You Have To Change Your Habits To Change Your Life
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Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships.

Open phones here at 888-825-5225. George Camel, Ramsey personality, host of the George Camel Show on YouTube. That's Camel with a K, very popular show, as well as, of course, the Smart Money Happy Hour, co-host with Rachel Cruz. He's my co-host today. Open phones here at 888-825-5225. Kathy starts this hour off in Indianapolis. Hi, Kathy. Welcome to the Ramsey Show.

Hi, guys. How are you today? Better than we deserve. What's up in your world? Oh, I'm trying to get there on your level. I am calling today to ask you guys kind of what you think my next steps might be. I've gotten myself into quite the mess. I have followed all of the rules of never opening a credit card in my life. I'm 27, and I've made it this far without one, and

I've kind of gotten to a point where I am desperate enough that I have been riding the line of wanting to open one this week because of all of my debt problems that I'm having. Yeah, debt problems are always solved by more debt. What do you mean?

So I've kind of gotten myself into a predicament with bills that are owed and my shovel is not nearly big enough. And I feel like I'm running myself into the ground trying to do side hustles and

I just graduated in June and started as a hairstylist, and the money is just not there like I thought it was going to be. And I know you kind of have to get clientele and build up your marketing and all that stuff. And after I signed my apartment lease, I found out that I was pregnant. So I'm six months into that journey now, and I have bitten off way more than I can chew as far as what I can afford. Okay. What does your husband make?

I'm not married. Oh, okay. Where is the father in the picture? Financially not. He is excited about the baby and all that good stuff, but financially not contributing at all. Well, I guess I'll just start there. He really doesn't have that option, morally or legally. If you father a child in the United States of America, you get to pay child support.

That's how that works. So sorry, Bubba. You get to step up and participate in the financial side of the equation. Why? Does he not work or is he just a twerp? I think it's more of a laziness problem if I'm speaking from my own perspective. So you have an apartment rent. You're not making any money. Are you behind on your apartment rent? Yes. How far?

At the moment, 15 days, and they're wanting to file eviction paperwork today. After 15 days? Pretty hardcore. Is this your first time missing a payment? Yes, it is, and that's, I think, why I'm in panic mode. You mean you've never been late, and after 15 days, they're filing eviction?

Correct. Yep. And they said that that's just their policy, I guess. I don't really know how to fight that part of it. It may take four months or something in Indianapolis. I don't know. That may be why they go ahead and get started. I don't know what the law is there, but you need to find that out. Okay. Because fear of the unknown is more fearful than fear of the known.

So you need to find out what the law is in the area, how long it's going to take them to evict you, and what you can do to make that right. How much is your apartment rent? It is $1,500 a month. Okay, and what are you making with hair? Just with hair is probably about $1,200 a month. Okay, and what about other side hustles? Side hustles included, I've been able to pull about $2,500. Okay, and you didn't pay your rent. What did you pay instead?

um i have a car payment that i pay monthly how much is it it is 250 is it current no it is not she didn't pay yet either what did you pay so i have paid um my wi-fi bills my electricity um all of my utilities are up to date well you made 3700 where did it go i mean i understand 500 of that may be going towards those basic bills

Oh, no, no, no. The total of all of my income is $2,500 a month. Oh, okay. So you make $1,300 with the side hustles. Correct. Got it. That's still a big chunk of change that is unexplained. Yes. And I think part of it is probably the trade-off with some of those side hustles. So I've been doing a lot of things with my car. So

Here in the last 30 days is really when it has absolutely crashed. And I think this is kind of just a rough patch for me because I've been able to keep up. But here in the last 30 days, it's just been kind of a disaster and I've fallen behind in the last 30 days. Okay. Here's the thing. You have to find a way to make actual money.

net of expenses. So driving your car around with DoorDash and making no net profit on the DoorDashing doesn't make sense if that's what's happening after you pay your car expenses, right? Like gas. Okay. Um, so you might be better off doing something else, but 1300 on side hustles tells me you're not working much.

You know, I feel like I am not really sure how the money turnaround isn't working out. I am constantly working as far as those side hustles go, definitely. I know things have flipped as far as building my hair business and trying to get clients in through the door with that. And I've heard that this is a slow season for that anyway because it's been back to school. How many hours are you cutting hair?

I would say probably about 30 hours a week. Yeah, and you're working about another 20 hours a week. So you've got another 20 hours you need to be working a week. That's what I'm talking about. Okay. Except for the part that you're six months pregnant, which makes this very difficult. I do realize that. But we've got to change, like you mentioned, the shovel equation. And the second equation we have to change is the prioritization. Okay? The first thing you buy is food.

The second thing you buy is lights and water. The third thing you buy is rent. The fourth thing you buy is car payment. So you make enough right now to, I don't know what you're netting on that side hustle, but you make enough gross coming in to have been current with everything if you had it properly prioritized. Do you follow me?

Yes. Okay, so what we've got to do in this crisis situation is we have to figure out where we can come up with $1,500 the fastest from all sources and new sources. What we can sell and what you can go do from there. How old are you? 27. Okay. Well, Kathy, it sounds like you're alone and pregnant and scared.

You're putting on a pretty chipper face, but if I were in your shoes, I can imagine the terror I'd be feeling. So here's what we're going to do. I'm going to set up a Ramsey coach to help you as my gift because I've been 27 and scared and I know how it feels. And tell Bubba if he's going to make a baby, he gets to pay. That's how this crap works. This is the Ramsey Show.

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If you're new to all this Ramsey stuff, go to RamseySolutions.com. Click on Get Started. It's a free service that we have. It'll start teaching you some of the vernacular, some of the words we use around here, like baby steps and dead snowballs and all that kind of stuff. Also, it'll kind of teach you where you are. You take a little assessment. We'll show you right where you are and then what your natural next steps are. It's completely free. We're not trying to trap you into something. We're just trying to help you. So, if you're new to all this Ramsey stuff, go to RamseySolutions.com.

So click Get Started at RamseySolutions.com. Yolanda's with us in Atlanta. Hi, Yolanda. How are you? I'm good, Dave. How are you? Better than I deserve. What's up? Well, I am calling because I have a life estate, or my mom has a life estate, and I am the

We Nanderman is what it's called. I guess when I looked it up and the remainder, yes, yes, the remainder. And I got concerned because I've heard you talk many times when people call in about having property, um, wield or whatever to them prior to the person's death and the, and the tax, um, ramifications that that involves. You got it.

That's what's going on. You're now the owner of the property. Well, my mom is still alive. No, no, you're the owner of the property. She has rights to stay in the property as long as she's alive. That's a life estate. Okay. But it's already dated to you. Should I reverse it? Can I reverse it? How long has it been going on? I think it occurred in 2017.

I want to say 2018. I'm not sure. I think it was. Who did it? My mom did it. I know. Me and my mom. With an attorney? Yes, with an attorney. Okay. I would check your tax pro.

and ask them and check an attorney and see i don't know since it's been sitting there so long if you can reverse that or not if you did last month you could just flip the paperwork back over and i wouldn't think anything about it but it's been sitting there for three or four years now five years now and i don't know honestly uh and i would make sure i had georgia law which is what's going to apply here because i assume that's where where's the house

Florida. Oh, Florida law. Ooh, Florida's got some wicked weird real estate laws. Florida, Texas, California in the column of weird real estate laws. And so, uh, they're actually weird good most of the time, but not always. And it's cause it's an income tax free state. There's no state income tax there. So, uh, yeah. So check out, uh,

Yeah, I think I'd talk to a tax pro, talk to an attorney. And if you can undo it, I think if you run the calculation on it, you're going to see that it's going to benefit you to undo it. Because basically when you sell the house after her death, you're going to be paying capital gains on everything over what she paid for it. Oh, no. Because the house was gifted to you. You got her basis. Right.

For tax purposes. Double check my tax advice because I'm not always right, but on this one I'm right. Okay, let me ask you one other question if you have time. Should I go back to the attorney who set it up? Would that be best? After you've talked to a tax pro and you're armed with knowledge. Okay. Because otherwise he or she may give you the arrogant attorney answer like, I'm never wrong because I have a law degree, which of course we all know is absolute horse crap.

I agree with you here. Go ahead. Yeah, in other words, you need to go back to this attorney after you talk to TaxPro and go, look, you're going to cost me with this?

an extra 40 50 000 bucks in taxes what's the property worth by the way the property is worth 347 and when my mom bought the house and my mom and dad had the house built um the house was built for 40k but so you got a 300k gain give or take upon her death and um

That is a gain you would not have to pay taxes on if she willed it to you. Now that it's already in your name, you're probably going to have to pay. If I got my answer right here, as a remainder, I'm almost positive this is true. So $50,000 swing.

You're going to pay 50 grand in taxes because they screwed this up. So, yeah, I'm going to go talk to my tax pro, verify that Dave is not crazy, okay, which is possible, but it's possible I'm crazy. It's also possible I'm wrong. But, you know, this is going downhill fast, George. Well, it's like going to a whole life salesman going, I want to undo this policy. They're going to try to talk you out of it most likely. So that's why I want you on. You go, look, because of this, my basis is going to be this, right?

And I'm going to have to pay taxes of 46,000 bucks because you did this. Instead, she could have just stayed in her own stinking house and left it to me in the will. And I wouldn't have to pay these taxes.

Because you get what's called a stepped-up basis upon her death. Your basis becomes what the value of the house is at market value at the time of death. So if she dies and the house is worth $360,000, you sell it for $360,000, you have zero gain. You put 100% of those dollars in your pocket. The way it is now, you're going to pay taxes on everything over what she paid for it or about $300,000 gain.

So it's just a, it's just dumb, but yeah, but, um, double check all of that. And if it's true, then talk to this attorney about undoing it. He or she doesn't want to undo it. I'm talking to another attorney about undoing it. If I can pull that off five years into this deal in Georgia, I don't know if you can or not. You may be stuck.

I hope I'm not. In Florida. It's not the end of the world. It's not the end of the world. Florida, I keep saying Georgia. But yeah, you're in Georgia. She's in Florida. Yeah, I'm in Georgia. Yes, she's in Florida. I'll get my story straight eventually. So a lot of people do life estates because they're trying to avoid probate. Is that the main reason? Yes, or...

They just don't know the basics of this basic tax thing we're talking about here. And it's a very basic, it's not a, if it's, if it's more than basic about taxes, I don't know it because I don't know anything about taxes. There's about four or five tax things. I know this just falls into the heading and one of them I know. Uh, and it's cause I've run into it on different things lots of times over the years, but yeah. And it's just kind of, it's like, um, I call it street law.

Where someone says, yeah, we're just going to give Bubba the house while I'm still alive. That way sister won't get it. You know, that kind of crap. And this is the, that's just street law and street law. Meaning you think you can just do whatever the flip you want. There's no tax implications to it. Yeah, you can give Bubba the house, but there's gift tax implications and or capital gains implications when you give Bubba the house.

Or in this case, not Bubba, but Yolanda. But I mean, sometimes people do that to keep... It's not as much an estate planning thing. It's they somehow get in their head that the government's going to get more

if they let it happen through a will. And the government gets less if you let it happen through a will, even if it's a state where the probate tax is a little high. Yeah, probate is still cheaper than that tax implication. Yes, less than capital gains tax. I don't think there's a state that has a higher probate than capital gains. So it's more about control and lack of legal and tax knowledge, usually, than it is some kind of sophisticated argument that...

that you're there but you can i mean you can use a life estate if you want to it's okay especially if you're not planning on selling the property like if it's a family farm and you were going to pass it down 100 it's going to be generational we're just not going to be selling it then sure you know that's fine you go ahead and do a life estate and the next generation keeps farming it and the the old people get to stay in the farmhouse you know and for life estate that kind of stuff that's lots of people do that there's nothing wrong with that at all

Uh, but, but again, it's, it's in Yolanda's case, it's handcuffed her big time as to what she can do with this property someday when God forbid her mother passes, but we're all going to pass. So was there a right way to do it? Would you say if you want to do it, do a trust? If you want to avoid probate, is there a better scenario for that? I really, I would not make avoiding probate my primary goal in life. Uh, cause all probate is, is the, uh,

court system that Executes the will and so if you leave a will the will is probated meaning that the probate court enforces the will

That's all it means. Now, some states have higher taxes on the size of the estate. And if you can avoid probate with a trust or with some other mechanisms, you're moving it outside of that probate tax. But in an effort to save a 3% tax on probate, you oftentimes can step over into a neck deep into the boiling grease. You know, I mean, it's bad. So you get just completely fried here. This is The Ramsey Show.

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Thanks for joining us, America. This is the Ramsey Show. George Campbell, Ramsey personality, is my co-host today. Joshua's in Seattle. Hi, Joshua. Welcome to the show. Hey there. How y'all doing? Better than we deserve, sir. What's up? So I am a 30-year-old single dad. Just got divorced earlier this year, and I'm in about $38,000 worth of debt of my own.

I feel like I'm living paycheck to paycheck and I don't know where to start to just get out of this. I've reached an emotional point where I'm done. I've had enough. I know I need to set up a budget, but I'm not sure how or anything like that or what the first step would be. I'm so sorry about your situation, Joshua. How long ago was the divorce? When was it finalized? It was finalized in January. Okay. Okay.

And coming out of this, what kind of debt is that $38,000? So it is personal loans I took out a while ago and credit card debt. Okay. What's your income? $65,000. Okay. What do you do for work? I'm a plumber. Cool. How old are the kids? Six and three. You're full-time custody? I have 50% custody. Okay.

Well, we can definitely help you and we'll give you some resources as well with this process. Number one, getting on a budget. You're right. That is the key and it's a difficult thing to do. And part of this, you might need to deal with the kind of trauma and the emotional side to just get, you know, you got the wind knocked out of you. And so part of it is just getting back up and going, how am I going to move forward with this new life and what does this look like? And once we do that, then we can focus on the finances. But it feels like you're just treading water.

Are you able to cover your bills every month, put food on the table? I'm able to cover my bills every month. I can somewhat put food on the table. I've got friends and an adopted family around that they help me out quite a bit with making sure that I'm fed and the kids are fed.

That's good. That's what we want you to cover first. Everything else can wait. And if that means talking to the creditors, the credit card companies, the lenders and saying, hey, here's my situation. Here's what I can do right now. That's okay. How much do you owe in your car? I own my car outright. Good. How much is your rent? So I actually have a mortgage and it comes out to $2,000 a month. And your take-home pay is what?

So my take-home pay is right around $4,500 a month, but then I also get disability from the Navy, and that comes out to $1,500 a month. Okay, so you're bringing home $6,000? Yeah. Right, right at it.

House payments awful high, but it's 33% of your time yeah, and That's left over from the divorce. Yeah, that wasn't what you signed up for that's left over from the divorce But that's part of what's tanking your monthly budget So yeah getting on a written plan will make you feel like you've gotten a raise getting on the budget and Right, so that's gonna be very important, but if we take your $6,000 put at the top of the page

and we take food out first and we take lights and water out second and we take house payment out third your truck is paid for so you just got to put gas and insurance on it that's it and you know you've got some money here you shouldn't be like begging food off of friends you're just disorganized you're just disorganized and have the crap beat out of you because it's been a hard year

But you've got mathematically, you're okay. You can work through this. Obviously, you need to cut up the credit cards and stop the borrowing. You can't dig your way out of a hole. You can't just get out of a hole while you're digging out the bottom. You can't just keep digging. So no more debt. Chop them up. Get on a written plan. Take care of food first, lights and water second, house third. Then you've got money left out of that.

I mean, there's two, 3,000 bucks laying there to do some stuff with, and we can begin to work on this. And then the other thing too is on the days you don't have the kids, I'd pick up extra time. As a plumber, you can make some serious money in overtime or side jobs, one of the two. Right. And, you know, an extra thousand bucks a month on this debt makes it go away a lot faster. Okay. Yep. That's a short-term fix, but it's a short-term problem if we get after it. So do you have any cash right now? Anything in savings?

I got about $100.

So step one, we've got to get a buffer between you and life. And that's going to be a starter emergency fund of $1,000. And we're going to get that as quickly as possible. We're talking a few weeks here. Then we're going to move on to the debt snowball, which is where we pay off all the debts, smallest to largest, regardless of the interest rate. And we're going to walk you through this in Financial Peace University. That's going to be our gift to you. Nine videos in there. Also with that, every dollar that'll help you create this budget. Income minus expenses should equal zero. A zero-based budget. Every dollar should have a job.

and you're going to get to work. And over the next 18 to 24 months, you're going to bust it to get to a place where these kids see your sacrifice, and you can put food on the table without having to worry about anyone else. Yeah, less than one month, I won $1,000. Less than a month later, I want two of these credit cards gone.

And so you're going to list them smallest to largest. You're going to knock off the little ones first and get some momentum like George is talking about. Hang on. We'll get you signed up. Austin will get you signed up for Financial Peace University. We'll get you into the class where you're learning how to handle money. And this all goes in your rearview mirror then. And this is the year of life change for you. So some of it bad, some of it good. And we're here to walk with you. So hang on. Austin will pick up. Joseph is with us. Joseph is in Salt Lake City. Hi, Joseph. How are you?

I'm doing pretty good. How about yourself? Better than I deserve. How can we help?

Um, so I'm 21 years old. I just came back from a summer of selling pest control and I, and I made $117,000. I don't have, I didn't pay for myself to go to college. I don't have any car debts. I don't have any mortgage or anything like that. And, uh, I was just wondering what your best, uh, advice would be going forward. I read Dave Ramsey going, growing up and my parents had been helping me through it. And I've got an emergency fund set aside for 10 grand. And I mean,

I mean, I could start going into investments like Roth IRAs or, I don't know, trying to save for a house, you know, save for a house so I can just buy it after college. What would you recommend I do at this point in my life? So is this your long-term plan? Do you want to stay in pest control? Do you enjoy it? I mean, I'll probably do it for the next five years. But you said you're going to college. Then I'll graduate.

Yeah, I'm going to college right now. I currently go every fall and winter. It's 10K total for that. And I pay for myself to go to college. During the summertime, I go self-pass control. So I'll probably do that for five years until I graduate, and then I'll just get some kind of job. I'll probably go into a business management degree or something like that. What are you studying in college? I'm studying business management currently. Okay. So do you want to be an entrepreneur and run your own business?

Yeah, that was always the dream to do, but, you know, just life beats you down sometimes. So I'm going to college right now because I know that's a very good thing to do at my age, and I can always have that as a fallback. Yeah, definitely. I would go ahead and finish that degree as fast as possible. And you've got – how much did you have saved out of this $100,000?

So I have 117 grand is what I came back with. Okay. After taxes, it'll probably be about 88 grand. Okay. Going to pay my tithing on that, got my emergency fund in the two semesters, and I bought a car in cash because, you know, I needed a car. Okay. Good. Good. Sharp young man. And after all that car stuff. What did you buy? How much did you spend on the car?

It was nine grand. I got a 2007 Ford Mustang. Perfect. I love it. Very good. Pretty good. All right. So, yeah, all I'm going to do is what cash is left after all the different things you listed out there, I'm just going to stack cash. It's college insurance plan. It's ensuring that you go through college. It's ensuring that you go through college. You don't need to start Roth IRAs. You don't need to start a house fund. You need to go through college debt-free.

And you've got this lined up. So you pay your taxes, you pay your tithe, you pay for the car, you set your emergency fund aside, and then you stack cash. And if you graduate from college with 50 or 60 grand in that account, then we can talk about starting to invest then or buying a home then. Just take it easy, man. You're just a go-getter. You're so far ahead of the game. You're a go-getter, man. You're a hustler. It's good. Hustle and grind, man.

You're doing great. Big piles of cash, get through school, then start your investing in house buying. That's what I would do. This is The Ramsey Show.

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Welcome back to The Ramsey Show. I'm George Campbell, joined by Dave Ramsey this hour, and we are taking your calls at 888-825-5225. Thanks for joining us, everybody. Tracy is next up in Lynchburg, Virginia. Hi, Tracy. How are you? Hi.

Oh, Dave and George, I'm so excited to be here and only by the grace of God, I am better than I deserve. Good for you. How can we help? Okay. So I had my IHADIT moment back in August. Since then, I've paid off $15,000. Okay.

I'm still $70,000 in debt. I make $90,000. I'm 51 years old, and I've been divorced for a year and a half. I work at a company. I've been with them. It was an amicable split. It was the best thing for both of us, and God has seen us both through. So I'm very grateful for having a good relationship with him ending this, but it was what we needed to do.

So I worked for a company, I'm still working for a company for 30 years. Back in 2009, they froze their pension.

And we got a notice back in September that they are actually terminating the pension, which will take place next year. We don't get a benefits report until March, but I know that we have three options that we have to make a decision for in July. One would be a lump sum distribution. The second is to roll it over. And the third is to start now.

monthly annuity payments at that time. I have Googled this until my eyeballs want to pop out of my head. There's only 4,000 answers on Google, I'm sure. I know, and I cannot get a clear answer, and I'm uncertain. I'm sure there's going to be penalties. No, there's not.

No. You're going to roll it to an IRA. Zero penalties. You're going to take the lump sum and put it into an IRA. Get with a smart investor pro. They'll help you do the paperwork properly. It's a direct transfer rollover. There's no penalties. There's no taxes. And it will grow from that point. Tax deferred. You're going to use a traditional IRA. That way there's no taxes. If you roll it to a Roth, it's taxable, but don't do that.

Okay, that was another question. You don't want to make it a Roth because it will be taxable then. You make all of that income because it's going to be a sizable lump sum. You've been there a while. I've been there a while, and I was there 17 years when they froze it. Yeah, but I mean you're going to have – it's going to be 100 grand plus, isn't it? Okay, so you would not take the lump sum? No, you're going to get taxed. You're going to get taxed. And taxed and penalties. Yeah, taxed.

At least taxed. I'm not sure if they close it. If you're penalized, I'm not positive off the top of my head. Doesn't matter. You're not going to do that. You're going to do a traditional IRA direct transfer rollover with your SmartVestor Pro in the four types of mutual funds. We talk about growth, growth and income, aggressive growth, and international. And by the way, this is great news.

It is. I'm so excited. I've listened to you forever. And like I said, a fire got lit under me back in August and I'm like, I make too much money on my own to

to be drowning like this and I'm taking charge. And when that came in the mail, I knew, I knew it was the Lord saying, this is good news. So I have a 401k at work. It's traditional one. And I have $300,000 in there currently. Do I put that,

In that one or do I open a separate one? No, it's not. You cannot add it to a 401k. That's not an option. Oh, okay. Yeah. I would just roll it to an IRA with a SmartVestor Pro. You pick the mutual funds. You're in total control. This money is leaving us.

This company will have nothing to do with them ever again. When you die, that money is laying there. In the meantime, it is earning more than it would have made in the pension. And so it's good news all the way around. But just if you don't have a SmartVestor Pro, go to RamseySolutions.com. Click on SmartVestor. You can get a list of the people in your area that are in our SmartVestor Pro program that do things the way we teach. And then you can meet with them and choose among them the one that best suits you.

A lot of people call in with pension questions, Dave. And if you have the option, let's say a listener's going, I started a new job. They're giving me the option of a pension or 401k. We would say go for the 401k because you have way more control over it and it stays with you.

Usually, and that's assuming that they are putting something into the 401k since they don't have to put something into the pension. If they give you that option, usually they're doing some kind of really sweet match in the 401k, and the company would rather you go to the 401k. It's better for both of you, the company and them, because the company doesn't have to keep up and manage your investments. Your 401k is your own investment. So that's a good point, George. Very good point. Ryan is in Baltimore. Hey, Ryan, welcome to the Ramsey Show.

Hi, how are you doing, guys? Better than we deserve. What's up? So I got a couple questions for you. My wife and I have been married for two years, and we will be out of consumer debt by the end of February. We don't have a house. We're currently renting right now from my grandmother. So once we're done paying off the rest of our debt, we'll obviously be saving up for a down payment on our house. Once we're out of debt and we're done throwing everything extra towards debt, we'll probably be making...

a month after our monthly expenses. Um, so while we're doing that, should we be putting that 5,000 roughly into mutual funds or just putting it into savings? Um, and right now we're also investing about 500 a month into two retirement accounts as well. Um, 500 total 250 each. Okay. Ryan, how long have you been listening to the show? Um, for consistently about the last month and a half, I took Dave Ramsey's class in high school. Um,

um when i was in school so i've been kind of like on and off with dave ramsey for a while now cool well you're you're doing some good things you're just doing them all at once and not in the right order so if you're walking through the baby steps you should be putting all of your effort every single penny of margin towards the debt which means we're not investing currently and there was a spot in between you said hey once we're debt free we're going to get the down payment but you were missing the fully funded emergency fund so do you currently have savings

For the emergency fund? So technically right now we do, but I'm kind of not walking through the baby steps originally. Like we've got about $16,000 sitting in savings. We're actually just going to pay off the car totally. We'll still have like $2,000 or $3,000 left after that. I'm sorry, how much debt do you have? It's about $26,000. And what's in savings? $16,000. $16,000 in savings. $16,000. So if you took that down to $1,000, that would leave you with $15,000 you could throw at this debt.

Yep. That's what we plan on doing. Today? Today, yes. Yeah, okay. Now, baby step one is $1,000. Baby step two is pay off all of your debts. Once all of your debts are paid off, baby step three is build an emergency fund. So you go back to that $1,000 account and you raise it up to a fully funded emergency fund of three to six months of expenses. Then you start saving for the down payment on your home. Until then, you don't restart your retirement plan, which you stop today. Okay.

Okay. Because I want that $500 added to that $5,000 and make it $6,000 because you tighten up the budget. And that means you're debt-free in two months.

And then you build your emergency fund. Let's call that $15,000 and three more months. Then you, I'm making that up, but if that's what it is, and then in three more months, you've got to start to have five, four more months, you're starting to have a good down payment. This time next year, you start shopping for houses and you'll have a good down payment with a fully funded emergency fund and no debt. And you restart your retirement at that point. Absolutely.

And the reason for all this is not because we're trying to be legalistic, Ryan, not because Dave said so, but because it actually freaking works when you do it in this order with intensity, with focus. And we've seen so many people do it the right way. And we've seen a lot do it the wrong way. And six months later, they're calling us saying, your plan didn't work. And we're going, no, you didn't do our plan. You did your plan. Did your version of our plan, which is not our plan. Don't go, don't do, don't be Dave-ish, which is what we call it. Go all in on this stuff. And I promise you, you're going to call us back and say, okay,

I did it. It paid off all the debt. We got our home now. We have a fully funded emergency fund. We're investing for the future. Man, it gives you such peace and confidence. This has nothing to do with it being the Ramsey way or Ramsey-ish. It has to do with what is the fastest right way to become wealthy. What is the most efficient use that moves you along the process the fastest and the easiest?

And that's what this system is. And we've used it for so many years that we've proven that that's the case. And so, yeah, total focus on baby steps one, two, three, till you get there, then do your down payment, then restart your emergency fund and you'll be in a really good shape. So well done. Well done. This is the Ramsey show.

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do work that they love, and create actual amazing relationships. George Campbell, Ramsey Personality, is my co-host today. He is a big star on YouTube on the George Campbell Show, and also, of course, co-host of the Smart Money Happy Hour, and author of the brand new book that comes out next week called Breaking Free from Broke, The Ultimate Guide to More Money and

and less stress. There it is right there. All right. Courtney's with us. Courtney is in Colorado Springs. Hi, Courtney. Welcome to The Ramsey Show. Hi. Thank you so much for having me. Sure. What's up? My question is, how do I protect or how does my husband and I protect our finances against his money-hungry ex-wife?

Money-hungry ex-wife. Why would she have any access to your finances? She's called the ex-wife for a reason. Basically, our main concern is, could she pull more child support when she finds out that he's been married? I'm sorry, would she get child support increased because he got a raise? Is that what you said? Because we got married, could she take more? She doesn't get more child support because you got married.

Child support is based on his income, not yours. Gotcha. Okay. So how else would the crazy ex have access to your husband's money? That was the only way I was thinking. I've heard that they do yearly audits. They do. They do, because your husband has children, and he should support those children, and the law agrees with that idea. Correct. And if he gets more money as his income, he's supposed to give more to his children. That's...

That's not a money-hungry ex. That's just dad taking care of his kids. Right. Has she contacted him? Is she making threats? Or is this just all kind of in your head right now of what could happen? She hasn't contacted him. I guess this is just me trying to make sure we protect ourselves.

Okay. Well, you're in good shape. As long as your husband is willing to give the legal percentage of his income to his children under the law for child support, which he legally and morally should do, if you want protection from that, I can't help you. But as long as he's willing to do that, you don't need protection from anything else. She can't get anything else. She has no access. Or if your husband is spineless and just gives her money because she yells at him or something, I mean, has he got that problem?

No, she's not. Okay, so he doesn't just hand her money just because she puffs up or something, right? Correct. Okay, that's just a behavior issue. That's not a legal or a financial issue. But yeah, I mean, sometimes people are intimidated by their exes or whatever, and we have to just kind of correct that by saying...

you know, X in front is a reason. Yes. X means no more. No more. That's what that means. We're making sure the courts decide how this goes down, not his emotions or her. And so that's the important part. And it sounds like this is largely right now just a fear versus a reality. Yeah. Like you have discovered that no one likes your husband's X. Oh, well, that's really, you know, because she's a greedy jerk. Okay, whatever. That's fine. No trouble.

But she's still over there and she's the ex. And the only involvement you have is just around the children. And so we'll try to be nice and pleasant and give the appropriate amount of child support. As long as you're trying to do that, then I don't think you're going to have any issues. There's nothing, nothing she can just, you know, or unless she shows up at the doorstep and your husband just caves and starts handing her money. But that's a husband issue. That's not a

protection issue then yeah this was simpler than i thought it'd be i thought there was some crazy stuff going on but it's just child support as far as we can tell yeah so yeah very reasonable well there's a real dynamic when you're the new wife and the ex is over there in the distance crazy that's there's still a connection that's a dynamic yeah those kids are still going to be in his life so you're gonna have to learn to manage it yeah that's a it's a thing christian's in missouri hi christian how are you hello i'm good good how can we help

I joined the Navy, and I'm leaving for boot camp in June. They cover most of your expenses, and so I have most of my five foundations covered. After I get my $500 emergency fund set up,

Am I ready to start going to step five because I paid cash for my car, they pay for college, and I don't have any daily expenses that most civilians have to pay for? What should I do with the $2,000 paycheck I get? So you're 18?

Yes, sir. Thank you for serving your country, sir. And thanks for going through the personal finance curriculum. I can tell by the way you're talking, it stuck with you. You went to that in high school, didn't you? I'm actually still in it. I'm graduating in May, and I'm taking it this year. Oh, wow. Fantastic. So boot camp is immediately after graduation, huh? Yes, sir. Wow, look at you. Okay. Well, we will graduate you from the high school curriculum to the adult curriculum.

which will mean you start with a fully funded emergency fund, which is three to six months of expenses. You're making $2,000 a month. Most things are furnished. So we might call that emergency fund $5,000, not $500. $500 is for high school students.

Yes, sir. Okay, but now you're going to leave high school and enter the land of grown-ups. So we're going to put you on a grown-up plan, and that's going to be an emergency. So your first goal is going to be a $5,000 emergency fund. You have no debt, right? Correct. Okay. And you paid cash for the car. And so beyond the emergency fund, you can begin investing with earned income and maybe fully fund a Roth IRA, and there's probably some retirement options through the Navy, I imagine. Okay. Maybe a TSP? My next question is...

In this curriculum, we learn everything interest rates based on a 12% interest rate for compound interest. How do I actually get that good of an interest rate? Look at your TSP in the Navy. It's the Thrift Savings Plan. They have a Roth version. You'll do that. If you look at the C plan in that, it's north of 11%. It's not quite 12% right now.

The C plan?

Okay. And when you leave the military, you can roll that out to an IRA if you want to. Okay. How much would you recommend me putting in that retirement fund? 15% of your income after you have your $5,000 set aside.

Okay. You're very wise to get ahead of this, Christian. I want you to continue all the way through boot camp to make sure you are writing down each month before the month begins where every dollar goes because there's a lot of really stupid stuff 18-year-olds in the military do with money, and I don't want you doing any of that.

A lot of crazy crap out there, son. So just be careful. Continue to be calm and wise like you are right now, and you're going to do really well. You'll be so wealthy, my friend. Thank you again for your service.

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Financial.com. George Campbell Ramsey personality is my co-host today. Open phones at 888-825-5225. I was just telling George a story and Austin, you need to hear this too. In 2012, I took a call here on the air.

From a guy who had a side hustle, and he said, I love my side hustle more than I like my job. When can I quit my job and do the side hustle? I want to double down. My parents say I'm crazy for doubling down. My wife says I'm half crazy for quitting my job. He was a pharmacist, so he'd spent a lot of money and a lot of time getting to be a pharmacist. He said, I want to quit pharmacy. I want to go into this whole other side of things.

in the gun industry. And I'm like, okay, so I'm a gun guy. So I'm talking to him and listening to him. I'm like, yeah, that's pretty cool. So I said, how much do you make? And he said, I made $65,000 on my side hustle. How much you make as a pharmacist this year? This is 2012. He said, $60,000. I said, well, double down. I'm on your team. I would advise your wife that you should go after this. It's what you love. It's your passion. I would advise your mom and dad that they're very sweet, but they're wrong and that you should go after this.

So a couple weeks ago, I was out west, and I visited the guy's business. He did $70 million last year. That hurts my brain. Wow. Wow.

And he acts like I did it. And I'm like, I didn't do anything. I talked to you for five minutes. You've worked for, uh, you know, what, 11, 12 years on your business. You'd built your business. I didn't build your business. I'm so proud of you though. Uh, I'll take credit for lighting a fire, but dude, you, you, you burned the forest down, man. Way to go. Way to go, man. That's pretty cool.

We don't always get to hear the follow-up 11 years later to taking some of you guys' calls out here. So some of you ought to tell us if we screwed it up 12 years later or if we got it right or whatever. Goodness. Good for him. Pretty cool. I'm impressed with him. Sharp young guy, too, obviously. Todd is in Fort Wayne. Hey, Todd, welcome to the Ramsey Show.

Hey, Dave. Thanks for taking my call. Sure. What's up? I've got a quick question for you. Back in 2009, 2010, when there was a big recession that we all heard about, my business went in pretty deep.

And since then, I've paid back everybody I can and taken care of all that. But I've got one credit card that went after me in 2002 collections. And it took me to small, I guess you call it small claims court, because I got a letter for a judgment against me. But at that time, I was still trying to get my head above water. How long ago was the judgment?

Uh, it was 2015, August of 2015. Eight years ago. Okay. Was the first one. Yes. Uh, the first one. Yeah. The amount was about, um, I don't know, two, $3,000, but of course with all their fees, that judgment was for 8,000 round numbers. And, uh, anyway, I just got another certified letter today. I didn't know how to, for sure, uh, how to contact these guys. I just knew it was out there, but they've added 2000 to it. Um,

Anyway, it says they have 14 days to congest. I'm assuming a court hearing. I didn't know the first time I could do that, but do I just pay them? I don't think they'll get to have a court hearing on this one. Okay. Because it's gone too long. Yeah. So let's learn a couple things here. Number one, you owe these people some money, and you're not disputing that. Agreed? Yes. Okay. And the original balance was what?

I don't know for sure. It was like $3,000 or something with their fees, original. No, I'm talking about fees. I'm talking about what you actually owe them. Oh, the first one was $79.97, so $8,000. No, no, no, no, no, no. That was with the fees. Okay. When you had a credit card before it went to collections, the balance on the credit card was $3,000, wasn't it? Yeah, somewhere around there. Yeah, that's what I'm thinking. Okay. So...

Here's the thing. They said they've added another $2,000, so it's now $10,000, right? Yes. Okay. There's a whole industry out there that most people don't even know is out there called debt buyers, and they buy old, bad, probably uncollectible debt.

Probably uncollectible because the person has already filed bankruptcy and they don't get anything, but they still will buy the debt, sometimes not knowing that. Or the debt has gone too long and it's past the statute of limitations in that county or that city or that town or that state, and so it's not collectible, which I think is probably the case with yours anyway. They probably get zero technically legally, but they buy old bad debt. Now, let me tell you what they pay for it.

A nickel on the dollar, maybe less. So this guy calling you or certified lettering you with a $10,000 bill likely has $250 to $500 invested in your account. Okay. That's good information if you're going to call him and offer him $3,000.

Yeah. I want to do right by this debt. I'm willing to pay $3,000. That's all I'm willing to pay. If you want $1 more, I'm going to give that to a lawyer and I'm going to fight you to the death because I don't think you can collect this at all because it's gone too long. So this is a case, this letter from our county courthouse or court, does that make a difference? Nope. The court didn't buy the debt. Some duper bought the debt.

Okay. So the Duber's brought you to the county courthouse. Is the Duber's name on there? Yeah, the collection agency, and there's a lawyer name on it. The lawyer's who you call. Call the lawyer. Okay. Because here's the deal. They are not in the business. This is not like if I owed you money and you were pissed and got a lawyer and sued me. Okay. This is a conveyor belt at a factory, and it's the junkyard. It's not even a factory. It's a conveyor belt at the junkyard.

and they're running like 9,000 parts a minute down the conveyor belt, and you're one tiny little part. Okay. All right. Let me give you another example just for fun, okay? A couple of Christmases ago, I decided to take advantage of this knowledge to do a fun charitable thing for our team. We bought 8,000 accounts from a debt buyer totaling $10 million worth of debt.

Our purpose in buying it was we were going to call all 8,000 people. We have 1,000 employees. So each of them got to call eight people and tell them their debt is forgiven in Jesus' name for Christmas. So we bought $10 million worth of debt to do that for $259,000, two and a half cents on the dollar.

Yeah, that's amazing. Yeah. So I'm telling you, this is how this works. So that's who you're dealing with. You're one of 8,000 in a package. Only you didn't, the package wasn't bought by me. So you got to go deal with the people. But it's still, I had 8,000 people that were in this one package for two and a half cents on 2.59 cents on the dollar.

All right. And that's how this industry works, man. And what do they want? They want more than they've got in it because this is a business for them, not a charitable event. So they got $250 or $500 in your deal. You offer them $3,000 and you stand firm and argue with them about 30 times. They're going to take it, get it in writing. Do not give them electronic access to your checking account. Those two things are very important. Okay. So I think you should pay them what you owe them, which is $3,000.

Okay. You got the three grand? Yep, I do. Very cool. Does that tell you what you need to know? Yes, perfect. Thank you. Cool. Thank you. So they're hoping a few people in this giant pile will pay that eight or ten grand to make this whole operation work. No, they never get it. 99% of the accounts aren't collectible. That's why they're worth nothing.

Because, I mean, what are the chances of collecting on something from 2010? 13 years ago. 13 years ago. If you can even find the guy. I mean, they're just saying glory hallelujah that they even found him. Right? We had trouble making the calls. We couldn't even. Old cell phone numbers. Bad numbers. We had a, you know, we had a what? I bet you one out of eight was probably bad or two out of eight. Yeah. The information we had with the accounts we bought were bad. Which tells you they had bad information when they bought it. Well, yeah, because it's old. Yeah.

I mean, how many people got the same cell phone number 13 years later, you know, and or whatever, the same address. And, you know, you don't send a change of address to people you owe money to if you're on the run, you know, so it doesn't happen that way. So it's an interesting world, but it's a very high number, low performance world. And if you'll keep that in mind when you're dealing with them, it's not personal. It's just a transaction for them. This is The Ramsey Show.

George Campbell Ramsey personality is my co-host today.

Open phones this hour, 888-825-5225. In the lobby of Ramsey Solutions on the debt-free stage, Jason and Jody are with us. Hey, guys, how are you? Good. How are you, Dave? Better than we deserve. Where do you guys live? Jacksonville, Florida. Oh, welcome to Nashville. Good to have you. All right, and how much debt have you guys paid off? A total of $365,000. Wow! How long did this take? About seven years and ten months. Oh.

All right. And your range of income during that seven years and ten months? So we started out at about 80, a little under 80, and we're now about 175. Excellent. What do you guys do for a living? So I am a wireless communications engineer.

I do adoptions from foster care. Excellent. Wow. Very cool. Okay. $365,000 was what kind of debt? So $86,000 was consumer and the rest of it was actually the house. You paid off your house. Looking at weird people. Way to go, you guys. What's this house worth? So right now it's close to about $400,000. Way to go. Very cool. And how much do you guys have in your retirement accounts?

Probably about 160 between the two of us. Way to go. You're heading towards millionaire. Halfway there. Way to go. Congratulations. How's it feel to have your house paid off? Wonderful. It's amazing. It's just, there's so much you can do now. We can do now without a payment. Amen. Amen. So what started you on this journey seven years and 10 months ago?

It actually started earlier than that. My sister, she's seven years older than me, and I had just graduated college and was unemployed looking for a job. And I was babysitting her twin boys, my nephews, and she had your book on her coffee table, wasn't using it. So I read it, and

I thought, well, I mean, I don't have any money coming in. So I, of course, made every excuse and put it back down. And then we had our first son.

And both of us were kind of like, we need to do something to change this. And a couple of my friends at work were also doing or were doing Financial Peace University at their church. And so that's how we got connected. Ah, okay. So you went to Financial Peace. We didn't actually go through. I just listened to your podcast all the way through. I still listen to it. When we were in here, it was the Baker Street was playing. And my son is that why we're here? Yeah.

He made the connection. This is why we listen to this every day. He's been hearing that since before he was born. Yes. I like it. Very cool. All right. So, Jason, how'd she get you fired up about this? You know, I kind of just followed along and I saw things, you know, snowballing and I said,

This is really working. I think I'll jump on board too. Yeah. Engineer mindset. You're like, all right, this is a process. It works. I'm on board. Yes, I have to see facts. Yeah, absolutely. I don't blame you. Me too. Well done, you guys. Well done. That's a long slog, but you got the house and everything done. Seven years. That's about the average people paying off their house in about seven years. Yeah. Wow. Did you pre-decide you were going to pay off the house at the end of the consumer debt? What made you just keep going?

We did. I mean, we just didn't like being in debt. And once you saw those numbers go down, it's like, we can do the rest of it. No problem. Yeah. We reach over and knock it out. Yeah. That's fun. Because you're definitely not normal anymore. I love it. So when someone says, how'd you get out of debt? How'd you pay off your house at this young age? What do

What do you tell them?

all went to debt. And I tell you, it really got that snowball going really fast for us. Yeah. Live on less than you make. Avoid lifestyle creep. That's what they call it. You get a raise and you just spend it. You don't know where it went, but you guys went, no, we're going to keep living on less so we have more margin to pay off this debt. That's it. We also, I had, um,

My grandparents lived in central Florida for 60 years in the same house without any central air conditioning. Whoa. And I always reminded myself and Jason when we were going through things and we're trying to figure out if we should buy this or not. It was always thinking, deciphering want versus need. And so if my grandparents at 80 years old can stay in a house with no central air and heating, then

In Florida. In Florida. Yeah. We can live without the air conditioning in our car right now. Wow. And then you get there, and now you can do anything you want to do. Yep. So what's your first big thing to do now that you don't owe a stinking dime in the world to anybody? Well, we did a Disney trip with one of our close friends and her girls, and that was exciting. And expensive. Yes, it is. Disney's proud of their services. Yes.

And then being here, we took our first flight as a family of five, which was a big deal. Yeah, it is. Yeah, so probably a good little southwest jump from Jacksonville to Nashville. You got it. Yeah, done that one myself a time or two. Excellent. They went from Disneyland to Ramsey Solutions. Which one's better? I just don't know. I know which one's cheapest. Kids can't decide. Yeah.

This one's free. We're not going to charge you for the ride. I'm just saying. And the cookies are free. So it's quite the opposite. It's a Disney inverse relationship. Oh, my gosh. Way to go, you guys. So proud of you. Congratulations. Who was cheering you on from the outside?

So we had friends and my mom, his parents, my sister, my really good friend, Robin Staley, and her late husband, Tim, were big fans and went through this journey with us. Yeah. Way to go. Very cool. You guys. Congratulations. Very cool. We've got a copy of the Baby Steps Millionaires book for you. The Total Money Makeover book and financial piece.

Membership for you to either go through it now or give it to somebody now that you're here. Baby Steps Millionaire is definitely your next step in your situation. You're on your way. That's called the Live and Give Bundle, the Live and Give Box. And so we'll give that to you at the break here. And let's bring the guys up and introduce them with their names and ages.

So we got Vincent, we got Victor, and we got Henry. Three, almost six, and nine. All right. Ready to go. Ready to go. Look at those good guys. I'm telling you. The matching blue polos. Yeah. Love it. I didn't have anything to do with that, by the way. Well, their family tree has been changed. Their lives have been changed, and they don't even completely understand what you two have done for them. But you're in really, really good shape. Congratulations. Well done. Well done.

Jason and Jody, Henry, Victor, and Vincent. Jacksonville, Florida. 365. House and everything paid off. Seven years and ten months make an 80 to 175. Count it down. Let's hear a debt-free scream. Ready, guys? Three, two, one. We're debt-free! Yeah! Woo-hoo-hoo-hoo! Well done, you guys.

That's what it's about, just steadily plowing through right there. Now a whole other life completely changed. So, George, that means that we've now done 53 debt-free screams this year. Wow. Since the beginning of the year. Time flies. For a total of just under $10 million in debt paid off total. That's pretty incredible. So all kinds of backgrounds, all kinds of incomes, all kinds of family situations. Everybody's doing it. And you've done this for 30 years now.

And the best part is that's encouraging to me is that anyone at any point can just decide. I mean, that's just, it's like a magic trick that you can just wake up and go, I don't want to live with $360,000 worth of debt anymore. I want things to be different. And then you just slowly but surely follow a proven process and pay it off. Yep. You get after it. There's no magic to it. You got to get started. You got to get after it. You got to push it through. You can do this.

And what we know is that we are positive because we personally witnessed people from every background, every income, every situation, every race, creed, and color have been able to do this stuff. And we're willing to help all of you. We want to help all of you because it's why we're here. It is so fun to sit here and hear your stories of winning.

with a whole new look on mental health, a whole new look on your career, a whole new look on your money. Man, it's a completely different situation than most people live. This is fun stuff. It's called The Ramsey Show.

It's way too easy to put off making a will. And believe me, I've heard every excuse in the book. But not having the time is one excuse we can kick to the curb right now. Because these days, most folks can make a legally binding will on their laptop

between loads of laundry. If you're wondering if you can make your will online or if you need a lawyer, we have a quiz to help you figure that out in less than five minutes. Just go to ramsaysolutions.com slash wills quiz ramsaysolutions.com slash wills quiz. George Campbell Ramsey personality is my co-host today.

You can see his new YouTube channel anytime you want. Just check out the George Campbell YouTube show. It's pretty stinking incredible. Hey, if you're liking this show and a bunch of you are new, thank you for that. Just let y'all know the inside story. We don't have a $300 million a year marketing budget. We don't have a football stadium named after us like...

Oh, I don't know. Suffolk or something like that. Excuse me. Allergies are bad. Bless you. Gesundheit. But anyway, so the only way this show grows and we help people, more people, is you tell people about it.

So we appreciate that. Share it. Tell people you listen. Tell people where your talk radio show is or talk radio station you listen to. Or you can share it digitally if you're a podcaster or a podcast listener or a YouTube follower or something like that. You can just hit the share button. Hit the subscribe button, the follow button. And that way it will automatically show up on your devices and will be there for you all the time. And also, by the way, leave a five-star review where you can.

One stars are not helpful. Mama said if you didn't get anything nice to say, don't say anything at all. But all the five stars we can get and all the shares and the follows and the subscribes, all of those things push the show to the front of all the Internet algorithms and cause it to show up on new people's searches faster and easier, and we get more and more people we can help. Thank you for that. We appreciate you. Daniel's in Atlanta. Hi, Daniel. Welcome to the Ramsey Show.

Hey, thanks Dave. Thanks for having me on. Sure. What's up? Um, so basically, um, I have the ability to totally pay off my home right now, but I am getting married in July and my, uh, my fiance, she's in medical school and, uh,

By the time her student loans are due, she's going to have around $300,000 in student loans to pay off. And I was just trying to get some advice on how I could potentially or what I should do with my house right now because I have that three-year buffer until any payments are due to help my fiancée. So she's got three years of school left? Yeah. And how's she paying for that?

I'll just, I'll be helping her. She's just taking straight loans. I'm saying after you're married, what is your income? Okay, so right now I have a fairly volatile income, but my salary is $110,000. How much do you have in savings? I have $275,000 in savings right now. Okay, what's it take for her to finish school after July? How much? Yes.

The grand total for her to finish up is going to be $300,000. The total of our whole schooling, but she's already started, hasn't she? Yes. Okay, how much does it take from this point forward to finish? So she's already, so it'll be, that's going to be the entire total. So I'm not exactly sure what she's taken out so far. That'd be good information to get since you're marrying her.

Yeah. What's left on your mortgage? So I have, well, I know that it's going to be $300,000 whenever it's all said and done. But it's not all said and done yet. Okay, so she's already been in school, what, a year? She's been in school, she's finishing her second year. Okay, and she's got three more to go. Yeah, she's got three more to go. If we call $300,000 into five, that'd be $60,000 a year if we're guessing, right? Right.

No, so it's going to be $300 total. I got that. Whenever she's done. But my point is, here's what I'm trying to lead towards, and you don't have the numbers, and you're trying to box me into some kind of corner, or you just truly don't know. So the deal is this. What I want you guys to do is I want you to pay cash from this point forward with your money from July forward after you're married. I don't want her to take out any more loans.

I want to use your $275,000 for her to finish school. No more loans. And my guess is she probably has between $50,000 and $100,000 right now. That's my guess. Okay. And so she probably needs another $200,000 or so to get through school. But let's budget and set aside of your cash what it takes for her to finish med school. That's most important. Because the first step to getting out of debt is not going further in.

Right. Okay. Do no more harm. Similar to her Hippocratic oath she'll take later. Right. Do no more harm. Right. Okay. So we're going to just, we're going to cash flow. Now, whatever cash you have above what it takes for her to finish from today forward, then we're going to start talking about paying off her student loans.

Then once those are gone, we're going to work towards paying off your house. That's working the baby steps. First, borrow no more. Second, begin to address the existing debts that are there. Third, we have an emergency fund. Fourth, we build and we start to pay off the house in baby step six.

That's what you've got to, but what you've got to ascertain to do that is you've got to find out what it takes in cash from July forward for her to finish school. And that is a number less than 300 because 300 is all in. Correct? Right. Okay.

We got there. So yeah, the goal is not to take any new loans when July hits and you guys are married. So cashflow, the wedding cashflow, the honeymoon, let's come back. Let's look at the pile of money. We have our incomes, our debt load and begin to pay it all off. Yeah. And then when she graduates and is an MD, hopefully her income will be North of 200 pretty quick and your income. And so you're going to have a three, $400,000 household income, and you'll finish paying off the house very quickly at that point.

with what's going on. So you've done a great job saving money. You're signing up for a debt ride. That's part of what goes with July. You've got a big old debt ride, but we're not going to just keep piling on the debt while we reduce the debt over on the other side on the house. That doesn't make sense at all. In a sense, that's like borrowing student loans to pay off your house.

Mathematically, it's about the same thing. It's just a balance sheet switch. Pay off 300 and take out 300. Yeah, exactly. We're going to pay off 300 on the house, but we're going to take out 300 over here on student loans. So that's the same as borrowing on student loans to pay off your house, which we wouldn't tell you to do that. And nobody would do that on purpose either. But that's the net result of all this trying to hide the P under a shell thing.

When people talk about Dave, we took a call earlier and someone said, is it fair? Because it's not her fault I went into this debt. And we just walked him through this and went, hey, you saved up hundreds of thousands of dollars. And all of a sudden you get married and you go, oh, but I worked so hard for that. I got to pay off her medical debt. How do you overcome that? You are marrying a doctor.

So there's an upside there. If you want to play tit-for-tat quid pro quo here. You should be able to get a great income out of this, yeah, as you go along. There's an attitude and mindset that goes along with getting married that's hard for people to stomach in this very independence-driven world. I worked hard for this, Dave. I shouldn't have to pay off their loans.

There is that mentality. Yeah, but he wasn't saying that. He was just trying to figure out the best strategy. I was impressed by him because he was so quick to go, all right, I'm going to pay off her debt. I'm going to cash flow her med school, which is very honorable. Or do I pay off my house, which is wise. That's what he's asking. So it wasn't a tight hold on it. But that's how we'd handle it, Daniel. The other thing that I want everybody to be careful of, and we've seen it in the last hour,

Be careful of your language. Jesus said, out of the abundance of the heart, your mouth speaks.

So I was forced to. I'm trapped. I can't do this. In our area, you can't do this. And all of these absolutism type statements and verbiages indicate a victim mentality, indicate you're stuck and you're not stuck. And when Daniel kept saying all in, all in, all in, it's like it presupposes that debt is the only way to do this.

And it's not presupposed because you called the place where we don't do it. We presuppose quite the opposite. And so don't presuppose all in. We're not doing all in. We're not going that. That's not the plan we're on anymore. Just change. She's marrying you and you got money. There you go. This is the Ramsey show live from the headquarters of Ramsey solutions. It's the Ramsey show where we help people build wealth, do work that they love and create actual amazing relationships.

Open phones at 888-825-5225. That's 888-825-5225. Jenna Starr, oh, George Camel, Ramsey personality, is my co-host today. He's also the co-host of Smart Money Happy Hour and the host of the George Camel Show on YouTube, which is exploding, by the way, one of our more popular Ramsey Network launches in the last year. Jenna is with us. Jenna is in Seattle, Washington. Hi, Jenna. Welcome to the Ramsey Show.

Hi, oh my gosh, I'm so excited to talk to you guys. You too, what's up? So I have a situation that feels complicated to me, but likely not to you guys, which is why I'm calling. I am the sole provider for my family and am self-employed as a therapist, a mental health therapist in private practice.

And I make good money, over $200,000 a year. And yeah, over 10 years, it's been amazing. But I'm paid pretty irregularly, mostly by insurance companies. And I usually know by like Sunday evenings kind of what my deposits are going to look like, but they tend to be irregular.

slightly different each week. And then I also get kind of random payments, like, you know, copayments from patients or just kind of paper checks. It's just, I'm not, I don't have like a, it's sort of predictable, but like also not predictable. How long have you been doing this?

How long have I been doing this? Over 10 years, actually. So over the course of a year, it's very predictable. Over the course of six months, it's fairly predictable. Over the course of one week, it's not. Correct. Okay. So give us some rough estimate here. What's your question?

So we're struggling to budget as far as the kind of grocery shopping weekly versus monthly, like just kind of really trying to understand our money better. We've kind of banked on like, we just make good money. And so we, money just sort of disappears and I'm trying to do better. We're trying, my husband and I are trying to do better. My one caveat question, I want to throw him under the bus is he also refuses to drop the coffee stand and wants to keep it in the budget. And I want to, you know,

mix it from the budget. So I want you guys to give me some... You mean buying a cup of coffee at a coffee stand? Correct. This is not your problem.

No, it's not my problem. You need to lose that battle and win the war. He needs a budget line item for his coffee. He gets his coffee and we get a budget together that we both work on that accomplishes our overall goals. Coffee is not keeping you from doing that. I agree. All right, that one's under the bus. You lose, he wins. Next. All right, George, how do we do an irregular income? So the simplest way to look at this is look at what a low month would be for you guys. We know it's not going to be zero, right? Correct. So what would be a low month?

A low month would be $12,000. Okay. So we start there. We'll input that in the budget. And when more money comes in, we'll just add that income into the budget on the income side. Got me? Okay. Yes. Then on the expense side, we're going to do it a little differently because it's a regular. We're going to make a prioritized spending plan. So let's have our four walls. We got to cover the bills, you know, the rent, the mortgage, all of that stuff. Food. Food on the table. You should have a set food budget.

That is fixed, that easily fits within $12,000, and it should not have to change based on the irregularity of the income. Okay. Other things will change based on the irregularity, but not food.

Okay. Because it's first. Now, are you at risk of running out of money even while in that bad month of $12,000? Or are you just trying to go, hey, we should be saving more with all of our expenses? Well, no, we're not at risk of running out of money. I just don't feel like we're throwing enough at our snowballs. Yeah, perfect, perfect. Yeah, we're not at risk of running out of money as far as our needs go. I just feel like after that, it sort of just disappears. Gotcha. Gotcha.

But it's not disappearing into the coffee stand. There's other places, other money leaks. Well, it's what she's saying, I think, and I don't put words in your mouth. This is disappearing into the disorganization and the chaos. And I want to get a handle on this so I can feel like I'm doing a good job.

Correct. It's like one week I'll pay the Comcast bill, and then the next week I'll pay a different bill, and I just don't feel like I'm organized enough. And so I feel like I want to have a better understanding, and I was thinking similarly what you were saying. If I just created an idea of budget and then whatever kind of comes extra, I could even just throw out our snowball. If you can live on the $12,000?

Without touching it and you get to everything you need to do, you could run a budget on $12,000 and every extra dollar above that goes to your debt snowball. That's an easy fix.

If you need $13,000 to live but $12,000 is your low, then you've got to add $1,000 to those last few things before you start the debt snowball. That's what George is saying. Yeah, so including our business expenses, we need about $9,000 to live, $9,000 to $10,000 to live. Okay, your business needs to be running separately.

Yeah, the business is running separately. Okay. So our household. No, no, no. Stop, stop, stop. You don't have it included. Okay. It's not running separately if it's included. Hello. So here's the thing. We run a business budget, and then when we bring money home from our net profits after paying the business expenses, then we work with that. So your business expenses run what?

My business expenses monthly is only $2,300 a month. Okay. All right. So you actually have a low of $9,700. Yes. Because you're not bringing home that $2,300. Right.

Correct. Okay. So, you know, so, so that based on what we're doing, I need to have, you need to have that separated out and keep it set completely separate, run a separate set of books, separate checking accounts, separate everything for the business. We actually give ourselves a weekly paycheck. We give ourselves, but that doesn't matter. You got to, you got, and then you need to cash out the rest of the profits beyond your weekly paycheck and beyond your expenses out of the business account over into the personal account. But the same principle will still work.

Because the same math applies. I just split it apart. So, okay. So you're still okay. 9,700 will still do it. If 2,300 stayed at the office, you can still do it on 9,700 and everything else would go to the debt snowball and then some. So in the 9,700, some of it's going to the debt snowball, but that's just how much more we put on the debt snowball. And every, every dollar premium will cause you to be able to do that. We've got a thing in there called paycheck planning. Okay.

that works really well for the irregular income. And you and your husband can sit down together and lay the whole thing out on the app or on the desktop, whichever you choose to do with every dollar.

And it'll lay all out. And we'll give you three months free and get you started on the every dollar premium, okay? Awesome. Cool. Thank you, guys. All right. Hang on. We'll have the team pick up and give you three months for every dollar premium because that'll do it perfectly. Oh, yeah. And it'll help him see where's all this money going. What did we decide we were going to do this month? Yeah. And then the only choice you're making is...

or whatever the flippin' coffee is. It's ridiculous. But, I mean, $8 is not going to get you out of debt. But you are going to start looking at everything, including the coffee. You'll see how much money you're wasting. How much more can we throw? How far are we going to cut our lifestyle versus the debt we have versus the $200,000, well, not really, $175,000 income that we have? This is The Ramsey Shed.

Are you planning to sail with us on the Live Like No One Else cruise? Then you better book your cabin before they're sold out. If you're on Baby Step 4 and above, come aboard March 22nd through the 29th of 2025 as we set sail for Turks and Caicos, St. Thomas, San Juan, and the Bahamas. Join me, the Ramsey personalities, and a ton of special guests for the ultimate debt-free celebration. Book your cabin because they are going fast. Head to ramseysolutions.com slash cruise today.

today george camel ramsey personality is my co-host today april is in idaho falls idaho hi april how are you hi dave hey what's up um so we actually live in beautiful salmon idaho it's a remote vacation um destination my husband and i have been remotely working for the last two years

We have $1.4 million in cash. We owe $360,000 on our house. My question is, we're officially debt-free if we pay that house off. Our jobs are kind of going away. So we can move back to a city, get stable jobs. I run a business in Boise, Idaho.

And that business kind of needs my help or else it's going to, it's going to, I'm going to have to run it half of the year into the full year. My husband can't get his really good job back.

Or we could buy a second home somewhere else and kind of do the snowbird lifestyle. My question is this. We have seven children, ages 19 to 6, and we did skip baby step number five. So how important is it that we keep our income higher, be more stable, support them through college, or do we kind of go for...

the dreamy, the dreams, I guess, and try to work on careers that we love and places we love to live. And the kids fend for themselves. Kind of. Just turn them loose. Well, I mean, I don't know. Part of our idea is going to Florida half a year, working there. My husband's a nurse. He can travel nurse. I can start another side gig. Or do you mind half the year when we live in Idaho? They can go to school there. We can support them.

I guess with housing, but not as much with money. What's your current house worth with the mortgage on it? $700,000. Okay, and you owe about half of that. You could pay it off today. But you're thinking about selling this and moving for work.

No, we would like, we would pay this. My number one option is to pay this house off, enhance it so it's more rentable because we can add things to it because it's a destination in the wilderness. And so we can add some more rental space.

options to it and make money off of it while we're not here. And then we could buy a second home for cash in like Florida or Arizona, somewhere warm. My husband can make pretty good money in nursing, travel nursing. And then I would probably get a seasonal side gig in the winter. And then in the summers, I would run my business in Boise half of the year.

But it's kind of messy that way. That's kind of what I want to ask is. That sounds like empty nesters. That doesn't sound like seven kids. Yeah, I know. We would probably net $200,000 a year if we did the snowbird kind of lifestyle with our kids. And we would probably net $400,000 if we went back to the city and kept things stable.

Could you do the $400,000 option until we get college taken care of and kind of get our financial situation in order? How old is the youngest? Six. No. We need like a 10-year plan. We're going to graduate four kids in five years. I don't think there's a wrong answer unless you call me up later and say the children were forced to get student loans because they're not forced to do that. No. No.

They're not. I mean, our oldest kids did a lot of dual credit, so they have two years done of school. Our younger kids are already working on dual credit. Our youngest probably will go for a scholarship. Can you cash flow their school with their help? Can they, with your help, cash flow their school if you do your Snowbird option?

We just make less that way. The other way would be. I know you make less. I said, can they get through college without debt? If you do the snowboard option or bird option. I think so. I do. I don't want to just dream this. I want to lay it out on paper.

Kid number one is going to need X. Kid number two is going to need Y. Kid number three is going to need Z. Kid number four is going to need A. Kid number five is going to need B. We lay out the money. We look at it, and the kid's going to do this. They're going to get the credits. They're going to work. They're going to go to this school. It's going to cost a certain amount of money, and here's how much we have, and we're going to tear into this million dollars in order to do this.

uh, with their, in order to supplement what they can't cover. So they don't have student loans and what you can't cashflow. Cause you did the snowbird option. If you can pull all that off, I'm fine with it. And you're going to haul them back and forth from Florida to Boise, right? Right. Okay. As long as you want to do all that, I'm good with it. But it kind of sounds like your snowbird thing is like, as if you didn't have children or something.

I know. I mean, because when I said haul them back and forth, you went, eh. Did you hear yourself? Yeah. I mean, the ones that live with us would have to go back and forth. The ones that are launching, which two of them are, you know, they can decide. And then we only got five to haul. Yeah. How old are you two? 46 and 47. I'll give you a medium plan halfway between. Probably doesn't work, though. It might work. I mean, you could go do the 400 for three years.

And that would launch the vast majority of the kiddos. And then the snowbird wouldn't involve hauling as many children on its back. Right. That's what I was thinking. Maybe we just need a little more time. I'd be unstable. Yeah. I mean, you can do either one. But part of the downside for me on your plan is hauling a whole truckload of kids back and forth twice a year because you're upsetting teenagers.

social networks and family and everything else, you're resetting. I mean, Sharon and I, it's just us. We can run back and forth and stay wherever. I mean, nobody cares particularly except grandkids griping about Mimi not being around. But other than that, I mean, we're not hauling people around. It's just me and her. We can go with a backpack and go. But you guys, you got a lot of stuff you're moving around, a lot of human stuff.

beings you're moving around there. So it's just however you want to do it. But mathematically, be sure whatever plan you're going to do that you map it all the way out. Begin with the end in mind, as Stephen Covey said.

And that's where I was thinking if she could use the $400,000 income and quickly, you know, front load a bunch of 529s for the young kids, cash flow the older ones, that can get them in a good spot. Yeah, do that for two or three years, not forever. Not necessarily until the six-year-old leaves. And the snowbird plan becomes maybe a five, seven-year plan. Well, not even. Maybe a three or four. I mean, you could do it for three or four. They've already got a million bucks clear, plus a house clear.

So, you know, approaching a $2 million net worth already. So well done, by the way, on that April. Awesome. Well done. So I just want you to be really intentional and thoughtful and just map this out, the whole thing out like it was a business plan. And, you know, you're estimating your cash needs and your cash sources.

And my cash source is my income. My needs are tuition and travel and whatever else we're doing here. And do we do that on 200 and deplete the million? Or do we do that on 400 for three years and then we'd never touch the million?

I like that plan too.

But just kind of going, well, I think I might. No, that doesn't work. And the next family movie night, everyone watch Borrowed Future as a family because that will spark the conversations about how we're going to go to college debt-free. And that'll get them moving. But I don't like the option of they all just figure it out and go get student loans. We can do better than that. Turning loose seven kids' feral is not a good plan. This is The Ramsey Show.

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George Campbell Ramsey personality is my co-host today. Thank you for joining us, America. Jacob and Taylor are on the debt-free stage in the lobby of Ramsey Solutions. How are you? Great. How are you? Better than I deserve. Welcome. Where do you guys live? So we're from Tulsa, Oklahoma. Oh, fun. Welcome to Nashville. How much debt did you pay? So we paid off about $182,000. Good for you. How long did that take? Too long, but about eight years. Okay, good. And...

What was your range of income during that time? So we started about $70,000, $70,000, $75,000, and then up to about $125,000. Cool. What do you all do for a living? So I'm a mechanic at a Lexus dealer in Tulsa. After I graduated college, I ended up in the nonprofit field for about seven and a half years, but now I'm a stay-at-home dog mom. I have a network marketing business, and I'm a part-time barista. Okay. Good for you. Cool. All right. What kind of debt was the $182,000? $182,000.

So it was student loan for her and then our mortgage. I paid off your house. Look at it. Weird people. I love it. So what is this house worth in Tulsa? It's worth about 280 now. Way to go, guys. Nice house. We're seeing it on YouTube here. Nice picture. Yeah. And it's all yours. All ours. How old are you two weirdos? So I'm 33. I just turned 32 last week. You have a paid for house. Yes. Do you know anyone that's 33 with a paid for house other than George?

He was a huge inspiration for us. Very, very big. That means the world. Well, I'm amazed that this trend keeps happening. I think we're seeing it more and more. People in their 20s and 30s. Late 20s, early 30s coming in here with a paid off house. That's right. Yeah, it's very exciting. Do you know, I mean, any of your friend group got a paid for house?

I don't think so. Not that I know of. Yeah. They'd be talking about it if they did. Yeah, that's true. Very true. They'd be here too. Where did this idea even come from? How'd you guys get started on this Ramsey way? Eight years ago. Yeah. Yeah. Good question. So right after I graduated college is when we got married and we actually got Financial Peace University membership as a wedding gift. And so I'd love to give a shout out to Tracy, a family friend who gifted that to us.

And that changed everything for our family. So we took it about three months after we got married. And I remember sitting there the second or third week and I was like, we have to teach this. Like we, people need to know about this. And so we went through the class and we kind of did things a little, a little out of order. We actually like bought our home during the class, but it turns out we did it right. We put 20% down. It's a 15 year loan, all of that. So all of that was right. But then we, you know, ventured on the,

The student loan, and we got that done. It was $38,000, and we got that done in 22 months. All right, good. So we knocked that out pretty quickly. And so right after that class was over, we started teaching. So we've coordinated nearly 15 classes now. Whoa. Super coordinator. Good for you. Thank you. We love it. Absolutely love it. Super coordinators. Yes. You've got to follow the stuff at that point. The whole class is looking at you. Have you led one since paying off the house?

We had one this summer, so we got to celebrate with them, and then we'll have another one in January. So that's really kept us accountable, you know, working with each of the classes and sharing our story and all of that. That's like your personal trainer having a six-pack. This is a good sign I'm in the right place when I'm in your class. Way to go. Yes, we're excited. So we...

In a lot of ways, I guess a huge part of our story is, you know, we've had emergencies come up just like anybody else. We've replaced our AC unit. I had a four-night hospital stay. And we also, Jacob is working on his bachelor's, and so we're cash-flowing that.

And so that's part of the reason why maybe it's taking a little bit longer. What are you studying, Jacob? Mechanical engineering. Oh, very good. Okay. How much longer do you have? About a year. Oh, wow. Good for you. That's going to be a great breakthrough for you. Yeah. But it's been an almost five-year process. It's all part-time. Yeah, exactly. So, and as newlyweds, we've done a lot of traveling. We've done a couple of international trips. We've been all over the United States, but all with cash, all without credit cards, and

And so that certainly has, you know, extended our, um,

you know, our deadline, I guess. But the goal was always to pay off for home seven years early. Yeah. And that's exactly what we did. Hit the goal. Yeah, we did. It's been really exciting. Well, once you're out of Baby Steps 2 and 3, travel is allowed. It just slows down how much you put on Baby Step 6. Or buying a car is allowed. Or going to school is allowed. It just slows down how much you put on Baby Step 6. But you still did all of that and did the house in seven years. Yes. That's pretty cool. Yeah, we sure did. It's been fun. It's been a journey. Yeah.

Living proof. This stuff still works. Yes, exactly. Every day. Yeah, and in a lot of ways, too. Jacob and I are both natural givers.

And so outside of our mortgage, our giving category in our budget was actually one of the largest. And so we were kind of practicing baby step seven even kind of before we got there. So, you know, the travel and the giving part of that, you know, we give to things that we're passionate about. We just couldn't wait to do that. Amen. Good for you. Yeah. Good for you. Okay. Now, how's it feel when you walk through the backyard and you don't have any payments?

It feels nice. It really does. I mean, we don't necessarily worry if that payment was going to be there the first of the month, but it's nice not having to, like even having to worry about that. Have y'all walked back in the backyard and stood and looked at the house and went, that's ours? Mm-hmm. We have, actually. Yes. Yes. Front, back. Walked through the grass barefoot. Pictures. Neighbors are going, what are they doing over there? Exactly. Yes. They do a lot of celebrating over there. I don't know.

That's good. Good for you. What do you tell people in your class the secret to getting out of debt is? Oh, man. Number one on my list is tithing. That's been just the forefront of our mind. And why do you think that is? Man, when you live life like this, you know, it's just better than... Open-handed. Yes. Yeah. It's just better than you can...

you can dream or imagine. And so, uh, blessings have come from that. And, and certainly, you know, since we have led 15 financial peace university classes, we watched the videos 15 times. And so, um, you know, just keeping up with that and having a group to walk through that with has been a really crucial part. So, you know, the accountability and the open handedness. Yeah. What about you, Jacob? I think it's a lot of it is not living above your means. I mean that we've,

you know, not been in any kind of dire straight situation, but we've also not like saying, Oh, I need to go into debt for, to do this, or I need to put this money towards the trip and not pay off what we need to pay off. So I think it's, it's knowing what you need as opposed to just what you want. Yeah. It's intentional. Right. Yeah. Way to go guys. I'm so proud of you. Thank you. Who was, uh, who was cheering you on?

everybody everybody yeah um a lot of a lot of my parents instilled a lot of this into into me from the get-go so they've always been kind of that driving force for for me especially not before we got married and then since since we've been married they've been you know a constant cheerleading team so and then her grandma and then our friends you know who who know that we're on this journey or we're on this journey you know they've always been super supportive and

our church family, our community group, you know, we, we've, we're surrounded by a huge support team. Wow. That's awesome. That makes a big difference. Yeah. And you guys are in your early thirties. You got no payments. Give me something you're excited to do in the give, save, spend category with no payments now. Yeah, for sure. Yeah. I mean, making our, our giving budget a little bit larger now, um,

We're updating our home. So like, you know, updating the outdoor space and replacing windows, things like that. Adulting. Yeah, adulting. Exactly. Yeah. Any big trips now? You're like, this is the big debt-free trip?

Yeah, actually, next May, we're going to go to Italy. So we actually had a fundraising gala prior to COVID. We won a trip through a silent auction and COVID kind of ruined that a little bit. Couldn't go. Well, now we are three years on from it. We're actually going to get to go on it and even in a better financial place than we were then.

So we're going to kind of use that as our celebratory. Yeah, oh, God. That's awesome. That's a good trip. Well done, y'all. That's fun. Yes. Well, congratulations. We're very proud of you. We've got the Live and Give bundle for you because you've been doing a lot of both, living and giving. So Baby Steps Millionaire's book, you'll be there very soon if you're not already. I didn't ask how much you have in retirement. How much do you have in retirement? We probably have...

I think we have probably about $100,000 now with IRAs. You said the house is worth $300,000? Close to it, yeah. So you're about $400,000 of the million. You're on your way to Baby Steps Millionaire. Right. On our way. Yeah, we got that book for you, and that's your next step, the next stop. And Total Money Makeover book maybe to give to one of your class members and a Financial Peace University membership if you find somebody that can't go. We'll assist you in your generosity plunge that you're taking. That's awesome. Yes.

So congratulations, you guys. Thank you. All right, Jacob and Taylor, Tulsa, Oklahoma, $182,000 paid off house and everything. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Yeah! Woo-woo-woo-woo-woo-woo! Wow. Excellent. Excellent. This is The Ramsey Show.

Our scripture of the day, James 1.5, if any of you lacks wisdom, let him ask God, who gives generously to all without reproach, and it will be given to him. Charlie Munger says, it is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid instead of trying to be intelligent.

George, that's like right up the alley of your whole YouTube show. Oh, absolutely. If you'll just not be stupid, you have a marketplace advantage. Absolutely. And Charlie Munger, rest his soul, passed away recently. But, man, that advice is timeless.

So I'm still using it today, just trying to help people avoid the stupid. Those clips of him and Warren Buffett together sitting and talking are fabulous. They're so brilliant, and they have so much wit. Yeah, they're just, well, they're dry. It's like two old man Muppets. That's what it reminds me of. It's pretty funny. The two guys in the balcony. But with a lot more wisdom. Statler and Waldorf. Yeah, a lot more wisdom than the Muppets. That's right, than a Muppet. Yeah.

But yeah, they just don't give... That's classic old man, don't give a rip. I can't wait to get there. Let me know how it is, Dave, when you're there. Don't care what you think. I've been there since I was a young guy. I don't care what you think. Kind of lost the need for that. Started it early. Max is in Boston. Hey, Max, welcome to the Ramsey Show. Thank you for having me. Excited to be here. Just last week, blew through Total Bunny Makeover in just like two days, and it really spoke to me. And I've realized that I just...

I have tracked all my spending for the last almost nine months since the beginning of March. I have absolutely no idea how to just go about the right behaviors. I see it and I feel like I'm not saving enough money that I need to be for my future goals. I know I want to buy an engagement ring for my girlfriend. I know that I want to start doing those next kind of

things in life and I'm just not, I feel like I'm behind, but I feel like I'm not in a terrible spot. I just need to dive into how to navigate money, I guess. How old are you? Just turned 30 in October. Well, the good news is you got plenty of time to reroute this ship. So what is your current financial picture? Do you have much debt? I have $1,200 with no interest for a mattress I got a couple of years ago. That's it.

That's it. So $1,200 would get you completely debt-free. But you're living paycheck to paycheck. Are you making good money? What's your income? My gross income for this year will be $91,000. Wow. But I'm still, yeah. Do you have anything in the bank? Yeah, I got $1,300 in checking, $8,500 in savings, $29,000 in a 401k.

I was very lucky and had a grandma who left some money behind. So I have $72,500 in an investment account and then $3,000 in crypto. And so that's what I'm working with. Well, you got plenty of money.

Yeah, I still just stress. The beauty, you read the total makeover. So let me tell you, those baby steps, they work. As long as you don't think you're unique or special and need to mess with them, it works. And so you already have a thousand bucks. You have the money and savings to pay off the mattress today. Let's get that out of your head. It's living rent free in your head right now.

It is. So get that out of the picture. Now we can work on a fully funded emergency fund, which you could have very quickly, make it $91,000. You already have a good start. Take some out of the investment account, create the emergency fund. Yeah, you already have it sitting there. So you're in baby steps four, five, and six if you move some money around. Cash in the crypto, pay off the mattress, build your emergency fund out of the money that you've got at your fingertips. If you can't quite get there on the three to six months, use a little bit of the investment money and move it in there.

and go that route. And then you're at baby step four, start investing 15% of your income into retirement. Do you own a home yet? No, I rent. Okay. You thinking about buying a house? I don't think I'll be ready for that for a few years, I think. What does ready mean, emotionally or financially? Financially. Why? You make plenty of money.

I'm not really saving a ton. I'm paying $1,900 in rents. My total living expenses is about $2,500. What's your take-home pay? Take-home is going to be, to rinse and mask, about $5,8718 for this year. So you can save $3,000 a month. In one year, that's $36,000. With some of the money you've got from your grandmother, you've got enough for a good down payment in a year.

So I should use that on a down payment and not just like ride in some of it.

Yeah. The problem is, Max, you're just doing a lot at once, and they're all good things. Saving is great. Investing is great. Paying off debt is great. But when you do it with some focus intensity, like mattress is gone tomorrow. All right, next up, we got to get the emergency fund. Great. We got that. Let's invest 15%. Then you've got some margin, and you have a focus goal. And so beyond the 15%, it's let's get the engagement ring. Let's work on the down payment fund. Oh, yeah, the engagement ring. Crypto will do that, yeah. Hey, there you go. It's a good trade.

Good trade. Fake money for a girl. That's a good trade. Do you want a wife or do you want some Ethereum? That's the call to make here, Max. I'm going to choose the thing that's real and not the thing that some guy made up. Max, you're on your way. George is right. If you'll take the stuff from the Total Money Makeover and follow it straight through, it'll give you a sense of power because you've got a step-by-step plan laid out there. It also sounds like you need to probably do a detailed budget and give yourself permission to walk these steps.

Somehow it sounds like you don't feel like that this is all possible. It's very possible with the math you gave us. But part of it is you have to start taking the actions based on that you start to believe that it's possible. And when you start taking those actions...

Pay off the mattress, get rid of the crypto, get the emergency fund in place, get the ring. You know, then take a year and let's save up the money for down payment. During that time, you're probably going to get married. That'd be awesome. Then you got two incomes to save towards a down payment on the house. And you'll be in really, really good shape at that point. That's where I would take you. So Josephine is in Brooklyn. Hi, Josephine. Welcome to the Ramsey Show.

Hi, how are you? Better than I deserve. What's up? I'm in a little limbo here. So I was watching your show off and on, you know, I worked, but then I was home working from home this day and I was watching your show where you was talking about old debt when you go into debt, when you have a debt and you don't pay it off and they go into collections and what they do is they pay a penny on the dollar. So

I took a payday loan out probably 13 years ago, maybe a little longer. Yeah. And all of that time never heard. So I was working for a company that went out of business. So all the emails and all that got, got blasted. So I probably owed maybe another $200 on it. And I, you know, was waiting for them to contact me and they didn't not make an excuse. So I didn't pay it. So in September of this year,

I got a call from a law office saying that that loan now was 14,000 something dollars and they could settle it out of court for, uh, about $3,200. So for the fact is that I'm actually saving for a home and I want to, you know, uh, not have any increase on my, uh, my credit report cause I worked hard to build up my credit. I paid them and now I'm getting another call back, uh,

another law firm saying that what I paid them did not cover the law fees, and now they're asking me for another $2,700. So you did not get it in writing that $3,200 paid the account? I have what they call an OOCR. I have something saying yes, that I do have something in writing saying that this settles the account. I do have something, yes. Tell the other law firm to stick it. You have a bill in your hand that says paid in full.

on an old bad debt for $3,200. You overpaid on that, but you gave them $3,200, and they gave you a piece of paper that says you paid the bill in full. Am I right? Well, no, they sent me, so this is what I did. I sent an email for an OOCR saying that this amount is for the debt, and this settles the debt. Yes, it does say this settles the debt. It settles the debt. This is a scam. Just tell them to bite it.

Not a chance I'm giving them a dime. Nope. Good luck with that. Yeah. Yeah. I'm sorry. Oh, people, people, people, people, payday lenders, scum of the earth, scum of the earth. That puts this hour of the Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.

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