, hey, we got a 2-week backlog. And so I don't buy that work is so slow that nobody's bringing their car in. I don't know what that says about the shop you're working for, but I would find one that stays busy.

Yeah, and that has been the problem too. I actually made that decision a few months ago. The last shop I was at was slowing down because of poor management and whatnot.

That's the true reason. That's why shops slow down, not because cars stop breaking down randomly during spring break.

Yeah, good point.

So there's problem number one. What are you actually making per month on average?

On average, um, about— like I said, it's so hard to know. On a, on a good month, I'm making $6,000. On a bad month, I'm making $2,500 to $3,000.

Okay, and are you living at home?

No, I have my own place.

Okay, what's your rent cost?

$750 a month.

Okay, that's reasonable for your income, so that's not the issue. So here's what we need to do. On the good months, you need to go, that is not my money to spend, that is Chase Bank's money, that is the buy now pay later company's money, because it's really not yours. You signed something that said I will pay you this money back when I have it, right?

Right.

So now it's an integrity issue. So just make it an integrity issue and then remove all of the reasons you could go spend that money. And that means deleting the apps, adding the friction, cutting up the credit cards. Have you actually closed these credit cards and closed these buy now pay later accounts?

I have not.

That's your next homework assignment. You know how I've stayed out of debt? I was $40 grand in debt when I was 23 years old, Chase. And when I got out, you know how I stayed out? I didn't give myself the option to go back in. I didn't have a way. I froze my credit with all 3 credit bureaus, 'cause I know I'm able and willing to do stupid stuff with money. So that's the kind of value line in the sand you need to draw for yourself, because the good news is you are so young that you have so much time to make up for the stupid tax. And one day you'll look back and go, that was cute. Remember when I was in $30 grand of debt? Never again, man. I learned my lesson.

Yeah. And I'm going to tell you something. Your way out of this, Chase, is getting to a better shop or picking up a second job where there's a good-run shop and they need quality hands. I just think you have way more money you're leaving on the table than you realize.

You could go detail cars in people's driveways and make $500 in a weekend.

Okay.

True or false?

True. Definitely true.

And Chase, we're trying to encourage you. You are not that much in debt. I mean, the kind of calls we get, I'm telling you, $30 grand for somebody like you who has ability, who has time, and I think you got the gumption now. Again, that's why I applauded you right at the start of the call. You want to change, don't you?

I really do.

Okay, you know what's on the other side of this is you deciding to do what George said, but then actually go work yourself silly. And when you have a bad day, instead of retail therapy, you go work somewhere. You got me.

I, I got you. And, um, one, one, one more question.

We don't have time for another question. I apologize, but you got enough to work on.

You got enough answers here. Go back and watch this call. That's your homework assignment. And don't do it because Ken and George said to. Do it because Chase's future is worth it. That's the new value you have for every single time you go to spend money.

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Attorney advertising. Results may vary and no specific outcome is guaranteed. All right, let's go to Frank in Atlantic City, New Jersey. Frank, how can we help today?

Hi, uh, this question is about my 10-year-old daughter. Um, my household income is about double that of my ex-wife's, and lately my daughter has been saying to me, uh, things like, that's so expensive, or she wants to pay for things that are my responsibility, like clothes and shoes, for money she's gotten either for birthdays or holidays or for chores. Um, what can I do on my end to help her with what I think is just a worry about money that maybe she's getting from, uh, my, my ex-wife's situation?

Yeah, that's really interesting. Do you, do you talk about money around her when you were married, even just a few years ago? She's 10, so she's been picking up stuff, you know, probably even at 6 and 7, begin to pick up anxiety around money. And I wonder if before you got divorced, was that the situation where she would have overheard arguments about money? Or, uh, do you think it's all from your ex-wife talking about money in a fearful way, always telling her we don't have enough, we don't have enough? What do you think is driving the fear?

Well, we, we've, we've been divorced, um, since she was around 5.

Okay.

Uh, so I think maybe, um, just that situation So really it's your ex-wife you think is scarcity mindset based on reality and talking about it a lot around her?

Maybe.

I'd ask. You know what I would do if I were you? And again, I'm a dad. Um, I, if I was in your situation, I'd sit down with her and go, hey honey, you know that dad can buy that for you. I have, I have more than enough money. I have the money to be able to do these things for you, but you're worried about it. Can we talk about that? What causes you to worry about it? Just real, don't put her on defense, but just real, you know how to connect to her. I would get her to talk to you about it. And what you want is her to tell you her fears and worries, but more importantly, you wanna know why she's worried and what's causing it. And that you need to address.

Okay.

And then when you buy something for her, go, hey honey, I want to reassure you, I've got plenty of money. Dad's very smart with money. Use phrases that one day she'll understand, like I budget. You know what I mean? Just talk to her like she's an adult and she'll pick up a lot of it. But what she's looking for is reassurance. And so when you go to buy her something, she's projecting onto you what I guess she's picking up from her mother. George, am I off?

No, you're spot on. It reminds me, Rachel Cruze wrote a book, Know Yourself, Know Your Money, and she walks through these different money classrooms we grow up in. And this is the anxious classroom, like we're getting at here. And she's worried about there is a scarcity mindset. And the best thing you can do is to reframe this whole thing as, hey, what I'm doing for you is a gift, which means you need to do nothing in return. This is an act of generosity. This is not a sacrifice. You're not putting me out. You're not a burden. This is something I want to do as your father who loves you. And I think that's the best thing you can do for her is realize this isn't your money. You might have financial worries one day. Today's not that day, sweetheart. Daddy's got you.

Right.

And she's so young that she can't fully even understand what's going on. And so these conversations will continue and they'll get a little more intense as she gets more age appropriate. And then teach her to give too. I think that it's one of the most freeing things you can do for someone who's anxious with money is to show them that if they give it, it will actually lower their anxiety and they're not going to run out of money all of a sudden.

Okay.

I think that's it. Money comes from work. Yeah. Dad works hard. Dad stays out of debt. Dad put money in savings and now he has the ability to be generous with other people, especially those that he loves. And you are one of those people. People.

And Frank, you're a good dad, you know. So thank you. Keep taking care of your money. Are you solid financially?

Yes.

No debt?

We're finishing up a tiny bit.

What's that? Finishing up?

Finishing up a tiny bit. Okay, great.

So hey, that's the other thing— get out of debt, have a strong emergency fund, you know what I mean? And all those things are going to give you more peace. And here's what— the reason I asked that, Frank, is not to put you on the spot. It's to show— it's to tell you that Everything we just said will help, but what will help even more is if she feels zero tension coming off of you around money. And if you're debt-free with a fat emergency fund and a great retirement plan, you're gonna put out an ease that she will pick up on. Makes sense.

More is caught than taught, as we say.

Yep.

Okay.

That's the last piece of it.

All right. And I don't know on, on both sides because there's a divorce in the mix. Does it feel like you're trying to buy her love? And I know you're not doing that, but does it come across that way when mom feels small now because dad bought her all this stuff? Is that part of it?

I don't know. No, I don't think so.

Okay.

Yeah.

Well, take her out on a date, do what we told you to do, and then explain to her, hey, I'm in good shape. This is what I'm doing. And begin to just talk about what you're doing. I'm going to be debt-free in 4 months, and then this, and it like, just talk to her and, and, and she's she's gonna feel that and more importantly, learn what you're doing. And we hope she learns yours because, and we're not trying to create a contrast here, but if she experiences you very differently on money than she does her mother, hopefully she's gonna go, dad's modeling the way and you are the model and that's what she goes after. So thanks for the call, Frank. Anthony's up in Cincinnati. Anthony, how can we help you today?

Thank you all for taking my call.

All right, y'all.

A little bit of background. I turn 52 next week. I've worked for Dave's absolute favorite employer, the IRS, since 2008 in IT. My plan and my wife were to retire in 5 years from the IRS. That would give me the full medical, dental, all that good stuff. This year, I was moved out of IT with a whole bunch of other folks to reviewing business tax returns. I hate this job.

You didn't sign up for that, did you?

No, I signed up for it and a whole bunch of us just got moved over.

Yeah.

But what I'm trying to get at is I'm looking at changing careers and studying for my SIE exam and moving to like a Charles Schwab type place. And the point of my call is I'm just looking for permission to make that change.

Yeah, well, it's not something that I can give, but I will tell you that you absolutely should change because just go down the rabbit hole tonight on what stress in a job that you can't stand, and it's a different kind of stress. It's a, I have no purpose in this, I can't stand it. Just go do the research on what it does to your body, what it does to your mind. And that will be, I think, the last domino that needs to fall. I don't even think you need it, but I would go do it. I absolutely believe you should transition to something something else. You're still a young guy. You still have a lot of life left and a lot you can give, and quite frankly, a whole lot more money you can make. So I absolutely would get out of there as soon as I could. I would not stay around for health benefits and pensions.

I just never would. Your health is going to decline in the next 5 years.

I'm not going to trade 5 years of misery for really good eye care, dental care, and all those things. When you can afford that in a better gig?

The only additional piece of information, because my wife is pushing in the same direction you all are, is I'm probably gonna take about $100K pay cut per year to make this transition.

Well, what are you making now?

$170K.

And you're gonna go down to $70K, you think, if you move into the financial sector?

I will take an entry-level position just to get my foot in the door and work up from there, but yeah, I'll take $750K.

Well, it's never the ideal situation. My question is, is if that happened today, could you live off of $70,000?

Absolutely.

We've been listening to Dave and following him for 20 years. So we've got, we're totally debt-free, including the house. We've got the emergency fund and all that good stuff.

How much do you have in the nest egg?

We could survive. The nest egg is $750K in the TSP and $55,000 cash liquid.

Fantastic. I'm gonna say, Okay, yes, and I'm okay with you taking the cut if you take your IT experience and you do some freelancing for maybe 6 to 12 months until you get, get your sea legs, if possible. I know that's with an asterisk, but maybe, maybe we could get $50,000 in some freelance work with your technology skills.

And maybe you go get a great IT job in the meantime and work on your your licensing, and then you switch over.

That's right.

That's a nice bridge too.

I like the bridge here, Anthony. That's what we're telling you.

It makes it less— that's a cliff, I got to jump.

That's right.

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Today's question comes from Ryan in Montana. "Been following the Baby Steps for 2 years and it feels incredible to no longer be living paycheck to paycheck. I no longer use credit cards and want to close them as part of embracing a cash-only lifestyle. What is the wisest way to approach this? Do I close them all at once or is there a smarter, more gradual approach I should take? If I close them all at once, are there any potential risks I should be aware of?" Great question from Ryan. Very astute. I rarely use that word, but this feels like the time.

I was getting ready to compliment you on good usage there.

Sometimes the words just come to me, Ken. So, at the heart of the question is, he wants to follow the plan. He's worried about, essentially, his credit score. That's really what's at risk here, of the credit score going down as you close all these cards, because your credit score is partially based on how many accounts you've had open, how long they've been open, and so when you close these, you hurt the credit score gods. They're very upset that you've abandoned them, and they will punish you with a lower score temporarily. Now, it's not going to tank your credit. You're not going to have an issue like renting an apartment, but But in the meantime, for a couple of months, it might dip a little bit. And then what will happen if you truly close all open accounts that have to do with debt? You will have no credit score after about 6 to 12 months if you do it right. That's what happened to me. It's what's happened to several people out there, millions now, that have followed this plan, that are credit invisible, as we call them. So your credit score becomes indeterminable, and then you just live your life.

And renting a car, Every rental car company has a debit card policy. When it comes to renting an apartment, they'll go, "Hey, are you a criminal?" "Nope." "Great. You'll have to pay a little bit more in the deposit, but sure, you can rent from us." And even with a mortgage, I went through a process called manual underwriting to get a mortgage without a credit score. And it was all kind of a nothing burger, Ken. They kind of made it out to seem like you cannot live without a credit score. You can't live without a credit card. And I realized very quickly it was a farce because they've never done it.

Yeah, absolutely.

So there you go. Just go for it. I don't think you're going to regret it on the other side. And if you got to do it all in, that means closing all accounts that have to do with debt in order to actually have no credit score.

Yeah, absolutely. Good advice. Let's go to Jim next in Dallas, Texas. Jim, how can we help today?

Hey, guys, how are y'all?

Good. What's going on?

Hey, so I'm switching employers in 2 weeks. I got a better paying job, but I— a year ago, unfortunately, I took out a 401(k). Loan. I've been paying on it, but I owe about $15,675 left on it. And I'm not sure what I should do about that because I don't have that money. And it's going to become— it's going to default basically if I don't pay it off within like 30 days.

Yeah.

Did you get the actual details in the fine print? Is it 30 days from today or when you— you already put in your 2 weeks?

Yeah, it's from date of separation, so when I leave the company, 30 days later.

OK. What day is that?

I think it's May 22nd.

May 22nd. So we've got a little over a month. How much can you save up in a given month? Is there a bonus from the employer? Is there anything like that?

No, no bonus. I'm putting about $6,000 away for the debt snowball right now. We're on Baby Step 2. I can ramp that up a little bit, but not enough to cover the gap.

Do you have anything you could sell? Or is there anything you could do as a side hustle?

Well, we've sold everything but the kids already. And you're married? Yes.

OK. Spouse is working outside the home as well? Yes, indeed. What income is going to roll through your fingers in the next 30 days?

We're doing about $12,000 household income right now. I think it should go up to about $13,000. $15,500 with the new rule.

And how much do you need to survive and pay the bills and minimum on debts?

About $4,500.

So that's $8,000 you could pay.

Yep, that sounds right. Right?

And that's just if we just use that income and do nothing else. We don't find extra stuff to sell, stuff to flip, do side hustles, get the whole family involved here. So the best option is obviously to pay the balance back within the window. I would find out— generally it's a 90-day window, so I'm surprised this one is 30, I would see if there's any leniency with that. If you go, hey, can you give me 60 days? Okay, that's your best bet, because in 60 days you've got it covered.

Yeah, somebody had mentioned the idea of a QPLO and paying it back by the next tax year, but I've never heard of that. And I'm—

yeah, I'm not familiar with the old QPLO. I'd have to look into that. But the worst thing you can do is to do nothing and let it default, because you will lose 30-40% of that loan balance to the IRS. That will just absolutely destroy your wealth. I would just act like this is my one goal in life, is to pay this back. I make this like a Liam Neeson movie. Wow! You're on fire today. I want that kind of intensity from Jim.

I agree.

I'm taking from my 401(k).

Exactly! You've got 40 days to recover this money and get the IRS and this employer off your back.

Thanks, Jim, appreciate the call. Let's go to Paige in Kansas City. Paige, how can we help today?

Hi, so me and my fiancé just bought a house last year, and we both have car payments, and his student debt was handed off to a collection agency. So we have a couple different loans that we're trying to pay off, and I know in the Baby Steps it says to, like, pay off your smallest loans first. First, but our smallest loan doesn't have an interest rate, so we're trying to figure out what the best route of action is to like what loan to pay off first.

Why don't you lay those out for us, smallest to largest?

So we live in a, um, oh, you said smallest. So our smallest is the student loan. It's $7,034.59. $162 a month with 0% interest. My fiancé's car is $9,645 left on the loan. It's a $400 a month payment and it's at a 17% interest rate. That's the one that I would like to pay off. And then my car is $28,000 left with a $600 a month payment and a 4.66% interest And our house is $50,000 left with $630 around a month. We pay biweekly, so sometimes we pay 3 times a month. It's at a 10.75% interest.

What do you mean by house?

So we live in a trailer house, but we also have lot rent because we rent the land that our house sits on, but we own our actual house. Okay.

Because this trailer is going down in value, so it's more like a vehicle. It's not going to appreciate like a traditional home.

Home.

So here's the truth: interest rates are not your problem. It's financial behavior that's the problem. And so that's why the debt snowball works, because if we were trying to attack interest rates and doing math here, we wouldn't have gone into all this debt. So how much do you actually make per year?

My fiancé— it's a little bit hard to determine right now because I just switched jobs. I'm a nail tech now, so I'm making $18 an hour flat rate. Rate with 40 hours guaranteed a week.

Okay, so you're making about $38 grand and you have a $28,000 car.

But I also make a lot in tips. I average between, between $10 to $20 per client, and I have about 5 to 7 clients a day.

Okay, so you're making closer to $50 or $60, is that what you're telling me?

Yeah, around.

This car is still too much of your world. If you sold this car, it would really alleviate things. And the second thing is, are you guys combining finance Are you just paying off your debts and he's paying off his? Are you guys all pooling money together?

So we're trying to— we haven't done it yet, but we need to combine our bank accounts, and we're doing 50/50. And my car I pay, and his car and his student debt he pays.

This is a real problem. You guys shouldn't be combining finances until you're married because you're creating a real mess. Okay, because what if something happened? He leaves leaves, and you just paid off his car debt while you still have a bunch of—

well, I'm not, I'm not paying on his car and he's not paying.

You guys need to focus on your own debts right now until you're married and then combine finances, and it will get a whole lot easier and less messier at that point. But you got to start owning up and stop looking at interest rates and start looking in the mirror.

Buying or selling your home is a big deal. You know that. And with all the clickbait stuff out there and the conflicting data, it's hard to know what's really happening. We're here to make the latest trends easy to understand. Median home prices went up a little to $403,000 last month. Mortgage rates also dipped to 5.4— 5.43%, excuse me, down from 6.16% we saw last February. And that gave buyers some breathing room. But you know, this rates can be unpredictable. So if you want to learn more about housing market trends and get some free tools to help you buy or sell with confidence, go to RamseySolutions.com/market. That's RamseySolutions.com/market. Or you can click the link in the show notes. Let's stay right here in Nashville where Catherine joins us. Catherine, how can we help today?

Hi, thanks for taking my call. So about a year ago, Uh, my husband and I decided to put some money— well, to put some debt into Freedom Debt Relief, which is a— I'm sure you know— a debt consolidation. I know that you guys do not, um, uh, um, recommend— recommend. Thank you. I'm a little bit nervous.

Take your time.

That you guys don't recommend those, but it was an emotional thing. My husband had surgery and the debt was just racking up. And Freedom Debt Relief, the salesperson being the salesperson he is, like I actually said, you know, I know this isn't Dave Ramsey recommended. And he was like, oh no, Dave Ramsey actually does recommend us. And I was like, I didn't say anything, but I knew that he didn't. But my question is—

You should have said, oh, he does. I'd love to see that that clip or that article where he recommends that.

Oh, next time.

Well, there won't be a next time, so I can't say use it next time. But okay, so you signed up?

Yes, we did about a year ago. And what my question is, we're doing a much better financial position now. Um, my husband got a new job and, um, we're just in a better financial position and I want to start doing debt snowball. And first get the $1,000 and, you know, all the baby steps. But I'm wondering, should I take out what hasn't been paid off already in the Freedom Debt Relief?

Yes.

Yes.

And get out of the process because you can do what they're doing on your own without the fees and the hassle. Hassle, and without tanking your credit, which they've already done. That part's— we can't undo that. Yeah, but all they're doing is negotiating with your creditors after you default and coming up with a lump sum. You do that yourself. If you couldn't pay, you just wouldn't pay, and then it goes to collections, and then you say, "Hey, would you take $4,000 for my $10,000 debt, lump sum, if it's market paid in full in writing? Great. Done." Okay.

And should I— because they have— because the percentage that they were taking the Freedom Debt Relief, they basically— I was saving, like, I did the math, I was basically saving like $100 or $200, which is not great. The ones that they are currently paying though on, should I leave those in there? Because there are two that have that they are currently paying on that they negotiated.

How many more payments are there?

One is, it's a total of 36, and I think I've paid 4 to 6. I'd have to look on the app. And the other one, it has like 24, and I think I've paid like 4 or 5.

Okay. I would read the contract to see what you can and can't do and read the cancelation clause. Laws to figure out what you have to do to get out. But I would just tell them, hey, I want to get completely out of this. And you might need to do a written notice. It's like a Planet Fitness. They get you in real easy, but to get out, it's an act of Congress. So yeah, I would definitely get out because you can do this on your own. It's going to end up being cheaper for you in the long run, even if they ding you with some fees on the way out. But these programs, they overpromise, they underdeliver, while ruining your financial life.

Right.

But when you're scared and overwhelmed, their Instagram ad magically pops up to save you.

Yeah.

So I'm sorry you fell for it, but I'm glad you're getting out.

Oh yeah, no, I'm definitely getting out. And, um, thank you for taking my call. Um, I hope nobody else falls for them.

There's the warning from Catherine. We love that.

And it's a good, uh, reminder, Ken, just to talk about what these companies do So the way these companies work, these debt— if you see debt relief, debt settlement, anything that promises like debt freedom without you actually doing the work, here's what they do. They tell you, hey, stop paying all of your creditors. Instead, send us those payments. What ends up happening is you default on the debts, it tanks your credit score, and then they try to negotiate a lump sum settlement. Hopefully. They can't guarantee that. Sometimes it doesn't happen. And the truth is, you can do all that yourself without all their crazy fees and sales tactics. Tactics, and it's what you should do. And try to stay current on your payments if you can, because tanking your credit is not going to help you at all financially. Yeah, I agree. Avoid.

Rachel is up next in Redding, California. Rachel, how can we help?

Hi there, can you hear me okay?

Yes, loud and clear.

Okay, good. Um, my husband and I live up in rural California, Northern California, and he has a blue-collar I'm Rob, and we have 4 kids, um, 8 and under, and we're just coming up on our 10-year anniversary. Um, we are on Baby Step, um, 4— well, I guess 5. We haven't saved for our kids' college yet, but we're thinking about it. Um, and we're just thinking about doing an anniversary trip, and I wanted your guys' feedback on— I guess I'm feeling kind of guilty. I'm a stay-at-home mom, so I don't make a lot I've been DoorDashing a little bit, but I kind of wanted to see what you guys thought about an anniversary trip. Like, I feel guilty for what I'm thinking about saving.

What are you thinking about spending? Sorry, what's the number? How much do you want to spend on this trip?

Um, we were thinking around $5,000 to $6,000.

Okay, how long is this trip? Is it like a week or two?

Um, yeah, we were thinking maybe 10 days to 2 weeks.

Okay, I can tell you right now, uh, 10 days to 2 weeks at $5,000 to $6,000 is not a—

you know, that's a deal. That's, that's—

you're, you're, you're not going luxury, you know, you're, you're being smart about it, you're making the most of that money, am I right?

Yeah, yeah, we'd be definitely staying at really cheap places and doing—

you don't need to stay at a Motel 6. Let's make this a trip to remember, and not in the wrong ways.

Well, yeah, let's get to that next, but let's at least take off the guilt. There's no guilt for you guys saving clean up $5,000 to $6,000 to celebrate your 10th anniversary. That's fantastic.

And there's no guilt in you being a stay-at-home mom and feeling like, well, because I don't contribute as much, I feel like I don't— you deserve it as much as anybody.

How long have you already saved up that money, or are you in the process of it?

Um, we just— this is just a plan we've had in the last couple weeks, so we're just thinking about saving.

And, um, is that going to stress you guys financially? In other words, where are you going to have to be really, really tight to be able to save that?

Yes.

Yeah, I don't have a problem with that either.

What does your husband make?

He makes about $4,500 a month, and with my DoorDash, I've been making around $1,000 a month.

Great. So when do you want to book the trip? When do you actually have to pay for it?

Fall sometime.

Okay, so are you willing to continue the DoorDash and use part of his income to save up this $5,000 over the next 5 5 months?

Yeah, yeah, I think so.

Yeah, I mean, you got the number.

If it's just your DoorDash money every month, sometime in the fall, you got some flexibility, you can cash flow this anniversary trip just from your work, your part-time work. You shouldn't feel guilty, you should feel proud of yourself for that.

Are you setting this money aside in a separate savings account?

Uh, yeah, that would be the plan. Yep.

Good, that helps to earmark it, because if you just have it in checking or you have it in your emergency fund, it feels like you're doing something bad when you take take that out to use it for a vacation. So instead, earmark it, 10-year anniversary vacation. And then when you put the money in, you know exactly what it's for. And then when it comes time to book the trip or when you have the money, pull the trigger.

I wonder if you've got $1,000 to $1,500 worth of stuff around the house you could sell too.

True.

I like that plan.

I love that plan. You know why? We just add a little extra money to this anniversary trip didn't have to work as hard. We got rid of some crap we didn't need anyway.

And then do your research. Splurge where it's worth it, cut back where you're like, we don't care about this over here, and you can work with a $5,000 budget easily.

Welcome back to The Ramsey Show in the Fairwinds Credit Union studio. I'm Ken Coleman. George Campbell is alongside, and we're going to go to Minneapolis where Ella is. Ella, how can we help you?

Hey guys, thank you so much for taking my call. This is awesome. Um, anyway, I have a question. So I'm following the Baby Steps Unfortunately, I'm not able to work right now. I'm on a medical leave. I have to have surgery this next Wednesday, and I need to come up with $4,000 before I have my surgery. And if I was able to work, I could get it, but right now I'm just kind of at a loss. I have— I've been marking things up. I'm going to have a garage sale and try to sell everything that I possibly can, but before Wednesday, I'm kind kind of stuck.

Is it due up front?

Yeah, they said that, um, it's to meet my deductible, my out-of-pocket deductible. And then— and so I've been on the phone and trying to work with them, um, to see if, you know, I can get on a payment plan or anything. And they're like, well, that would be like the last option. I'm like, well, that That might be your only option because I don't have it.

Is this at a hospital?

Yes, it is.

Is your doctor aware of this?

Yes, he is.

And what did he say about going forward on this or rescheduling, or how serious is a reschedule? What's, what's going on? Give us the full picture.

Okay, so unfortunately this is my fourth surgery in 3 years. But hey, I'm a trooper, it's okay. Like, I get through it and—

So sorry.

I go to work. It's okay. Thank you, I appreciate it though. And anyway, sorry. I talked to my doctor about it and he told me, he was like, if anything, he's like, we're gonna do this surgery, you need to have it.

Right.

And he's like, just tell him you made a payment arrangement, we're still going through it, and then they can figure it out. Right. And I'm like, okay. Good, good.

I think that's what you have to hope for. That's our sleep okay at night answer. And then you do everything you can, you know.

Have you called the hospital billing department?

I have. Oh my gosh, we're like best friends right now.

Oh good. What do they say about financial assistance, charity care, that kind of stuff?

I have submitted all of, you know, my pay stubs and everything to them. They're gonna gonna try to review it to see if I meet the qualifications, but I already make too much money. And what's your next paycheck?

And when's it coming?

That's, that's the thing too. I'm, I'm not sure. Today was the last paycheck that I'm getting until hopefully my Minnesota paid leave comes into place. And it was only me like $400 because I've been on leave for the past 2 weeks.

Was it unpaid?

So yeah, the, um, so I was only able to work 2, 2 days this last pay period. Otherwise, like, yeah, it's really frustrating. And like I said, I do follow the Baby Steps. I've, and unfortunately, like I'm in Step 2, but I'm trying to get paid off I have $18,000 left and I've paid off $60,000.

Way to go!

What's left in the $18,000? Um, so what's left in the $18,000 is some leftover surgery debt. Um, I have 2 small credit cards and, um, 2 small personal loans. And I— guys, I'm telling you, I have— I've brought my budget down And I know where all of my money goes, thanks to you guys.

Good.

And I had my $1,000 and, you know, I can live very simply. It's just my body hates me.

Oh, bless your heart.

But you have $1,000 to your name.

Nope, because I had to use that to pay my rent and everything. Oh, and then on top of that, I have to move because the house that I'm renting in. I just found out that it's in foreclosure. Oh my God, my landlord hasn't been— yeah, so it's like a country song. Yeah, I know it is.

It's really bad.

I'm more of a, I'm more of a punk rocker, so I'm just like, oh, come on.

Well, you know, there's always— I mean, what is your— you know what you need to do? You need to find one of those punk rock songs that you really love that's kind of got like the tough, the tough times lyrics, but there's some bright side on it, and that becomes your sound track, you know?

Oh, it is Social Distortion, Reach for the Sky.

There it is, Social Distortion, Reach for the Sky. And you know what, like, I'm not being, you know, like, kumbaya here, but that's your, that's your soundtrack. You've been through a lot. Better days are ahead, right?

Absolutely.

You're gonna get through this. Don't— do you follow the advice of your doctor? So let's take that stress off the table and get yourself healthy. Get healthy and then get back to work and keep walking the Baby Steps out. And I'm telling you, better days are ahead.

Thank you.

And then document everything like a mad woman. I mean, there should be an income-based discount if you're on medical leave. You should qualify for a significant reduction on this thing or a full write-off. And on top of that, bring proof of income loss. Say, hey, listen, I made $400. Here's what I should have made. And this is gonna remain this way until I'm fully healed. Healed.

Yeah.

And I think if this person is your best friend, if I'm your best friend at the office, I'm going to do everything I can to go, hey, your bill suddenly disappeared.

Yeah. Oh, I like that. Oh, I see what you're saying.

Fingers crossed.

Yeah, I mean, they can pull some strings over there. A human being has to deny or approve these. One little—

it's one little keystroke. I see what you're doing, George.

Yeah, it's not illegal.

George with a little, uh, George with a little espionage.

This is why these people exist.

I love it.

And so So just, you need to utilize, you need to know this stuff better than they do to where you go, no, I actually read the fine print and here's what it says. You need to become an expert in healthcare 'cause there's a lot of incompetent people in healthcare.

Mm-hmm.

Oh, I know that. I work in healthcare.

Perfect. So become the expert on your situation. And when you are more, when you have all of the options, all of the information, you can win this thing. And we are rooting for you to get through this surgery surgery to heal up, to get rid of these debts, get that emergency fund. You have a bigger why than most people.

That's right. What is the prognosis, uh, on the other side of the surgery? Do you know?

Not 100% sure yet.

Okay.

So, um, but yeah, do you have a good sense of confidence that you're going to be able to get back to work relatively soon, or is that completely up in the air as well?

Oh, I told them, I go, I'm going back to work on May 1st.

I'm like, look, I don't care, no stopping you.

I'm like, I— oh, there isn't. Like, I work 2 jobs, I work 2 jobs, I have tons of side hustles, and I'm just like, no.

Like, oh, Ella, listen, you know what, I love the advice George gave you, and I hope they don't charge you rent this month if they're under foreclosure.

I feel like that should give you a little freebie.

What's the story there?

I, I feel I feel like I'm not even gonna pay them and I'm just gonna try to save and just move and put my stuff in storage. And if I have to couch surf for a little while, good for you. It's okay.

Good for you.

They're the ones about to get sued and going through bankruptcy. So I think they're gonna have their hands full. Yeah. They got, I wouldn't be worried about that.

Bigger fish to fry than you. And Ella, you inspired me just now. I wanna tell you something like, I love your attitude given everything you're dealing with right now. You're unstoppable. I love that you said, "I know I am," and you're gonna get back going, and boy, are we cheering you on. We're in Club Ella.

When I talk to people on The Ramsey Show, 90% of the problems I hear come down to one thing: not having a plan. They're not living on a budget. They have no idea where their money's going. Money is just happening to them instead of them happening to their money. And guys, that is so normal, but it doesn't have to be normal for you.

You.

And that's why I want you to go download our EveryDollar budget app. EveryDollar not only helps you tell your money where to go with a budget, it also builds a plan to free up extra money so you can pay debt off faster and start building wealth. And the best part, your plan is completely personalized to your life. It's the same advice that you would get if you called the show, and it's right in your pocket. So, don't keep living normal. Go download the EveryDollar or app, answer a few questions, and get your plan today.

Hey, George, have you heard about Ask Ramsey?

Heard about it.

Yeah.

I use it daily.

Do you really?

I ask, I talk to it because nobody wants to talk to me, Ken. So I go to Ask Ramsey and it's very conversational.

Yes, you do.

It wants to talk nerdy like I like to talk.

What is Ask Ramsey? Some of you are wondering. It is the AI tool that's built and trained on proven Ramsey principles. And we're going to break down the most asked questions from this week. We had some questions around budgeting, college funds, investing. But the most asked question, George, was around paying off the mortgage. The main question is, is, should I prioritize paying off my mortgage or investing for more long-term growth? So what do you think Ask Ramsey said, George?

Well, I hope it said this. First, you gotta be investing 15% of your gross household income into retirement. Anything beyond that is a Baby Step 6 item. So you can throw that money at the mortgage, but it's not a this or that, it's a yes and. Yes, you should be investing. Yes, you should pay off the mortgage. You don't need to do one or the other, but you should not stop retirement investing to rush the mortgage. That's the truth. A paid-for house gives you peace and margin. Once the house is paid off, then you can start investing even more than that 15% and increase it to your heart's delight for your wealth goals. So Ask Ramsey can help you determine how much extra to throw at your mortgage each month, what your payoff date would be. It'll help you with all the nerdy stuff, do the calculations for you. So go ask any of your financial questions today at ramsaysolutions.com, or just click the link in the description if you're listening on podcast or YouTube.

Nice. Let's go to Cassandra now in our backyard here, Nashville, Tennessee. Cassandra, how can we help?

Hi, thank you for taking my call.

You bet. What's going on?

So I am— well, I have $9,000 in debt for my car, and it's very manageable, and it's in my monthly budget to take care of that, but I have more than enough money to pay it off right now if I wanted to. Um, my question is is if I get rid of that payment and it affects my credit score, I'm looking to put a down payment on a home in the future. Will someone lend me that money for a home if my credit mix isn't good, if I don't have multiple lines of credit?

Got it. What other accounts do you have open right now as far as debt?

I have a secured credit card and I kind of use it as my budget for gas. I never spend more than 30% on it.

OK, so the car is the only debt?

Yes.

How much do you have in savings?

$22,500.

That's all the money to your name?

Um, I also have a retirement account.

OK, but as far as liquid money, $22,500. And if you paid off the car loan, what does that leave you with?

Um, $9,000 less than that.

Okay, we're talking like $13,000 or so is what you'll have left.

Yes.

Well, the good news is you're not gonna have to worry about purchasing a home anytime soon because you're gonna have to still save up an emergency fund, then save up the down payment. So this is a far away goal, right?

Yes, it is.

Okay, and your credit score is not gonna tank once you pay off your car. It might go down temporarily, but it's not gonna go down to where you're not gonna get a a great rate on a mortgage.

OK. Thank you.

So I would not worry about that. Now, if you stop making payments or miss payments, those things will negatively affect your credit score, and it'll stay like that for a much longer period of time. But just paying off a debt is not going to go away. You're going to go from a 700 to a 650. Way to go, Cassandra. It's a good thing to pay off your debt. So you're basically saying, should I stay in debt on purpose so I can qualify for more debt at that point?

Yes.

And so truthfully, even if you cut up your credit card, and this is something I did, my credit score eventually disappeared. I became credit, you know, my credit score was indeterminable, and then I went through a process called manual underwriting. I submitted just a few more documents, a real human being looks at the documents and says, yep, we can give a loan. It was that simple. So that's just to give you, put you at ease, that even if your credit score disappeared off the face of end of the earth, you still could qualify for a home loan if you have a good down payment. You'll have no debt, so you'll be a very strong candidate, and your income's strong. All of those are much bigger factors than just a credit score.

Okay, yes sir, thank you.

Yeah, thanks for the question.

Yeah, really good. Cameron is up in Phoenix, Arizona. Cameron, how can we help today?

Hi, so I'm currently a student physical therapist about to get licensed in around late October My biggest thing is I'm about $120,000 in debt by the time I get licensed, and I'm actually making $80,000 to $85,000 out of school. And I have $10K in my savings. And I was just curious, you know, I have my $1,000, of course, that is my base foundation of savings, but what else? Do I just throw everything else towards this snowball method? And kind of what's the way to go about that? Things.

When is your last payment for education?

Oh, what was that?

When is your last payment due for education? Are you already there?

Um, no, no. And so it'll technically be, I believe, September.

Okay.

Of this year.

Because my goal would be to avoid going into any more debt before graduation. And so that's kind of— we're trying to just stop the bleeding at this And so I would hang on to that money to use it for the following semester for tuition, textbooks, et cetera.

Yeah.

So limit the damage. And then once you graduate and you have your income, now let's start using the Baby Steps, the debt snowball method to start attacking these student loans from smallest to largest. Are they in separate loans, I imagine? Yes.

Yeah. All separate loans. Some federal, some subsidized, unsubsidized stuff.

Yeah.

Awesome. Leave it that way. Don't do any kind of debt consolidation, lumping it into one giant loan. It's going to be so much easier to pay off pay it off when you can attack the little one with a vengeance, free up that payment applied to the next one. That's the debt snowball. And I have good faith and confidence that you'll be able to pay off the $120K. Now making $80K, it's gonna take a little while, but hopefully you can get your income up, maybe work overtime and really go hard at this thing for 2 or 3 years and knock it out fast.

Yeah, and that is an absolute huge reason why you don't wanna add any more to this. 'Cause coming out of this thing, this is what I can't stand. And this is why I don't like the student loan program program for so many people. You know, they come out and they're excited. They've got the great job. And then it's this mountain they have to climb.

And they can.

And we've seen and we've helped a lot of people do it. But it's just—

Well, the scary part is, Ken, the financial aid. When I walked in the financial aid office and you get the package from FAFSA, you're like, "Wow, what a gift. They're giving me 4 federally subsidized loans." I thought, "That's basically free money." And it's basically just a slightly any better way of getting punched in the face.

It's true.

It'll heal a little faster.

Let's go to Jacob real quick here in Nashville. Jacob, how can we help?

Hey, I'm trying to determine, make sure I'm doing all the right things to be able to retire as early as 50, very comfortably. How old are you now? I'm 29 right now.

OK, we've got a little ways to go.

How much you got saved for retirement?

Retirement?

So I was fortunate enough that my, my father, my grandparents, my great-grandparents put together a uniform transfer to minor account when I was very young. I'm not entirely sure what the beginning balance was. I want to say it was close to $50,000.

What is it now?

I, I, it is now up to $490,000.

Whoa.

And, uh, About $75,000 of that is my IRA in a Vanguard account.

So $490,000 total is your sort of nest egg you've built so far.

Yeah, well, that's just associated with Vanguard. So I also have about $38,000 in a 401(k), about $12,000 in a 403(b).

So what's the total nest egg? Can we go $550,000? We're just crushed for time, so I'm trying to get to it.

Yeah, sure.

$550,000. How much will you contribute monthly going forward for the next 21 years?

Sure.

So my only contributions is maxing out the Roth or maxing out the IRA. So, uh, about, um, $600 a month.

Well, I'll tell you this, at 50, you'll likely have about $5 million. Now that's without accounting for inflation and buying power, but $5 million I mean, you tell me, can you live off $5 million at 50 for the rest of your life? I think so. I think you'll be work optional, and my guess is you actually go do something that really matters to you.

If he has George Campbell's budget, he'll be living like a king.

Living large.

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I like playing defense. I'm telling you, especially with your wealth.

I get it. Chris is up in Los Angeles, California. Chris, how can we help today?

Hey guys, thank you guys so much for taking my call. Such an Honored.

Well, we're honored to talk to you. What's going on?

Hey, uh, so real quick, I'm, I'm 28 years old and, um, I'm currently on Baby Step 2. Um, I have $16,000 in credit card debt left. Um, and I just got an opportunity from my parents to buy one of their properties that they had for about 20 years now with two tenants, with, uh, two tenants that are in right now, and the house is valued at about $700,000, but they're going to be selling it to me for $350,000 for what they bought it for years ago. I just, I'm like not too sure what I should do. I don't know if I should purchase the house or just keep going, trying to clear my debt, or I'm kind of lost, to be honest with you.

Do you want the fun answer or the real answer?

The real answer, to be honest.

Okay, the real answer is you have no business taking on that mortgage right now and being an investment property guru. I mean, for a lot of reasons, I don't, whenever I hear the word, I have an opportunity and that involves going into a bunch of debt when you already have a bunch of debt, it tells me it's not an opportunity. It's actually a burden disguised as an opportunity.

Deal.

So that's my fear, is you, you take on this— it's such a good deal, oh my gosh. I mean, why not just inherit it from them later on down the road?

Exactly. Yeah, that's what I kind of figured.

Why are they trying to get out if this is such a great opportunity?

Yeah, and, and you're right, you're right, George. I'm not too sure why, but it makes sense. It makes sense.

And by the way, and George is right, the Financial, it's a no-go. But you know what else is on the other side of this too, besides being a bad financial decision? You're going to end up resenting them, because once you start feeling the stress of all this, you're gonna go, they talked me into this, and now it's going to affect your relationship with your parents. So this is a no-go financially and relationally.

Absolutely. No, definitely. I really appreciate it. Yeah, I mean, I've heard it, I've heard it all. I mean, this is— people have already been telling me, I don't know, if you don't take it on, it's going to be a stupid decision.

Well, the question is, you gotta reframe it. The question is not, is this a good deal? The question is, can I actually handle this right now without it crushing me?

Right.

And a good deal at the wrong time is a bad deal.

Yeah.

And so I would just say, you know what, I would have loved to, but I've got some financial goals right now. I'm not in a place to be buying investment property.

Exactly.

But I love you guys.

Good luck with the sale.

Yeah, thank you, Chris. Uh, your instincts are right. Thanks for the call. Bridget is up next in Anchorage, Alaska. Bridget, how can we help?

Hi, um, so my husband and I are in Baby Step 4, but we're kind of in a unique situation. So I have a normal 9-to-5 corporate job, and my husband owns his own fishing business that's seasonal. Um, we're to the point that we can invest 15% of our income while I'm working, but we're also about to have our second child. And, um, so I'm hoping I can quit my job and be a stay-at-home mom. Um, but if we did that, we wouldn't be able to afford to invest 15% of our income. So what should we do? Like, should I continue working? Because with his schedule, he's gone all summer for 5 to 6 months of the year, so childcare gets really complicated. And then he's our childcare winter. So I'm— we're kind of at a loss as to how much do you make. So I make about $75,000.

And what is he making from this business per year on average?

So it varies. He's about 5 years into it and it has slowly grown. So I think his highest year was he made over $100,000 just off of his business. But then this last year it was closer to like $45,000, $50,000. So he has some other income, some other like side jobs and things that he does, but those are, it's also seasonal.

Well, the math of the situation is you can't afford to stay home if it means you can't build wealth for the future. And we have variable income in the business, which adds a whole nother layer of stress to your family. So I want Ken to speak into how he can turn this thing from a variable part-time deal into more stable full-time income?

Yeah, I mean, well, I wish I had him on the phone. How well do you know about his business?

Oh, I know lots.

Okay, well, what do you think is the opportunity? Do you think that, how would you describe it? At what stage is it? Infant stage? Are we toddler stage? Are we teenage? Like, just, is it—

No, the issue is it's seasonal. So he's a hunting and fishing guide, right? So there's only that certain season season that he can be doing that, right? Especially in Alaska. And so he's kind of limited time-wise. So he can sort like, if he gets more guides and things like that, he could potentially be selling more trips, which he's working on. And so like this year he's going to be making a lot more, which is great. And like we already have for our emergency fund, we did a full year because of his variable income. We wanted to make sure that we we already have enough set aside that we would be very comfortable. So like, I guess potentially he could work more in the wintertime and just kind of take on some other jobs.

Has to.

But I'm thinking what businesses thrive in Alaska in the wintertime that are adjacent to what he's doing now?

That's right.

That would be my homework.

That would be ideal. But the reason I asked that is that emphasis is that he's the only guy right now right now. The business is all completely on his shoulders. He's the only guide, correct?

So he has a couple others. It just depends on how big the trips are, but he doesn't have anybody else that's full-time with him. So he hires a few different contractors for the summer.

That's fine because it's seasonal. So that's what I was getting at, because that's the only way to expand in a seasonal business, right?

Is exactly—

he's got to reproduce himself. And so I'm guessing he's, he's close to teenage age, right? He's not, he's not an infant. He's already moved on to hiring other people. So good. So, so that lets me know where our, where our opportunity for growth is, and it's more trips, more guides. So he's got to work on that, and that takes a little— it takes a little bit of time to grow that. So I think what's enormous is, like what George said, is what's something he can do that's in that space? And I'm using the word space very generally here, but it's in that old hunting, fishing, recreational— yeah, well, just hunting and fishing and all that.

That's—

if he's in that space and he can make good money and they— and it kind of just dovetails in some way, creates relationships in some way, or they're, they're willing to go, we know we got you from this time, this time, and then when we get to the summertime, you're off and doing your thing. You just got to increase your income. He just cannot afford to just be seasonal right now. You guys can't. You need more money.

So it's not a no. I would just make it a— it's a not now. And if we can prove that for 2 years in a in a row this business has profited him. He took home over $100,000. Boom, he's now replaced the household income in a bad year.

That's right.

And that tells me we're going to be just fine if you never work again. He can sustain this thing. So that's where I would just want some proof, because 45— if it's another 45-year and you stay home, that's going to be tight.

Yeah, that's right, for sure.

One other thought on this, Bridget, to take back to your hubs on this. I, I think he's got to treat the seasonal business like a bonus, you know?

Yeah.

Like in the corporate world, the, you know, corporations, they pay bonuses, right? Kind of like a year-end bonus. And I think he's got to treat that seasonal job as, that's my bonus. We're living off of what, you know, I'm doing in this other role. And then that's our big lump sum of money. And I think if we can begin to think that way, that's going to pay off for you guys. And then that's going to get you in a position where eventually, you know, you can do that. So just a little thought there, but I do think it's important to frame it it that way, you know?

Yeah, yeah, for sure.

And that's where you get ahead big time, you know what I mean? So we're living off of his regular job, the seasonal gig, until it's a full-time— it can fully fund what it needs to. It is our big bonus job. So thanks for the call, that's really fun. You know, you and I should go on a, uh, on a hunting fishing trip in Alaska.

You think I'd make it?

I think you could make it.

I don't know I don't know that my wife would allow me to. I don't know that she'd think I'd come back alive.

I think our wives would let us, and I think it would be just rich and funny just for social media alone to see you and I attempting to go on some Alaska type trip.

If you just gave me the reel ready to go, I could probably do it.

Yeah.

Then help me reel the fish back in.

What I think would happen is you and I would be fly fishing and you would accidentally snag my ear.

That's a real possibility.

Yeah.

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

Our scripture of the day comes from Proverbs 19:23. The fear of the Lord leads to life, then one rests content, untouched by trouble. Our quote of the day from Scotty Pippen: A Gucci wallet and a Target wallet hold the same amount of money. A $10 million house and a $100,000 house host the same loneliness. A Ford will also drive you as far as a Bentley.

All right.

Thanks, Scotty.

Scotty dropping dimes over here, as the kids like to say.

Do they say that still?

I don't think anybody says that. I'm getting messages from the booth. I'm getting a, Ben is saying no, no one says that.

Your kids are at home cringing right now going, Dad.

Well, I'm afraid I've said something I don't even intend to say. Do we know what dropping dimes is?

I don't think it's a bad thing.

I don't think it is.

Yeah, you're not gonna get in trouble.

Okay. Kelly, the producer, has never heard of it.

Our resident Gen Z said. No, it's—

she's a millennial.

I take it back, you're a millennial. She just— she plays very young and, you know, fun compared to me, who is an old soul curmudgeon.

Yeah, yeah. By the way, she does have a great hat on today, the Masters hat.

There we go.

Fantastic. Uh, there she is, everybody. Look at that. All you need is a pimento cheese sandwich in your hand. Uh, let's go to Jim in Lansing, Michigan. Jim, How can we help? Hi, Jim.

There he is.

Hi, so, yeah, so I just had a quick question as to how to talk to my dad about credit cards in our business. So I started a business with my father about a year ago, and I personally, I don't do debt, I don't do credit cards, I don't do any of that. It's all scary to me. Now, he loves credit cards. He doesn't have a lot of debt in his personal life, but he just loves credit cards. He has them all over the place. And I voiced, when he wanted to get one for the business, I voiced my concern then, but I know better than to argue with my father. And we ended up getting a business credit card. And I just figured I would take initiative to make sure that nothing bad happens with that. Now, this past month, something bad did happen with that. We tried to pay it off and the bank marked it as fraudulent.

Fraudulent.

And so then we got late fees and interest on that credit card, and that terrifies me. I want to get rid of this stupid thing, but I don't know how to— I don't know how to have that discussion.

Well, this is a generational money fight. He's been living this way for so long, you're not gonna change his mind as the young whippersnapper.

I know that.

Are you guys 50/50 partners?

Yes, every time that I talk to him though about the credit cards, his excuse is, you know, I've been doing this longer than you've been alive, I've never been charged interest. But now he has been, and I don't—

well, what he really said is, I don't respect your opinion in this business.

That's right. And which means he's not going to accept your opinion.

Yeah.

So now you got a real problem. Don't you?

Well, yeah, so he's a great businessman, so I don't like the idea of that, but I just—

well, but are you long-term in this business? Have you already made the decision, or is this just something early on you're just kind of, oh, I'll do the family business for a while till I figure out what I want to do with my life? What's your status?

No, this is, this is, uh, this is long-term for me, but—

okay, how old is he?

I would guess like 50.

Okay, so this is a long ways away from like you inheriting the business on your own. This could be another 25 years of this. It's not gonna be the last fight you guys have. So just know that going into business with family can be a fun idea and a harsh reality. So the conversation is, Dad, I respect how you built things. I wanna build this as well. I wanna feel like an equal partner. Can we try running this thing lean, debt-free, and see how it goes. And when and if we run into a situation where it's like, dang it, we need the credit card, I will concede, and we'll have that conversation. So give him a trial instead of a debate, and that way he'll put his defenses down. Does he like a challenge?

Uh, yeah, I can give that a shot.

90 days.

Maybe.

I don't know.

Yeah, I don't mind George's approach.

He might be a stubborn horse. I don't know.

He might be. You got nothing to lose with George's approach. I have a high sense here that it's not going to go the way you want it to go and he's not going to change. So that means—

I likewise.

You do too. Okay. And so I like George's approach, but you need to reconcile the fact that this is the business I want to be in. This is my long-term play. And I philosophically disagree with my dad on debt.

And the truth is, you guys did not align on values for this business before you started the partnership.

Mm-hmm.

You didn't set the ground rules or the boundaries and said, hey, one value I have is we're gonna run this business completely debt-free because it lowers our risk, lowers our stress, and increases our chances this thing survives. That's really the heart of why you're doing it.

Right, we don't have any loans or anything on the— yeah, we don't have any loans or anything on the business. It's just that credit card.

You're running the expenses through it.

We don't have any points because we're paying somebody else's points.

Yeah, that's where those— that's where those late fees will go, man.

So I, I just think you, you talk to Dad, you keep chirping about it if you want to, always respectful, make the challenge that George gave you. I'm all for that. But I'm also a realist to know that if he just isn't going to change his mind, you aren't going to change it for him. And so I would reconcile that and go, I'm gonna do things different when I'm in charge. Until then, I'm gonna focus on what I can control, or, or, you know, what I do agree with, and just learn how to deal with that. It's just a tough situation. I don't want you to have this constant tension between your dad and you over this issue, because it seems like it's a healthy business otherwise.

Yes, yes, absolutely.

Yeah, tough thing, man. It's, it's tough.

But hey, you're not going to leave the business over it, so then you got to make peace peace with it and try to over time get them on your side. But again, it's an old dog, new tricks are hard.

I know, trust me, George is always trying to teach me new tricks. Uh, Aubrey's up next in Raleigh, North Carolina. You see what I did there?

Well, I would just think I just helped Ken download like an airline app for the first time, and it felt like helping my grandpa. He's really— he had his readers on and everything. It was fantastic.

It was—

that's what it reminded me of.

It's true. Was that a Starbucks in Charlotte? That was fun. Aubrey, how can we help you today.

Hey, how are y'all?

Good, what's going on?

So look, I'm just curious, uh, me and my wife, we've been married now going on 2 years. We've completely gotten out of all of our car debt, you know, and everything else like that. So we're just left with the house now, um, and I'm just curious, uh, she would like to go on, uh, she likes to travel, uh, she was a travel nurse when we got married, and, uh, she wants to travel to Italy, and I'm wondering if we can kind not necessarily put a pause on the house, but maybe not pay as much extra on the house to be able to take fun trips.

How much is the trip gonna be?

The trip's probably gonna end up being around $4,000, if I had to guess.

And you have no debt?

No, no debt besides the house. No, sir.

So this is—

you're just simply saying we would slow down on our aggressive paying off of the house to be able to just sock $4,000 away fairly quickly to take a trip to Italy?

Yes, sir.

I know, yeah. Why is that a problem? I think it's great.

You live your life, man. I mean, Baby Steps 4 through 6, I mean, really through 7, is you're taking the foot off the pedal here and go, we don't need to be gazelle intense anymore. We just need to be intentional. So as long as you're saving up, you're paying cash for this trip, trip, I mean, it's not going to delay your mortgage payoff by a year. We're talking a couple months at most.

I don't know how you're going to do a trip to Italy for $4,000 is what's running through my mind. That's the most impressive part. I was like, what are you doing? Are you staying in a box?

Are you guys doing hostels?

No, it's a family trip, so it's kind of split costs between everybody.

Oh, that's even better.

Like lodging is split, so that makes it a little cheaper.

Got it.

I wish I knew some Italian right now. I would throw it out there as an encouragement to say, do this, live a little. George, you know any Italian? Bienvenido.

That might be Spanish. I have no clue. I think I failed that class.

Kelly, help us out. What is happening?

She did Duolingo, right?

Ciao. Ciao.

That's not a good—

That's not what this needs though, but thank you. She did help us.

Well, ciao.

We'll see you in Italy. Right.

That works. Okay, great. Yeah. Aubrey, I mean, listen, you don't need permission on this from anybody.

You're not doing anything wrong by doing this. It's okay to slow down your self-imposed goal. The key is you're being intentional. You're going to pay it off early, aren't you?

Yeah, yeah, we definitely want to.

Is this a case—

it's a little bit daunting still. Yeah, still having $200,000 left on it.

Okay, really quick question. Is one of you, you or your wife, actually leaning towards not doing this, going on the trip? Yeah.

No, we're both— I would say we're both leaning forward towards it. I'm more— I, I'm more on the terms of paying stuff off as quick as possible.

Lean hard, man. Lean into that Leaning Tower of Pisa.

There it is, full circle. You worked really hard on that. I think I like Kelly's chow better. But, uh, hey, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.