Get a Healthy Level of Disgust With Your Bad Money Habits
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From Ramsey Network, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. I'm your host, Jade Warshaw, joined by George Camel, both best-selling authors. Look at that, George. Look at that. Would you look at that? We're hosting the show for you guys. For the next couple of hours, we'll be taking calls about your life.

and your money. So chime in, give us a call. The number is 888-825-5225 and we'll get you on the line. Who's on the line now? We got John from Long Island, New York. What's going on, John? What's going on, John? John, are you with us? We're having an issue here.

There we go. Hey, John, how are you? Hi. Hi. Good afternoon. Can you hear me OK now? We can. It was on us, not on you, dude. OK. OK. My question is, I made a mistake and I wanted to not make another mistake. So I wanted to make sure I want to use my Roth 401k in order to pay off a very high interest key lock.

Okay. And the situation is I'm not going to be able to afford both my primary mortgage and my HELOC. So that's going to put me in a position. And basically, I ended up using my HELOC, unfortunately, in an investment scam. It was a pump and dump type thing. And I basically lost $150,000. Oh, my gosh. So let me get this straight. You took out a HELOC of $150,000 to invest in some online scam?

Well, when you look at it that way, that's not, yeah. What happened was an online investment club that I...

and they were teaching me things and giving me different advice. And I was making money along the way and I used what investment money I had. Then I was lured into using my emergency fund and I was still making some money. I mean, talking about 5% to 8% a week. And then there was supposed to be this big VIP tip before they wanted me to become a paid subscriber.

So I was encouraged and I got greedy and I said this could solve a lot of my problems and Yeah, then I invested that so all in all I had $250,000 invested in them and now it's zero did they take your money or did you lose it on a bat a risky investment? I lost it on a risky investment that I invested through my own brokerage. Oh Wow, but they advised you to do this. This is correct. I

Does this company still exist? Nope, they're gone. Can't find them, can't contact them. They're not a brick and mortar place. They were an online. Oh, my goodness. I'm so sorry, John. We'll let this be a lesson to everyone listening. If it has the word investment and club after it, just run far, far away. 100%. So you've got this $150,000 HELOC. How much is in the 401k that you're talking about?

I've got a total of $400,000 in my 401k, but 120 of it is in a Roth component of it, which I can now remove tax-free, penalty-free. Your contributions? Yeah. Wait, did you say a 401k or an IRA? A Roth 401k. It's a Roth 401k. I don't think you're going to be able to get this money out tax-free. Oh, no. Well, I'm 63 years old. Okay. Okay.

And it's been there for, the account's been open for 30 years. Is this all of your nest egg, this $400,000? The $400,000, yes, but I do have an $800,000 house that's going to be paid off in three years. Okay. And you're saying, can you use your future income? Because you're saying you can't afford the HELOC payment and your mortgage payment. What does that add up to? Okay.

I earn $125,000 a year. My current mortgage with taxes and insurance is $3,400, and the HELOC alone is going to be $1,200 in interest payments alone, and then in two years it's going to convert to a payback. Oh, gosh. Which I don't know what that payback is going to be. Like a lump sum payback. Well, it's going to be a 20-year payback on a 30-year payback.

type rate. Okay. So your payment all in, what does that add up to? Interest and the principal? With the current interest the way it is right now? Yes. Interest only? It would end up being, well, like $4,600 a month. Okay. That's what I've got. And you're bringing in how much? Eight grand a month? I'm bringing in, well, I'm netting $1,500 a week. Okay.

Okay. So why are you only netting 6K a month, but you make 125? That's 72. Are you still investing? No. Well, I'm only putting $50 a week in there. But you're only taking home 57% of your gross income. That's what I'm confused about. So we need to pause investing, number one. Every single cent you've been investing, stop it. We got to get rid of this debt and get to some foundation. Do you have any money in savings that's liquid? No.

I've got $20,000 in liquid. Okay. What's left on the mortgage? $80,000 at a three and a quarter percent. It'll be done in three and a half years. Okay. And are you single? I am single. No dependents? No dependents. Well, I just, you're going to rob your nest egg by almost half, which worries me. I agree with that. Which means how are you going to retire? I agree with that.

Well, I agree with that. And the way I was looking at it was as like a three pal system where one would be the 401k, the other would be my home, which I'm going to sell and downsize when I retire. And the other would be Social Security. Social Security, I've got about $3,600 a month expected coming in. The home is $800,000, which will be paid off when I retire. Well, if you're going to sell it anyways and downsize, can you do that now and use the proceeds? What are you going to make when you sell the house?

Well, it'd be the whole $800,000. Minus the $80,000 that you owe. If you sold today, you'd probably walk away with $680,000, $700,000, something like that. Again, we all have our own situation. I have an elderly mom who's living with me, and I take care of her too. To just say, turn around and move. But you said you're going to move when you retire. I won't have a job then. My job is here.

The downsides on Long Island is you sell high to buy high. I need to go to a lower cost area of living, and that I can't do until I retire. Got it. Because your employer is there? Yes. I see. Okay.

Oh, man, this is a rock and a hard place, John. You're right. You're right. And the way I was looking at it was, well, you know, and then the alternative then is after I pay the $120,000, there's still $30,000 left over, which I wanted to then take a 401k loan. No, no, we're not going to do that. You called in and said, I don't want to make another mistake. And most of the solutions you've been laying out sound like another mistake.

Okay, may I just explain what my thinking was? Because the interest I would be paying back would be paying back to myself rather than me paying it to the bank. Life hack. But you're still robbing all of the future growth of that money, which you're already robbing because you're trying to pay off the HELOC with it. Right. So your first mortgage is...

when we're looking at it as a whole, your first mortgage is $3,400 a month. And then the HELOC portion of it right now is $1,200 per month, right? Correct. What would happen if you paid off the $80,000

in a lump sum, and then all you're paying is basically the second mortgage. Freeze at $3,400. I like that plan. That's a better plan. Well, because I'm giving up a 3.25%. You're not giving up anything, John. It's paid off. Who cares? It's gone. And now you're at a place where you can breathe with your money financially month to month.

And continue to make some progress. Okay. I'd still be paying $1,700 on taxes and insurance. Yes, but that's a lot less than what you're... You're always going to pay that. Yeah, that's not going away anyway. Freeing up $3,400 means you can stay in the house and pay off the HELOC without murdering your nest egg. That's what I'd do if I were in your shoes. This is The Ramsey Show.

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You're listening to The Ramsey Show. I'm Jade Warshaw, joined by George Campbell. And we're going to be your hosts today, taking your calls about your life and money. Give us a call. The number is 888-825-5225. And George, my favorite announcement that we've been doing, The Ramsey Live Like No One Else Cruise. It's here. There you go. I'm working on my ship horn. It's not as good as Jade's. It was a little light. It was a little flimsy. You need a little... Mine was more of a dinghy.

Yours was an actual cruise ship. Yours was the lifeboat. So don't miss your chance to join us. Like I said, it's called the Live Like No One Else Cruise. This is a celebration, right? We're going to do one of the biggest debt-free screams ever because the folks on this cruise have accomplished something. These are folks who are past Baby Step 2 and Baby Step 3 cruising with us on a seven-day cruise

cruise through the Caribbean. It's worth it just for the amazing cruise. Even if we weren't there. It's a vacation. The stops are amazing. Tell them where we're going. Turks and Caicos, St. Thomas, Puerto Rico, the Bahamas. And here's the thing. Like I know a lot of you are like, what do we have to do, Jade? How do we get signed up? The good news is all you need to do is a $600 deposit.

$600. You don't have to pay for the whole cruise up front right now. No, no. You do this in installments. Like, Jade, you're telling us the budget. Yeah. If it's in the budget, put the deposit down and pay the rest as we go, as we get closer to the cruise. And you've got a lot of time. The cruise sets sail March 22nd through the 29th of 2025. So put your $600 deposit down today, and then you've got all this time to save up for the rest of it. And all of us are going to be there. Dave, all the personalities, including myself, George Campbell, John Deloney, Rachel

cruise, Ken Coleman. We're all going to be there. A special guest. And Dave's got some pretty famous cool friends. Yes. And so we're going to have magicians and musicians and celebrity chefs and all kinds of experiences and, of course, the normal entertainment on the cruise. That's right. And excursions. So it's going to be well worth your time. The ultimate

debt-free celebration. So you've worked hard, you've lived like no one else, and now it's time to celebrate. So make sure you book your cabin now before we sell out because these are going fast. I can tell you that. Book yours at ramseysolutions.com slash

cruise there we go oh i can't wait i'd have some fomo if i wasn't already going the love boat remember that oh yeah that's before my time but i appreciate the reference yeah you know it was cut is it before your time too you're not that much older than me let's not talk about that george let's take a call all right we got andrew in jackson mississippi what's going on andrew

Hey, guys. So I'm just trying to call. So I don't really consider myself a business person. So this is probably why I'm asking the question. But my full-time job is an automation engineer, controls engineer. So I do like manufacturing automation for a DOD contractor. And so that's my full-time gig. I make about $100K a year on that.

And so I started doing some side work as doing the same thing, but literally just drove down the street and knocked on the door of another manufacturer and said, hey, you don't need any help like this. So kind of started doing controls work on the side, netted like 8K last year. And then this year I'm expecting to net somewhere around 30K. So it's kind of growing a little faster than I thought.

Um, so kind of the main question is when do I know like when to take that full time? Cause mainly my concern is, you know, I have a new baby. She's seven months old. Um, got another kid who's about to, um, my wife, uh, is a physical trainer. So she does that kind of just very part time, but is mostly a mom, which is great. Uh, and she sacrifices a lot for me to do this, but, um, um,

My main concern is just like how long, how can I keep it going? I guess I'm really worried that if I did take it full time, it wouldn't be as secure as my full time. Why? I don't know. Right now, I mean, I don't expect to do it like full time very soon just because,

You're still at $30,000. $30,000 is all at one client. Yeah, it's still at $30,000. It's still on one client, but I've got a lot of interest in leads out there and quotes out there I'm expecting to hear good things about and expand that. Yeah, I think you're on the right track. I guess I don't know what the threshold is. Do you have any debt? Transition. Yeah, so I've got a car loan that's about $10,000, but the contract I'm actually working with aside for that one customer.

should just pay that off completely. So that should probably be next month. Okay. Anything else? Yeah. And then about 17K in student loans, which would probably be paid off either by the end of the year or next year. Well, the good news is right now that $30,000 side hustle is allowing you to move faster on the debt. And if I were you, I think you're on the right track as far as trying to diversify the clients that you have, because you don't want all of your eggs in one basket, especially when you're out there on your own. It is nice to say, I work with this client, this client in

you know, have a long list of wells to draw from. But in your case, I'd be looking to replace my current income. If you're at $100,000 now, that would be the goal. And I mean, you went from $8,000 to $30,000. Maybe next year you hit $70,000. So maybe this is like a two, three year play. And by then you're kind of able to jump ship and go over, you know, into your own ship there. And so that's

That's what I'd be looking for to replace that 100K and know that it's steady. How many hours are you putting in to make the 30K on the side hustle? I would say that I try and limit myself to 15, but to try and get the work done is probably more like 20 hours a week. And then plus the, it's kind of a manufacturing environment, so you kind of never know with my full-time job, but it's anywhere from like,

40 to 60 hours a week with a full-time job. You're working. Yeah, I'm wondering what your capacity is to scale the business because you can't just go, well, I'm going to have nine clients and work 90 hours a week. So you've got to figure out how to scale it to where it's not taking more of your time to take on many more clients. Right.

But once you can kind of do the math and go, all right, I'm putting in 20 hours a week and I'm making 50 a year. Well, if I did 40 hours a week, I can make 100 if I got two more clients. So start doing some math. While you're doing that, aggressively pay down the debt, get six months saved in an emergency fund, and probably a few months of just cushioned save to launch the business. Yeah. So once you get the boat that close to the dock. My main question is like the emergency fund, if it's six months is enough or do you think it needs to be more just?

a cushion. I would do six months in the emergency fund, but then have a separate savings account where you stock up maybe three months of expenses to float to kind of get this thing launched, to get your feet under you. What's it cost you to do your work? Are you putting out a lot of money in order to make this $30,000? No, I'm kind of pulling a startup move and really just running out of my garage right now. So taking advantage of all the free software licenses I can. But

- I'm probably under, I mean, 2K overhead 'cause of software, but most of the time the customer pays for it. So it's, you know, cash flow pretty well. - I'm with George. If, you know, there's the three to six months of expenses on your personal side, but if you can kind of create that same thing in retained earnings on your business side, that just gives you that feeling of, okay, I know I've got the money to do the things I need to do, and if you have a slower month, like, you've just got that cushion there on both ends.

which I like. Very good question. He's pretty close to this. I would say in another year, maybe two years. Yeah. There's the financial part, which is get debt free, get the emergency fund, get the retained earnings. And there's the business side of, can I scale this up to where I'm not relying on one client? Cause I had a friend do that and it's scary cause they lost that one client and there went their business. Oh,

And so you want to have some diversification, just like we talk about with investing, smart to do that with business too. Yeah, really important. When Sam and I first started working in the cruise industry, our only client was Carnival Cruise Line. They're a big, big fish, but it's just like this feeling of, okay, I'm dependent on them. If they, for some reason, decide we don't want to work with you anymore,

If a pandemic happens and no one can cruise anymore, there goes our entertainment business. Well, listen, that happened anyway. That happened anyway, even though at that time we were working with all the cruise lines, but cruising in general, I mean, we don't have to say what happened then. It wasn't personal, but it did come back, so that's good. That's good. But in general, when it comes to this side hustle, small business, should I go full-time? You want to make sure it's earning money, number one.

Consistently. Consistently. And you want to make sure it'll scale to where if you were doing this at a normal, you know, 40 hour rate, you could actually create the same full-time income and replace that. And once your side hustle, small business revenue exceeds your monthly expenses, well, that's a ding ding. Let's go. So the lower you get your expenses, the faster you can launch, which is why we tell you don't launch a business while you're struggling with debt and you're trying to jump ship. Don't do that. It's way too much risk.

Well, George, you also made a good point about the fact that because he is working so many hours now, he's probably in the current state not going to realize the full potential of his side hustle income because there's only so many hours in the day. So there is a moment where you have to kind of sit down and do the math. And there's that kind of...

leap moment where you're like, okay, I got to make a leap. It's a calculated leap. It's not you just, all right, I'm jumping off a cliff. Let's hope I land on my feet. Yeah, I can't jump very far. I got to get the boat close to the docks where I can just step in. That's right. That's right. That's the goal. A calculated risk is what we're talking about here. And I think that our guy is very close to taking that. So if you have a business venture, you can check out our Entree Leadership Podcast. It's a very, very good one to listen to. Dave Ramsey is the host. This is The Ramsey Show.

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You're listening to The Ramsey Show. I'm Jade Warshaw. And I get the privilege of sitting next to a best-selling author, George Campbell. The privilege is all mine. Really? Yeah. But you wrote Breaking Free from Broke. Oh, okay. That's fair. See, there we go.

george you're trying to confuse the people i'm sorry we're taking calls all afternoon long give us a call 888-825-5225 we'll discuss all of the things going on within your life and your money even get into some career stuff and uh but right now george there's a lot popping off when it comes to how people are managing their money we know things are tight right now there's a lot of factors out there there's inflation and there's the housing market and insurance costs are going up and

The truth is Americans are feeling it and they're trying to find ways to squeeze in their budget and make things work. Because this article is how the middle class stays middle class. Here's the headline from Money Wise. Why it's a big problem that 46% of the U.S. middle class are now slashing or completely cutting out contributions to their retirement funds. Yikes. So the survey found that nearly 46%

of middle income families, they're cutting back on retirement contributions and they're doing it because of stubbornly high inflation. That's the major culprit that they're saying here. And they're even saying they're pausing them indefinitely. That's either cutting back or pausing indefinitely, which is a weird thing to say. It is. I'm never contributing again. Well, I know that people

probably listening are like, wait a minute, you guys at Ramsey, you're always telling people to pause their retirement. Like, why are you so upset about this? And the difference is we never tell people to pause their retirement indefinitely. We want you to be millionaires. We don't want that, you know, indefinitely. We tell people, George, to pause their investing for a short period of time while they're in baby step two and three so that they can pay off their consumer debt, not their mortgage debt, just their consumer debt and save up

three to six months of expenses so that, and that way they're protecting their investments so that if there's an emergency, they're not dipping into that emergency fund, or I'm sorry, they're not dipping into those investments to cover everyday emergencies. The truth is people just don't become debt-free when they're trying to do 17 things at once. So you need that focus intensity to get there. And as of April 2024, the Consumer Price Index said

which measures the changes in the cost of consumer services and goods, had risen 3.4% on an annual basis. Within that index, food costs were up 2.2%, shelter was up 5.5%. They're saying all of this is putting a strain on American households in that middle income range, 67% of whom say their income is falling behind the cost of living. And they're saying things are so bad that 36% of those surveyed are using credit cards more frequently to keep up with expenses. And that tracks. I found that on the Ramsey Show as we've been taking calls.

More and more people are turning to credit cards as their emergency savior blankie to get them through, which is a terrible plan. Here's the thing, though. Inflation is still high, but it has gone down. And we're seeing it slowly but surely go down, but it's still higher than it would be or should be. So I do want people to kind of, there's a big part of this, George, that it's like if we keep saying everything's on fire, people are like, ah!

And they're like running around. But there's part of it where we have to go, OK, things are actually getting better. You know, interest rates are still high. Inflation is starting to come down. So there kind of needs to be that feeling of, OK, we are going to come out of this at some point and we don't want to go to these crazy extremes. Right. And so there's part of this, George, where I look at these people and I think, yes, if things are too expensive, you're busting your budget. You don't want to use credit cards. I like the fact that they're saying, what can I cut out? I think the problem here is just that.

Some people might be cutting out the wrong thing, especially if they're not in debt. If you're not in debt,

Now is not the time to be pausing retirement. Now's the time to prioritize retirement and maybe cut some other things in your budget if it's feeling tight for some reason. - And let me show you with some math why this will cost you millions. If you follow the middle class plan of just let me, I gotta keep up my lifestyle, I'm unwilling to sacrifice and therefore I'm gonna stop retirement contributions. Let's say you're 35 years old, you have nothing in retirement and you're part of this group who says, you know what? I'm gonna not put anything in retirement, I'm gonna stop indefinitely.

Well, at 65 years old, if you just invest 300 bucks a month, that's what most people are probably doing. It's a little bit, get the match. Get the match. That's all I'm going to do. Just that 300 bucks turns into $678,000. George, that's not enough money to do anything with.

I'll take $678,000 if you're offering it, Jade. And here's the deal. People act like it's nothing. I'm like, this is something. Let's say you're 45 and you say, I'm going to pause. Well, pausing that $300 monthly investment from 45 to 65 would still cost you $227,000. Wow.

And this is not a lot of money that you're actually contributing, Jade. It says the contributions were 72 grand. Wow. And so you can see the more contributions, the longer the time span, the bigger and scarier this number gets of what you're missing out on. That's a really good point, George. But let's even talk about it in terms of what we choose to cut out of our budget. So let's pretend you're just kind of the average person.

You're average American. You're making $67,000 a year household income. And you're really feeling it. You're that average person that's maybe got a couple of car loans. Probably underwater on those. Underwater on your cars. Maybe you've got some credit cards that you're leaning on here and there. I'm not saying you're balling out with credit cards. I'm saying you might be using them to get gas and things like that.

what would it look like to trade in those car notes instead of being so focused on the retirement edge? Which again, if you're in debt, we do want you to pause retirement. But what would it look like for you to kind of change your mindset and go, what's really the thing that I need to cut out of my budget that's going to make a big difference? And for a lot of Americans, it is their car payment. Whether you're

making a lot of money or a little bit of money, if you're feeling tight, it's probably because you're spending $500, $600, $800 a month on vehicles. And if you can get that under control, then you can pay off your debt quickly. You can pause it while that retirement is paused. You're paying off debt quickly so that then you can come back with a vengeance. You can invest 15%. You've got that money cleared up again. And so you're

Yeah, it's one of the only types of debt that's somewhat reversible because you do have an asset attached with the liability. So you can sell that car, hopefully get a good portion of that money back, get out of this thing, save up a little bit more and purchase a used cash car to get around in. That's a big part. And then there's just lifestyle. That's right. And I get housing is expensive. We get calls where people's mortgages 50, 60% of their take-home pay. And I'm going, and you wonder why you have no margin in your life. It's big. So you've got to make different decisions when it comes to housing. And that might be a...

a big one that a lot of people are facing right now. I mean, we're coming off of a crazy, the housing market is still crazy, but there was a time where people were paying so much more than value, right? And they overbought and now people are kind of feeling that. It's like, oh man, my mortgage is 40% of my take-home pay. And for those people, you might have to look at

figuring out what's a better option for you moving forward because if you can't see if you can't see on the horizon you earning more money to close that gap you're going to be living like this yeah that's and they have golden handcuffs jade because they'll call in and say well jade i have a three percent

interest rate. Why? I can't let that go. And they're just stuck in that position because they're unwilling to let go and rent for a while. They might be in a season of renting. They're going to have to jump to a much higher interest rate. And so these are real problems on top of, of course, the groceries and eating out and your lifestyle and the subscriptions and all the luxuries that you've come to

to enjoy that are hard to get rid of because it's hard to cut down your lifestyle. But if you can do this for a season, you never have to worry about cutting out your retirement contributions, which is the last thing you should go to cut out on after you're debt free. So I hope these people are in the camp of, listen, I'm just broke and I got a lot of payments here and there and that's why I'm cutting back on retirement. That makes sense. That makes sense. But as long as they're doing it with the intention to go hard on paying off the debt, because again, this is not an indefinite choice that we want you to make. Otherwise, you're going to retire with nothing.

And that's definitely, then you'll be calling the show saying, I'm 67 years old and I don't have anything in retirement. Can you help me? We call it social insecurity for a reason. That's right. These payments will get you at the poverty line if you're lucky. 100%. For most people, they're going, well, I make 1500 bucks in social security. And you're like, okay, if you made 1500 bucks at your job, you would be in the poverty line. Yeah. I mean, what is it? 40% of your income is what...

You hope to gain. You get a portion of your income back. And depending on your life, how long you've been contributing, what your income was, it's not enough to survive on. And so you've got to develop a plan. And I'm telling you, in the millionaire study we did, 80% said the 401k was my ticket to millionaire status. That's right.

that and a paid for home. And so this is not the spot you want to pause on. 15% once you're out of debt consistently, you will become a Baby Steps millionaire. Absolutely. And if you're looking, if you're like, Jade, I don't know where to start. All I know is it's hard for us. We're living paycheck to paycheck. A good place to start is with a good budget. You know, we all the time we talk about every dollar budget because it's the best way to really see what's going on with your money. It's a monthly habit. You're doing it

every single month before the month begins. You're creating and sticking to a plan. And EveryDollar makes it really simple. You can plan spending, you can track transactions, you can save for honestly what matters most to you. And all of this is in an easy to use app. It fits into your lifestyle. And this is what we need. This is how we make progress. And when you look at your EveryDollar budget, you can see what you're spending money on and pick the right things to cut back on, not the things that are going to be valuable for you moving forward.

Go download it. Everydollar.com. Every dollar for free at the App Store or Google Play today.

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You're listening to The Ramsey Show. Thanks for listening. I'm your host, Jade Warshaw, joined by your other host, George Campbell. We're chopping it up all hour long. Hey, if you watch this show, you love this show. Thank you so much.

Honestly, without you guys, we wouldn't have jobs. There would be no show. There would be no show and we would not be hosts. So thank you so much for watching. Thanks for listening. Thank you for sharing it. Matter of fact, if you want to support this show, something that you can do that's very easy, not very time consuming, is you can share the show. You can like it on whatever platform you listen to it. You can subscribe to it if you watch it on YouTube, whether it's the Ramsey Show, even a show like the George Campbell YouTube show.

channel that would be a great one to subscribe to while you're at it and it's going to show up in your feed anyways because the algorithm knows this is what the people need so there's like that convenience factor which is nice because when I go on YouTube I don't want to search like I don't want to have to type it in I want it to just pop up and so when you subscribe it does that and then of course share it with a friend you know if you hear us talking about something and you're like oh Barbara could really use that just send it to Barbara you know so that's what you gotta throw Barb under the bus you know Barbara she takes out he locks

That is true. She does. She sounds like someone who would be like, it's a good idea. I use my equity. That's right. So share it with someone who needs it. That helps us out. It helps everybody else out. And it really does help to kind of spread this life change all over, all over the world. And that's what we want. All right, George, straight to the phone lines. We got Jake in Montgomery, Alabama. What's going on, Jake? Hey, George. How are y'all? We're doing great.

Okay, so right into my question. So I got married last year. I'm 25. My wife is 23. She just finished her first year of medical school last month. And I am taking on the challenge of trying to cash flow it. So yeah, luckily in March, we were able to pay off her first year before she finished. Amazing. And luckily, we almost have enough to pay off her second year. How much did that cost? Can I ask?

Yeah, so because of scholarships and her parents had paid into something when she was little, so about $10,000 goes towards that a year. But it was still between $26,000 and $27,000, so it's still a good amount. So you guys paid almost half of that.

Yeah. Okay. Wow. So, but my wife is miserable with it because med school is hard enough, but she feels like, you know, at this stage of life where she feels like, you know, we never get to do anything. You know, she gets to see all of her friends doing all these fun trips and stuff. She doesn't have time to do things.

You're right. You're right. But any free weekend that she does get, I think it just sort of reminds her that we don't get to do as much because of, you know, and I think she sort of feels responsible for that, which, you know, it's just the stage of life that we're in. And I'm fully on board on doing whatever we can to, you know, to get her ahead. What kind of doctor is she studying to be? Like what kind of what's the end game?

So she would love to be a pediatric pulmonologist or a rheumatologist or anything like that. But, you know, right now it's just so stressful that, you know, as long as I have a doctor in front of it, it's always the joke that I make. She would be happy. She just wants to help people. Well, I ask that because most people kind of go into that profession knowing it's a lot of school. Like you're going to be learning for a very long time. They know they're not going to have a life for the next six to eight years. And she's only one year in.

And, you know, so what does that mean? Tell me how we help you. Yeah, so really I'm trying to figure out right now I'm contributing about 12% of my income to a Roth. And although...

currently I think we can still do both contribute to the Roth and have her med school fund. Um, but you know, in order to, to have the med school amount at the, you know, and come August, like, you know, everything sort of has to go perfectly. Well, life isn't perfect. And so I'm trying to decide, do I still contribute to my Roth while I have this fund in place or, you know, like at what time can I sort of, you know, relax the strings a little bit? Um, cause my wife, you know, she's pretty

He's pretty tired of being on rice and beans, even though. Well, do you guys have any other debt? Tell us more. Do you have debt? So no debt. Do you have an emergency fund? Well, we have a mortgage. That's fine. So we have a $200,000 mortgage. We have about $100,000 equity in our house. We bought it last year. Okay. I paid off my truck in December, so we have no consumer debt. Do you have savings? Yes. So I have an emergency fund of about $30,000. I think it's a little over where it needs to be. Okay. That's fine. What are you guys making? That's fine.

So I make right now maybe $125 or so, and I expect it, you know, I'll have yearly raises. Okay, good. That'll probably help with cash flowing this. So assuming nothing changes, I think we're okay, but, you know, I'm just trying to decide if I'd,

If I quit contributing to my Roth temporarily, is it worth it?

And so for me, honestly, out of all the things that you said, the bigger question is what's your wife want to do? Because you guys are sitting around funding, you know, $10,000 or more a year for something that it sounds like she's already burned out on. And there's a long road ahead. I mean, yeah.

I know that you're the one saying, I don't care what it is. It just needs to end in doctor. But I mean, George, what do you think? Yeah, she needs to create a life that's sustainable. And that doesn't mean she needs to go on crazy vacations every year, but she can find some fun things to do on the weekends that don't cost a whole lot of money. So I don't know what friends she's watching and where they're going. She needs to realize her life looks different.

in this season. And that season might be five or six years of schooling and fun might look like we go for walks, we go on bike rides, we find free activities in Montgomery, we do the free concerts, whatever it is. And maybe you include a little bit of fun money. Let's put 200 bucks in the fun money line item and that's what we have and get creative with how we use it.

And so if I was in your shoes, you know, if you were down to the wire and you're like, oh my gosh, we're not going to be able to fund this year's school because I'm investing. That's when I would go, okay, let's pause for the next three months and make sure we're back on track. Restart. And if your emergency fund is overfunded, you could always bring that down, you know, to let's say three months in order to use some of that to cover the remaining expenses for school. Yeah.

I actually wanted to take a moment and interview you a little bit, Jake, because we have people all the time who call in about med school and it's like there's no way to pay for it. I want to know more about how this is working. Tell me what the school costs a year. Tell me where she's going. I feel like people would want to hear that.

So everything together is about $36,000 a year. So luckily with the scholarships and what her parents had paid in when she was younger, we only have to pay $27,000, which I say only. But luckily, I've always been a saver. So when we got married, I had about $80,000 in savings. And so we found a great deal on a house. We found something off market.

So whenever we got in, whenever we purchased the house, I put about 50-something down. And it lucked out that we ended up getting about 40-something thousand in equity, you know, even before we put anything down. I'm talking about with this school. I want to hang out on that because... People don't know there's even med schools that are 36 grand a year. Right. And your parents are only contributing 10,000 a year for this. And then between scholarships and cash flow, and you guys are doing the rest, what college is she in? What school is she at?

So, she's at the University of Mississippi. Okay. So, it's... Is that online? We're from...

So we're from Montgomery is why I said that. Okay. But you guys are living in Mississippi currently? Yes. And so she can take that degree and go into rheumatology. She can go into pediatrics, all the things that she was wanting to do. And it's costing you guys $36,000 a year. Like a residency, fellowship, all that type of thing. And how long is this program?

So she's there for four years, and then depending on what she goes into, that's where it's sort of unknown. Depending on what program she gets into is how much longer after four years. Makes sense. And what do you think that'll cost? Sorry, George. So once she gets through the four years, to my understanding, she starts getting paid a little bit, but it shouldn't cost us anything extra. Oh, good.

I think what you're doing here is exactly right. You guys are planning ahead.

You're trying to get that money saved up so that you're already ahead when the year comes. You've got a little bit from the parents. I think you keep walking down this road. You've made smart choices by paying off debt. And I think that she's going to graduate completely debt free. Call us back with the update and make sure you're parking that money in a high yield savings account. Let it grow a little bit for you along the way. I love that medical school with no debt only on the Ramsey show.

From the Ramsey Network, you're listening to The Ramsey Show. I am Jade Warshaw, one of your co-hosts today, joined by best-selling author George Campbell. We're going to be chopping it up with you all hour long, so give us a call. The number is 888-825-5225. Bring us your toughest moments.

money questions don't go too hard on us jade come on now george i was depending on you i was i was gonna say george can help you out he's sometimes you just want a soft toss you know give me an easy win yeah a little no no curveballs but truly if you have listen we'll try it throw some curveballs we'll see if we can answer it um give us a call so let's go to billings montana where sean is on the line what's going on sean sean are you there

Yes, I'm losing you. Hey, thanks for taking my call, Jayden George. I have a question for you. I'm wondering, what do I do if my wife is going behind my back, spending money, making bad money choices without talking to me beforehand? It's really hurting us and I just don't know how to get her on board to stop doing this kind of behavior. What kind of behind the back? Give us a little bit more detail.

Right. Let's say she'll sign my daughter up for some kind of dance thing that's very expensive without talking to me beforehand. Or she'll borrow money from her mom, thousands of dollars without talking to me beforehand. And then I'm stuck with putting the bill, you know, it just comes up out of nowhere. What happens when you confront her about this?

Well, I've tried everything. I've tried like being really kind of angry about it and confronting her harshly and that doesn't work. She shuts down. She thinks I'm a bad guy. She says, this is why I don't talk to you. So I've tried the opposite. I've tried being very soft and understanding and try to like let her know she can talk to me. That doesn't work. Everything kind of backfires on me. So I'm looking to you guys for some guidance. Has this always been going on? How long have you guys been married?

I'm sorry, you're breaking up. Can you repeat the question? Sure. How long have you guys been married? Uh-oh. Still losing you. Uh-oh. You're in those mountains in Montana. I'm in the middle of, you know, nowhere, kind of. I thought I had good service. Now I can hear you. I was asking how long have you guys been married?

We'll try to get them back. We can answer it in a general way right now without having more details. Here's what I'm getting at. I was asking him, George, how long they've been married because what I wanted to get to is has this been an occurrence that's been going on? Is this 10 years of this behavior and pattern or are they newlyweds and they're figuring it out? But what I was thinking, George, is I detected that they've got some...

animosity between each other that may have nothing to do with the money simply because of the way he said he confronted her about it and the things that she said in return. This is why I don't trust you or this is why... So in many ways, I almost wonder if this behavior is a lashing out of sorts from another... Something else. From other issues. And so that's...

Based off that little bit that we heard from Sean, I kind of think that that might be it. I mean, the first step, I think you guys need marriage counseling. This is beyond a money thing. She shuts down, doesn't want to talk about this. There's no trust. There's no communication here. This isn't a healthy marriage by any standard. And so that's step one is...

While financially we need to get some headway, we need marriage counseling to get to the root of the problem, whether that's this marriage or past trauma or the way she grew up or the way she thinks the money should be handled. We need a third party here because the third party can help when one person shuts down. You need that person who's not the spouse.

to try to resurrect the situation. 100% because I mean, I know if I say something, if Sam says to me, hey, Jade, I wish you wouldn't do X, Y, Z. And my response is, see, this is why I never tell you anything or this is why I don't talk to you. That is an indicator. I've got a lot of beef beneath the surface that needs to be

And so, yeah, I agree. But it sounds like he's at least trying to communicate in different ways and not just come at her harshly every time and go, hey, listen, you borrowed money from the mom. And I don't know how honest he's being with how it makes him feel. And I don't know how much of a vote she lets him have in this marriage. It sounds like he doesn't have much say. I think it's taking him off. Yeah. And so he has a right to be angry. 100%.

I didn't get to hear her side. Maybe she's got another side to this. Sounds like there's something. So yeah, I agree with you, George. Counseling is the way to go. This is what we would call financial infidelity. It's one thing to make a small purchase that wasn't in the budget. Hey, groceries went over. It's another to buy, you know, I signed her up for a thousand dollar dance class. And it's even worse if there's a spectrum here of I'm going to go into debt behind your back. Borrowing money.

Yes. And then he said he's footing the bill, which makes me think their money is not together. Another clue. They've been disjointed and separate probably from the start. Yes. And so at some point, even with separate finances, we're supposed to work out perfectly. You got to come together and go, that wasn't cool because that affects me too.

Yeah, that's a good clue, George. Something, if she's feeling the need to reach out and borrow thousands from a family member, then my mind, I would have asked him next. I would have said, well, tell me about the budget. Is she the type that you handle the money and she gets an allowance because that doesn't work? So I wish we could have gotten into more, but Sean, call us back another time and we'll dig into it.

Yeah, I got to foot the bill for Whitney. I wouldn't be alive to tell the tale. No, you wouldn't. If I said that I had to foot the bill for something my wife did. You'd be on the moon. I would not. And my wife stays at home now, so she doesn't bring in income, you know what I mean, like in the traditional sense. But it's still our money. She gets just as much of a vote as I do. The same amount of vote. Mm-hmm.

And I think that's the most important part. And especially for stay-at-home spouses, it puts them in a real precarious situation. There's a lot of shame and guilt when they go, well, I don't want to spend this money because I don't bring any money into the house and I want to go provide. I'm like, moms, do you understand? Or dads, whoever stays at home. Value.

You would need to hire Mary Poppins to keep the house afloat. When I get home, I am thankful that I got to be here with adults and go to the bathroom when I want to and eat when I want to. Yeah. Because my wife is just, it's chaos sometimes. And so bless, bless all the stay at home spouses doing the Lord's work out there.

you are worth every penny and more. And there's a way to avoid that power struggle of one person is working out in the marketplace and one person's doing work at home. One person's bringing in income from that job. The other person's providing a lot of value at home. When you have a budget that you're working with together and you guys are deciding those line items together, right? I know on our budget, there's a Sam's fund money. There's a Jade's fund money. There is...

you know, all these categories where it's like, I know that at any point in time, I can go into the budget and use money on XYZ because it's planned for. I don't have to say, Sam, can I have $50 to get my nails done? I still have the autonomy there. But at the same time, there's the communication is open to see, hey, I see that this money is available for Jade to spend how she wants. This money is available for Sam to spend how he wants. And there's really no...

It's autonomy with guardrails and communication and accountability. And if you don't want that, please don't get married because you're going to just hurt the other person and hurt yourself in the process when you go, I just want to live exactly how I want to live without anyone telling. You got to have someone else speaking into it too. Yeah, I think my feelings would be hurt if Sam was like, you know, I just want my own account over here just to do the things that I want to do. I think my question would be like, well, why don't you want me to know about it? Because...

I'm not going to keep you from doing anything. So I think these are the conversations that we have to have. John and John Deloney and I were hosting the other day and we were kind of poking fun at when couples don't share their money. And so they've been mowing each other back and forth. And so many people were saying, Jade, you know, it's, it's whatever works for the couple. And I'm like, I get that. But there is some, there are things that slowly eat away at a relationship over time.

Even if you think, yeah, this is working for us, there's a bit of trust that's being deteriorated every time you make a separation. You know what I'm saying? And so that's kind of where I... Save the Venmo for your friends, not your spouse, please. I agree with that, George. You want a good marriage. Yeah. Share the bank accounts. This is The Ramsey Show.

This show is sponsored by BetterHelp. Hey good folks, it's Deloney, and with back-to-school madness on deck, my family's schedule is already so packed. And we haven't even made room for things like exercise and date nights and counseling and all the other things that make our life even worth living. When it comes to taking care of me, I have to remember to put on my oxygen mask first, meaning I have to do the things that help me stay well and whole. And you have to do the same thing too.

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This is the Ramsey Show on Ramsey Network. By the way, you can watch the show on YouTube if you've never done that. Maybe you've just been a podcast person. I think it adds a little extra value when you watch it on YouTube. It's just like you can see what's going on. Yeah. You know, people have been clamoring. They're like, I just want to watch George's face while I listen. Facial expressions are...

Or you could check out the Ramsey Network app. That's another place where there's some fun stuff going on. You can view the show and some other things as well. In the meantime, we got Ramsey's show question of the day. Today's question comes from Jim in Oregon. He says, I'm trying to take the lead in my family and get the burden of keeping up with the finances off of my wife. I've messed up and let her down a lot and we've gotten in debt.

Now we are stuck in the revolving paying credit card off every month. She doesn't believe in debit cards. It's not Santa Claus. Okay. She doesn't believe in debit cards, which makes it too easy to get money out of the bank. So she refuses to get a debit card. I know that I've let her down and I'm trying to fix it. But every time I try and discuss it, she's tired or not feeling well. How do I get her to understand that the credit card is part of the problem? Hmm.

Well, I don't know that she's going to listen to you, Jim, considering that you've made your own money mistakes. She's going, what makes you king of the hill over here telling me what we're going to do with our money? Yeah. This sounds like a conversation that's been worn out in their house. Yeah. No one's going to win this argument. You're both losing right now. And part of it is you're not aligned with the foundation argument.

of money, the principles, the values, that's part of it. Because then the game plan that's carried out from your values and principles is going to go in different directions. You're trying to do this with a debit card. She's trying to do it with a credit card. You probably have different views on debt. So that's part of the issue I'm seeing here. Yeah. If I were them, I'd probably, if you can get her to, you might even frame it up and actually...

like it wasn't even your idea and just say, someone told me about this thing, Financial Peace University, I'm going to watch it. Would you like to watch it with me? And that way,

you kind of get to be the, you guys get to, we get to be the bad guy, right? And we get to be the one that's telling you, here's the best way to handle your money. And I might try to start there if she'll even sit down and watch it with you. And if not- That's a red flag if she's unwilling to even move forward in this money journey with you. And I think for a season, you co-lead.

Right now, I don't think either of you should be like, I'm taking the reins. Just trust me. That's a terrible financial plan in any marriage. There needs to be communication, accountability, and alignment. That's where Financial Peace University is a great tool. And when it comes to this, the credit card, the debit card, it's too easy to get money out of the bank. I'm like, do you know where credit card debt has to get paid from? Your bank.

So this idea that a debit card, it's too easy for the money to leave. Well, that's a human problem that we need to fix versus just dealing with some symptom. Well, and then there's clearly an emotional side of this. And I feel like we say this a lot, but counseling is,

If she right here, you're saying, I know I've let her down a lot. I'm trying to fix it. I'm trying to take the lead. I've messed up and I've let her down. You said that three different times in this letter, this short little paragraph letter. That for me is an indicator that there's some healing that needs to take place. And so counseling is a great place.

And by the way, I think that counseling all the time, you know, on kind of a regular, like we just go and have a check-in. Just maintenance. Yeah. It's so good. It helps your communication. It helps you talk through things that really are issues. And it prepares you for when an issue does pop up, like how to talk about it and how to make the most of it. Yeah, that's good. Well, thank you for the question, Jim. That's a tough one. I think a lot of people relate whether or not they're the exact same situation. There's generally some disagreement about how we...

handle the money. And so I like the idea of you saying, hey, forget my plan. Clearly, I've screwed it up. I don't have all the answers. What if we try this proven plan I heard about, Financial Peace University? Would you be willing to try someone else's plan, not Jim's plan? I think that might open her up a little bit. I think so, too. I think he's trying to get a little baby bird to come to him like this. And there's been a lot of

False start. So hopefully that helps him out. All right, let's head over to Chicago, Illinois, where we've got Jacob on the line. What's going on, Jacob? Hi, can you guys hear me? Yeah, we can. So I am 22 years old and I'm about $90,000 in debt. A large portion of that, about $45,000 of it is from my car loan. Wow. I made about...

$85,000 last year, I want to say, maybe closer to $90,000. I'm a realtor and a part-time server. Okay. And then my credit card debt adds up to around $30,000. What are you spending this money on?

Um, I, I do go out to eat a lot. Um, I also, you know, um, spend a lot of money on like marketing stuff and, you know, paying office dues and fees and stuff like that. And then I also, uh, gamble a little bit. Um, what's a little bit? Well, a little bit more than I should. Um, probably, I probably lost about 15 or 20,000 in just that.

I self-evicted myself from the casino. Okay. What about your phone? So how about my phone? I'm on my parents' phone bill still. No, I mean the gambling apps on your phone. Oh, no, I can't do that. Since it's statewide, it does not allow me to. Okay, that's good. When's the last time you gambled at all?

On a vacation, on a cruise. It was about a month ago. Okay. Okay. So that's part of the problem here because you're not going to make much financial headway when you've got an addiction in place. So I would handle that first before we do anything else. And this car needs to go. It is way too much of your world at 22 years old. What's it worth? Yeah. My biggest problem with that is the trade-in value is dropped significantly. I paid...

Well, trade-in value always sucked. Since the beginning of time, trade-in value sucked. So not trade-in. What's the private part about it? I was looking at the used models, and they were selling more than the new ones, so I thought that maybe that would happen to me. If you were to check KBB, what would it say that if you do a private sale, what could you sell it for? The last time I did it on KBB, it was showing around $30,000 that I would get for it. What car is this?

It's a Kia EV6. Oh, there we go. I was hoping it wasn't a Kia. I'm telling you, every call we've had with a Kia EV, this value has dropped so insanely fast, it hurts my brain. Do you have any money laying around? Do you have any money saved anywhere?

I have a Roth IRA with about $3,500 in it that I can't touch. I put $100 into it per month. Let's stop that. Can you promise me you're going to pause investing until we get this debt cleaned up? Yes. That $100 is much better spent getting some financial foundation for you right now. And you'll get back to investing. You're 22. You've got plenty of time to invest if we can get out of debt over the next two years. Then from 24 to 64, you have all the margin to invest for 40 years.

Do you have any other liquid or non-retirement money? No. Okay. Are you living at home? I am. That's the good news. So you have very little bills and expenses. Correct. So you're making $85,000. How much is the car payment? The car payment is $975 a month. Oh my goodness. Wow. That's something. How quickly could you save up the difference that you're underwater on? To save $15,000.

Are you making five or six grand a month? It depends on how many houses I sell because I'm commission-based. I mean, I make around like $600 to $1,000 per week in the restaurant. I work three days a week there. On a normal month, what are you seeing? What's an average amount that you would take home? On a normal month, probably anywhere from around $3,000 to $7,000. Okay, so let's say that normal for you is around $4,500 that you're taking home.

$975 car payment. What are you paying each month toward the credit cards? I'm paying the minimum balances due. So minimum payments are with each one of them. I have a couple different credit cards. So it would probably add up to around over $1,000 a month in minimum payment. Okay. So we'll say $1,100 to the credit cards. So right now, yeah, you're spending a little over $2,000 just on this debt. But the good news is you've got that much free in margin to really make this happen. If I'm you...

I am amping up the server work that I'm doing. I'm amping up in the real estate side. I'm trying to get as much money as possible because the first thing here is let's clear that $15,000 underwater difference so that you can get out of this Kia EV because it is whooping your behind. And then let's save up as much as we can, $5,000, get you a cash car. And

And then we're going to start attacking these credit cards. But hey, again, this is the theme. I want you in counseling. We need to figure out what's behind the gambling. We need to figure out what's behind you kind of propping up this lifestyle at 22. What's causing you to go into debt and overspend at such a high rate at such a young age? Because I want you to get that under control before it starts controlling you. This is The Ramsey Show.

You are listening to The Ramsey Show. And hey, I just want to remind you, this is your chance. If you've had a question about money, if there's been a question that you've had, but maybe think it's a silly question or a dumb question or something you should know by now, there's no dumb questions in personal finance. It's all about learning and getting the information and putting it into action. So myself, Jade Warshaw and George Camel, your other host today, we're going to help walk you through it again. No question.

is too silly. Matter of fact, you could just say, hey, I'm asking for a friend and that way we can... I've always said, Jay, there's no dumb questions, only stupid people. And I stand by it. Don't blame the question. That's just words. George. I'm kidding. You're not making these people feel any better. I'm having fun with it. I'm joking. I've asked a lot of dumb questions in my day. Oh man, I remember... I still do.

Well, you know, that's in the eye of the beholder, the person who's being asked. But I remember, you know, when it comes to personal finance, it is one of those things where there's a lot of lingo. There's a lot of jargon. There's a lot of words that maybe you've heard before and you feel like you should know what that is.

but you don't know what that is. Well, I'm just not the type of person who should be investing in a Roth 401k. Yeah. I don't fully understand it. Yeah. And guess what? There's a knowledge gap that you can fill. Yes, you can. And you gotta be dangerous. It's dangerous with who you fill with because some dudes on social media, some guru selling you on some investment club, not the vibe. Ooh, that's very good. That is very good. You need to be careful of where you take

your information from. Luckily here at Ramsey, we've got over 30 years of experience and backing. Everything that we teach here has been proven over a 30 year track record and we know that it works. We talk to- - And we're get rich slow. And if it sounds like get rich slow, it's probably the right path.

And if it sounds like, bro, we're going to 10X your money, it's probably not the right move. You're about to get screwed. Yes, big facts. So, so true. So if you're looking for something to get involved in, you could follow any of our personalities on Instagram, George Camel, Rachel Cruz, Dr. John Deloney, Ken Coleman, myself. We're all giving you information that you can value and trust more.

Okay, off my soapbox. I just kind of wanted to talk about that a little bit. I appreciate that. You know, it can be intimidating. Let's talk to Gina. She's in Orlando, Florida. My neck of the woods. Florida, what's going on, Gina? Hello. Hi, guys. How are you today? We're great. Good to talk to you. How can we help?

So great to talk to you guys. Okay, so I'm going to get right to the point. So I work for a very large company in Orlando, a very large unionized company. Okay. And I started in January and I got my offer letter in December. Okay. They offered me $18 an hour.

And I signed it, emailed it back, went along with my paperwork, started in January. Now, it is now June. And I know that's a long time from January. But just recently, I had to refile for my benefits. And they required some of my pay stubs. So I'm looking through my pay stubs and I noticed for my hourly pay, it says $17 an hour. And I'm like, what?

Well, that must just be one of these pay stubs. So I'm going through all of them and they all say 17 an hour. And I'm like, I'm really confused at this point. So I give my manager a call. I let them know. And they're like, oh, all right. So I send them an email of my offer letter that shows exactly what they offered me. It's shown there twice.

And I email it to them and, you know, I kind of just wait a day to see what happens.

So from then until now, I have been getting nothing but the runaround from this company. I've called HR. I've been in contact with payroll. I've been back and forth with some of my top managers, some of my regular managers. And is this just to get the retroactive pay or have they at least changed your pay going forward?

They don't want to do anything, Jade. They don't want to do anything. They are literally saying because they are a unionized company that they are, that is the rate for that role. And I'm like, I understand that is the rate for that role, but that is not what you offered me. And that's not what I signed for. And it's a sign of contractually obligated to pay you that amount.

And I know that and that's what I've been saying. And my managers have been talking to HR. They've been talking to the union and saying, hey, this is what her offer said. You know, can she can she at least get, you know, some some back pay? And they are giving me a no, like a flat no answer. Do you have any friends that are lawyers or a friend who knows a lawyer, somebody who can just you can run this by and they're not going to charge you?

I do not, but I may, my mother-in-law may know somebody. I don't know off the top of my head. Ask around a little bit. Ask around a little bit because that's what I would do. If somebody came to me and said, Jade, say again. I said, this isn't right, right? If you're telling me that you have in your hand a signed letter of saying this is what you'll be paid and you've signed it and the company has signed it, 100% it's not right.

They're breaking the contract that they have with you. That's what I'm saying. So it's like any other document that I signed with them, is that too void? Are none of my documents that I signed with this company, are they all void as well? Well, did you sign anything that says 17 an hour? Are you having documents that some say this and some say that?

Nope. My offer clearly said, it said, you know, congratulations, you know, for XYZ, you're going to be offered 18. And then you open up a link at the bottom and it shows your role and it shows you everything that, you know, what you're obligated to do for the company. Yeah. And again, pay rate.

And I signed that, and it says my name. It says my address on it. Let's decide how worth it this is. Can I do the math for you, Gina? Yeah, do the math. I think that's my main question. Should I let this go, or is this worth pursuing? I think both. I don't want this to consume your life. Gina, Gina, stay with me. Listen, we're arguing over $1,000. That's the amount of back pay you're owed. January to June, an extra dollar an hour.

That's $1,000. So know that going in. Don't go spend $6,000 on a lawyer to make $1,000.

Don't let this consume your life to where you... I'm trying not to like, yeah. I know it's frustrating because of the principle and you feel wronged and you're worth more than $18 an hour. You're priceless, right? Number one, you don't want to work for this employer. So you need to go find a new job and jump ship when you do. Number two, you can do your due diligence. Look into Florida labor laws. Look into the Fair Labor Standards Act. There's some other resources I have here. Department of Labor.

You can file a complaint with them. You can look into mediation legal action. You can look at the Florida Department of Economic Opportunity. They have resources for you. The U.S. Department of Labor Wage and our division. So there's a lot of things you can do. But again, what is worth Gina's time? If I'm you, I'm going, screw them. I'm worth more than this. They treated me wrong. I don't want to work for an employer like this. Go find a new job.

We're not talking about $300,000 a year here. That's right. And so you can go find a job making $18 an hour elsewhere. What job is this? What kind of role are you in? It's for a pretty big company here. I don't want to name drop. No, what's the role? You don't need to name drop the role. Like what skills? Okay, so the role I am, I work in a club level lounge. Okay. It's not like, yeah, it's a lounge position.

Okay. Can you find another, can you find more work like that, that pays similar or more? Absolutely. Move on. Absolutely. And my whole thing is I just wanted to know if this was worth it or not. Am I stressing myself out over really? They did you wrong, but you're to George's point, they did you wrong, but you're spending more mental calories on it. They're somewhere eating a sandwich.

They are sitting somewhere with their feet up. They could care less what Gina is talking about. And you're the only one over here that's stressed out to George's point, only, you know, over a thousand dollars.

And so don't give them that power in your life. You're giving them too much power. You're going to be drinking your own poison soon with just all the resentment you've built up toward this company and the people you've dealt with. And I just think you're worth more than a thousand bucks. I just want you to move on with your life and go never again. And I'm going to make sure I'm going to check that first pay stub. And as soon as I see an issue, I'm going to say, nope, this is what we agreed on. And so you've learned the lesson here and it's not on you, but you just need to move on and

I personally, I wouldn't go hire, you know, an attorney over this. No. I would fight on my own for a few more hours and a few more emails, and then I'm just going to move on. Yeah, I agree. I like that. I'm sorry that happened, though. That sucks. Yeah, definitely put no money into this. I think she can go somewhere, George, and I think she can earn a lot more money. Her next job, she's going to be getting paid $25 an hour going, why was I so stressed out about that? And like the company at the same time.

Yeah, there's always, sometimes you think you're between a rock and a hard place, but there's a lot of other directions that you can go, and that's what's going on with Gina. This is 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

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You are listening to The Ramsey Show on The Ramsey Network. I'm Jade Warshaw. Next to me is George Camel. We're taking your calls all hour long, 888-825-5225. And if you didn't know it, you know, maybe you just watch the show and you just think we're two folks in a studio. Actually, it's two very large buildings that we work from and it's all

A lot of people in here. I think there's like over a thousand of us. That's right. Working in here day in and day out. Lots of different resources that we offer here. Ramsey Education, Ramsey Trusted Services, just to name a few. Then there's all the stuff like EveryDollar and everything like that. And one of our favorite, Ramsey Trusted, they're here to help you guys. Okay. You need help everywhere.

with things like real estate, and we're here to help. So selling a house the Ramsey way, it's really what makes home ownership a blessing instead of a burden, and we've got the right tools for you. Our Ramsey Trusted Program is really the only way for you to find an agent that you can trust. This person's gonna keep you on track with the things that we teach here at Ramsey, which is so important. You're gonna get the best offer on your house, and you're gonna find the right house for you if you're looking to purchase a house. This is so important, George, because

It's a jungle out there, right? And people will do anything, especially with this market. If you're trying to buy a house, people are doing bridge loans. People are doing zero down loans. For sale by owner, trying to save a buck. Oh gosh. Now's not the time to do amateur hour. I know. And you don't want an agent who's so desperate to make a dollar that they'll kind of suggest...

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so that's what we're looking for i love my ramsey trusted pro that has helped us with our houses she's great you come you come like lifelong friends with some of these folks they're amazing mandy linfesty shout out shout out in the in the middle tennessee area williamson county i'll appreciate that i know she will all right let's go to the phone lines we got elizabeth in austin texas what's going on elizabeth hi um how are you doing good how are you

Good. Sorry, I just wanted to make sure you could hear me at first. Yeah, definitely. So just to kind of get to the point, my stepmom and I don't have a really good relationship. I recently found out that she has absolutely no retirement funds or plans, and there's just no way my husband or I could even think about helping her. Okay.

And so I just, I'm not quite sure what to do in this situation or like how to avoid feeling guilty that I can't help. Is she asking for help? No, not yet. But her and my dad aren't very financially responsible. So it's... How old are they? I'm worried that if some... She's 56. Okay. Okay.

Okay. How old is your dad? Same age? He's 53. Okay. Are they both working? They are right now. Okay. And where does your dad come into play? Because you're talking a lot about stepmom here. He doesn't work. He works, but he doesn't work at home. So he has a job as a truck driver. And...

He has like a pension that he's vested into, but that's only like $500 a month for when he retires. Have they told you about their financial situation? My dad has. He's been very vocal about that. Is he worried about it when he tells you? A little bit. Yeah. Just because that's not a lot of money to live off of. Sure. What's your financial situation?

So my husband and I are currently in baby step two. We make $90,000 a year and we're scheduled to have, if everything goes perfectly, we're scheduled to have $50,000 paid off by March of 2026. And that's the full amount? That's the full amount, minus our mortgage. Okay, great. Yeah, that's excellent. Okay, so...

I sympathize with what you're saying because they're your parents. You love them. You see them drowning and you want to save them, right? But at the same time, you've got to get yourself into the raft first and save yourself so that you can pull them into somewhere safe. So there's all of that there. It sounds like your dad, at the very least, it sounds like he's willing to talk to you somewhat about this. One thing that you can try is to say, hey, you know, dad,

Some of the things that you're saying, I have felt that too. We've been worried about the future for ourselves and I found this plan. It's called Financial Peace University. We've started working it and it's working for us. It's a lot of work, but it's helping us. I'll send you a copy of it and maybe you do it like that as opposed to, because you're not, here's the thing, you can't save them.

And you're not responsible for their life and their decisions. Yeah. As much as you might have empathy for their situation. And we know that you can't change people. We've tried. I wish I could. You know, you can't, your personal trainer can't care more about you losing weight than you. Yeah. It just, it doesn't work. You can hold up the oxygen. They don't have to inhale.

And so part of this is having the hard conversation and saying, listen, I can't take care of you guys if you don't take care of yourselves. I'm not we're not going to be able to have you move in with us and have us float you if you didn't prepare. Now, the good thing is they're not that old. No, they're probably, you know, if they work really hard for the next 10, 15 years, they can have a decent little nest egg and retire with some peace. Would you agree? Why are they why is there no hope for them at this point?

Well, it's not so much that there's no hope for my dad. It's just my stepmom really loves to shop. And so... And is she going into debt for this? Yeah, she has in the past. It's caused them to go through bankruptcy twice now. This is...

Even more so, this is becoming an issue you can't solve because these are marital issues. They're financial issues that you're seeing. You're seeing the symptoms on the outside financially speaking, but these are marital issues that you, I mean, you're only seeing the tip of the iceberg on this. And with any kind of misbehavior, if you throw money at it, you're just going to be enabling more of the same misbehavior. She's not just going to change her habits because you gave her $5,000. She's going to go, whoo, shopping spree.

How long have they been married? How long has she been your stepmom? 16 years now. Okay, so this is locked in. What's your relationship with her? It's really terrible. She was physically and verbally abusive when I was little. Oh my gosh, I'm sorry. So, yeah. So, I'm not trying to put words in your mouth. You're looking at this and you're going, this woman is dragging my dad down. A little bit, yeah. And so, yeah, you're mad, right?

Have you brought this to your dad? Have you shared your honest feelings with your dad? About how she's treated you and her financial situation and how it affects him, his retirement? Yeah, I have. For Father's Day, I got him a total money makeover. And he started reading it and he wants to get on the right track now, but...

It's just it's on him to get her on board. And you're going to have a much harder time doing that with your position. And so I think the more you can encourage him, get him on the plane, get him fired up, that will then hopefully be contagious to her. Or at least he gets some boundaries and goes, listen, you can't spend like this anymore. I'm taking away access to this card because you're putting our family in danger.

And the way that you motivate him is by sharing your journey. Like share when you're winning. When you guys do your debt-free scream, share that. Share how it feels to have this peace. Talk about the conversations that you're having with your spouse. Hey, you know, we've been, it was tough at first, but we keep opening up the lines of communication. Just be open and share. You can't make them do anything. All you can do is tell them about it. And then you kind of just have to step away and really just leave it in God's hands at that point.

which is tough to do, George. It is not easy. We want to control the people that we love. Let's just be honest about that. But we can't. It doesn't work that way. This is The Ramsey Show. ♪

From the Ramsey Network, it is The Ramsey Show. I'm Jade Warshaw, joined by George Camel. We're taking calls about your life and your money, so you can call in. This is a live show. It's calls from everybody around the country, and you can get in on that action. The number is 888-825-5225. Again, this is a live show, so if you want us to take your call, call in now. 888-825-5225.

225. Let's go straight to the phone lines. We've got Casey who's in Sacramento, California. What's going on, Casey? Hi there. How's it going? Going good. How about you?

Very well. Thank you for taking my call. You bet. So, basically, my partner and I have been together for forever. We have separate accounts, but all of our finances are combined and shared for all intents and purposes. Okay. I am currently switching careers, going back to school to get my teaching credential, and we're thinking we can make that happen without taking out any...

loans or debt. So that's good news. My partner made a bad car decision in his early twenties, which shot his credit score. He hasn't done anything to remedy it, but he also doesn't have any debt. Okay. I, on the other hand, have about $10,000 in credit card debt. We've been throwing money at it, you know, minimum payments, everything extra that we can, but obviously with interest, we're not making any headway. We're looking at putting money towards it.

Yes, absolutely. It's combined debt. We're working the steps and we're really trying to get past baby sub two so we can start saving for our first home. So my question being, I know you guys are not proponents of calculating your way out of debt and whatnot, but why or if is it a bad idea for us to take a personal loan out in his name so we can pay off the credit cards, get that consolidated fixed rate monthly interest and

pay that off early, throw all of our extra money at it. So my credit score goes up and once we pay the fixed rate off, his credit score will be in a better position once it comes time to buy a home. It's $10,000 in credit card debt? Is that what you said? Yes, ma'am. Is it one card or is it a bunch of little ones? So it's two cards. We've already paid off the smaller cards. So what's left? What's on card one and card two?

$4,000 and $6,000. Okay, so you got a $4,000, a $6,000. What do you guys bring in combined income? Combined, he's got about $5,000 a month and I just took a serving job so I'm not totally sure what that's going to look like moving forward but that'll probably add up to about $5,000 a month, hopefully. Okay, any kids? No kids. So you guys are making $10,000 a month. Tell us about your renting or your mortgage. What are you paying every month? Trying to figure out where this money is going. So,

Yeah. So my income with the career change, I have not had more than $400 monthly income for the last like five months. Got it. So he's really been floating that boat. And we're still making a payment, but we're just not making headway. Interest is just kicking us.

But now you have the job, so we should be making headway. I mean, if you're both bringing in $5,000 a month, I mean, that's very good. So there's no need to play the whack-a-mole debt game by using more debt to pay off the other debt so we can stay in debt. And so the goal here is how do we use your future income to knock out this debt? And so what's your minimum payment on card one?

It's like $130, but it varies based on if I can throw any extra money on it, right? But the minimum is $130. So what would you say you're throwing at it? Are you throwing $300 extra at it? $500? Sometimes it's just the minimum. Sometimes it's like $50 to $200 extra. Well, that's why you're going to make some serious headway, and you're going to get ahead of the interest if you start throwing $500, $1,000, $2,000 at it.

So that's the problem is you're just sprinkling some extra money on it. We need to just shovel it onto there. And here's the good news. You guys have been living on $5,000 a month. You've been living on your husband's or your partner's income.

And now you're going to be making another $5,000 a month, which means we've proven that you can live on $5,000. So this other $5,000 coming in, that's your shovel. All at the credit card. Think about that. You'd be debt-free in two months if you pretended like this money was not a raise to increase your lifestyle, but instead this is just money to pay off the debt. Could you be debt-free in a few months? And...

Absolutely. But I was also thinking with the personal loan, right, it would be a good vehicle to get his credit score back without taking a credit card out. Screw the credit score. What good is that? To get another car loan? No. So come time to buy a house. Well, you guys are going to be debt free when you're debt free. If he's debt free now, pretty soon his credit score is going to disappear.

That's what happens when you're when you stop borrowing money, your credit score over time, usually six months to a year, it becomes indeterminable, which is basically what we would call maybe a zero credit score. And that's not bad. That's actually better than a good credit score when you think about it in the market. And so if that happens, you pay off this debt, he pays off his.

he remains debt-free. Both of you are going to see that happen. And when it comes time to buy a house, you'll still be able to do it. You'll just do it with manual underwriting. And the house dream, this is a few years away because we still have to get an emergency fund once we're out of debt. We still then need to save up a good down payment. So we're talking probably two or three years, right?

Yeah, that was actually going to be a question. So you do still save the emergency fund prior to the down payment savings. That's right. So baby step two, pay off all consumer debt using that debt snowball method. Smallest to largest balance, minimum payments on the rest, but that little one we're going to attack with a vengeance, throw as much extra as we can. Baby step three is save three to six months of expenses in a fully funded emergency fund, which for you guys might be what, 15 grand? Yeah.

What's three to six months of expenses? Okay. So once you have 15 grand there, let's create a different high yield savings account to start making that down payment fund happen. And then that could be, you know, 60 grand in there. So that could take a year or two, three. Yeah. Casey, does it make sense to you why we're telling you to do it in that order?

Yes. Yeah, it does. Yeah. I think it is kind of tough to hear like, oh man, I got to save up this money before I save up the down payment. But it really is so that you can go into that home with peace because going into a new home and buying a home is not,

Not for the faint of heart.

sometimes consolidation can feel like the solution is like okay we took two things and we turn it down to one just transferring from one place to another using different types of debt yeah it sounds good on paper and then the same people will call us back and say hey i did a zero percent transfer balance on the credit card to this one i did a personal loan i did a he lock because the interest rate and that's never the solution we have to get at the real heart of the issue yeah which is the person in the mirror yeah not the interest rate that's right and i think

there's a psychological component to that. It's like, let's say you had five different debts and you consolidate them down to one. Part of you feels like you've done something and I have less quote unquote less debt now. It's like, oh, this is easy. This is one easy, convenient payment as opposed to the five I was paying before, even though it's probably the same. And so in many ways, you kind of feel like, oh, I can

I can go into debt again. I only have one, right? And so I think you really have to guard against things like that. It's like having a different, you know, I got a 25 pound weight here, a 25 pound weight here. What if instead I put them together? Well, now I can't lift it. It's just too heavy to do all at once. And I'm a little guy, Jade, so it's more difficult.

Yeah, you got to spread it out amongst the biceps. Is she still online? Okay, Casey, I'm going to send you a copy of my book, Breaking Free from Broke, because in there, I lay out the entire process for how to buy a house without a credit score. This is how I did it, how we panned it off early, and I hope you follow suit and that becomes you guys one day. Absolutely. So hang on the line and Kelly's going to pick up. We'll send you a copy of that book. Love it. Thank you, George. That was very generous. I'm trying to be nicer these days, Jade. I've been known to be a little cruel. That's okay. Breaking Free from Broke is the book. This is The Ramsey Show.

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today. This is The Ramsey Show. I'm Jade Borshaw. Next to me is George Camel. We're taking your calls. You can call in 888-825-5225. The only caveat has got to be about your life and your money. Okay, so now it's a good caveat. You know, there's a lot of podcasts out there. This is a financial podcast. It's for personal finance. Okay, so let's go to the phone lines. We've got Michael who is in Chicago, Illinois. What's going on, Michael?

Hi, how are you guys doing? We're great. What about you? I'm doing all right. So I have a situation going on right now, but just to kind of cut to the chase, my main question is whether or not I should be withdrawing more money from an index 500 fund to put towards paying off that specifically from student loans that belong to my, well, that come from my wife, belong to us. And then some credit cards between the both of us as well. How much are the student loans? Yeah.

The student loans are $3,458.54. And how much are the credit cards? One is $2,382 and the other is $867.37. $867? So we're just short of $7,000 for all of them. Okay. And what's in this? Is this like a taxable brokerage account for general investing? I believe so, yes. It's not retirement? It's a...

No, no, it's not retirement. No, it was actually, it was originally a, I don't know what they're called, but my grandfather, before he passed away, was saving it up for me. That's awesome. Once I turned 18. What a guy. How much is in there? Well, originally it was $20,000.

And so this is where the situation gets kind of weird. So I'm currently undergoing a switch in districts. I'm a teacher for the visually impaired. I teach blind kids. Okay. So I'm moving from one district to another, but I've had a weird situation where normally a teacher's contract starts and ends in August, but for some reason in this original district, it ends in July. So I'll be technically...

Originally, I was planning on going through July and possibly even August without pay or insurance coverage. Fortunately, the new district is willing to at least cover part of the insurance as long as I contribute my half. I asked them whether or not they'd be willing to start like an early contract or something like that. And they still want to look into it, especially since according to.

form that they gave me recently, my pay wouldn't start in their district until September 10th. So I'd be going from July to September 10th without any pay from my side, which would be about $3,000 a month. That's fine, considering that I've already withdrew $7,000 from my index fund to try and put towards the debt. Okay, so you've already played this game. You've already withdrawn some money. So how much left do you have in the index fund?

About like $1,500. I think originally it was $22,000. I went through $7,000. When I checked, actually, I just wrote it down. Let me go and look. You said $1,500. Shouldn't it be $15,000, right? Sorry, $15,000. Okay. $15,440.15 is still in the index fund. And then you've got the $7,000 of debt. So that leaves you with $8,000 in the index fund, plus you've freed up your debt payments, which you can now use to save and float you for those two months.

If you need it. Yes. And so the reason why I really ask is because when I brought up this idea in conversation with my wife during our monthly meeting, financial meeting that we have, she was concerned about what that would look like in regards to taxes if I withdrew essentially $14,000 from the index fund. Okay. Well, that's a calculation you can make and you can withdraw a little more to pay the taxes if you need to. But that's going to come tax time, right? Yeah.

So we got time to figure out what the taxes are, save up for that, and make sure that we have the money allocated for that. What's your wife earn? She earns about, you know, she doesn't earn like a consistent salary like I do, but she makes, I'd say about like $15,000, sorry not $15,000, about $1,500 a month. $1,500 a month? What is she doing? Mm-hmm.

So she works as an orthodontal assistant. She makes about $8.50 doing that. And then she also works at a pizza location and makes, just on weekends, it's something she's been doing since high school. Do you guys have kids? We do, we have one. Okay. What's the childcare situation? Is there one or are they older?

We have been blessed with a really, really good child care situation where we have her parents next to our neighbor who they're really close with watches her for like $20 a day. Great. So that's been really fortunate. I mean, how old are you guys? I'm 27. My wife is 25. All right. All right.

I love that you guys are paying off this debt. It sounded like because of the gap in pay that you were thinking of reaching into this again for the gap in pay. I really want to stop that habit. That's kind of been, I have this money. Once you've invested money in a brokerage, and I understand it was a gift, but the intent is for that to sit there and stay there. And so I really want you guys working the baby steps in order, which really the next thing for you guys, you need to get $1,000 saved.

And I want you to really lean into this and do it the right way. And you've got child care. Your wife's got to work more. If I may, we actually also, we haven't combined our finances yet just because we went straight from being married to buying a house to having a kid. So it's something on my docket. She's actually kind of against it, but I've been kind of slowly. Why is she against it? I don't know if you guys recently...

She doesn't like looking at the money coming out of her account. And since I pay a majority of the bills, she would feel like if she, if she looks at it, I mean, she doesn't like it. No one likes money coming out of their account. I know. I know. It's part of being an adult. And so my proposal to her was, you know, that's, I mean, I totally understand that. Like you guys said, nobody likes that. It's like, hold it. I'd be more than willing to take care of that myself because I'm kind of a nerd. I, I like numbers. I like that kind of stuff. So,

So I'd be totally fine if she just didn't look at it. The idea is that you guys go together. You say, where do we want to do our banking? Okay, let's go open up an account. And I'm going to change the direct deposit at my work to go into this account. And you change the direct deposit at your job to go into this account. And then we sit down together. We open up our budget. In this case, I would suggest every dollar. And we decide, okay, you're bringing in this. I'm bringing in that. How do we want to spend our money? And I think that...

It's one of those things where you can say a word and everybody has a different definition of what that means. And I have a feeling that when it comes to money and you say, let's share our money, everybody pops up with the definition that they grew up with or had in their last relationship or heard somebody else say. And I think when it comes to that in your life, you've got to define for you guys exactly what that means. So there's no gray area. There's no room for someone to insert money.

you know, insert bad situation here, right? It's like, you've got to clear that up. And I think if you sit down with her and say, listen,

Things are all over the place right now. I'm about to have two months where there's no salary. Thank you for the money that you're bringing in, but if there's a way to get it up. But I really want us to work together. And here's what that means for me. I know that you have worries and doubts and fears, but I'm not going to be the person that tries to control this. I want us to both look at it together 50-50. When somebody comes to you and says 50-50, that's pretty much...

you know, bang on. It's like, yeah, 50-50. I love that. So I think that's the conversation we need to have. What I was going to say also is that we actually both have our own current savings accounts too. So last I heard from her, she has like another $3,000 in another savings account. I have about $2,500, I want to say, in another savings account. So we still have that. You can almost pay off your debt without even touching the index fund.

Right. Yeah, that's true. That's true. So that's part of combining all this. And you can even use the same checking account you have. This is what I did with my wife and I. Go to the bank and say, I want to turn this into a joint checking account and add my wife. Once that's set up, we transfer her money into there. We shut down her account. Now we have full accountability and transparency of where the money's going. Yeah, keep $1,000 of that aside. And then you're putting $4,500 onto this debt. And...

I would really, you know, and the index fund is a brokerage account. Yes, we would tell people all the time to drain those accounts in order to pay off debt. So there's nothing wrong with that. But now you're just withdrawing $2,500 from the index fund to pay the rest of the debt off, which is going to be very minimal in taxes when you look at what the actual long-term capital gains are on that. And then we move on. Now you can enter this new season with way less stress, freed up payments. And during those two months you're unemployed, you're going to go to work.

Do side hustles. Go find some gig work. And, you know, instead of having to dip into an emergency fund or index fund to float that those two months. So just plan for that. You know what's coming. That's what I would do. And both of them, I mean, you guys are in your early 20s. I really want to plan...

more so for your wife. It felt like she was floating a little bit. So I want to make sure that she's really locked in. It doesn't seem like childcare is the barrier to entry there. So I want to make sure she gets locked in and I want you guys bringing home solid income from now on. I saw this quote, Jade. This woman said, I don't look at my bank account. I don't need that kind of negative energy in my life. And I'm like, that's how she's feeling right now. Listen, let that motivate you. The proverbial fire under your butt is what you need. Some of y'all do need to log in and look at your bank account. This is the Ramsey show.

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This is The Ramsey Show. Hey, thanks for hanging out with us. I'm Jade Warshaw. Next to me is George Camel. We are taking your calls. This is a live show, so you call in. The number is 888-825-5225. A nice young lady will pick up on the line, screen your call, and the next thing you know, you're on the line with George Camel in the flesh. Can I just say, God bless the phone screeners. It's Kelly today. I tried it, Jade, for a second. I was like, hey, let me just take the raw call coming through the line. Y'all,

It is a wild ride. It's a wild ride. It's a wild ride. I mean, Kelly helps you kind of get your thoughts together, right? And kind of streamline it all down into... And she's so nice. Yeah, she's kind. She's kind. We've had a lot of Kelly's phone screening and this Kelly is the nicest we've had so far. That's all I'm going to say. That's great. That's

That's great. She's happy that you said that. We can see her. There's glass there, and we can see her through the glass. There's a lot of people back there that make this show run. Will Rudder, I'm talking to you. That's right. He's running the board, the audio, the faders, all that stuff, the bumps, the music. There they are. Of course, producer James Childs. Fearless leader. I think we got Andrew, Nathan, Zach back there running all the video and the switching and the lower thirds and Zoom. Yeah.

Y'all, we get the easy job. We're puppets. This is a puppet regime. We're just here to look good. Who's pulling the strings? You tell me. James. I can tell you who's pulling the strings. All right, I'm going to pull a string here and go out to Lauren who's in Des Moines, Iowa. What's going on, Lauren? Hi, guys. So I was wondering what your thoughts were on signing over a vehicle title to an ex-business partner.

Tell us more. There's some history here. Is there a good relationship with this ex-business partner? I mean, they didn't leave on really great terms, but they're still working through issues. And this is one of them. It's a

like a somewhat newish mountaineer. And you know, those can get kind of, or no wagoneer. Those are expensive. I see. Yeah. So, um, the partner, the ex partner used like 60,000 to, um, put a down payment on it. And then the rest, uh, 35,000, I think is left, but the original loan was for 40,000. Um, and it's in the business's name and the partner has since left. And, um,

he's asking for the title to be signed over for $35,000, which I think is the remainder of the loan. And I just don't see...

Yeah. What do you think? Well, let me just make sure I understand. So you guys own the business. This was a person that was a partner with you. He said, I need a new vehicle for work. So I'm going to do this through the business money. Spent $40,000 on a Wagoneer. Now he's no longer part of the company. And he's like, I want to keep the Wagoneer basically. So can you guys just turn the title over to me and I'll just keep the car and pay the payments?

Yeah, that's what he's saying. Yeah, he used $60,000 of the company money just out of the company funds. Oh, company money, not their income. Oh, I see. Yeah, it was just company money that was in the company bank account that he used to put a down payment on the vehicle. And then he financed $40,000. So it was about $100,000 all in. $60,000 in down payment, $40,000 on the loan remaining. So it's $100,000 is what it costs. What is it worth today? Yes.

I don't know what it's worth. I haven't ran that. That I don't know, but I could find out. So if you said, if you essentially, if you said, yeah, we'll sign the title over to you, but you owe me $60,000. Uh-huh. Would they take that deal?

I mean, that would be ideal. Yeah. I don't think they're going to do that because they're going to say, well, the value of the car is only $60,000. So I can go out and buy a better car for $60,000 if I was going to use my own money. Right? Because technically the business owns it and you are the business right now. Right. I mean, we hold the title. But they have the loan in their personal name?

No, they don't. It's in the business. And that's why I was like, this doesn't sound right. This guy has no money. He has none of his own money into this. I mean, right now, technically, he's on the hook for the $40,000. Right. Yeah. But not really, because if he doesn't pay it, it's on you.

If he doesn't pay it, it's on us. And I think in the transfer of this loan, yeah, he wants the title signed over. I'm not doing any of that. I wouldn't do it. I would make this super clean. How long ago did he buy the car? Let's figure out how much of his own money he's put into this. How long ago did he buy it? It was two years ago. And it was out of the company bank account.

Oh, okay. So has he made any payments with his own money towards this? No, they stopped payment. They're pausing it till this transfer thing goes through. Well, who's paying the payment? He hasn't paid his own money. The company's still paying it. Then it's your car. Is it just you two or are there more people involved here?

Um, it's my husband. It's my husband and then this other partner. And then I'm just finding out about stuff. Well, that's what I'm saying. The company is paying for it. Your husband is paying the payments on this. Yeah. Pretty. Yeah. You guys own the car. This guy is no longer working with you. He doesn't get to keep the car. Riddle me this. Why don't you guys just sell this vehicle and get out from under this car? You don't want it. You don't need it.

Yeah, so we just need to get it in our possession then? Is that what, he's in Minnesota. Oh, yeah. He's still driving a car? He is. Yes, he is. This is a liability waiting to happen. Wow. You need to get back that car. They have no right to this vehicle. Yeah. Okay. It's under the business name, and they are not part of the business.

So legally, it's your car. This guy said, don't mind if I do. And he took that wagon here. I'm having heart palpitations right now. Wow. He's like, I got a $100,000 car. No one is stopping me. Can they legally even be driving this car right now? I don't know. I would do some due diligence and homework and maybe even talk to an attorney to figure out what the right way to go about this is.

Because I feel like you guys are in a precarious situation, and I'm not in on all the details, and I am not a legal expert. But this sounds like a nightmare if you don't get out of this ASAP. Is he the kind of guy that'll figure out that you want the car back so he'll, like, crash it on purpose or, like, do something to it to try to get back at you? Oh, I mean, you never know when people are desperate, I suppose. I hope not. It doesn't sound like they have the money to even buy you out of this thing.

No, I think he's struggling. I think you need to say, listen, we are selling it for the market value. And if you want to be that person to buy it at market value, then you're welcome to it. And they become a general person like anyone else that would buy the car from you. So I would go check the Kelly Blue Book value private party and you list that car. My guess is you're probably underwater on it. Yeah, I'm guessing too because it was just a couple of years ago. And what's left on the loan right now?

35. 35. So if the car is worth more than 35, you guys will make some money on this deal. Okay. So I hope it's worth 50 or 60 when it's a nice car, two years old. I hope it hasn't depreciated from 100 down to 35 in two years. That would be... I know. Depending on the mileage and the condition. But, you know, those luxury cars, they can depreciate real fast. And when people want a Wagoneer, they want a brand new Wagoneer because a used Wagoneer, no one wants to sign up for that money pit. Yeah. Yes. Yeah. Yeah.

Yes. So I would not keep this car. I wouldn't let them keep driving it. I would sell it ASAP and get out from under it. Yeah. When she was talking about transferring the title, I thought that he put $60,000 down of his own money. It's the business money from the company account. And then when she said he's paying payments, he was paying payments from the company account. And I guarantee you he saw some stupid Instagram that was like, bro, if you get the Wagoneer technically because of the weight, you can depreciate it 100% and you can actually make money and it's a tax hack.

I want to slap every guru on the internet that has said stupid crap like that. I just think that he thought he was- You should finance a $100,000 car for your business because it's a tax hack. Yeah. You're the hack, bro. Don't fall for this.

Oh, my goodness. And I guarantee you some accountant told them to do it. It's like, oh, bro, this is the move. You can depreciate. You'll save money on it. You're basically making money right now. Well, who told him he could just drive off with a car he didn't own? Who told him that? Well, and part of it is on them. Because if I'm the partner, I'm going, no, we are not financing a $100,000 car through the business. Yeah, that's unnecessary. We never found out what kind of business they are, but...

I can't see why this was necessary. And it's one more reason we say partnerships rarely make sense. They're very risky and they're the only types of ships that are liable to sink. That's right. It's the Titanic in the business world. Yeah. Hopefully they can make some money. You know, new cars, when they drive off the lot...

You know, they're losing money instantly. But in the first four to five years, they're losing 40. They're losing so much. Especially those types of vehicles, those, you know, Range Rovers, Land Rovers, the ones that are a money pit when something goes wrong. Nobody wants to sign up for that money. I know that's right. We're seeing this happen with a lot of the electric vehicles. Buyer beware is all we're telling you guys. This is the Ramsey Show.

You're listening to The Ramsey Show, our scripture and quote of the day. Isaiah 66 verse 9 says, I will not cause pain without allowing something new to be born, says the Lord. Love that promise. Love that. Albert Einstein said, a person who never made a mistake, never tried anything new. Booyah. That's what I'm talking about, Al. That's what the people need to hear.

All right. That's wisdom. That is wisdom. All right, guys, if you want to give us a call, you still have time. The number is 888-825-5225. George and I will chop it up with you. That's what we're going to do with Eric, who's in Milwaukee, Wisconsin. What's going on, Eric? Hey, so my wife and I are considering to purchase my dream kind of owning a lake house. And it feels like our income is good enough to do it, but our net worth is maybe not there quite yet. I just wanted to get your guys' thoughts. Yeah. Lay it out for us.

Yeah, so our income is about $625,000 per year household income. And our net worth is about $1.4 million now. About $750,000 of that is in stocks. $225,000 is retirement. $250,000 is kind of in high-yield savings. And then we own some land where we potentially build this lake house that's worth about $175,000. Well done. So lake house is worth $175,000. Did I hear you say $250,000 in just like liquid savings? Yes.

Um, yeah, the land is worth $175,000 where we might build the slag house. And then, yeah, $250,000 in liquid savings, some high-yield savings accounts, and kind of different bonds. And what about your house? Did I miss this? We rent an apartment that costs about $3,500 per month. Okay. Well done. That's awesome. Holy moly, how old are you guys? You guys are crushing it. We're 34 and 33. What do you do for a living? Because everyone's wondering how you make $625,000 a year.

Both in technology jobs, so we're kind of riding that wave at least until AI takes our jobs. There we go. That's the spirit. I feel like you guys built AI. If you're making that kind of money in tech, you're behind it. I wish. Yeah. Unfortunately, we're just consumers of it all. So the goal is for the lake house to be your primary residence? No.

No, it would be a secondary. So we'd still keep the apartment and then have that as a secondary kind of seasonal use only. So it really wouldn't save us money. And we still might buy a primary home in the next few years too, although no immediate need there. So this is kind of like a, it's a very expensive luxury. It's an expensive toy. Yeah, exactly. But you guys are, you're debt free. Yep. With an emergency fund. You have all this money in the bank. And what's it going to cost to build the lake house? We think about $400,000.

Okay. So all in, you're talking land plus this lake house is $575,000? Yeah, something like that. I think for a couple making $625,000, that's very reasonable. This is a green light all the way around. How much are you trying to put down? We paid in cash. All in cash. Okay. So is the plan to... Tell me more about that plan long term. Is it you're taking from this $250,000? Tell me what the plan is in your mind.

Yeah, we would liquidate most of that $250,000. Just keep six months emergency expense there. And then, yeah, sell some of the stocks as well. Yeah, these stocks are just like company stocks in a general investing account? Yeah, just ETF and mutual funds primarily. Okay. None of those are retirement? No, the retirement is separate. We have probably about...

225 in retirement. And you guys, here's the thing with the net worth side. You have plenty of time to catch up on the wealth building side. I mean, you could save up a million bucks in two years. If you're completely debt free making 625, it wouldn't take much if you don't increase your lifestyle by a ton to just save up a million bucks and retire early. So I'm less concerned on the wealth side and the net worth side. You guys have done such a great job managing this money, not inflating your lifestyle, paying cash for things, still being very reasonable for the amazing income you have.

So yeah, I like the idea of having a primary home. I don't want you guys renting long-term. And so I might get a primary home first paid for, then do the lake house. But I don't think the order matters much because you're going to do it all so fast. Yeah, I agree. I love this. I think you have a great plan. I think you guys have been really smart and it shows. And so kudos to you. Very good. Thank you for the call. $625,000. Riding that wave. Debt-free, which means it's not all going out to payments every month. That's right. Wow. Killing it.

Killing it. We got to go into tech, Jade. What are we doing here? I know. Well, we need to help these people. I'm not that smart. That's why I'm... That's a lie, George. All right. Let's take another call. We got Monica. She's in Greenville, South Carolina. What's going on, Monica? Hi. How are you guys doing today? We're great. How can we help?

Yes. Yes. Um, all right. So, um, my mom passed away and she left me a little bit of money, about 20,000. Um, I use some of that to help with the burial and then I use the rest to purchase a duplex. Um, I stay in one half and I rent out the other. Um, I got so used to all this cash that I was getting into my job pays me about 55 K a year and my rental income brings me about 11, four a year. Um,

I got too happy cause they kept dangling credit cards in front of my face and I took it and now I'm like 13 and half thousand dollars in debt. I have absolutely no emergency savings. I have like $300 and a 401k for a previous job. I was thinking about maybe rolling over to a Vanguard, um, uh, emergency fund. So, and my credit cards I pay every month is about $730. Hmm.

Oh, gosh. I mean, the 401k, yeah, you need to roll it over, but you'd roll it over into an IRA. Do a direct rollover IRA. Not to a brokerage or not try to get your hands on it because it's still retirement funds. And so we want to keep it-

Yeah. Okay. This is chump change as far as retirement savings go. So just roll it over to an IRA because the penalties and fees you're going to pay, it's going to turn into basically nothing if you actually withdraw that money and use it. So, okay, let's figure this out. What's your mortgage every month that you got to pay? It's $1429. And what's your take-home pay every month? Take-home pay is about, I can give you exact numbers. Is it like $4,000 a month?

$3,500 a month? Are we just from work or are we including rentals? Okay. It is $3,224. Okay. And then what do you get from the rental? How much do you charge that person a month? $950. $950. Okay. All right. So things are a little bit tight. Okay.

Oh, and I do get like additional $300 for my mom's like death pension. She had a remainer, so I get like $300 for the rest of my life. Okay. Okay. So we're like a little over, we're like 4,400 bucks a month that you're taking in. Are you investing right now? I'm confused as to how you're paying 30% every month, every paycheck in taxes and whatever else.

No, I don't have any additional investments. Do you get a big tax return? I always have to pay.

Okay. I'd look into that as part of your homework. Figure out why you're not taking home as much as you should be. I don't know what the taxes, I don't think South Carolina has crazy income tax or anything like that. But figure out why you're, look at every single thing coming out, all the deductions. There might be some healthcare, 401k, you'll see Medicare, FICA, whatever. But figure out why you're not taking home more than that. Because we needed the income to get up. And as you can tell, this rental income, it's not solving the actual problem, which is the spending.

It sounds like you were kind of living, you were propping up a lifestyle that was unsustainable for a while. Yep. What were you spending the money on?

Oh my gosh. And I don't even buy stuff from me. I like to spend money on my nieces and my nephews. My brother reached me past life. I like to buy stuff for them. I actually do a lot of stuff in the community. I'll buy lunch needs and stuff and I'll pack it up and I'll pass out to the homeless. I do buy some stuff for me, of course. But honestly, I just buy. I can't even work

call what I was buying because it's nothing tangible and that's the sad part. I think you just need a budget. I think for you, in order to be able to do the lifestyle that you want and not go over to the extent that it's making you lash over into credit cards, I think you just need a really good plan for your money. Have you worked a budget?

Yep, I actually downloaded the budget sheet from EveryDollar. Okay. And I sifted that out, like I put all my information in there. Okay. So yeah. Okay, good. I want you working on that because at the end of the day, that's the only place you're going to find your margin. And cut up these credit cards. Can you promise me you're going to cut them up?

I am. And that means we're going to use Monica's money from her bank. And guess what? You don't have the money, which means we're not going to spend money we don't have. That's the new rule. That is. So list those credit cards out from smallest to largest. And you might cut back on some of the... I mean, you're going to have to cut back on some of the things that you were spending money on in order to make headway on this credit card debt. And get a side hustle, probably, just to knock this out faster. Yeah, because it'll eat up those minimum payments quick-like. So a side hustle is definitely...

on the menu for you. This is The Ramsey Show.

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