If You Don’t Have Money You Can’t Help Anyone Else
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From Ramsey Network, this is The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Camel, joined by the one and only Jade Warshaw, and we're taking your calls at 888-825-5225. You call in, and we'll do our best to help you take the right next step. That's all we can do. Our best. Let's do it. Tony joins us up first in Grand Rapids, Michigan. What's going on, Tony? How can we help?

Hey, hello. First of all, thanks for taking my call. Absolutely.

I've got myself in such a mess that I am just so stressed out and scared about where the future lies here. I've been watching you guys' show for about a month now, and I'm getting with everything that I can as fast as I can to do what you guys are. Well, I'm proud of you for at least taking a step to go, I don't want to live like this anymore. What can I do about it? No, not at all. What's happening in your world? What's taking place?

Well, I'm a truck driver. Last year, I made about $142,000, and the wife works, too. She probably makes $25,000 to $30,000, probably.

I've got some bad knees and had some surgeries done last summer on both of them. That put me out for about six months, and I went back to work, and oh, about three months was good, but then the next three was back to being bad again. So going up and down a ramp and delivering inside the stores and so forth. Yeah, sounds like we needed a different career. Yeah, so I ended up getting an easier job.

But I went from, like I said, 142 to about a 55 or 60,000. Okay. So now, obviously, since Memorial Day area, it's just went downhill, and I'm so far behind. How much debt do you have? Well, the way I add it up is about 110,000.

So you got $110,000 of debt and now doing the job you're doing now, you guys are still making $90,000. If you're making $60,000 and she's making $30,000, that's still a great income between the two of you. I think it's just that you're not used to it. Well, you probably picked up all these debt payments when you were making bank thinking, well, it'll always be this way. Well, exactly. Yeah, that's the American way, Tony. You're not alone. No.

I picked up two newer, well, I bought one brand new truck, bought a couple years ago, bought a 2018 truck, bought a Ranger Bass boat, which I know Dave really likes that, huh? Well, the good news is you also have a lot you can sell.

When you've got two trucks and a boat. Yeah, I've already got my for sale sign on the F-150. The sign is going on the boat. Okay, tell us the numbers. What's the boat? What do you owe on the boat and what's it worth? Well, it's a Ranger. It's a 525 is what I still owe on it. $52,500? Yeah.

Yes. Okay. And I just called the dealer, and he's telling me that they're going for roughly $40,000 to $50,000. So you're upside down slightly? Yep. So I'm upside down a little bit on that. And then the truck, I owe $12,500 for, and Kelly Blue Book and Edmonds is telling me it's right around...

I think it was $10,000 to $14,000. Okay, good. So you could break even on both of these. Yeah. And that clears $64,000 of debt right there. Exactly. Does that make you feel better? Hey, don't glaze over that because that's a huge thing right there. What do those payments add up to?

If you take the boat payment plus the truck payment, what's that every month? Well, the boat payment is $610 a month, and the F-150 is $704. Wow. Man, my Silverado, I was going to say I owe $34,000 on that, and Kelly Blue Book is saying that's about $20,000 to $23,000. So I'm really upset. You're under one on that one.

But I mean, to know that you could clear, to know that you could get back a little over $1,300 in your pocket just by selling the boat and the truck, that's got to... Most definitely. You know? I'm so ready to do it. Are you behind on any of these payments?

Yes, I am. Which ones? The Bolt and the F-150. I'm about a month, month and a half behind. The Silverado is three months behind. Goodness gracious. Is anybody... Yep. So your phone's blowing up. 1-800-PAY-ME is going hard. Are they coming after you? Are they about to repo this thing? Where are you at?

I talked to them. I made a payment about a week ago, and they said that'll take me out of the repo status for maybe a couple of weeks. Okay, good. Now let's talk about your wife's income. What is she doing right now for work? She's a security guard. Is this part-time?

No, it's full-time. Is she able to pick up extra hours? No, not at that job. Okay, so somebody, one of you guys is going to need to pick up some extra hours doing something ASAP. I don't care if you go over to Walmart and work night shifts. You do some security shifts. Yeah. She actually even called them yesterday. Okay. And if she can even go to work a retail job making $20, well, she just got an $8,000 raise. Mm-hmm.

Because the holidays are coming up. There's going to be so many options. Seasonal work. It's already started. So that's going to be your goal tonight. One of my homeworks for you guys is when you get off the line, you and your wife sit down tonight and make a list of all the places that you're going to apply and make a number goal and say, okay, honey, I want you bringing in $500 extra a month. I'm going to bring in 500 extra. Like sit down and put real numbers to this because when it, the realer it looks, the more motivating it is.

It is. But if it's very vague, you don't really know what you're going after. So make that very crystal clear. What other is there anything else that's on fire debt wise? Because I love that you can sell some things to clear it. Can you tell us about the other 60,000 of debt that you've got? Well, I've got 3,500 on a visa. I've got like 8,000 for taxes for the last three years.

Three years is my guess. Okay, we're going to move that. About 8,000. We're going to put that at the top of the list. That's your next priority is the IRS because they can screw up your life, Tony. So we get current, we get current, we do the taxes. And in the meanwhile, we're selling the boat and truck. That's the order of all of this happening. So keep telling us, what else do you have?

Well, I got medical and collections, but I don't know the amounts of those. I need to run my reports and actually write down everything. You know what I mean? Yeah, let's do some homework. You can go to annualcreditreport.com and pull your credit report from all three bureaus and have your wife do the same thing. It'll take you just a few minutes to do, and that's going to give you guys a true financial picture.

of where we're at, how much debt we have, where do we owe money, and what's the status, and then we can develop a plan. We're going to help you with that plan, Tony. I'm going to gift you one year of every dollar premium so you can actually list out your income, list out the expenses. You and your wife spit shake. Here's the plan. We're going to stick to it. And by the way, those medical... I have a question about that. Sure. I have a question about the dollar...

the Everett dollar, I actually downloaded that. - Good. - And how do you actually start it when you're behind?

Okay, so that's a great question. The same way that you would start it if you weren't behind. You still go through and you add your income to the top because it gives you a space to add all the times you're paid and what those amounts are. And then you go through, Tony, and list everything you could actually spend money on. And George and I did a really great video. It's on YouTube. If you go over to the Ramsey Solutions, Ramsey Show page, you can find it there. You can do it in five minutes. But remember, your homework, get current on everything first. Number two, you're going to settle the tax bill first.

Number three, you're going to sell the boat and the truck. Number four, settle those medical bills that are in collections. Settle them for pennies on the dollar, okay? Don't pay full price. And sell everything until you're what's known as a minimalist. It's very trendy right now, and you're going to be on the other side of this very soon, Tony. We're rooting for you. Thanks for calling in. This is The Ramsey Show.

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Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw. This hour, open phones at 888-825-5225. Well, Jade, we've got an exciting interview that released everywhere today, and you don't want to miss this. A few weeks ago, Dave and I sat down with Ben Shapiro to have a real-life conversation about work, family, building wealth, the American dream. And the interview is now available on YouTube, podcast, the Ramsey Network app, and on YouTube.

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Let's get to the phones. Mary is in Charleston, South Carolina. Mary, how can we help? Good afternoon. Can you hear me well? Yes. Hey, I was explaining that I inherited two houses. We got out of probate beginning of March. And

And the end of March, I got in a really crazy car accident. So one of the houses is total free and clear because he bought it cash. The other one, there's some money. There's a mortgage on it. I decided because I was using all my money to pay for everything that I'm really, really low on funds now.

And so I decided to try to sell the other house. I was going to use it as my warehouse if I'm paying for a warehouse every month. The paid for house or the mortgaged house you're going to use as a warehouse?

But a four house. Okay. Because we got it in like 2018. He paid like $40,000 for it. It was like 10 houses for $250,000 deal. Thankfully, he only bought this one, even though I didn't even want him to buy this one. Mary, who passed away? He was my partner. We ran a nonprofit together, but I took care of him. Okay. And he passed away. He was 80. Okay.

How old are you? I just turned 52. Okay. I'm sorry for your loss. That can't have been easy. Oh, this is a long distance. Because you're in South Carolina. Yeah.

How can we help today? I want to make sure we give you the right next step. What's going on with your finances that you're so desperate?

Are you debt-free now? Okay. But you don't have any loans.

No, sir. No, sir. I hated debt before my girls went to college. I had paid off my student loan and everything. So why are you so desperate to sell this house? Well, because of the car accident, I haven't been working, and we were running a nonprofit, and I haven't been doing anything. So I've been using all of our reserves, all the money I have. So you've been living off of savings, and you have $0 coming in every month. How much savings did you start with, and how much do you have left? $0.

Um, uh, about, um, between 80 and 90. Is what you started with. Okay. Yeah. And what do you have left? Uh, truthfully? Yeah. We're not judging you. No. No reason to lie to us. No, no, I don't. I don't know I'm crazy. You're talking that out. Um, um.

$200 maybe. Maybe two, maybe four. So we're about down to zero. Let's call it zero. And you have no income coming in every month. And you're unable to work? Well, I'm not fit for duty. I know my brain works and I can probably do things, but I can't stand really well. I can't take more than six steps without being out of work. Have you filed for disability?

No, sir. I didn't think about that. I'm trying to get my daughter to suffer disability with MS. You asked about what I spend my money on. I spend my money on my kids because she's no longer working. But you don't have any money to spend on the kids. So we need to either figure out something that you can do.

with the nature of your disability or we need to file for disability for now. Yeah, because here's the thing. If you go and sell one of these houses, even if you have the cash, if you're funding your lifestyle, which is bringing in zero income, and if you're funding lifestyles and enabling, to use your words, your grown children, you're going to blow through that money lickety split and then you're going to have nothing left to liquidate. So to George's point, we got to find something that's work from home, that's call center, customer service, something where if you needed to sit

in your swivel chair for eight hours a day and help people over the phone with your Stanley Cup, you can do that. And I think that you can, like you said, your brain works perfectly fine. You're perfectly coherent. I think that in all of this, like your inside is what's wounded, like your emotions. You've been through a ride with losing your partner. You're going through some things with your grown children. And like, honestly, it just sounds like your life has been turned upside down. And I think that is where the frustration and just kind of that feeling like you're stuck in the mud, right? Yeah.

So I would not turn this into a warehouse. I think we do need to liquidate these houses. What I would do is go to ramseysolutions.com, click on Trusted Services. You'll see SmartVestor Pro there. You need to connect with someone who can help you manage and invest this money wisely because what could happen is...

You sell the houses, put all this money into an investment account that then spins off enough to cover your expenses every month. So that's what I would be doing while filing for disability if you can truly do no work whatsoever because we need something coming in. I don't want you on the streets. And you've got to cut off the... If you've got healthy adult children, you've got to cut off...

this supply. I thought I heard her say that somebody had MS or something like that, but whatever that means, you've got to figure out a way to help them become self-regulatory and that you can do your own finances on your side too. Cause you can't, if you don't have any money, you can't help anybody else, George. That's what it boils down to. So sorry, Mary. All right. Let's talk to Mark in Greensboro, North Carolina up next. Mark, how can we help? Hey, how you doing? We're doing well. How are you? Awesome. Um,

Man, thank you guys for what you do. I've been listening to this show longer than you guys have been on it. Wow. That's not long. Not long. I thought you were going to say since it's been on the air. But that's cool. What's your question today, Mark? What's your riddle for us?

Okay, so it should be a pretty simple question. I've got a surface question and then a deeper question. The surface question I know the answer to, and that's should I close my credit card account? Yes. So I think we all know the answer to that question, but here's why I'm asking it. Obviously, I know that the goal is to have a zero debt.

debt or zero credit score. I look forward to that day, but I have a mortgage. So that's not going to happen until I get rid of the mortgage. And my concern is that I'm playing, we are probably going to be moving in the next few years, which means that I'm going to need that credit score and able to get a different mortgage.

Is it going to hurt my credit? And the only reason I'm asking is because, and I probably spend more time on Credit Karma than I should. Is it going to hurt it because I've had that one card for over, it's the only card I have left and I've had it for 20 years. And is it going to hurt my credit score?

when I close that card. Not enough to keep you from buying a house at a good rate. It might initially ding it a little bit, but you paying your mortgage on time- It'll climb right back up. It's going to climb right back up. You stay current on those mortgage payments. And then when you sell your house and buy another one, well, the score is not going to disappear instantly. And so in the meantime, that score is going to still sit there. And when you go get another mortgage, they're going to use that score. And by the way, credit karma,

let me tell you something. They, they try to play you because I remember, uh, George checking my credit karma score after we had paid off all of our debt thinking, Oh, it's going to go to zero. It's going to go to zero. And I kept thinking, man, my score, it's kind of starting to be bad, but it's not rolling to zero. Hmm.

they play you because they want you to take out more credit to increase your score. Because guess what? That's how they make their money, Mark. Their whole goal is to get you into more debt. They don't give you an accurate score. If you go and actually like to a real reputable source, you'll find your true score.

Oh, yes. So beware of sites like Credit Karma because remember, they want you to engage in more credit activity. And they'll try to scare you with notifications and emails. Hey, your score is dipping. You got to take out more credit. It turned out my score was really to zero, but they weren't reporting it that way. So be careful with those sites. It's a terrible scoreboard. If you want a scoreboard, use a net worth calculator. Okay. Not a credit score. That tells you nothing about your financial life other than how good you are at playing kissy face with the bank.

And I don't know about you, but they got that old man moth breath. No, thank you. No, thank you. This is The Ramsey Show.

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Welcome back to the Ramsey Show. I'm George Camel, joined by Jade Warshaw. Open phones at 888-825-5225. Heather's up next just down the road here in Nashville, Tennessee. Heather, how can we help you?

Hi. Me and my husband have tried to do a pretty good job with budgeting so far. And now, just kind of budgeting and living within our means, now we're about to be parents in about a little over a month. Woohoo! Congrats. Thank you.

Thank you. It's very exciting. So we're just kind of looking for some advice on like how to budget with a new baby and like how to care for this new child and still be able to live within our means kind of with all the new expenses that come with a baby. Absolutely. Well, George, you're closer to this than I am. I'm the newest dad. I've got almost

almost 14 months old, Heather. So I've had some experience now budgeting with a baby. And the truth is there's an upfront cost that's like, it feels overwhelming because we got to get the stroller and the car seat and maybe another car seat for the other car. And the beautiful thing is if you have some good people in your life, some family, friends, they throw the shower, you've got friends that just had babies, reduce, reuse, recycle. The amount of new crap we think we have to buy that you can just borrow or

cake from a friend as a hand-me-down, it's amazing how much money you can save. Oh, I was going to say, hit that registry link and send it to everyone you know. And the registry link as well. So that covers a lot of the upfront to where it's not as actual as, it's not as overwhelming. And then on the ongoing budgeting side, the things to think through obviously are the basics. We're talking diapers and formula.

A lot of diapers, a lot of formula, unless you're feeding. And so those are the things to add into the budget. Yeah, the idea is to feed unless we can't. Are you guys in a good financial spot to where this is not going to be like a giant curveball?

That's what we don't know. We're right on that edge where we're fine right now, but we don't know how this baby is going to upset anything. Well, do you have savings? We're talking like, let's say a few hundred bucks is added to your budget. Now, if there's daycare expenses, that's going to be the biggest one in the budget if you go that route. So what's the game plan for that? Yeah.

Well, thankfully, my mom and his mom have agreed to take care of child care for the first few months. Wow. They've made that commitment and they've made that promise to us. Yeah. That's a blessing. We have a wonderful support system. Yeah. And you guys have the money set aside for any hospital costs and things like that? Savings? Yeah. That's the thing we've adjusted our budget for already. But we're just kind of like, OK, what else do we need to kind of prepare for? Yeah. If you have the out-of-pocket max, you know that number with your insurance. We know that's the max we're going to pay.

Beyond that, it's what are the things that we need as we leave the hospital and come home. And truthfully, people think they need to have a good decked out nursery. My baby didn't even see that nursery for like six months. My baby initially slept in a pack and play that probably cost $30 that somebody got us. And...

They were in that for a long time before they even went into their crib. And we borrowed a bassinet from a coworker for the first six months. And they don't really do much. So much of what we got didn't come into play until like three to six months later. That's right. And truthfully, Heather, we're in a good financial spot. I still went to Facebook Marketplace to get the recliner and the crib and all of these things because I did not want to pay retail price. And so there's a lot of ways you can make this. You can make a baby as expensive as you want. You can do it as affordably as you want.

And so do you guys have any debt? Just some college debt, but we're kind of putting that on hold for the moment. My debt isn't gaining any interest right now, and his debt isn't because of the Biden administration and kind of the weird things that have been going on there. So we're just kind of like, okay, we can pause on that for now as we adjust to life with the new baby and then get back to that when we're comfortable. Yeah, that's the move. You're doing the right thing. We call it stork mode, where you pause the baby steps and just stack up cash. So how much do you have in savings? Yeah.

Right now, I think probably collectively with all of our accounts, probably close to 8,000. Great. And that's going to continue for the next month.

Yeah. And so another, I guess kind of the other question I have is like, after the baby comes, kind of like how, is there like a good piece of advice for how long to kind of like stay home before going back to work? It's up to you and what you guys decide that you can afford and what your goals are. And what your, you know, workplace policies are. Do you have a maternity leave?

I work for myself. I just teach private music lessons. And then my husband just started a new job about a month ago. Thankfully, they're willing to work with him with the baby and everything. So it's been a little tricky trying to figure that out. But yeah, so we're kind of his is more the.

kind of like, okay, how long is he able to take off before he has to go back? I mean, I'd say set a plan, sit down and set a plan, but also hold it loosely. Like I remember I said I was going to be back after I'm in music as well. I was back then. And I remember thinking, oh, I'll be back. You know, I just need a few weeks later week.

And it ended up going from eight weeks to 12 weeks because you just don't know. So I'd say set a plan. Well, if it's a C-section, it's going to take longer to recover. Exactly. So I'm hoping and praying that everything goes super smoothly and that it's a very quick recovery. But also we got a plan for if this takes a month or two or three or four, we got to be prepared for that too. Yep.

Yeah. I've already told my students since my baby's be around Thanksgiving, I've told them, okay, from Thanksgiving on, I'm not going to be doing lessons until sometime in January, maybe February, depending on how long I need. You know, something you could do. My, my creative brain just opened up real quick. Something you could do is between now and then create something that's, um,

online or like that they can have while you're gone but it doesn't require you being there so maybe it's a little webinar series that they can do or like just a little course that they can take while you're not there but it still brings in some money i don't know just a thought from a fellow music creative but it sounds like you guys have this dialed in you got eight grand in savings families there to support uh you've got a great system going on i assume you already did like the shower and stuff right

Yeah, so we actually have probably 80 to 90% of what we need. Amazing. And probably 2,000 more items than you even will ever use or need. That's kind of what happened. I know. We definitely have some things that we don't need, but will definitely be fun to use. Well, then you can return it, get gift cards, and use that toward the things that really matter, which is really just diapers. So many diapers. You know what, George? Nobody warned me.

Okay, I think I have the opposite. I think that so many people talked about the cost of diapers so much. Well, it wasn't the cost. It was the amount you go through. The amount. Okay, yeah. I think in the end I was like, the diapers weren't the thing for me. It was everything else. Yeah. It was, yeah. Well, my wife is fairly crunchy. So she wants like the European brand formula that's like $4,000 an ounce. It's like liquid gold. And so we got a budget extra in the Camel family for her crunchiness. Here's what you need to budget extra for. Mama. Mama.

Mama needs things that are going to make her comfortable during the most uncomfortable months of her life. A spa gift card for a massage. Postnatal massage. Yes. Get you some nice pajamas. Get you the best...

pump that money can buy that you like. Like, don't just, don't forget about mama during these times. Splurge on mama. Splurge on mama. Yeah. My wife, she's, we got to pay for physical therapy now because her back is jacked up from carrying the baby. Yeah. It's a lot. So that's something you got to think about. Yeah, get yourself like a nice, like baby carrier, whatever you decide. Yeah. Oh man, those, those, those days and months. Jade's missing it. She's like, ah, simpler times. A little bit, I am. Don't let Sam Warshaw see this. He's going to be like, uh oh. I love it.

All right, let's move on to Wayne in Fort Worth. What's going on, Wayne? How are you doing today? Doing well. How can we help?

Yeah, my wife and I are going to need to make a quick move. And our situation is that we have no debt and haven't had debt for many years. We have roughly $175,000 in savings, plus $500,000 in investment portfolio, $500,000 in other assets that are

liquidatable. Wow. And we have, and we have a paid off home that's worth about 425,000. So yeah, it's pretty cool. I mean, God's been good and we've been listening to Ramsey show for, I don't even know how long, 20 plus years. Way to go. And your baby steps millionaires. That's right. It's been great. My question is, and this is where my wife wanted the Ramsey advice. And I know you guys, they are there for that. Um,

We need to make this move and it's going to have to happen pretty quick. And so I, you know, the house that we're looking at is $490,000. Our house is worth, you know, even if liquidated, we would get $400,000 back. Can I, two questions. One is, can I borrow against myself, against my own portfolio and use my cash to purchase this other house?

while I'm waiting for this one to sell and then just pay myself back. You know what I'm saying? Yeah. And what's a reasonable percentage of net worth that you should have invested in a home considering it's paid off? And I think I had heard Dave one time said... Wayne, I'm going to hold you over to this next segment because I love this question and love the way you're thinking. So hang on the line. We'll be right back with you. Sorry I ran out of time, but I'm going to answer this as soon as we come back. This is The Ramsey Show.

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Welcome back to The Ramsey Show. Right before the break, we were talking with Wayne in Fort Worth, Texas. Let me recap what's going on in Wayne's life. He's crushing it. They're baby steps millionaires. $175,000 in liquid savings, $500,000 in an investment account, $500,000 in other accounts, other things, $425,000 in the house. And they're wondering, should they purchase a $490,000 house? And if so, how are they going to do this? So, Wayne, is that a fair and accurate summary?

Yes, it is. Okay, great. So you had two questions. One was, should I sort of borrow against my own investment account? The word borrow scares me. What you're really doing is saying, I'm going to use a portion of my investments to purchase this home with cash, correct? Plus the equity in your home? Well, I would rather, I could, you know, use equity in my home with a bridge loan and

and cash to do this, or I could use my, you know, truly borrow against my own accounts, you know, my own brokerage account just for the short time. So I'm not actually selling assets and taking the tax hit. I would be borrowing against the brokerage account and then utilizing the sale of the home to

to pay it back in a matter of a month or two. Why do all the gymnastics when you can just pay cash so easily with the equity in your home plus a little bit of money? I mean, just even from your savings, you could do this. You don't have to touch the investments or borrow against it. Yeah, but then I would have to do a bridge loan. Do you feel good about that? Why? You said it's $490 for the house. You said you'll get probably $400 in net profit from the sale of yours, so you need an extra $90.

There's going to be a gap of time between making this purchase and the sale of mine. So would you feel comfortable? So you're going to purchase it first, you're saying? Before you sell yours, you need to make this purchase? Yeah, that's right. Do you feel comfortable just taking the almost $500,000 and paying cash and then when your other house sells, replenishing it?

Not really, because we would be taking a pretty big hit on pulling out money out of the investment portfolio. What are the other assets you said you had? When you said you had $500,000 invested, you said you had another $500,000 in liquid investments. When you say liquid, I'm assuming, hey, I can get to this and it's not really going to...

Cause a problem. Yeah, I can move it, but it's probably a three month window on that stuff. Yeah. You know, like, you know, sports cards, that kind of thing. So it's like collectibles. Okay. I see. Okay. I know that market very well. And I know that that really is, you know, the funds, but if you have to liquidate it in a quick turnaround, it might be 420. Why is there a gap between buying this new home and selling yours?

Well, when we put this home up for sale, it's going to be a matter of anywhere from three weeks to three months. You just don't know for sure how long it will take to move it. And the place I'm moving to is in another portion of the country, so I need to make that move soon. Okay.

And then, so I'm kind of like left in this kind of a, and I don't really want to do a short-term rental. And I did find a place that I feel really good about that was 490. And just for clarity, just for clarity, the reason that you're wanting to borrow against your brokerage versus just take out a conventional mortgage is interest rate, I'm guessing, yes? We just, you know what, we got that thing where we haven't had any,

debt really in you know in five or six years now and it's pretty great and i just don't even want to like pay you know the the points on a on a you know anything i don't want to pay that what were you saving up and what was the investing for because i like to have a goal when i invest money versus just like having a pile sitting out there so are you investing in retirement on top of all this

Everything, the 500, basically the 500 that's in the brokerage account and the 500 that's in the collectibles and whatnot, I see all of that as future retirement. And not to mention, we still have income. We're still around 280 a year in regular income now. I mean, the truth of this is just because you've paid off a house,

doesn't mean you can never have a mortgage again because plenty of people upgrade in-house. They buy a starter house, they pay it off, and then when they want to upgrade, they take a small mortgage out. And the small part of that is relative to their income and net worth, obviously. So there's...

You're not evil if you say, I have a paid off house and I'm going to buy another house knowing that I'm selling this one and I have a mortgage for it. That's your choice. Looking at your numbers, I don't think it'd be the worst thing in the world. But if it were me, I'd want to find a way to take some of the hard earned cash that I have and I'd want to pay for it in cash because to your own point, you don't like having payments. And I get that. And even though in this case, it'd be pretty arbitrary. I don't know how quickly your current home will sell, but probably...

relatively quickly if it's priced right. And you can make it contingent. A lot of times you can even rent back from the new owner for a month or two until you get into the new house. So there's a lot of things you can do to avoid all of the hoopla. But if you wanted to get a mortgage and then as soon as your house is paid off and as soon as your house sells, just knock out the mortgage, we're talking like a few months. So the interest is not going to be detrimental here.

I agree with that. And the second part of my question was the percentage of net worth, because at my moderate level of net worth, it's my understanding that, you know, assuming I don't have debt, that you could be up to 50% of net worth value. There's no rule there in our millionaire study. We found that it just happened to be this way, that these baby steps millionaires, about a third of their net worth was tied up in their house.

Right.

But right now, because we were so focused on home and payoff and investments haven't caught up yet, right now I feel it feels lopsided. But it really doesn't matter. The point of that equation is not having too much tied up in the home is that you want to make sure that you have income-producing assets. And your investments are going to produce income versus your primary home, which produces nothing. It just costs you money. So that's really the thought process. Yeah, this would be roughly a third. So we would be in line. How old are you?

55. Yeah. And to George's point, that will change. So 10 years from now, your investments have doubled. Your home may not have doubled. It may have gone up $100,000. Right. And so I wouldn't worry too much about that. I would just focus on staying debt-free, investing as much as you can. You could do maxing out all accounts. I would focus on the tax advantage accounts. It sounds like you guys have focused on the non-retirement accounts. Do you have any 401ks or IRAs?

Yeah, we have 401ks, IRAs. It's difficult because the income level is too high for Roth, but we can do backdoor Roths. Yeah, there's mega backdoor for the 401k. And then beyond that, HSA, if you have one of those, you can invest there as well. Then there's taxable brokerage. We're doing maximum allotment on every one of those things for the last many years. Oh my goodness. Those are great. Wayne, you are the poster child. We also do 20% to charity, so we're...

Excellent. We're doing what we're following. We're in good, good position. I'm proud of you. Well, thanks for the call, man. I want to be Wayne when I grow up. That was really good stuff. These are good problems to have. All right. Let's get to our question of the day here. Student loan debt is an epidemic.

We know that. Defaulting on debt makes you feel even worse. And our question of the day sponsor, Y Refi, refinances defaulted private student loans and builds a custom loan based on your ability to pay. So you'll have a payment you can afford with a low fixed interest rate you couldn't get anywhere else. So go to Y Refi dot com slash Ramsey. That's letter Y R E F Y dot com slash Ramsey might not be available in all states. All right. Today's question comes from Diana in Georgia. She says, my husband and I make two hundred and thirty thousand dollars a year and we have two hundred and thirty seven thousand in debt.

debt, not including our house. Our current house is valued at $600,000 and we owe about $450,000 on our mortgage. Okay. Our problem is we have outgrown this house and I'm ready to move now. Our living spaces are filled with toys, so we desperately need a playroom or you could just get some organization. My husband and I would like to have an adult space after the kids go to bed, master bedroom, and we don't have that either. I found a home

I ran the numbers and it would double our mortgage payment to $5,000 a month. This is over 25% of our take-home pay, which I know is not what you teach.

But it could make a huge difference in our day-to-day life by stressing you with that. Oh my goodness. What do you think, Jade? Well, you heard my commentary within the read. And so I think that you are on that stuff. And this is a bad, bad, bad, bad choice. I think you're probably really emotional, truly. I think that you've got a lot of kids going around. I think that you're stressed. And I get that. But I think...

This house is not going to solve your problems while you're broke. The house is going to make it worse. You got $240,000 consumer debt. You got barely any equity comparatively to what you're about to jump into. And then you're about to stress yourself over 25% of your take-home pay. This is not... You need to invest in some nice storage for these toys. You need to make your master bedroom a no-kid zone. Y'all are not allowed to come in here when the door is closed or when it's open. And I think if you set some boundaries...

and get your space under control, your mind will get under control. We need to downsize and declutter our money and our house, not upsize. That's the short answer here. This is The Ramsey Show.

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From Ramsey Network, this is The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm Ramsey personality, George Campbell, and joined by bestselling author, Jade Warshaw. And we're taking your calls at 888-825-5225. Call us up, and we will do our best to help you with whatever life has thrown at you, good, bad, ugly. We want to know about it to help you take the right next step.

Brie's going to kick us off here in Sacramento, California. Brie, welcome to The Ramsey Show. Hi, thanks so much. I'm so excited. You guys are the perfect duo for my question. Wow. I'll let Ken Coleman know. Thank you so much for that. It means a lot. What's going on? Okay, so I will exercise brevity here. I have extremely generous and thoughtful in-laws. They do very well, though they are not Ramsey principal people. And with that being said, a couple years ago, they opened Ramsey.

whole life policies for all four of their children that they pay for and technically own. But when they gifted it at Christmas, they said, you know, we opened these policies, but they're yours. If you want to cash it out, if you want to add to it, if you want to just let it sit, that's totally up to you. Flash forward three years later, now that we're married, because they gifted the policy when we were dating. Oh, wow.

I would like to cash out the policy because my husband and I both have term insurance, so we're covered there on our own. I would like to cash it out and put it in a high yield, which the interest would probably cover what they're contributing every month anyway, which is $65. But my husband doesn't want to be ungrateful or have a difficult conversation. And I don't know if my mindset should be like, you know what, technically brass tacks,

They own the policy. It's their money. Should it be out of sight, out of mind? Or should I push for this because it's what we follow in our marriage? I mean, they said you could cash it out, right? They did. Who are the policies for right now? You said there's four of them? They have four children and they opened whole life policies on all four children. But they own, the parents still own all the policies and they're listed as the beneficiaries, not the wives. Oh, that's interesting. So the policies on him...

So we're talking about one policy and how much do they pay per month for this policy? $65. And what's the cash value?

After the surrender charge, it would be about $11,400 at this point. Okay. And you're saying, hey, we put that in a high yield, we're going to make the $65,000 back, and we don't need this policy. And it would be something, if it was in a high yield, that I would contribute to where I'm not going to throw money into a whole life policy. Into a terrible product with a terrible return. Right. Absolutely. Well, what is their intent at this point, paying for a grown man's whole life policy?

Well, I think I was trying to wrap my brain about that, too. And the only thing that crossed my mind is, are they trying to just set this up as a savings plan so all of their kids have money to pay inheritance tax when they go? You know, like, so if there are expenses based on their inheritance, they already know that they've helped put aside money to cover that. How wealthy are these people? Because inheritance tax is not going to kick in unless we're talking like $20 million. Yeah, they're very wealthy.

Okay. I don't know if I'd touch this. I don't know that $65 a month is going to also pay for any meaningful taxes, if we're going to be honest. Right, right, right. There's part of me just listening to you talk. I don't know if I'd touch this because this was kind of in place, A, before you guys were married. It's their money that they're spending. And the fact that you are not the beneficiary of

kind of lets me know that this is just something that they're doing. It doesn't really make sense to me, but who cares? It's not...

I would tend to not try to control this. It's almost like, like my mother-in-law has a five 29 set up, um, for the kids. And that was something she did. I'm happy she did it. And she put some in it and we put some in it too. I could try to be like, Oh no, I want to do this state's five 29 and I want to change it. But I'm like, this is something nice she's doing. And she did it for the state of Florida. Cause that's the state you're in. And that's fine. Um,

I'm just grateful for it. And it's still some money that I wouldn't have had before. So I'm like, okay, great. And I'm not going to touch it because if I think that it's going to stir up a hornet's nest, which in this case, for me, it probably wouldn't. But if you sense that at all, or seriously, it sounds like your husband maybe does, I'd be like, okay, great. Thank you for the thank you. And just probably move on.

So more so the first like out of sight, out of mind, like pretend it's not even a thing. I mean, that's me. I don't know, George, would you be different? It's not hurting you right now. Obviously, you feel like there's a better use of this money. And your husband is going, hey, they're just doing a generous thing. We're not having to pay for this. They're not taking debt out in our name. This is just one way they want to give to the kids.

They are free to do that. And so I don't think this is on fire. If you never see this money, you're going to be okay. So whether they put it here, I mean, you could talk to your husband and say, hey, what if they put that 65 in a investment account that one day we then get to use as an inheritance to pay the taxes, whatever. Are there better ways to go about this from a wealth strategy perspective? Yes. Yes.

It's hard to tell people how to give to you. Especially with this relationship where it's like it's in your husband's name and it's a thing his parents did and now you're trying to get in the middle of it. I feel like there's more harm than good. I think the only reason it crossed my mind is because of in the way it was given. You guys can do what you want with this. So I was like, do we want to do what we want with it? Are they the type of people to get upset if you did cash it out?

I don't think so. I think that they may not agree, but I don't think that they're going to be upset. Listen, I would not want to be the one. It'd be different if you're... Listen, there's a lady in the audience right now. She's going, don't do it. Don't mess with the in-laws over 65 bucks a month that you're not paying. It would be one thing if your husband was like, dude, I was just looking at this whole life policy my parents have on me. Like, this is whack. I'm going to go tell them, you know, da-da-da-da. And then you could be like, yes, honey, you go do that. But the fact that even he is like...

I don't want to come across ungrateful. That for me tells an underlying dynamic that even maybe you don't fully know is there, which is, yeah, don't touch it. I get it though. Yeah. And Thanksgiving dinner is coming up. We don't want that. Yes, ma'am. Oh my gosh. Yeah. It's like, don't mess with the whole life policy. Don't mess with the macro. But I am proud of you guys for getting term life in place and having a much better policy in place there. I'm, I think that was the move to do. And if you were in a different situation, I'd say, Hey, get term life.

And then go ahead and cancel the whole life. Pay this one at a charge and cash it out.

All right, well, I'll stop stressing about this. Thanks, guys. Yeah, I think it's not worth your peace of mind over $65 a month that you're not paying. As long as they have the right insurance in place for them, this is just something that someone did. Especially at their level of wealth. Their in-laws clearly aren't broke. They're not spending money they don't have to fund this thing. Sure, sure. It's like my in-laws buying me a biscuit, even though I'm gluten-free. And I go, hey, thanks for the biscuit. I actually don't eat gluten. And they go, no, we want to buy you a biscuit. And then when you're not looking, they're not looking, you kind of...

Put it, you give it to the dog. Feed it to the dogs. My little French bulldog is very overweight. She doesn't need that. Oh yeah, that trying to slumber down. Sorry. That's a good message though for all of you out there who don't have term life in place. Let this be your wake up call. You need it 10 to 12 times your annual income on the policy and you can get a 15 year term, 20 year term, 25 year term. Here's why you don't need insurance for your whole life.

Once you follow the Ramsey plan for 15 or 20 years, you're going to be what's called self-insured. You have a paid for home. You have sizable nest egg that will cover your family in case something happened to you to replace your income. Not to mention you don't need an insurance policy that's going to, quote, invest for you. You can do your own investing. Yes. Combining investing and insurance is a terrible, terrible idea with terrible returns. And all it does is line the pockets of these whole life insurance salesmen.

that they pose as wealth strategists because they go, well, this is actually an investment strategy. The wealthy use. Don't buy it. So if you want to get term life in place, the only one we've ever recommended to Ramsey, go to Zander.com. Our friends there will take care of you. They've taken care of my family for years. Yep, that's what I use. You can also go call 800-356-4282 to get that plan in place. And man, the peace of mind is worth it. The policy is a fraction of the cost of whole life and you'll sleep better for it. This is The Ramsey Show.

Are you working the baby steps? One of the smartest and most impactful changes you can make is to ditch your cash value life insurance plan, if you have one, and replace it with a term life policy. Listen, the only thing a cash value policy is good for is overcharging you

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from the top-rated companies. They keep the whole thing simple. You can apply online or over the phone, and they even have low-cost plans that don't require an exam. Go to Zander.com or call 800-356-4282. Even if you don't have a cash value policy, if you're one of the 70% of people who have no life insurance or not enough, it's even more important to get this done. 800-356-4282 or Zander.com.

Hey, good folks. Dr. John Deloney here. Don't you think life is too short to hate Mondays? Listen, you're worth loving the work you do and where you do it. So guess what?

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Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw. It's a free call at 888-825-5225. And some say the advice is...

Worth what you paid for it. And if you ever wonder what George and I talk about in between segments, this last time we talked about a t-shirt idea with George's face on it. We have some visitors out here in the lobby and she said, I was hoping I would find a t-shirt with your face on it. And I went, you are the only person who would ever buy that. So it would not be worth making. You're better off getting the Walmart iron on than just doing it yourself. Oh gosh.

You got to put the two Frenchies on either side and then it's... And then it's still not valuable to anyone. But hey, whatever floats your boat, I'm honored. Charlotte is in Nashville, Tennessee up next, just down the road. What's going on, Charlotte? Hi. How can we help? Thanks for having me.

I have a couple quick questions for you. I had some medical debt from being in the hospital at a hospital that was out of state, a couple states away. It turns out I was out of town for something and got sick and had to go to the hospital. They kept me in ICU for two weeks. It became an astronomical bill. Oh, my goodness. Yeah, I had a very strange, rare type of pneumonia and sepsis. Are you okay now? Yes.

I am. Okay. On the top of the fact that I'm still fighting with cancer, yes. Oh, goodness. I'm so sorry. I have a wonderful God who looks out for me. But my question, my concern is this. Okay, so this bill obviously was very large. They did work with us some to take it down, but it's still a $30,000 bill.

I haven't worked since my cancer diagnosis. I've not been able to work. So we have only my husband's income. It's not a large amount of money, but we make it. Thank God we don't have a lot of debt other than our house. This is the problem. This is a non-for-profit hospital, but they want their full $30,000. I said, I can make payment arrangements.

My payment arrangement was not acceptable to them. They wanted $800 a month. I said, I can't do that. So to make a long story short, I went ahead and paid money on the account through their automated system. The following month, I called them back to see, can we do some type of payment arrangement that's affordable for us that I can commit to and do?

They still, then they dropped it down to 600. I'm like, I still can't do 600. I'm thinking maybe 300 a month. They weren't willing to do that. They said that wasn't enough for them to mess with. And so that was probably going to go to collections. I went ahead and paid some money to the automated system again.

And then a few days ago, I contacted them saying, hey, you know, we got to do something here. Basically, my husband and I discussed this, and we are willing to pay them $10,000 of the $30,000 if they'll consider the bill paid in full. The sad point is we have to take this out of his retirement fund because there's no other way we can do this.

they had in the meantime, sent this to a collection agency. And I said, I don't want to deal with the collection agency. I didn't run my debt with them. I ran it with you people. I'm willing to pay you. I just can't pay you the 600 a month you want. Well, the good news is there is some good news here. If it's with collections, you have a better chance of settling it.

Because they bought this for pennies on the dollar from the hospital. The hospital's already free and clear from this. They've already written it off. The hospital said, we'll take some money over not getting paid. So we'll sell it to collections. Okay, so I spoke with the hospital a couple of days ago to offer them, can we do $10,000 and consider this paid in full? And the collection agency's out of the picture.

And so they're sending it back to their review board to decide if they'll accept this. In the meantime, I'm getting...

text messages and letters from this collection agency. So I'm at a point where I don't know what to do. I'm willing to pay this hospital 10,000 and call it a deal. Yeah. I would think my 10,000 is probably more than the collection agency gave them. It might be. It might be. Here's the thing. If this just happened, there might still be some confusion over who's holding the debt. That's, that's very possible. But if it's in collections, collections owns the debt. Now I will say when you're settling something, um,

You could talk to a lot of bozos before you talk to the person who's going to actually help you with this. So this is kind of, as much as I hate to say this, this is going to be your full-time job for the next couple of weeks until this gets settled. And they might not take 10. They might say it's got to be half or whatever. Whatever deal that you can strike and you're going to have to

beat them over the head with this and say, this is the only thing I have. This is my financial situation. This is my health situation. If you want a dime from me, this is all you're getting. And I could care less. You can call me a million times. You can email my phone. Do not rob your retirement for this. No.

Please. Don't take a dime out of retirement. Don't take a dime out of retirement for this. That's okay. Listen, that's part of it. That's okay. We're not going to rob our future over this. They can't come after your retirement accounts. No, no, no, no. I'm saying he's still working. He's not retired yet. This is in his investment fund for his retirement later in a year when he retires.

But what I'm saying is if we don't give them some money, then they're going to take this to court to get a garnishment of his wages. We can't afford with my health and things going on. We can't afford for his income to be any less than it is. So if they get a garnishment, we're really screwed. So this is why we thought offering them 10 grand is the best we can do.

Because we're not going to take all of his retirement. But if you have that in writing that, hey, we offer them $10,000 to settle and they wouldn't take it and they want to continue on and sue and go through all the paperwork and legality and spending all the money with lawyers. I mean, I would cross that bridge when and if we get there. And the chances of getting there is so slim on something like this. This happens every day. Literally every day. And the purpose of them selling it off to the creditors

the debt collection agency is because they've gone, okay, we're just writing, we're charging this off, we're writing this off, we've washed our hands of it. And they've already, you know, accepted a smaller amount. So the debt collection company, if they, you know, if they can clear a little bit more than they were already paid for it, then great. So here's what I want you to do, Charlotte. Here's your homework. Document every single time you reach out. Record the call, screenshot the emails. And I want you to call them more than they call you.

I want them to be tired of you calling. Oh my gosh, Charlotte again? Screen her calls. She keeps calling trying to settle the debt. I want you to be the squeaky wheel to get the grease. And by that, I mean this thing is paid in full. So don't give them access to your checking account and make sure that you have in writing every time you contact them and get everything in writing from them. When they say, hey, we're willing to settle for paid in full on this debt, make sure you get that in writing.

Because these people are, they can be smart. And I asked for that, and this is the gentleman who's the coordinator for their financial hardships, that's whatever I'm speaking with. I told him I would want this in writing before we give you a job. Well, we don't normally put that in writing, but I can give you something from my email. No, it takes you five minutes to give me a letter. I bet your bill is in writing, isn't it? That $30,000 you owe. It sure is. Did you get an itemized bill from them? Okay, so at this point,

I did. Did you look through it and go, yep, that's right, that's right, that's right?

Oh, yeah. It was 14 days in ICU. There wasn't anything they didn't cover in there. And you've tried to appeal with your insurance? Is there any coverage through your insurance that would help pay this? We don't have insurance. My husband lost our insurance when the whole COVID thing happened. And now our insurance that they want through his job he has now is $1,400 a month. We can't do that. I'm not working. We can't.

We can't do it. How are you covering your cancer treatments? Everything we've done so far, he has had to pull from his retirement. There's not going to be anything in that retirement account when you guys get there.

And now we're at a point, we know this, it's like, what do we do now? I don't have anything more left. I'm not even doing any treatments right now. We can't do anything because we don't have any more money to give anybody without having anything to live on. So this is, I mean, I'm at a point now where I don't even know what to do with this. Have you not looked into the marketplace health insurance? I mean, with your income in Tennessee through ACA, you should be able to get a very affordable plan if not free.

We did look into that and what they explained to us was it was going to be like 300 and something a month for the basic coverage. What she told us was for what I need, like for my cancer treatments and my heart issues and my COPD and everything I deal with, that it wouldn't cover any of that. So we're like,

What is that going to do with any good then? I can pay $100 to walk in my doctor's office myself. Well, we need to find out all of the programs available to us and take advantage of them. Jump on ramsaysolutions.com, click on Trusted Services, and Health Trust Financial can help you navigate what the best option is for you. I'm so sorry you're going through this. I hope this medical debt is behind you. I hope they throw it out and go...

She's got cancer. She's broke. Guys, let's just call it a day and get rid of this debt and stop going after her. This is scum behavior. This is The Ramsey Show. What does the future hold for business? Ask nine experts and you'll get ten different answers. Economic growth or a recession? Business taxes will go up or

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This is The Ramsey Show. I'm George Campbell, joined by Jade Warshaw. Open phones at 888-825-5225. We just launched a brand new tour. This is a live event with Dave Ramsey and Dr. John Deloney. They're hitting the road, coming to a city near you on the Money and Relationships Tour. And there's a new twist on this. You shape the conversation each night to choose your own adventure. You select the topics that matter most to you, whether it's budgeting, relationship dynamics, achieving your financial goals. Your voice drives the night. So Louisville.com.

They're coming to you April 21st of 2025, Durham April 23rd, Atlanta April 25th, Phoenix May 5th, Fort Worth, Texas on May 7th, and finally Kansas City on May 9th. So join Dave and Dr. John live and in person. You're going to laugh. You're going to learn. You might even just change your life.

to get your tickets for this tour at ramseysolutions.com slash tour, T-O-U-R. And if you're tuning in on YouTube or podcast, there's a link in the show notes. There you go. That'll be a good time. Sad, I kind of want to go travel to see one of these events, you know? Yeah. Sad we won't see it here in our hometown. Oh, that's true. I'll have to get tickets. Not a bad idea, a little road trip. All right, Josh is in Seattle, Washington. What's going on, Josh? Hello, good afternoon, George and Jake. Can you hear me okay? Yeah. Yeah.

Long time listener, first time caller. So a little nervous, but we got you. My main question here is, um, how do I know if I'm on the right career path? And if I'm not on the right career path, how do I find something that I know I can do longterm? And, uh, for contacts, I'm 24, I'm active duty military. I work in the medical field. Um, I,

I work full-time and I also go to school full-time on the side. It's online.

And I have had the ultimate goal of applying to either med school or PA school. But right now going to school part time, my grades aren't doing so hot. So I am starting to just, you know, have some doubts and wondering if I'm on the right path right now. Why are your grades down? Is it you're too scattered or you're not, you know, capable of handling the material? What is it?

No, I definitely don't think it's that. I think it's the full-time job. And I've had a few life things come at me, some sickness in the family and some recent death of family. And it's just been consecutive things.

consecutive events like that come and the greats aren't doing so well now. So I'm not too sure if I should stick with it or I don't, and I'm not sure either if this is my ultimate dream. So I'm just having some doubts and just looking for some advisor guidance. Well, I wouldn't let the, I mean, you've, you've had some life,

some tough life stuff happened to you. And that would be distracting, I think for anybody. So I wouldn't want that to be the thing that, that takes me off course. This is a, if that's the case, it's a season and you'll come out of it and you'll be able to refocus, um, in a later season. But as to whether or not this is ultimately what you want to do. I mean, a lot of times I kind of like to just take a moment and clear my head and just think, okay,

in 10 years from now, what do I, where do I see myself? What do I see myself doing? How do I feel? What, what, what's going on around me? Is there, you know, are there children around? Is there a different scenery around? And really get an idea of where do you see yourself? And if you look up and say, okay, 10 years from now, do I see myself working in a hospital environment? Do I see myself in a private practice? Is there no

do I not want to be in the medical field at all? And so if you did that just for the moment, what do you see? I'd say for the moment, I'm really pretty much in limbo. I've always had the notion. We didn't grow up rich and I always had that notion of just finding a career with some stability, with

good pay, good job security. And I never really thought past that. And then I had a lot of my family members in the medical field and the medical field has given me that stability, but I am kind of in limbo right now and still don't know. So you've been looking at it. I never got deeper than just, I want a stable job with good benefits. Like that's no way to live or filter this by. Exactly right. Your parents needed that because it was a different time, right? The generations that came before us, it was survival.

And now we're in a position where we can thrive, even in the world today where everyone's going, you can't do it. You can. And we have some great resources from our friend Ken Coleman that we're going to send you, namely his new book, Find the Work You're Wired to Do. It comes with a get clear career assessment. And here's what you're looking for. Here's I'm going to give you the spark notes. You're looking for your top talents. This is what you do best. Clearly, you're good at what you do. Otherwise, you wouldn't be doing this right. Military, medical. We kind of know the things we're good at, the skills.

Then there's your top passions. This is what you enjoy doing. So that's not what you're good at. This is the stuff you love to do, how you perform your passion. And then there's mission, the results you want to produce, the impact you want to have. And so once you can dial all those in, you get kind of this purpose statement when you take the Get Clear Career Assessment that will then help you go, yep.

I'm going to med school. I want to be a nurse practitioner. I want to be a MD, whatever that is. It'll get you a lot closer to figuring that out. And then it becomes, okay, how are we going to do this debt free? How far into this are you? Have you started? Are you pre-med? Where are you in your schooling right now?

Yeah, I am a senior. I'm going to school for laboratory science, and I'm a senior right now. I've been to all online. And, like, I've been doing a lot of my prereqs, and the prereqs to get into those, I just have not been having good grades from, I had a recent family death, and now I ended up with a C in this prerequisite. And with the prerequisites, I'm starting to worry that I might not have, like, a good enough prerequisite grade to get into those.

to get into like a grad school. But yes, I am my senior year. I'm pretty close to finishing. Were you doing good before the life stuff happened? Like were your grades good before that?

I'd say I've only been going to school consistently for the last two years because the two years before that, the first two years of college, basically, I got all the credits covered through the military. I'm not going to lie. There's a lot of doubt in your voice. You sound like you're not sold on your own dream, and it should be the opposite. You should be convincing me why this is...

It sounds like you're trying to talk yourself out of it, and I can't give you that permission. I will not sleep well at night knowing I told Josh, this doesn't sound like it's it for you, bud. I think I'm trying to talk myself into it. Yeah, that's what I'm saying. And it's like, it should feel the opposite. It should feel like, yeah, like no one...

how do I make it to where nothing stops me from doing this? Right. And I don't hear that. So I think George is right. Getting connected with Ken's career assessment is going to help you because it sounds like there's probably something in that skill set that you want to do, but just not in that specific format. So that's going to, that's going to be the key here. And it may not be, I want to be an MD.

There's a lot of paths. I've got a lot of family members that are in the medical field, pretty much all of them. I'm the black sheep. And so my brother's a nurse practitioner. My cousin just became a doctor. So there's a lot of paths you can take that have different levels of schooling and cost. Can you tell me if the military will continue to cover your schooling? So right now, that's another issue too. Like right now, they only pay for half of my credits per year. So I've

I've been playing out of pocket for the rest of it. But once I'm out of the military, yes, they do cover school because I have the GI Bill. So if you got into med school, it's 100% covered? I'm out next year. Okay. Yes, sir. That's right. Wow. That's a blessing. As long as it's a public university. Sure. Okay. This is interesting. This has got layers to it. Yeah. Yeah.

I would definitely, I would keep running this down. It sounds like the fact that you're stirring about this tells me that there's something here. And again, like Jade said, I wouldn't let this phase of life that you're in sway you because you got a C on a prereq. Okay. You don't need, you're not trying to go to, you know,

for med school here. And so I don't look at the frame on my doctor's office. I just go, well, if he was good enough to get hired at this hospital, I guess he's good enough for me. And maybe try to, you know, what you're talking about, whether it's being a PA or a medical doctor or maybe you're a lab technician, if you're going in for lab science, I don't know. But maybe try to spend some time in those environments for real and see what it makes you feel. Like what is it igniting you? Yeah.

Talk to them about the good, the bad, the ugly in every single one of these career paths. Because, you know, a lot of people, they get into it and they leave the field because it wasn't what they thought it would be. Or they got burnt out because they weren't prepared for what was ahead. And so I think having a full picture and doing your homework is going to give you the clarity you need. And Ken's book will get you started on that path. I'd probably go in there, George, and really make a pros and cons list of each thing. Because there is part of this that I wouldn't want fear to be the driver. I'm afraid I won't.

past the prerequisites. I'm afraid I won't. I've always had some, I've had people tell me like it could be just the season of going to school and working full time. Like if I was going to school full time, it would be better. Yeah, you've got a lot going on. You're tired. I'm just kind of in limbo. Yeah. I am pretty tired. I'm starting to get burned out. I take a good nap and then read Ken's book. We're going to send it to you. So hang on the line and thank you so much for your service to our country. This is The Ramsey Show.

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Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw. If you didn't know, we've got a Ramsey Network app that's free in the App Store, and if you choose to download it, there's a place to ask your questions. And so from time to time, we answer one of those questions. This one comes from Haley. She says, My boyfriend and I have been dating for almost five years. We have had a joint bank account and shared all expenses since we started living together at age 18. Should I be concerned that he has not proposed yet?

Yes, and if so, how should I move forward considering we financially share everything? Hmm.

Oh, yeah. If I could turn back time. Yes. Yes. You should be concerned. I feel like we just had this conversation last week. We did because you made the cow reference. I did. I said, if you can get the milk for free, why buy the cow? Which is a very old lady saying, but still very true. The hard part is he's not motivated to change course.

He's playing house. He's already playing the game. And so, I mean, in his mind, he's probably like, what's to gain? Like, we are already combining our money. We've been going along this long. So it's going to be hard to make that kind of make that case. But here's the thing. If you say to him, we've been together five years. Our finances are combined. Let's get married. Like, let's make this thing legal. Let's protect both of ourselves. If we say that we're really committed, let's prove it. If he's like, no, I don't want to.

♪ To the left, to the left ♪ - It's time to go. - Everything you own in a box to the left. - And if I'm in your shoes, I'm going to decouple everything financially until the day we are actually married. 'Cause number one, there's a piece of this that you already feel, of this like, this doesn't feel right. It feels weird that we're just like roommates sharing all these expenses with the joint bank accounts.

It's funny because there's married couples that don't feel comfortable combining their financial life. And then everyone playing house is like, let's just combine everything. It'll be better. I'm like, all y'all are doing it wrong. But even if she decouples it and he's like, I don't want to get married. Then I'm like, what are we doing? What are we doing? I still would have very deep questions. Now, don't get me wrong. I guess everybody doesn't want to get married. But I would still have deep questions as to why you don't want to solidify the covenant with her.

that we've kind of said for five years, yeah, we want to do this. Well, and aside from that, there's financial protections that you have when you're married. And right now you're putting yourself at risk by combining everything with basically a buddy. I'm hoping they're renting and didn't buy a house together. Oh, yikes. You know? Wow. Sorry, Haley. Not the answer you wanted to hear, but it's the one you needed to hear. That's right. All right. Let's get to the phones. Paul is in Syracuse, New York up next. What's going on, Paul?

Hi, can you hear me? Yes. Oh, man, super excited. Thank you so much for answering my call. Absolutely. I'm actually a new fan starting this month. My cousin introduced me to the show. So I love you, Nancy and Mark. Oh, shout out. We're honored to have you on board. I love a good shout out. Thank you. Thank you. So getting into it all, basically, I woke up about a month ago.

And now I'm ready to start kicking debt's butt. So we have $315,000 in debt and it's between two homes, a home equity loan, a 401k loan, and more. About $110,000 of that doesn't include the mortgages. Okay. And we have a household income of $192,000 a year. Awesome. So...

Yeah, it's great. And you're probably thinking, well, how am I in that spot with debt? And what it came down to is a lack of accountability, gambling, and I just wasn't budgeting. So as of three weeks ago, now I have a budgeting app. I use it every single day. And just from the two weeks of watching the show and listening, I was able to answer a lot of my questions, but I cut out unnecessary expenses.

I stopped contributing to my 401k. I had 10% contribution. Now it's zero. Great. I can get that extra money for my debt. Good. Liquidated the stocks, and I have a CD that matures in December. I'm going to put that to debt. Great. So I'm feeling good. I'm motivated. Can you tell us more about the houses, just so we know what that means? Is one of them being rented? Yeah, of course.

Yeah, yep. So the first house, I have $90,000 on the mortgage, valued at $250,000. Okay. And it's being rented out, and I'm making about $600 of profit on that. And then I used the HELOC to buy the second house, and I got a mortgage of $120,000 on that. And that's where we're currently living. And what's that one worth? $150,000.

That one's worth about $170,000. Okay. So you have $50,000 in equity there.

And so where my question lies is I'm using the debt snowball method and the home equity loan I have is got $63,000 with a variable rate of 5.5% and the payments are killer. So it's like $356 for a payment and over 75% of my payments go straight to interest. Most recently I was like 60 bucks went to principal. So it barely moves that.

And I have a 401k loan of 20,000 with a fixed rate of 8.5%. Comes right out of my paycheck and the interest gets paid back to myself. And so my question is, if I go after the 401k loan first, should I take another 401k loan out to just go after the home equity loan? No, you haven't learned your lesson. No.

You do not borrow against your retirement and do not take out 401k loans because if something goes south and you were to lose your job, you're on the hook to pay this off within the last the next 12 months or it gets worse and worse. On top of unplugging all the growth. And so the key here is, Paul, the principle is we never use debt to pay off other debt.

And so the key is to change our habits, use our future income, use our savings. That's exactly what you're doing. So you're on the right path. The only caveat is no more debt, no more borrowing money.

If you just say that's off the table, what am I going to do instead? Well, you're going to attack that HELOC with a vengeance because you're angry at this thing. You're angry seeing it all go to interest. You're angry at the interest rate. You're angry at your own choices. And that's what actually causes people to get out of debt is that fire. It's not finding another loophole, another shortcut to use one debt to pay off the other, playing a shell game. So just to clarify, the first property that you said you had that you owed $90,000 on, that was the one you took out the HELOC on, correct? Yes.

Yes. Okay, so you said it's worth $250,000. So if you were to sell it, that HELOC would go with the property, right? And you'd still net. What do you think you'd net at the end of it? If I was to sell that property... You said you owe $90,000 plus the $63,000 plus fees, probably talking $80,000, maybe $75,000? Yeah.

Yeah, after closing costs and everything. Which is not bad. There's part of me that I would simplify this very quickly. And the $600 a month, fine, whatever. You could make that with a side hustle. Exactly. It's not worth what you're experiencing right now. And so if I were you, I'd sell that. I'd get rid of the house. I'd get rid of the HELOC right along with it. And I'd have $75,000 to say, okay, what do I want to do here? Do I want to... What's your next smallest debt? Is it the 401k loan?

I'm thinking yes. The next smallest debt is, so my credit cards is three grand. My truck payment is 11. Okay. So you'd knock both of those out with the extra 75 plus the 401k loan. So how far would that get you? What would be left if you did all of this? Plus all the stuff you said you're already doing. It should get you everything cleared, but 35,000 of debt based off of what I feel like the numbers you gave me were.

Because you said you got the CD, you're liquidating the stocks, you've paused the 401k. Let's say you sell the house, use the 75 to pay off debt. Would that knock it all out? It would be pretty, yeah. It'd be pretty close. You had 110, you take 75 out because of the home sale that leaves you with 35. And then you've got whatever savings you have laying around that you clear down to a thousand to knock out the rest. Paul, you're about to leapfrog into debt freedom.

and release so much stress that's been building up and you've got a you're on some thin ice here with all the this rental thing going on all these loans you've been taking out i think we're done paying interest and we're about to start earning it my friend and we'll get back into real estate investing later on but right now we're building a foundation yeah i'm proud of you man good hey for all of you listening on the show uh to the show on youtube or podcast it's about to end so go join us on the ramsay network app to finish the show completely free go to your

app store download the Ramsey Network app and we'll see you over there you don't want to miss what's coming up next you can also click the link in the show notes to go watch the rest of the show in the app for free as well thanks for listening

Hey, you're still here? What are you doing? You do know that the rest of today's show is playing right now over on the Ramsey Network app, right? All you got to do to finish the episode is search Ramsey Network in the App Store, Google Play Store, or just click the link in the show notes to download the app for free. Yep, you heard me right, for free. Then right there on the home screen, you can watch the rest of today's show. Bada bing, bada boom. All right, I'm getting out of here. Enjoy. We'll see you on the app.