A Past Gambling Problem Is Haunting His Financial Future

28:04Right. If both of y 'all lost your job, y 'all would have to mow lawns. Y 'all could come up on an annual basis with the taxes and insurance. this is what real wealth looks like not having a fancy policy that somebody else manages for you because you're quote-unquote too dumb right how old are you amanda we're 43 okay do you guys have some wealth already built like what's your current nest egg look like across retirement accounts uh so i have about 450 000 in my 401k i haven't worked for about five years. Are you apologizing for having half a million dollars? Are you serious? Making excuses. Okay, what about your husband?

28:49What's he have in retirement? He has a pension. I don't know how that works. Okay, let's take the pension out of it. Let's just put this in your ball in your world here. You have 450 grand, you're 43 years old, and you pop that 1000 bucks into an investment account, you're likely going to have are you ready for this? $5 million at 65. If you just do that, Just$1 ,000 a month, the amount you were paying to that insurance policy. Put it into your 401 or into a mutual fund. Yeah, even a Roth IRA. Now, you'd run out of money pretty quick because you'd go over the limit. But you can invest outside of retirement.

29:22If you max out all of your retirement options, you can invest outside of retirement. Just into an index fund and a brokerage account. And that'll still get you that number. Somehow you and your husband would have to figure out how to exist with your paid-off house in$5 million plus his pension. However, are y 'all going to make it? And your husband is saying you're broke? I don't worry about paying for four weddings. Oh, four weddings? That might make you broke. Yeah, I take it back. We have four girls, so I said, we're going to pay for their college. He said, I'm not worried about college. I'm worried about weddings.

29:52Okay, so he's right. He's right. Y 'all are poor. But you'll get there. You'll get there. They don't do full-ride scholarships for weddings, although I feel like they should. You know what, though? You can do the cash-out option when your daughter comes home and says, Hey, I'm engaged. You can sit down and say, okay, we'll write you a check for$20 ,000. And we will marry you in our local church. Just right down the street. Right? There you go. I'd rather take that. Or you can just put it on a house and go alone. That's right. We will pay your down payment for your house, and we'll meet you and throw rice at you outside the courthouse.

30:27Young couples will be like, oh, my gosh, housing is so unaffordable, and then spend$120 ,000 on a wedding. Like, it's worth it. It's my special day. goodness gracious we've got it twisted but hey we're rooting for you Amanda it's a stupid tax you're gonna be fine the resentment that'll sting for a little while though

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32:36jp is in new jersey up next jp welcome to the ramsey show hey folks hope you guys are doing well we are call what's going on with you um all right so my spouse and i have been married for three years um we started fpu when we got married and now we're at babysat four which is awesome we put 15 percent down into our into our retirement and are thinking of buying a home We've been renting this whole time, famously in Jersey, pretty high cost of living. So we're trying to decide if it makes more sense to use what we saved and buy or keep renting and start investing what we've saved. Now, the caveat is we're planning to stay in the area for another five to seven years.

33:18Okay, so you're already investing 15%. Why are you wanting to invest more? well we have all this that we have saved and we just started like and baby steps and say wow we could be kind of gaining more if we invest um so we were like to invest to use that to the down payment like what makes more sense how much money do you have outside of our emergency fund we have about 140 000 whoo that's a heck of a down payment what kind of house are you looking at what's the budget? The budget's around like$600 ,000 max. Okay. So what's your target here? Are you trying to keep it within the Ramsey parameters to keep it to 25 % of your after-tax income?

34:02Yeah. We're trying to follow that as well. And we were thinking if we do do that and we leave in five to seven years, is the equity, does that match what we could win if we invest? trying to figure out. Well, you tell me. Tell me exactly what the stock market is going to do for the next five to seven years, and I'll tell you if it's a good plan. No idea. That's another presidential election, too, by the way. Perfect. So here's what I would do is try to time the market and decide, is this money going to go towards investments or house? I think both are good. You're already investing 15%. I would rather see you guys get your foot in the door to the housing market, because I can tell you this, houses are going to be more expensive seven years from now, and it's a moving goalpost.

34:46So I would rather see you guys get into a home as soon as you're financially ready versus hanging on to the money or investing the money because you're going to be multimillionaires at this rate. How old are you two? We're in our mid-30s. We're 34 to 33. And how much money do you guys make? We make about two, I guess, before taxes, about 280. Okay. A third grader doing this math could tell you you're going to be a multimillionaire investing 15 % of hundreds of thousands of dollars with compound growth for the next 30 years. That's awesome. So in that case, I'm going, okay, well, let's really hunker down and get this house knocked out, which means we need to find a down payment goal so that we can get into this house.

35:27So is that$200 ,000,$175 ,000,$250 ,000? What is that number for you guys? So what we're looking about, it's about like$155 ,000. And you're at$140 ,000 right now. Yeah. So$15 ,000 is what's stopping you from buying a home? Pretty much. And you'll make that in the next month or two? Yeah, exactly. It sounds like you should start home shopping by Christmas. All right. We have been looking, and then we kind of pause, and we're like, we want to make sure that we're doing the right thing. You are doing exactly the right thing. Now, in the baby steps, this would be baby step 3B, or you can do it in 4, which is you invest anywhere from 0 % to 15 % while saving up a down payment.

36:11So if you guys want to keep that 15 % and throw anything else at the down payment savings, you'll get there in no time. But I would not prioritize investing over buying a house when you're already doing Baby Step 4. You guys are doing great. And for whatever it's worth, I pause retirement to save up for my down payment. I see. The pause that you do for three months is not going to make that big of a dent long term. Right. So do you have a good real estate agent? We do. We do. Okay, good. I would start shopping now because it could take a little while to start finding the right one. And in the meantime, you guys keep stacking cash, keep stacking cash.

36:48And when the right one comes along, you guys are going to be financially ready. All right. Will do. Way to go. Congratulations, dude. I needed a win today, JP, and you gave me that. Thank you for being an inspiration. All right. Bill is in Sacramento up next. What's going on, Bill? How can we help? well i'm looking for some godly advice and you guys are the key john is the holiest man i know godly part george will do the advice part

37:16no uh i got a situation i got a couple kids they're in private school and uh my job is cut back way back on their uh overtime and stuff that i was using to keep them I'm in private school. So my wife works, I work, and we're just getting barely by, and all it takes is an appliance breaking down or a car that needs to be replaced, and we're going to go in debt. Right now we don't have any debt. But we've got about$600 ,000-plus equity in our home. So we were wrangling or tossing around the idea that what we could do is we get just one, you know, just a single mortgage. They're thinking about maybe taking out a loan against it, you know, whatever percentage they charge, and taking that money and it would pay for the next four years of school.

38:05No, no, no, no, no, no, no. And pay for a car, and then just pay it off when we sell the house. Please don't do that. Okay. Please don't do that. Is this private school, is part of the reason you send them to a private school, is it a faith-based education for them because that's something you value? Oh, yeah. It's a Christian organization, and it's top-notch. Okay. Great. That's amazing. I'm going to tell you something that's hard to hear. Okay. Sure. It's faith-based and it's top-notch. It can be world-class. And in the current situation where you find yourself, you can't afford it. And this is dad to dad.

38:43Okay. I'm just telling you like dad to dad. That's a hard thing for me to say to another dad who's trying to do the best he can to raise great kids. But I will tell you, in my house and in George's house and our neighbor's house, the spiritual life of our kids is chiefly our responsibility. Absolutely. And if you can, if you have found yourself in a season where you can afford to also put them in a different environment where you know their teachers are all believing the same faith that you value and all that. That's amazing. But the other side of this is the biblical principle that the borrower is slave to the lender.

39:23And if you take out a HELOC against your house, even though you have built inequity, you are creating tension inside your house that your kids will absorb from the inside out. Okay. I would much rather, if you like, just again, dad to dad, I would much rather you guys have a hard conversation with your kids, which by the way, would be one of the greatest lessons you could ever teach them, which is dad had his hours cut and our finances have changed. And if they saw their dad weep, if they saw their dad be sad, that would be a blessing to them because they would see dad have real emotions and then go do the next right thing.

40:04Which is for this season or at the end of this year or at the end of this semester, This is as far as we can go. And if my hours pick back up, this is priority number one. I know it's going to impact your friendships. It's going to impact your school stuff. It's going to be hard. But my job is to keep all of us safe. And I won't put the house on the block for something that I can get down the street. And I'm just going to have to up my intervention in the school system, in the schools, in us talking about spiritual matters at home, doing morning devos, whatever you want to do in your house. because I'm going to have to take full ownership of that and not outsource some of that to a school.

40:40Those are hard, hard conversations, man. But I would not be a good dad, a fellow dad, if I told you, yeah, the right thing to do is to borrow against your home for this season right now. Okay. And if things are tight now, that HELOC is just going to make it even tighter. You're adding an extra payment in your life and you're putting your house on the block because that puts your home at risk as well. And so to John's point, I think this is going to add more stress than it's going to add peace of mind that you're doing the right thing for your kids. I think you've probably raised some great kids.

41:11Am I right? Oh, absolutely. Yeah. Do you think a temporary change in school would affect their character and their values and the principles you've instilled in them? If it did, I'd kick them out behind the woodshed. There we go. There we go. We have a solution. But I would not do this, Bill. I don't think using your home as a piggy bank is going to be a blessing in your life. and we just talk to too many people that are your age going, I wish I never did this. I wish I didn't take out the HELOC. I'm unable to retire now and unable to make these payments. And that's just going to add stress into your home.

41:45Or the moment you take out that HELOC, you're going to get called in and they're going to say, hey, you know, we've been cutting hours, man. And unfortunately, we're going to have to lay off some positions. And then you're in a big, big time mess that you're not in right now. And so, man, I always want homes to be places of warmth and safety and peace and adding adding debt to your house plus putting your house on the block man that's a way to add some major stress take that off the table and find any other way and it's not going to be fun but it's going to be for a season

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43:52Welcome back to The Ramsey Show and the Fairwinds Credit Union Studio. I'm George Camel, joined by Dr. John Deloney. Open phones at 888-825-5225. Tyler is in Fort Worth, Texas. Salt of the Earth folks over there. What's going on, Tyler? Oh, no, I guess. How are you? Good. John is upset with me. He doesn't like my comment about Texas. I think Fort Worth is the 817. It's a great town. And George doesn't know how to talk to Texans. I said salt of the Earth. That's a compliment. I'll teach John what that means after. What's going on today? So my wife and I got married a little over a year ago. So that brought all of our debt together, obviously.

44:37We're about$150 ,000 in debt. That includes car payments and a camper payment and student loans. And I also filed Chapter 13 bankruptcy six years ago. and I'm at the light at the end of the tunnel where it is paid off in July of next year. Awesome. Good for you, man. Yeah. What got you back into the mess? Well, you know, Chapter 13 keeps you eating beans and rice just like you guys say it should. But what put me back into it, my wife had$40 ,000 worth of student loan debt before we got together. vehicle payment. I had to have a vehicle to get back and forth to work. I currently don't really need that now.

45:28I have a work vehicle that I can drive back and forth to work. She needs a vehicle to drive back and forth to work. Her Jeep, we have about$10 ,000 in debt left on it. I want to sell my pickup, but I just found out today that the transmission went out, and that's a$6 ,000 repair. I just don't know where to start. What do you guys make? About$180 ,000 a year. There's some good news. And what can you sell your truck for if you've got the transmission fixed? If I'm somewhere between$33 ,000 and$39 ,000. Okay. And how much money do you have in savings, if anything? I've got about$500 in savings right now.

46:09Okay. And what could you sell the camper for? uh the camper's probably about 30 000 and we owe about 45 on it so you're underwater on that are you underwater on the truck as well um i owe 31 on it so if i put a transmission back in it then i technically yes i would be underwater on it but then i could sell it and walk away from the payment good well i'm just thinking that if you get rid of that camper in the truck man you can breathe a little bit yeah so the whole reason we got a camper was because we moved from montana to Texas and living in a camper with a couple dogs is the cheaper option than renting down here.

46:48I mean, we pay around$1 ,600 a month with my lot rent, the camper payment, and our electric bill. So you're currently living in the camper? Yes, sir. Okay, what would rent be? Rent somewhere from$2 ,000 to$2 ,500 a month. Hmm. Is there anywhere cheaper? Uh, every place that I've looked at that accepts dogs is usually pretty high. It's hard to find a place that accepts dogs without it being around that two grand mark. Okay. Well, I'm just worried because this camper is going to continue to just tank in value. And you're going to be even more underwater on it to where you're going to go, well, I guess we have to live in this camper forever.

47:31This is our life now. And so for a couple making$180K, you can afford$2 ,000 in rent. Yeah. So I just don't want you doing bad math going, well, it's worth it to stay in this camper and stay in debt. When you could knock out$45 ,000 plus the 31 of the truck, that's half your debt right there. Yeah. And now making$180K, how quickly can you clean up$75K? 12 months. So that's the napkin math I'm seeing on paper. I don't know if you see that future, that path out of this. But there's a very clear path out of this if you guys want out. And bro, you asked us, we don't know where to start. George gave you a math, like a path, and it's literally a year from now.

48:15That's it. But I want to get to, if you were just sitting with me and we were having nachos and you said, I don't know where to start. I don't think you have taken full ownership yet. Because I've heard you say, go ahead. Oh, sorry. No, no, I was going to say, I just went through the baby steps reading the book. No, I got you. I got you. here's what I want you to begin to own from this point forward. Not I had to, I needed to. There's the only, I want you to say, I chose to go buy a$50 ,000 truck that I couldn't afford, even in the middle of a bankruptcy. I want you to say, we made 180 grand and instead of paying $2 ,000 a month for a one bedroom apartment, because we are choosing, I'm owning, I'm choosing to have two dogs in this little bitty space.

49:04I chose to buy a camper that I couldn't afford. Ownership here is where you got to start because so far the story you've told us is all these things have happened to you. And I just want you to exhale and say, I've made some choices. And so that means, cause here's what that's freeing. I made those choices and now I can choose to make other ones. Cause right now you're just waiting for the life to happen to you. The other direction. That's not how it works. And so there's some kind of reckoning about, man, I did something really dumb. I went and bought a big, nice camper that I can't afford so that we could keep two dogs.

49:40And bro, I love my dogs, love them. And when my wife and I were getting out of debt and we had to move into a apartment on a college campus with a toddler, I had to pay somebody to keep my two dogs for a year because long term more important those dogs was my wife and my son and my freedom do you know what i'm saying yes sir but it just comes with you owning all of this not this happened and then i had to and this happened then i had to this happened then i had to i'm gonna own this because then you can own what happens next and george just gave you a literally a one-year plan can you just fast forward to yourself this time not christmas of 2026.

50:23You're done with bankruptcy. You owe nobody anything. You and your wife. And you finally have that clean slate you've been dreaming about for seven years. Yeah. And it's going to be a hellacious year. And if y 'all move two dogs into a bedroom apartment, it's going to be full of dog hair and smells and all that stuff. Great. It's a year. It's one year. You know what I'm saying? Is your wife on board with this? plan? So we've talked about a few different things. I told her I wanted to figure out what we needed to do to get our life back on track to where we had money in the bank and we survived.

51:05I mean, we live comfortable as we are, but I would love to live better than comfortable. I think we needed some discomfort before we get to comfort. Right now, $11 ,000 is probably going to slip through your fingers in the next 30 days. Am I wrong? no you're not and it's going to go right back out to lenders and minimum payments restaurants restaurants and comfort right that's what's been happening because that's why we only have 500 bucks when we make 180 grand a year so what i what i want you guys to do is make a budget tonight where you list out your income eleven thousand dollars expenses here's my four walls here's food, utility, shelter, transportation.

51:45Here's the minimum debt payments. Anything that isn't on that list, we don't spend money on. For one year, could you guys commit to that? I believe we can. And the one thing you need more than anything after six years of bankruptcy and starting a new life with somebody is you need some confidence. You need to begin to trust yourself again. And you can't think your way to trust. You have to act your way to trust. Doing the next right hard thing for one calendar year will change everything from your DNA on out. Go check out Every Dollar Tyler. We'll get you started. Kelly's going to pick up. We'll gift it to you if you guys commit to doing this stuff and call us back if we can help along the way.

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53:45Our question of the day is brought to you by WhyRefi. If your private student loans are in default, it can feel like the end of the road. But WhyRefi helps you find a way forward with a low fixed rate payment plan that fits your life. Go to whyrefi.com slash Ramsey. That's the letter Y. R-E-F-Y dot com slash Ramsey. Not available in all states. And we've got something special today. Today's question comes from Bailey in Florida, and it's an audio question. So let's take a listen, John. Hi, my name is Bailey, and I'm from Florida. I'm on BabySatune. I'm trying to decide what to do with my car. I have a 2021 Honda Civic that I owe about$18 ,790 on, but it's only worth around$17 ,500.

54:25My brother works for Ford, and he wants me to get a brand new Ford Maverick with a lifetime warranty. He's got these employee discounts. He's able to get all these fees taken off. He's kind of been my financial advisor most of my life, and he thinks it's a great decision. He makes great money. It's not like I'm taking financial advice from broke people, as Dave would say. Should I sell the Civic and get it in a cheaper used car while I pay off the rest of my debt, or would getting a new car make sense? Oh, boy. There's so much to unpack here. First of all, your brother is your financial advisor, and you said he makes great money, so it's good to take financial advice from him as he tries to talk you into a car that you can't afford that he's going to make commission off of this whole thing just feels odd to me not as odd as a ford maverick with quote-unquote a lifetime warranty yikes and guess who's making all the money off that warranty his brother no wonder he's rich yeah exactly uh you're in baby step two you've got debt.

55:28You're$1 ,300 underwater on this car. I'm guessing you will make that within your next paycheck. And so just save up a little bit more than that to get just a new-to-you car, get something used. Please do not go out and buy a new car. I don't care if you're getting an employee discount. Buying a brand new car is going to depreciate in value like a rock. And you're going to be carrying this payment, which is just replacing the payment you have now, which is just broke people mentality. Yeah, you basically have a car with a lifetime warranty. It's called a Honda Civic. Those cars last for eternity.

56:00They're apocalypse cars. You already have one. So if you make, you know, 50, 60, 70, 80 grand and you want to keep the car, then just pay it off in the next year or two and be done with it. I don't know if you have more debt than that, but that's where I would start. And if you want to sell it and get a used car, because you said, while I pay off the rest of my debt, that tells me there's a bigger problem here. And so in that case, I think it will expedite your debt-free journey if you sell the Civic for, you know, 18 grand, 20 grand, and then buy a 10 grand car. That'll get you out of debt much faster.

56:32So. And let's just put this out here. George, I know in my life, I'm pretty sure I know yours, but let's just put this out there. You're pretty good with money, pathologically so. I call you and I have money questions, right? So I trust you. Have you bought a new car? In my life? Since you started cleaning up your money mess? No, I haven't bought a new car ever personally. Yeah. I just got a new to me car and it was almost new and I still couldn't, I couldn't fathom paying the MSRP retail price. So instead I found one that was slightly used and I got a 22 % discount. I did the exact same thing.

57:18My discount wasn't near that high because I bought a reputable brand instead of the one you brought. That helps. But even I couldn't bring myself to buy a brand new car. It was new that year, but someone had driven it and they had brought it back for what it... And we are both in a place where we... You could and it would not be against the Ramsey parameters because here's what we say. If you have a net worth of a million or more, you can stomach the depreciation. You can buy the new car in cash. Or as Dave says, can you just take that money and set it on fire in your living room and your family will still be able to continue on, right?

57:48And so it's this, even if you get like a deal and a thing and all the fees taken off, the second you drive that Ford Maverick off the lot, it's worth less. It's worth less. It's going to lose 10%. You couldn't back it up and resell it back to them for even the same price you just got it minus all the fees and everything. And so like, I've never heard of anybody buying a new car in themselves out of debt. And that really isn't a real sentence I just made up. But you can't buy yourself a new car to get yourself out of debt. You just either have to suck it up and pay off this Honda Civic, this 21, which will last you for all of your life.

58:27Or, like George said, sell it and get a 2005 Honda Civic that's still running for$3 ,000. And it looks ridiculous. And drive that until you pay everything off. I drove one of them. I had an 09 Honda Civic. I drove up until a few years ago. It's still driving somewhere. Well, here's the truth. Kelly Daniel, your producer, her son bought it and then he crashed it within two weeks. I bet you they... It's on a pound lot somewhere. Nope. I bet you somebody with a hammer and a chisel fixed the thing and it's still driving somewhere. They are truly invincible vehicles. Those are great. Yeah. So, yeah, I think you're stuck in a broke people maze here.

59:04And I would choose a better role model than your brother who's about to get you into a lifetime warranty and yet absolve you of all of the... He said all the fees are taken off except that lifetime warranty. That's thousands of dollars extra that you paid. That's mostly commission to him. Hey, I think it's worth calling out here. When you're trying to get out of debt, I faced this today, George. Somebody sent me something. I'm trying to – I want to buy a place where I can go hunting that's just mine, right? And I can invite a couple of buddies. Somebody sent me something today that's really amazing, and it's actually at a really amazing price.

59:39And I don't have that money. and if you're trying to get out of debt, it's amplified. A hundred percent of the people who get out of debt have a quote-unquote great opportunity from their uncle, their dad's trying to sell a thing, or I'm just going to sell you this guitar or this, what. It's always going to come, and you have to stick to it. It's just like getting on a really firm nutrition plan for a season, and then somebody shows up at your house with three dozen cookies they just made for your family because you have a choice to make when that happens. There's always going to be a new deal.

1:00:10A shinier, newer, better thing in front of you. It can be a great deal. It's just not a good deal for you, especially during the season. So let this be an exercise in saying no. All right. Peggy is in Colorado Springs up next. What's going on, Peggy? Hi. Hey. How can we help? Well, I wanted to ask, get some advice. My husband and I are in our middle 70s. Youngsters. Youngsters. Yeah. We feel like it. And we have had an opportunity come up to take a cruise in Europe from Rome to Istanbul. And it's going to cost, I figure, I've been creating a budget for it, and it looks like it's going to cost, I can barely say it, about$35 ,000 for the whole thing.

1:01:02And I'm just trying to find out if we should even be thinking about spending that kind of money. What's your net worth? About$1.5,$1.6 million, somewhere in there. And how are you guys covering all of your expenses right now? We have a paid-for house that's worth about$800 ,000. And our monthly regular income is about$9 ,000. And then we each have little part-time jobs, so to speak. And so that's a little bit of extra income that's not part of that$9 ,000. Great. So maybe call it like$10 ,000 a month. You're making six figures a year, no payments, no mortgage. How much money do you have saved for the trip?

1:01:57Well, I've been looking at cruises like this for a couple of years now. And in fact, this cruise, it came up, we got a note from a letter from his alumni association from this college. And it was this particular cruise. And it's one I had been looking at. And it was with the cruise line I had decided that we would cruise with whenever we did it. Serendipitous. Do you have$35 ,000? Well, we'd have to take it out of some of it. I have about$10 ,000 toward what I was saving for the cruise. So the rest of it would— Come out of your retirement accounts? A little bit, but it would come out of one of our retirement accounts.

1:02:42I mean, you're probably not going to be depleting those retirement accounts in the next few years, right? You've got$9 ,000 coming in outside of that? Yeah, what I've been doing since we both have earned income, with the RMDs we have to take from the IRA, we've been funding our Roth IRAs. Peggy, guess what? You're going to Europe. I feel like a game show host right now. You're going to Europe. Go and have the time of your life, take tons of pictures, and rub it in your kids' faces. And don't do the math on what it's costing you per hour to enjoy the trip. Just enjoy the trip. Have fun.

1:03:30you

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1:05:11Michael is in South Carolina up next. Michael, welcome to the show. Hey, guys. Thanks for taking my call. Appreciate what you guys do. So I'm in a sales position that has a base plus a bonus that you get throughout the year. Then you get a bigger bonus at the end of the year. End of the year is here. And I'm expected to get a bonus, or I will get a bonus that I will most likely never get again. So I want to use this money as best my wife and I possibly could. How big is this bonus? It's about$200 ,000 before taxes. Jesus Christ. Is there any openings? You guys hiring? Well, yes, there are, but hey.

1:05:51I'm interested. Why do you think you'll never have this good of a year again? So the way our structure is that you get your base salary, and then based upon the quota, your percentage of your quota, you get a bonus based on what percentage of your quota you get to. And that bonus is a percentage of your base salary. It's confusing. It's actually pretty common in the sales world these days. So I basically had a pretty low quota last year and blew it out of the water. And so I know my quota this year is just going to get higher and higher and higher. And, hey, I expect to blow it out of the water again.

1:06:24Don't you blow that one out of the water, dude. Yeah, man. So what's your total salary for the year if you get this$200 ,000? Base salary right now is about$80 ,000. Okay, so$80 ,000 plus the$200 ,000? That's just one bonus. I got commissions throughout the year that totaled about$60 ,000 or so. Nice. Homie, had the year, man. $340 ,000? Yeah, it was a good year. It was a good year. Great. Are you married? I am. I'm married. We have two kids. and the dilemma that we're in. So we have a house that we bought like five years ago and we just recently moved into a new house, new to us, and we rent the other house out.

1:07:05It's got about$100 ,000 left on it at a 3 % interest rate. The new house we're in has like$290 ,000 on it at a 7.25%. So you're probably getting at where I'm going. Sure. How much do you guys have in savings? So in our savings, So we have in our savings, if I log into my app, it's about$20 ,000. We have about$10 ,000 to$15 ,000 in a brokerage account that's totally separate. And then I have some retirement accounts and stuff as well. And any other debt outside of these two mortgages? So I would normally say no, except I did recently buy a mower, and it's 0 % down for a year. So I've just been paying what it would cost to pay it off.

1:07:51I know. Bro, you make$340 ,000 this year. But I'm going to finance a mower. It's only$1 ,000, but I'm putting like$200 a mucks on it. Okay, well, we'll pay that off with your bonus. How about we start with that? We're going to stretch and pay that off. All right. Deal. What will be the actual net from all of this? Like, how much will you net by Christmas to be able to throw at these mortgages? i'm hoping to have i'm i'm going to say a hundred thousand but i mean it could be possibly a hundred and twenty to a hundred and thirty thousand dollars that i could do anything i want with okay so if i was in your shoes normally we'd say let's knock out the primary mortgage first but if you can knock out this rental mortgage with one fell swoop and free up that payment to now apply to the other mortgage i would go that route and attack the the primary aggressively at that point okay that's kind of where i was leaning as well yes and and and good can i just say dude out of the gate you know what you're thinking like you're thinking like a farmer like the old school farmers that have a homestead yeah they have do you have a homestead we do we have some garden some animals that bring in some stuff yeah okay so like this like this idea has been lost on us as a culture but the farmers for all of human history would have a year that was just record yield and it was amazing and they knew that doesn't happen every year and every five to seven to ten years there's a bust year right right and so the fact that you're as young as you are as successful as you are knowing i crushed it this year i made 340k this year i'm probably not going to make that next year most people in your situation go buy a house based on i make 340 a year and they buy two stupid cars.

1:09:40Good on you, man. This is awesome. I would enjoy some of it too. So I think you and your wife sit down and go, hey, we're going to knock out the mortgage, anything above and beyond that, well, and the mower, anything above and beyond that, we're going to enjoy some of it. We're going to give some of it, maybe stack some in the emergency fund if you want to beef that up a little bit. And man, that's going to free up some cashflow because now that property is cash flowing pretty nicely with no mortgage on it. What will you be netting from that property once it's paid off? It'll be about$700 after rent is what we'll get for it.

1:10:11$700 profit. That's right. Are you even profiting? It sounds like you're losing money on this thing right now then. Well, so the mortgage on the house is about$700, and we charge about$1 ,400 for it. So we'll bring in about$700. No, but when you... In my mind, once I pay off the mortgage. But yeah, you pay off the mortgage, you'll be making$1 ,400 a month, right? That's right, yeah. That's what I was getting at. In my head, it's like I want to put some of it back into it. But, yeah, I guess I would be netting for it. Oh, I forgot you're really wise. My bad. Yes. Man, if you keep a small fund for taxes and insurance in that house, and if you start building a small emergency fund for when, not if, the air conditioner fails and the roof needs to be replaced, bro, you are so far ahead.

1:10:54So far ahead, man. That's incredible, dude. And I would sit with your wife and set maybe a four - or five-year goal to knock out your primary mortgage. because how old are you two? 30. 30. So think about this. 35 years old. You have not a payment in the world. Two paid-for houses. Two paid-for houses. One's cash flowing, and you're still making hundreds of thousands of dollars a year. It's a pretty sweet life. Yeah, that would be amazing. Or how about this? What if you did a hold my beer and you said, I want to scratch and claw, honey, for one more year. I want to be the most aggressive salesperson on my team, and they're going to give me a bananas quota and I'm going to crush it too.

1:11:34Let's see if we can pay this house off in 18 months, our primary house. Oh, yeah. You know what I mean? But then have a destination. After that, we pack up and we all go to Disneyland or Disney World or wherever or we go to Jamaica, whatever you want to do. And then you look at her in the eye and say, then I'm going to exhale. I'm not going to be the most crazed out aggressive because I want to be present for you and these kids. but we have a chance in the next 24 months to set us up forever. All right. Well, it sounds like I'm on the right page. My mind was like, well, hey, should I focus on refinancing this house to bring this payment down or do I just pay off the other house completely?

1:12:14You can figure out what the break even is on, you know, when you're actually going to break even on that refinance because it'll cost you a little bit. Seven to five and bring it down to what is it right now? Five and a half. Are you on a 30 year? I'm on a 30 year right now yep you could probably refinance into a 15 and have you know right in the fives right now that'd be worth it your payment's going to go up because it's a 15 but you'll knock that thing out within a few years and be done with it because way more is going to principle i dare you to go look at that amortization schedule you're going to throw up seeing how much is going to interest versus principle on that balance oh i hate it every time every month and i get the statement i'm like oh and i don't know if you're like me i and my wife always makes fun of me about this I have a weird thing about the first number, right?

1:12:56So when we were paying off debt, I was like, I just need to get it with a two in front. I just need to get with a one in front, right? Even if it was$199 ,999, I just needed to get that number. If I'm you, I'm looking at that seven in front. If I could refinance that, and even I was going to recoup in 12 to 18 months, and I could get a five in front, I would just feel better. You know what I mean? Yeah. Yeah, I'd get in touch with a... I thought like a best case scenario... Go ahead. No, I was just going to say, if you want to just run the numbers, our friends at Churchill Mortgage can just help show you the numbers and go, hey, this makes sense or this doesn't make sense based on your situation and the market.

1:13:32Okay. And I'll tell you, when I called Churchill and asked about refinancing a couple years ago, the first thing my Churchill person told me is, I'm going to dig into this and run the numbers. I will not take your business if this isn't a good deal for you. and that's how I knew oh you're my right person real deal yeah well that's great that's awesome hey congratulations on a giving me a little bit of a yeah man congrats on a great year can I ask what you sell I sell security systems fire alarms that kind of stuff you're dang good at it dude they don't give out money to people who who aren't making them a lot of money especially sales sales people yeah you've earned it and more so congratulations and you can jump on to churchillmortgage.com and get in touch with their team over there and help you run these numbers.

1:14:22And it might save you some. I think at the rate you're going, you're just going to knock this out. And so they might go, yeah, if you're going to knock it out in two years, may not be worth it, but it's going to be seven. Sure. Let's refine it. And have an amazing Christmas for your wife. Do something cool for her. Get a crazy gift that blows her mind.

1:15:11The all-new EveryDollar is here, and now it's way more than just our world-class budgeting app. There's a ton of advanced features to help you make faster progress with your money. And the average person finds thousands of dollars in margin in just the first 15 minutes. So start every dollar for free today. You can get it in the App Store or Google Play. Mark is in Ohio up next. Mark, welcome to the show. Hey, guys. Thanks for taking my call. It's an honor. Absolutely. How can John and I help? Well, I'm calling about my father. He's been a Christian for probably nearly 50 years. He spends his life every day serving people.

1:15:49That's his calling. And he owned a construction business for something like 35 years. And during that time, he's acquired a lot of rental properties, all debt-free. And the issue is, what I'm calling you today to talk about is that he doesn't have a will or an estate plan. and he says that he doesn't need one because he believes that the Lord will return before his death or during his lifetime. Okay. So how do I encourage him to do that without making it feel like he's questioning his own faith? And who am I to do that? What date does he have in mind? Can he tell me when the Lord would be arriving?

1:16:36No, no. No, he doesn't have any date or anything like that. Just before he croaks. He's like, it's definitely going to happen before I pass. Yeah, yeah, that's what he believes. And he knows that. He has good authority. Yeah, yeah, yeah. All right. Here's what I would say, dude. This is a very tough situation. I would sit down with him and say, Dad,

1:17:04watching you do life has been one of the greatest learning lessons and coolest things any son could ever have. I've watched you serve people. I've watched you, he probably gives rent below market value, right? He probably takes care of people. Is that true? Oh, yeah. Yeah. So if you lead off this conversation by saying, watching how you serve your local community and you go make money and you figured out how to do both of those well and you've dedicated your life to God, all that's amazing. It's been a high privilege being your son. Can I ask one thing of you? In the event that something does happen to you before the Lord returns, this would be a huge mess for me.

1:17:52Right. Would you do me the honor? Because some people think wills are for them. Would you do me the honor of putting this stuff down in writing on the off chance? Because you're not going to convince him, right? Right. Like, you're not going to make a rational argument. He's going to be like, you know what? You're right. He's not going to do that. And so really what you're appealing to in this moment is your sense of discomfort. Yeah. That to me is the only shot you got. Do you have siblings? Yeah, there's 10. 10 of us. That sounds fun. So how does he feel about the government? Well, he's not a fan.

1:18:39Well, he is a fan because he's letting the government decide what happens with his estate. That's the way to say it. Yeah, you're right. He loves the government, actually. He trusts the government to handle all of his estate planning right now. He's hired him out. Yeah, you're right. And they're happy to do whatever they want with his property. They're happy to take his probate fees on top of his estate taxes as all this unfolds. So here's what I would say. even if Jesus returns tomorrow, scripture still calls us to be wise stewards today, because we don't know what tomorrow is going to bring.

1:19:12And so you can appeal with that. You can appeal with the government angle. You can appeal with the Mark wants it for security and peace of mind angle. Because here's what we do know. The calls that we take on the show where 10 siblings are involved, dividing up a very complicated estate, never ends well. It ends with relational resentment. And even if all 10 of y 'all are on the same page, which there's 0 % chance of that, right yeah right right it's those 10 and y 'all have all married other people yeah right and they all have cousins and they all think that by marrying into a construction empire empire that they're gonna suddenly get rich and uncle randy wants a piece because he helped him with that deal one time that's right he told me he promised me he promised me and bro getting 10 signatures to simply sell one hundred and ten thousand dollar rental property is a nightmare it'll be it'll be a reality show on hgtv i'll tell you that much right yeah that's my biggest fear you know is causing issues amongst the family have you told him that because that's another big one dad i want to i don't know that i have i want this family i I want my brothers and sisters, I want us to all stay united after you pass.

1:20:29In the event you pass before Jesus returns, I want us to all stay united, and this will be tough.

1:20:39Like, you're almost guaranteeing that y 'all will all dissolve your relationship in some shape, form, or fashion. Right. I hate that you're in this situation, man, because your dad sounds like a pretty amazing guy. He's just got this thing in his mind that's pretty tough. And it might be a protective measure for him because he doesn't want to – he has been a pretty strong guy and a guy that's always been in control of who he's giving and his own company and all that. And the thought of being in a hospital bed, the thought of passing away is so heavy that it's easier to create a story that, no, no, no, I know it's going to happen.

1:21:17Which, if Scripture's pretty clear, you don't have any idea when it's going to come. Nobody does. Right. Right. Right. Yeah, well, hopefully if he hears this, maybe this will help persuade him. I hope so, man. Yeah, send him a call. Send him a call. Because, I mean, George and I are both sitting here. What an amazing guy. What an amazing legacy he's left. And what a way to pit brother against brother and sister against sister. or brother's wife's cousin suing everybody because they tripped and fell on one of the houses in there. You know what I'm saying? It's just, golly, what a recipe for dissension among your family tree.

1:21:59You've spent so much time watering and growing. Right. Yeah. There's so much out of his control, and yet there's so much in his control. And this is one of the things he can control during his time left here on Earth, and I hope it's a long one. All right, let's get to Sue in North Carolina. Sue, get right to the question. We're up against the clock. How can we help today? Yes, sir. I was calling actually to find out when you sell your house, that's what my husband and I are getting ready to put our house on the market on February 1st of 2026. Okay. And the big thing is that we're having a problem with when we're moving up near St.

1:22:39Louis from Charlotte, North Carolina. Yeah. And my husband and I are not agreeing on where we should live, if we should go ahead and build a house while we're living in our house and sell in our house, or should we rent there and then build. So I don't want to rent, but he does. What's his argument for renting? We're kind of each other's throats about it. Well, is he stressed out with the idea of trying to sell this house and we don't have the money from the equity and we're trying to build this new one and we need a loan for that? Oh, I'm sorry. I didn't mean to interrupt. I'm trying to get to the bottom of it.

1:23:20Yeah, we have$225 ,000 equity. Okay. So we're doing well and we bring in about$8 ,000 a month. You know, we're retired. We're over 60 and we don't have too much debt. So we're just this is we've been in this house for 25 years and it's a turnkey. So everything's ready. I'll accept just a few will repairs, like about five thousand dollars worth. So I can tell you, Sue, every time me and my wife have moved, especially we move towns, we always rent for six months at least. okay yeah can you compromise a short-term lease just to kind of get the lay of the land get your bearings because moving is already so stressful where's the grocery stores where is the nearest place for the grandkids like all those little like where's the restaurants all of that stuff man finding a new place in a new community that's a that's a tough lifestyle shift and then the timing of it gets tight to try to time it all to sell yours close on yours close on the new one all in the right time.

1:24:24So if you can make all that happen and not be stressed financially or otherwise, go for it. But I think there's a lot of wisdom in just renting for just six months. It's not a long time. You can put your stuff in storage for a little while. And then say, okay, I'll rent, but you've got to hire turnkey movers that will get it out of the storage space and put it exactly where I want it. And he has to leave town while the move happens. Oh, yeah.

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1:25:41Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. I'm George Campbell, joined by my good friend, Dr. John Deloney, and we're taking your calls at 888-825-5225. Give us a call. We'll try to help you take the right next step for your life and your money. Tyler is in Texas up next. What's going on, Tyler? Hello. Nice to be talking with you today. You as well. I am a buried man. I just became a dad last year. Congratulations. My baby girl was about a year and a half. fantastic and we we just got rid of uh over a hundred thousand dollars in student loans yeah dude congrats brother thank you very much and now we're in a interesting predicament um so we want to buy a house we are completely debt-free at the moment um but i am currently with a second job i'm the maintenance man at our proper complex part-time and we have free rent.

1:26:46Oh, heck yeah. And we, so we'd love to, uh, we'd love to get into a bigger house and we kind of need it, but gosh, how can I walk away from that? One word, uh, uh, three words. Sorry. I was going to say one word, one, three word, sentence. All right. You ready? Okay. With a plan. Right. My wife and I did the exact thing. I moved into a residence hall. One of the things at the university was over, I was over housing. So we got to live in that apartment for free. And there was me and my wife and a toddler in a very small place and it worked for a season. And so we had a plan. We had an end date, But that end date was contingent on two things.

1:27:35One, my wife and I shook hands on it. And two, there was a financial goal we were going to try to get to. Exactly. I think the challenge for you guys is this thing kind of feels indefinite. Right. It's indefinite. And we feel like the end date of this is going to be dependent on getting a certain amount of down payment. Great. And being able to achieve a certain monthly payment that we think would be very manageable and would give some wiggle room to give us some incidental spending without dipping into our emergency fund. Because we don't want to be house trapped with too much of a payment. Absolutely.

1:28:13But where we're we want a three, ideally a four bedroom house and something like that where we are living is looking at about a quarter million dollars. OK, great. And and that's that's not undoable. But most of America is like, that's it. That's amazing. I want to move to your town, dude. Don't tell anyone where town you live in because everyone will move there. Right, right. Well, we want to keep our payments under$2 ,000 a month for sure. Okay, so we have our magic numbers. The house is going to cost$250 ,000. We want to keep the payments around$2 ,000. So how much down do you need? I can do the math for you right now.

1:28:53On a 15-year, you're looking at maybe$60 ,000 down. Does that sound right? Yeah, sounds about right to me. How much do you have currently saved outside of your emergency fund? we've got 14 000 directly dedicated uh for down payment at the moment uh and we we can probably do thirty five hundred dollars uh momentum towards that a month so that's one year from now you have your number ta-da ta-da 42 plus the 14 with high yield savings account you'll get right around 60 so a year and you sit down with your wife and you say we have one year of and if y 'all want to cut spending she wants to make some money on the side whatever it just accelerates this right but and if we get sixty thousand dollars we have 14 so we have 46 000 bucks left to go it's gonna take us about a year and then we're out of here well cool deal so within the dave Ramsey framework, it is within the realm of blessing to walk away from free living in favor of something like this.

1:29:59Dave pays an insane amount of money to keep up his various houses. Yes. Free rent would never stop Dave from buying real estate. I'll tell you that much. He would just use it to accelerate buying more real estate. Because here's the other thing to think about, that real estate is going to cost you more five years from now. And so at some point, the free rent party is going to end. At some point, you're not going to want to live in an apartment or you're going to have a big enough family where it doesn't make sense. And so I would start planning for that day. And it starts today, my friend. That's awesome, dude.

1:30:31I appreciate that. Well, thank you for that advice. That's really helped. Hey, congrats for your new kid. Congrats on you being a dad and a husband who is putting in two jobs to put his family in a position where they're going to... That's all this is awesome. We don't to talk to a lot of great dads and great husbands, you're one of those guys. And so it's an honor to talk to you, brother. And the fact that you've created$3 ,500 in margin just to throw at this savings, it just blows my mind. It's fantastic. Very inspired, man. Thanks for the call. Elizabeth is up next in Cedar Rapids, Iowa. What's going on, Elizabeth?

1:31:05Hi. My question is if I can afford to put my kids into a Catholic school. Ooh, what's that cost? So it is about$6 ,000 to$7 ,000 a year is my understanding. Per child? Per child. How many kids? So I have two kids, and they won't need the first one when it starts for another year and a half. Okay. Do you have$14 ,000 of net income to throw at this without derailing any other financial goals? Well, with 30 daycare costs, I feel like my thought is that would just channel into what the cost of Catholic school is. So I feel like we're making things work right now with daycare costs. When you say making things work, are things tight?

1:31:55Do you guys have debt you're trying to pay off? Do you have savings? We just earn mortgage to pay. And I'd say we're probably like pretty close to breaking even each month as far as expenses, going out with mortgage and daycare and then just household things. Are you investing right now? Yes. Okay. So you're investing 15%. You have an emergency fund. You have no debt. You're doing the baby steps to a T, but all the money is allocated to those places. And right now you don't have extra money to throw at, let's say, the mortgage or toward kids' college funds. Pretty much. So what's the plan with that stuff if this is the foreseeable future for the next, I don't know, 10 years?

1:32:38That's a good question. I mean, as far as knowing that daycare currently with two kids is probably about$25 ,000 that I'm paying a year, I see the balance as, okay, this isn't as expensive as that. So I should be able to have an extra income. So the$10 ,000 you save, you could funnel toward 529 plans for college, throw a little bit at the mortgage. Correct. I mean, it sounds reasonable. What's your household income? About$160 ,000 a year. And my husband is commissioned, so his is a little bit more fluctuating. It's variable. Okay. Yeah, I mean, it's green flags for me. If this is a big value to you guys, it's part of your faith, and you want to do this, and you have the money, and it's not derailing your other financial goals, I'm good with it.

1:33:27Here's what it's going to cost you, though, okay? I want to be sober about it. Yes. Given the financial picture you just gave George and I, or me and George, it's going to cost you, you're all going to be a Camry family. Okay. And you're not going to go buy the big suburban, and when you get into the middle school and high school and your kids are doing sports and athletics and everyone's rolling up and new Escalades and stuff like that because it's a private school. And going on vacations for fall break. That's right. Y 'all are going to, this is enough of a value for y 'all that it's going to be worth, we're going to be a used Camry family because this is that big of a deal to us.

1:34:06And that's okay. That's amazing. I love that choice. But I want you to make those choices with sobriety, not always being like, man, we should have a different car. We need a bigger house. Nope. This was our value and this is what we chose.

1:34:31Hey, you guys, Rachel Cruz here. Look, I know you want to do better with money, but let's be honest. Life seems to be getting more and more expensive. And lately, you hardly have any breathing room in your budget to do anything but cover the basics. You work way too hard to feel broke. Our EveryDollar budget app can help you free up margin fast. Most people find an average of$3 ,015 in their first 15 minutes of using the app. Think about it. That's thousands of dollars just sitting right there in your budget waiting for a job to do. With EveryDollar, you'll find the margin and the motivation you need to start making real progress fast with your money.

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1:35:46and buyers have more options in negotiating power, and sellers may be facing more competition right now. Mortgage rates dip slightly to 5.5 % in September, which is giving buyers some breathing room. But since rates are unpredictable, the best time to buy is when you're financially ready, not when rates drop. So to learn more about housing market trends and get free tools to help you buy or sell with confidence, head to ramsysolutions.com slash market or click the link in the show notes if you're listening on podcast or YouTube. Ashley and Dan are up next in Virginia. What's going on, guys? Hi!

1:36:18So we recently moved from the south, from Baton Rouge, Louisiana, to Virginia. We previously tithed at a church that we had been going to probably almost a decade in Baton Rouge, and we haven't found a church home yet. We've tried a couple, and we've been looking around, and we just don't really know where to tithe. I was a very strict tither, and my husband, Dan, did probably like at the end of every year, he would just do 10 % of everything he made. He would donate at the end of the year. So we just don't know where we should tithe to now. Great question. Where are you feeling convicted to give?

1:37:04I really loved our church. We both really loved our church that we used to go to, and if we're not together if I go visit home or something we'll still watch that church that's in Baton Rouge and so that's where I tithed until we started going somewhere new and then I gave one time a tithe to one of the churches that we went to because I felt like you know I probably should do something here in my local community instead of back home but now I just don't know since we haven't settled. Are there a bunch of kids in your community that just lost food benefits? I don't believe so. I think Virginia is still doing all the food benefits statewide, but that is a consideration.

1:37:54The church that we have been going to has been giving a lot of money, I think they put in where they did$20 ,000 to communities that had lost or were at risk of losing food benefits. Well, let me free you. There's no wrong way to give as long as you're doing it with a joyful spirit. And so you're not going to screw this up. If you're asking the options, you could give to your old church for now. You could give to every new church you jump into on Sunday. You could stack it all up and give at the end of the year. Maybe you find a church home and you just save up all that money and throw it at that new church that you call home.

1:38:33Or you can go find a local elementary school and say, we hear there might be a gap in school breakfasts and lunches, and we want to be a part of filling that gap. Consider the spirit of the thing, not maybe the destination, right? Yes, that makes sense. That makes sense, yes. I'm just proud of you guys. That's a really cool thing to say. This is a really important value to us, and we want it to go somewhere, and we just don't know exactly where until we land. Keep George's words in your head, which is a sentence I've never said before. Wow. You can't mess this up.

1:39:14Generosity is a posture. It's a way to do life, right? Yeah. I think you're going to do the right thing. Whatever that thing is, whatever you do, it was the right thing. I want you to know that. John is in San Diego up next. John, welcome to The Ramsey Show. How can we help today? Hey, yeah, thanks for jumping on with me. I just have a quick question for you guys to see where to put some money and kind of pick your brain a little bit. I'm 20, excuse me, 30 years old. I live in San Diego, California. I've got no debt at all. My company pays for my car. I just have to pay the gas on it as well as very minimal monthly expenses.

1:39:53and make about$300 ,000 a year and have about$200 ,000 in savings. And I'm just curious to know if there's anything I can do to put this money anywhere to help save on taxes. I don't own any houses or anything like that. And also I just feel like in San Diego it's kind of impossible to buy a house with what I've got going as well. It's impossible to buy a house with what you've got going. What does that mean? just like it the income that i have and the savings that i have and just the prices in scanty i've absolutely stored in my job okay what so you're a single guy yes okay so what is a small home in your area cost that you would want to buy give us a number probably about 1.4 okay so how much would you need as a down payment to make that a manageable mortgage payment in your world probably about seven grand i think would be what it would be right now with 20 down which seems like a lot okay so 20 is is the goal that's the number that would get you into a home correct i mean i'm just trying to avoid that pmi but is that even smart to have to do as well or should i just look at other avenues like buying out of state to continue renting here i don't know You're lost.

1:41:08Well, you don't need a house right now. You're a single guy. If you want a house, that's fine. I don't know that you need a$1.4 million starter home. Now, I know prices are insane out there. That's probably a starter home in San Diego. But you're telling me that it's impossible for a guy with no debt, with$200 ,000 saved, making$300 ,000 a year that he'll never be able to afford a home in San Diego.

1:41:33That's what it's seeming like. And you said you have very little expenses. How much can you save per year at this point if you're living frugally and throwing most of your net income at that savings goal?

1:41:47Probably$80 ,000 to$100 ,000. Out of$300 ,000? So you're saying$300 ,000 gross, you net, what,$180 ,000 or so? Around there, depending on the variable. A lot of it's commission, so it's between$250 ,000 and$300 ,000. $15 ,000 a month? You could somehow figure out with no expenses and no debt how to scrape by on$80 ,000 by yourself? Correct. I bet you could scrape by for less than that. Ballpark, though, you could throw$100 ,000 a year into the savings, right? Mm-hmm. So four years from now, you have$600 ,000 saved. Mm-hmm. I think that can get you a house. So just hold off a little longer? Yeah.

1:42:28It's not a now or never thing. Is there anything I can do in that meantime between now and the next four years to help me save on taxes? Well, that's a different question. Buying a house for a saving on taxes. If you're a W-2 employee, there's not a whole lot you can do. Now, you can max out a traditional 401k. That'll help a little bit. But there's not like some magic trick if you're W-2. John and I pay a whole bunch of taxes. And I'll tell you this, you are in the, I'll make up a term, you're in the squash bracket, where if you made significantly less, there's programs to help you with taxes or to pay none.

1:43:10And if you made significantly more, you're in this big, wild, it's a whole nother universe of buying a property over here and moving it over here and triple stamp and double stamp. You are in the squash where you are making a significant amount of money and you're getting crushed on taxes. And you live in one of the highest tax states in the country and you live in a really high cost of living, expensive place to live. So you have three like really gnarly compounding variables on you. But this is a conversation folks who make and nobody has any sympathy, right? Nobody, but people who are making$300 ,000 to$1.5 million are getting hammered on taxes because they're just below the big games that guys with tons of money play with tax money, and they're just above any sort of relief program whatsoever.

1:44:06Sure. So this is where you are. And as one of my buddies, one time I called him and said, hey, I've never had this happen in my life. I had a book go number one. I called him and said, I just need to tell one person, he's a banker, how much I spent in taxes last year. And he said, good God, that's a lot. And then he goes, wait a minute. That means you make a bunch of money. I'm never paying for drinks or nachos again. And we all started laughing. And so there is, yes, you're paying a bunch of taxes. You can smile at night knowing that the roads are getting taken care of and the firefighters are showing up and so be it, or you can just beat yourself over the head every night.

1:44:42But either way, you're in that category that's paying a ton of taxes and there's no games to play or relief in your bracket. I just keep stacking as much cash as possible, keep living frugally, and sooner or later, you're gonna have a half a million bucks. And I would get into the housing market when you can. I wouldn't wait a decade and I wouldn't do it tomorrow either. Or you can move out to the suburbs. You're paying a lot of taxes and you're also winning. incredibly. Congratulations.

1:45:24Hey guys, it's Rachel Cruz, and I've got great news for you. The Ramsey Christmas cash giveaway is here. We are giving away$500 every week, plus a grand prize of$5 ,000 in cash. Listen, you can enter daily to boost your chances of winning, and there's no purchase necessary. Just go to RamseySolutions.com slash giveaway. That's RamseySolutions.com slash giveaway. Good luck, you guys.

1:46:11jenna is in florida up next jenna welcome to the show what's going on yes hi uh thank you so much for taking my call today i was calling wanted to kind of see some professional health i wanted to see if there's ever ever a point where there's just too much debt. We don't worry about the debt. We just say, hey, pay minimums forever and just try to save up as much money as you can so you can actually try to enjoy retirement and life later on. You sound tired, Jenna. Are you tired? Tired. Nervous about what you guys are going to say. I mean, you know what we're going to say. Don't be nervous. You call it the Ramsey Show.

1:46:50But you're saying, hey, our debt is so insurmountable, should we just ignore it and have a wonderful retirement? I don't know how that thing leads to the other thing. Right. Yeah. Like it doesn't go away. I don't know. So either collectors come after you, sue you, or you file bankruptcy, it implodes your financial life for seven years. There's no like, well, can we just pretend it didn't happen? Well, no. I mean, we would pay like, just continue paying the minimum, but then try to also put money in savings. How bad is it? How bad is it? Give us some numbers. Okay, so we have a car,$26 ,000 left on my husband's car.

1:47:31I have$47 ,000 in my student loans. And then we have$475 ,000 in my husband's student loans. And then$525 ,000 for the house. So we've been trying to run numbers. Our budget, we have margin$3 ,000 left over. So it's just... Is your husband a physician? Yes. Okay. So what's your household income? So our income is$16 ,000 a month. Is that your take-home pay? That's what ends up in the bank? Yes. That's what ends up in the bank every month is the$16 ,000. Are you guys investing a single penny right now? I believe I'm putting like 6 % in retirement, and I think he's probably putting like 10%. Okay.

1:48:21Okay, so you're about to get 16 % of your household income back if you pause investing. Okay. Did you get a refund last year on your taxes, or did you owe? No, we owed. Okay. So that's 16 % right there of your, what's the household income you said? $16 ,000 a month. No, what's your gross household income for the year? Like, what did your tax return say you made? My husband makes$250 ,000, and then I make$70 ,000, so$340 ,000. Okay, so if we do 340 times 16, you just got$55 ,000 back in your life. On top of the$3 ,000 a month. On top of... That's$90 ,000 now that you can use to tackle debt. I've got more.

1:49:07He has to be an adult and sell this car because he can't afford it. and he's going to be the doctor that parks at the very back of the lot in a used Corolla. I'm serious. And you know how I know this is possible? Because I was a guy with a PhD that drove a used Corolla and parked in the back of the lot. I was the guy with the second PhD that drove a 94 F-150 that I bought for$3 ,000 out of some guy's field in West Texas. Right? Right. And you know how I drive now? whatever I want. Right. And then the other piece, you said$16 ,000 is what you guys take home. What are your actual monthly expenses you need just to keep the lights on and cover the minimum debt payments?

1:49:55Yeah, so that's kind of, our mortgage is$3 ,500 a month. After all of our bills, private school, everything. There we go. Ding, ding, ding. We just found a moneymaker. How much are you throwing at private school a month? $1 ,200. Okay. All right, so there's another$14 ,000 a year. On top of the 90. Now we're over$100 ,000 a year we can throw at the debt. Okay. Are you seeing what we're doing here? Yes. And we're not even trying. We're just soft tossing right now. If we actually looked at your budget and said, here's your actual income,$16 ,000. Well, really, it's going to be more once you guys pause investing.

1:50:40You're going to bring a few thousand back. So let's call it$20 ,000. and now let's learn to live on seven well now there's 13 grand a month we can throw with the debt right you get that that's 156 grand a year and if he sells the car you're down to let's see 47 plus the 475 that's 522 and we're gonna be debt free in less than four years and listen right because we've even like floated the idea of like selling our home but we love our home and no i you don't even have to do that because listen i i've i've studied i've i've worked through the mental health of physicians yeah and it's not good and i'm convinced that this is one of the core issues is physicians and their spouses it's hell seven years plus rotations, plus no sleep, right?

1:51:36Plus matching, plus residency, all that stuff, and you finally get out, and then you get that first check and you're like, finally I can, dot, dot, dot. Right. And then you add a whole bunch of crazy stressors because we're doctors, we're supposed to be rich, and you're broke. I've got people in my life who I love and care about who are working physicians who are still paying on their student loans and now they have kids in college madness madness yeah literally it's you guys taking and by the way if he works extra shifts or picks up er shifts which i have buddies that do he can cut this in half and you're talking about 24 months 30 months and you're free and then you know what y 'all are for real wealthy then you can live that doctor lifestyle yeah y 'all make 300 grand and you're broke i know it's embarrassing sorry i don't think i don't think that's embarrassing i think what's embarrassing is y 'all are too smart to be this broke y 'all are making daily choices to be miserable you know what i mean to be stressed out right how old are your kids um she was two three and a half She's three and a half.

1:53:01She won't even know what day it is. You could pull her out and put her in a Tuesday-Thursday school, or I mean in a Mother's Day Out program five days a week at a church. I mean, it's Elmer's glue and googly eyes. We don't really need private school to do that right now, do we? Yeah, you're good, man. Be in a position to send her to whatever school you want in your community when she hits third grade. Right. No, I get it. I guess our thought was a private school is just so hard to get into. We just had to start early, so that's kind of how we ended up here. That's how they like it. They want you to be like, you know what, your three-year-old is good enough for us.

1:53:39Pay up. And if you don't get into this school when they're three, they won't get into that school when they're seven. If they don't get that, then they're... None of that's true. Zero of that is true. And by the way, after four years, he's a physician in your local community. He'll know somebody. Y 'all will be fine. Yeah. Right? Yeah. Yeah. It's reassuring because we were just running the numbers and we would just get frustrated and we would just say, you know what? We're just going to have to pay minimum the rest of our life kind of thing. No. It's just going to be three years of y 'all not acting like doctors, y 'all acting like teachers.

1:54:14Yeah. And which, by the way, is still a good life. I think you'll realize how much of that stuff you didn't really need and how exciting it is to be on the path to freedom instead of a path to hopelessness, which is what it is now. Well, we'll just make minimum payments. We'll end up paying a million dollars for his student loans that were$475 because we just let the interest build up and build up while we didn't attack the principal. And I just think you're worth more than that. And you're worth being out of debt in the next three years and having the next 30 of freedom. Can I guilt trip you for a second?

1:54:49Sure. Go ahead. I'm going to guilt trip you, but I'm really just sending this message out to anyone listening. I actually don't want my physician, the person that I go to and I'm not, I'm not okay. Or let me make it, let me one up it. When my daughter's not okay, I don't want that guy stressed out of his mind because he can't breathe at his house. I don't want that woman, that physician that I bring my daughter to, I don't want her shaking while she's looking at my daughter because her bills are so high. She can barely make her payments, but her kids in the right school and she's got a nice depreciating asset on the parking lot and she has a spouse that is working and also making 70 grand, which is an amazing salary.

1:55:31I don't, I don't, I want a person who's holding my daughter to exhale and be completely autonomous so they can make the next right decision for my daughter, not the one that's going to get them the most payout so they can make this payment so they can make.

1:55:52you

1:56:08Our scripture of the day, Proverbs 13, verse 3. Those who guard their lips preserve their lives, but those who speak rashly will come to ruin. Les Paul said, don't say you can't until you prove you can't. Attaboy, James. Les Paul of the great Gibson guitar. If you didn't know, Deloney is a big Les Paul Gibson guitar fan. James is a Fender guy, which... To each his own. That's kind of all you need to know. Oh, you are too. I like both. I think they both have their, you know... I like Gibson for acoustic. I like Fender for Electric. You like cold brews too. That's a whole other thing. All right.

1:56:44Ryan is in Oregon up next. What's going on, Ryan? Welcome to The Ramsey Show. Thanks for having me. I have a question for you, please. I'm a permanently disabled veteran, so I'm on a fixed income from the VA for the rest of my life. and with a wife and three kids in the economy, it's been a challenge trying to save for retirement and trying to pay off my home. And I'm wondering if you have any ideas on how I can possibly save more or get higher in steps and whatnot. What's the nature of your disability, brother? A hundred percent, I shattered both my legs, my ankles, and part of my back. Oh my goodness.

1:57:30Well, on behalf of the regular civilians who are just going about our lives and don't realize the day in and day out pain you experience on our behalf. Thank you. You're welcome. That didn't put money in your account and that doesn't make your pain go away, but I want to just tell you thank you. Yeah. Appreciate you. Thanks. Wow. So what is your fixed income? So I get$4 ,200 a month. I have a wife and three kids. my wife has to stay home with me because I unfortunately need a lot of help.

1:58:03So, you know, with the price of everything and, you know, mortgage, a car, three children, there's just none left and I'm having a hard time saving. Yeah, I just, it just escaped my mind and I can take a bunch of time on this call looking it up, but I won't do that. There's a program, one of my closest friends in the world, is a part of it where he gets paid for taking care of his disabled brother. Have you all applied for that program? We have, yes. We're waiting for that. Oh, waiting for it. Okay. That tends to be a huge relief. Yeah. I hope you guys get approved for that for sure because that'll help increase the income.

1:58:45So what are your current expenses every month? Are you guys doing a budget? Absolutely. Cash flow system. And that's obviously helped a lot because we know exactly where each dollar is going. And we were able to fine tune that. But I have a mortgage. How much is that? I live, it is$2 ,200 plus I, it's an HOA, so I pay an HOA fee on top. Yeah. Then all utilities, of course. I drive, if I do ever drive, just a free, you know, beater old Honda. And then my wife, we do have one auto loan out for her. How much is left on that? $19 ,000 left on that. What's the payment? The payment is$390 ,000. Okay, so if you got rid of that car and had a cash car, you could then at least invest the$390.

1:59:43Is there any money left over right now as it stands? Are you guys in the hole or are you just able to cover the bills with that$4 ,200? I'm able to cover the bills. I have about$10 ,000 in savings that I've been able to come up with, but that's over years because there's just not a lot. So I do have that, but we also need a new roof. So do I pay off the car? Do I – I got to get the roof? So there's just – it's very challenging. How urgent is the roof? Is this like tomorrow or is this three years from now? Within the next six months. Okay. I would continue stacking cash and get through the storm with the roof, and then we'll take a look at the car and see if it's worth selling that.

2:00:30downsizing into a cash car or saving up. I think that payment will at least free you guys to invest something. The other glaring issue is that most of your income is going towards your mortgage and HOA. Right. So is this housing situation the long-term play or can we find something more affordable? The big thing is I don't know if I was to sell my home. Yes, I have equity. Everything else is visit even more. So I don't even know what I could get into that would even save me much. Here's what I'm hearing though. Bro, you're doing, you are squeezing blood out of a rock every month. Most of the people who call into this show, there's like the last caller we just talked to, there's money everywhere, right?

2:01:16That's not you. And so like the harrowing part of this conversation is like you have a math problem. Y 'all are doing amazing with what you got. And so the challenge here is it's just it's very hard to keep squeezing the same tomato over and over. Absolutely. And that's where you have to ask way more what I would say more existential questions, which is we're in Oregon, which is an expensive place to live and it's a high tax area. Right. Do we have to move to Kansas? Because that's the world. That's the cards we're holding right now in our hand. True. Yes. I wouldn't wish that on you, but I don't, I don't know.

2:01:56Like, right. And then also with the VA system, how's the VA in Kansas? You know what I mean? Yeah. I have no idea. So that's a really big factor where I would live is based on the VA care systems around because they're not all the same. Totally. And that's going to be one of the, that's like that energy you have, that desperation you have, which dude, I can hear it in your voice, man. Um, like, and it breaks my heart because you're a, you're a dad who gave everything for all of our kids. And you're looking at this, like you have a very clear trajectory for yourself, which is I cannot work. And this is the amount of money we have right now.

2:02:33Hopefully you get approved for that program, um, which would give a ton of relief to your family. But without that, like y 'all have to make a hard decision about, I got to get on the phone and call all my buddies and find the best VAs in the country and see if I can find the lowest cost of living. And that might pull you away from family and resources and friends. I get all of that. That's a nightmare. But like you said, dude, this tomato is running out of juice. And tell me about your kids. How old are your kids? 15, 10, and 7. Okay. So, I mean, you know this as well as I do. I have a 15-year-old and a 9-year-old.

2:03:06You're one fun afternoon away from a broken arm, right? Oh, sure. Or whatever, like running into a tree, just having a good time. And so, and then bam, there it goes. Like, so you're, I get that I can hear it in you, in your voice, you're on a razor's edge. The only thing I can see right now is y 'all have to ask yourself way bigger questions or can your wife go earn 150 grand doing something? And again, I'm just making that up and y 'all can hire care for you. That might be the other way to gap it. I wish that was possible, but that's not either. God almighty. There's only two ways to get margin here and it's to spend less and make more.

2:03:45And you guys have done a lot to spend less and we can get rid of the car payment at least, which will free up some breathing room. And on the other side, we got to figure out, can we make more? And maybe that's through her being a caretaker and that gives you the breathing room you need. And then we can look at, okay, what are the best investment options? Now, without earned income, what's your VA disability, I don't believe counts as earned income, correct? Correct. So you can't invest in an IRA because you need earned income to do that. But you can invest in a taxable brokerage account. That's not a retirement.

2:04:14And if your wife does end up making money, she can open a spousal IRA and invest in that, which has some tax advantages. And then you've also got a high yield savings account you can take advantage of for your emergency fund, sinking funds, the roof fund, all of that. So there is a path forward, but there's some variables here that feel immovable right now that we've got to figure out. And that's going to be the hardest part. And tell me about your disability benefits. Is there a – and brother, I know you've thought through every one of these things. I'm just throwing things up against the wall here.

2:04:44Do you have the ability to work from home or to side hustle from home? No, and I legally can't. Okay, that was my question. If you were to get an online job, some shape, form, or fashion, you'd lose your benefits, right? Bingo. Okay. Jeez Louise, man. What a nightmare, dude. I'm so sorry you're going through this, Ryan. There's no magic wand here for you, but I'm glad we could at least sit with it and help you brainstorm. Yeah, no, and I've kind of looked at every avenue. I just wanted to ask just to mean because I listen to you guys all the time. If someone might have an idea, then it's going to be you.

2:05:21I would kind of give it a timeline for you guys to try to navigate all this, try to increase the income, try to solve it. And if you can't, it's going to mean bigger life change, like we talked about with lower cost of living. Where could we go to lower our expenses? If this$4 ,200 a month, this is it, this is all we have, then we've got to get our expenses lower, and that might mean moving across the country. I hate that you're in this situation, bro. I hate it. It's a disservice to you. All right. Until next time, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Bryce Jesus.

2:05:56Thank you.