Admit Your Financial Mess—Then Clean It Up

24:27And I don't know. I still don't even really understand the shared part. What's the goal of all of this?

24:33George Kamel:Yeah, this is all confusing. Why did we do this in the first place? It just sounded cool? Well, I know for them, they wanted—I'm just here for the ride. Who's living on the land right now? Nobody's living on the land because we're still clearing it out. So nothing has been even—nothing can be built on it yet because we still have to clear it. And we're doing it ourselves to save money for that. but okay when i asked about the shared part like why are we sharing it um so everyone only technically has four acres each yeah okay and the rest is just common area about it common area and one of them i mean i asked about it again um last week and to uh one family member he expressed that eventually he wants to get cows and i believe like have a cow mill or something like that and i i just said well i'm not interested in that um i just want to let you know that i don't i mean that's cool for you but i don't want to partake in it and i have to feel like i have to say something now because are they trying to share costs of all this i'm confused yeah what's the actual question here uh the question is yeah yeah and and the reason that we're i'm i'm calling is because there are now expected costs that everyone is supposed to be sharing and and i thought it was only going to be this tractor that uh they just purchased because in the beginning we were using a tractor that was uh loaned to us for free so we just had to pay for the food okay so you're saying hey bo cephas wants to get a giant tractor that's five hundred thousand dollars to clear the land we're going to have to pony up 125 grand you're what that's your fear yeah not that much sure but just the example he wants to start a farm he wants to get the cattle and now it's on all of us to split it all right listen here's the deal i'm i am so confused because i don't understand how everybody by the it sounds like technically everybody gets 18 acres but then you get four acres plot to put a house on and it just seems so convoluted and all that's all that's very confusing and very frustrating for you here's the problem i don't know how george and i help you i hear your question but this is already done and you're the wife your husband gets you into this it's not in any of our names yet it hasn't been subdivided so so this is a marriage conversation sounds like it is it is a marriage conversation and because it's um uh and i spoke to him about it i was and they reassured him don't feel pressured if you don't want to continue with this you can just sell your portion back to us can they afford um i believe so because honestly we were the only ones that were hesitant about it and is your husband hesitant He is because of the expense, but I know he has like FOMO because eventually he does want land and he does.

27:52And I don't mind living near my family. Here's an idea.

27:55George Kamel:Can you just sell the land back to them and buy your own land one day when you're ready and willing and able to actually handle it? And I've said that. What did it cost you guys to get in this?

28:08George Kamel:I'm looking for a number, Stephanie. Give me a number. $65 ,000? It's like$65 ,000, and his mom gave us$40 ,000 to put towards our portion because that was part of our inheritance. So she doesn't want it back. That was a gift. Well, his brother said, well, if we did sell back, then they'll keep that portion, and whenever they sell their house, then we'll get back. No, it was your inheritance. It's your money to do what you want with it. Well, yeah, yeah, yeah, but we would get our inheritance when they sell the house. um like you guys have over complicated every single corner of your life if my life depended on repeating back to you what you've told me so far in the last five minutes i'm a dead man i gotta tell you this is crazy this is a corn maze that's what you built out here this is nuts and it's going nowhere fast because everyone signed up to somehow do this themselves this is you putting a full stop on your husband and go, Hubs, we need to have a nice dinner.

29:10George Kamel:No one interrupting us. I've got fear. I've got doubts. I do not want to do this. Do you hear me? Do you see me? And I hope he's got enough sense to see and hear you and back out of this deal. This is going to turn into a nightmare. These people are making up deals every other day. Uncle Larry and Mabel are talking to his brother and they're cutting deals and nobody knows what's going on this is a reality tv show if i were a tv producer i'd be going everybody do this and uh we'll throw a hundred grand towards this just so i can film all this because this is going to be a nightmare yeah i'd rather him have fomo because he backed out than have his current reality which is a resentful wife and a mess on his hands that he has no control over.

30:00And I didn't want to be that. And I said, I don't want to be the reason that you don't get to do this, but just know these are my fears. And so I know he's having to make that decision, you know, ultimately very soon on whether we're going to sell or not back to them. And he's been reassured that no one's going to hold anything against him if we don't do it. Yeah, but I'm suspicious of that.

30:26George Kamel:People that say, hey, listen, there's no pressure. We're not going to hold it against you. That's a manipulative move a lot of times. I'd get out of this thing. There's no good ideas in this mess. It's just manure and overgrown land. George, will you quiz me on the details of this, see if I can remember half of what she told us? It was that confusing. To quiz you, I would have to know half of what she said. Oh, boy. I'm so sorry, Stephanie. I hope you and your husband can figure this out. This is definitely more of a marriage issue than a financial one.

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32:28George Kamel:Yes. So go to joindeliteme.com slash Ramsey for 20 % off. And that discount brings their annual plans down to about$9 a month. So go check it out. Joindeliteme.com slash Ramsey.

32:57George Kamel:If you're enjoying the show, do us a quick favor. Hit the like button, the subscribe button, the share button. All of that helps us get the word out to more people because you guys are our best marketing plan. We don't do Super Bowl ads and billboards. We just have awesome fans that spread the word. So thank you for doing that. Nathan is in Huntsville, Alabama. Up next, what's going on, Nathan? Hello. This is a question about business. So I had started this business about a year ago, and I was wondering how would you suggest to get more customers? What's your business? If I'm having difficulty.

33:39Detailing.

33:40George Kamel:Car detailing? Yes, sir. Okay. Just kind of personal, like I want my car cleaned. Do you come to me? Is it a mobile detailing or do I come to you? Both. If you have difficulty driving to and from, I can come to you. What have you done so far as it relates to promoting the business? i've put it on facebook i tried putting it on google and i've tried to get my word out by like old-fashioned going to stores suggesting like deals and stuff but haven't got very many stores what do you mean by stores like say an automotive store like auto zone or o'reilly's what do you think your best model is is it um people coming to you or you going to them what do you think is the best deal um basically coming to them because i get a better deal right so the only thing is um i'd have to like pay them a little bit or discount it when um i use their water because i don't have a water source right you pay them to use their water You don't pay them.

34:57George Kamel:If you come to my house and use my water to wash my car, I'm not charging you. Yeah, I'm thrilled. I've had guys come to my house and do my car. I'm like, yeah, the spigot's right over there. Knock yourself out. I don't know what you're talking about there. Okay, so here's the thing. Who are the type of people that pay for someone to come to their house or to their place of work to detail their car? Describe that person for me in your mind.

35:27someone that might not have common sense to start a business.

35:31George Kamel:Well, think about it. If I'm going to AutoZone, I'm more of a... No, not the answer I was looking for. I know a pretty good deal about cars if I'm going to AutoZone regularly. So I probably don't need someone washing my car. I probably want to do it myself. And so I wouldn't be going AutoZone. I'd be going into nicer neighborhoods where people don't want to deal with the hassle. They want someone to come to them, be professional, do a good job. So you need some good referral marketing. Like, hey, I'll give you a$20 to$5 gift card if you refer someone to my business. Hey, can I get you on a schedule to where once a month I'm coming and washing your car, and we get you on the books, and I'll give you a discount for that?

36:06George Kamel:Have you tried different models like that? I've tried, like, maybe once or twice, but I haven't gotten any money. How much business have you gotten so far?

36:20George Kamel:How many clients, how much money have you made?

36:24within a month, probably like 700, and that's barely enough to get by.

36:31George Kamel:Is that like three or four cars? Yeah. Okay. Brother, here's the deal, okay? This may not be for you. I'm not knocking you. I would want someone to tell me the truth, and certainly if I'm going to call a show like this and ask, I want somebody to shoot me straight. I don't think you're wired for this. the answer I was looking for from you is somebody who has means who has a disposable income they're very busy and so these are your wealthier neighborhoods and if you put a very simple clear message with a very good hook and offer like George told you and you're going around and you hit a neighborhood with I take my neighborhood there's probably 2400 homes in there listen you keep showing up long enough eventually somebody's gonna go I remember that guy and I took his card and it's on, it's right there by the microwave, babe.

37:22George Kamel:And boom. And you're there like this is hustle and consistency and going to the right places. It's also going to a pretty good size companies in your area that have, you know, anywhere from a hundred to 200 or 300 cars in the parking lot every day. And some of the people are going, man, if I, if this guy will come to my place of work and detail my car and life is good. This is not a difficult business, nor is it a complex strategy. But I'm going to be very, very honest with you. If you can't take what we just told you and turn it into real clients in the next 30 to 60 days, I'm not sure you're cut out for this.

37:59George Kamel:And I think you should go get a good pain job. And let's lick our wounds, figure out what we did right, what we did wrong. Yeah, are you working right now on top of that, Nathan? Yeah. What are you doing full-time? I'm working for another detail shop. I've worked maybe like two or three other details. How are they getting business? They got enough to pay you. Yeah. One was Donahue Chevrolet in Fort Wayne, and that's where I got my first. So working at a dealership. That's a car dealer. Yeah. Yeah. Are you in an area that just isn't as affluent where people are not willing to pay for this type of service?

38:44George Kamel:Is that part of the problem? Yeah. Because getting your car detailed is a luxury. Yeah. You understand that. And so you have to go after people who are willing to pay a luxury price to trade their time for this service. Do you have pictures of cars you've detailed? Do you have a website? Do you have business cards? Is your pricing clear? here? Yeah, I have a website through Wix, and I have my page on Facebook. All right, what are you making in your current job as a detailer for working for somebody else? What are you making? Weekly, about$500. Okay. And the most you've ever made is$700 in a month on your side hustle.

39:32Yes, sir. Okay.

39:33George Kamel:Well, I'm glad that this is not your only means of income. Glad you got that. I think you need to reassess right now. And the good news is this is your side hustle. So I would tell you, try it a little bit longer. I was under the wrong impression. I'd give it a little bit longer with the techniques that we've given you, and you got to go to the places where they are potential customers. But if it doesn't work after 90 days or so, I think you got to find something else where there's a little bit more demand. And so it could be in the same type of thing, but it could be a bigger pain point. But I know of a guy in my neighborhood.

40:13George Kamel:Again, I live in a large neighborhood. There's a guy that's making really good money cleaning garbage cans, coming in and power washing them, cleaning them out. And I'll be honest with you. If somebody knocked on my door today and said, can I do that? I go, no, I'm not interested. My trash can doesn't smell that bad. It's okay. I can live with it. Ken's like, it's made for garbage. Why am I cleaning it? Why am I paying for something that's supposed to stink? But you get my point? There's obviously a pain point in our neighborhood for that. And somebody's figured it out. And they're making really good money.

40:48George Kamel:Pressure washing sidewalks and porches. Maybe it's a slight shift here. You've got to keep getting active and trying, testing, what am I learning from this? Why is it not working? And figuring out why don't you have repeat customers. Yeah. Have these people that you've actually serviced, are they calling you back or texting you back to get another appointment on the books? yes i thought about actually going to churches in my area and trying to do their vans for uh nutritional price as well what do you charge for a let's say a normal car um for a car that's not so dirty about a hundred inside and out okay i mean that's that's pretty affordable in the detailing world.

41:40George Kamel:That's a bargain. So there might be a world where you charge more, which creates more perceived value. Yeah. Because the guy who's charging 200, I expect he's doing a better job than the guy who's charging 100. Oh, yeah. Are you consistently, but back to George's question, are you consistently getting calls from the people you've already done this for? Like every month they're calling you? Yes. Okay. I would at least Start with them and see if they can help you scale this thing with some word-of-mouth referrals. They get a little kickback. Share it in their local Facebook pages. I'm telling you, there's a goldmine in neighborhood Facebook pages.

42:17George Kamel:You get people posting about you raving where they can't help but share. Oh, my gosh, I ran into this guy, Nathan. Does incredible work. Very affordable. Reach out to him. That's the kind of stuff that'll spark you. Somebody was raving on our neighborhood Facebook page about you the other day. Really? Yeah. That's odd. I'll find out more later. We'll be back.

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43:48George Kamel:From the Ramsey Network, this is The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Camel, joined by my friend Ken Coleman, and we're taking your calls at 888-825-5225. Andy is in Greenville, South Carolina. What's going on, Andy? Hey, guys. Thanks for taking my call. Absolutely. My wife and I, we're on baby steps four, five, and six. And our current interest rate is right at about the rate of inflation. So my question is, should we continue with Baby Step 6 and pay the mortgage off early? Or because the rate of inflation is canceling out the rate of our interest, can we just pay it off?

44:42George Kamel:It's canceling it out? You're not paying interest all year long? How much interest are you going to pay in the next 12 months? Have you calculated that? No, I haven't calculated the total. We're at about a 2.6%, 2.8%. And what's left on the mortgage? $100 ,000. Okay. So you're pretty close to knocking this thing out. What's your household income? Well, I'm self-employed, so it varies, but I think last year was around$160 ,000,$180 ,000. Amazing. What's been your worst month or worst year? uh that would have been a long time ago but uh probably 40 000 okay but that's unlikely when you say it varies we're not talking about it could be zero it's a could be 140 could be 180 right okay cool what's the question behind the question because i don't think this is about the rate of inflation well no i'm just i guess is my theory a sound that the rate of inflation cancels out the rate, your interest rate, and essentially you are borrowing the money for free.

45:58Is that sound? And if so, wouldn't it be smarter to use the money elsewhere?

46:05George Kamel:There's the question. That's what it is. The heart of it is I want to do something else with this money and paying down the mortgage is not exciting and it's a low interest rate, so why bother? We've heard this 100 ,000 times. So let me just at least talk about the inflation part. Inflation is only really affecting how much things are costing over time. It's not affecting how much you're paying in interest. So now if you were saying, hey, the rate of my savings account, if I have$100 ,000 in a savings account making 4 % and I have$100 ,000 I could put toward the mortgage and it's at 2.6%, wouldn't it be smarter to keep it in the savings account?

46:41George Kamel:That might be a better example at least to crunch the numbers, right? Okay. I think I'm faulting you. So because the rate of inflation, again, it's not affecting how much you pay on your mortgage. It's not affecting how much you pay in interest. So it's not canceling anything out. You're still going to pay thousands in interest this year. So what you're really saying is if I could use that money elsewhere and either put it in a savings account with a guaranteed rate of return, at least for now, or invest it with a variable rate of return. Could be up. Could be down in the short term. What I do, I'm going to pay down my mortgage regardless of the interest rate.

47:18George Kamel:And that's what I've done. And it's what we've recommended for decades now. There is no caveat in the baby steps that says, yeah, pay off your mortgage, except if you have an interest rate below 3%, then feel free to invest that money instead. There's no caveat. The interest rate is above 3%. It's that the inflation rate is also at 3%. And what I'm telling you is that doesn't affect your life and how much you're paying an interest in that mortgage. It's simply affecting how much things are costing. Purchasing power, the overall purchasing power of my dollar is less. So wouldn't that mean that...

47:56George Kamel:Are you also investing 15 % of your household income? I'm sorry? Are you investing 15 % of that$180 ,000? Yeah, we're in four, five, and six, yeah. Great. So you are already beating inflation by investing. And so I don't want you to conflate the two things. We're doing three things at once with Baby Steps 4, 5, 6. 15 % to investing, got that down. Put some money away towards college. got that down. And then baby step six has nothing to do with trying to beat the market, trying to beat inflation. Baby step six is all about trying to get to freedom as fast as possible. And when you free up that mortgage payment, there is less risk in your life, there's more peace in your life, and there's a whole lot less interest in your life.

48:36George Kamel:And so mathematically, depending on the time of day and the year and inflation, we could always argue about the math, but baby step six has always been about way more than the math. And if you crunch the numbers, what could I then do if I invested that entire mortgage payment, that all of that principal and interest going towards an investment account, your mind will be blown. So I hope that... All right, fair enough. But you're, I mean, as an intellectual conversation, I'm probably not equipped to fight about inflation versus the mortgage. I'm just telling you what I've done, what we recommend.

49:09George Kamel:And there has not been a caveat that I've ever heard where we go, well, if you can make more, go ahead and do that. We're always going to tell you to pay off that mortgage. And we always tell you, if you regret it, you can always go back into debt. The bank will be happy to loan you money at a higher interest rate, of course. But I found that very few people are regretting it. As y 'all are financial experts, is it true that the rate of inflation cancels out the interest rate if you're lost. I've never heard this in my life. Well, you keep dying. You're doubling down on that one. Where did you even hear this?

49:43George Kamel:I've never I didn't. Was this a tweet or something? Was it a news headline? No. I mean, I chat GBT. What would Dave say? And I thought I'd better call. OK, let me flip it on you. OK, I want you to explain it to us as to how you believe the rate of inflation uh and i'm assuming you're talking about the same thing that i'm thinking of when we see uh the reports come out from the fed and we see where where inflation was over the last quarter is that the same thing we're talking about uh yeah okay interest rate or the i'm sorry the inflation rate is like between 2.5 and 3 so you explain it to us because i mean i'm confused how Purchasing power equates to your fixed-rate mortgage.

50:31George Kamel:Right. So explain how what you're paying in your interest rate on your loan. Explain how you think that the inflation rate cancels that out. Okay. Well, I'm no financial expert. Let me start there. Not like you guys. You don't have to be. You don't have to be to explain to me the very thing you're asking. Because we've already told you. George has said twice. As a financial expert, he is one, I'm not. I'm trying to hit it from every angle, and maybe I'm just still not understanding it. So, Gault, we've got about a minute. Give us your best shot as to why you think it cancels it out. All right.

51:11Well, the rate of inflation going up from where I initially got the mortgage, so my mortgage payment, the interest rate, is equal to the rate of inflation. So the cost to rent the money, so to speak, to get the money from the bank to pay for the mortgage was set when interest rates were lower than what they are now. So when inflation rates. So because inflation has gone up to equal to my interest rates, my question is, and I don't have an answer for this. My question is, does that cancel out? Okay, well, I accept your answer. The answer is no.

51:53George Kamel:I had your friend, Chad GBT, help settle the debate here. And it literally says, these are apples and oranges. One impacts the value of your money. The other is the cost of borrowing. So they're not equal to each other. There's not really a direct correlation. And man, the time we spend arguing about this, you could have just paid down the mortgage, Andy. Simplify your life. Get off AI. Get in reality with no mortgage payment. I think you'll like it better on the other side, my friend. Thanks for the call. Fun discussion.

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53:42George Kamel:Aaron is in Spokane, Washington up next. What's going on, Aaron? Hey, thanks, guys, for taking my call. Sure. My wife and I purchased an IUL, Indexed Universal Life Insurance Policy, when we were in our early 20s. I'm 29 now. Since I've been listening to you guys' show for probably, I don't know, the last month, I took a deep dive and see what they're giving me, their rates and stuff, and I saw that the money that I put in, it's been eaten up by most of their fees. Yep. That's IUL for you. So I'm all in, you know, taking it out. I'll take care of this, you know, get the stupid money to get, you know, take away the fees that they're going to take when I take the money back out.

54:33But I don't know where to put it and park it so that we can retire in a nice time period because we're only 29. We started up the whole thing when we were 25. So what is your goal here?

54:47George Kamel:You want to cancel this policy. You figured out it was a ripoff, and then you got scammed. But I hope it wasn't from someone you like. No, it was – I worked for the Postal Service, and someone came in and sold it to us. Okay. Did they sell it to other coworkers? Yeah. Oh, boy. Well, let's help get them out too while you're at it. Yeah. So what's it going to cost you to get out of this thing, and what will you get out of it when all is said and done? so right now it says uh twelve thousand dollars is how much i have into it right now and it said if i take it out the surrender money i would get is ten thousand five hundred okay so there's essentially a fifteen hundred dollar penalty to get this money out and you're willing you what they want is the sunk cost fallacy of well i don't want to lose fifteen hundred we might as well keep it around well there is some cash value well there is a little face value on the policy What is the face value of the policy?

55:44George Kamel:The actual death benefit? It would be$300 ,000. Okay. So you need more life insurance anyways. Yeah. And what are you paying per month? I have an additional policy. I'm paying$240 a month. And you already have an additional policy? My additional policy is, I think it's only like$15 a month, but it's for an additional$250, I believe. Is that a term life policy or a different type? That's a term. Good. Okay. And what do you make a year? I need$62 ,000. Okay. So that means we need a much higher policy on that term life. We need at least$620 ,000, 10 to 12 times your annual income. I'd probably go for$750 ,000.

56:30George Kamel:It's going to be very affordable, as you can see. You're paying$15 a month for$250 ,000. It's not going to go up that much to go to$750 ,000. So you can keep that one and get a supplemental policy for a half million on top of that. That could be one way to do it. And you can jump on to Xander.com and get those quotes. Those are the folks we trust, the same people I have my life insurance through, my wife's insurance through. And now on the other side, you're asking about building wealth. You want to retire one day. Yeah. And you were sold this as a wealth building scheme, I'm sure. Yeah. Okay.

56:59George Kamel:So we want to separate insurance and investing. Never combine them because then you have a product that does both things very poorly. So instead, what I'd recommend doing is investing 15 % of your$62 ,000 income into retirement accounts that are tax-advantaged. Do you have one of those through the post office? I do. What do they offer? They offer 5%. 5 % match? Is it like a 403B? What's their retirement plan? It's kind of like a 401K, but it's the federal version. It's called TSP. TSP. There we go. Thrift Savings Plan. Yeah. So when you go in there to kind of match the four mutual funds we recommend, you're going to have options of C, S, and I when you jump in that TSP.

57:43George Kamel:Are you tracking? There's a lot of acronyms here. And so you'll do 80 and C. That's the common stock fund. And then 10 % in the S fund, 10 % in the I fund. And that will get you pretty close to that diversification we recommend. 15 % going into there. From 29 to 65, you're going to be a multimillionaire. Yeah. You can crunch the numbers in an investment calculator just to prove it to yourself. And then you have insurance on the other side to protect the wealth that you're building. And I think you've learned that lesson now. So don't conflate the two. Make sure you have the right types of insurance in place.

58:19George Kamel:You can jump on to ramsaysolutions.com slash checkup, and we'll walk you through it to make sure that you have the right coverage, not too much, not too little, not any crappy policies that you need to get rid of. And on the other side, you invest 15 % of your household income for the rest of your career. you're going to be a very wealthy man. Yeah. Do you have any debt right now? I already, what was that? Do you have any debt? No, we're, no car debt, no credit card debt, and our house is almost about halfway paid off. Way to go. Yeah. Proud of you, man, that's awesome. Yeah, thank you. I do already contribute the max 5 % already into my TSP, so should I just take out that $240 that I'm contributing right now within my budget can I just put that in there do you guys have an emergency fund of 3-6 months of expenses I have just about we have about$15 ,000 so if you're there, if that's the number that gets you there then I would up that contribution you told me you're only investing 5 % and we just covered that baby step 4 is 15 % so you would triple that amount I don't know if you jump online to your portal for the TSP, and you just ratchet up the contribution from 5 % to 15%.

59:37Okay, and just keep it in that one. Don't do any third party outside of my job?

59:42George Kamel:If 15 % gets you there, and it's a Roth TSP, do you have that option? Yes, it is. Whatever I contribute goes into Roth, but then whatever they contribute goes into traditional. That's right. Yeah, the match will sit on the traditional side. So yeah, if you have a Roth TSP and you go that split between the CSI 80-10-10, 15%, if you max that out somehow, if your income goes way up, then you can move on to a Roth IRA as well. That would be the next place to invest. What would be the max that I can contribute? To the TSP? Yeah. Is there like a certain amount I can put into the Roth per year? Yeah, it's the same as the 401k, so it would be$23 ,500 for this year.

1:00:27George Kamel:Oh, okay. So you won't hit that. Investing 15 % of your 62, that'll be$9 ,300. Okay. So that's exactly what I do, man. You're on the right track. You're doing a lot of things well. I'm sorry you got hosed by apparently a good salesperson selling this IUL at the post office. Do they allow people to just solicit in there? They have to go through a couple people to actually get in there, but I think it was just our management and we're in North Idaho, so they don't really care. They're like, sure, come do a little lunch and learn. If you're providing free lunch, we'll listen to you. Is that how it went down?

1:01:05Yeah, kind of.

1:01:06George Kamel:I got a sense that there's not a lot happening at the post office in Northern Idaho. Like this is juicy stuff. We're pretty high up there. Well, see, you made me think it wasn't that big of a deal. You were like, oh, they don't care. All right. Anyways, I tell management don't let more insurance people in the door. Yeah, definitely. I think we're done with that. But thank you for the call, Aaron. It's a good discussion and a good reminder for everyone out there, little teaching on insurance versus investing and any type of permanent life insurance, which is what Aaron just talked about, this indexed universal life insurance policy, IUL.

1:01:39George Kamel:I did a whole video on this on my YouTube channel to expose it for the scam that it is. And every time I do this, Ken, guess who's coming after me? The IUL salespeople are very aggressive in the comments section saying, this guy doesn't understand. It's great. A lot of wealthy people use this. And I'm going, not the ones that I know, not the smart ones. And so you got to be careful out there. Never mix up your insurance and investing. Never combine the two. Anything that's sold to you as an insurance plan and an investment scheme is just that. It's a scheme and you should run, run far away. So what do you do instead?

1:02:13George Kamel:Get a term life policy, level term life, which means you're going to pay the same payment every month. You're going to get way more bang for your buck. It's not going to have the cash value portion that they tout. You don't need that because you're going to build your own wealth by investing 15 % of your household income into those tax advantage retirement accounts. And if you do it the right way, you do it that way, you're going to pay a fraction of the price for your term life. and you're going to build some serious wealth with compound growth with way less fees. So I hope that makes it simple.

1:02:42George Kamel:For anyone that doesn't have a term life policy, jump onto zander.com. Get it done today. This is how you tell your family, I love you. If something were to happen to you, how would they replace your income? What are they going to do? Instead of just grieving, now they're in a financial bind. So getting that term life policy 10 to 12 times your annual income, 15 to 20 year term is great for most people because if you follow our plan for 15 to 20 years, you become self-insured. The house has paid off. You've had decades of compound growth. Your family's going to be just fine.

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1:05:12George Kamel:Hey, if you're tired of living paycheck to paycheck and feeling like you can't get ahead, you've got to join one of our free EveryDollar trainings. There are new trainings every week this month. They're all hosted by one of the Ramsey personalities. And we're going to show you how to stick to a budget and find$9 ,000 of margin. That's right. Using EveryDollar so that you can get out of debt and start building wealth. Plus, you can ask us any questions during the live Q &A. Again, this is all virtual. You can join us from anywhere. Sign up for free at everydollar.com slash webinar. It's free. I don't know.

1:05:43George Kamel:You got nothing to lose. If you don't like it, just hop off. You only lose a few minutes of your time. But most people stick around the entire time. And then I jump off and our team's still there answering questions. What do you think, George, of all the coaching you've done in this area, you've done these webinars, you've done our live streams, what do you think are the top one, two, or three reasons why people have a hard time making a budget work? Oh. I've never asked you that before. It's a great one. It's got to be something that you think is a root cause. Well, I think there's – I think number one, it feels overwhelming.

1:06:16George Kamel:They think, well, I'm not the type of person. I'm not a spreadsheet guy. Yeah. So there's overwhelming. Okay. And then there's fear. There's fear of what they're going to see. Because what we're doing with the budget is holding up a mirror, going, hey, this is what you look like. This is your financial reality. And most people don't want to look under the bed and find the boogeyman. But once they do, it's actually, and you know this, once you face that fear and just do it, you go, oh, that wasn't so bad. Yeah. And so I think they're overwhelmed. There's fear. And then it feels like one more thing to add to their stress and anxious plate.

1:06:48George Kamel:I think that's right. And they don't want to screw it up. That's good. And they think they can't stick to it. It's too much work, too much time. I don't have the time to deal with that. So if that's you listening to George going, that feels right, kick the tires. Do this free training. It's been eye-opening because we asked the question, how long have you been living this way? Paycheck to paycheck, stressed, anxious. And most people say most of my adult life. Yeah, it's all they know. Their nervous system has actually been reconditioned to feel that stress. It's bad. So if you want a way out, we'll show you.

1:07:18George Kamel:And it's been very empowering, encouraging to see the results here. Go to everydollar.com slash webinar. Join us for the next one. I'll be doing a few a month. All right. Peter's in Tucson up next. What's going on, Peter? Hey, gentlemen. Thanks for taking my call. How y 'all doing? Doing great. How can we help? Yeah. So my wife and I have been living with our in-laws for about nine months, and we're just looking to, we want to get our own places as soon as we can, and we're open for advice. Okay. So you've been living with her parents? Yes. Yes, sir, her parents. For the specific purpose of saving up money?

1:07:55Saving money and paying off debt. We just became debt-free in May. Oh, congratulations. Yeah, thanks, guys. We're just fully focused on saving for this down payment.

1:08:06George Kamel:Do you have your emergency fund fully saved up yet? We do. We're on Baby Step 3 Bravo. We got$15 ,000 savings. Cool. Nice. How much are you saving per month toward this down payment? Well, so we're bringing in about$8 ,600 a month, and we usually put away anywhere from$3 ,000 to$3 ,500 into savings. Hold up. You're telling me that even living with your in-laws, your expenses are still$5 ,000 a month? I saw this coming. Yeah, well, no, our monthly expenses are$810 ,000. And we give them some money for rents, and then we have our subscriptions and storage in Texas where we used to live. But you said you're putting$3 ,500 in savings, right?

1:08:52Yeah, anywhere from$3 ,500 to$3 ,500, yes, sir.

1:08:54George Kamel:But you're making$8 ,600 a month take home? Did I hear that right? Yes. $2 ,000 of that is my wife's paycheck, and that goes right into savings. Yeah, but George is wanting to know where the rest of that money is going. He's starting to break out hives over here. You make$8 ,500. You're putting$3 ,500 away. Where is the other$5 ,000 going? So far, you've laid out some rent, the$8 ,000. Yeah, well, majority of that time, we were putting all that to the debt to pay that off. So the last two months, we did some traveling, and then we had our six-month car insurance. Okay, so you've had some expenses come up and some entertainment.

1:09:37George Kamel:You guys are debt-free now. There's nothing wrong with going on vacation. But here's what I'm getting at. I have found that most people who say, hey, we're going to live with the in-laws to save some money. What ends up happening is they get comfortable. They increase their lifestyle. And that goal is going to be seven years of living with the in-laws. So that's what I want to know. Is there an exit strategy to go, nope, we are going to have$50 ,000 saved for our down payment within 12 months. And then we are getting out. What's that actual number? What's the number you're trying to save for down payment?

1:10:05George Kamel:And when do you think you'll get there? yeah well we want to put down the least we can three percent just to get into the market so we want to have about 28 000 to include closing costs to have a nice buffer for an emergency fund so 28 000 the number we're looking for um how much do you have down is not a good financial strategy can i just tell you in any area of your life yeah so does that mean you're going to have a mortgage payment, that's far more than 25 % of your take-home pay. Well, because we'd have PMI on top of that. I mean, we wouldn't want anything that's more than 2 ,000 a month for a mortgage.

1:10:43George Kamel:That's what I'm saying. The higher the down payment, the lower the mortgage. So if you're putting very little down, that means you're likely going to have a gigantic mortgage that's more than a quarter of your take-home pay. That's what I'm getting after. Gotcha. Yeah. But nowadays, I'm sure you guys know, that would take us years to get to that 20 % for the down payment. How old are you guys? 24. Oh, my goodness. Well, you're on your deathbed, I guess. Let's hurry it up. Well, hold on. I got to dive into this. I got to dive into the years thing. All right. So let's run through the numbers. What expense are we looking at on a house?

1:11:18George Kamel:What are you guys looking at? Anywhere from$280 ,000 to$300 ,000. Okay. Let's take the high number. Okay, let's take the high number. Okay. You're going to buy a house for$300 ,000, okay? 20 % of that is what? $60 ,000. Yeah. You're tracking with me? Basic math here? Yes, sir. Okay. So 20 % down payment on a$300 ,000 house is$60 ,000, okay? You said you wanted to save$28 ,000 at a 3%. And what George is saying is that's not a good idea. your reply was, it'll take years for us. Well, the gap between 28 and 60 with your income is actually not that much. And my guess is you're going to do 3 % down on a 30-year mortgage?

1:12:07George Kamel:Yes. That's an accurate guess. Okay. So here's the deal. So far, you were following the Ramsey plan, and now you turned it into a choose-your-own-adventure, which I have no problem with. I'm going to sleep well at night no matter what you do. I just want to see you win. So if Sure. Following the Ramsey plan, we would recommend only a 15-year mortgage where your payment is no more than a quarter of your take-home pay. So you guys make$8 ,600 a month. Are you doing any investing right now? We're doing a Roth IRA. We're putting a small amount just because we're prioritizing saving. We're putting a small amount months into that.

1:12:37George Kamel:Okay. So when we say 25 % of take-home pay, what we're talking about is after taxes but before any other deductions like retirement or health care premiums. So that should help your numbers. Let's call it$9 ,000 then? Okay. Okay, so divided by four,$2 ,250 is what you're aiming for with that 15-year. So if this was a$300 ,000 house to get to$2 ,250, we would have to put down, ready for it? About$70 ,000. All right? Okay. So$70 ,000 becomes the magic number instead of as little as we can put down. So now let's talk about the$70 ,000. Currently, you have nothing saved for the down payment. We're just getting started.

1:13:16yeah i mean we'll be we have the king grand savings and they take away the two thousand that for the emergency fund so about 12 i'd say well you need you need at least 15 for the

1:13:25George Kamel:emergency fund so let's not touch that do you have any money outside of that right now not currently okay so let's say we're starting from zero we need to save up 70 grand and you can put away five thousand dollars a month you tracking with me that is 14 months from now we are we have 70 grand ready for the down payment and we can move not years gotcha so that is that's how specific i want you to be with an exit strategy and truthfully i would i would say let's do a year max and really hunker down and save up the 70 grand in a year okay yeah yeah tighten the hatches yes that's the only way i would stay in the scenario i would not stay in the scenario going well once we have the down payment maybe we'll get out of here but And if I'm you, I'm wanting to get out of my in-laws' house as soon as possible, man.

1:14:15George Kamel:You're still paying a grand. I mean, you might as well get your own place and pay an extra grand and slow down your house down payment by a few months. That's all it's going to do. Yeah. Yeah, right. Okay. All right. Yeah. Well, thanks for the insight, guys. We appreciate it. Absolutely. Hey, I'm rooting for you. I'm not trying to doggone you. I just want to see you in, and I want a very clear plan and exit strategy here so that we don't turn this into a hammock. This is The Ramsey Show. Thank you.

1:15:14George Kamel:Welcome back to The Ramsey Show. I'm George Campbell, joined by Ken Coleman. 888-825-5225 is the number to call if you want to join the conversation. Hey, are you staying on track with the baby steps? As you've heard from some callers, some people tend to veer off the path. And so if you want to get back on it, you want to check your progress, you can take a quick quiz and receive a personalized plan just for you. Simply head to the show notes and click on the link titled, Are You On Track With The Baby Steps? and complete the quiz. And before we get to the calls, Ken, we have a special announcement to make.

1:15:45George Kamel:Yeah, very excited. So you have a show called Front Row Seat that has just blown up in the last few months. It's a lot of fun. It's a deep dive conversation show and we have a live audience. The audience gets to sit in the interview and actually sit around me and the guest. Hence the name. Hence the name. And they get to ask questions. So I wanted to tell our very large audience, If you're going to be in town July the 16th, that's a Wednesday. So if you can be in the Nashville area. In the Nashville area at our headquarters. George Camel is joining me as my guest on the show. If you're a big George Camel fan, you want to meet George, ask him a question.

1:16:20George Kamel:We're going to be having a really fun deep dive around money and myths and winning financially. It's at 1.30. Central time. 1.30 Central Time. You can sign up to be in the audience by going to KenColeman.com slash show. Pretty simple. KenColeman.com slash show. If you're going to be in Nashville or you're close enough that you want to come up for this very fun experience. People have made the drive from Kentucky and who knows where else. We have people drive in from all over the place. So there it is. Join us. I'd love for you to join us. Don't embarrass me, guys. I want there to be a wait list.

1:16:49George Kamel:I want it to be packed out. I want there to be standing room only. George's fragile ego needs you to show up. Four people show up. I'm out. I'm not doing the interview. Actually, we'll cancel it. Let's be honest. I would do this in a closet to nobody. So it's fine. We're going to have a good time either way. But we'd love for you to join us, kencoleman.com slash show, if you want to be a part of that live audience. Connor is up next in Indianapolis. What's going on, Connor? How can we help? Hi, George and Ken. Thank you for taking my call. I guess I'll give a little backstory first. So my wife and I got married seven months ago.

1:17:22We're from the Boston area. Shout out to George. Yeah. And, you know, coming into the marriage, I was debt free and she had an amalgamation of student loan debts, credit card debts and medical debts that we decided, you know, once we got married, we were going to go score stirs on our debt. And so part of that is that my wife is a medical professional. We decided to travel nurse. And so we moved out to Indianapolis and she's travel nursing. It's cheaper to live out here. She's making more money. I switched professions. I'm making more money. but one of the student loan companies, it was a private student loan with Citizens, they reached out to us because we were trying to refinance with YReFi.

1:18:06And so after four months of not paying Citizens, Citizens reached out to us with a payoff offer that's 45 % of the total value, and they said they'd consider it paid in full. I'm looking for some advice on how to talk to debt collectors and whether or not that's a good deal, I guess.

1:18:25George Kamel:Well, number one, you sign on the dotted line for the full amount. And so that's what the amount you owed. So I wouldn't be looking for a good deal. This isn't Black Friday. We're not shopping for TVs. So as far as a good deal goes, you know, the longer it sits out there, the better chance you have of settling. But if they're offering 45%, I'm going to take it because you're saying it hasn't gone to collections yet. So the collections department emailed us and said that they would do 41, 45 % at Citizens. I was thinking the same thing, George. That's the sweetheart of a deal. So it hasn't actually gone to – like a debt collector has not bought this debt from Citizens yet.

1:19:02No, a debt collector hasn't bought it from Citizens yet. It's just in the Citizens Collections department.

1:19:06George Kamel:That's impressive that they're even offering this because usually what happens is they go, you can't pay. It's going to collections. Collections comes after you. Now, collections, they buy it for cents on the dollar. So you probably have a better chance dealing with collectors, but I would not just let it go to collections hoping to save a dime. I would pay that amount, 45%. What is that amount? $51 ,000. Okay, and how much do you guys have right now that you could make liquid cash? We have$5 ,000, but we talk to our bank and they will give us a personal loan for$51 ,000 over a five-year term.

1:19:42George Kamel:We're going to go into debt to pay off the other debt so that we have a new debt? So the way that I had thought about it is I heard you guys talk about if you have a car that you're underwater on, sell it and sign a note for the difference, where this would be$60 ,000 less than the initial cost. I didn't know if that was what you would recommend or not. No, a car loan, that would be a very different scenario because you have a depreciating asset here and we're trying to get out from under it. Instead of being in 25 grand of debt, we're in five grand of debt because we got rid of the asset. So your student loans would be very different.

1:20:14George Kamel:So what I would do is say, hey, we have this, this is how much money we have right now, would you be willing to allow us to pay this over time for that 45 % of value? Or is it lump sum only? Have you got clarity on that? Yes, it's only lump sum only. They offered us a pay over time of$67 ,000 over the course of a year, and we can't afford to make those payments either. How much do you guys make a year? Combined right now. So I'm working in sales. So with my base, Our combined salary take home is$140. Okay, but that only includes your base. Correct. I mean, I'm assuming you're going to make some commission.

1:20:57George Kamel:You weren't terrible at sales. The thing is, I just don't know what the commission is because I just changed career direction when we moved out here to Indiana. And so I don't exactly know how much I'm going to bring home because I've been doing sales. Sure. But I'm telling you, hey, if we sold like our life depended on it, could we make$200 and knock out this debt in less than a year? Yeah. Yeah. And even making$140 ,000, is this all of your debt or is there other debts hanging around? There's other debts hanging around as well. There's a government student loan that's$32 ,000 and a credit card that's$12 ,000 that will pay it off.

1:21:30George Kamel:But you're behind on this private student loan. Are you current on the rest? We're current on the rest. We had tried to refinance with Y-Refi, and so that's why we're behind on the private student loan. Okay. Well, I would definitely hunker down and focus on that debt because it sounds like it's about to go to collections, which is just going to add pain and misery to your life. Can you make minimum payments on the rest of the debts while attacking that collection debt aggressively? Yes. I would do that, and I would take their deal of 45%. Make sure you get it in writing and don't give them access to your checking account.

1:22:07Mm-hmm.

1:22:08George Kamel:That's the deal here. So you can give them a cashier's check, money order, but we're not going to do – or a prepaid debit card. That can also be a good option. But don't give them electronic access to your account. Yeah, of course. Okay, got it. Thank you. Yeah, good luck, man. You've got a battle ahead of you, but we've got to change our mindset around this instead of going, hey, is there another type of debt I can use to pay off this debt to make me feel better? The debt is the debt. And so switching it around, moving it around, playing a shell game, it'll make you feel better temporarily, but it doesn't solve the problem.

1:22:38George Kamel:All right, let's go to Nicole in San Antonio up next. What's going on, Nicole? Hi, Ken. Hey, George. Hey. My spouse and I, we're in baby step two. We bring them about$8 ,000 a month, and we're working to become debt-free, and we're really just stuck right now, and we're unsure of what our next step should be. We have$11 ,000 in crypto, and then we have$50 ,000 in a rental property and equity, and we're about$98 ,000 in debt. What kind of debt is that? So we have$2 ,700 in hospital bills,$4 ,100 in consumer debt,$32 ,000 in a car loan, and then$59 ,000 in student loans. What's your household income?

1:23:23um we bring home about 96 a year okay tell us about that car that's a lot of car that's a lot what's her car worth yeah um her car it's probably worth about 20 grand and you owe 32 yes we were actually um upside down on another car um and we had to get out of it because it was there was like maintenance problems on it so we ended up just you rolled over the negative equity

1:23:55George Kamel:yeah seen this seen this play before it's not a fun one what's that car payment every month so we just refinanced it and it's about 5 20 a month okay and what are you wanting to do what's your question today so my question is should we sell the crypto um again it's like 11 to 12 000 and then just pay all that to our debt or could we sell our rental house um someone's in it right now and they're going to be in it for the next till next august we make about 590 a month off of it but we just put that in um savings in case something happens like ac goes out or something yeah i would get out of the rental game you might look into how you could get out of the lease and get the tenant out of there asap and i would liquidate the crypto.

1:24:42George Kamel:You are not in a place to be investing. You're not in a place to be rental gurus. You got to get out of$100 ,000 worth of debt. I would likely try to sell that car too and save up the difference you're underwater. It's going to be a journey to get there, but you can do it.

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1:25:46George Kamel:from the Ramsey Network. This is the Ramsey show where we help people build wealth, do work that they love and create amazing relationships. I'm George Camel here with Ken Coleman and the phone lines are open at 888-825-5225. Ken will help you make the most income possible with work that you love. And I'll tell you what to do with it. Once you have some, Diego is in Newport Beach to kick us off this hour. What's going on, Diego? Hey, George. Hey, Ken. How are you doing today? Doing great. Good. How are you? I'm doing fairly well myself. Thank you guys for taking my call. Just a little backstory before I get into my question.

1:26:22I'm 23 years old, and my wife is 25. We have recently just gotten married. I mean, recently. That's like two weeks ago. Hey! Yeah, it's very exciting. I'm very blessed. And she's amazing. I'm a very lucky man. But my question is coming down to finances. We are both debt free. She's a public school teacher and I'm a pharmaceutical sales rep. Moving forward, how do we combine our finances into one? We both agree that's what we want to do. So I'm just struggling to really get the logistics of moving over into one account. Do I keep my prior investments in a separate? I just need a little bit of backstory or advice on how to do that moving forward as well.

1:27:11I know this might be a two-part question, but as well, a proper way to start saving for a house. Do you go the mutual fund route or just throw money in at high-yield savings?

1:27:21George Kamel:You're asking the right questions. I love it. Congratulations. Okay, I'll make this as simple as possible, and I'll tell you what I did. I had a checking account, and I made it a joint account. So I didn't even switch the numbers. It's the same account number. I just made it a joint account at my bank and added my wife to it. And then my wife, we just transferred the money from hers into that joint account, and we shut her account down. So we have one joint checking account and we have one high-yield savings account. And that's where we keep our emergency fund. You can create a little separate high-yield savings.

1:27:50George Kamel:But either way, every single account that I have is joint. So her name is on it and my name is on it. So that's what you do going forward. Is that you bring credit cards as well? Well, I don't believe in credit cards like I don't believe in the tooth fairy. So what we're saying is, yes, everything is joint. Why did you have to bring the tooth fairy into this? I'm just letting people know. I got a lot of kids listening to this. I didn't get any money from the tooth fairy. Now that explains it. So I got gypped is what I'm saying. But anyways, yes, everything in your life would be together. So her name would be on it, your name would be on it.

1:28:25George Kamel:Okay. That definitely helps. Yeah, as far as you're saying the house savings goes, is this something that is in the near future, like two years, or is this more like five, six, seven years? It would hopefully be three years, and I would love to put 20%. Now, being in Newport Beach, California, it's a little rough out here. So the average house is around$1.2 million. If you take 20%, on average, it's around$242.60. She makes$85 ,000. I make$70 ,000 plus$20 ,000 commission. I don't plan on staying in this position for another two years. I look to get a salary increase. I was going to say, pharmaceutical sales, I feel like should start at six figures.

1:29:14George Kamel:But it sounds like you're just getting into it. Correct, yeah. I just graduated college about a year ago, so it was anything I could take. I'm very lucky. But in terms of what I want to do, I wanted to do a 20 % down payment. Now, I earlier heard you say putting over for a 15-year mortgage. How come not a 30-year fixed rate? Well, our goal here with the Ramsey crew is to get out of debt as fast as possible and stay out of debt. And so the options here in America are generally a 15 and a 30-year. And what we found is 30-year mortgages have over double the interest because there's usually a slightly higher interest rate on a 30-year versus a 15.

1:29:55George Kamel:Plus, you have it for twice as long. And some people fool themselves into thinking, well, I'll just take on the 30 and pay it like a 15. Rarely does that happen because there's something called human nature. and human nature says, I'd rather not put it toward the mortgage. So the 15-year is sort of a forced savings plan. That means no matter what, 15 years from now, let's say you buy it in two years. You're 25 at that point. Well, by the time you're 40, no matter what happens, you have a paid-for house in California that has been appreciating for 15 years. And so that's the reason. It's a huge savings on interest.

1:30:29George Kamel:It's a forced savings plan that gets you through the Ramsey plan faster. okay that definitely that makes a lot of sense because i always thought keeping it at a fixed rate would make it easier in terms of how i'm dealing with finances but human nature does seem to always take over right it's a 15-year fixed rate versus a 30-year fixed rate so it's the same thing it's just cutting your time in half which does increase your payment so will be a higher payment um but that's a good thing because it means you're adding way more to the principle knocking that out faster instead of sending it to the lender through interest because if you go look at the amortization schedule, you'll compare the two, you'll go, oh my goodness.

1:31:06George Kamel:For the first 10 years I'm paying this 30-year mortgage, almost none of it is going to principal. I'm paying thousands to the lender. And so the goal is to get out of debt as fast as possible, pay as little interest as possible, and it's the only type of debt we don't yell at you for. And what I would do is just park it in a high-yield savings account. With a three-year timeline, it's not long enough to have some serious compound growth in the market, and you could lose money in a timeframe that short. that is true and then i guess should i still keep investing then in a uh mutual funds like i currently use vanguard their smb 500 and then the vanguard total start market which is a vti yeah i use that and then should that just be just for personal use well are you guys investing for retirement outside of that so she has a 403b because she's a public school teacher and then she has a pension when she retires and she contributes 10 % of her paycheck.

1:31:59For me, I have a 401k. My company matches up to 9%. I currently put 12%. And then on top of that, I have a Roth IRA. Oh, great. So we both have our retirement kind of already handled. I guess I was just really confused on using a mutual fund to, I guess, make the process quicker.

1:32:20George Kamel:You can have a taxable brokerage account and just invest there, but we look at that as a longer-term play if you're going to be investing in a taxable brokerage account. So if it was parked there for five years, I would say it's a good move. Anything less than five, I start to get a little shaky on, but you'll likely be okay. You've got an index fund there, so it's very diversified. It's not risky like a single stock, but you're still in the process. When you go to close on that house, that market could take a dip, and your stomach will go with it. Yeah. And then I always hear you guys mention an emergency fund.

1:32:54What is the appropriate timeline? I know everyone kind of varies between three and six months. Now with us being combined finances, does that still look at like a higher price point? No, it's still. How do you guys measure that?

1:33:12George Kamel:So you take your combined household income, okay? And now you're going to take three to six months of that. So it's just simple math. Divide your total income by 12 and let's get a three-month number, a four-month number, a five-month number, and a six-month number. And then it comes down to your discretion. We just give you a ballpark between the three to six months, three months of your income being a minimum. So if you make five grand a month, your expenses are five grand a month, six months of that would be 30 grand. So that should be your goal. And that comes before you save up for a down payment and before you invest.

1:33:45George Kamel:So get that done ASAP if you don't have it already. then get back to it. Well, thank you guys. I appreciate your time. Enjoy the rest of your day. Hey, congrats. I'm going to send you Financial Peace University as a little newlywed gift from Ken and I. Is that okay, Ken? I don't want to put you on the spot. Are you willing? I am very willing. Very willing. I want to see a young couple win and this guy's got a good head on his shoulders. Very smart man. I can tell based on the conversation. Just need a little bit of guidance to go, okay, what's the next step? What's the next step? You're asking the right questions, Diego.

1:34:14George Kamel:Wishing you guys the best.

1:34:35George Kamel:Hey, George Camel here. So you're thinking about buying or selling your home. It's exciting, but there's a lot to think about, and all those decisions can feel overwhelming. Well, here's the good news. You don't have to tackle the process alone. Ramsey's Real Estate Homebase is the place to find all of your free tools and resources for help to get prepared to buy or sell your home with confidence. You'll find calculators, start to finish guides, a podcast, and even an in-depth video course hosted by yours truly. What's not to love? So if you're ready to take the next steps toward your home goals, go to RamseySolutions.com slash real estate.

1:35:07George Kamel:That's RamseySolutions.com slash real estate.

1:35:20So

1:35:30George Kamel:buying or selling your home is a big deal and you want an expert in your corner fighting for you to find the best deal for the right price. And the Ramsey Trusted program is the only way to find a top agent you can trust who will help make your home a blessing, not a burden, and make sure that you do it the Ramsey way. It's easy. You compare agent profiles, interview them, and choose the one you want to work with. Find a local Ramsey-trusted real estate pro for free at ramseysolutions.com slash agent, or click the link in the description if you're listening on YouTube or podcast. Nick is in Pittsburgh, Pennsylvania.

1:36:01George Kamel:What's going on, Nick? So I am about$30 ,000 in debt right now on a pickup truck. And then in addition to that, I currently owe about$15 ,000 to an attorney for ongoing litigation that I'm going through right now. And I just am curious, how do I balance paying my attorney with trying to snowball the pickup truck? Tell us more about this ongoing. That's the part that concerns me, ongoing litigation. What's happening? Well, it pertains to custody of my son. Me and his mother split up. And she is currently going through active addiction. So it's not something I'm willing to compromise on. I need to have them.

1:36:54And that's it.

1:36:55George Kamel:Yeah, we've taken a lot of these calls. And what I have learned is sometimes these things go on and on and on. Is there any sense of how much longer this is going to play out? um well i so we have a hearing coming up i think in october and it's they're they're ready to put a final order in on it and because it's just drug on for far longer than it should have so you feel pretty good that october is going to be there's a finish line here the finish line no more attorney's fees yes okay is there one other question on this is there any uh is there any sense or a way of knowing how much more you'll have to pay your lawyer in between now and October?

1:37:44Well, if nothing pops up, then it should be minimal.

1:37:50George Kamel:That's what I was wondering. Okay. If something does pop up, then we have to go back to motions court, and that's where it gets expensive. Okay. All right. Thank you for giving us that. That helps us a little bit. So you currently owe the attorney$15 ,000? yes okay what is the current conversation been about payment and when you're going to pay that um like are you just racking up a bill that eventually they're like hey this euro this is all owed up front now well it's they've been letting me pay as i can as i go along um but it's it's just getting to the point where um i'm looking at those years on the end and getting a little nervous and it's now they're doing the work it's it's only right that i pay them for the work But it sounds like you, how much are you paying them currently if you're$15 ,000 in debt?

1:38:40Well, I was paying about$2 ,000 a month. And then back in February, I wrecked my last truck. I had no choice but to go out and finance one because I had burned through my savings paying the attorney off. And it's just... Well, let's make it clear. You had a choice. Nice.

1:39:01George Kamel:You could have chosen a$5 ,000 pickup truck. You chose a$30 ,000 truck. That's correct. Okay. I just want to make our language clear because I think that's what partially has gotten into some of this mess. What's your income? I was right around$100 ,000 last year. And for how long were you paying$2 ,000 a month? Because that tells me, well, I'm sorry, how long were you paying$2 ,000 a month? And then were you pulling that out of savings or was that a part of your normal income and you were cash flowing the 2000? I had about$10 ,000 in savings. I burned through that and I was cash flowing the rest.

1:39:42George Kamel:So, OK, so how much could you pay a month after you've paid all of your bills? What is your margin to be able to put towards all of this debt together? uh after after i pay all my bills

1:40:01to pay the attorney just to pay the attorney just what's left over no i'm saying what's

1:40:05George Kamel:left over your minimum payments your truck payment and you pay your bills your food utility shelter transportation insurance what's left at the end of the month or what should be left? Between$2 ,500 to$3 ,000, depending on the overtime I work. Okay, so$2 ,500 to$3 ,000. So let's operate George off that lower number. So that's enough to cash flow the rest of the attorney fees, correct? Yes. Okay, so let's focus on that. You're in a storm right now, and so you don't need to be aggressively trying to pay off debt. We just need to avoid getting into more of it well is there any other debt besides the truck no no i had uh i've never really all right let's okay let's look at the truck really quick that's all you just recently bought the truck yes about six months but five six months ago all right give us the give us uh we know you owe 32 on it what could you sell it for

1:41:05i'd have to run blue book on it but i'd imagine 32 maybe okay close to what you paid for it

1:41:10George Kamel:george i'm wondering if because what's that car what's that truck payment every month about 800 right now that's a raise my friend that's a that's almost a ten thousand dollar raised. George, I'm wondering, do we not cash flow a$5 ,000 or$6 ,000 SUV or truck, just something, to get the pay raise immediately of that truck payment back, and we wipe$32 ,000 off the books, and now he cash flows that$15 ,000 pretty darn fast. He's also a pretty able guy, probably could do some side hustle work. That's what I'm prescribing. I like this plan. If you can work it out with the attorneys to have this paid later, I don't know what the current process is for payment, but if you can pay what you need to for the attorneys right now, and then anything above that, put in savings so that you can cash flow a car, then we can get out from under this truck.

1:42:07Okay.

1:42:07George Kamel:Because that's killing you right now. What do you need a$30 ,000 truck for right now?

1:42:14I don't really need a$30 ,000 truck. The last truck, I got tired of going to the parts store every week and spending$300.

1:42:21George Kamel:I get it. But you look at the big picture. I'd rather deal with the nuisance of putting duct tape, if you will. I'm using that as a metaphor on a car that we're not chucking$800 a month out. Because listen, let's just fast forward for a moment. I want you to picture having no debt, not owing your lawyer anything. Hopefully your son, full custody. Hopefully all that works out. and you have no debt, no truck payment, and no lawyer fee hanging over your head, and you're making really good income, I want you to fast forward to that moment. How's that look to you?

1:43:00I'd say it looks like sitting on cloud nine.

1:43:03George Kamel:Well, then you'd have like four grand a month cleared up. I mean, you would have so much cash flow and margin. A lot of cash flow margin. That's the play, man. Listen, here's why. I would say George and I would give this advice to anybody who called, but for a guy who's in a fight with his ex, who's dealing with substance issues, and this is over your son in custody, man, that I can't even. The stakes have never been higher. I can't even try to put myself in your shoes. But I do know that it is really hard on you mentally and emotionally, just that situation alone. And and and the debt on top of it.

1:43:40George Kamel:And so here's the deal. life already sucks for you, doesn't it? Yeah, it does. So here's my point. Let's go ahead and embrace the suck and knock out the debt. And so when we hopefully clear this relationship hurdle, now we're also debt free pretty shortly thereafter. I just think now's the time to bite the bullet here. Yeah. Think about that. I mean, you get rid of that car payment. All that's left is the 15K. You start chunking three grand a month toward it. You're done in five months with those attorney fees. You're completely debt free. So think it, your life's going to look very different six months from now.

1:44:16George Kamel:And so it's hard to see the forest from the trees right now when you're in the thick of it. But man, I see a very different future for you just in the early part of 2026. And Nick, I would tell your lawyer, this sounds like your lawyer is a good person and already working with you. If you were to describe what your plan is, as George and I've laid it out, I think that's going to take some pressure off of you as well because they're going to go, oh, dude good man uh i'm good i just think that'll help you as well because i understand the weight of that owing something to somebody who's helping you with the biggest thing in your life yeah man wishing you the best with this legal battle that is not fun but there there's hope on the other side for you my friend

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1:46:05George Kamel:The Ramsey Show question of the day is brought to you by Why Refi. If you're ready to stop drowning in private student loan debt, Why Refi throws you a rope. Talk to Why Refi to see if refinancing your defaulted loans with a low fixed rate is an option for you. Visit whyrefi.com slash Ramsey. that's the letter y-r-e-f-y dot com slash ramsey may not be available in all states our question today is from marco in arkansas i'm in uh sorry i had to do it i like that didn't we just meet a family from texarkana arkansas we did in the lobby oh there they are right there very nice uh marco says i'm in baby step two with ten thousand dollars left to pay off i'm ready to go all in by working two full-time jobs until i get through baby step three i'm worried that my kids will be affected by dad not being around as much.

1:46:52George Kamel:Should I go through this to benefit us in the long run, or am I going to cause damage to my children and potentially my spouse, even though she's on board with my plan, I make about$100 ,000 at my current job? What? You're not going to damage your children. They probably aren't even old enough to know that you're around. It kind of goes like this. So I'm on the other end of the spectrum of George, Georgia's just getting started. And I'm, you know, like I see empty nesting. It's in your near future. It's there. It's another millennia for me. And boy, oh boy, am I excited about it. I love my kids, but I got to tell you, it looks nice.

1:47:35George Kamel:Anyway, point is, is that I feel like there's a season where the kids, they have no concept of time. You know what I mean? They're babies, so they don't even know what's going on. Then they're toddlers, can't appreciate what's going on. Then they're like elementary. They're fine. You know, they're fine. And then you've got this like maybe second, third grade. They start being aware mom and dad aren't around, whatever. And then they become middle schoolers and you don't want to be around them. And then they become teenagers and they don't want to be around you. So I just want to give some perspective here as a guy who's in this.

1:48:13George Kamel:Marco, you're going to be fine. It is definitely, if they got to see a little bit less a dad for a season, as long as they understand why to the ability that they can understand. If they can't understand it, it doesn't matter. If they can, I think they're really going to appreciate it. They'll get it. And everything's going to be okay. Yeah. And based on his language here, he's saying, I'm ready to go all in. It sounds like this has been stressing him out and he's wanting to get rid of it fast. And here's the thing. A stressed dad, a stressed mom is not a present dad. Yeah, the kids feel that.

1:48:44George Kamel:They feel it. And so I'd rather you not be around them if you're like a live wire because you're so stressed out about your money. I'd rather you be at work working to clean this mess up. And the other thing is the math ain't math information. You got 10 grand to pay off. You make 100 grand at your current job without the two full time. Why is it going to take you so long that you think you're going to cause trauma to your kids? Are you going to be doing this for three years? I think you could clean it up with the current income if you just got your expenses down. You can get out of 10 grand of debt and save up another 25 pretty quickly making six figures.

1:49:15George Kamel:So I don't know that your plan is necessary. I would like to see what we can do on the expenses side before we go to up the income. But either way, if this is a short period, like six months to go hard at this, your kids will be like, wait, what happened when I was two? I don't have any recollection. Not ringing a bell. So I wouldn't worry about it. But way to go, Marco, for being willing to go all in and having a spouse that's on board. That's a good sign. Sarah is in Boston. Up next, what's going on, Sarah? Hi, George. Hi, Ken. Thank you so much for taking my call. Sure. So, sadly, last month my mother-in-law passed away, and she left—thank you, thank you—she left two paid-off properties to my husband and his two sisters, and the siblings have agreed to sell the primary residence.

1:50:03but my husband wants to keep the other home. It's a small cottage on Cape Cod, and he plans to use his share of the primary home sale to buy out his sisters. Cool. So, yeah, but my dilemma is, you know, emotionally my heart and my husband want to keep this Cape house, but my logical side says that we should probably sell both properties to pay off our mortgage faster and then become completely debt-free. What is faster? I really just wanted to get your advice.

1:50:38George Kamel:Yeah, thanks for the call. So, faster. Give us a real specific idea here. In other words, if you don't sell these homes and put it all on your mortgage, when do you anticipate paying off your primary home? So, we only bought it about two years ago. So we're looking at another 13 years or so, hopefully quicker. That's if you put nothing extra toward the principal, though. Right. Yes, exactly. What's your income? We make around$310 ,000 a year. What's on the mortgage? What's left? $560 ,000. Okay. So I'm trying to find a compromise here, and I think I have one. What if we keep the cottage, but we agree to a plan to then pay off this home more aggressively?

1:51:30I'm surprised by that plan, but I think that sounds good.

1:51:35George Kamel:Why are you surprised? I thought we were going to be told to sell everything and pay off our primary. Well, you're not in any kind of dire situation. You're not broke. We're not. You make$300 ,000. You guys are killing it. This is really an inheritance that he's just sort of rearranging. And here's the, I love, George and I, of course, this is all live. I didn't know what he was going to say. Usually I disagree with Ken and I'm the more aggressive one. And I'm actually pretty relaxed now. I couldn't agree more with George. I want to be in this cottage in Cape Cod. I do too. That was the first thing.

1:52:10George Kamel:A cottage in Cape Cod doesn't come along very often was A. A, B, you told us that both you and your husband's hearts were in the cottage. You were like, we love it. And that was B for me. That was like, oh, there's the one-two punch. And then when I got the rest of the story, again, we always try to give advice on what would we do if we were in your shoes. And that's what I would do. I would keep this cottage and have fun with it, make memories. It's an asset. I love the idea of him buying out his siblings. I think that's great. You're cash flowing that. I just don't see any reason to not take this opportunity.

1:52:55George Kamel:What's your mortgage payment every month? It's around$4 ,000. Okay, so making$310 ,000, amazing income. Could we throw another$4 ,000 or$5 ,000 a month at this moment? Could we just double it? we we could definitely take a look and get there i think if we looked at the budget and sit down with your husband and go okay here's the deal i called the ramsey show here's what they said we get to keep the cottage but we pay off this house in six years yeah i think he would be completely on board you can be thrilled i'm gonna throw a possibility that again i wouldn't do so i want to say that i wouldn't do this and you'll understand but you could do it you guys could If you own that cottage free and clear now, you're not going to be up there vacationing all the time.

1:53:40George Kamel:You could rent that and take that income and put it into the primary home and really speed this up. In other words, let's say this is way low, but let's say you cleared$50 ,000 on that cottage from renting it. And you put that towards your primary home just in one year. I mean, that's a pretty big chunk. I would consider that. I don't think you have to do it. We have considered that. Yeah, we've considered renting because realistically we'll probably only be there three to four weeks. Again, it's something I would want to keep it as mine, and I don't want people ruining my rental. But if you guys feel good about it, you're not violating any principles, and it could be a wise thing to do if you can make money off of it.

1:54:21George Kamel:And it's paid for, so you're not trying to arbitrage and, well, they're paying the mortgage for us. You're covering the expenses just fine. The only other thing I would add to that is George and I would like the option of having a friends and family discount on said cottage. yes we have done that in the past there was a lot of hesitation there for the camel coleman i think she thought i was serious i was kidding i would never do that i'm just a joke it was a bad yeah we're not gonna pay full price invited anytime come on down no i love it i love this plan and i think i do too go use our mortgage payoff calculator at ramsey solutions.com and start to have some fun and dream with your husband and go okay if we did an extra four grand a month we doubled the payment we could pay it off in like six years and likely what happens is you paid off in four or five because you guys are so focused with one singular goal.

1:55:09George Kamel:And I think that's the key here. You be in agreement about every single decision. I love this. And find some compromise. That's okay. Your husband's going to be thrilled. I'd get him some turtlenecks, maybe some chowder. You know, how do you say it, George? That was pretty close. Not bad. Yeah. I mean, Sarah doesn't have a thick Boston accent. So I feel like you're at least thicker than hers. Oh, good. I do like a thick chowder, though. I do too. I do too. Thank you, Sarah. Wicked good call. This is The Ramsey Show.

1:56:07George Kamel:Our scripture of the day, Ephesians 2, verses 4 and 5. But because of his great love for us, God, who is rich in mercy, made us alive with Christ even when we were dead in transgressions. It is by grace you have been saved. Jordan Peterson said, It is my firm belief that the best way to fix the world, a handyman's dream if there ever was one, is to fix yourself. There we go. Classic Jordan Peterson. He interrupted himself in the middle of that. It's a handyman's dream. It's a beautiful mind in there. Yeah. You know? I tend to do the same, Ken. We're on the same level of genius. It's interesting that anytime I see anything on social media of you or Jordan Peterson, I think of the other.

1:56:50George Kamel:Thank you. Yeah. It's a symbiotic relationship. I mean, you are an intellectual heavyweight. What can I say? You're no paperweight. My rabbit trails are next level. It's genius. It's not a waste of time at all. Oh, I feel like this is going to be a very interesting call coming up. I'm nervous. Let's get to it. Rebecca is in Portland, Maine. How can we help Rebecca? Hi, thank you for taking my call. So my boyfriend and I have been together for 11 years, living together for six. I do live with him in his home that he owns. He no longer has a mortgage payment. When we moved in together, we did open a joint account and we just picked a random number that we would each put into the account each week that basically just covers utilities, the taxes on the house.

1:57:46What kind of sick game is this?

1:57:47George Kamel:You choose a random number? What is this, Powerball? I know. Hold on a second. It can't be random if it is designed to cover utilities. So we agreed each to put$350 a week. So$700 goes into the account each week. That covers the cost of all of the utilities, the taxes on the house, our groceries come out of that. And then, you know, if we go out to eat, we pay for it out of that account. But we have our own separate accounts that we pay for vehicle payments, insurance, cell phones, stuff like that. Okay. So what's your question? So my question is, recently, my boyfriend would like to make some upgrades to his house, replacing all of the windows.

1:58:40There's a retaining wall that he would like replaced. and he feels that I should pay 50 with him. Wow. I've never heard.

1:58:54George Kamel:He wants you to pay 50 % of this? I'm sorry? He wants you to pay 50 % of those expenses? Correct. And he owns the house free and clear? Correct. This is the weirdest relationship I think I've heard about in quite some time. So let me rephrase this. My landlord wants me to pay for his home upgrades and renovations. 100%. And oh, by the way, we got a little something working on the side. This is like a friends with benefits gone awry. Yeah, this guy hates commitment until it benefits him financially. Yeah. Thank you. Well, let me ask you a question. Because we're on Team Rebecca. Because this is you called.

1:59:34George Kamel:So we start out on your team. You guys have been together. did you say 11 years and you've lived together for six correct okay so why isn't he putting a ring on your finger what is going on here um so he actually did propose to me um six years ago and you said I did say yes but it really has not gone further than that wait so are you engaged yes we did have a couple little bumps in the road so it just kind of because you said boyfriend which tells me it's not a fiance I agree the language matters here I think there's a statute of limitations on this I'm not sure either of you see each other as marriage material.

2:00:34George Kamel:It sounds like this is an okay roommate situation at best. Do you want to marry this guy?

2:00:45George Kamel:Oh, boy. If there was that level of hesitation with my wife, I'd be sleeping on the couch. You do not have to say another word. We already got our answer. Are you wearing the ring? I am not. Okay. So there's a sunk cost fallacy, if I had to guess. Wow. You've been together 11 years. It's what you know, and it's just easier to do life with this person than to break free. Is that correct for both of you, probably? Yeah, that sounds pretty accurate. Okay. Also, I think the conversation changes. So let's answer your initial question. No, you can tell this guy to pound rocks. You guys have had some fights before.

2:01:22George Kamel:This is a relationship that has zero future unless something dramatic changes. That's what I've heard. and tell him i'm not going to put money into a house that i don't own yeah it's that simple i agree what is your share of equity in this home that you've built together and done renovations and repairs on it's zero yeah yeah if he gets pissed off and and kicks you out tonight you're in trouble as far as place to live my honestly i'm more concerned about if something happens to him. If something happens to him, I have nowhere to go. I mean, what do you mean if something happens? Yeah, this is turning into a lifetime movie.

2:02:07George Kamel:Should we have the ominous music playing right now? Well, I mean, I'm 46. He's 50. I mean, I just, I'm thinking about my future. and if something happens, whether it be, you know, we break up, I, yeah, I mean, I'm 46. I would like to have, you know. What are you wanting out of life? Do you want to be financially independent? Absolutely, yeah. Are you, do you have any debt? Just a car payment. Okay. What is your income and what do you do? I am a dental hygienist. Great. And last year I made$76 ,000. Okay. The year prior to that, it was$72 ,000. So you could move out today and get a place on your own just fine?

2:03:00George Kamel:Yes. Okay. All right. Now, you do not have to answer this, but I think you're ready to answer it because we've already asked you, do you want to be with this guy? And it was like crickets. Okay. so what is keeping you from breaking up with him or at least just moving out uh you know what never mind i i think i know what the answer to that is let me ask a different question

2:03:28George Kamel:um if he broke up with you today and said we're done how would you feel about that

2:03:40um be honest i so i think that i do have a little bit of a dependency um you know we've

2:03:47George Kamel:been living together for a long time i know i want you to tell me the real answer to that question i know why i changed my question and you thought about it for a second which tells me i've done this a long time you had an answer you just don't want to give it to me so then you went into politician mode. I want you to answer the question as you just answered it in your head. If he broke up with you tonight, what would be your real emotion? And if it's two or three emotions, just lay it out there. I'm going somewhere with this. So hit me. What would it be? I would be afraid. What else?

2:04:26Overwhelmed.

2:04:27George Kamel:Good. What else?

2:04:32George Kamel:be honest after we got through that the initial fee would be afraid we talked about that dependency you've been with this guy a long time but what would be the other emotion that would be after that you

2:04:51George Kamel:Say it. We know you know. Say it. Just say it really quick. We got to go. Say it. What is it? I mean... I think you'd be relieved and I think you're afraid to say it. You would feel free. There it is. You would feel free. You would feel this weight lifted off of you to go, yes, I'm scared of the future and I'm overwhelmed, but good gosh, this feels good. and I'm not trying to break this relationship up but I think you gotta listen to your heart and you need to get out on your own if this guy woke up and smelled the coffee and changed towards you maybe there's a future but I think you gotta move out go all on your own I'm not saying he's a terrible person and you're a gem of a human I'm just saying I think we've run its course with this relationship and it might be time to part ways as hard as it may be this is the Ramsey Show

2:06:00George Kamel:What if you could watch The Ramsey Show before anyone else? Well, good news. Now you can. For the first time ever, you can stream the show a day early in the Ramsey Network app. That's tomorrow's episode, today. Real calls, real answers, real fast. It's free, it's easy, and the content might just change your life. So search Ramsey Network in Google Play or the App Store, or click the link in the show notes. You never know what calls coming up next.