Discipline Today Can Rewrite Your Financial Future

28:34Another aspect of the baby steps. If you told him that, what would he say? So we've had that conversation before and he's like, absolutely not. Okay. So Sydney, I hate to say it. And we don't have a lot of time. So I just feel like I got to like, get it, say it to you. I think you guys have way of a bigger issue happening of being on the same page financially than a whole life insurance policy. And I wish that was just it. But as we start peeling back on this, you guys aren't on the same page. And it's it's I don't want to say it's impossible. It's just it'll take a long time hard for you to be the one, Sidney, that pulls him through this process and that to make progress.

29:15and so you guys need to sit down tonight and you need to tell him, Sydney, how you're feeling and what's going on inside of you because it's not just a whole life policy that would feel good if he just cashed that out. That's great. There's more to it. You have$180 ,000 in debt. That's terrifying. Is that scary? Oh, yeah. Yes. Okay, so talk about that, Sydney. Talk about what you're feeling, the sleep that you're not able to get because you're stressed, you're scared if something happens to you. Do you guys have kids? We do. We have. She's almost two. Okay. Yes. And so I'm like, the weight of this whole issue of just your entire financial picture is weighing on you.

29:58And you're trying, which I applaud you, to make a little progress here and there. But it's not going to do much, Sydney. It really won't. Unless you guys sit down together and say, hey, we are in a marriage and we've committed our lives to be a team together. and we're going to tackle every area of life together. In-law issues, parenting issues, and our money issues. And we're going to be a team. The money is the problem. The debt out there is the problem. You're not the problem, looking at him. And Sydney, you're not the problem. How do we tackle this together? And you're really not going to make a ton of progress, Sydney, until that happens.

30:33And I would push and fight for that, for you to be heard and in what you're wanting, because it does not sound like he's going to do much in this process.

31:01Well, Dave, you know, on the show all the time we get calls about cars, used cars. What's one thing you want folks to know? Well, really a couple things. Number one is always buy used unless you've got a million dollars. We don't buy new cars. And if you're going to buy used, number two, you want it to last. And that means regular, proper maintenance. Yeah, that's a big deal. I know when Sam and I moved from South Florida up to Tennessee, that's the first thing you're looking for. You need somebody who can take care of your car. So when we found Christian Brothers Automotive, it was a no-brainer, and they've been absolutely great.

31:29We're excited to recognize Christian Brothers as the official auto repair partner of The Ramsey Show. Christian Brothers keeps things simple, honest, and transparent. Every repair is backed by their nationwide nice difference warranty. Three years or 36 ,000 miles, whichever helps you more. Listen, Dave, I'm first to admit I'm not into cars like you are. But the thing about Christian Brothers is I feel just as confident going in there. They're not trying to upsell me. I feel 100 % confident that I'm going to get the service that I need. Hey, if you want your car to last and stay on track with the Baby Steps, trust Christian Brothers.

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32:29well tax season is upon us to get free checklists and guides that'll help you file be sure to go to ramsey solutions.com slash taxes all right caleb from indianapolis indiana is on the line. Hey, Caleb. Hi there. Me and my wife are on baby step four, debt free, and are looking at buying a house. And we're having a disagreement about how much we should have as a down payment. Oh, well, congratulations for getting so far. Well done. I'm paying off debt and getting ready to buy a house. That's exciting. What are you looking to spend? So we have about 90 grand sitting in a mutual fund and a good starter house in the area is around$150 ,000.

33:10What she wants to do is spend$50 ,000. No, she wants to leave$50 ,000 in the mutual fund and probably would have$30 ,000 as a down payment and$10 ,000 for closing cost. I want to use the full amount so we can have an$80 ,000 down payment. If we do it her way, we're following your guys' rule that payments would be around 25 % of our combined income on a 15-year fixed. The reason I'm wanting to do the full 80 grand is so that in the future, we at least have the opportunity to live off a single income. And I feel like that would make it easier for a baby set six. Okay, I see what you're saying. So you're wanting to put 80.

33:50She's wanting to put a total of 50. Did I understand that? She wants to leave 50 in. So it'd be 30 grand as a down payment with 10 grand for closing costs and fees and all that. So me looking at this right quickly, your way, the payment's around$972 ,000. Her way, it's around$1 ,400 ,000? I believe so, yeah. Okay. And your thought is we can go to a one-income household later on if we so choose? Or at least to have the opportunity of that. We don't have any kids yet, but we're wanting to start trying within the next couple of years. Caleb, what is she wanting to do with the$50 ,000 in the mutual fund?

34:26She wants to leave it. What is that for her? She does want to leave it. She views the mutual fund as more of an investment. It feels like it would grow more there than it would in the house. She's very frugal and a large purchase is just uncomfortable for her. There's like an extra safety net for her in a way to have that available. Okay. I actually, I'm with you, Caleb. I think that that I would rather do that. I think there's more security. Once you have a home, it becomes the number one thing that you want to protect if you ever hit hard times. And so I kind of like the idea of saying, Hey, if we do this, our mortgage will be so low that even if only one of us were working, it would be okay.

35:09And that feels way more secure in my mind than having some money floating. Yeah. Money just floating. How much do you guys make a year, Caleb? Combined around 80 grand. I just got a promotion. Okay, great. How old are y 'all? I'm 26 and she's 22. Oh, wow. You guys are young. Y 'all are so young. Okay. I always hate giving like a gray answer because I know people want like a black and white. Like Jade said she would do your way. I would probably say I would lean your way to Caleb. Like if someone, we just got this question on money and marriage. They were gifted a big inheritance and they're like, should we just throw it all at the house or should we use some for investing?

35:48And we're like, yeah, just attack the house. Cause you have all the time in the world to invest. Yes. You know, every single year you guys can open up a Roth, you can fund your Roth with work, you know, while you're working and you will, you will be fine at retirement. So my caveats, my caveats are you sound very buttoned up, Caleb. You sound like you love running your Excel sheet and your numbers. And sometimes when we're so in the numbers and so in a formula, we forget about life. And I'm just curious if she sees like we're going to have to replace a car soon. Like we're going to have to do a couple of big purchases and having the cash available to help us do those things smoothly would be wise, right?

36:27Like, I don't know if that's the case, but if that's something that's in her head, that's good to know. Either way, either option, you guys are going to be fine, Caleb. I mean, I really do believe that. I think that you guys, you could follow the yep the five percent twenty percent down and be fine you could throw way more at close to 50 percent of it and be fine um but at the end of the day I would probably choose team Caleb um just because I like having a lower payment and you guys just have so much time on your side to save and invest and that and it does free up uh for you know 450 a month yeah almost 500 bucks way more quickly so that if there was something like a vehicle or all of those things that it would be nice to have a chunk of cash for you could do it yeah that's right really quickly that's right yep or maybe you'll meet in the middle too caleb you know leave i don't know 25 in or something i don't know leave a little bit in just for her to have a little bit of that security if she wants so yeah y 'all could meet in the middle and be great um but either side i think you you'll be fine i mean you guys are so young and you're so on target that i'm like i think you guys for sure you're gonna be fine so final ruling there's no wrong answer but if we if we were forced to decide we go with the lower the lower payment therefore higher down payment yep yep that's it all right i love it thanks for the final answer final answer all right we've got katie who's in billings montana hey katie how are you hi i'm good how are you excellent how can we help today?

38:01Great. So I am so confused when it comes to the world of investing. My husband and I were not in debt, thankfully, and we have been able to save up about$500 ,000 in the bank. Wow. Well done. I contribute, I contribute$500 monthly into a Roth. My husband does not have one. and the investing I guess you could say that we do is just in CDs in the bank at 3.75 % and we have about 200 ,000 in that but other than that that's it because it feels safer to me and is that foolish? Well let me make sure I understood this right I thought you said you had 500 ,000 in the bank but then you said 200 ,000 in CDs so some of it's just sitting freely and some of it's in the CDs or is that in addition to some of it's just in savings accounts yeah okay wow why are you guys averse to investing what happened that made you feel squeamish I guess nothing happened um it just it's foreign to us yeah yeah and what you don't know can be scary and when it exactly and when it comes to retirement like I said I do put 500 500 a month um from my paycheck into a Roth account for myself.

39:24But you don't see that money until I'm close to 60 years old. And I sure a CD seems a little bit safer because it's a six month, 12 month return. Yeah. Katie, how old are you guys? I'm 31 and my husband's 37. Okay. So just to do a little calculation for you. Oh my gosh. Are you ready for this? This is going to probably make you sick. I'm ready for it. Okay, so I just put really quickly in, if you just dropped$500 ,000 in the market, right, and average, I put 12 % rate of return. Some people get mad at that. I'm going to just do it for fun because it was way more than that the past couple years.

40:00Yeah, that's fair. There's some down years, but the past couple years have been fantastic. So I'm going to put 12 % average. It's actually been more than that, but I'm going to just leave that. And if you did that right now at 31, by the time you're 67, if you just let this money grow, you would have$36 million. Wow. So if you kept it in now, if you kept it in the CD, which is averaging 1.7 % interest right now, I'm going to bump it up to two because I'm feeling gracious to the CDs. You'd have 1 million. You'd have 1 million. Sure. So you're leaving$35 million on the table, Katie. so what we have to realize is we need to understand this intimidating part of money which is investing and I get that there's a lot of people use diversification index funds S &P 500 you know you're like what is what is all like yeah what does this all mean um so I would because you guys have done so well I mean it's crazy it's yeah crazy that you've saved this much I mean this is it's amazing you guys are incredible at 31 years old I would sit down with a smart investor pro in your area.

41:08When we get off the phone, Christian will pick up and he can kind of direct you on the website where to go. But I would meet, Katie, meet with two or three SmartVestor pros in your area. And I want you to get, number one, a feeling from them. And these have all been vetted, so these are great people, but you're going to naturally connect and feel more comfortable probably with one or two over another. And that's really important in this process, because anyone that's going to help you kind of push the buttons in investing, you want to feel really, really good about. And I would ask every question that you can think of.

41:45Don't feel like, oh my gosh, I feel stupid asking this. I should know. None of that. And actually start to get the basics and learn what does this mean? What does it look like if I invest in an index fund or a mutual fund? What types of funds are out there? I mean, there's so much you could be doing with this money to make you money. that's, it may kind of feel risky, but at the same time, compared to what you would make on the other end. Absolutely. I think it's worth the risk. That's not really even there. The ups and downs are real, but the overall picture is pretty bright. So that's what I would do, Katie.

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43:35welcome back to the ramsey show in the fair winds credit union studio it's still me jay warshaw with rachel cruise going straight to the phone lines where we got jeff in atlantic city new jersey hi jeff hey rachel jade how are you an honor to be on the show awesome we're glad to have you i discovered uh the ramsey about the ramsey show about six months ago and i've been following a lot of your principles and uh just have a question got a question for you okay so i'm 37 next month my wife is 31 and we have been putting away money investing in retirement investing in you know future growth for ourselves to live comfortably later on and we in our community the children live next to the parents relatively close next to the parents and we have bought three residential single-family residential homes for our children to be able to live next to us we got three girls yeah we bought three homes for us we want that we want our girls to live next to us so we bought the three residential homes so they can live a relatively walking distance to us okay how old are the girls so the girls are eight six and four wow you got started early with the purchases i mean yeah yeah yeah we definitely wanted to start early and um We got great interest rates.

44:57We bought it when the COVID rates were around in the twos and in the threes. So right now we got tenants there that covered the rent until it's time to give it to them when we feel the time is right. And my question goes like this. My wife and I have had some hard discussions about these homes, and we've came to the conclusion that most likely the kids will not want to live because the area is changing, and most likely the kids will not live next to us. Sure, yeah. So what happens is we find ourselves in an interesting position. Right now we have tenants that cover the mortgage, and we have a little bit of extra every month, like$2 ,200 extra from the three homes every month.

45:38And we've been doubting ourselves that this is the right path going forward because we are thinking to cash out these three homes, sell them, cash out$1.65 million from, you know, basically what the down payments we put in. Yeah, what you get out of equity, out of the three. The equity is 1.65. Take this 1.65 minus the taxes we would have to pay on that, which is about, let's say, we'll end up with like 1.3 or something like that. Okay, yeah. And put the 1.3 into an S &P merit fund where, let's say, 20 years down the line. I love this. That grows to a huge number. Yes. And then if they want to live in X, Y, Z area, okay, here's a million dollars, go buy the house.

46:23Genius. A genius move. No, so my question is, is that the right move or should I just let the house keep on being paid off by tenants?

46:34Do you guys own your house, Jeff, you and your wife, or do you still have a mortgage on it? No, we actually have a 2 % rate. Yeah, we own our house straight up. We actually have like 1.3 equity in our own home. Okay. And you don't owe anything on it? No, we do. It's worth about... What do you owe on it currently today? $368. $368, but it's worth 1.3? No, no. It's worth about 1.8. Holy smokes. Way to go. Maybe 1.9 even. You know what I would do? If you're offloading the three houses for the kids, I'd take a little of that money. If you said the whole thing, you'll walk away with 1.3, I'd probably take some of that and I'd pay off your house in full and then I'd invest the other million.

47:20And then invest your mortgage payment back into this fund for the girls. Even though, now I've been listening to Ramsey, I know you guys say you pay off that mortgage no matter what. So my question is, I got a 2 % rate with 15 years exactly to go. Even though it's 2%, pay that off? Yes, because you're the guy who would take the full mortgage payment that you were paying and you'll invest it in that. You'll invest it. I can tell that you would do it. You'd rather make 12 % than 2%, you know? Right, right. I hear that. I hear that. Yeah, and Jeff, too. But my question is, would you sell the three homes?

47:54That's my question. Yes, I would. You would? I would, only because the reason that you said you purchased them was for your kids to live in them so that they could be close to you. That was the number one reason. And that's the only reason I heard, by the way. And so much life. And when you told me they're ages four, six and eight, so much can happen in that time. Number one, like you said, the neighborhood can go down. Number two, they're three different women who will have three different lives that could go in any direction. I would never want this for you, Jeff, because I know how much you love him.

48:25But she may meet a Mike and end up moving with her husband. You know what I mean? Somewhere. Or you get a different job and you want to move. Like there's so much life that can happen over the course of the next 18 years or so. And so for that reason, I think you'd probably get a better bang for your buck and have more freedom with the type of investment that you were talking about. and when you told us the spreads on the rent it wasn't all that great yeah either right no like like no we don't end up making money at the end of the year because yeah here in hvac breaks and break even and totally your principles going down yes okay so i have clarity on that i have one more question i'm sorry i'll make it quick no go ahead what is the right so again i'm 37 next month my wife is 31, 32 next month.

49:15So what is the right age to write a will? Today. Really? Yeah, today, because you've got, especially because you've got minor kids and there's a big part of the will that's going to decide what would happen to those kids if God forbid something happened to you and your wife. If you don't make a will today, the courts will decide that. And that is for that reason alone, there's many other reasons, but for that reason alone, I would be sitting with a lawyer today. It's a mess. Yeah. Jeff, one of the Ramsey person I host the show, George Camel, he has my favorite line. He's like, if you hate your family, don't do a will.

49:49Because it's so, it creates what would be a horrible situation. Your whole family trying to untangle, you know, your whole life and from the financial sense and try to figure out what is happening financially, what's happening with the girls. I mean, it's just, it can create so much stress, but when it's all laid out in a will, if you go to Mama Bear legal forms, Jeff, you can do a state-specific will with them. Your estate might be a little bit more complicated once you guys get into it because you own multiple properties and different things. So you may actually want to sit down with an estate attorney just to draft one up.

50:24But yes, I would do a will today. And I just want to applaud you, Jeff. This is such a success story, like what you and your wife have done, because we talk about changing your family tree. And that's in the way you view money, the way you handle money, the role that money plays. And when you're deeply in debt and you're living paycheck to paycheck and life is so stressful with money, that's the environment your kids grow up in. But you guys, Jeff, have made such great decisions. Your girls not only are in an environment that's peaceful when it comes to money, but you're also going to literally live out changing their family tree.

50:59Like if you bought your girls a home and they never had a mortgage and then they invested that mortgage payment for the rest of their life and then their kids, that's generational wealth working for the good. Do you know what I mean? Right. I just want to add one comment that, first of all, I wish I would have found the Ramsey, the Ramsey show earlier, only found it six months ago. But I will say that I grew up in such tremendous poverty that, and I'm the oldest of the family, oldest of eight. I come from a family of eight. I was the oldest of eight living in true, I can't even tell you what kind of poverty I grew up in.

51:30So when I became an adult, it was, it was such a drive to really, really, really. And when I discovered the Ramsey show, I'm like, oh my gosh, the match made in heaven. They taught my language. I love that. I love that. Jeff, you guys are amazing. We're so proud of you. Yep. And your kids, they're going to be so much better for it. I can tell you're going to raise them to be able to actually be great stewards of this money and do exactly what you've done, which is continue that legacy for the family.

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53:56All right, let's head back to the phone lines where we have Chris, who's in Montana. Big Sky. What's going on, Chris? Hey, thanks for taking my call. You bet. So I make about$4 ,500 a month gross, conservatively. Monthly bills, including my car, around$3 ,200. And after a recent divorce, I live with my parents paying$400 a month while I kind of stabilize my financial life. um in that time i've lost over 180 pounds had a major skin removal surgery and i'm kind of getting back to a point where i'm feeling disciplined and focused but my biggest concern is my daughters so both of them have a genetic condition that's called dicer one syndrome my youngest is clean so far but my oldest has cysts in her lungs kidneys and brain oh i'm so sorry and we're happen to monitor that very closely.

54:50So I'm trying to find the balance where in the event of a very possible medical issue, I have a comfortable savings buffer beyond that base$1 ,000 emergency fund and where the balance is between how much should I have there just in case because we regularly go from Missoula to Seattle Children's Hospitals for the Girls, which is about eight hours each way. How often do you foresee going to, do they have them removed every once in a while? Is that how it works or what's that going to look like for you long-term medically? So right now it's just monitoring and making sure that they don't grow any more than they have.

55:31She's got one in her left kidney that has grown at a concerning rate. So they've got medical boards meeting on what's the best decision because I mean, you can operate with just one kidney, but if we take one out and the other one's already got an issue. Yeah. How much, Chris, on average, do you think you guys are spending a month on this? Or is it every like four to five months something comes up or every eight months? What's the calendar look like? It's about four times a year that we have to make this trip. And each trip is around probably$600 to$800. Okay. So you don't hit your deductible.

56:09It's just straight out of, everything comes straight out of pocket. So they are, so that's all travel expense and hotels. They're under Montana Medicaid. So they're taken care of by the state. Okay. So what I probably would do, because how much debt do you have? Including the car total sub 30 ,000. 30 ,000. Okay. And you're, I'm sorry, you're divorced? I am. Okay. Is your wife, that$600 to$800, is that split between you guys? Or is that what you're paying and then she's paying the same amount too? What does that look like? I generally fund it. I'm in a better financial position. And then she'll help with a hotel every other night kind of thing.

56:55Okay, I gotcha. Okay. So what I would probably do, because Jade and I are both moms, and I'm like, I would do anything for my kids. They're number one. And paying off debt's amazing, and we want you to be able to do that. But taking care of our kids and making sure that— First things first. Yes. Absolutely. So what I would probably do is have a different account that would be kind of like my—the girl's account, if you will. And I would make sure I have$800 in it. And then when you use it for a trip, I would pause the debt snowball, refill that, and then go back to the debt snowball. But I would have that$800 continuously in an account, even if that means pausing the debt snowball for a bit and throwing money at that to replenish that account.

57:40But that's the one I would keep consistent. And then if something changes, Chris, if you guys get a different diagnosis or you see she's going to have to have surgery and there's going to be more expenses either on the travel side or anything medical, that's when we would pause the baby. That's when we'd pause baby step two and build back up a bigger emergency fund. That's probably what I would do just because it seems consistent. But yeah. Tell me about the state paying for it. Is there an income that if you hit a certain income, the state will no longer pay? Yeah, I'm sure there is. And they go through their mom with that side of things.

58:18Okay. I was going to say is that on your side? Okay. So your income can go up as much as you want and it won't affect their care? Yeah. Then they still get consistent medical care with Montana. Okay, good. So on your end, I would then be doing secondary to what Rachel said, I'd be doing everything I can to blow my income up as far as I can. How long is this deal going to be going with your parents? The$400 a month? They're very flexible, though. I have it as long as I need it to get up on my feet. Okay. And what's your thought in your mind on that? I would really like to be out of there in two, three years at the absolute most.

58:57Okay. Okay. And you guys just split custody of the girls? Is it, how does that work every? 50-50. Yeah. So, uh, Sunday to Sunday, I have a week at a time and then they go back to mom. Okay. So I'd be looking for a side hustle or something that when that week that they're not with you, that you can just go crazy on. Because I think for you having that fund for medical and then getting this debt paid off, that is going to relieve so much stress. Like there's enough stress with the diagnosis of this, that getting the financial side in order as quickly as possible is going to do a lot for your soul.

59:30You know? Yeah, absolutely. Yeah. Yeah. That's what I would do. That's what I would do. Yeah. I'm sorry, Chris. You guys are going through that. It's horrible. So heartbreaking. Very tough. But you've got a plan now and that can give you a lot, a lot of peace. And who you're going to be even in the next two years, Chris, what you've done so far from a health perspective is unbelievable. Losing 180 pounds. Like you are amazing. It's amazing. So keep on the track because you're creating a whole new life for yourself, Chris. We're proud of you. So good. All right. Thanks for the call. We've got Jackson next in Boise, Idaho.

1:00:02Hi, Jackson. Thank you for the call. Hey, good to be on here. Kind of didn't expect to be on here, but this is awesome. Well, we're glad you're here. How can we help today? Yeah, it's really cool. Yeah, so I'm getting out of the military. I'm 100 percent disabled, permanent in total. And so I get the VA health care for free. However, you know, I do want to have a family at some point. And I've heard a lot about like HSAs. And my kind of question is, should I kind of open up another account or open up, get other insurance for the sake of an HSA? Or should I wait until kind of that bridge comes fray?

1:00:40You don't have the family yet. You're not married or with kids yet? Yeah. I mean, just are you just saying for the for the possible ability to invest in the HSA? Is that what you're talking about when you said you've heard of them? Yeah. I've heard a lot of like the tax advantages and stuff. And so I kind of figured it'd be good thing investment wise, but also like the health insurance thing. I mean, well, right now you're fully covered by VA, right? Yes. So you don't need the coverage and your family is not here yet for them to need the coverage. And so then when you think about it from an investment point of view, it really is on down the line from other ways to invest.

1:01:19I would rather you invest money in a Roth IRA if you could or something like that. before I'd go to an HSA. It's kind of just like once you have it, it's very nice to have, but it's not something you have to seek out and go get for that purpose. So for that reason, I would say you're just fine as you are. Yeah, as is. Yeah. Yeah. It is a great option, like Jade said, if you're using it above healthcare for an investment, but that's after you've maxed out, whether it's 401ks, Roth IRAs, I mean, all of it. It's just another investment vehicle. But at this point in life, I think you, yeah, I probably wouldn't, I probably wouldn't hassle with it because you have great healthcare with the VA.

1:02:03Okay. Well, that makes sense. That answers the question. I appreciate you guys helping. Awesome. Thank you so much for the call. It's a good question. Yeah. HSAs, you know, they're, they're really great. Like you said, they've got that triple tax advantage. And a lot of people, if you know, you don't need to access the money for health. Yeah. Go ahead and invest it. Usually you can invest it. There's usually a minimum of like a thousand dollars that kind of has to stay liquid and then you can invest the rest. And over time it'll just convert into a normal like IRA. You don't even have to use it for medical expenses, which is, it is nice to have that.

1:02:38But if an HSA is not the right, a high deductible plan is not right for you, I would not get the plan simply to have access to an HSA. That's right. Absolutely. Absolutely. Because saving and your emergency fund and stuff can cover some medical things that are out of pocket where the HSA may step in and do that if you are using it for medical purposes. So there's ways around it for sure. It's great if you have it. It's just kind of another tool to invest in, but definitely not necessary and probably wouldn't move mountains for it. No, I definitely wouldn't move mountains for it. Thank you so much for the call.

1:03:09This is The Ramsey Show.

1:03:18Thank you.

1:03:48Dave, we got a lot of calls on this show where life happens. One day someone's healthy, they're working, providing for their family, and then a curveball hits. You know, we hear it all the time. A car accident, a cancer diagnosis, a heart attack, and suddenly everything changes. Yeah, and that's why you've always said that having term life insurance from Xander is essential because it protects your family if the worst happens. Yeah, that's right. You need 10 to 12 times your income in coverage. No gimmicks, no whole life junk, just straightforward term life protection. But there's another piece that people often overlook, and that's long-term disability insurance.

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1:05:36The truth is we wish that we could get to every call and every question here on The Ramsey Show. But we can't. I mean, there's a limited amount of time. We have segments and we go to commercial breaks. So if it ever seems like we cut you off, it's because you got to make that clock. But if you do have a question and you want an answer for your situation, you can always head over to our website and use Ask Ramsey. Ask Ramsey is our free AI tool that's built and trained on proven Ramsey principles. And you'll get an answer that really is the Ramsey way. So you don't have to worry about it. You know, if you go to, I don't know, like OpenAI, you could get a lot of things mixed in there.

1:06:12But if you go to Ask Ramsey, it will be Ramsey advice the way we would give it on the show. So ask your question today at RamseySolutions.com or just click the link in the description if you're listening on podcast or YouTube. Love that. All right. Next is Katie in Columbus, Ohio. Hi, Katie. How can we help today? Hi, my name is Katie. I just wanted to see, I recently got a$2.6 million settlement, and I just wanted to figure out what I should kind of do with the money. Oh, wow. I have a mortgage, and I'm trying to figure out whether or not I should pay that off or not. Yeah. What was it from, the settlement?

1:06:52It's a lawsuit. Is it like, but you're okay? There's nothing, Is there anything we should know about you going forward or you're all good? I'm all good. Okay. So no ongoing medical issues or anything out of it? No, not yet. Okay. Okay. How much is your mortgage? My mortgage is$190 ,000. That's how much we have on the principal. And I'm at 2.75%. Okay. Is it just you or do you have a family? I have a husband. I don't have any children. Okay. And my husband is a student right now, and he's working on becoming an air traffic controller. Oh, how old are you guys? I am currently 30, and my husband is 31.

1:07:38Okay. And do you guys have any other consumer debt? Let me see. We have 105 from student loans for me. I'm a nurse. Okay. And then my husband, he's going to be about 150 total. Okay. Great. But no car payments, credit cards, anything? Cars is$25K for me, and then my husband, he only has$6K left on his. Okay. Credit cards? No credit cards. Okay. So my biggest question would be, before we get to the$2.6 million, let's pretend that$2.6 million, whatever happened to cause that to come your way, never happened. And were you already on the track to say, you know what, this debt is kind of crushing us.

1:08:31We need to we need to do something about it. Had you already kind of been looking at that or kind of tell us how you arrived at calling calling the show? Was it just the two point six million? Yeah, so I mean, basically, it's the two point six. But in all reality, my husband, once he graduates from school, our plan was to immediately start attacking debt as much as we possibly could. Okay. I have been working 60 hours a week currently, and I make about$120 ,000 annually right now. Okay. Okay. So I just wanted to, before we started saying, you need to take this money and pay off the debt, I wanted to make sure like philosophically we aligned on the idea that debt is no moving forward.

1:09:14If it gets paid off, that we're not going back into the habit of taking out debt for stuff we want. Oh, absolutely not. No. Perfect. Perfect. Yeah. Because sometimes you can come in with a lawsuit like this or an inheritance and just in one sweeping motion, be completely debt free, even your mortgage, which is amazing. That's where we're going to guide you to. But it comes back. But if that behavior, yes, hasn't been changed or the belief system hasn't been changed, you'll be right back into debt, you know, and how quickly. I mean,$2.6 million is amazing. But, yes, we just want to make sure that you can, yeah, sustain a lifestyle that still makes sense.

1:09:50So, yeah, so, yeah, Katie, I mean, what I would do is, yeah, it looks like you guys will have close to$200 ,000 in debt, not including the mortgage. If you include the mortgage, that's around$400 ,000 after all the student loans and everything. So I would pay everything off. That would leave you$2.2 million. And yeah, there's really three things that you can do with money. And I would do all three at some capacity. You can give it, you can save it, and you can spend it. So I would look to see what are things that you and your husband really care about. I don't know if you are someone that practices a certain faith or if there's things in the community that you guys, I mean, as a nurse, I'm sure you see a lot.

1:10:37So I don't know what that looks like for you, but any level of - Yeah, we go to church every Sunday. Okay, yeah. So any level of generosity is gonna be, I think, an important part of this picture just because the practice of that, I think it's an amazing thing and it changes who you guys are. So I would be giving - I do have a question about that, actually. Yeah. And it's just because like, and I don't mean to break you off, but basically like with the other financial advisors, we talked to you like three different, but we're still trying to figure out who to kind of go with. But everyone has, seems to have a different opinion on gifting money to family because they don't want it to turn into a transactional relationship and they don't want it to change the relationship dynamic.

1:11:22What is your opinion on that? Because my husband and I are both, you know, we both want a gift, but we want to make it so that it's not like a reoccurring thing or an expectation with family. Yes, I think it's great advice because you can easily, yes, get into that where it becomes a habit that Katie is suddenly so rich and we can just go to her when we need things. So is there something that you guys have pinpointed with your families, like maybe paying your parents' house off or like, is there a thing that you're thinking about or you just, okay, what is that? What are you guys thinking about?

1:11:57So my in-laws, my parents are unfortunately not around. Um, but my in-laws, we were thinking about, um, gifting them with a car. Their car is on its last, um, its last leg. Um, and they, they need a new one. Um, and they're, so I was thinking about that. And then also getting, um, you know, giving my, giving my brother some, some money too. He's got some health issues going on as well. Yes. So. Yeah, I would be okay with that with some like very communicated boundaries around it. I think just the idea of it just happening, I'd probably be a little bit more intentional with it. Okay. So I probably would sit down with his parents and just say, hey, you know, we've been put in a position that we're able to do some giving.

1:12:53and we would love to help replace your car. And here is, I almost would, this may be sound too controlling. I almost would go ahead and just buy it. 100%, I was gonna say. Instead of giving them cash. And a very like modest car. Yes. But a good car, right? Like go spend some money on it. Do your family members know about the 2.6 million? Do they know this happened and that you got a large sum of money? not at all and I don't plan on sharing that I think that's great that's what I was gonna say so I think you guys can kind of like sneakily come in and help them in that way and then your brother if he has outstanding medical bills and you guys want to pay some or all or whatever you decide then again if you can not just give cash pay the bill pay the bill pay for the pay and get the actual car you know that kind of thing I think is helpful and um but I think that's the way to I Yeah, that doesn't like freak me out.

1:13:54It doesn't freak. I think you know the person. Yes, that's a big deal. You know the type of character that someone has where they maybe have the propensity to take advantage or they have the ability to, you know, you give them an inch and they take a mile. And if you know these aren't that sort of, this is not that sort of person, then I would do that in two seconds. Yep, absolutely. And I think it's a great blessing. Yep. Really good. Yep. Thank you very much. Yes. And then investing some too, Katie, and spend some. You know, if you guys need some upgrades on some things or you want to take a great trip.

1:14:23Yeah. Leave some room for that because you don't need to be working 60 hours a week anymore. You know, I wouldn't change your work. I would still be contributing and still be going to work. I think that's just good in general for a person. Yeah. You don't want it to take away your sense of purpose. Yes, that's right. You know? Yeah. So I could see spending a reasonable amount, like you said, on things that increase your day to day quality of life. Get Spotify Premium if you haven't already. I mean, come on. Get some of the enjoyment of life. I think that's great to up some of your lifestyle a little bit.

1:14:57Yeah, and just be really intentional. Be aware. And then again, be sitting down with an investment professional that you guys feel good about. And invest a good bit of this money because this will take you guys on into retirement. Yes, into retirement and completely change your life. So I hope that helps, Katie.

1:15:21Thank you.

1:15:48but you can face them with a plan. Y-Refi helps you refinance into low fixed rate payments built around what you can afford so that you can take control and get back on the baby steps. So go to yrefi.com slash Ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey. May not be available in all states. Today's question comes from Daniel in California. He said, I'm 28 years old and have$100 ,000 in student loans, car loans, credit cards, and a 401k loan. My girlfriend and I have lived together for three years and recently got engaged. Would it be better for us to elope and then save for a formal wedding once my debt is paid off?

1:16:28Or should I pay off my debt while she saves for the wedding? She has no debt. I'm currently working both full-time and part-time to knock out what I owe. Oh, man. This always hurts my heart. I was on the show with Ken because Ken is like not anti-wedding, but he's like, just don't worry. I know. It's fine. It's one day. It's one day. I love a great wedding. Like, so it always hurts my heart when I'm like, just go elope. But I would, Daniel, after three years, go tie the knot. And then you guys can save up and pay for a great wedding. So I would go down to the courthouse, make it what it is. And then you guys save up for a fun party.

1:17:08And I think that, so I would go get married. But again, it kind of hurts my heart a little bit because I love a good wedding. I do too. too um she's she's gonna be the one that feels this yes probably you know that but got a hundred that's gonna take a while even if you're working a part-time job and you know what I mean I'm like that's gonna be another two and a half years possibly depending on what he makes um so I wouldn't wait that long to get married I would go ahead and get married I wouldn't unless her idea okay I could talk about this a little bit more okay go um if her idea of a formal wedding can be done for a lot less than what I'm thinking in my head like you guys can cash flow it yeah what are you thinking 10 15 yeah I was yeah I was thinking 15 20 but if you can if you can cash flow it both of you and maybe it's like she you know with her job can contribute half and you contribute half I might I might could be okay for that and you could do it in like six months or something yeah um just because i just feel like she's gonna be like wait a second i know she's gonna be bought in you're telling me that i can't have my wedding because of your debt i i i agree like sitting in this chair i know it's right but if sam warshaw came to me back in the day and was like first off i have a hundred thousand dollars in debt and for that reason we're just gonna elope i'd be like true I've taken off the ring she'd say nope I don't know if I would that's a good point though if you can cash flow this but I wouldn't wait I wouldn't wait longer than than five to six months though I would do it quick agree I would do this quick because you can't have a really nice party it doesn't have to be in secret I guess is what I'm saying right right you can have a really nice party and then save up and do another really nice party later on yes so yeah if you can save for it quick again four to five months yeah uh then you can yeah do the wedding but if you guys are just like it's not a big deal to either one of you um then i would yeah then i would elope and then you guys can yep put your incomes together pay off that debt faster and then oh man that's hard it is hard but yeah you you heard you heard our ideas yes we gave you two options that's good all right we've got richard who's in bowling green kentucky on the line right up the road What's going on, Richard?

1:19:32Oh, doing good. Thanks for taking my call. Yeah, you bet. How can we help today? Okay. I found you guys about a year and a half ago. Just a year ago, I'm lucky enough, I guess, or thankful enough, I found me a really good job. I make$140 a year. Good. And we kind of made a boo-boo. We bought my 16-year-old at the time a car, and she's like, I'm going to work. I'm going to pay for it, blah, blah, blah, blah. Well, she, after about six months, decided she wasn't going to work. Now the car is in mine and the wife's name because she was 16 and can't take the loan. Sure. How much? And, well, at the time it was 23, and now it's down to 14.

1:20:13We have paid it down to$14 ,000. Okay. My question is, should I sell it or should I keep it and just finish paying it all? Because I'm in my debt snowball right now, and it's like the bill I'm working on right now, it's three more debts above that. And then I'll be putting all towards that car. How much are you and your wife's vehicles worth?

1:20:35What'd you spend on those? Well, I spent 20 on mine and it's paid off. And I spent like 28 on hers and it's paid off. Okay. And how old is your daughter now? Well, she just turned 18 two months ago. Okay. I mean, you're in the parameter, like for your income, 140, we'd say no more than half of your annual income in vehicles. So you're right there, 20, 28, and 23. You're right at the cusp, a little bit over. But since others are paid off, I'm not going to be too much of a tyrant about it. You could keep it and pay it down. She's 18 now? Yeah, she just turned 18. And have you guys talked to her about taking over the loan?

1:21:15Tried to, but it's like talking to a brick wall. Ooh, I'm not liking when I'm hearing about this. I have a hard time. She doesn't sound very grateful. Yeah. Right. Yeah, she's got this attitude that she's entitled to it. And I'm like. Oh, then sell it in two seconds. Right. She ain't put up with that. Well, and you put your daughter in debt, Richard. I don't like that either. Right. So out of the principle. Yeah, if you guys were baby step seven, you had tons of money. I would say if you wanted just to pay for it and then say it's yours, whatever. I don't like the idea of you setting her up with debt.

1:21:52So I think you sit her down and say, sweetie, I'm so sorry. We messed up. We, you said we had a boo-boo, right? Yeah. So you said at the beginning of the call. Right. Not only is the deal that we had made disintegrated, which I don't blame her entirely. She's 16. Sure. Like the frontal part of her like brain hasn't even formed yet. So you're putting a lot of responsibility on a 16-year-old, which was not very smart. How much is the car now? um it's right at 450 a month that's a lot how much could you sell it for if you sold it what would you get for it oh i don't have no idea to be honest with you i mean 100 i wouldn't know like i said it's yeah so i would look it up 14 on it yeah i mean in a perfect world it's not upside down in a perfect world you'd get 18 and you could buy her a four thousand dollar car and just call it like a hey we did this but yeah but i would say the two things number one the deal that we made was a bad deal for you.

1:22:47And the deal we made now goes against the value system on which I think that you should live financially. And because of that, in good faith, I can't keep you held to a loan because I don't think that that's the right way to live with your money. And so it's in our name and we're going to sell it. But she is 18. So I don't even want to give her the choice to take it on. No, I would not transfer this over. Rachel makes a very good point. on the one hand you guys were in the wrong for bestowing this life of debt in front of her and we see that now and then she also it sounds like i don't know just deriving from what you've said she's kind of hard-headed and as is not really doing what you guys are hoping for in this moment so i would not want to reward that behavior i like what rachel said about kind of going and saying hey you know what we said this that was our mistake our bad however you also haven't shown that you really want a vehicle and because of how you're acting it's very hard for us to even uh fund one the correct way which is in cast for you at this stage so i i would kind of play both sides of that field she's gonna be mad mad mad richard so mad so listen that's the thing about when you set up a boundary you put up the boundary and then regardless of what that person how they react what they say that's on them at that point but we you probably know from data points that it's not going to be great.

1:24:11But I really do believe in the long run for her, it's going to be better. It's going to be better. It's going to be better. And she is going to remember the lesson. If you, to me, there's something so big when a parent apologizes, and it's like, I made a mistake. And here's what I did. I never should have done that. That sticks with a kid for a very, very long time. So she's going to remember the fact that my parents went into debt and they looked at it and realized it was the wrong thing. And I almost, I almost would be willing to take back my former thing about not getting her a car. Cause what I wouldn't want to happen is that that lesson getting lost in the, the, the part where she no longer has a car.

1:24:55Do you know what I mean? So there's part of me that I'm like, maybe I would give her the$5 ,000 car cash. Yeah, I probably would. Yep. And then she remembers the bigger lesson. She's real pissed. She can go get a car loan on her own and make her own decisions at that point. Yeah, that's true. That's a good one. Thank you for the call. Sorry, Richard. I hope it goes well. We'll be praying for you.

1:25:42All right. Welcome back to the Ramsey show. We're here in the Fairwinds Credit Union studio taking calls about your life and money. I'm still with Rachel Cruz. I'm still Jade Warshaw. We're doing it. We're still doing it. All right. Going back to Dominic, who's in Springfield, Massachusetts, I'm guessing, on the line. What's up, Dominic? hello jada how are you i'm good how can we help did i get it right is ma massachusetts uh yeah okay um yeah so i gotta i just have a quick question for you guys uh not too long so um i have a lot of money investing so like i'm a rookie when it comes to investing i just started i hired an investor back in september and um i'm watching my investments go as along the way and And it doesn't look like my investments are doing as great as I wish I could.

1:26:29And the other thing is, too, I think I want to cash out my investments. Because a couple years down the road, I'm trying to buy a house and move out of my parents' house. And I just don't know if I'm – should I cash out the investments or just kind of hope for the best? Are they retirement? Is it like IRA, Roth IRA type stuff? What's it invested? What's it be cool? Well, no. So a lot of my – so, yeah, no, I do have a 401k, but I wouldn't use that for the house. So I have a lot of my money in the S &P 500. I have$97 ,000 in what's called River Bridge. And then I have another$135 ,000 in another little fund that they have.

1:27:09It's called a structured note. Okay. And is it just a taxable brokerage account? Yeah. One of them is kind of like a brokerage account. And then the other one is, I guess, I'm not really so sure how to put it. The River Bridge is what's NVIDIA and then Google, it's an investment. Okay, so they're single stocks? Yeah, so it's not a single stock. It's a lot of them, yeah. How many together? How many single stocks are in that fund? I think it's about 10. I'm not entirely so sure, to be honest. Okay. Okay. So part of me, what I don't like about what I'm hearing is you're not sure about what you're invested in, which is always a red flag for me because you should understand it enough to be able to explain it back in a way that is clear.

1:28:05So part of me, and I think you understand facets of it, obviously, but there's obviously facets that maybe you're not sure of. So that's thing number one that I'm thinking about. Thing number two I'm thinking about is the fact that you said, ultimately, you're trying to buy a house. And I'm wondering what your timeline is for that, because that does play into whether or not I would keep this or what I would do with this money going forward. So what's your timeline for the house? Within the next couple of years, I'm really interested in moving out of my parents' house. And I was thinking whether I should rent or buy.

1:28:39and I am looking more towards the buying because I feel like I can afford it. I do have a good chunk of change. Yeah. Yeah. How much are you making a year? My full-time position, I make like$75K a year. Yeah. How did you save up all this money? I mean, it's like almost$235 ,000. Yeah. No, I'm a really frugal person. I don't really spend my money. Yeah. And before, too, I started working full-time. I had a, like back in high school, I was working a little part-time job, you know. That's awesome. I pretty much always saved money and never really spent. Good for you. Well, if you're thinking about, there's two parts to this.

1:29:18So first off, based off of what you've said, the way this money is invested, it's not invested the way we would tell you to do it here, the Ramsey way. It sounds like your 135 is probably mostly in bonds or something like that with the structured note that you have. And then the other is in index funds, which is fine. we would teach you if you were going to invest your money to do it in mutual funds across four different types. And it doesn't sound like you have it invested that way. So I would think about rolling that money into the proper investments versus cashing it out per se. Now, if you were ready to buy a house immediately, I would say you could go ahead and pull it out.

1:29:58But if you really are thinking, hey, this is two to three years down the line, what I'd be doing is I'd be meeting with the SmartVestor Pro and saying, hey, I have this money invested. The reason that your return is not very great is it sounds like you have a lot of bonds with that 135 invested. That's why it's probably going very slowly. And I would say, I don't like the way this money's invested. I don't believe it's invested the Ramsey way and that it's getting me the best rate of return. And then I would have them roll it over into better funds. And then, yeah, I just let it sit and grow for the next however many years until you're ready and just understand that when money is invested for five years or less you may or may not you know what i mean that five-year point is kind of when we see like there is a locked in um um you've your money has grown there's a higher rate that will have grown by five years versus if it's less than five years there's more um fluctuation within that so just know that and even like the river bridge account like i i would almost feel more okay with that if you said there were 50 individual stocks in there but the 10 feels really limited a lot of risk in that to be honest with you um it might river bridge i think it is a lot more okay so i hired so i don't do this by myself i hired a professional he's really good i i like him a lot and um he answers all my questions when i ask him and but your returns aren't your returns aren't what you said they should be that's a red flag for me yeah i yeah um i don't know if it's really necessarily his fault, which is I guess it's just the stock market.

1:31:27Well, it depends on what you're invested in. That's the whole point. So if you're invested the way we say, like your bonds are going to move slower than anything else. That's kind of like what you transfer to when you're almost ready to retire. So you could stand to be more aggressive in your approach. That's just me high level looking at it based on what you said. Yeah, looking at some funds that are, aggressive growth type mutual funds, you probably would see more return. But also, it is the long game. But I would make sure that from an investment strategy perspective, like what you're saying, Jade, there's a right way to play that long game.

1:32:07I agree. I mean, don't get me wrong. If you love this guy and you think that you just need to spend more time with him to understand, great. I'm not going to tell you to divert. Yeah, it might even be that just not really giving it a fair chance. Because I used to just do CDs, which is guaranteed. But then once you go to the stock market, you're like, whoa. You know what I mean? Totally. Yeah, yeah. That's a big jump. I might just be that I'm just not really. Yeah. Yeah. Well, and I think over the next two to three years, Dominic, I would use majority of this to put as much down on a house as possible and then have that and then re-energize the investment machine, if you will.

1:32:45So I think you're, yeah. I mean, I would look into it, but two to three years isn't going to make or break you because you're probably going to use this for the house. But I would just from a knowledge perspective, like what Jade's saying is sit down and really get a good grasp on what all this is and check out our investment, you know, philosophy on the four types of mutual funds. And again, we're even OK with an index fund that's just over, you know, the broad scope if you just want to put your money in that, too. But but the diversification piece is really is really big. So that's what I would ask him about that, that other fund.

1:33:15but I'd get out of the bond market personally. Yeah, I would too. It sounds like I was just kind of looking at it a little bit and it just sounds like it's way more predictable. There's an income facet of it. There's a lot of protection against the downside of the market. So it sounds like this is just very, very conservative for you. And at your age, you probably don't need it. You don't need to be. Yeah, you got time, buddy. So get out there, test the waters. Well done, Dominic, though. Keep the habits in place, though. The fact that you've saved that much is so impressive. We just wanted to go as far as possible for you.

1:33:49Yes, absolutely. Thank you so much for the call.

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1:35:38All right, we've got Susan on the line. and she's in Seattle, Washington. Hi, Susan. Thanks for joining us. How can we help today? Hey, thanks for taking my call. So I'm kind of at a loss. The man I married, we've known each other four and a half years, and we got married four months before he passed away. Oh, my gosh, Susan. Anyway, I've always had a soft landing in my life, and there's always been somebody. Well, this is the first time. And again, it's a little bit of a soft landing. He left a little life insurance. I've sold a lot of assets that I have, and it's helped. I am self-employed. But when I found myself, and I went through a grief support group thing, and one of the things they talked about was grief spending.

1:36:30I'm like, oh, that's not me. Sure enough. it was about four weeks ago I realized oh my gosh I'm I'm a grief spender I mean I was just going over my numbers he passed in August and since September over my budget I have spent$33 ,800 now some of that was on tires to the car and you know oil change and stuff but the majority of that has just been on memberships, house cleaners, gardeners, handymen, and dog stuff, and just stuff I don't need or didn't need to buy. And every time, and I just empathize with myself when I would click that little buy button on Amazon, it was, oh my gosh. Are you using the insurance money for this, or is this something you're going into debt to no fortunately no i'm not going into debt so i currently right now in savings i'm down to 20 000 and three months ago there was 57 000 in there okay some of that i've been using to live on i i need um two grand a month to live on in my house my business requires two grand and it's staining on its own so i'm not worried about that but i do need my business to kick it up a notch so that it and support my business and me.

1:37:57But that's going to take time because when he got sick, I did back off clientele, et cetera. The$2 ,000 a month you live on, what's that cover? Do you live someplace where there's no mortgage? Or tell us more about that. It's a rent, and that's utilities. Rent is$1 ,450, and it's gas, lights, trash, water, and Internet. Okay. And that's going to be gone in 10 months? well yeah if i keep going in the way i'm going yeah yeah i am getting uh more inheritance next week there there's another inheritance check coming how much that'll boost that 20 up to 50 000 it'll be 30 000 and then there is another uh probably 25 000 in assets that i need to sell that I haven't gotten to yet.

1:38:49I'm working on it. There's just an awful lot to navigate. And then there's another pension of his that I haven't applied for yet, and that's about$18 ,000. So when all said and done, if I spend no more out of the savings in about a month, I should be$95 ,000 in that account. Okay. Yeah. So do you feel like the counseling is helping with the grief spending? now that you've kind of pinpointed it? Because sometimes part of the problem is like realizing, oh gosh, that's me. And then you identify it and you can kind of start to work through it. Yeah, I finished the grief counseling back in December and I didn't realize my problem until about three weeks ago.

1:39:33Now back in September, a friend was booking a cruise. I said, sure, I'll book that cruise with you for February. So two weeks ago, I went on a one week cruise. It was 500 bucks. I say it was only 500 bucks. Yeah, that's not bad for a nice, you know, balcony stateroom. But I didn't calculate the$100 parking fee and the$400 I had to board my dogs. Yeah. Plus, I spent another probably$500 or$600 on luggage and clothes. None of that was in my purview back in September when I booked the cruise. Sure, sure. Yeah, those expenses. Yeah, they sneak up. No. Go ahead. Well, I was going to say, first, give yourself some grace.

1:40:15Because I do think when you're in a season, especially of grief, our bodies, we're looking for a way to cope. Right. And if we're not aware about or not intentional about it, it can go. We can start medicating sideways. Right. Whether it's drinking, gambling, shopping, like whatever we're doing to have a level of stability, we search out for. So I don't want to fault you for that because I think, you know, that's a it's a that's a common. Very normal. Yes. So now I think the fact that you've realized that now we can put some things in place to help with it, to actually create some friction between you and buying things.

1:40:56So I would do, you know, from a low level, I would delete Amazon Prime. I would not have my card saved on any website to make it an easy purchase. I would take off Apple Pay off of your phone. like put some actual logistical friction between you and and spending any money okay that's like one thing you can do um another thing that when you're coming off of and i wouldn't say that you're necessarily are addicted to spending but a lot of people especially in 12 step they say to redirect where you would normally go and spend or normally go and get a drink um instead do something helpful right when you feel the need to spend go for a walk when you feel the need to spend have that friend that you call and you tell her I'm going to call you every time I'm tempted right it's this redirection of your actions that actually can be very helpful because you almost train your train yourself to have a new set of habits um so yeah that those are a couple of just things I would probably I would start today and then of course the budget and kind of the working with still, you know, yourself, I think is still big.

1:42:06Yeah, I think in this call, I would tend to err on the side that what Rachel said is probably the bigger and the biggest part of this, because until you can get that piece in alignment, anything else that we teach you is not going to hold, right? Because you need to have that self-control that's built in. But once you do have that, yeah, there's the practical side of making sure you are in a budget like every dollar, and we'll make sure that you get that before we hang up this call. But I have it and I have created the budget. It's easy to pay my bills. Good. The discipline of learning how to be really detailed when new things pop up is something that is a muscle I think that builds over time to just think through every aspect of what you might spend money on.

1:42:48But my biggest question, besides these lump sums of money that's coming, is what's your month to month? How much money do you earn coming in month to month? Right now I'm earning in my business about two grand, just enough to cover the expenses of my business. So I've been living off of whatever he has, whatever he has. So it's not actually profit. It's having to be reinvested right back into the business to keep it going. So I would say that I'm concerned about that. And that would be, along with what Rachel said, creating the friction, my number two piece of homework for you would be figuring out what earning an income looks like for you.

1:43:29How long have you had this business? Five years and it was doing really well. What caused it to decline? My husband's sickness and me stopping stepping back. Okay. Do you have a timeline, Susan, a realistic timeline? And when you think it's going to start actually creating a profit, is it going to be like another year? Is it going to be three months? It's actually starting to build back up again. What kind of business is it? I'm a transformational trauma coach. Okay. And I'm pretty elite in the area I live. Okay. So I'm pretty well known and it is lucrative. I mean, so it's getting a clientele back, but like 24 and I had my husband's income as well.

1:44:17In 2024, we were doing close to$100 ,000 that year. And we live in a small town. How much were you making out of that? About 52. Okay. So if you could get back clientele-wise to that 52, you could sustain on that. Easily. I like that for you. In the meantime, honestly, I'd pick up a side hustle because when you have too much time to sit at home. I know when I'm at home, Rachel, and my eyes just look at the walls, I go, oh, it'd be nice to get something new for that wall. Oh, I need a new bedspread. Oh, like when I'm not doing enough with my time, I tend to spend more money. And I think a lot of us are like that because you're bored and you're looking for release.

1:44:58You add grief on top of that. And I think it's just a recipe for overspending, which is what you've seen. And you need an income right now. Yeah. So it's going to kill two birds with one stone to get out there, get a side hustle until this business is producing and do what Rachel said, put some friction in place.

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1:46:24One of our favorite things is when people share their stories of how they're winning. and we just got this amazing review of our EveryDollar app. She says, I love this app. It makes it super easy to budget with my husband. We have implemented this practice since our wedding day and we've had zero money fights because there is full transparency and we're on the same page. Love that, that's amazing. Hey, you can do it too. You can take control of your money and you can change your family tree. You can live like no one else. Go download our EveryDollar budget app for free in the App Store or Google Play.

1:46:56All righty then. Stephen is in Hartford, Connecticut. Hey, Stephen, how can we help today? Hi, I was doing the baby steps and I'm finally at that pay off the mortgage step. I found you guys last year through a guy at work. I've been messing up and I've been putting money towards my escrow. Is there a really good way to attack the mortgage? Because I'd love to be paid off in about five years or sooner. I mean, the best way is to pay extra payments. So you pay your normal payment that's due, that satisfies the interest, and then after that's free and clear, then you can go back and put extra payments and put them directly onto the principal.

1:47:34And that truly is the best way to do it over time. Okay, so when you say pay on the principal for the mortgage payment, are you talking about like the lump sum I pay every month or is it actually like a certain mortgage payment? So your mortgage payment, the payment that you pay every month, it's probably comprised of a couple elements. There is the actual loan balance, what you owe for the home. And then you probably have some insurance that's built in there, some taxes that are built in there. Right. HOA. HOA. Sometimes that's built in. So your payment is going to all those different places when you pay your monthly payment, interest, all of that.

1:48:14So after you've paid that monthly payment, you've satisfied the interest, you've satisfied the taxes, anything else that's built in. Now, any extra money that you apply, it's going to go directly to the loan balance, which we would call the principal. So it's going to go straight to that. And that way, it's like a pure, it's pure money. So if you pay$500, it's going to lower your balance by five, you know, it's going to lower it by that much because it's already, it's on top of your normal payment. And a lot of times. That's what I thought I was doing, but it was actually just sitting in my escrow and then I got a check for the remainder.

1:48:47So what I would do is you can either call it in and tell them. I know on mine you could go in and you can actually decipher if it's going to be a normal payment or if it's going to be a principal-only payment. It actually has the option. If yours doesn't have that, then I would call in and do it that way. And if you're doing it, you kind of have to make sure for the month you've already satisfied the payment for the month or else it'll go towards your monthly payment. Does that make sense? No, I have no problem with that. I usually pay a little early and then what I have at the end of the month is what I try to put on extra.

1:49:22Yeah. So after everything was done, like all my bills are set and paid, I throw whatever I have left over just right in there. I kind of have like a free account type of thing. Yeah. after everything goes through the budget. Is there a good strategy on how to pay it? Like, try to do, like, two, three extra mortgage payments and try to kick it down? Or is it just throw anything and any extra that you have at it? As much as you can within, you know, what makes reasonable sense for you. So we always teach that, you know, when you do the first three baby steps, you're very intense. Everything is as fast as possible.

1:49:56You sacrifice everything, you know, in order to do this quickly. But then when you move into baby steps four, five, and six, you're moving into a season of intentionality, which is I don't have to be like, you know, balls to the wall, but I do want to be thoughtful about am I intentionally putting extra towards this? And that really is up to you. If you're in a season that you want to go really fast, that's fine. Or, you know, what I find, Rachel, is that there are seasons where you're very, you know, gung ho about it. And then there are seasons where you're like, you know what, I'm going to renovate that bathroom.

1:50:27And so maybe you pull back a little bit, but you're still putting something extra. And so it kind of ebbs and flows. But the point is that you're always doing something and that you have a plan for what that looks like. It's not just kind of a haphazard thing, but it is an intentional behavior. And I'm sure you've run numbers, Steven, right? I mean, people do like Excel forms or a mortgage calculator and you can watch that as that principle goes down. I actually just learned about that from Dave. Okay, good. Yes. Like I said, I'm new to this. I just did my mortgage calculator thing. me. So I'm hoping to be, like I said, I just refinanced for a 15 year.

1:51:00Oh, good for you. Yeah. I was, I had horrible credit and everything like that when I first did this. So my interest rate was high. Okay. So good. With doing everything, I was so scared because paying off everything, obviously my credit score dropped. So they had to do the underwriting thing that you guys talked about. But they did it. That's awesome. Yeah. Well done, Steven. Yeah. So now it's going to a 15 year and I just really want to pay it off. Yes. Well, for a lot of people, when you start to see those numbers. And what's crazy is even, I don't remember the math, but we did this at a live event recently.

1:51:30It was like four extra mortgage payments a year and how quickly that takes off what it does on the principal and how much, I mean, how much interest you save. Tens of thousands, if not even hundreds of thousands of dollars of interest. Like it is wild. What even just a little bit will do. Do you know what I mean? That's what's so encouraging about it is when you start plugging in your numbers, you're like, oh my gosh, like this goes a really long way. And a lot of people that are doing the baby steps, they pay their houses off in seven to 10 years. So yeah, you may be faster than that, Stephen, or you may be right around that.

1:52:02But I think when you at least have the mindset that you want to pay off your house, it happens faster than just settling and saying, I'll have a mortgage for 30 years or 15 years. Yeah. So if you do what Rachel said on a 30 year mortgage, just doing four extra principal payments, you could reduce it by 17 to 20 years. Yes. Just by doing four extra principal payments. Does it say 15? Uh-huh. On a 15-year, it could shrink it to around 10 to 11 years. So that is major. That's just five years. Yeah. Just a few extra mortgage payments. So if you did that six times a year, right? Like it starts to just shrink so quickly.

1:52:37That's what's wild about it. Yeah. It's really, really crazy. Yeah. If you spent the average right now, which is around $400 ,000 on a mortgage, the normal terms, yeah, on a 30-year, you would save potentially$200 ,000 in interest simply by doing that. Yeah. Yeah. So if you've not ever played around with these numbers, you can get yourself, like you can go down a rabbit hole of just like, oh, like really realizing. And that's money back in your pocket. Hundreds of thousands of dollars, that's not going to interest. It's for you. Yes, you saved that. It's amazing. And can we just say that for a minute?

1:53:10Sometimes when you're playing, when you're talking about numbers like this and they feel like they're out in the future, it can feel like it doesn't matter. But it does. These are real dollars that you are paying. Real dollars. $200 ,000 that will come from your money. And so just really take some time and think about that. It can feel almost like it's not us. Real. Yes. But it is. It is real money. All right. Very, very good. Let's go to Holly in Sacramento, California. Holly, you're up. How can we help today? Hi there. Thanks for taking my call. I have a two-part question. The first one, I'm a single teacher mom.

1:53:49I make$114 ,000 a year. I have life insurance through work at$300 ,000. And I'm just wondering if I need extra term life insurance on top of that. Yes, I would. We say 10 to 12 times your annual income. So I would put more like a million, have a million dollar policy. Yeah. Okay. Yes. And hopefully you can get it. Hopefully, you know, and you can supplement it. If you want to keep the work one, I'd be okay with that if you got a$700 ,000 term life. And it shouldn't be too expensive if you're healthy and all the things. So yeah, but that's what I would have that to supplement. Yeah, and you can get that through Xander.

1:54:27You can hop on and they'll get you set up. It's really easy now. I mean, they'll even come to your house and everything like that. Yeah, it's great. Okay, and my other question is I recently paid off my car and one other large debt. Oh, congratulations. Thank you. I'm working on paying off my HELOC loan, and it's at$20 ,000 right now. I'm paying$1 ,000 a month, and I'm just curious, what should my next steps be in order to continue to support my child? I have more than$1 ,000 in my emergency fund. I'm nervous about putting it down to$1 ,000. Yeah. How much is in your emergency fund? I have$6 ,000 right now.

1:55:09$6 ,000, okay. and you're paying an extra thousand so on track you know year and a half or so you'll have that HELOC paid off yeah yes yeah I mean I would say if there's uh I mean that's a great I mean to be a single mom working um yeah there's a different level of stress there yeah you're doing I think you're doing great uh Holly if there's anything extra that you can put towards it at any capacity obviously the faster the better um but you're killing it girl I mean yeah I think you're doing great. Yeah, I think you're going to feel the motivation on your own to find ways to get more and more income going towards that.

1:55:45And it's going to be knocked out before you know it.

1:56:42Hey guys, Dave Ramsey here. free to use. Go to RamseySolutions.com and try Ask Ramsey today. That's RamseySolutions.com.

1:57:03All right, our Ramsey Show, a scripture and quote of the day, Proverbs 3, verses 5 through 6. trust in the Lord with all your heart and lean not to your own understanding and all your ways acknowledge him and he shall direct your paths Dolly Parton said if you don't like the road you're walking start paving another one oh pretty good pretty good classic man I feel like I'm walking on air after James gave us that yes nice encouragement James I don't know how to act and then we got Dolly Parton and Proverbs just we're gonna end the show well I know I wanted him to come on he didn't all right Curtis is in Richmond Virginia what's up Curtis hi how are you ladies doing this afternoon excellent how can we help well let me start by 2025 was a really bad year for me.

1:57:56I'm sorry. Um, in May, I lost my wife. Um, December, I lost my dad. I had been his caregiver for a few years. Um, when I, when I need to become his caregiver, I left my job because I was getting a stipend to help take care of him. Plus, my wife had a very good job, and it was her idea for me to bring him into the house, help take care of him, do what needed to be done because that's what I felt like I was led to do. Sure.

1:58:43Fast forward to now, the savings that I had between my wife's passing and now my dad's has been eaten up by going back and forth to the hospital, the funeral expenses, trying to catch up on bills. And I have found myself to be about$13 ,000 in debt. And that's after paying down almost$70 ,000. Wow. But I have no job now. And I'm trying to find one, but I have found it very difficult. What's your field? Like, what's your expertise, Curtis? Well, I was military to begin with. And prior to that, I was in sales. Okay. And how long were you out of the workforce taking care of your dad? How many years?

1:59:45Eight years. Oh, okay. Wow. Yeah. Okay. Yeah. And how old are you? 49. 49. Okay. Okay. So there's no, just to get a better picture, there's no savings anywhere to speak of. Do you have anything that was put away while you were in the military? Anything like that? No, I've blown through all of it. Okay. See, dad ended up with dementia with Alzheimer's. Okay. I'm sorry. Sorry. And Trish, it was unexpected. She passed with a massive heart attack. Oh, my gosh, Curtis. Oh, I'm so sorry. This is really tough. Yeah, it was a really hard year. I'm trying to stay positive. I'm trying to put it in God's hands because that's what those of them want me to do.

2:00:36It's also grieving the life that you thought you were going to have for the next 30 years, you know? I mean, life looks completely different. And as Dr. John Deloney always says, it's almost like you close not even a chapter of a book, but a whole book. And you almost have to open up a whole new one and start rewriting your story. And, you know, the hard thing is, is, you know, you're 49. And so it's hard because you have a long life ahead of you. And it's also a positive thing because I think you can make some incredible changes and start, you know, it's a new life that you have to look at, right?

2:01:16It's not even rebuilding the life that you had. It is, it's looking ahead and saying there's going to be a new Curtis. And what do I have to do now for myself to not only sustain, but what's good for me? and finding some positive small wins in the midst of this grief is not only gonna help you financially, Curtis, but I also think in who you are and kind of going back to, yeah, finding a new purpose and how to contribute to the world. And that's a hard thing to do. I do know at the end of the call, though, we will give you Ken Coleman's book, Find the Work You're Wired to Do, because there's still a whole second chapter, Curtis, of your life to be written, you know?

2:01:59Yeah, I agree. This is kind of like a renaissance, like a rebirth for you. And in many ways, that can be scary and daunting. But in other ways, it can be really interesting and can be exciting after enough time passes, and you can see it as an opportunity to start something fresh and new. And I actually think that that might end up being the case, career wise. So I'd be sitting some time, spending some time thinking about if I could do anything, and I know when King coaches people, he kind of starts with that. If I could do anything, what would it be? And then kind of just run that down. And that would kind of be, if I were in your shoes, I think that that would be a journal prompt for me every day is if I could do anything I wanted to do today with my career, with my talents, what would it be?

2:02:44And I would just spend time thinking about that because I think sometimes in life we don't give ourselves, there's always something going on and we do what we have to do. We do what we need to do, but very rarely do we always do the things that we want to do. So I think that that would be a really good exercise for you. And I think it's just going to take time. Yeah, absolutely. Yeah, but anything that you can do today to start bringing in an income, and it, of course, won't be your dream job. But I think getting up, having a routine, having a schedule, having something that you're doing, I think does start to re-energize you.

2:03:21And there's a level of dignity that's there and getting a paycheck and actually start seeing progress in some part of life. and this would be the more financial side part, but it can be powerful when you start actually getting up and doing something because it could be so easy just to not because you've been through so much. And don't hesitate to call us. Call us back if you feel like you're getting that traction and then you're saying, okay, I'm making this money. Now, what do I do with it? The good news is 13 ,000 in debt, once you start having any income come in, you're gonna realize, oh, I can knock that out.

2:03:54That's right, that's right. Fairly, fairly quickly. and I have no doubt that you're going to do that. I just think the fog needs to clear a little bit more for you to get your bearings in this. Thank you for the call. All right, let's go straight to Nicole in Louisville, Kentucky. Nicole, we're right up against the clock. How can we help today? Thank you so much for taking my call. I am in my early 40s and my husband is in his early 50s. We've both grown up and lived our entire lives in the same location and we're really interested in starting a new adventure. Wow. We have found a place that we want to move to, but we want to rent there first before we sell our current home.

2:04:31We are debt-free except for that mortgage. We do have some older kids who are currently renting, and since we have family nearby who could also support them, we want to know if renting our house to them would be wise. Probably not, because you guys will probably sell it in a year, right, if you're wanting to keep it, just for a short term until you find a house that you guys want to buy in a new location, right? right? If the new location is as much of a fit as we hope it is, yes. Okay, but if it's not, you'll come back home and want to live in the house that you're in? Is that what you're saying?

2:05:06Yes. Okay. It's hard to give up the interest rate that we have until we know we have to. Oh, okay. Interesting. What type, I mean, what would you do for work? Are your jobs, you know, our jobs are remote, so we can, yes, we can do the exact same things we're doing now. there. Okay. Would you guys be able to support, um, the rents of the new place? And then for some reason, if something goes haywire with family, are you, I mean, does that put you in a financial bind? I don't think so. We've tried to use the 25 % of our income to say like, what could we afford in rent plus covering the mortgage if we had to, but of course, you know, anybody helping cover the mortgage while we're gone would help.

2:05:51I normally am not a fan of that, but since it's still a question mark of if you're going to stay in the new location, I would be okay with you keeping it and doing a one-year, very clearly communicated, a one-year rent agreement to people you know, which means that I can go haywire. That's why I want a lot of margin with you financially because I don't want this to ruin any kind of relationship. It can get weird. But yep, if If you have that one year and then you guys, if you want to stay in the new location, that house, you need to sell it. Nicole, I don't care what the interest rate is. You need to sell it and move your life to the new.

2:06:26Or if the new location didn't work out, then you move back home. But I would just do it for one calendar year and that's it. Yeah, I like that idea. And it's good that you have the kids because they seem like they'd be just the right person to rent the house. Thank you for the call. All right, guys, thanks for hanging out with us. Remember, there is ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Thank you.