Don't Be A Slave To The Lender

24:14George Kamel:Well, that's the thing. I don't know. I mean, I've tracked all these subscriptions that we have for like our TV services and everything, and it seems like they're coming out automatically. Lee, this has nothing to do with Netflix. Yeah, Netflix is not causing$50 ,000 in credit card debt. This is a guy who – this is a couple who finances a couch. Yes. This is – And our car payment. But look, we're trying to show you the math on this. You probably – you guys take home like 15 grand a month. At least. And that's not enough for you. You went to credit cards on top of that because you couldn't afford your bills.

24:55George Kamel:Yes. That's the problem we're trying to get at. Is that close? Is that vacations? That's what I'm trying to get to. Is there a spending addiction? Well, our house had to be remodeled, and yes, my wife does have a small – I wouldn't say small spending addiction. Oh, gosh. Let's see. Our house had to be remodeled. We had a huge water leak. About all of it went to our house remodeling. Okay, that's what I was trying to get to. It's different that our house exploded. You put house repairs on the credit card versus I just have to get new clothes every week, and my wife wants new furniture every other month.

25:30Those are two different things for me, just trying to help get to the bottom of how we can help you best, okay? Okay, yes, I understand.

25:37George Kamel:So is there one car payment and one that's paid off, or do you guys just share one car? We share one car. The car payment, she bought a car. She finances it. We are about – I'm trying to break down it. We have our car payment. The loan that we have for it was$25 ,000. And now every week or every time we need to pay the car payment, we keep on setting it back because we aren't able to pay that. So I'm wondering if it would just be better to sell the car. I don't know. It's hard to explain. You can't make the car payment? Why can't you make the car payment, brother? Uh, we have not enough money to pay it.

26:26George Kamel:Okay. We've got bigger problems here than we can solve on a single call, but you guys need to have a come to Jesus conversation tonight. Go look at your paychecks that showed up in that bank statement and then go find out where the heck all that money went. Do y 'all share a single checking account that both of your checks deposit into? Uh, no. Well, actually, she has her own. I have my own. Okay. And she will not stop spending it. I'm in the other room right now. I don't want her to hear anything. Here's the thing. I respect that. You're a good husband who wants to protect his wife's honor. I get that.

26:57But brother, what George and I have been trying to dig at and is becoming incredibly apparent to us is you have a huge situation on your hands. Yes. The money as you know it, as it's coming in, as it's being spent, there are tens of thousands of dollars unaccounted for. and that happens and and i know i don't want to put things out in the universe brother but that happens when somebody's struggling with addiction somebody's got um having an affair somebody's just wildly out of control and so hear me say as serious as i can and as lovingly as i can you got a huge mess on your hands and the only way forward is for you and your wife to get in a room and y 'all to put everything on the table and say we are about to lose our home in our car and we make$225 ,000 a year.

27:52George Kamel:Yes, I definitely think I should have a talk with her. And, you know, I've been struggling to figure out if she's been cheating on me because she's been hanging out with one of her coworkers that she will not tell me anything about. Yes. Your gut is, I hate to tell you, brother, your gut is probably directionally right. Okay, yeah. And it's terrible because she's the one that telling me that I have a spending problem when she's out here buying couches, and I don't know how to deal with any of it. I need to put all this on the table like you said. I liked your idea. Do you have a mirror nearby?

28:33George Kamel:A mirror? Yeah. Yes, I do. I want you to take a look in that mirror and say, it's not all my fault, but it's my responsibility, because so far nothing in this conversation has been Lee's fault. at every turn. She financed the car and she bought the couch and she has her own money. I don't know what she's doing over there, but man, if she could just get her act together, we'd be doing great. I don't believe that's the case. I think you both have some serious work to do on yourselves and on your marriage. Here's what I would request at this meeting. Both of you pull your credit reports and you can do that for free.

29:08What's the website, George? annualcreditreport.com annualcreditreport.com you pull it for free and it will show you in real time who y 'all owe money to and how much

29:20George Kamel:well that's amazing I'll definitely have to check it out and what did you say it was called annual annualcreditreport.com here's the next thing I when there's a whole bunch of credit cards because brother you don't know what she's opened in her name exactly and so I want to know as a married couple where are we spending our money. And if there are certain credit cards, she won't, like, you can't look at that. You, I'm never going to tell you that I'm not pulling my credit report. You don't need to know that. Then you need to go sit with a marriage counselor or you need to go see somebody and you might end up sitting with an attorney because you've got a big, big mess on your hands.

29:55Okay. Exactly. But George is right. You have to own what you do next, how you show up and treat her with kindness and dignity, even though she's not giving you that back, how you say, here's exactly what I want us to do together. Give her a clear plan. Here's the numbers I want to see for us. Because y 'all simply make way too much money to, not to be in the situation you're in. George and I talk to people all the time who have a lot of debt and who make a lot of money. But dude, you've got a hole in the bottom of your account somewhere that y 'all are just shedding money. There's zero reason why y 'all shouldn't be able to make your payments, even owing 100 grand, making as much money as y 'all do.

30:32Unless y 'all live in a$5 million house, And your payment is$7 ,000 a month. Is that true?

30:38George Kamel:No, it's about, I would say our payment for the house is around five grand. Oh, that's a lot. But it's still a fraction of what you guys are taking home every month. And that's just one tiny piece. You know what? That's a lot, but it's not out of whack. So yeah, that's a tiny piece. You've got a big problem on your hand, brother. The only way is to go directly through it.

31:06Thank you. Thank you.

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33:23George Kamel:up next we've got michael in fort wayne indiana michael welcome to the ramsey show hey thanks for taking my call absolutely um i um i have a just want your opinion on something my uh My wife and I and our family were in baby step four, five, and six. And just thank you for all the principles you guys teach. It's put us here. It's such a blessing. And we just had our youngest kid go to kindergarten. So that enabled my wife to go back to full-time teaching after being out for 11 years. Wow. She's amazing. Just so thankful for her and just all she's sacrificing to do that. But kind of our motivation as a family for her to go back was we're super close to paying off our mortgage.

34:13George Kamel:How close? We're super, like,$42 ,000, I think. Nice, dude. We're almost at the finish line. That's a car loan for some people. You got this. Yeah, exactly, exactly. So we're almost there. And so, anyway, once you take out taxes and giving and then the 15 % that we've done on my income, it makes the shovel a little smaller to get it done. And so we're wondering if we can get it paid off in like 11 months or a year, what would you guys think of still doing the 15 % towards retirement from my income, just like we've always done, but holding off on hers until we get that house paid off? And then after that, just bump it all up about 15 % just to get it done.

35:05I'm interested to know, George and I may disagree on this, but I want to be as honest as I can here, okay? I did that exact thing. Did you? My wife and I circled up and said, hey, we're going to pause this for one year and get this thing done forever. And for me, who's got a psychosis about owing people money, it was the right thing. But, man, going on more than a year, going more than 18 months, it's really – and trust me, from lived experience, it's real hard to put that 15 % back. Right, yeah. To start pulling, because, man, that feels like free money, and the discipline it takes to go back to investing, I've lived it.

35:45It's really hard, right? Yeah. What do you think? What's the principle, George?

35:49George Kamel:Well, I'm wondering, what does your wife make a year as a teacher now? So she's bringing in$52 a year now. And that one's got an automatic deduction, doesn't it, for a teacher retirement system of some sort? So they've got an automatic deduction that goes towards the Indiana teacher retirement, and they've got like a 401k on top of it. And that's what we were considering. You know, we'll do the 15 % either now or after we pay the house off. How old are we? I'm 42. She's 36. Okay, 36. So let me just do some math here. I'll pull up our investment calculator because what I like to do is go, okay, what do all the sides look like of this equation?

36:25George Kamel:So what you guys are saying we're going to give up is$650 a month for a year. So$7 ,800, right? Yep. So let's say that we just, we had that 7 ,800 and it was growing for us for the next 20 years. Now you're 62. She's still a young, sprightly 56, right? Right. I'm going to give it 20 years to grow. I'm going to say 10 % average annual rate of return, no monthly contribution. Just that pile of money growing for 20 years. That's really what we're giving up. That's the opportunity cost we're talking about in order to pay off the mortgage a little earlier. So I'm going to calculate. It's$57 ,000. Yeah.

37:02George Kamel:So that's the actual numbers we want to compare, not just, well, it's$650 a month. We're just giving that up. We're actually giving up close to$60 ,000 to make this happen a little bit sooner. So what I would do is say, all right, let's say that she did invest 15%. How much does that slow down the mortgage payment? When would you guys pay off the house? So from what I'm seeing, without doing the 15, it'd be 11 or 12 months. With doing it, it'd be like maybe 16. so it's not that much longer. I know it's not a huge, huge deal. So we're talking four months apart. And then here's my other thing, and this is where my brain goes.

37:38George Kamel:I go, okay, how do we make up the gap? How do we put that much extra while she invests to still pay this off in under a year? What am I willing to do? Side hustles, work harder, cut expenses, make other sacrifices to not derail our financial plan? Because you guys have worked so hard to get here and to unplug investing for a year just as a muscle. you're going to atrophy a little bit. Yeah, that's what I was saying. It's hard to come back, dude. Yeah, no, I get that. I get that. Versus going from 15 % to 20, 30, 40 % once you guys have that mortgage paid off is going to feel easy. Oh, yeah. Yeah, it's just like you're just adding a little more.

38:16George Kamel:Yeah, no, I get that. Can she tutor over next summer? Can you commit to doing something else? Because that's really what we're talking about is a couple of grand. Less than 10 grand is the difference here. Yeah, we can look into that. Not going on vacation this year or something. Yeah, and that's probably a good way to look at it is if we want to accelerate this, there's going to be some pain. Do we want that pain to be 20 years from now when we're like, man, we could have$60 ,000 more in retirement? Do we want that pain to be we're going to skip a vacation and we're going to go camping somewhere in Indiana instead of going on a big trip this year?

38:53What pain are we willing to endure short term so that we never have a house payment? Because we want to accelerate that thing. And you might land on it's four more months. Let's just stay the course. And hopefully also we gave you a good like ringside seat to I'm an over emotional guy. I know that. Right. And so I'm a super nerd who's like, what are the numbers? Exactly. George is like, well, future me is going to really be sad. And so the it's just knowing, man, I wish I wish with all of my heart I had with George has, which is the ability to feel uncomfortable. and then always do the next right thing.

39:30I've been practicing that for a long time. I'm trying. I'm coaching. Right, he's trying. And hopefully he wishes he had a little more fun like I do. A hundred percent. Right? I wish I had hobbies like John does. Yeah, yeah. He wishes he had joy and laughter in his life like I do. So like all I have to say is I couldn't sit here and say you can't do that because I did it. That's exactly what me and my wife did. And she knew she's married to a person who's quasi insane about owing people money. Like it's a lived experience. It's like it melts me. And so for her, she's like, oh, I get my husband back in a year.

40:01Yes. Whatever we got to do.

40:03George Kamel:That's like John is the little devil on your shoulder. And then I have Dave Ramsey on the other side going, you move from intensity to intentionality and maybe step four through six. So that's what I'm hearing, too. And I was intentionally intense. Like, dude, you're going to be 43 and 37 with a paid for house. Like, that's insane. So if it's four months beyond that, we're still going to cheer you on and go, that is incredible. And the fact that you invested the whole time is even more incredible. So that would be my personal plan would be let's invest 15 % of our full household income for now and see how we can still hit our goal of knocking us out in less than a year.

40:39George Kamel:And I almost can guarantee it. Now, I can't say it for sure. You guys will pay this house off in a year while investing. And can I completely do a 180 of what I've been saying? Yeah. I want to throw a third option on the table. What if you and your wife sat down and said, we're not going to do it in 10 months. We're not going to do it in 14 months. We're actually going to do it in 16 months. And we're going to take a little bit of money each month. Now that you're back in the workforce full time and we still have kids, we're going to hire a house cleaner. I want to take you to a nice meal once a week.

41:12I'm going to take the kids out and let you just exhale because now you're surrounded by kids all day and you come home to more kids. Like you all begin to build in what kind of life do we want to have? because in the same way in your home, like in my house, I'm psychotic about a couple of things. Your wife may be feeling the weight of, I'm back full time, but I also feel this pressure to keep my old identity and, and, and, and. You all ask yourselves, what kind of home, what do you want your home to feel like? And I would say even being part of, like George was saying, being intentional is, we're going to actually do something great.

41:46We're going to slow it down a little bit and we're going to go out to eat. Yeah. We're going to give each other a room to breathe.

41:51George Kamel:She deserves it. She's amazing. Just the sacrifice she makes these first couple weeks of school. It's awesome. Yeah. And, man, classroom is different than it was 10 years ago, brother. It's different. Amen. And so, yeah, give her the love and care and support she needs. Ask her every morning of your life, how can I love you today? And, man, be all about supporting her. You sound like a really good husband. So we've given you pretty much no answer, right? I gave you the right one. John gave you an alternative. So I think we're both somewhere. Yeah, George gave you the right answer, and I gave you the two alternatives, the one I did and the one I probably wish I would have done.

42:28There are no sins being committed here, but the plan works if you work it.

42:33George Kamel:And so we say four, five, six are done simultaneously, and 15 % is forever. In fact, once you pay off the mortgage, you just increase investing. But even if you had it, you're like, hey, we're good on retirement. We still tell people to invest because there's more impact to be made for your family, for your community, for the things that you want to do. It's a good problem if you had too much money in retirement. You can come back and yell at me later, even if you paid off the mortgage four months later on. Way to go, man. Thank you.

43:14Okay, George, we hear from so many people that are trying to live out the Ramsey plan, right? They're getting out of debt and everything. But the hard thing is there's not many banks out there that actually support the way we teach people to handle money.

43:25George Kamel:Yeah, most banks, they don't want you to win with money. So they charge a bunch of nuisance fees. There's all this fine print. And worst of all, they are pushing debt products at you nonstop. Yes, but the good thing is that Fairwinds isn't like most banks. They're not like the other guys. They're not like the other guys. Yeah, they are not pushing debt. And they actually want you to win with the baby steps. And so what's great, too, is they created the smart bundle for Ramsey fans, which includes a high-yield savings account and no monthly fee checking. Which is huge because it's rare to have a checking account tied to a high-yield savings account.

43:57George Kamel:You can get all of that with Fairwinds. And for the nerds out there, you can have 10 different high-yield savings accounts for different goals. So you got your emergency fund, the car upgrade fund, the vacation fund. The world is your oyster. So beautiful. And check out the debit card, the new one. The live like no one else debit card. Oh, that's beautiful. It's so beautiful. That's a conversation starter. It's so good. And when you swipe or you tap, every time you take it out of your wallet, you're remembering that you are living like no one else and you're being intentional with your money. I've been using Fairwinds for months and months now.

44:25George Kamel:I love their features, the app, the customer service. It is all so good and so aligned with the Ramsey principles. Absolutely. So, y 'all, we both bank at Fairwinds, and we love their commitment to Ramsey values. So, check it out. You can get that smart bundle. We're going to drop a link in the description, or you can go to fairwinds.org slash Ramsey today. That's right. That's fairwinds.org slash Ramsey, insured by the NCUA.

44:55George Kamel:Welcome back to The Ramsey Show and the Fairwinds Credit Union Studio. I'm George Camel here with John Deloney taking your calls at 888-825-5225. Thomas is in New York City up next. What's going on, Thomas? Hey, how you doing? Doing great. How can John and I help? So I currently am house hacking. I am trying to move. I don't like my current living situation because I'm in a low-income area. I feel like my two options right now is, one, move out to an apartment and rent. But I would rent out my current unit. Or two, which I was leaning towards is just buying another property in a better area, but continuing to house hack.

45:41So, Thomas, I'm an old, old man. What is house hacking?

45:46George Kamel:John hasn't been on TikTok ever. I would not know how to log into TikTok. Yeah. What is house hacking? It's a family unit. So I live in one unit and I rent out my other two units. And I get rent for the mortgage. Is that what the kids call it these days? House hacking? Yes. All right. All right. That sounds miserable. It is pretty miserable. I actually hate it. So let me ask you this. So I was an early adopter back in 2009, 10, into this thing called biohacking. and I used to, there was no continuous glucose monitor, so I'd prick my finger every morning and I was always peeing on ketone strips and I was keeping like these detailed Excel spreadsheets.

46:26And then one day I was like, I'm biohacking myself into a life that I hate living. Yeah. Right? And so then I quit biohacking. You know what I mean? But, so yeah, I don't know. George knows more about this TikTokization.

46:42George Kamel:I want to know what caused you to get into this house hacking situation. I'm assuming you're a guy in your 20s. How old are you? Twenty-five. Okay. What caused me to get into it? I mean, I just want to become financially stable when I diversify. But like, did someone tell you about this? Did you see a video and it sounded alluring and you started looking for multifamily homes? I think I was on YouTube a few years back. Yeah, I didn't like how expensive rent was. And, you know, I've always heard that it's better to buy them to rent. so figuring out how I can buy. Okay. What I want you to understand is that a lot of times the things that seem really cool on the internet are often going to destroy your life.

47:23George Kamel:Now, you're not quite there yet, but you're getting a little bit of that taste in your mouth of the reality of this was not what was sold to me when I bought the course or whatever. And so I want you to realize that it's okay to opt out and go, you know what, I'm going to go rent for a while and just sort of reset. I can sell this multifamily because I don't really want to be a landlord by default just because I thought house hacking was going to be the move. And both George and I have both rented, both married. I've rented, both of my kids have lived in rented homes at certain times. And we kept plugging away and our life is changed now.

48:01You get what I'm saying? man? Like the fact that you're thinking about future you and you're trying these things tells me you've got what it takes to become financially secure. You're not scared of doing hard stuff. You're not scared of putting yourself in uncomfortable situations. You're not scared of like, like doing the next right hard thing. So man, all you need is a clear path. It's actually going to get you where you want to go and not get a bunch of clicks on some social media site, right?

48:30George Kamel:Yeah. So what are you making right now? What's your income and what is the income you're actually netting from this multifamily? If any. My income, like gross is 300. What do you do? Software engineering. Amazing. 300 ,000? Yeah. You know who doesn't need to house hack? Guys who make$300 ,000 as software engineers. Thomas, you won, dude. You can pay your own mortgage like a grown adult. You don't need people doing it for you that live next door that also knock on your door when the toilet breaks. That throw parties. I'm trying to, like, you know, put myself in the best position. Thomas, you're in it.

49:12George Kamel:Do you have any debt right now? Nah, I have, like,$4 ,000 student loans. Okay. You can pay that off today? You have that money in savings? Yeah, I can. Today. How much will you have left in savings after that? A good amount, like, uh, on$90 ,000. Amazing. So think about this. Today, you will be consumer debt-free with$90 ,000 in the bank. What is owed on the mortgage on this multifamily? I just bought it like 18 months ago. I almost bought all of it, like$650 ,000. $650 ,000 is what is owed and it's about worth $650 ,000? I bought it at like$690 ,000 right now. If I have to guess, between$750, maybe a little more.

49:57George Kamel:So you could probably walk away after fees with a little bit of pocket change if you sold it. Maybe. Maybe. Okay, because right now they're just paying the mortgage. Like, basically, you're staying there rent-free? Yeah. What's the cash flow like? Because you have a big old mortgage on that. $100. Yeah, I mean, I'm like negative$100 after rent is collected. So you owe$100? Like, after I get all my rent, I have to put like$100 of your own money to pay the mortgage. Okay. So you basically have a very low rent right now, but you have to do work as a landlord and deal with all the risk and liability and all that fun stuff.

50:37Yeah. And somebody else regularly flushing your toilets. Yeah.

50:43George Kamel:Right. So what is your actual dream? If I could erase this whole house hacking thing, we restarted today. What does Thomas really want? Do you want to live in a single-family home in a decent neighborhood and start a family? What's on the other end of this? Yeah, a nice single-family home, a nice neighborhood. So buy that. Set yourself up for the life you actually want. What was growing up, like, what was money like growing up for you? Money wasn't, I wasn't, I wasn't, like, yeah, money wasn't there. I wasn't broke. We weren't broke. you know money wasn't was it a source of tension? yeah I mean we didn't my mother did a good job so we didn't feel it as children I'm not saying this as a character anything any shade on anybody I'm just trying to get to a because where George and I are sitting you're 25 years old you make 300 grand yeah when you're 27 you'll have banked $900 ,000 after taxes is you get what i'm saying like bro you're doing really really well now you're in the uncomfortable adult seat of slow and steady so imagine you go rent for a year even if it costs you i don't know two or three grand i don't know what it's going to cost in your area for a place that you like and you just live fairly frugally live on less than you make should be easy on 300 grand with no debt you bank 150 grand on top of your 90 now you got some serious money you got 240 000 to put down on a house that you actually want you're saying i should like just buy my single family home in my neighborhood buy the home that you want because you don't need somebody to pay your mortgage that's not the issue yeah if you if you buy the house you want and you start building the life you want and a few years from now you want to get into real estate that's awesome man you'll be able to do that with cash buy the place yeah And then put two different families on either side of each other, give them a great deal on rent to support them, and, man, everybody wins.

52:54Do you have a girlfriend right now?

52:55George Kamel:Even if I'm not. Yeah, I do. Okay. What does she want for your future together? Oh, yeah, nice little family home. She wants that duplex life. I think you know what to do, man, and you're in a great position to do it, but all it takes is putting this house on the market and going, well, tried that, wasn't for me. Wasn't for me. That's okay to say out loud. You should get into radio because your voice is way better than mine. So smooth. Golly, I would love to have a voice like that.

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55:13George Kamel:James is in Raleigh, North Carolina up next. James, welcome to the show. What's going on, guys? How are y 'all? We're doing great. How can we help today? Awesome. Hey, let me just start by saying I'm a little bit relieved and a little bit disappointed that I'm not talking with Dave today because I knew Dave was going to whoop my tail. We can do it. We'll dial it up for you, man. We've gotten our tail whipped by Dave, too, so we know. Look, John, I listen to you all the time, bro. I'm a pastor, and I sit with a lot of hurting people. And, man, I've gleaned a lot of even, I don't want to say tactics, but techniques as how to sit with people from you.

55:55George Kamel:So I appreciate you, bro. You got it, man. Thanks for calling. How can we help, man? Yeah. So my wife and I have been married 14 years. My wife is amazing. We have six kiddos, 10 down to one. I am a pastor of a growing church And I also run a small business And it's kind of in a spot We've allowed ourselves to get kind of back into a spot Where we've got a good bit of debt And we have an income issue But at the same time I also have just a time issue So anyway, we're trying to get started back on the baby steps And get out of debt And so it's just and looking for maybe a little bit of help with us as we're trying to get started and such.

56:42George Kamel:What kind of debt is this and how much? Yeah, so we've got about$70 ,000 consumer debt. It's about$30K and a personal loan. Two grand we owe to the local county. We're paying on taxes for our land. We have about$5 ,000 over two different credit cards. and then$16 ,000 in a truck I bought last year when I was starting the business and then also$8 ,000 for an enclosed trailer I bought as well. For the business? What's a small business? Yeah, so I do light remodeling, handyman, that kind of stuff. What did you report last year? How much did you make? About$65 ,000. Yeah, about$65 ,000. and it was about half the year I was doing it full-time, the other half of the year, or really not even the other half.

57:38George Kamel:In November, I actually stepped, so really about 10 months of the year I was doing it full-time. In November, I stepped in as a lead pastor at a church, and so I cut back to about two or three days a week with the business. I'm honestly not sure right now if it's worth it. What is your salary as a minister? $60 ,000. Okay. So you were making$125 ,000. Are you making a grand a month doing this now? With a side business? Yeah. It depends, honestly. Feast or famine. Like June, July was maybe a grand. August will be about$7 ,000. Because you're, yeah, on the months that are bad, you're bleeding money from this thing just trying to make payments on the truck and trailer.

58:30George Kamel:And was the$30K personal loan for the business? No, that was, we moved about two years ago and purchased a piece of land and put it on What was the land for? And just where we live. We sold our house and just lifestyle. We moved out of the city, moved out into the country to raise the kids that way. Okay. Yeah, so we ended up, we thought we could cash flow it off the sale of our other house and it just, once we got in it, we couldn't. so we ended up getting a personal loan to finish drilling the well and that kind of stuff. Does your wife want out of this debt? Are you guys ready to go back to debt freedom?

59:10George Kamel:How bought in are you guys? We're locked in. We're together. We're locked in, bro. I posted my truck yesterday. Wow. Now I don't know what I'll do if I sell the truck. Well, here's the other side of it.

59:26You can't get through this without sacrifice. Gnarly sacrifice. It seems to me, and push back on me, man, and George, you tell me if I'm wrong, you happen to have a key in your back pocket, which is I can go turn a key, and I will collapse at the end of one calendar year, but I can make another$65 ,000 on top of being a pastor here and get my family cleared out of this mess.

59:53George Kamel:Potentially. I think this is where I'm struggling. I've got the church in the last year has doubled. The Lord's doing its cool work, and it's doubled. And in the last nine months, I've done five funerals and walked with folks after they've become widows because the spouse committed suicide. Sure, sure, sure. So you're saying that the church is demanding more time from you now, so you don't have time for the business, which is producing the income that you need to pay off the debt. Is that what we're getting at? and i have six right and i have six kids so so here this is my kids are my first ministry this is one of my wrestling with all of that well this is one of my like top of the top five hard conversations i have to have this is one of the the hardest okay this is up there in the top five you you want to be a pastor you might even use the language you are called to be a pastor and by all accounts like all uh what i would call and i hate hate using these but by earthly metrics you're pretty good at it you're creating a world that people want to be a part of you're not creating it you're help facilitating the world right you're good at it and you and your wife dug a seventy thousand dollar hole yep and so at some point you're going to either have to pause this dream and this calling because to clean up decisions that past you has made, or you're going to have to look at your wife and say, I've got six kids and this is my priority and I'm going to show, give them a ringside seat.

1:01:26I'm going to show them what it's like to clean up a mess you've made. And like I say, you will be spent. You will be a wrung out rag at the end of a year. Or you get with your church leaders and say, here's the, here's the situation I've found myself in right but like i hate that you're in this position but that you got a math problem in

1:01:47George Kamel:front of you get what i'm saying yeah yeah for sure and and one million percent like we put ourselves in this position so i mean we're there oh i hear you i hear you i know that you've taken full responsibility so that's why we're not going to beat up on you because and dave wouldn't either because you're not a guy who's not seeing it for what it is you know what you did you know the way out and you're going, how do we do this? And we're giving you the roadmap. It's just not a fun one to say, hey man, you got six kids and you're going to miss out on some things over the next year as you clean this up.

1:02:16George Kamel:But the other side of this is you do nothing. You go into deeper debt. Now you got kids who are two through 11 and you got a bigger pile of debt. And so kicking the can down the road is also not going to solve it. So the best way to get out of this debt is just go through it and go, all right, if I can make 70 grand doing the side business plus our income, we can knock out this debt in 12 months. Yeah. Yeah. And I mean, there's a, there's more work. Work's definitely not the issue. I mean, I can. Sure. You can drum up more work out there. Or you and your wife say, hey, this is a two year project and I'm going to make 30 grand a year and every penny in the side business is going to go to towards our debt.

1:02:56every penny, which means we've got to learn to live off my$60 ,000 ministry income.

1:03:02George Kamel:Yeah, well, and something we did last year, or this year, which was the right decision, but just kind of added a complication, is during COVID, because I've been in ministry for a while, but was kind of the associate pastor, but during COVID, we got food stamps, which, which, you know, of course I would never want to be on or even tell anybody I was on, but we were. And so, man, with as many kids as we have, we were getting$900 a month. And we killed that this year. We're like, we're done. I started the business now. We no longer are eligible. And we're doing, you know, we're going to turn everything in.

1:03:44George Kamel:We're walking on the up and up, and we're going to sacrifice that. So I also got like a$10 ,000 pay cut in some sense this year. Because you're covering that now. But, bro, yeah, and it was worth it. My wife and I talk about it all the time. Like, praise God, we are not— Well, now you're in control. Yeah. Can I have permission to Jesus-juke you, James? Jesus-juke me. Okay, here it is. Proverbs 22, 7. You know about a thousand more verses than I do. The borrower is slave to the lender. And you knew that, but now it's a stark reminder that that lender owns your time that you could have been spending with your kids.

1:04:18George Kamel:So it's not the side job's fault. It's not the church's fault. It is man. I'm so mad at the decisions I made and the lenders I have to pay And i'm going to get out once and for all and never go back in which means cutting up the cards Selling the truck selling the trailer and working your tail off to climb out of this thing for true freedom. We're rooting for you

1:04:51gems

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1:06:28George Kamel:If you're sick and tired of working so hard and have nothing to show for it, that is normal. And normal is broke, sadly. You don't have to live that way. Our EveryDollar budgeting app helps you find extra money every month and builds you a personalized plan to beat debt and build wealth. And in just 15 minutes, you'll find thousands in hidden margin, and you'll feel like you got a raise. So don't live normal. Live like no one else. Start EveryDollar for free in the App Store or Google Play. Sarah is in D.C. up next. Sarah, welcome to the show. Hey, thanks for having me, guys. Absolutely. How can John and I help?

1:07:02George Kamel:So I have a timeline question for you all today. So I am fairly newly engaged, and my fiancé and I are sitting down with the numbers, and we're keeping things separate for now, but planning on combining, So just kind of planning for all of that. And we are currently in a small rental apartment and want to know about saving for a wedding and a down payment for a house with kind of a few little asterisks to the grand scheme of things. So one of the major sacrifices that we've made to try to pay off all of our debt is staying in a fairly small apartment that's not super conducive to raising children in.

1:07:54George Kamel:My fiance is in the police department, so we actually live in a not-so-great area that I wouldn't feel comfortable bringing a small child into the home. but in return for his presence as a police officer and some of what he does on the side for them we don't pay rent so obviously that is a huge blessing and has allowed us to pay down our debt but I don't want to have children here I'm about to be 31 and so we would like to start on children shortly after getting married um when's the wedding yeah that's no we haven't set a date yet um part of doing that is setting out our financial goals because we like i said setting up for the wedding is sort of part of this timeline question okay and how much debt do you guys have left separately so he is almost done he has about 3 000 left in student loans that's it um paid off the credit card paid off the car Awesome.

1:08:59George Kamel:So he's set. He'll have that done in like a month or two. Great. I have$11 ,000 in my car loan, and then I have$214 ,000 left in my student loans, which sounds scary, but I started at over$300 ,000 total. So I've made a lot of progress. Wow. Are you a physician? I am an overnight emergency veterinarian. So kind of the second caveat to that is the longevity of my job. You know, I love what I do and I wish I could do it for forever, but my body tells me that I cannot do overnight for forever, especially in emergency. And I'm worried about probably needing to take a pay cut when we start having kids.

1:09:46George Kamel:I could work as a regular veterinarian and probably still make$160 to$180 in this area, but it would be a substantial pay cut, obviously.

1:10:00I'll let George speak. I have some ideas, but we'll wait.

1:10:03George Kamel:So the overall question you're asking is, when do we make the move? Where do we go? Should we rent? Should we buy? so i would love to buy that's the preference but yes if you have thoughts on that would be great my question is when to stop aggressively paying down the debt which i mean i'm putting like close to eight thousand dollars every month into my student loan right now so when do i divert from baby step two to try to you know do the things that are needed for the next steps of our life without putting it up too much on hold. Next steps being wedding, down payment, all that? Yeah. Okay. Well, I'll give you the simplest answer, which is you are not going to stop being aggressive on the debt, but you should pause and save up for the wedding and do something reasonable.

1:10:55George Kamel:Now, is it just on you two to cover all things wedding or is family helping? It's probably just on us. Okay. Then I'm going to do the smallest sweeting, make it, Just call it an intimate wedding. It's cozy. You don't need 150 people there because you're basically paying for them to party at$100 a head. Yeah, let me talk about that. We're planning on doing something small and reasonable. Okay. And the reason I'm not like, you got to get married tomorrow. It's just that once you guys are married, you're going to have a superpower, which is combining your finances and your goal and your vision, which is going to move everything faster.

1:11:27George Kamel:because if you had all of his income, now he's debt-free, throwing at your debt, well, now we can make some progress fast. It's not going to take you as long. You're going to get done in less than half the time. And so that's where the focus should be, which means we are renting for the foreseeable future until we are completely consumer debt-free, we have an emergency fund, we have a solid down payment, because what happens for people in your shoes, you guys make great money, you have the baby, and all of a sudden you want to cut back and you can't because you have a huge pile of debt, you have a huge mortgage, you have nothing in savings, and now you're frustrated.

1:12:02Yeah.

1:12:03George Kamel:And you're scared. And so I'd much rather you do this with peace and just rent for a while with your incredible incomes, even if it's for three or four years. That's okay. I guess does that – I'm nervous and very hesitant to put off our family planning and children. Oh, I'm not saying that. Listen, I'm telling you to have a baby. And when that time comes, you guys should move and go rent somewhere, even if it costs you money. Or every single apartment or condo I've ever rented had some police presence. Is there a possibility that there's nicer apartments, nicer places somewhere within a 30 or 45 minute radius of where you all both work, that that would be a possibility?

1:12:49George Kamel:So probably not like I mean, yes, we could move and like rent somewhere different. Like that's definitely obviously a thing, but not in the same setup where we would not pay rent. Or a subsidized rent? So they do exist. It's a program like through the department. Okay. But the way we got this one, and it was essentially like handed down to us from his best friend. So what would rent cost if you didn't have any subsidies? If you just had to pay for rent somewhere reasonable, a nicer place, what would it cost? um probably like 2500 to three grand we live in a pretty terrible housing area the housing market's awful okay and if you guys are married at that point you guys are bringing home my guess is maybe 12 to 15 grand so our take home combined is um about 16 ,000 a month amazing so think about that.

1:13:46George Kamel:2 ,500 out of 16, that's not the thing that's going to hold you back from paying off debt. And you have a higher quality of life, which means when you come back from a long day at work, you can rest your head somewhere and feel good about it and sleep better. Yeah. Yeah. I know this, it feels like I'm climbing a mountain or sleeping under it currently. Well, can I, can I, can I say some hard things? Cause I love you and I want you and your husband to have an amazing life and have 50 kids and have everything you want. Is that cool? yeah of course it would be really um advantageous to you and it's a it's a it's a psychological exercise as much as it's a spiritual exercise write down all of the things not need all the things you want and what you're going to find is you want a whole bunch of things and everything you've said so far you wanted you want a nice house you want a safe place for your kid.

1:14:41You want to have kids right away. You want to get married. All those things are amazing. They're all awesome. I support each one of those a million percent, but you also wanted to take out 300 grand to go to school. Yeah. And so that particular want that you gave into is now holding you back from all these new things that you want. And so let's sever ties with that old want as fast as humanly possible so we can get to the life that we want now. But trying to cram the things that you want now into an already existing mess will make everything less peaceful, enjoyable, life-giving. And what ends up happening is we want to blame everybody else.

1:15:29You looking in the mirror and saying, I thought I had to, nobody told me different, whatever. I took out$300 ,000, so I'm going to live like a maniac getting the stuff paid off I'm going to get married and have a really small wedding because I don't want to spend 20 grand on that I want to spend 20 grand on two more months of paying off my student loans we'll have a different party in two or three years but we are going to attack this thing so we can get into the life that we actually want

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1:17:38George Kamel:Today's question of the day is brought to you by Y-Refi. If you've fallen behind on your private student loans, you don't need more shame. You need a plan. Y-Refi helps borrowers explore refinancing options with a low fixed rate and payments based on what you can afford. Go to Y-Refi.com slash Ramsey. May not be available in all states. Today's question comes from Antonio in Florida. Antonio writes, my wife and I have been on separate pages regarding credit cards. She uses them to play the points and miles game, but I'd like to get rid of them. She's recently started realizing how much work it is to manage all the things that come with the credit cards and also wants to get rid of them, but is worried about destroying her credit score.

1:18:19Is that something we should be concerned about? No.

1:18:24George Kamel:Thanks for the question, Antonio. That was fun. See, here's the thing. I don't think our answer is going to be satisfactory because it needs to be a lived experience. Us just telling her you're going to be fine probably won't be enough. And I wrote about this extensively in my book Breaking Free from Broke. A whole chapter on credit cards, a whole chapter about what I call the perfect spender, the points redeemer, the people who are like, I'm playing the game perfectly. Why would I stop? And now not only that, but why would I stop when it could then hurt me to stop because of my credit score? So what you need to remind her is that a credit score allows you to get more debt at good terms.

1:19:01George Kamel:So what else are you trying to go into debt towards? And how does a credit card actually help you move forward financially? And once you realize that it is a game, that it is a maze, and at the end, you're like, where's the cheese? And like, oh, no, there's no cheese. They expired. There's another maze now. You just keep doing this until you die. and so I'm glad that you're realizing that this is a game and that she's realizing hopefully that this is a game and it's just this was fun but you're saying she wants to get rid of them so here's the thing you just get rid of them your credit score might take a temporary dip and then you move on with your life and you pay cash for things using your own money and that is where you get so much freedom that you can't I can't explain to someone how good it feels to not use someone else's money um well let me let me because i was gonna say um antonio your wife's right it will destroy her credit score it'll go to zero it'll implode it i would say it doesn't matter but you're saying just a little dip yeah i mean if you immediately like you pay it all off you close the account you'll see a dip in the credit score now the question is it's not going to be like that forever six to twelve months after you have no accounts open it becomes indeterminable so if i went to check my credit score right now, it would just say, ain't nothing here, bud.

1:20:17George Kamel:We don't got any records of you. Right. I'm off the grid, basically. That's like me looking up like, what is my score on like a dating website? I'm not on them. That's it. So the only major thing people get worried about that is legitimate is, well, how am I going to get a house? And there's something called manual underwriting. We've talked about it a lot on the show. And it's like the old times before, you know, the late 90s when credit scores were all the rage, you just went into the bank or the lender and said, hey, here's my income. I don't have any debt. Here's my down payment. here's my rent you know payments that were on time my utility bills have been on time and you can get a mortgage without having a credit score and again that's not theory i've done it and so i've done it too and before every human became commoditized and reduced to three digits a number right that some computer spit out and said this is this is your risk profile to us as a big um entity yeah man man you're unwriting they actually look at you and your actual situation um and antonio that i'll tell you the two things that were convicting to me about credit scores thing number one is it has zero nada no bearing on your financial position meaning i could give you i don't have this but if i found it and i gave you five million dollars it would affect your credit score in zero ways and so we we've suddenly over time this extrinsic metric called a credit score, we've allowed it to infiltrate not only our borrowing and lending world, but our self-worth as some sort of proxy for how are we doing financially.

1:21:49I hear so many of my friends and even family members say, well, I want to keep my credit score because it's this. And they never say, here's how much money I have in the bank, or here's my net worth, even financial net worth. They just want to keep this credit score up. It's not a proxy for how well you're doing financially at all. It's simply a proxy for how much have you borrowed in the past and how good did you manage that relationship? That's it. The second thing is, and this is me getting all high and mighty. And George, you and I have talked about this just privately. I mean, I was big on having a credit card, using it for the free points.

1:22:27I travel a lot and I didn't want to pay for flights and I would pay it off every month. And I lived like that for a long time. I remember the aha moment when I got a bunch of points for a huge purchase that I got reimbursed for that I thought, wait a minute, they're not my friend. They're not just hooking me up. They're not a charity. Who's paying for these flights? And as I dug into that, that's when I said, I'm out of this game because the people who pay for that flight are the folks who are struggling to pay their bills every month, who are paying over overdraft fees. that's what's funding my free hotel rooms and flights.

1:23:04And I don't want to get a free flight on the back of somebody who's struggling like that. So I'm out. I'm out. If I want to go somewhere, I'm going to pay for it. And if the airline I use or the hotel I use, they have their own point system. Like if you use my airline system, my airline will give you free flights over time. Great. That's between me and them. But somebody who's struggling isn't funding my good times. I just don't want any part of that kind of gross system.

1:23:28George Kamel:I got the numbers for you here, John. This is in the book, in this chapter on credit scores and credit cards, lower income cardholders paid$4.14 billion in fees just that year. Those with higher incomes raked in$1.26 billion in rewards. That's pretty wild. So lower income people are paying$4 billion in fees and the rich do get richer because they're raking in those rewards. The credit card company is not blessing you. They're just simply redistributing that money. Right, and so in my head, there's a single mom whose husband just, or whoever, the guy just walked out, and she's got to get groceries, and she puts them on there, and that same month, her hours get cut, and they charge her$35,$75 late fee.

1:24:08That's what just bought my flight? I'm not, no way, dude, right? No way. I don't want to be a part of a system like that, so I'm just going to opt out. Man, well, I'm riled up now. So, Antonio, cut them up. Cut them up and move on with your life.

1:24:20George Kamel:Bella's in Sacramento up next. What's going on, Bella? How can we help? hi guys i am so excited to talk to you guys i've listened you guys are like celebrities in our house wow we're celebrities somewhere we're not celebrities in our own house or on the internet so thank you so much so yeah i never thought i would be calling about my dad um so my dad who's always been very meticulous with money like his checkbook but he's old school so he does you know have a credit card with points. He has multiple credit cards. And now we're in the position of having to make decisions for him because he's starting to suffer from dementia.

1:25:01George Kamel:And so, yeah, he's had this Sears card for, I don't know how many years, racked up like six figures of reward points. And I guess recently Citibank bought out Sears. And so when they began sending him statements, he didn't see his reward points that held so much value to him. Now he's suffering from dementia, so he doesn't understand now that it's not money, it's reward points. And so he's thinking Citibank stole like$120 ,000 from him, which I'm like, Dad, you can't even have that much on a credit card. How much does he owe on this card? So now he owes about$4 ,000. I tried to talk to them. He stopped paying it because he thought they were stealing his money.

1:25:47George Kamel:I tried to talk to them and tell them, hey, we're trying to figure out a way to help resolve this. He doesn't have an income any longer. They're just not moving. And so now they just served him with a summons for court, which doesn't have a court date on it. So I don't know if they're threatening him, but I just don't know as a daughter, like what options I have to help him out of this situation. I've never been here before. I'm guessing you don't have financial power of attorney. Not yet. We're all in the process. Like now that we're starting to really obviously see that our dad, who we've looked up to, was like suffering from dementia.

1:26:27George Kamel:We're like, oh, wow, we need to start getting things in place. Yeah, get financial power of attorney as soon as possible, okay? Okay. And you can try to settle with them explaining the situation. and I don't know how much the courts care about his health. The credit card companies just want their money. He's just an account number to them. And so you're going to have to fight this and explain what's going on. You could settle. You could just let it go and they try to sue him and the debt stays on and whatever at that point. Or you can go to court with your father who's got dementia and say, here's who they're beating up on, judge.

1:27:01I don't know what that would get you. Or if you look and say, hey, he actually owes you$3 ,000. You and your brothers are going to come up with that money and help clear that debt because he did take that money from them. We're going to clear it. We're going to close this account. That might be the path forward.

1:27:15George Kamel:And I would contact our friends at Guardian Litigation. You can go to guardianlit.com slash Ramsey. They help with exact situations like this. Good luck, Bella.

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1:28:45George Kamel:Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. I'm George Camel here with John Deloney taking your calls at 888-825-5225. Dan is in Minneapolis up next. Dan, welcome to the show. Thanks for having me. Absolutely. What's going on with you? Struggling a little bit here. Talk us through it. So currently I have a newborn baby, 10 months old. My wife just found out she's losing her job. Oh, man. And I just started a new business. Perfect storm. Yes. Was there severance with her job? What happened? Um, so she actually is an online telehealth nurse. Um, and they had a meeting one day with 200 employees on the zoom call.

1:29:37George Kamel:Uh, the CEO of the company hopped on and said, Hey, if you're on the zoom call, you're all going to be losing your job. And if you have any questions, take it up with HR and hung up the phone call. Wow. What a coward. I hate that for her. And then after that, I guess, uh, they had a employee group chat or whatever. Everybody was on there talking, and three minutes after the call, they shut down the group chat for them all to talk to each other. And what do you do for work? So I actually just started a concrete and asphalt paving business. Is that full-time, or do you have a different job while you have the side business up and running?

1:30:17George Kamel:Yep, I do have my full-time job as well, that I do heavy equipment operating. All right, I'm going to cross my fingers here. Please tell me, as you started this new business, you didn't go also leverage a big truck and a dump truck also and a front loader as well. No. Luckily, I just started listening to you guys, a little bit of background about me. I grew up on a Native American reservation as a kid. My first memories, my dad was abusing my mom. Grew up learning everything from my mom after they got divorced. And then when I joined the military, she ended up actually stealing money from me while growing up.

1:31:00George Kamel:So then I kind of ran off, did my life, lived lavishly, enjoyed our time and stuff like that. Well, after her and I got married, my wife and I, I should say, got married, I found you guys on YouTube, started watching the Smart Money Happy Hour and the John Deloney Show. Yes. Became big fans of you guys. So then when I started my company this summer, I told my wife, I said, I'm just going to cash flow the business. Awesome. So as of right now, my business has no debt, but we still have consumer and personal debt. Dude, I know that's a tough season you're in, but you didn't make it worse. So I'm proud of you for that, man.

1:31:36I have my fingers crossed because almost everybody in your situation does the opposite. So well done for literally just this moment, right? Yes. Just this moment. I appreciate that. Awesome, dude. Awesome.

1:31:48George Kamel:So how much are you bringing in from your full-time job in the side business right now every month? So my full-time job every month, well, I make about$100 ,000 is what I actually pulled in on taxes last year. That was before the new job. And I'm just kind of getting the balls rolling, getting some jobs coming in. And for September here, it's looking like the concrete side job is going to be bringing in probably about$12 ,000 to$20 ,000 of profit. That's fantastic. How reliable is that? Can you consistently make a certain amount every month doing this? In Minnesota, pretty much just the summertime.

1:32:25George Kamel:So I have September and maybe some jobs in October, and then after it freezes up, I'm pretty much on standby until next spring. So we've got two more months to really hustle. Yes. Okay. And then tell us you've got a 10-month-old, right? Yes. Okay. I guess nothing is good about what happened to your wife. the complete lack of humanity her employer showed the way that was done all of that cutting off her like human connection with her colleagues like all of that was disgusting and gross at every level right and and there's going to be a season of grief for that your wife and you are going to be right to be like skeptical of trusting businesses and bosses all that's right and I'm trying to look for some light here your wife has right now what i would say is one of the hottest credentials which is a nursing degree right yep and so what does it look like for y 'all to sit down and say how much debt do we have we didn't want to put we she had a work from home job which was awesome um so your picture is going to change but for one year if we put our daughter and we get some child care could your wife go work full-time and get all these debts paid off so that y 'all can then go about living on your hundred grand plus whatever else you bring in yeah that's a possibility um i've been working hard ever we got married in 2024 and starting in 2024 for her and i combined together we had 213 000 of debt and that's no home that was just a camper we lived on the road while she She was a travel nurse, my pickup truck, toys, and her student loans.

1:34:09Over the last two years, we've been buckling down trying to pay it off,

1:34:14George Kamel:and we're at$143 ,000 in debt right now. Okay. What's left? I'm selling. Go ahead. What's left on the debts? The next is the, we have three credit cards, a car, or two cars technically, and then my truck and camper. Okay, do we still need the truck and camper at this point? Are you using the truck for the business? No, you guys might like this. I actually just shook hands with the guy and I'm selling the truck and camper tonight when I get off the phone here. What a boy. You buried the lead, man. yeah so i mean i'll be about 10 000 upside down on it but we can attack that pretty quickly i feel like so that will leave us after that sale i think we'll be about 67 000 left in debt dude that's great what are the cars worth god you're awesome man could you continue this with the car like just do the snowball of selling all the things with wheels and motors in your life yeah so with that deal actually um i got a work truck for my company i'm actually going from a $40 ,000 truck down to a$2 ,500 truck with rust on it.

1:35:20George Kamel:But it's like, I'll make more money that way. As it should be. Atta boy, Dan. And then my wife's car, we traded her. She had a 2024 car. We just traded in for 2018 to make it more affordable so she can get around as well. Okay, so look, brother, if you go down to$60 ,000 in debt, that's literally her work. That's take home for her if she goes all in for one year plus child care. Yep. And if y 'all make, if she She doesn't want to do that. You don't want that. That little baby, right, is 10 months old, for God's sakes. Doesn't know what day it is, right? Like, dude, if you all shake hands on one year of hell, one year of it not looking like you thought it was going to look, you are free forever.

1:36:08Yeah.

1:36:09George Kamel:You'll do the business because you want to, not because you have to. Your wife could stay home if she wants to. or she can keep working full-time as a nurse because she loves it and y 'all get on with it, man. But you're talking one year of sacrifice. One year left, dude, and y 'all are free.

1:36:28I feel great. You're free. And I got to tell you, Dan, I got to tell you, you grew up in black hole hell, right? Yep. and you as a man have turned and faced that hell and your kids, I'm getting goosebumps, your grandkids are not going to know what that's like because you turned and stared it down. It's an absolute honor to talk to men and your wife is involved in this, men and women who are saying, this trauma ends with me and from now on, my family is going to be free.

1:37:33George 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.

1:38:05George Kamel:That's RamseySolutions.com slash real estate.

1:38:26George Kamel:Welcome back to The Ramsey Show. I'm George here with Dr. John, taking your questions at 888-825-5225. Ron is in Denver up next. Ron, welcome to the show. Hello, Dr. John Deloney and George. How are you guys doing today? We're good, Ron. How are you, man? I'm doing great. Thank you so much. Just wanted to give you a shout-out, Dr. John, because without your advice and wisdom, I would have never moved with my wife because she is out of my league. So, thank you. Wow. John gave you the confidence? Well, I'm so far out of my league, dude, that welcome to the club. It's awesome. Thank you. Thank you guys so much for your time.

1:39:06George Kamel:You betcha. I'll just get straight into my question. So she wanted to do a little debate between my wife and I, see who, see, I guess, which way we should go. So I'm 30, she's 32, and we have a condo that we're about to sell. Should be netting around 160 to 170. Our only debt is about$34 ,000 on our 401k loan, and everything else is paid. and then we have on our home as well we bought it last year we have a three to one buy buy down rate to buy down and it returns back up to six percent in about two years and so what she's we can comfortably afford the payment today but my wife worries about what happens if we lose our job her family lost their home a while back due to debt so it is a real fear for her and i totally understand that.

1:40:00George Kamel:And so what I want to do with it is build a basement, but she wants to recast the home. So we're just a little, uh, you know. So just to make sure I'm on the same page, y 'all have a home and you have a condo and you're selling the condo. Correct. Yep. Okay. And you're going to net one 60 and you're going to immediately pay off this 401k loan. So you'll have about 125 left, right? Yes. Okay. And so how much is your mortgage on your current home? Right now, with the buy-down, it's about$3 ,500 with HOA. And it's going to go up a percent every year, so that payment will increase? Correct. So at the very end, at 6%, it should be around$4 ,500.

1:40:42How much do you owe on your current home? Around$580, and then it's worth around$750. Okay.

1:40:53George Kamel:And what's your household income? Did I miss that? uh yeah so right now our base salary is around 330 and then with bonuses we're around 4 450 ish depending on performances incredible income okay so what's the what's the ultimate goal here like when you guys sit down what like a year from now where do you guys want to be what does your life look like oh we just a year from now uh i think i definitely have the 401k taken down have some peace, I guess. But I feel like we could have peace in the basement and paying off the 401k loan. So paying off the 401k loan costs you what out of your net profits?

1:41:36George Kamel:$37. Yeah. Okay. So you get your$170 out of the condo, you pay down$37, you still got a nice pile left. What is the basement going to cost? Around$50 to$60. Okay. You pay that. Now you still got money left. Then what? and then she wants because she the thing is she's really scared about you know just in case we never know what's going to happen with our jobs and i i don't feel as though we don't there's there's some good job security in what we do you'll have six months of expenses saved right we do yeah we have about 40 000 so why don't you get on y 'all make 400 grand a year why don't y 'all get on a two-year plan and i don't know how y 'all are going to do this it's going to be tough but y 'all just live on$200 ,000 a year and take the other$200 ,000 and pay your house off in 24 months and give your wife freedom and peace.

1:42:29I do like that. You're 24 months away from this being a nothing burger.

1:42:35George Kamel:The recast makes you feel better, but it didn't really do anything. It's going to lower the payment, but it does nothing for the balance. Okay. So a recast, you're going to take a lump sum, throw it at the mortgage, and then you can recast it, and it'll just re-amortize. so okay and by the way if you did that today your recast would be at today's rates which are going to be the penalty point of the rate you have in three or three to five years or whatever it is okay yeah i guess i never thought about that but what if we just said screw all of that thinking and you look at your wife and say i want to take two hundred thousand dollars a year and pay our house off in two years after we put a basement in it we take the other 60 grand we put it towards the mortgage directly, bring it down, and then we're going to pay the sucker off, and then no one can ever take our house from us.

1:43:27That is, I mean, yeah, it sounds great.

1:43:31George Kamel:I think it's, you know, it sounds very easy in our brains. It's just, you know, two years from now. Here's the deal, brother. Here's what your wife is saying. I have the lived experience of not being safe and I want to feel safe and the way she's trying to achieve safety is moving money around which is completely understandable if you look at her and say I'll show you safety I'm going to be disciplined and safe and I'm going to propose a plan that I want you to speak into and together you and me ride or die we'll get this thing paid off in 24 months, which means I'm going to not do all of my crazy whatever's and I'm not going to spend on this and blah, blah, blah.

1:44:15I'm all in because I want you to walk into our home that nobody else has a stake to and just laugh because it's ours. That's what she's truly saying to you. I've been unsafe before. I've lost my house and I never want that feeling again. And she's just getting on YouTube or going to a local place and they're telling her, well, you could do this. And she's, You've got a wife who's in deep water, and she's saying, well, somebody reach down and grab me. What she wants is stability and a plan and a guy who says, I'm all in on helping you feel safe in this home. Through action, not through feeling.

1:44:49You get what I'm saying?

1:44:51George Kamel:I do, and thank you for that advice. That's why I married her. Thanks for your advice again. I was going to let her, because she listens to this as well. Do you guys do a monthly budget together where you sit down and she has full awareness of what's going on with finances? Correct. Yes, we do it a little more than we'd like to. We do it once a week. Oh, wow. Is that for her or for you? It's usually for me. Okay, stop. Stop. You're burying her. You're burying her. Your love for numbers is gasoline on her anxiety fire around numbers. I never thought about that. You get what I'm saying? Y 'all make a plan every month and stick to it.

1:45:33Okay. And then if you want to play with spreadsheets in the middle of the night, like I do, like I know George does, then do that.

1:45:39George Kamel:My favorite kind of insomnia, spreadsheet insomnia. So you've got the plan, man. This is more – it's more emotional than reality because your income is so high. Even if one of you lost your jobs, you're going to be okay. If you have no debt and emergency fund, the chances of both of you going without work for years is – that's paranoia at that point. Right. So you can decide, do you want to give your wife a gift of putting$130 ,000 down on your principal of your mortgage and bringing it down really low and put it off, get in your basement for three years or two and a half years? Or do you want to say, hey, this basement is going to cost$60 ,000.

1:46:16The other$60 ,000 is going to go directly to the principal. And here's a two-year plan to pay off this mortgage. We're going to do this together. You all sit down and have that conversation because that's more, George, that's the actual issue here.

1:46:27George Kamel:there's no real clear plan about what we're doing and why we're doing it yeah it's just that every week she gets dragged to the table to real look at numbers and what about this and what if this happens which for her is just oh it's it's more of her body's like i told you we're not safe i told you this could happen i told you i told you i told you and she's lived it man and that's a very man that's a real experience so good for you ron for caring about her and for asking questions In my house, my wife has full transparency into the finances. She has the accounts on her phone, but I just become like a human version of that.

1:47:01George Kamel:And every once in a while, she just goes, how much do we have in savings? And I go, here's how much. And she goes, okay, that's it. It's just that's where you want your finances to be. Well, it was funny. In my house, it's the opposite. Occasionally I'll be like, I'll tell my wife, hey, we have this much in savings. And she'll be like, have you not been sleeping again? And I'll be like, yeah, no, I haven't. so it's it's me trying to make myself feel better by acting like i'm a tough great husband communicating she's like i i know we're good you can't save your way out of psychosis john listen i don't want to be the one to trust me be your armchair therapist no that's what my real therapist said

1:48:01I'll see you next time.

1:48:12George Kamel:Dave Ramsey here. For more than 30 years, I've been talking to folks on the air, and I can tell you that most people are broke, not because they don't make enough money, but because they don't have a plan. You need to give every dollar you earn a job, because when you do that, something changes. You stop guessing. You stop worrying. You stop stressing. Our EveryDollar budgeting app will show you how to find extra cash, pay off debt, and finally start winning with money. But most people won't do it. They'll keep living paycheck to paycheck. Keep hoping things will change without making a change.

1:48:48George Kamel:It's time to say enough is enough. It's time to take control of your money. It's time to start your EveryDollar budget for free today. Go download it in the App Store or Google Play.

1:49:26George Kamel:We'll see you next time. trusted agent for free at ramsysolutions.com slash agent, or click the link in the description if you're on YouTube or podcast. Heath is in Columbus, Ohio up next. Heath, what's going on? Hey, guys. Appreciate you taking my call. Absolutely. What's your question today? Hey, so I've got a situation with my in-laws. They are in their mid-70s, and during COVID, my father-in-law gambled away all their savings. Oh, man. And so... How much was it? Yeah, so they, you know, I don't know exactly. They had worked their whole lives, and my mother-in-law, she got some inheritance from her parents when they passed away.

1:50:10George Kamel:Her parents were very well off, so I'm assuming it was several hundreds, thousands of dollars. But, you know, I don't know for certain how much it was. And they've been working full-time, you know, for the last couple of years, but they're getting older, and, you know, my wife and I are trying to figure out, what's the future and what's our role going to be in all this. I've got five small kids at home, and we're bursting at the seams in our place. So unless we move or add on to our house, them staying with us is not an option. But their other kids are not really involved, so it's going to fall on us.

1:50:48George Kamel:The burden is going to fall on us. Are the other siblings estranged when you say they're not involved? Yes and no. It's kind of complicated, but they're really not in the picture. as far as or in a place to take care of them in any meaningful way. So your wife is the closest child they have that's actually still communicating with them? What does your wife want to do?

1:51:11George Kamel:I don't know. It's tough. I mean, we're probably about four hours away from them. So it's not like we can get over there once a week to go help them out with stuff. But I think if my in-laws would be open to it, I'm sure my wife would want them to move closer to us or in with us. I don't know if that would be something acceptable for my in-laws. They're pretty stubborn. Do they have a mortgage? They do not. What's their house worth? I mean, they're in the middle of nowhere. It's probably if they could get$100 ,000 for it, that would be a lot. So I think the, I mean, you got two big challenges in front of you.

1:51:56One, will they even accept your help? Yeah. Right. And maybe they won't now, maybe they'll be forced to in five years, like who knows. But I think that's a, that is a thing that's really hard to metabolize when we want to help people that we love and they are either too prideful or too scared or their ego is too big or any number of reasons, but they won't accept our support and love as we can give it, right? And so that's number one. Number two is you and your wife have to just be flat out honest about what we can and can't do. Like, and like, because what happens a lot of times, especially in big emotional situations like this, is we just spend all of our energy on what we can't do or what we should do versus And y 'all need to have an honest come-to-Jesus conversation about here's what we could do even if they would allow it.

1:52:52Could we have – could we come up with$1 ,000 to subsidize a one-bedroom apartment in our neighborhood? That's all we can do. That's all we have. And we're not going to give the money to you. We're going to give it directly to the place. Can we support groceries? You get what I'm saying?

1:53:09George Kamel:Yeah, I do. And that's kind of part of the reason that it's difficult for us is that I do very well in my job, and I've got a pretty significant amount of savings. And so if we were to add an addition onto our house or something, we could do that. But I struggle with, well, okay, I mean, I've got, again, I've got a bunch of small kids. Like, I want to think about their future. I want to plan to be able to not put my kids in the situation that they're putting us in. That's exactly right. That should be your priority. And and so, you know, but but at the same time, like, OK, yeah, we could I could write a check tomorrow and we could put it, you know, an in-law suite edition on our house.

1:53:55George Kamel:And so that's just where, you know, I'm struggling with the right thing to do. And if we – I don't think if we told them, hey, we want – this is our plan. We want you to come live with us. They probably would not accept it. But knowing what's probably going to happen in the future is that they're not going to be able to work at some point in the future. Right. If we had a place for them, then I think it would just be a natural choice for them to come live with us. Against their will, they would just do it. Well, that's where you all – Well, they wouldn't have any other option. Well, so that's where, I mean, you kind of giving us a very clear path for you and your wife, which is y 'all let them know when and if y 'all need support.

1:54:35We're ready to sit down and have that conversation. And that conversation ends right there because they'll probably respond with, well, we're fine. You don't need to worry about it. Great. Cool. And then you and your wife have to live in the reality that probably at some point you will be responsible for some sort of care. Yeah. And, um, and so we'll start putting a little money aside over here. We might start looking at a different house down the, down the road. We might look at one bedroom apartments in the neighborhood. Um, and by the way, a picture for your kids, it's easy for me to wrap my head around the only legacy I can leave to my kids is money.

1:55:12There also is a huge legacy towards, I watched my parents care and love well, their aging parents, right? Right. Like that's also part of legacy. It's also part of care. And so all of that is a tricky balance. Right. And none of that comes in any sort of thing that y 'all wanted or asked for. Right.

1:55:33George Kamel:For sure. How much are they letting you into their own finances? Oh, very little. I mean, when they ironically, Dr. I called a couple of years ago when everything kind of hit the fan when they lost everything. And you and Dave gave me some some great advice. And so we're back now because if they were to tell me they had$10 ,000 in their bank account, I think that would probably be a surprise to me. Sure. Is he still gambling? I don't think he's gambling anymore. But, I mean, they're working between the two of them. They're each working at least 40 hours a week, if not more, and they're almost 75 each.

1:56:14George Kamel:Are they taking Social Security? Oh, they're not. My father-in-law held a cash-paying job his entire life, so probably did not report most of his income. So if they're taking Social Security, it's minimal. Okay. So you and your wife have to have the conversation of what does taking care of mean? Yeah. Is that going to be$3 ,000 in a nursing home? Is that going to be like, are we going to help them sell everything so they can get on Medicaid? Like, what is that going to look like for us? and you'll have you as, as her ride or die, you as her husband are going to say, like, you're going to have to work to not have that calculator running in your head of, well, if we had taken that money and invested it, we could have given this to our kids.

1:57:04Right. Cause if y 'all agree on a number, like do your best to say, I was a part of this decision. I'm a, I'm a guy who's not going to let two elderly people just like get stuck in the system, especially if I'm being successful, like I'm going to grieve that. And then I'm going to go on and take care of folks in the amount and to the degree that me and my wife agreed. And then I'm going to go on about my life and go from there. And it could be, I'm not, I'm probably pie in the sky here. It could be that, could it, could it be that they would be fun to have around your kids or is that a no go?

1:57:39George Kamel:You know, I think they, I think they would be, but, um, I just, outside of something drastic happening. I can't see, at least my father-in-law wanting to leave. It's a town he grew up. He was born in that town. But he made choices. He may not have a choice to stay, right? He made a lot of poor choices, yeah. Yeah, but he may not ultimately, because of his past choices, he may not get a say in whether he stays or not. Yeah, that's true. Which stinks. Hey, let me tell you this, brother. Your anger's right. You're right to be mad at him for how he handled his finances, for how he did whatever it is he did.

1:58:18That anger won't serve you loving your wife well, and y 'all coming up with a plan together moving forward for here's the reality that we have in front of us. None of us wanted this, none of us planned this, but this is what it is. And we are people who take care of our families. So here's what that's going to mean for us. Here's what we can or cannot do.

1:58:44Thank you.

1:59:04George Kamel:You spend hours researching before making a major purchase like a home or car, but it's also a good idea to put in the work searching for the right insurance coverage. To protect your biggest assets, I recommend using Ramsey Trusted Pros. Whether you're looking for car, home, or any other type of insurance, Ramsey Trusted Providers have been coached and vetted to serve you like we would. Find what you need at RamseySolutions.com slash insurance.

1:59:50George Kamel:Welcome back to The Ramsey Show, our scripture of the day, Colossians 4, 5. be wise in the way you act toward outsiders make the most of every opportunity Maya Angelou said I've learned that even when I have pains I don't have to be one yeah George I'm still learning listen to the great Maya I gotta take that advice alright Sean is in Des Moines up next what's going on Sean yeah I'm just thanks for taking my call just trying to get down to the bottom of how my wife and I can stop living paycheck to paycheck I'm glad you're here. That's a big milestone, just to want to do that. It's tough. I mean, we get bills paid, but at the end of the week, we're sacrificing something that we're not necessarily in need, but there's not a lot left at the end of the week.

2:00:42George Kamel:How old are you guys? I'm 32 and she's 30. How long have you been married? Not even a year. We'll be a year in November. Congrats. Okay, so what got you two to this point? So backstory, I married my wife. She has three kids, and we are soon to have one of our own. And when I was a kid, going through high school, my parents had told me that my grandparents had kind of set up a fund that grew and grew and grew to give all the grandkids a certain allotted money for college. and that always kind of stuck with me that, you know, I'd like to do that to my kids someday. You know, in the last year or two, we've been getting our stuff paid, but it's, you know, I want to be able to do something like that for my kids someday.

2:01:36George Kamel:So your stated goal is, I want to create generational wealth, and therefore I need to have some eventually. And debt is holding me back from that. So how much debt do you guys have collectively? Some is mine. that was pre-existing. I bought a parcel of land before we got married. So now it's her land as well now. So that's kind of hanging over our head. We have$165 ,000 on our house, $76 ,000 in car notes, and roughly$4 ,000 in credit card. Could you sell that parcel of land today? Not with a... a buyback clause. I bought it for my father. So if I were to sell in seven years, then it would go back to my father.

2:02:28But would he give you the money back for it?

2:02:33George Kamel:I think he was happy to sell it to me. I think he was happier to see a couple goals to the farm. And that was kind of his way of starting that. You know, I got it at a very discounted rate. if you sold it back to him how much of a check would he write you 800 ,000

2:02:57I mean there's your generational wealth right there brother

2:03:03George Kamel:yeah it's a family piece that I've been wanting for years and that was kind of the push I traveled for work for many years I did that for nine years and to be with my now stepkids and a kid to be on the way. I left that and joined another job, which paid significantly less, but more time with family. So what do you guys make now as a household? $130. Okay. Well, there's some clear writing on the wall here. The cars have to go. This is crazy to have$80 ,000 in cars making$130. Do you agree? Yeah. What are they worth?

2:03:46George Kamel:Um, probably$25 ,000 on mine. I would say probably$40 ,000 to$45 ,000 on hers. Okay, so you're probably$6 ,000 underwater? Yeah. So you scrape together$6 ,000 over the next month or two. You can get rid of both of these cars and buy some cheap ones? Maybe save up for a few more months? Yeah. I mean, what are the payments on these things? the payment on mine so and that's that kind of leads me into the next thing the land that I bought at a very discounted rate fell into a pretty good hole and had to use a line of credit against that still well below what it's worth but that note is hanging over our head as well okay okay but listen you you've talked yourself into a corner brother and I'm saying this man as a guy who obsessively, I check land prices every day of my life.

2:04:42Okay. And I'm not even a generational guy. Okay. So trust me, I love the impulse and the idea. But if Dave came here and brought me one of his cars that he's collected and said, I'm going to give you this for 25 % of its value, that's an incredible deal. But if I don't have that money, it's not a good deal for me unless I'm planning on buying it and flipping it. Yeah. Here's what you have. You have two competing legacy dreams. One, I want my kids to have peace in their spirits when they leave our home, that they'll have some money in an account that they can go take on the world. And you have another legacy, which is I'm going to come hell or high water, put my family into financial ruin for this vision, but I will keep this land.

2:05:37I will farm it regardless of what's going on in the world because that's who we are. And you have to pick which vision you and your wife want to live into.

2:05:47George Kamel:She's very stuck on her ways. As far as having really nice things, I grew up very fortunate, not wealthy by any means, very weird farmers. We make do with what we have. Sure. So that's been kind of a change. And I'm being humbled by it as well. Maybe putting things off to not pay for them or not, you know, spend the money that we don't have. Sure. Well, Sean, there's two paths to go. It sounds like you're not going to sell either of the vehicles. You're not willing to sell the land. So the only other option is you guys work your tails off 80 hours a week for the next six years to try to get this thing paid off.

2:06:33George Kamel:That's it. Or we can shortcut that by getting rid of these things that are going down in value, these vehicles that are crushing us. Who are we trying to look good for? Because so far, you said you want to build generational wealth. You're creating generational debt so far. At every turn, you are taking on more and more debt to try to fund this lifestyle to look like you've made it. Or sitting down with your dad and saying, dad, I want more than anything in the world to keep this farm, but I can't afford it. I simply cannot. Like in this new world that I chose, which is three young kids, a fourth on the way, a new life with a new partner.

2:07:07I walked into this, eyes wide open, and I can't make this work anymore. I can't keep living two lives. One as a farmer, as a generational farmer, landowner, having to take out lines of credit to keep farm running, and also be a responsible adult with these four kids I've got living this other life with my spouse. That's a tough pickle to find yourself in, man. But the longer you avoid dealing with reality, the old saying is conflict deferred is conflict amplified. This problem doesn't go away. It just gets bigger and bigger and bigger and bigger. The sooner you and your wife can align on who we want to be and what is that vision going to cost us and how quickly can we get through that, that's the path to freedom, man.

2:07:50And none of this is easy. It all hurts, man. all that hurts. I can't imagine George going to my dad and saying, you gave me this incredible gift and I can't afford it. That would, that would break my spirit, I think. And it'd probably break his spirit. And it's the right thing to do for my new responsibilities, my three kids, plus the one on the way, plus my wife, that would be the right thing to do. Or sitting down with my wife and saying, we, we make a good salary and we have this almost million dollar piece of land. We cannot afford these two cars. We're going to sell them and we're going to drive beater cars because money in the account, money in our future is more important than comfort today, right?

2:08:26I mean, I don't know another path forward. It sounds like you want to want to get out of the cycle of living paycheck to paycheck because if you want to, you've got a path right in front of you, man. It's not going to be a pleasant one, but you've got a path. It's just going to take a complete reorientation of how you all do life together.

2:08:45George Kamel:Right. And the hardest part for me is knowing, like you said, sit down and have a talk with my dad, but the hardest part for me is it's a significant amount of money to anybody. My fear is that by selling that back to him, that it's going to put him in financial ruins and that that's something that's just been over my head. I mean, you can't carry his burdens also. This is hot potato, Right? My hope is that he kept that$800 ,000 that you gave him. Man, hard choices in front of you, Sean. Make the right ones. That puts this hour of the Ramsey show in the books. Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.