Don’t Follow the Trends and You Won’t Fall for the Traps!
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This is the Ramsey Show, where we help you win in life. Win with your money, win in your work, and win in your relationships. I'm Ken Coleman. George Camel with me today in another fine-looking shacket. He's ready to go. The phone number to jump in is 888-825-5225. 888-825-5225. Now, you know, we're talking about serious stuff here.

But George and I like to have fun with it. We can mix the two. So when we get together, we try to have some fun. Let's have some fun today as we talk about the very serious stuff. George is our resident money expert, and I'm your resident income expert. I want to help you make more money, and George wants to help you do good stuff with it. So we're going to get right to it, and I'm going to tease this, George. Okay. At some point in the show, our fearless leader James Childs will tell me,

I'm going to, we're going to get political. Whoa. That's all I'm going to say. Is this dangerous territory? Should I be? No. As a matter of fact, I think the audience is going to love it because it's a unifying statement and it has to do with money, George. Okay. How about that? We can all agree on that. So now everybody can take a deep breath. There's not going to be anything controversial. No vitriol. No vitriol and nothing controversial. But it is that time of year, George.

And so more on that a little bit later. But first, let's get right to the phones. Heather is going to start us off in Knoxville, Tennessee. Heather, how can we help? Hi, thanks so much for taking my call. My aunt, who was in her mid-70s, she's been a widow for about seven years now, has been the victim of a romance scam, we just found out. Oh, gosh. Is this like the catfishing that we hear about?

Yes. On Facebook, a guy had reached out to her and she'd been talking to him for about a year. We found out and we said, you know, this is a lot of red flags. We think this is a scam. Whatever you do, do not send this guy any money and you don't need to talk to him anymore. But...

She did not listen to us, and we just found out that she has lost at least $23,000 in credit card charges that we know of. We don't know if there's more or not. Oh, my goodness. So she didn't send him money. She racked up debt in her name and bought him stuff? Yes, and then sent him the money.

So we are trying to figure out what to do. She lives off of Social Security. She only brings in about $1,200 a month. Her whole bank account was cleaned out, and we're just trying to figure out how to go forward from here. Before we get to the money part, I just have to ask, is there any...

potential help from Facebook and any of this or the credit card company on this? I mean, that's a good question. I have a feeling that it's from overseas because she was buying a bunch of $500 minute cards for phones that she was sending him. So that makes me feel like it's out of a lot of jurisdictional hands. Okay.

Yeah, it's rare that anything can be done about this stuff. I know. I just had to ask. I am just—my stomach has turned here for you. Oh, yeah. Yeah, it's horrible. Have you reported the crime at least to your law enforcement's non-emergency number and at least have this on file? Yes.

Yes, they've reported it. They're going to be getting all the details. I'm not sure how much they can help those since she took out loans in her name and things. They're going to go, hey, this isn't fraud. You did this. Yeah. But at least it's on file, and maybe they can track this scumbag or who's doing this. You can also report it to the state attorney, FTC, at least...

to make yourself feel a little better. But the truth is we're going to have to rebuild ourselves here. Let's pretend like nothing is going to come from any of this. What about this credit card debt? Have we cut up grandma's credit cards yet or your aunt's? Well, we're trying to. I don't know if we've gotten the full picture yet. But, yeah, we're going to get those credit cards canceled. Her bank account, they had to close the bank account because,

And what had happened was that she was going to get reimbursed by this guy. So we sent her a check, which she deposited, and it cleared for a few days. And then it's back.

Well, yeah, well, he wanted a certified check out of that. So she turned around and wrote a certified check because the bank thought she had the funds, and then it cleared out everything that she had left, plus she went into negative once they realized it was a fraudulent check. So they canceled that bank account, so it's like she doesn't even have that at bank anymore, so everything is... So she has a new bank account now? Well, we're going to have to set one up, and her son is on the bank account, so that is one good thing, but I don't know if we have...

the ability to i don't know if she should have access to it to an account if that's even an option does she realize what has happened i think on some level but i'm afraid on another level she hasn't really processed it because she keeps thinking that he's going to send her the money even now it's very fast how old is she she's about 75. is she is she having struggles with just mental acuity i i think she's just very very lonely

And you're the niece. Like, where are your cousins at in all of this?

are around unfortunately they don't have a lot of financial security to help in this instance but um my uh my aunt's sister so my mom and everyone are trying to kind of gather around her and help where they can to help her get out of the negative on a lot of her bills but that's about all that we can do and so were you calling us for ideas or were you calling us for

for some type of approval on something you're thinking about. That's what I'm trying to get to the bottom of. I'm wondering, is it moral or ethical for us to say, just don't even, don't try to pay back these credit cards, put those,

I mean, she truly does not have the money. And so I don't think there's anything wrong with saying, listen, she was a victim of fraud. This is what happened. She doesn't have the money. She's living off of $1,200 in Social Security. It'll be, you know, she'll be $128 by the time this thing gets paid off. Yeah, I agree.

And the truth is, Heather, she needs to cover her four walls first. I do not give a rip about the credit card companies. She's got to make sure she's got food on the table, utilities are covered, her housing is covered, transportation is covered. And the other thing you need to do is, number one, cut up her cards, and then second, you need to put a freeze on all of her credit.

So all three credit bureaus put a freeze on it so that no one can open up account, including her. Yeah, I agree with that. I'd do that instantly. I think the son does need to manage the money from here on out. She's shown that she's incapable and she's still not even convinced this is fraud, which means it can continue to happen if we continue to give her access to more money.

Absolutely. Okay, now that's a great point, freezing all of her accounts for the credit-wise. And do we need to get her to sign something for us to be able to do the money? Because I think she does have her mental faculties other than this gigantic blind spot. Or would we just set up a new account? You might need a financial power of attorney unless they both say, hey, this is a joint checking account. The son is on it. Mom is on it. If we do it that way, you'll be fine.

Okay. This feels like a family meeting, though. But yeah, this needs to be a... The fact that the niece is calling and tells me, number one, you really love your aunt, which is so sweet. Yeah. But I think we need to have a big family meeting and go, here's the next steps that we're going to take. Yeah. And you lay all of that out that we just talked about. Yeah. If this were my aunt or my mom, there would be an absolute come to Jesus meeting to make sure she understands she's been scammed. And this is not real. No.

And let's address the loneliness as well. But, man, we've got to rebuild here. And this is a community thing. If you're involved in a church or a good community, I think you go to people and say, let's help her out. Maybe even third-party counseling. But protect her, by the way, before we help her. Or else all those good deeds, George, and all that money raised for her is going to go back out the window on the next thing. Wow. Tough call. Don't move. We'll be right back. This is The Ramsey Show.

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Welcome back to the Ramsey Show where we help you win with your money, win in your work, and win in your relationships. I'm Ken Coleman. George Campbell is with me this hour, 888-825-5225. All right, so we've been talking about this for a while, George, and it's going to be here before we know it. It's the very first. Now, we had this deal set up once before, and then we had this thing called a pandemic that hit.

And so the cruise was no more. And now the Ramsey cruise, we call it the live like no one else cruise. Is that what it's called? That's right. That's the official title. Do you know why it's called that? Because if you live like no one else later, you can live like no one else. So you can go buy a ticket and go on a cruise with us, with Dave Ramsey, George Camel, John Deloney, Jade Warshaw, Rachel Cruz, and myself and other guests. And you can just do that.

by simply putting a deposit down, George, of $600. You know why? Because you've got $600. You've got the margin. So this is for folks who have done the first part. They've lived like no one else. They've made the sacrifice. They paid off the debt, got the emergency fund. They're investing for the future. And now we want to celebrate with all of those people on a debt-free celebration cruise. Are we going to be checking people's baby step status at the door? That could be fun. I would love to volunteer to be that guy. If you give you a clipboard, you would be so happy.

How do I verify? Are we pulling credit reports? You can't. How are we going to do this? It was a joke. It's a ludicrous suggestion. But nonetheless, you got excited about it. But what if we freak people out as they try to get on board and I go, no, no, no. Let's check that credit report. What if we had Dave shoot a video and it was kind of like an AI video of Dave and you had to walk up and he would look you in the eye and you go, now before you get on this boat, I'm going to need to see your ticket and I need you to look me in the eye and tell me you're in baby step four or higher. Are you? No.

Could you see them? Yeah. That would be kind of fun to freak people out. I got to see your DFE, your debt-free verification. Oh, see, look, you've already run with this. All right, George, tell them where we're going because the lineup is absolutely unbelievable. We're going to Turks and Caicos, St. Thomas, Puerto Rico, and the Bahamas. Yep.

That's an amazing lineup. It's a great, great, great lineup. We also have some good friends going with us. Big time chef, Manit Chauhan, Deanna Carter of country music fame, and Stephen Curtis Chapman of Christian music fame. So we got a little something for everybody there. And all the personalities, including Dave, will be speaking, hanging out with you. And George is going to swim with the Dolphins. We're looking at an excursion where you swim with George and the Dolphins.

It's a synchronized experience. Yeah, so we're working on that. By the way, George swims in a swim shirt, so that's always worth seeing. And floaties. That's an extra bonus. With the floaties. With the floaties. So here's the deal. You get your room by just putting $600 down is all you've got to do, the deposit. And cabins are running low. We are going to sell out. They're expecting us to sell out within the next month or so. So you don't want to miss that. And you can sign up right now. Book your cabin at ramseysolutions.com slash cruise.

ramseysolutions.com slash cruise. By the way, George, I want to point out we have a lovely studio audience out there in the lobby today. International. International. We have Scotland, Australia, and more. Yeah, it's unbelievable. So always fun to meet you fine folks, and we'd love for you to come see us. To the phones we go, 888-825-5225. Tampa, Florida is where Matt waits for us. Matt, how can we help today? Hey, thanks for taking my call. Sure, what's up?

Hey, I'm separating from the Air Force next month or in a couple months, and I have a few job offers lined up for airlines. I'm a pilot in the Air Force and I'm switching to the civilian sector, and we're looking at probably a 40% drop in pay.

if I can start right away when I leave. We did buy a house about two years ago here in Tampa, and we bought just before the mortgage rates, or we locked in just before the mortgage rates started going up, ended up with a higher rate than we bargained for. And it's going to be a little tight trying to keep the house. So my question is with, and especially with

training start dates for a lot of these airlines as a few job offers, but they've all paused training for the remainder of the year. And they could potentially pause it further in the next year. So my question is, is it a dumb idea to sell our house and move in with our family, which we kind of take a hit on equity,

Um, and, uh, we, we might be slightly upside down in it. Um, you know, by in order of up to, I mean, we could break even, we could end up losing, like having to pay out like 30 grand or something like that to get out of it. There's a lot coming at us. So George, let's break a couple of things down here. That'll help us. First thing is explain the training delay. Okay.

And in context with, do you want to fly commercial airlines? That's where you want to be long-term. Is that the case? That's right. And so if they're delaying training, that means they're delaying hiring.

Well, sort of. I've got three job offers. They just say, we're not going to start you until January at the earliest. Start you in training, which means essentially start you in paying you. When are you leaving the Air Force? Basically, I want to stop moving so much. But are you optional to leave, or is this like, hey, on this date, it's over? Or can you hang on to the Air Force for a while?

I could, but it's really important to me to be able to get with an airline, a major airline, at the earliest possible point. But if this is the difference between you guys losing your house, I'm going to go, well, let's pause on this career move until we know what it's going to look like and that we can afford it. Yeah. I mean, let's skip ahead then. So we're jumping around, but I think it's important to jump around, George.

We don't like the idea, George. We don't want him to try to sell a house and take a loss on this. It's like there's a whole lot of options before we get to that, correct? Yeah, well, and the question is how do we get you from the Air Force position to another position without a gap in income and without a loss of income? So what are you making now and what are the job offers offering? So what I'm making now is about taking a pay of $11,000 to $12,000.

per month and the first year of pay with any airline is a little bit lower. So I'd be looking at about $6,000, $7,000 per month. Even with your experience?

That's right. The first year pay is always lower. Does your wife work? But it bumps right back up. My wife works. She's a nurse. She makes about $4,500 a month. So it would still be a $40,000, excuse me, a 40% hit in your first year. How quickly does it jump up in year two? And does it get back up to where you currently are or is it still below that level?

It would go back up to where I currently am. So for one year, you basically got to float the 40% difference in one year. But you don't have, I mean, being an airline pilot, you don't have a lot of time for the side gig, do you? Or something else that you could do to make up that money for one year and not lose the house?

So that's true. And the other big concern is what if they don't start training for longer? Why is this the only option? Could you not do cargo plane? Could you not fly private? Why is commercial day one the only option?

So I could do other things in the meantime to keep an income. I think you have to, Matt. Matt, you have to. You're basically telling us that we're looking at six months from today at the earliest that you would actually start to get a paycheck, and you're looking at leaving the military when?

At the end of September. And now I would get about $15,000 of extra pay upon leaving. But that's a month and a half. That's a month and a half. What's your mortgage payment? Mortgage payment is about $3,600. Okay. So based on our parameter, about a quarter of take-home pay, you would need to bring in about $14,000 to make this house sustainable. Okay.

Right. And right now, if you and your wife, let's say you took the pay cut, it was seven grand, your wife makes five, you're at 12. So you've got a little bit of a gap. I have other job offers that if they did start me, one of them is scheduled to start me, they could bridge the gap in between now and then. You just answered your question. I think, George, we like that. We're about shy on time here, George.

I think we prefer he take that option, not sell the house. You can't take a job that brings home less than $10,000 a month. So if you make that the one thing you're focused on, you'll focus on it. You're saying not sell the house. Try to avoid selling the house. Avoid selling the house. Delay your dream of leaving Air Force until we figure out what's next. Because they could turn this house into something that's an asset. Yeah, moving in with a family all because of an urgency to get out of this job. I don't see the need to. I'm with you.

All right. Thank you for your service, Matt. Absolutely. We appreciate you. You're a great American. Don't move. More of the Ramsey Show coming right up. Buying your first home is a big deal and sets the stage for your financial success. So work with a mortgage advisor you trust, not just some random website. Churchill Mortgage is Ramsey trusted because they help you avoid hidden traps and expertly guide you through every step. Learn more at ChurchillMortgage.com. This is a paid advertisement.

How you doing out there, America? You doing all right? You doing okay? You making enough money? You keeping enough money?

How's the old relationships around money? Oh, boy. It's awkward. Some of y'all still are trying to Venmo each other and their spouses. That's a scary scenario, Ken. How's that American dream idea to work really well, to work really hard and keep moving up, maybe start your own business? How's that going, folks? How's it going? We're in an election year, George.

People are starting to lose hope out there, Ken. Or they're hanging on to hope for the wrong reasons. That's right. Yeah. And so we want your hope focused on your actions and what you can control, and that's what we do here. I'm Ken Coleman. George Campbell joins me. 888-825-5225 is the number. Devin, is it Devin or Devon? We'll find out shortly. I'm going to guess Devin. Harrisburg, Pennsylvania. How can we help?

Hi, guys. Thank you so much for taking my call. You bet. It is Devin. You are correct. Okay, good.

All right. So my question is, my husband and I, we have three children. They are 20, 18, and 16. And our rule has always been that if after high school you don't have to go on to college, that's fine if that's what you select. But you have to get a certification or a license or work full time, that kind of a deal. We have our 18-year-old daughter. She just graduated from high school in May. Will not be going on to a university. Again, totally fine. All right.

Oh, my gosh.

Yeah. So, um, so she is somebody who very much needs her insurance. Her plan has been that, uh, in August she would work full time at a retail makeup store, like an Ulta or Sephora. Um, cause that's where her passion lies. And then after a year, go and get like an esthetician license or something like that.

My question is, because of the change in insurance, does it make sense to have her, like, to not have her work full-time, rather just have her do a part-time for the next year and then kind of see where we are? Or do we kind of stick to our guns and say, hey, this is the deal. You're an adult. This is what you chose. And then deal with the ramifications of, you know, retail insurance? Yeah, I don't... My first pass...

Is I don't know that I would change the expectations for her. Now, I'm assuming that if she's careful and this role as a makeup artist or whatever you call it these days, an esthetician, I mean, that she can do that with low risk. Is that true?

Yeah. I mean, she, there's no rhyme or reason as to when she fractures. I mean, she, I mean, she's again, broken so many bones. I mean, she can sneeze wrong and she can break a rib. Like, so it's not so much that, you know, it's a dangerous situation. It's just what it is. And we've always, you're right. And we've never coddled her. Like, I know that sounds awful, but like, Hey, you're broken. You have to go to school. So she was the kid in the wheelchair and that kind of a thing. So again, we're,

We're kind of what we're trying to keep doing, like now that she's an adult. But with this change in insurance, I mean, it's not if she's going to need it. It's when. Right. But I like the idea of her working full time and having her own insurance. It's time. But the stipulation was if she's working full time, which I assume is 40 hours a week-ish, then she has to get her own insurance, regardless if the employer offers insurance. Yeah.

Well, no, if the company she works for offers it, she has to take it. She can no longer stay on our insurance. It's just the new insurance. See, Devin, here's where I'm at. I don't know what George thinks. I would not make a decision to limit her earning ability, to limit her dignity building, simply to save her a little bit of money on insurance. I mean, because in other words, it's like, well, she could stay on my husband's insurance, but she has to only work part-time, which means the way I look at that is...

I'd say it this way. Let me put it to you this way. Here's what I hear. Devin, I'm going to recommend to you. Imagine me saying this to you, Devin. You tell me what you think. Devin, I think your daughter should make less money and be limited and almost on a fixed income because I'd like her to stay on your husband's insurance.

Yeah, no, no. Okay, so you get my point. Right, right. I mean, she could get disability, but we have said absolutely not. You are capable of working. You're going to work. So walk us through this. Let's say she's working at Sephora full-time. She has insurance through Sephora. What are the downsides there compared to what you have right now?

So if she, you know, ends up in the emergency room or she has a bunch of different specialists that she does have to go to, the co-pays are much higher. There's a much higher, you know, out-of-pocket expense. Well, let's be prepared for the out-of-pocket maximum and let's teach her how that works and let's make sure she has that amount saved. That's a great point.

And depending on the insurance, we also don't know what the insurance is going to be. Let's look into that depending on the employer. Let's find out what the co-pays are. And then it becomes a line item in her budget that she needs to manage.

As a working adult, go, this is going to be a higher percentage of my budget than all of my friends, and I need to be okay with that. That's right. She's going to have to effectively have, I think, a line item in the budget that is, I'd call it copay. And I just think teaching her how to be self-sufficient here, you guys are going to sleep better at night knowing that she's figured it out. And it's literally a function of saving and allocating that in the budget to go,

It's kind of like a mini emergency fund, but it should be actually in her budget. And she going to continue to live at home? What's the plan there? Yeah, no, she'll probably... Yeah, she'll be... She has to live at home for probably the next few years. Okay. Yeah.

Yeah. But see, I like that. But see, I like that because now she can stack more money away in that actual line item of copay or medical. Like she has a medical line item and it's like a mini emergency fund, George. How does that feel to you? Correct me if I'm wrong. I feel real good about this. And so show her, hey, we're going to get a high yield savings account set up for you. This is what an emergency constitutes. We're going to make sure we have the out of pocket max. Here's what your copays might look like year one. We're going to have that in the budget and you're going to put that money away like a sinking fund.

So that when and if something happens, you're going to be okay. You have the money to cover it. And I think that's going to really give her that dignity to go, I can take care of myself. That's huge. While under the care of mom and dad and under their roof. So she has minimal bills while working full time. There's no reason why she can't put away money. Yeah. Thank you.

Wonderful. I appreciate it, gentlemen. You're an amazing mom, by the way. You are, Devin. I can't imagine the difficulty of that situation. Three kids, one with that special need requirement, and I'm wishing her the best on her journey to become an esthetician. Yeah. Devin. Appreciate it, guys. Thank you. Devin, can I put you on the spot? I think you can handle this, and if you don't like this, just say no, and it won't be awkward at all. But I just have a feeling right now, George, and I'm going to trust this feeling.

Devin, I want you to just speak to moms and dads out there. You're talking to a massive audience right now, and they've got little ones who have special needs all across the spectrum. It could be just anything. We just have no idea. And it is causing emotional stress, mental stress, and financial stress.

feels like you and your family have really navigated this well. What would you tell those folks? They're in the midst of this and they're feeling like maybe they're not going to be able to figure it out. Maybe they're just feeling like they're never going to get through it. What would you say to them?

So our faith has been absolutely crucial in all this. We did not know she was going to have this disease when she was born. She was diagnosed at six weeks old. So, again, our faith has just really what pulled us through. Also, my husband and I sticking together, really just kind of being on the same team, obviously getting out of debt was incredible.

incredibly crucial because our medical bills were just insane. She broke her neck when she was two and had to be life flighted to Johns Hopkins. So, I mean, that was a $25,000 helicopter bill. So, but we were able to do all of that because we were debt free. Um, and so honestly, what I would just say is you just, you know, special need parents, you know, God chose you for a reason. Um, we don't know what it is, but your kid is awesome and you just keep walking forward and you do it together with your family or whoever's around you. And that's, that's how we do it.

Wow. That's beautiful. Devin, thank you. Thank you. You really encouraged some people today. $25,000 helicopter bill, George. I mean, you got a little one right now. Can you imagine? I cannot imagine. I mean, first of all, the trauma that would cause me, let alone the financial aspect. That's what I'm saying. From every aspect. Oh my goodness. Here's your little one.

So what I'm hearing is for special needs parents, they can't go, well, the Ramsey plan is not for me because we have different circumstances. You have to do this plan if you've got that. You have to stay dead. I think it's vital. You have to have the emergency fund. That's what I heard from Devin, not from us.

And wow, what a special family. But then fun to see that their daughter is coping and not just coping, winning and thriving. And thank you again, Devin. I hope that encouraged those of you out there that are in that situation. We're here with you. We're here for you.

This stuff will help you get through these dark times and come out on the other side. Wow. Great stuff, Devin. Thank you again. All right. Don't move. Quick break. We'll be right back. This is The Ramsey Show. We'll be right back.

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Welcome back to the Ramsey Show. Thrilled that you're with us. I'm Ken Coleman. George Campbell is with me. The phone number is 888-825-5225. 888-825-5225. All right, George, it's time for our question of the day, and it comes from Nick in New York.

Nick says, I wanted to ask your thoughts on getting an American Express charge card. I'm completely debt free and see there are major benefits in terms of points and airline miles for using these cards that you pay back the next month and never carry a debt. What is the downside to using them like a debit card?

This is a question we get very often, Ken, and the part that frustrates me is that you can't use a credit card like a debit card because they're so different. You're using other people's money and paying it back later versus using your money and paying it right now. And so you can't say, well, I use it just like a debit card. What's the difference? There's a huge difference. Number one, American Express, they're known for the charge card, Ken, which means you pay the full balance every single month.

where they get you is with very high annual fees. They're known for having some of the highest annual fees. They're also known for having the highest transaction fees. So when you, have you ever seen these signs at a business? We do not accept American Express.

You've seen those? Oh, sure, because they don't want to pay the percentage. And American Express has fees upward of 3.5% versus a 2.5% with the other cards. So the businesses are saying, hey, we're not going to take the hit on this. The consumer's paying big annual fees. And on top of that, what do you think happens psychologically when you're chasing the points and airline miles? Well, naturally, you go...

We'll put a little more on the card this month. We're going to get it back, quote unquote, with our cash back. So why not? And the problem is the credit card companies love this. There's a reason they're promoting these so heavily. They can devalue the points at any time. There's a reason they've moved from cash back to points. Because what is 100,000 points? Well, it's like two grand.

And yet your brain goes, it's like Chuck E. Cheese. You remember going to Chuck E. Cheese? Of course. That's why it works that way. You got a thousand tickets and you're like, oh man, I'm going to get the boom box at the top. And they go, nope, you get a sticky hand. You get a pack of sweet tarts. Sweet tarts and a sticky hand is what you're walking away with. The sticky hand. And you still think, I'm winning. Oh, that's funny. So Nick,

Truthfully, as a guy who had the, I had the American Express Delta card back in the day, Ken, and the Discover cash back card when I was 20, in my young 20s before I knew the Ramsey plan. And I thought I was winning because I was playing these games and yet I was not moving anywhere financially. I was in fact going backwards. And once I cut up the cards, used my own money, I created my own reward system because I was way more cognizant, way more intentional with the money. And I

I created my own rewards. I was able to save $2,000 to buy some flights at the end of the year by getting on a budget and using my own money. So simply put, the juice ain't worth the squeeze. The long answer, you can go read the credit card chapter in my book, Breaking Free from Broke, where I talk about all of this at length. Hope that helps. Yeah, good stuff. Thanks for the question. All right, let's go to the phones. Jonas is up in Los Angeles. Jonas, how can we help?

Hi guys. So I'm going to achieve Baby Step 1 by August 1st. After starting Baby Step 2, when should I pause to save for a basically guaranteed and necessary professional move? How much would the move cost, do you think?

Um, it varies. Um, I'm not taking any of my furniture wherever I go, but I'm in early career academia. So I'm thinking three K is like the barest minimum to potentially get me across the country and start over wherever I end up. Uh, is it traditional in the academic world to offer when they hire someone to offer some type of a moving bonus?

It depends on the position. If it's a tenure track position, yes. If it's like a visiting lecture position, usually no. And what are you going for? I have everything because of my field. I don't get to be too picky. Well, why make this move then to be a visiting professor or whatever it's going to be? What's the upside for you versus staying where you're at? I can't stay where I'm at.

here in my position here and it does not renew. So I have to apply for the job, like academic jobs this fall and then I have to move accordingly. And professionally it's better for me to leave my home institution where I got my PhD, go somewhere else and kind of get some distance and then pop around. It's a weird job market. Okay.

Well, okay. So George, what do you say? He thinks he's got about $3,000. We're estimating about three. Let's round it up a little bit. Let's say three to five, George. What does he do? Well, you've got a thousand already with Baby Step One. And so if and when the job comes to fruition...

I would say let's pause the steps and let's quickly save up that cash. And that might mean selling stuff, might mean working extra, side hustles, whatever it takes to come up with that difference to get you across the country. But I would also tell you I would do my best to negotiate and say, listen, I'm going to need as part of this job offer some relocation money and negotiate that in on the half of it.

Exactly. And I think they should be willing to help. If you're a great candidate and you seem like a real sharp guy, they should offer something with a cross-country move. We lost him. I think he's flabbergasted by that. I think he was stunned by the level of detail you gave him there. All right, let's go to Cheyenne. Can I just tell you something, George? I've never been to Wyoming. I heard it's beautiful. I hear good things. And I got a little excited when I saw Cheyenne, Wyoming on there. Dave is there. Dave, how can we help?

Well, yes, sir. Our household income is around $900,000 a year. We live on $200,000 of that. We don't have any debt. I hope not. I was going to say, that was what I was expecting you to say when you're socking away $700,000 a year. That's pretty good. Well, we've been married 12 years and not had debt since our third year of marriage. Way to go. I assume your house is paid for as well. Yes, correct. Okay.

I want to know how to maximize our retirement savings with the greatest tax benefit. And at that income level, can I contribute to a mega Roth doing the back door? So you've got a few options and this is for any high income earners out there. You don't have to make $900,000. Even if you make $250,000, these might be options you can look into. So you do have a 401k through your employer?

No, I'm self-employed. My wife has a 401k through her employer. Okay. As someone who's self-employed, are you doing any investing through that? Have you set up a solo 401k or a SEP, anything like that? No, I'm just contributing, I think it was $7,500 to my, I have a Roth account, which I've not contributed to lately. I have a traditional 401k that I rolled over.

And then I have just an individual brokerage account. Okay. And so I've just been putting $7,500 a year in that from myself. Well, you've got to be doing a backdoor off IRA with making that kind of money.

So I need to do that. That is an option. You need to, legally. You cannot contribute to a Roth IRA with that kind of income. What you can do is use after-tax money to fund a traditional IRA, and then you can immediately convert it to a Roth with no penalty. So I'm going to set you up with a team because that's what you need. With this kind of income and this kind of money, you don't want to play games and try to just DIY it and hope for the best. So number one, go to RamseySolutions.com and click on Trusted Pros.

Number one, you need a great tax pro, and we've got those. Ramsey Trusted Tax Pros at ramseysolutions.com. They're going to help you minimize taxes with that kind of income. The second thing you need is a smart investor pro. These are the investing pros we trust to help our folks navigate the wealth journey. And it's not just choosing funds. There's a lot at stake here when it comes to tax planning, estate planning, college planning, you name it. And so they're going to help you figure out the options that are right for you that are legal for you to take.

But I'll tell you just on a quick radio call, of course, filling up the tax advantage accounts is going to be your best bet. So Roth 401ks, anytime you see Roth, that's great. That's after-tax money, grows tax-free. The next best bet is to look into a backdoor Roth IRA and a mega backdoor Roth, which is where you use a 401k and contribute after-tax money into the 401k, and then you can roll it over, similar to the backdoor Roth IRA. Beyond that, do you guys have an HSA, a health savings account?

My wife does to her employer. I do not. Okay. So with that HSA, you can also contribute there and beyond a threshold of about a thousand bucks, you can invest. And when you're 65, that can turn into a traditional 401k essentially. You can use that money for things outside of medical expenses. So beyond all of that, the brokerage account is your best bet where there's no tax advantages, but there's no income limits, no contribution limits. Yeah. That's the spark notes. But again, reach out to that team, Ramsey solutions.com and they can help. Yeah.

Yeah, a smart investor and a tax pro would be absolutely your number one option here. Good problems to have. Oh, yeah. You're going to love it. He's going to love the plan they developed for him. So really good stuff. All right, that's going to do it for this hour. Thank you to George Campbell. Thank you, America, for listening. This is The Ramsey Show.

Hey folks, Dave here. And I know some of you listen to the show waiting for a call that answers your specific question. Maybe you need help with budgeting or investing or saving your emergency fund, but wouldn't it be great if you could get the answers you need right when you need them? Well, I got great news for you because you can, when you download the Ramsey network app, you get our advanced AI search that lets you easily find the calls that matter to you.

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Just search Ramsey Network in the App Store today. Welcome, America. This is the Ramsey Show, where we help you win with your money.

When in your work and when in your relationships, the phone number to jump in is 888-825-5225, 888-825-5225. I'm Ken Coleman. George Campbell is with me. George will be our money expert today. And as always, I am your work and income expert. And that's why we are here for you. We want you making more money, saving more money, investing more money, a lot more money.

ultimately so you can live the way you want to live. I'm going to tease this coming up in just a couple of segments this hour. I got the green light from the powers that be, George. They're taking the governor off of me, you know? Like, you know, a governor keeps the golf cart from going too fast. Oh. And then we're going to talk a little politics. We're going to take on one single issue that I believe

Every American can get united around. And that we should be talking about. And we need to be talking about more. And in light of the presidential race and as wacky as it's been, holy moly, July's been a month. Feels like a year. It's been the longest month. So that's coming up. You do not want to miss it. Trust me. And for those of you that are getting squeamish, don't be. We're not going to take on that. I don't think you can be offended by this. In fact, I would challenge you to try to be offended by what I'm going to say.

How about that? So we'll see. That's coming up. But first, we go to New Haven, Connecticut, and that's where Charles is joining us. Charles, how can we help? Ken, George, it is great to be able to talk to you guys today. So quick question. My wife won't let us let go of the last credit card, and I just need your help convincing her. What is her reason? She kind of likes the buffer of it, you know, just...

pay it off at the end of the month. She kind of likes the thought of the safety and the travel. My friend's gotten stranded before, and all he had was a debit card, so he wasn't able to rent a car to get home. All right, question for you, Charles. Question. Yeah. What's the limit on this one card that you guys have? What's the max you could charge on it? Oh, I don't know, about $5,000 or so. I got an idea. Yeah.

I'd come up with $5,000 and say, babe, I have replaced the comfort of the credit card with the absolute max that we could borrow. And so I've got an additional five grand in our emergency fund. That's why the emergency fund exists anyway. But I just, George, I've long since wanted to answer this question this way, and I haven't had an opportunity to. It hit me not too long ago.

So if it's about the actual security, let's go put the cash of the max amount that you could borrow, and then I would close the account, and I wouldn't ask permission.

Okay. I'd cut the card off. There's some really simple work around, Charles, and I could hit you with, here's what you could do, here's what you could do. The truth is, this is emotional for her. It's been a security blanket for a long time. That's right. And she's not yet convinced herself that she has become the bank. You guys are in a place where you have the money to cover an emergency, right? Right.

So if I told you, well, have your account, let's say you can open a separate checking account. Like, for example, Charles Schwab has one that's like the investor checking. It has a debit card. You can use it internationally. There's no fees. And you could just use that fund for travel and never touch your actual bank checking account. You see where I'm going with this? Yeah. Use as much as you need for travel and you have your checking account separate in case there was fraud for backup. That's a solution. What would she say to that?

Um, I, I think that she might go for that. And let me tell you the reason that it's only maybe is she can't stand the Ramsey plan. There it is. Ding, ding, ding. See, and that's exactly, by the way, what I was doing, Charles, was being a little sneaky by addressing what she's presenting as the problem. And then when we provide a solution to that problem, we find out what's really going on.

And this would reveal that, George. Both your idea and my idea would reveal, oh, it's something else. I just don't like those people. So why doesn't she, what really ticks her off about the Ramsey plan? Probably you.

Actually, that would track. No, actually, George is who got me into the Ramsey plan. I didn't like it at first either. George really, he's a real good salesman. I know. I know. I was just thinking that maybe your wife, I thought maybe your wife didn't like you. I was trying to come up with some. Well, maybe your wife would like Rachel. Is that a good, you know, Rachel's inoffensive. Everyone loves Rachel. Yeah, exactly. Yeah. So why do you feel like it's restrictive or intense? What is for broke people?

Well, that hurts my feelings. It is for broke people. It is. And it's for rich people. Well, they become rich. Right. Luckily, we skipped Baby Steps 1, 2, and 3 when we found Ramsey, and she just feels like it isn't for us. Oh, because you were already technically in our Baby Step 4 when you found us?

That's correct. Okay. So what is your household income? We have to claw through one, two, and three. Right now it's 120. Okay. Are you guys exactly where you want to be financially? Do you think you could be doing any better? Or is she like, hey, we are crushing it. Don't mess with it. It ain't broke. She doesn't actually, I feel like she doesn't understand how well off we are.

Is she also financially responsible, or did you kind of... She's extremely financially responsible. I'm actually, I'm the nerd and I'm the recluse. So what are the chances that she would not pay off the credit card balance every month? I would say zero, but it actually happened a couple months ago on her own card. See, see.

So she got bit by the snake and she says, no, no, no, the snake is still my friend. Yeah. Well, it was my fault. We're best buds. I mean, it's not the snake's fault. I picked it up.

Right. It wasn't a full bite. It was just it snapped and barely missed her. It was only like a $10 balance or something she forgot. You know, it wasn't big enough to really leave a mark. So here's the deal. Charles, I'm going to send you a copy of Breaking Free from Broke. And in there, I want her to read the credit card chapter specifically. In the credit card chapter, I cover the eight archetypes that I found of credit card people.

the perfect spender, which is the person who says, I pay it off in full every month. I use it just like a debit card, right? The rewards redeemer, which I never pay for flights and hotels. I love it. I think she's more of the fraud protector. So number one, she says credit cards are safer. So it's really smart.

On top of the world traveler. What if we're traveling and it's just more convenient? And what if, what if, what if I need to rent a car? Which, by the way, you can do with a debit card. Then there's the emergency shelter, which she's also this person. I need my card in case of emergencies. What if something happens and we need to put it on the card? Well, that's kind of a non-starter with me when you guys already have an emergency fund, right? How much do you have in savings? Right.

Right now we have a $10,000 emergency fund, and then we have on top of that around $17,000. Oh my goodness. And she still thinks this is the path. Is there more? Is it a fear thing? Because another one's the fear tranquilizer who says, having a credit card makes me feel more secure. I feel like part of it, we had a lot of fraud on one of our bank accounts.

So sometimes she brings up, oh, she doesn't like the bank we have. Switch banks. But, yeah, I feel like that'd be a... Put a freeze on all of your credit. Switch banks. Yeah, but here's the thing. We've got to address this. And the problem's solved. We've got to address the relationship piece. So you're going to have to patiently...

and methodically address all of these concerns for her. Or else you guys are going to still be at odds over this. This is not, you know, I said this earlier and I was being glib and I need to retract it. You know, for your marriage, I wouldn't just go behind her back and turn it off. I want to make sure I was kidding around about that and I wanted to correct that. And because here's the reality, this is about vision casting.

and you're going to have to just walk her through these fears. Hang on, we'll get you George's book, Breaking Free from Broke.

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George Camel joins me, 888-825-5225 is the phone number for you to jump in. We'd love to hear from you. And boy, boy, am I getting fired up for our next segment. More on that a little bit later. Craig is going to start us off in this segment. Dallas, Texas is where he is. Craig, how can we help today?

I just want to say thanks for picking up my call. I'm a new Ramsey, I guess, member here. I just started listening like about two weeks ago. Wow. Awesome. Wow. You're like the hot now sign at Krispy Kreme. I mean, fresh. I love it. Yeah. Pretty brand new to all this. My question is, I have a spreadsheet of mine and my wife's budget and

And I put all of our bills and all of that stuff into it. This was probably about two or three months ago. And my mortgage comes out to about 48% of what we bring home every month. Oof. That'll leave a mark. Hold on, George. I'll get the Tums for you. I actually got some heartburn. Yeah, a little heartburn. All right. So what is the mortgage and what is your after-tax monthly income?

The mortgage is $180,000. It's $1,428 a month. My wife, she brings home about $2,000 a month, and I bring home about $29,000 to $3,000. Okay. So altogether, we're talking $5,000 and the mortgage is $1,500 for $1,428. What do you guys do for a living? She works for the state of Texas, and I'm an electrician.

I don't know if the numbers right here, but what you just told me would mean your mortgage is 28%. The mortgage is 1428. You guys are bringing home five. Did I miss something? Oh, well, maybe I looked in my, or maybe I have a wrong calculation in my spreadsheet, but I guess that leads to my question is like, we don't really have much debt. We have about $1,500. We have about

three months of our expenses saved up, and I was just basically trying to figure out, like, it feels like we're not saving anything any month, but I don't know if that's because of us or... What kind of debt do you have? We have, like, $1,500 in credit card. Both of our vehicles are paid off. We have about an $800 medical debt that we're paying off. Okay, so if you paid off the medical... You have savings right now? You said you have three months of expenses saved? Yes, we do. What's in savings? We have...

We have $16,000 in our savings right now. What are you doing hanging on to the debt? Why not just pay off? I mean, you got $2,300 in debt. You have $16,000. Pay it off today. I guess it's just kind of scary watching that money go away. It's scary watching your money go to lenders every month.

Yeah, that's true. You're actually wasting money making these payments when you actually can get rid of it right away. 22% interest on that credit card, that scares me. Just for information here, how much are you saving on a given month? I mean, it really depends on if... Give me an average. Come on, man. Your last three months, give me an average. What do you think? Saving from just our income, probably basically zero. Okay.

Well, then how did you get the $16,000 saved up? We actually saved it up probably a few years ago, and we've been dipping into it. It was actually more than that. So you're telling me right now you guys are paycheck to paycheck as far as expenses. You have nothing left over when you pay everything.

we aren't necessarily paycheck to paycheck after everything is paid but i mean after like all the bills and groceries and stuff come out we probably have anywhere between 100 and 400 a week

Well, $400 a week, that's $1,600 a month you could be saving. So I think what's happened is you're new to the plan. You guys are just new to paying attention to where your money's going. And you're going, we're making pretty good money, but it's disappearing. And that's where the budget comes into play. So I'm going to gift you every dollar. I prefer that over a spreadsheet because I don't know what your wife is like. My wife ain't looking at Excel.

But if we have every dollar and we're both logged into it, now we're talking. We get on the same page. So I'll gift you that. But the other piece I want Ken to speak to is the income. Is your wife working full time? Yes, she is. Why is she only bringing home two grand a month? Because she works for the state. Well, see, a lot of the money in her paycheck goes towards insurance for us and our kids. What's her gross income and what position is she in?

I don't really know what you would call the position. She works in child support, but her gross is probably around $38,000. Yeah, and so she's just kind of capped. There's not a lot of room for promotion, and even with a promotion in that, it's just not that much money from a state job. So she's what I would call, George, a little bit capped. What I'm curious is, Craig, what's been your income? Give me the last two years as an electrician and what you've made gross.

Anywhere from mid-30s to I'm in the 40s now. Okay. Craig, I'm going to ask a question, and I'm shocked. Are you early on in the trade, and are you not seeing that there's massive opportunities for electricians now all across the country, but certainly in Texas?

I'm about three years in, but we live in a pretty rural area. We're not actually in Dallas. Oh, I see. Okay. So, but you feel like you've got your best option right now? There's no upward mobility or dare I say you picking up 20 hours of side jobs for people and making some money there? I understand you're in a very small rural area, but are you capped out as an electrician where you are?

With where I'm at right now, I think I'm on the upper end of it with where we live. Are you married to Stain in this rural, remote location?

We're pretty invested here. We're right next to all of our family. We grew up in this area and we bought our house here and our kids will go to school right across the road. I get it. So here's the deal. The only way you make more income is if you actually start doing some stuff on the side.

Yeah. So that's a viable option here to get ahead. You don't have to do this forever, but if you want to get ahead more income into a budget that George is telling you to. So here's what we're getting at. Discipline budget and let's bring in some more income. If we can bring in an additional $20,000 a year, that's significant, is it not? Yeah, for sure. Well, that's less than two grand a month for a guy who's a working electrician. I don't think I'm painting too high of a goal, am I?

No, I don't think so. All right, so let's get a bigger goal. So if the number's 30 or 40 or 50...

using George's discipline in the budget here that he's, you guys are going to be in great shape. And you need to prioritize savings. It's not, well, if there's something left over, that'd be nice. It's, nope, we're putting, we're covering our four walls, food, utilities, housing, transportation, insurance. Beyond that, we are putting money away in savings. We're going to invest it in a Roth IRA. If she has an employer retirement program, we're going to put money away there. And part of this is just also deciding we're never going to go into debt again because it's robbing from our future. And we're trying to build for the future. Yeah.

And so that's one line in the sand on top of the budget, on top of getting the income up and making savings a priority. I don't think this house is what's killing you guys. I agree. Okay. Well, that's definitely a plus because we really love where we live and we're going to try to make it work how we can. Yeah. So, and by the way, the numbers you gave George were correct, not the numbers in your spreadsheet. Is that right?

Yeah. Okay. Then so he ran the numbers. You're fine on that. And Excel lied to you. So go check out every dollar. It's going to be much easier to use. You type in your income at the top for the month. You lay out all of your expenses for the month. It'll show you if it's an every dollar budget, meaning income minus expenses equals zero. You want to give every dollar a job. And that includes the savings goals, the giving goals, the spending goals, everything.

And I think you guys can make this work in a rural area. It doesn't sound like you're living a lavish lifestyle out of control. We just need to dial a few things in. And again, this is a great example of some people who, by the way, I love this, you know, they go, this is where we want to be. So when you're in a smaller rural area, you are limiting your income possibilities. So then you're going to have to deal with that.

And maybe you have to do some things different for a short season, but that is a reality. So, you know, at that point, you got to be very, very creative. But I think the budget, they're going to be okay. I really do. They were able to save up money before they can do it again. All right. Thank you for the call, Craig. All right. Don't move. When we come back, the one issue that every American should come together on and vote for this November. I'll unpack it next.

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Welcome back, America. This is the Ramsey Show, where we help you win with money, winning your work, and winning your relationships. I'm Ken Coleman. George Campbell joins me. And I've been telling you about this throughout the show, and so here we go. We are in a... We have some international folks with us today, by the way. We have some folks from Israel, Australia, and Scotland. And so I'm sure they're paying attention to the...

Unbelievable headlines that we've seen come out of our political coverage. I mean, what a month July has been. Hello. An assassination attempt. And then a sitting president deciding to bow out of a re-election race. You just don't see those headlines. And it's been crazy. And so obviously the election is coming in November, George. And I think there's one singular issue that the Ramsey Show needs to be addressing.

I think there's one singular issue that Americans on the left, Americans on the right, Americans in the middle, all parties, all faiths, all creeds, I think this one issue should be the dominant issue in this election. And George, I'm sad and I am a bit worried that it's not.

And so we're going to unpack it today. What a tease, can I just say. That was, well, let me tell you something. It is a growing problem, and it is growing by the second. The issue that I believe that the American people should unite on is the national debt. Here we are at Ramsey Solutions, where for decades we have helped people get out of debt.

And we talk about it through scripture. We talk about it through grandma's common sense ways. We talk about it through the baby steps. And it is such a freeing thing for individuals when we talk to them, George, across the studio and into the lobby on the debt-free stage. And we hear their stories and they culminate their story of getting out of debt by screaming, I'm debt-free.

And we talk to people and say, what does it feel like? And it just is such an unbelievable part of our show. So we must discuss the national debt. And we have a massive audience. And so I'm asking this audience to hang with us for a few minutes here as I discuss the national debt and actually why it should be bothering you. Because there are five specific outcomes that would affect you and me and George today.

If we were to default on the national debt, which we've come dangerously close to, by the way, this is not like a thing that, oh, it'll never happen. Yeah. We've been on the precipice multiple times. We have. And we've also seen the national debt explode. I asked the team, as we speak, the national debt is growing. So we're going to throw it on the screen for our listening audience. Get the national debt calculator. We are right now, George, at $34,960,000,000,000.

in debt, and it continues to go up. They're literally, if you're watching right now, you can see it on the screen if you're listening, this is out there. They have this at bus stops in Washington, D.C., by the way, where it's literally going, and it's a ticker. This is like the opposite of Xanax. This is very anxiety-inducing. You just see those numbers grow at that alarming rate. We are just... And we owe money to a lot of people. 100%. Which puts us in a precarious position. So before I break down the five factors...

They're the five ways this will affect you. I want you to understand something. The reason that we, the people, you, me, George, we just don't pay attention to this is because we somehow think the federal government's got this ultimate insurance policy or that they're all going to come together at the last moment of crisis and figure it out. But folks, if you pay attention to the headlines...

Year in and year out, we see Congress deal with what we call raising the debt ceiling. They aren't doing anything about it. It's like raising your credit card limit every year because you can't get your spending under control. So here we are on the doorstep of $35 trillion. Now, some of you think this is not an issue, Ken. You're being a little dramatic because it's the Ramsey Show. No, I'm not. Here we go. Five very personal outcomes.

If the American people don't do something, say something, and I'm going to tell you at the end, by the way, what we can do. There is a very practical way to deal with this. But first, how would it affect you, George? Number one, interest rates would spike through the roof. The reason for this is because investors, hello, countries that have loaned us money,

effectively investing in the American economy, would demand higher returns because of the risk, because of the default. So the cost to borrow goes way up. For everybody and everything. You think interest rates are uncomfortable now? We're talking about double-digit interest rates overnight. So credit card interest rates and mortgage interest rates, student loan interest rates, car loans, everything. Number two, the stock market

would probably experience a significant volatility. Think, am I saying crash? Can't guarantee this. Massive decline in the stock market. What does that mean to you? Tell them, George. What does that mean to them? Well, when people get spooked, including the big-time investors, they sell off their equities. And when they sell it off, the stock price drops.

goes down. But how does it affect the average American person? Well, you look at your 401k and we all remember, you know, the 2008 crisis or whatever. You know, we saw this just a few years ago. That's right. My retirement just got cut in half because of what just happened with the market. Right. Number three, you think inflation has been bad over the last couple of years.

If we default on the national debt, inflation skyrockets. Everything skyrockets. It's nasty. It's ugly. You're talking about Depression-era issues. Really, really ugly. Really, really scary. Number four, government services. A default could force the government to cut spending.

Some of you go, yeah, it's about time. Until you think of the social unrest of government entitlements and government programs being slashed. Social security. And not being able to be delivered. That's exactly right. So you just think about that. And then the fifth factor is unemployment. Now you're talking about depression era stuff where literally people could not get jobs. There were not jobs to be had. So am I painting a bleak picture here?

Sure, but it is a picture that must be painted for us to understand that while we here at the Ramsey Show are saying, hey, control what you can control and get rid of your debt, let me just tell you something. George and I are debt-free, and we would be affected dramatically if

by our government defaulting on its debt. We are racing towards $40 and $50 trillion of debt, folks. And all it takes is one major country who we have a lot of debt with to call the debt in. And the very story that draws people to Dave Ramsey could happen to this country. This is not a joke. So why do I bring it up? Because we have a massive audience.

And we have a massive responsibility. In this election year, George, I am proposing that the issue that the American people get behind is removing the national debt, eliminating the debt, and going a step further. So how do we do this? George Aspey says, so what do we do? Well, many states in the country have in their state constitution a requirement for a balanced budget. So I grew up in Virginia. That is one state where in the actual constitution of the state, the Commonwealth of Virginia,

you have to balance the budget. A.K.A. you can't spend more than you're making as a state. This ticker the team just put up here where we're barreling towards $35 trillion can't happen. And so how would we do this if we the people, to Congress, to our senators, demanded a balanced budget amendment because it would take that kind of support. The American people would have to be in absolute unity in massive numbers

And then you can get an amendment to the Constitution. I won't do a whole discourse on how to do that. So we need like a national rice and beans type diet here to spend less than we make, which we joke about Congress spending like crazy, writing new bills. That's right. I think we the people need to say, you know what? Instead of fighting over social issues and fighting over insults and accusations, we ought to go, you know what? The thing that threatens us the most is the actual national debt.

And we need an amendment to the Constitution. Well, for people, Ken, going, you guys, this is far more complicated than you're giving credit to. It really is this simple. We are spending more than we're taking in. It's that simple. That's how we got here. I could take Mr. Camel to Washington, and I could have George in a room with all of the bean counters in the federal government, and George could actually balance the budget. I know you could.

We could take every dollar and hand it over to our bureaucrats. I think every dollar would break if we put $35 trillion into our debt category. So there it is, folks. I bring this up because I think we should be paying attention to this. A balanced budget amendment to the U.S. Constitution would, in fact, force the politicians to get our country debt-free. That would let us all sleep well at night. Why don't we think about it? Let's think about it. Tell us what you think. Can I say one more thing? I yield my time.

I think I already made you yield it, whether you wanted to or not. This is the Ramsey Show.

Welcome back to the Ramsey Show America. My fellow Americans. I forgot to say that to start off the rant in the last segment. I was hoping you'd weave in constituents. Well, I can. It's one of my favorites. Oh, instead of listeners? Yeah. It's a little stuffy. Hey, let's get to the phones. 888-825-5225. He's George Campbell. I'm Ken Coleman. Thrilled to have you with us. Daniel starts us off in this segment in Houston, Texas. Daniel, how can we help?

Hey, thank you for taking my call. You bet. So the dilemma I have right now is that me and my girlfriend are looking to buy a house within the next year, probably starting summer 2025. And we're debating whether to go the conventional route or go the FHA route that Grant Cardone and many other real estate gurus preach. Yeah, you had me at Grant Cardone. Guru. Okay, what is causing you to want to buy a house when you don't have any money?

I'm sorry? What is causing you to jump into this? Because FHA loans are first-time homebuyers who are broke. My girlfriend's going to graduate from college around May of next year, May 2025, and depending where she gets a job, that's where we'll be looking to buy a house and settle down. Okay. And what's the urgency to buy a house versus rent until you have enough money to do this with a little bit more peace and equity?

The fear of, I guess, throwing money down the drain. Let me paint you a different picture of fear. You move into this house with an FHA loan, meaning you have to borrow the rest of the money because you're putting basically nothing down with these loans. That's right. Now you have a giant mortgage that you can't afford. That's 64% of your take-home pay, and you don't have money to pay the rest of your bills. Do you see that side of the fear?

I do. I do. And the problem is your risk meter gets broken when you follow these gurus out there who are saying, bro, here's how you get this house and you're going to rent it out. You're going to buy 10 more houses. By the time you're 30, you'll have 100 houses. That's pretty much what they're saying out there. Am I correct?

Yes, sir. Okay, so we've got to turn off those inputs because they are not there to bless us. They want you to buy a course and go to the 10X event where you're going to 10X your mindset and all this crap, right? So that you can have a yacht too. It's important to point that out. So that aside, here's my beef with the FHA loan. So this is a Federal Housing Administration loan. It allows people who don't qualify for a conventional mortgage to still become homeowners. So you can put as little as 3.5% down. Okay.

and they have more leaning credit requirements and allow a higher debt-to-income ratio. Here's the problem. Those borrowers are required to pay an upfront mortgage insurance premium, MIP, of 1.75% and an annual premium of anywhere from 0.15% upwards of 0.75% for the life of the loan. The only way to remove that is to put more than 10% down. Even then, you still have it for 11 years.

And so there's a lot of downsides here. And most people that are trying to do these loans are simply not in a place financially to make homeownership a blessing instead of a burden. And I want you to do this the right way. And another way you're going to do it the right way is with not buying a house with someone you're not married to.

We have seen too many times, Daniel, on this show where people call in and say, hey, I bought a house with my girlfriend. It didn't work out. And now it's super messy because it's like who gets to keep the house and how much equity because I put this much down and she didn't. Do you see where this could go south? Yes, absolutely. And so, number one, I would rent. I'm not going to comment on your situation, but until you're married, I would not buy a house together.

Okay. Can you promise me that for the good of the group? Okay. And number two, don't buy a house until you're debt-free with an emergency fund and a solid down payment. I'm not saying you have to have 20%, but you have to have enough that you've got some skin in the game to where you're not underwater on this house when you move in.

Okay. Now, I do have a follow-up. And I understand you just said not 20%, but at least enough. What is the fine, the sweet spot, at which point you're not, you know, I'm not missing out on the cost of opportunity on taking extra money and investing it in the S&P 500 or et cetera, a list of other- Do you have any debt? I have about $20,000 of student debt. Okay. How much money do you have saved? $50,000. Great. Why aren't we paying off the student loans today?

Because... Let me guess, the opportunity cost of investing that in the market. Yes, sir. What's the interest on your student loans? About 4.6%. Okay. And the 50 grand is in a savings account making 4.7%? No, it's in the market. Then you don't have $50,000 saved. You're playing with $50,000. If the market goes down 20% this year, you don't have $50,000. Right.

Okay. So that, that one alone frightens me that you have nothing in liquid cash. So here's what I would do if I was in your shoes. This is one man's opinion, but this is the Ramsey plan that millions have followed to a path of peace instead of a path of 10Xing your mindset.

Here's what you're going to do. You're going to sell enough investments to pay off the student loans. You're going to sell enough investments to give you a three to six month emergency fund. And then whatever's left becomes your home down payment fund. And you're going to move that into a high yield savings account because you told me a house is not a five plus year goal. It's like a one plus year goal, right? That's right. Let's play this out. Elections coming up. Everyone freaks out. Stock market takes a dip. You're 50 turned into 30.

temporarily, but still. You want to buy a house next year, now you're, you thought your down payment was going to be 50, now it's 30. That sucks, doesn't it? Yes, it does. And so I'm trying to give you a path of peace where you're moving slower, but you're actually going to get to where you want to go without falling flat on your face. So I know I sound like the old guy in the room, Daniel. I think you're a real sharp guy. The fact that you've come this far, you've saved this much, you're investing, I love that you want to grow your wealth, but there's a few prerequisites here that I think you should knock out. Yeah.

And Daniel, I'll just add this. George said it, but I just want to drive this point home. By keeping the student loan out there and just keeping it like it's a pet...

And then putting all that money in the stock market, you know you've doubled your risk. You've not removed any risk. You're not playing the smart. You've actually doubled your risk because you could lose that money, as George said. Some money, any money to me is so ridiculously risky, and you still have the student loan hanging on to you, dragging it around for years and years and years. So I would just really implore you to think through that.

And because that's not what you're hearing on TikTok and Instagram, because by the way, we're not selling you a course to tell you that we're telling you now. And I just think it's really important not to get wrapped up in that. You're looking at the short term gain. You're not looking at the long term play. And the long term play is you're going to be wealthy if you get rid of all the debt in your life. And you got a house that's an appreciating asset. And there's no risk in any of those moves. None.

So I hope you understand that. I really do. Because I know that's countercultural, what we're saying.

I understand. I understand. All right. I'm going to send you a copy of my book, Breaking Free from Broke Daniel. In there, I unpack credit scores, credit cards, student loans, mortgages, including the FHA loan and all of that. And then I'll show you that path that I'm talking about. And I hope that I convince you to go down that path because I don't want you calling back saying, I bought a house with my girlfriend. It was an FHA loan. We're underwater on this thing. We're breaking up. What the heck do I do?

And we're probably going to take that call in the next hour. So this is not a crazy land. This is going to happen. This is a reality that we face. And I just want more for you than that.

So if anyone out there, they want to buy a home the right way, you want to make this a blessing and not a burden, go to ramseysolutions.com slash real estate. Our team has created a hub with tons of free tools, tons of free resources to help you reach your home goals. Whether you're wanting to buy, you have a home you're wanting to sell, you wanted by investment property, you want to find a great real estate agent. We have it all in one place for you, including some great calculators as well. So be sure to check that out. ramseysolutions.com slash real estate.

You know, it just occurs to me because I think he was absolutely, you know, processing what we're telling. Don't know if he'll do it. Don't know if he agrees with us. He was processing it. But it is so not fun compared to what he presented us with. What he has heard up to this point is so much more exciting. It's not sexy. And fun. And it's like, ooh.

But it is not a great long-term play, and it is rife with risk. And yet it's being packaged as, you're an idiot if you don't do this. And that's what's really tricky about this stuff. There's a lot of ways to go about this, but we found this way actually works. No matter who you are, what your income is, but you've got to get your risk meter back intact. There you go. Good hour, George Campbell. I'm Ken Coleman. This is The Ramsey Show.

Welcome, America, to the Ramsey Show, where we help you win with your money, win in your work, and win in your relationships. 888-825-5225 is the number. 888-825-5225. I'm Ken Coleman. George Campbell is with me. And we are here for you. Let's get it started with Natalie in Miami, Florida. Natalie, how can we help today?

Hi, guys. I'm in a major bind with my husband. We were doing pretty well at one point, and I guess with everything that's going on with the world, his business is not doing as well. I don't work because I just had a baby, and my husband is doing terrible at his job, and now he has to do Uber.

We have Financial Peace University. We know about saving and putting money away, but we don't have the money to. I want to work, but we feel as though bringing my child to child care would be an extra expense. We just don't know what to do at this point. Sure. Tell us about what do you mean when you say he's not doing well at his job? Does he own his own business?

Yes. He used to do property acquisition. He worked in real estate. He sold and bought land, and he was doing very well. At one point, he was doing about $200K or so a month, or I'm sorry, a year. But now, I guess no one wants to buy. I'm not really sure how that works, but no one's really buying anything. And he only closed one deal this year, and I

I think April, and it was like 15K. That used to be consistent, but now it's not. So we've only had one closing, and it's just been really, really bad for us. Well, he's got some experience in real estate, correct? Yes. In sales. In sales, too. I just would, if he was on the phone, the first thing I'd say to him is, listen, man, the economy and demand can change. Something has happened there, but

And I honor him, Natalie, for jumping in the car and driving Uber, but it's just a horrible exchange for money for his time when he's got so much transferable experience and skill.

And I think he's got to be looking at high paying sales jobs or at least jobs that have high levels of commission. He just has so much more to offer both of you and his ability to earn money. And Uber is not it. So the first thing is you guys have an income issue, not a budget problem because you're down to one income and it's a very small income. Correct? Yeah.

Right. And we have a high debt too. We have like $460,000 in debt. What kind of debt is that? Credit cards. We have our home. We have a HELOC. How much of the $460,000 is your home? $217,000. And what about the HELOC? $149,000.

Wow. And I have student loans, too. Yeah, like he got the HELOC out to try and, I don't know, make it work for his business, but it failed. So now it's like we're all... Well, he made a very risky move, and it didn't pan out because life happens. He's regretting it now. Do you have family around you all? We don't. That's another tough issue. What's your home worth?

I don't know. I think he said like $400,000 or $500,000. Okay. So you guys have $250,000, maybe $300,000 in equity in the home, which is good. What are you doing to pay the bills now? How much money do you guys have in savings? We don't have a savings. We use it all up because we haven't gotten any closings or anything in the past. So are you living off of credit cards right now? No. We're very behind on everything. So you can't make any payments? No.

Barely. Are you going to lose the house? Right now, I don't know. What were you doing for work before you were staying at home with the baby?

I was an underwriter. I was a full-time underwriter. What were you making? For commercial lines. This was like six years ago. I haven't worked in six years. Okay. But back then I was making about... So you were home before you guys even had kids? Yeah, after my first child, he just said, you know, stay home. Okay, so you were second. Okay.

Yeah. Okay. George, I'm going to give it over to you, but I got to jump in really quickly here. Natalie, you're going to have to get very innovative and creative with childcare. I agree. It's not a daycare because that's going to end up eating up a lot of the money, if not most of what you would go earn. But you guys need to get involved in a church. You need to get involved in neighbors. You got to talk to anybody and everybody you know. Say, is there a grandmother that's looking to make a little bit of extra cash?

Because you are going to have to get back to work. You guys are in an absolute...

Big time emergency. And you have to work, which means you find somebody older. My wife and I did this is why I'm giving you an example. Somebody who's not looking to make a bunch of money off of you, but would be very happy to take care of kiddos. You're not worried about them because you know they're in good hands with a grandmama or somebody like that who's raised children. And you know her and trust her. She takes care of the babies for a fraction of the cost of

of daycare, but you have got to work and he's got to get out of Uber. He's only Ubering the graveyard shift. He's not sleeping. He's working two and three jobs, but he's got to take that sales experience and go get a sales job immediately, George. And I don't see daycare as an added expense or childcare. If you're making $4,000 and daycare costs $1,500, well, you still have $2,500 that put food on the table.

And so you're right. If you're not making that much to where it's just a wash, it may not be worth it. But I would want to see you go make 50 grand back in the underwriting world or whatever you were doing, whatever your skills transferred to. Or else they're going to have to sell this house. And then what? That's the worst case scenario is we sell the house, we pay off all of our debt and we rent.

once we have a foundation under us of debt-free with an emergency fund. But I think you guys, your world just got rocked. You were living la vida loca, spending, enjoying your big lifestyle. And we have to choose reality, which is that life, we got to grieve that life. It is over for now. Maybe we'll be there again one day, and I think you will be. But for now, we got to live like broke college kids and just make ends meet, cover four walls, food, utility, shelter, transportation, insurance, and the rest of the debts. If you can't make the payments-

You can't make the payments. The credit cards, tell them, hey, we don't have money right now. We can't pay you. Here's what we can do. But the big thing here is your house. You can't get behind on this mortgage. What's the payment every month? $24.52, maybe.

I believe. Okay. So if you guys aren't consistently bringing home eight, nine, 10 grand, this house is not going to be sustainable on top of your other bills. But I think the key for you guys is looking at reality. It's scary at first, but if you list it all out in every dollar, which I'll gift you guys, that's our treat. One year of every dollar premium to help you through this. You're going to list your income, your expenses, then begins the work of going, what can we cut from this budget? And the truth is pretty much everything.

Yeah. Very little is necessary right now when we're in this phase. And then we're going to look at making more. So how can we spend less? How can we make more? And Natalie, we're also going to give you one session with one of our financial coaches here in the building or wherever we're going to put you with the financial coach, one of our coaches.

because you need to be able to go beyond this phone call. We can't walk through the minutia of some of the steps you're going to have to take. So if you'll meet, agree to meet with one of our coaches, hang on the line. We'll cover the cost. We'll cover the cost of a financial coach to help you out. But you guys can do this. But we're talking about the mindset is absolutely, we are in a five alarm fire and we've got to get out of the fire.

We don't sit there and think about the fire. We get out with everything we've got. We're here with you. This is The Ramsey Show. Welcome back to The Ramsey Show, where we help you win with your money, win in your work, and win in your relationships. 888-825-5225 is the phone number. All right, so, George, I think I know the answer to this, but would you tell people to be on the sidelines right now if they're thinking about buying or selling a house?

Or would you tell them to be in the game? If you're financially ready to step into it, do it. Don't wait for the market. Good. So I knew that was the answer, but I thought I'd tee you up. I don't want to put words in your mouth. You made me look like a hero, Ken. Thank you. Absolutely. And so I want to tell you about our Ramsey Trusted Program so that you can find an agent you can trust to keep you on track with what we teach here at Ramsey and get you the best offer if you're selling and find the right house if you are shopping.

And so we'll send you to some of the top agents in your area who we trust. We've vetted them. And then you get to interview them. And you decide who you want to work with. These Ramsey trusted agents have years of experience. They're going to help you make the right decision. Ramseysolutions.com slash agent. That's if you're looking for that agent for either one of those options. It's Ramseysolutions.com slash agent. Go check it out. All right. Detroit, Michigan is where we go next. Anthony is on the line. Anthony, how can we help?

Hi, how's it going? Good. How are you? Good, good. So my question is, are my wife and I's mortgages up for renewal in about six weeks? And we're going to have just about enough to pay it off. And the question is, should we pay it off and leave ourselves with almost nothing just for a little bit? Or should we wait? What does almost nothing actually mean?

We are going to be left with maybe around like just a few hundred dollars after we pay it off. We're thinking maybe we could. Yeah. That's a little tight for my liking. Now, if you said, hey, we're going to go down to about three months of an emergency fund in order to pay off the house, I'd say go for it. But anything less than that, I start to get, you know, just a little sweat on the breath. There's just no reason to take that kind of risk. Take it right to the edge. You're so close to the edge.

How much longer would it take you if you did what George said and just said, okay, we'll back it down to three months emergency fund? Well, I don't know how the bank would allow us to set up that remortgage. Tell me about this renewal. You said the mortgage renews. Oh, yeah, that's interesting. What is that? I've only heard about this in Canada. Yes, I'm actually located in Canada. That explains it. So it's like you have this rate for five years, and then it moves to the market rate the next five years. Is that how it works?

Exactly, yep. Okay, so why not just, you have the new mortgage at the new rate, and then you knock it out in a few months? They would make us do at least one full year. You have to make one year of payments before paying it off early? Yeah, you wouldn't be able to pay off the lump sum until the year's up. Is there a penalty if you do? What's the stipulation there? They won't take your money? Yeah, you'd have to do the full, full year of the interest payments.

That's the dumbest thing I've ever heard. So that's the penalty, essentially, is one full year of interest. Well, you know, what's left on the loan at that point? Let's say you put as much down as you could. You left three months of expenses. What's left on the new mortgage? Probably like five to ten grand. Okay. So five to ten grand, the interest may not be all that much.

No, it would probably be at around a 5% rate. Okay, so we're talking like a few hundred bucks. That's the work around there, George. So if that's the penalty is you pay a few hundred bucks, I'm okay with that to leave you with peace instead of at risk. Because that's when the emergency hits. You know that, right? Soon as you go down to a few hundred bucks, you have the car repair, the broken tooth, whatever it is. And so that's what I would do if I was in your shoes. I'd pay down as much as I could before the mortgage renews, leave three months of expenses in that

savings account and then knock it out as soon as you can and you pay the penalty because that's Canada for you, man. I don't know what they're doing over there. I'll tell you what, it's just wacky. Wacky, George. That is wacky, Anthony, but I'm proud of you, man. That's amazing. You're so close to complete debt freedom. Well done. I love that. Especially in Canada, which I don't know if you've seen the prices in Canada and the homes and the mortgages, but it's out of control. So to be a debt-free homeowner in Canada, I think is the ultimate flex. Yeah.

Yeah. What's going on? What's going on up there? They're like, milk is $17 a gallon, Ken. This is crazy, but they got the health care they brag about. It's always their thing. They go, hey, but it's free health care. Can't afford to live, but when we die, we're going to have great health care. That's all I hear from Canadians is how expensive housing is up there. So thinking of all my Canadian friends going through it. Oh, Canada. I see where you're going with that, Ken. You see what I did there? Let's go to Portland, Oregon, where Rachel is waiting. Rachel, how can we help?

Hiya. I'm calling in today because I've got a question related to whether or not I should go back to school or what my husband and I should do planning for kind of going ahead and whether or not I choose to leave my current job and go back to school full time. The biggest thing is I'm looking to...

I spend my career, end up in a position where I'm going to be making almost double the income that I'm making now if I return to school and do this three-year program. Tell us what this is. Three-year program to be able to become what? I'm currently a nurse. I'd be going back to school for nurse anesthesia. Oh, okay. Gotcha. And do you have the money for this three-year program? No. How much is it?

Altogether, it's going to be about $147,000. Wow. What school? It's OHSU. Are there any more affordable schools that offer the same program? The big issue is there aren't a lot of programs on the West Coast. OHSU is the only program in the state of Oregon. If I chose to, I would have to go out of state for a different school. So you're telling me if you want to be in nurse anesthesia, you've got to go to this exact school and pay $140,000. Yes.

If I didn't want to leave my home and my husband for three years. Right. We understand it. It's just amazing that that's your... The only option. That's pretty rare.

Yeah. I mean, I can go, I mean, with healthcare, the beautiful thing is I can go a lot of different routes. But for my career, this is kind of where I wanted to go next step. Sure, I get that. Listen, I get it. And I want you to go after the thing that you want. I mean, that's my whole thing that I'm always espousing. My question is, is there a path that would involve a hospital or hospital system development?

paying you or paying the tuition because they need someone like you. Is that an option? I think in more rural areas, states you can move to. My current state, my current position doesn't offer that. The hospital I work for would pay a percentage, but it would be minimal at best.

My husband and I, we do make the kind of income, and we've spoken about this, that we would be able between now and when I started school, we could probably put away about $75,000. Wow. But we'd only be able to come up with about half the money. How long would it do? What was that? All three years wouldn't be due up front, would it?

No, we'd be able to pay yearly, but I most likely would have to stop working. And so the big issue is that in the year before I start school right now, while I'm working full-time, we would be able to save the money, but we wouldn't be able to save any more. Once you're in school, you have an income, you couldn't continue to cash flow. And sorry, I spoke over George, Rachel, and that's why you couldn't understand this. My question is, you're going to save the $75K in a year. Is that what I heard you say?

It's a little over a year. All right, so how long would it take you to save up the entire $140,000? It would probably be just shy of two years, maybe. If I'm you, and you are not going to like this answer, but if I'm you, I wait. And here's why. I think if you make the mental decision...

to say, you know what, I am not going to go into debt. I'm going to walk into this new career where I can make double and I'm not going to owe a cent. No stress, just the work I love, the results that matter deeply to me, and I don't have any stress with the money. I think that if you were to commit to that and say, okay, we think it's going to take us two years, I think the human spirit

somehow rises up and I think you beat the two year mark. And if I told you to wait a year and a half and it would be free, it wouldn't have any debt. Would you wait a year and a half? Yeah. Then I think you can wait two years. George, I'm with you on this. I love this plan and that patience is going to pay dividends because all of your fellow nurse anesthetists are going to be like, what? Debt free? I got 200 grand in debt. How'd you do it?

I'll tell you what you're going to be doing. You're going to get in the car after a day of helping people, saving lives, making lives better. You're going to get in the car and go home and have zero stress with money and paying off $140,000 with interest. Wait. It'll be worth it. This is The Ramsey Show.

This is the Ramsey Show. I'm Ken Coleman. George Campbell is alongside, and we are here for you to help you win with your money, win in your work, and win with your relationships. 888-825-5225, 888-825-5225. From George Campbell to George in Atlanta. George, how can we help? Let's go.

Hey, thank you guys for taking my call. So I've been on a string of doing dumb stuff, and I'm trying to get a second opinion before potentially doing something else that's dumb. Oh, wow. This is a great setup, George. I like a self-aware person doing dumb stuff. That's good. And before you ask the question on how dumb do you think it is right this very moment before you get our opinion?

As it is, I don't think it's a dumb idea. I've been watching you guys show for a long time. I'm on baby step three of the baby steps. Well, I'm working through baby step three right now. Sure. Okay. I haven't completed it yet. So you have no debt? No.

No, I don't have any debt. Well, no, that's actually not true. I do have debt. Let's start with honesty, George. I do have a car loan. Okay. How could you be on baby step three if you have a car payment? Well, yeah, you're right about that. Well, I do have the money in savings that I could pay off the car loan, but I haven't paid off the car loan.

Hence my dumb stuff here. So I'm trying to get a bit of organization. Well, I feel like, George, we're off to a little bit of a dumb and dumber start here. Yeah, relationships are built on trust, George. So we need you to be vulnerable. Yeah. All right. What is your question? Yeah. Well, my question is this. So...

Since the past year or so, um, you know, just a string of crazy stuff. I've taken on extra responsibilities. My hand, my income is like halved. I was making, um, a hundred and $10,000. Um, you know, when I had my transportation business running, um, but you know, contractual stuff changed. Um, and you know, they wanted a whole new fleet of stuff at a house that, um, I ended up having to sell, um,

Um, you know, because it was just, you know, way too much to afford after like my income changed. So you bought too much house. Your business has sort of, you know, take, taking a big dip. What is your income now? Yeah.

$50,000. So $50,000, so huge change in income. Still working for yourself, or is that somebody else paying you? No, so as it is right now, and that's another thing, too, even in the sense of school. Luckily, I got out of college without any debt.

but right now I work as an IT technician. I have a bachelor's degree, even though that's not making too much money on it. Sure. What's your question, George? I want to make sure we get to it.

Yep. My question is, so right now I have my car that is... The car's worth $28,000, loan's $40,000. So, you know, using those numbers. And I'm thinking, do I take... I have about $50,000, $10,000 in liquid cash, $40,000 in the market. And I'm thinking, do I...

As it is right now, put the difference, get rid of the car, and just buy a used car. That way, I won't have a car payment. Yes, that's very smart, George. That's the smartest thing you've said so far. It's the only smart thing you've said so far. Okay, what is option number two? Well, option number two is keep the car and continue making the car payments, but the only issue with that is...

On $50,000, you know, the car payment, insurance, and other bills, like, it's not making any sense. I would agree. Option one, George. George and I are picking door number one for you. So the car is worth $28,000, you owe $40,000. Let's sell it for top dollar and the difference you have in cash. And then we're going to buy ourselves a very reasonable used car. We're talking about like a $10,000 car. So liquidate some of your investments for that.

And now with the money left over, which you said you have like 40K in the market, we're going to liquidate all of it because you need an emergency fund. This is your never going into debt again fund. Right. Now we're at a different place. Think about this. You're completely debt free, no payments. You have an emergency fund of three to six months of expenses. Now any future income we can use to build wealth and invest.

There's that. So this is a complete reset. But it's going to happen very quickly because you're actually in a really good spot because you have all this money sitting out there. You're just not doing the right things with it. And now you'll actually be in baby step four by the way we actually define them, George. Exactly. So what's your car payment? What are you paying all in for this car every month? Right now on this car payment, I'm paying $750,000.

Plus insurance. Insurance is just crazy. It's $500 for insurance. Why is your insurance so high?

Uh, I have no idea. The only thing that I could hear from the insurance companies when I call is that state, whatever they got going on, insurance is high. You need to reach out $6,000 a year. As soon as you're off the phone. Yeah. You're going to reach out to our friends at Zander and they're going to reshop your insurance because you are way overpaying and you're getting hosed.

I think so, too. Unless you've been in a thousand wrecks and this is a luxury vehicle. I have not. I have zero accidents. Okay. $500 a month? Yeah. I literally have heartburn right now. It's my, oh. And they told me that's on the low end of things. Yeah, how did that happen? You're going to go to Zander.com. They have independent agents who will shop across the top companies. You're not going to be with these captive agents that, you know.

I think someone's honestly lying to him, George. Oh, my gosh, George. We're so close to doing things the right way, but you got to just trust us on this, that our way is going to lead to a better life. We are unbiased. We just want to help George. That's it. Wow. That's a lot right there. I'm still having a hard time processing. That's his actual insurance. Six grand a year for one car. That's a lot. Yeah. Oh, boy.

I don't think I pay half of that for two cars. Yeah, but I will tell you, as a father of two teenage boys, it's a racket what insurance is doing to boys and those of us who help with the insurance.

It's unbelievable what they charge. Yeah. I mean, it's all about risk and the insurance world has gone crazy. I just got the update and, you know, my insurance agent at Zander said, hey, there's luckily your insurance isn't going up, which is great considering a lot of people's insurance is going. Oh, sure. Across home, auto, everything. Insurance is just crazy. I think there needs to be reform on that.

How do we do that? Well, again, it's lobbyists and getting the lobbyists out of D.C., getting some good people in Congress to go, at what point do we not get a better deal on our insurance? You know what I mean? We're paying a lot in there. We're not using it that much. Come on. That's the whole point. Someone's making big profits here. Big profits. Speaking of Washington, Washington, D.C. is where Rachel joins us. Rachel, how can we help?

Hi, I've been just like turned on to listening to y'all. So my question is, I'm trying to figure out how I should go about clearing out some past debt that I had. For some context, I had to let about eight of my credit cards go to collections because I was having to pay for an attorney to go through family court. And so with that, it tanked my credit score a lot. And so I haven't been able to pay on those accounts

And I've been trying to figure out, is it worthwhile or in my best interest to begin calling them and set up a regular payment account to pay them off in full for what the balance was originally owed? Or if I should settle and take the 10% or, you know, try to offer them.

10 cents on a dollar to see if that will help. Yes. You should try to settle with them and say, hey, if the balance is 10,000, say, listen, I got two grand. Will you settle this in full and get it in writing that it is paid in full if I give you this $2,000? And you keep doing that across every creditor until this is knocked out. That's the right way to clean up this mess and get your credit score back intact. Now,

You know, if you've been listening to this show, we don't care about credit scores, but having a terrible score will hurt you financially. So as you pay off your debts, your score will improve over time and you get back to being on time with your payments. So do you have any money right now? No, I'm pretty stretched thin and I'm trying to figure out like what type of a side job that I could possibly pick up to try to help create some extra income so that I could be able to start offering some settlement.

Okay. Well, we're up against the clock, but you can go to georgecamel.com slash side hustle. I've got a great quiz that's going to point you in the right direction. We're also going to send you Ken's book, From Paycheck to Purpose, to help you figure out some stable core income along the way. So hang a line. We'll send you those. But here's the deal. There's only two ways to do this. Spend less and make more. And right now, I think we need to do both to climb out of this and get back to some

Stable footing. You can do it, Rachel. We're going to walk with you on this. Just a lot of intensity and intentionality, and you will get on the other side of this. Thank you for the call. We'll be right back. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Coleman. George Camel joins me. We're so excited you're with us. Our scripture of the day comes from Exodus 20, verses 8 and 9. Six days you shall labor and do all your work, but the seventh day is a Sabbath to the Lord your God.

And then our quote of the day from Mark Twain, don't go around saying the world owes you a living. The world owes you nothing. It was here first. So Mark Twain would have been wildly offensive to all the whiners on TikTok who think they deserve a universal income. I'd love to see Mark Twain's TikTok.

I think, I literally think it would be, it would combust. He'd get a follow from me. Yeah, absolutely. All right, let's go to Connie now in Memphis, Tennessee. Connie, how can we help?

Yes, I'm going to try to get through this without crying. I lost my husband of 35 years. We were together almost 40 earlier this year. So sorry. Thank you. We were already at baby step seven. Everything we own is paid for. I'm 61, so I plan to work until 65. Losing him really...

changed my perspective on a lot of things. And I've got granddaddies I want to spend time with, and I want my time to be my own. We have a little over, the IRAs that we had are combined into my account now. And I've got a little over a million in that and a pretty substantial 401k. I've been with

a very large hotel corporation and their legal department for since 95. Um, so, you know, we were preparing ourselves for retirement. Um, but he had a life insurance policy and, um,

It's currently, I went to my local bank and I bought myself some time by saying, you know, I was getting 1.05% and I ended up telling them I really don't want to move my money, but can I earn more than that? And they said for 90 days they were going to give me 5%. So I know I've bought myself a little time. I do want to make my money. I want to be a good steward of this money. Absolutely. I don't enjoy spending it. Well, go ahead and move it after the 90 days.

Absolutely, but I wasn't sure exactly where. I want it to be accessible to me. Absolutely. I want to be smart with it. Again, you know, I've downloaded it about a month ago. Sorry, you broke up, Kona. You downloaded what? I downloaded the app about a month ago. Every dollar or?

Yes, the EveryDollar app. Great. So I know with spending and giving, I'm saving $500 a month. What is your actual income right now, and are you still working for the large chain? I am working. Okay, so what's your income? I am working.

72. Okay. And then do you have, what's the 401k amount? Is that above and beyond the IRA that you mentioned having a million in? Yes. It is 160. Okay. So your total nest egg, is that everything?

Yes. Okay. So we got a little over a million. The life insurance was $175,000. Okay. So let me give you a few tactical steps. And you got a paid four house, so you don't need any of this money right now, which is great. And you're going to continue to work, continue to invest. I would encourage you to try to max out all of your tax advantage retirement options that you have. I'm putting 18% in 401k. I've been doing that for a long time. Wonderful. Wonderful.

So with this $175,000, number one, it's good temporarily in a savings account. But even then, you may want to invest this money into the market. And here's what that could turn into. You're 61. Let's say you invest this into the market. And a SmartVestor Pro, if you go to RamseySolutions.com, click on Trusted Pros, they can help you invest this in the market in a way that's diversified. And it can help you grow at market rates versus a savings account.

And if you have seen the stock market this year, it's hitting record highs just back to back to back. And so like my 401k is up 20%. And so over time, what we've seen is the stock market, the S&P 500, the largest 500 companies have seen about a 10% average annual return when you look at the long term over decades. And so 61 to 71 with that money parked 175k, you never add a dime at 10% return, you'd have almost half a million dollars at 71 instead of 175. Yeah.

So that will at least help add to your nest egg. And so I would encourage you, if you don't need this money in the short term, to invest it for the long term. And you already have the nest egg growing for you. And if we see 10% over the next 10 years, your money's going to double. So that nest egg, the IRAs, will go from $1 million to $2 million.

Wow. And so I think you're going to be just fine if you can learn to live on a budget. It doesn't sound like your lifestyle is out of control. And so you're doing the right things. And I love that you called in with this question. I did one crazy thing. I've...

My daughter and her husband have two little boys, and they're about to have a third, and I did buy them a car. That's sweet. Well, wait a second. Wait a second. Did you feel bad about it? Why do you think that's crazy? No, well, I mean, I bought them a brand new car, and I wouldn't have necessarily done that, but I felt good. I did feel good about it. I don't feel good about spending it on myself, honestly. Sorry.

I'm sorry. That's okay, Connie. Listen. You've been taking care of everyone else your whole life, haven't you? Yeah. You always think of others. You're just a selfless person. Yeah. You're a sweet, sweet person. You paid cash for that new car, didn't you?

Yes. Okay. There we go. We didn't go into debt. We didn't put ourselves in a backward financial position. You still have money. Oh my gosh. You're not broke. You are so set up for the future, Connie. It's unbelievably exciting coming out of this awful pain. I know, and it's sad because I'm doing this by myself. I know. It's not how you pictured it. That's the hardest part. I know. No, it's not. I know. I know. And we feel for you on that. But...

The peace of mind is huge. So, George, on her specific question, I want to make sure, does she put that in a really good savings account because she wants access to it? If you are really, like, I don't want to put this in the market, we have friends over at

Laurel Road. They're an online bank. It's FDIC insured and they've got 5.15% APY right now. You can go to laurelroad.com slash George. That's L-A-U-R-E-L road.com slash George and get an account going there. And that's 5.15% and there's no gimmicks there. No monthly maintenance fees. So you can get to it

Which is what you want liquid so that'll do for now, but I'm saying long term Okay, you don't need the money and so I would still consider investing it into the market with a good mutual fund index fund and let that thing grow for you at an even higher rate over time Yeah, so but again none of this is on fire and so but I like some of that George for Connie taking some trips with her grandbaby do something fun. What have you done for Connie? Yeah, I

Well, we actually did go to Chattanooga this last week. I mean, I work for a very large hotel corporation. So, Colleen, where would you really like to go? Where would you really like to go? And you can't say any place in Tennessee. Oh, no, no. Well, we stopped the state of Colorado for probably the last...

30 years. We've probably been 40 or 50 times. We love the mountains. What was the retirement dream with your husband? Yeah. What was the thing you guys were like, man, when we retire, we're going to do X? Well,

We actually bought a 19-foot GeoPro. It's more of a couple's camper, and I'm actually in the process of selling it or going to sell it because I really can't see myself. I get it. Don't want to lie on it. Connie, I got an idea. Yeah. Connie, I have an idea. I think you should go on a trip with some of your best girlfriends.

Somebody else told me that. Absolutely. I should do that. I think you should. I don't know if I'll ever be ready to go back to Colorado. No, no, go somewhere else. No, this is like the ya-ya sisterhood or the traveling pants or the fried green tomatoes or your best girlfriend. Just go somewhere and have fun. You've been through a lot. You're still grieving.

And some girl time doing something you've never done before. You've got a lot of cash to be able to do a really fun trip and celebrate you, celebrate all that you have still, and just do something fun for you. I just, I really think that's a good idea. And like our friend Dr. John Deloney says, you got to grieve what was the picture of what you thought it was going to look like. And now we've got to have a new picture of what's the next 30 years going to look like for Connie?

And I think that's going to be, you know, sad, but also exciting to start dreaming again. And you're in such a great place financially. And so you guys, both of you created this legacy. And that is something that no one can ever take away from you. Something to be proud of. Connie, thank you so much for calling us and sharing your story with us. I know that was not easy and we're rooting for you. And the sun is going to keep showing up.

and you've got a bright future ahead for you as well. George Campbell, thank you, my friend. Always fun to be with you. Thank you, America, for listening. This is The Ramsey Show. ♪

Hey, folks, Dave Ramsey here. You know, budgeting doesn't have to be boring. You just need a budgeting app that's made with you in mind, and that's EveryDollar. The EveryDollar app has helped millions of people work the baby steps and take the stress out of planning and managing their money. Start budgeting with EveryDollar for free right now. Just go to RamseySolutions.com slash EveryDollar and download the app today. That's RamseySolutions.com slash EveryDollar.