"I’m 50 With No Retirement Living Paycheck-to-Paycheck"

28:34That's how I like to roll. That's why I moved to a cute little coastal town outside of Boston. Yes. By the way, you're completely addicted. once that seawater that gets in your nose you can't go inland so here's the deal because of that uh george tiffany if it were me i'd be buying like a townhome in a decent area and i'm going small two bedroom if somebody wants to stay with us kick the kid out he can do an air mattress i mean that's me and i know that that's but my if my wife were here she'd be like you're so intense on all your decisions. But I don't need four bedrooms. And that's what, it's so funny because we went from 4 ,000 square foot home in Charlotte because that's how they build them.

29:19They build them huge. We went to a cute little 2 ,000 square foot cape and I told my husband, I'm like, I love it. I love the cute little house. What does your husband think? We haven't brought him into the picture. Does he have opinions or is he like, whatever you want, honey. He's so easy. He's excited we're going back to North Carolina to be closer to family. We're looking in the same neighborhood as his sister and their kids. So the kids are all going to be back together playing. So it's all positive. It's just not where I – I've never felt Shirley. I'm from New York. Never felt Shirley. But you're a good mom.

29:50There's no question. I think God's hand is all over this. I don't think this is the universe. I'm just going to say that. And I think that because of this, if you take that$300 ,000, you need to pay the car off. And whatever's left, get a cheaper house, smaller, get a good real estate pro. So Ramsey solutions.com slash agents and, and get somebody who knows what you're trying to do. And I think you, you, you put a huge chunk down knowing you're going to get all that back. I think you're going to get some appreciation in seven years, but there's no risk. And you've just lowered your payments. And with that combined$350 ,000 salary, George, they're socking money away like crazy.

30:30And then she goes to the coast. Yeah. Yeah. We're going from an$8 ,000 a month mortgage to probably, when I was crunching, there was like$2 ,800. Goodness gracious. I'm like, what do we do with that? We've never really, you know, it's interesting to go to the reverse cost. It ain't$2 ,800 if you buy what I'm telling you to buy. You buy some$250 ,000 townhome or$300 ,000 townhome with$200 ,000 down. I'm stacking money for the coast. I was going to say. I'm like an animal for seven years. I'm thinking of the coast. I'm thinking of the coast and I'm stacking money like crazy. You stack a hundred grand for seven years and invest that, you'll have over a million bucks to put towards this coastal home that you guys are dreaming of.

31:12So I think you're on the right track. I would just say let's go with some research and patience and a pro.

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32:44All right, if you're working the baby steps, the best way to do it is by using every dollar. Now, it's more than just a budgeting app. Now, we've built the baby steps into the app, and it has a coaching component. So it's a whole different product. Fantastic. You can track your progress, get personalized recommendations for your situation, and you can get coaching. Did I tell you that? In the app. It's unbelievable. So it's like having one of us walk with you every day. I don't know what that would be like. Without having to hear this. I think I would probably be a lot more fun to walk with than George because he's just so neurotic.

33:18Well, I feel like you have probably a mall walker's pace, which I think is a good pace. It is. If you're walking with me, you're going to be a little tired, but you're going to feel good about it afterwards. If you're walking with George, you're going to be reminded of all the things that could go wrong in the world. Is that fair? That's encouraging. Yeah, that's accurate. No, I'm kidding. I love George, folks. It's just a joke, just sarcasm. We're actual friends. That's right. You can start every dollar for free today by downloading it in the App Store or Google Play. Let's go to Madison, who, oh, this is where George went to college, I believe, in Mobile, Alabama.

33:53Madison, how can we help? Hey, guys. Glad to talk to you. So I have kind of a calculation question. How do you determine or calculate what is appropriate to spend on a vacation? And I'll add the caveat that this would be for our 15th anniversary. Hey. These are some of my favorite calls. I'm going to let George lead because there's a good chance I disagree with him. Well, let's check off a few boxes. Are you completely debt-free outside of a mortgage? Yes. And do you have an emergency fund saved up? We do. Great. Okay. And how much are you planning to spend on this vacation? If you could just dream it up, how much would it cost?

34:31Well, that's a dangerous question because I'm both the nerd and the spender, so they're free spirit. Which means you've done the research. So let's not dream it up. Let's just think it. You've been thinking about it. What's the range that you think this is going to cost? So somewhere in the$5 ,500 to$8 ,000 range, all in, like flights, food, coffee at the airport, like everything. How many days? Seven whole, because, you know, 15 years deserves a whole week. Let me tell you. Okay, and what's your income again? Did you tell us this already? No, I didn't. What's the combined income? We're about to have an income change, so I'll tell you kind of in a couple months where we'll be.

35:13we will be at combined 135. Awesome. And when is this trip going to happen? October. Okay. And do you have the money now? Are you guys going to sort of save up with a sinking fund to get there? Kind of a both answer. We're in baby step four, we're investing 15%. Everything extra is going to orthodontics or something comes up with the house. We have the cash on hand to save up. So we've got a little bit of it saved up enough to get the tickets at this point. Great. So you can sort of start that, start the cashflow and then continue saving for the actual kind of spending on the trip and all of that.

35:49Yeah, yeah, absolutely. And there's no budgetary strain between now and October to save the rest of the money. It feels tight, but maybe it's just because it's a decision between, well, we don't have a lot in the 529. Do we put more there? We have five kids. So there's a... You definitely need the seven-day vacation. All right. The kid's teeth can be straightened out later. I got to tell you. That's kind of our thought. Madison, you're going on vacation. Congratulations. Yes, I say go. And don't think twice about it. The kids will be fine. Oh, I know they will. We're cashing in on the grandparent situation.

36:27So I know they'll be fine. I'm not worried about it. I don't feel any guilt or anything. It's more like... No, I meant the 529 and all the things. You'll make up for life. We can make up for that. This is huge. This is a big deal. And yeah. Okay. I'm excited for you guys. Well, that makes me feel better. Yeah, very good. Me too, man. I'm counting down the days. By the way, where is this trip? Do we know? We're looking at St. Lucia. All you had to say was Caribbean for me. You could have started with that, and Ken would have been like, I don't care. You're going. I'm telling you, I'm half pirate.

36:57I love the Caribbean. I love everything about it. If it's got Saint in front of it, count me in. That's another thing. That's pretty much it. If you just say St. something, I'm like, yeah, sure. I'll go there. Love it, love it, love it. Unless it's St. Louis. I guess I'm not looking forward to my 15th anniversary in St. Louis. Now you went and offended everybody from St. Louis. Wonderful city, just not where I want to go for my 15th anniversary. I think that's fair. Fair point. Yeah. You pulled that out of the ditch. Just want to make sure the good people of St. Louis aren't. Nobody wants to go to the top of the arc and take a selfie for your 15th.

37:28I'm scared of heights, so no thank you. Let's go to Gina in New York City. Gina, how can we help? Hi, guys. Thanks so much for taking my call. Sure. I'm just wondering what I should do with this$6 ,000 that I have saved. Should I save it for April because I know I'm going to have to pay my taxes? I'm an independent contractor. Or should I apply some of it towards my$9 ,000 credit card? Do you have an idea what you're going to owe in taxes? So last year, I made more money than I ever made before, and this year I made more than that. And last year, in April, I ended up having to pay$8 ,000. So that's why I'm like, maybe I just need to hold on to this and keep adding to it until I know exactly how much I'm going to have to pay in April.

38:15Smart. That is wise. Here's what you don't want to do. Okay. Is you use all this money to pay off debt, and then tax time comes, and you go, I owe the IRS money, and I don't have it. That's a dangerous game to play. So I would wait. Do you do your own taxes or do you work with a tax pro? I work with an accountant. Okay, great. So I would do that as soon as possible so that you know the exact number that will come out of that account on April 15th. And it sounds like common sense here that it's going to be closer to the$8 ,000, if not more, based on what you told us. yeah i'm just you know with these possible like overtime um tax right off that they're you know that i've been going around the rumors my husband my husband has a regular job and he does overtime and he does a lot of overtime so i'm just wondering how that's going to factor into it well let me just stop you right there we don't base this on rumors unless it's legislation that's been signed then we're just fantasizing and if it is it's probably not for the previous tax year?

39:20Well, his employer actually sent him an email saying that in 2025, when you file taxes for this year for 2025, that there's some type of a tax benefit for all the overtime. Okay. I would just look into that with your accountant. Yeah, we just want to make sure. Okay. So homework is file your taxes with the accountant, find that number that you're going to owe, make sure you have that and anything above and beyond that, we can start attacking the credit card debt sooner. But yes, I would be just stacking cash right now and not use it all toward your debt. This is sort of a sinking fund to make sure that we are covered come tax time.

39:58All right. Thank you guys so much. Absolutely. George, it's such a great reminder. We don't want to hear something from somebody or we read something that we're not quite sure about and it involves taxes. We want to get on the phone today. You don't have to have your tax statements or your withholding forms to call the accountant. So she should be on the phone. And Gina, you're listening. You're calling your tax pro today to say, I've heard this. Is this true? Based on this. And again, they can give you ballpark, you know, but if it's significantly more money you made last year, again, just the way I would take it, I would put more back.

40:41I would be saving another couple grand minimum. Pretty darn soon. And a good reminder for anyone who is self-employed, 1099, you should be paying quarterly estimated payments on the IRS website to avoid this gigantic, scary bill that you can't afford come April. And so log in every quarter and work with your tax pro. If you use tax software, you can calculate how much you should be paying in taxes and to send the IRS some money ahead of time. Yeah. Yeah. Absolutely true. Stacey and I, before I came to Ramsey, We had our own company and our accountant had us do that. We were paying quarterly taxes.

41:15Sometimes we'd get a little bit back if the estimate was a little bit too much, but you'd rather that. Well, you could get hit with penalty and fees if you don't do that too. That's correct. You want to do it by the book. And if you guys want a great tax pro, a CPA enrolled agent, we vet them. We have a whole network of tax pros to connect you to that will help you just like Ramsey would. So you can reach them at ramseysolutions.com slash tax pro and find one in your area. Don't wait. Don't be that person who's April 13th. You're like, I guess I should probably look into getting those taxes done.

41:44I like to get them done early. I don't know if you can tell just by my face. I'm a guy who's like, let's knock this out. Yeah, and this might shock you because I tend to be a little bit seat of the pants. I as well like to get the – as soon as we get the stuff. Wow. Get it right in. Get the paperwork. Yeah. We got a local tax pro. And I got the double whammy benefit. My Tax Pro works in the office for my SmartVestor Pro. Wow. So it's all in the same building. Really keeping it in the family. I like one stop, folks. One stop. Take care of it all. Ken's dentist is also in there. That's wonderful.

42:20And I get a haircut there. We're looking for a masseuse, by the way.

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44:08welcome back to the ramsey show in the fairwinds credit union studio i'm ken coleman alongside george camel we're excited to be here for you today the phone number to jump in triple a 825 5225-888-8255-225. Tim is up next in Ann Arbor, Michigan. Tim, how can we help? Hi, thanks for taking my call. Back in 2023, my wife and I did IVF, and the IVF medical company we went through didn't have the greatest billing department. They made some errors billing us for things we didn't get done um and we addressed it with them um and now it's two years later and they have sent it to collections we're getting um calls and mail from a question company trying to get the money back and we have to know hey it hasn't been resolved on there and we don't feel like we should pay this sort of amount of money that's left over so we kind of seem stuck Look, I mean, on one hand, yeah, we just pay and be done with it.

45:13But for me, no, no, no, no, no. Let me let me jump in to ask when you. Yeah. You said just now that you resolve this when you resolved it in the past and they somebody acknowledged that those were erroneous charges. Do you have paper record like electronic record of all of this? No, I'm sorry. What I meant was it wasn't resolved. Oh, and we have. So we paid what we're supposed to pay, but for the erroneous billing, we haven't paid that yet. Who did you pay when you say you paid what you were supposed to pay? You paid the IVF clinic? That's correct, yes. Okay, and then you got a separate bill from the IVF clinic or straight from collections?

45:55Because IVF clinic should have been sending you bills first. Correct, yes, they did. And we reached out to them saying, yeah, this is incorrect. This needs to be rectified. They said, oh, we'll take care of a look into it. And months, months, months went by, pretty much years. And so now is the first time we're hearing from this collection company saying, hey, these are sending bills from the company. Right. Now, my next question is, do you have records of proof? Can you prove that you never got these services? You never got the itemized bill. In other words, is there some paper trail between you and the clinic that would prove that you never got the services that they're billing you for?

46:38so what in a sense yes the the code they put in for the services that we had we never had done so in a sense yes i have that um and maybe we could even ask the physician himself because we know him as a friend and he could say yes that was never done either tim tim hold on no no no no no no tim this is like dude i would be talking to the doctor who's my friend well we actually have um and unfortunately he doesn't work here anymore doesn't matter and doesn't matter can he validate can he validate on the record that these he never treated you in the way that they build you it's an it's a yes or no question that what i mean i can ask him again And that's not, unfortunately, it's not his area, his expertise of billing.

47:36We can try again to ask him. No, no, no, no, no. Again, I'm going to bulldog on this because you called for help. Okay? So, George, back me off here if I need to back off. This guy is the doctor who treated you and your wife. Yes or no? Yes. Okay. And you have talked to him about this before to say they have charged us for services, And I'm not going to ask you to say what it is. It doesn't matter. But but you've talked to him about it and said they've charged us for this. And and and you didn't do that. Have you had that conversation with him? Yes. And what did he say? He agreed. Yes, I did not do that.

48:18It was more so it's not something that he has knowledge of as far as billing. I didn't say about billing. I'm saying they've charged you for something and he has acknowledged or can acknowledge that he did not treat you for that. Forget the billing part. He can testify. Yes or no? no that hasn't happened okay but my point is is he could testify he could do an affidavit he could he could do i mean if i was going to fight this that's where i would be going and i'm going sure we know the doctor and the doctor said he didn't do this and so if even i got to hire a lawyer george not a lot of hours but just somebody who can who can say all right we're going to fight this and here's how we're going to tell the company to pound sand we're not going to pay you for this.

49:09Have you been in contact with the collection company? I have. I let them know the erroneous bills. They put it on pause. Okay. They came back to us about like a month later saying we reach out to this company, the IVF company, and here's what they say. You still owe it. So they're not really doing anything about it. You need to get a debt validation letter. Yes. Okay. And then you need to get the itemized bill from the clinic that's correct. Yeah. And those two things they should be in conflict where the itemized bill says one thing that says you don't owe and then the collection company then has to get rid of the yeah the faulty debt let me tell you something else i would do if this were me tim i would literally go into the clinic and ask to meet with the office manager whoever's in charge i mean when can i get on your schedule like a retroactive coding audit from the billing department and you were you just mentioned the word compliance they're gonna be like oh crap we gotta do you mention the doctor and go i'm willing to ask our friend to go on the record like we're just not playing around they're out of business in our area and they're gone so i can't even go into the office now the ivf why wouldn't you lead with that tim the place isn't even in business so there's no billing department to deal with nationally they are in other states not in our Okay, so get in touch with the corporate billing department and say, hey, this location closed down.

50:34This is not difficult. I have this bad debt. I need a debt validation. I need an itemized bill from you guys. I need a coding audit. Here's the account number. I feel like this is partially on you, Tim, because you've been letting this just fester for years. And you just gave up and went, well, I guess we'll just deal with that five years from now. I can definitely handle that. Like, Tim, honestly, if we were to have a doctor come in here and check my blood pressure versus yours, I'm more pissed off about this than you are. For you. Like, this is, you are in the right. Yes or no? Yes. Yes. Say it with some conviction, man.

51:15Like, fight. Fight this. This is obnoxious because, George, you're the expert on this. It's my belief that he does all of these things. everybody gets together as the powers that be get together and go okay this guy tim is right and not only is tim right i'm waking up at 2 a.m in the morning thinking about tim and i'm done as i promise you if this were me this thing would be resolved fast i would not let slumber to my eyes until this thing was handled and so tim this this is where you got to be the squeaky wheel you've got to be contacting them so often they've got your number like they've got it listed oh tim's calling again who wants to handle this one yeah and eventually you're going to get to the bottom of this but the truth is you just gave up too soon yeah and nobody over there by the way over there being the clinic and uh the collection nobody over there cares about you sure and the health care system in general is full of incompetence and so your job is to be so persistent to correct their competence that you win the game that you flip it from they don't care about you too.

52:21They care deeply about making this right so they never have to think of your name again. This is the level of intensity, the sword of righteousness. It's a fiery sword and we are swinging it at everybody in our path because you're trying to screw me. Ken just took us to church.

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54:15The Ramsey Show Question of the Day is sponsored by YReFi. If defaulted private student loans have taken over your life, YReFi can help you breathe again with a low fixed rate plan that fits your budget. Visit yrefy.com slash Ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey. Not available in all states. Today's question comes from Hunter in Arizona. My dad gave me an RV when I was 18. I'm now 24, married, and have two little girls. It is a very nice RV, and I'm very well accustomed to the RV life, but my wife refuses to live in, quote, something that doesn't have a foundation. The gull.

54:55We could sell our house, buy land with cash, and live for free instead of paying our$1 ,500 mortgage every month. My wife would prefer to move in to her parents and pay$8.50 a month for rent and utilities. It's a great deal, but I think owning land and having no payments other than utilities is much better. Which is the better choice? I don't like any of these. Yeah, these all sound like... Because if I'm reading this right, George, one option is sell the current house, buy land with cash, and live in the RV. Am I reading that right? It says and live for free. Which means the RV. Yeah, that's not a plan.

55:30But he already lays out that the wife's not doing that. And she counters with, let's move into our parents' house, her parents' house. None of these are good options, it sounds like to me. It sounds like everybody's unhappy. The question is, is the$1 ,500 mortgage, is that sinking them right now? We have no other information about this. And so let's assume they can afford it. I think they just don't like paying it. Based on their framing here, we could sell our house and buy land with cash. Yeah, this guy wants to park the RV on the land. His wife's like, no chance. I'll say no and raise you. We move into my parents' house.

56:08Who wants to move into their in-laws' house? Live with mom and dad or live like you're in Breaking Bad? I don't care what the price is. Both of these are terrible options. I would rather you guys go rent somewhere if you can't afford this mortgage right now, if it's a really crisis situation. I'd sell the RV. Yeah. Stay in the current house. You said you're accustomed to the RV life. Your wife refuses. I don't think she even likes the RV life. I am fairly certain she hates the very concept. I think it's okay to admit your life changed. And yes, it's sentimental because your dad gave it to you when you were 18 and you'll grieve that.

56:41But it's just the thing going down in value. It's just a hunk of metal. And so if you want an RV in the future, you can always buy one. But if you're in a pinch, I would sell it, pay off any debt you have, get to a better place financially, and then see, is this mortgage sustainable for the long-term future? The only RV I would ever buy would be the model from Christmas Vacation. Oh, the exact replica? Well, yeah. If you could find that year, that model. That's probably a hot commodity. I don't think so. It's a piece of crap. But then you could basically save it. It's just like it's nothing. And I would, this is cash.

57:15This is me. And I'm basically parking it somewhere until the day after Thanksgiving, at which point I create a Christmas display somewhere with that. Charge five bucks a pop to walk in there and all of a sudden. Pays for Christmas. Billion dollar idea. You were doing custom cocktails in the little RV. There's a guy in the lobby that's already ready to go. You've had worse ideas. And you know what it is? Everybody gets a moose glass. You see where I'm, everybody, it's like, I'm going to charge you too much for the Christmas cocktail, but you get the moose glass and you get your picture. And I have a cousin Eddie guy standing out there in his robe.

57:49the whole thing if this was shark tank all the sharks would be chomping at the bit for this idea so i gotta find me one of those rvs stacy's gonna hate this we'll look at the break for the record all right seth is up in los angeles seth how can we help today i'm in a contract on the house that i i still have time to back out of however i'm realizing the solar lease is problematic uh because it's a 22-year contract. And if I want to buy out the contract, it's$45 ,000. No, thank you. Why are we not making the seller buy it out as part of the deal? The seller in the contract that we're in escrow on said that the solar goes with the house.

58:37So I haven't posed a new option. Sure, the solar stays on the house, but you should not be on the hook for this whole thing, for his bad decision that he's now trying to get out of. Yeah. Is it like, it's just not worth it, is it? Yeah. It might be a next of kin scenario to where they're just, they're getting rid of the house and they don't want to pay into it at all. So I don't know the entirety of the situation, but I do, I think it might be a next of kin just trying to suck up as much money as they can on the sale. 100%. So this is 40, how much did you say? The buyout? The house. The buyout of the solar is$45 ,000.

59:16Over 22 years? That's if I want to buy it out. It is a, I think they call it a balloon lease to where every year it goes up by 3.5%. And so right now my electric bill would be$145 ,000-ish. And by the end of year 22, it would be$316 ,000. And I'm currently living alone and probably would not use that much electricity. What made you agree to this? Yeah, why did you sign the contract? I didn't realize it was that problematic at the time. Did your realtor not go, hey, man, just FYI? The contract was sent to me. The realtor did not realize it was a 22-year contract. and the buyout of it. I had to do that digging myself to figure out what the buyout was because they did not give her that information either.

1:00:16Well, you know what? It doesn't matter because you're telling me you can get out of it, correct? Correct. Walk away, man. Get out of this thing. Think about it. You're paying new system money for old panels. A whole new system should be less than$45 ,000. Your 22-year lease kills any resale value because you're not going to be in there for 22 years. You're assuming all the risk for the solar, the maintenance, the roof issues, and there's zero upside. You didn't get the tax credit. You didn't choose the system. This was a terrible deal all around. So I would say dodge the bullet and get out of this.

1:00:46Yeah, that is initially my thought process as well. The question also poses if it's about$25 ,000 below comps and the seller is paying for all essential costs of realtor fees and and inspection fees and those things it's still not worth it you're still on trying to talk yourself into this i would go hey if you want to cover the buyout i'm in otherwise no deal okay that's it you play hardball now yeah you've got walkaway power i hope yeah there's other houses that you can get a deal on that aren't stuck with this terrible debt attached to it. All right. So, hey, this is very simple for us. We walk away from this one.

1:01:37Turn your favorite walkaway song, whatever that is, and get it in your head before you call them up, you know, maybe walk on by you two. I don't know. That's what I would choose. I'm going to call them, going to get fired up, pumped up, tell my realtor, I'm done. And then let's see what the negotiation looks like then. By the way, one of our amazing teammates, It's Will Rutter just texted me. And the RV is a 1971 Ford Condor camper. I'm interested in buying anything with the name Condor. Okay. Strong. Do you know what I'm saying? Like that sucks me in a little bit. Are you seeing any prices for those, George?

1:02:17I see one. Bid for the chance. What are we talking about? I need to know what the market is. Yeah. The one you sent me, Will, is right in the range. it's pretty good beat up and then i would hire an artist to make it look like the one uh in the movie you know what i mean they could probably do with it some type of sand blasting or something like that it looked like it had a lot of rust on it uh are you coming up with anything you're not the only one ken i i just found a forum where someone said i'm looking for the motorhome like cousin eddie had in the movie oh yeah you're not the first one to think of this i never said i was i think this guy wants to get to your business idea but i don't know how many people are thinking about it turning into a seasonal bar.

1:02:55See, I'm thinking moneymaker. This feels like a retirement dream because it's going to cost you money. I don't think it's going to make you money. I disagree. And talking your life into it. The only cost is buying one of these things. All right, we'll stay with the research and see what the market is. Do you want to take a guess? I'm going to say - What it would cost? I'm going to say people are charging 50 grand or more for something like that. If they know what they got. Who doesn't know they have a condor? There might be some old guy out there who hasn't seen a movie since you know 1968. I don't know it's the greatest Christmas movie of all time I think if you got a condor you know you got a condor.

1:03:26You know what you got.

1:03:52We'll be right back.

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1:05:36all right jeff is up next in minneapolis jeff how can we help yeah i just wonder if i could get some money advice or real estate advice kind of both i guess We will allow both of those today. We're feeling very generous. Awesome. Good. Go ahead. What's up? Okay. Well, the real estate part of it is it's our daughter's house that I'm wondering about. She got divorced about a year ago. And she got the house, but she also got the mortgage with it. But there's plenty of, there's about half of it. She has good assets, you know, half the value. but she had to refinance it for half of it, and she really can't afford it, so we've been helping her.

1:06:24I'm just wondering if we did the wrong thing, probably co-signing for it so she could qualify. Oh, you co-signed for the mortgage? We did, yes. For the refinance, yep. And you're helping her? Because she can't afford the payments right now. She's going to school and working part-time, yes. So how much are you guys giving her every month? Well, it varied. I mean, sometimes she'd come up with a full mortgage, got close to Christmas there. We didn't even see a payment throughout then. So it's kind of been biting us a little bit there. And she's working full-time? Full-time and going to school for teaching right now, too.

1:07:04Okay. What is she doing for work? She's working in a school setting as a paraprofessional, they call them. Okay. So let's fast forward. She's done with school. She's a teacher. Making, I don't know,$50 ,000? Is that? Yeah, maybe a little more up in this area. Can she afford her life on her own in this house at that time? Or is it still going to be tight? I guess time would tell. Let's ask you specifically, what's the mortgage payment? Mortgage is$1 ,700 a month. So there's your answer. I don't think this is sustainable. No, I don't either. I think you need to have a hard conversation with her and say, hey, we're going to need to sell this house.

1:07:47It's not sustainable for you. It's not sustainable for us. And she can rent for the time being, right, while she's in school. Yeah, there's an area up here. There's not a lot of good areas, housing. How old is she? She's 43. We're kind of just looking out for the grandkids mostly. How old are they? 13 and 10. Kind of don't want to have to see them get taken out of the house right away. I know we don't, but I know we don't. But this is not sustainable, as George said. And you're a great father, by the way. Like, you are a phenomenal dad. But this isn't your burden. This could be forever. This could be, yeah.

1:08:31Because once she gets used to you floating two grand a month, why would she go, I don't want to take that anymore. Maybe at some point she gets on her feet, but that could be years and years from now. But she actually can get on her feet if you get her out of this pit. Yeah, that's what I say. She could probably go put a good down payment somewhere cheaper and have a smaller payment for sure. Right. But that's my point. So let's get out of this house. You guide her through this. Say, hey, we've been helping you this way, but it's actually not helping. We're just spinning our tires. And here's how we want to help you.

1:09:05We're going to guide you through this. Let's sell the house. Get out from underneath this. Get a lower payment if she needs to rent for a year or two until she gets the teacher salary. you know the kids are going to be fine as long as the 10 and the 13 year old are with her they've their their life by the way has already been wrecked so it's not the house they need they need her and to be completely honest with that house has got some trauma associated with it so i could make the case that the best thing to do not just financially george uh emotionally I think this is the best thing to do. I'm thinking of an investment, though.

1:09:45It's such beautiful property. Again, you know what you keep doing, though? You keep trying to justify pouring money into this pit that she cannot get out of. If you want it so bad, she can sell it to you. And it can be yours to deal with. Let's put it this way. I actually thought about that, but I don't know if I want to go that route. You know, I don't want to own a property in the country. You just told us it was a beautiful property and it could be a great investment. So which one is it? It is a great investment, but I don't want to live here. Okay, then we need to get out of it. There's a lot of beautiful properties that I don't want to own, and this is one of them.

1:10:24So here's the deal. Are you guys in a good place financially? We're sitting okay. Yeah. No, I'm retired. My wife's still working. Okay. I mean, what's your net worth?

1:10:39Maybe about$500 ,000. Okay, so you're not in a place to go buy property. You're not in a place to float your daughter, you know, a few grand a month. And I think you need to be honest with her. And just tell her, hey, we've been artificially propping this whole situation up. We love you. We want to help you. But we can't take this mortgage on, and you can't either. And we need to face the reality here. That's probably good advice. Do you guys have room in the house if she temporarily stayed with you? no but there's there's another there's another she's involved with someone else and she's barely at this place at this house actually because she's at his house whoa okay so there's another man in the picture yeah he's got a cabin so they're up there all the time and i keep giving us more reasons to list this house this afternoon i agree but i i come up here and ski and i use it It's been a recreational property for me.

1:11:35Oh, so now Papa's got some benefits here. Jeff enjoys this house. This isn't about her. No, maybe not. Oh, no, I'm going to remove the maybe. It's not about her. She's in the cabin with the new dude, and you're the one that's up there skiing and telling us how great a property it is, but I don't want to live here. And I got to say, for a guy who co-signed on it who needs more net worth, I would be unloading this house. And by the way, this is already messy. Who's going to get all the equity when you sell? She will. So you're not taking a dime from the proceeds of the house? I'm hoping that she'd have enough where she could reimburse some of the money we've been throwing out there.

1:12:19Well, that's a whole new conversation. Have you guys talked about that and agreed to it? When you co-signed the mortgage, is it, hey, you're going to reimburse us for what we've paid you? because that'd be a shock to me if I was your son and this was a big surprise at the end yeah I mean you know she wasn't gonna make the payment with her income of you know what she was making I'm not so sure you didn't go well I really like the skiing up in this part of the woods and I could help my daughter out at the same time I mean can you not get a motel six near the ski slope yeah i know they tell me they leave the light on it's actually more of more of the kids than me i think for me oh no you're all over the place man are the kids staying there alone while she's at the cabin how is this working i suppose you guys are both talking i couldn't hear i know it's my fault i was trying to be a smart aleck go ahead george i'm just confused so it's about the kids now but the kids are staying at the house she's at this other guy's house I'm just confused by the whole situation.

1:13:19They all go to the other guy's house. They go there. They stay here. It's clear that this house means not a lot to these kids anymore. They're already getting taken every which way to different houses. So what's the difference? I would sell this and get out from under it, take all the risk out from under your feet, and then you can go rent a spot if you want to go ski anytime you want. And with the money you save from getting out of this dumpster fire, you can afford to go enjoy some skiing. Sorry, Jeff. I mean, we're for you. You called us. You talked yourself right into the corner. I kind of knew what you guys were going to say.

1:13:56I listen to you guys all the time. Well, that's good. I'm glad we didn't disappoint. That's always good. But you're a good man. But hey, the key is here's the principle underneath it. If you're going to help, it should be one, temporary, two, intentional, three, conditional. that's what you need. Not open-ended, not, well, it could be a good investment and we're going to co-sign. There needs to be very clear boundaries anytime you help someone. And we never loan money, so I like that you didn't do that. But if it's going to be a gift, it needs to be, hey, we're going to gift you this for the next six months and here's what's going to happen after that.

1:14:31You're going to be out of school. You're going to have a job. You're going to be taking this on. We will not be giving you another dime after that. And that's not callous. That's actually good for her. Because she's a grown woman and she needs to live her own life and not be propped up by mom and dad at this point. And he could take that savings and maybe invest in me with my Christmas pop-up with the Condor. Yeah, you want this to be a safety net, not a hammock. And it's quickly turning into the ladder. I'll just ship it up to the ski area. We'll just park it outside the lodge. Me and Jeff sitting out in our lawn chairs.

1:15:02Let go of the dream, Ken. I believe they call that a callback, James.

1:15:13Thank you.

1:15:40All right, folks, you know this, buying or selling a home is a very, very big deal, and you don't want to mess that up. You want to go into it clear-eyed, level-headed, ready to go, and you do that by using our Ramsey Trusted program to find a top agent you can trust in your area to make this whole process, whether you're buying or selling, a blessing, not a burden. You can find a local Ramsey trusted real estate pro for free by going to Ramsey solutions dot com slash agent Ramsey solutions dot com slash agent or we have a link in the show notes. Let's go to my friend Ken and I'm friends with all Ken's George.

1:16:17You've never met a Ken you didn't like. It's a great name and just you know you just know it's a solid person. Ken is joining us in San Francisco. Ken how can we help. Hi Ken. Hi George. Thanks for taking my call. You bet. What's going on. So my wife would like me to sell our truck and get a newer truck. And I'm not sure if that's a great idea. And also, if I end up selling it, how much truck I could afford. Oh, this is one of George's favorite things to talk about. So hit us with the details. Let's get into it. It's a 2000 Ford Ranger. It's got low miles. and it's had a couple issues, but I'm able to work on a truck that old.

1:17:00And I like low registration and insurance payments, and I own it outright. And can we say, that's a fantastic truck, that little Ford Ranger. Oh, I miss those old ones. Yeah. Perfect size. That's the truck I would have if I was a truck guy. I was getting ready to say, short guys like us, if we drive trucks, it's a Ford Ranger. No question. Okay, so your wife, what does she think about this? She's thinking it's a death trap. What is her reasoning for why you need a new truck? Yes, that's exactly it. She believes it's unsafe for the kids and also has bad paint fade. So I think she just also doesn't like driving it around.

1:17:37Just the curb appeal is off-putting to her. She doesn't like the patina, huh? Now, where are you guys at financially? Do you have any debt? We have zero debt besides the house. and other than that we have we have high yield savings account with approximately 125 ,000 okay buy a truck dude what are we doing here oh no there's no need to shout I'm not saying don't buy a brand new truck but could you get a new to you truck for what's your household income it's approximately 330 ,000 oh boy your wife has just got the patience of job Dude, this is like extreme cheapskates level. This is wild. And by the way, it takes one to know one.

1:18:24When George says that, that means you've been diagnosed. Okay, so what truck would your wife like you to have, and what's the price point of said truck? So if I was to get a new truck, I was looking at a used Toyota Tacoma, maybe in the 2020-year range. So approximately$30 ,000. I would do it yesterday. Wow. Wow, George. This is all green lights. This is so fun. This is a rare truck guy. Most truck guys are broke with huge payments, and their truck payment is more than their mortgage. Ken, is your wife near you right now by any chance? Yeah, she is. Can she hear this call? She can, yes. Good. I just want to make sure that she heard that George said, do it.

1:19:10You know? Buy the truck. And here's the parameter. Make sure that everything with wheels and motors in your life is no more than half of your annual income. Check. Check. Pay cash. Check. Be debt-free with an emergency fund. Check. So you are all green lights. Make your wife happy. Check. Okay. You're not doing anything out of control. You should have a little party to say goodbye to this truck because I think it's fantastic. It's sentimental. You can frame a picture of it in the house. Well, you know what? Actually, a quick question because I was thinking about this. how much is that i don't know what a a 2000 uh a ford ranger would cost in that condition do you have any idea what you could get for it uh i believe i could get around six thousand dollars for it all right can i throw something out george sure do well let me ask a question before i throw it out ken do you need the six thousand dollars from the ford ranger how much do you need that money to buy the truck that you want to get?

1:20:05Particularly need that. He doesn't need it. Okay. Can I suggest that because... You want him to keep it, don't you? He likes it a lot. You got room for an extra ugly truck around the house? Or does she not want to see it? We do have room for it. Yeah, I could probably keep it. That's an idea. Well, does she want it gone from her existence is what we're getting at? I think she just doesn't want to pick up the kids in school with it. Well, would you like to keep it, or was this just all financial, and it was the concept of how little money you were putting into it? Or do you want to keep it? It drives great, so I wouldn't have a problem keeping it.

1:20:44I'm going to throw it out there. Well, here's the good news. I'm going to throw it out there. You can go buy the truck tomorrow and not have to sell this one. And so it's not like an on-fire situation. That's why I'm, yeah. But my guess is your wife's about to call 1-800-GOT-JUNK and get this thing out of the driveway. It's worth$6 ,000. Yeah, but I'm just saying she wants it gone. And for those reasons, eventually you have to let go of things. And so I think it's been high time. How long have you had it? I've had it approximately three years now. Oh, okay. So it's a new truck to you. Yeah, I had a commuter before, and my commute got short.

1:21:20So I got a truck. Oh, man, Ken, you are special in a good way. The fact that you love that 2000 Ford Ranger patina, the paints pealing off of it. With six figures in savings making$300 ,000 and we're arguing over. But this is the next door. This is the everyday. This is the millionaire that you don't see coming because he's rolling up in a 2000 Ford Ranger. I love it. Ken, do you mind asking what is your retirement portfolio? Leo? Right now I have a 457 with approximately 380 ,000 in it. Yeah. Fantastic. Yeah. He's rocking. What's your house worth? The house is between 900 and a million. And what do you owe on it?

1:22:07We owe 315. Fantastic. So you guys are baby steps millionaires. Yeah. No question. Yeah, thanks to my dad listening to Dave back in the day. That's amazing. Here's the cool news. I'm not saying you should do this and I wouldn't, but you could buy a new car because we tell people, hey, if you're going to get a new car, you've got to wait until you've got a million-dollar net worth for a simple reason. It's too much of your world wrapped up in something going down in value before you hit that milestone. Okay. Yeah, I'm just – I like the cheap insurance and registration, but I hear you. I hear you.

1:22:40And I'm sure you've done your research to find what trucks have the cheapest insurance. Oh, yeah. Oh, yeah. For sure. This guy researches. You know, this guy could sub in for you. Absolutely. You two are wired. We could do a car segment. Exactly the same. Yeah, yeah, yeah. I'd swap this Ken for this Ken any day. Well played. I love it. Thanks for the call, Ken. And I don't blame you. He's far more your kind of guy than me. I needed a win today. I was feeling like a real fuddy-duddy. And so it feels good to deliver some good news. It does, doesn't it? Really important. By the way, I do think it's important.

1:23:10We have new people all the time. So I'm thinking new listener, new viewer. I want you to explain again a little bit more detailed as to why we do that formula of how much the car versus – I just think it's important to explain the why. Easy math. Not just the what. If you have a household income of$100 ,000, then everything with wheels and motors in your life, that could be an RV, a boat, cars, should not add up to more than$50 ,000. Half. That's the top limit. And why? The reason is those things are going down in value. So you've got a depreciating asset. And so if you have$80 ,000 worth of car and you make$100 ,000, that is so much of your world that is literally tanking.

1:23:52And so you don't want to make these decisions, especially with debt. Because here's what we see. They buy the$40 ,000 truck with a payment. So it costs them$50 ,000. And six years later, that thing is worth$20 ,000. So now you've got a real problem. You're underwater within a year on this truck, and you've paid way more than it's worth. And that puts people in a bind. So the good news is you pay cash for a car, you can never be underwater. That's exactly right. Because let's play that scenario out. Let's go what you said. So if you have a million dollars in net worth or more, and you buy a brand new car and something, you know, life-changing financially happens, where do you sit?

1:24:30Well, you're sitting with a paid-for car. That you can unload. No debt. That's right. With a sizable net worth. That's right. Nest egg. so you can stomach the depreciation. It's all about ratios. Right. And so you got to go, well, this guy makes$300 ,000 so he can buy a$30 ,000 truck. The person calling in who makes$40 ,000, I'm going to tell them to sell that truck if that's in their life. Yeah. And so it's not that expensive trucks equals bad. It's are you doing this in a place of financial strength versus it really being a detriment to your financial future? Yeah. We should have told Ken, and if he's still listening, steak dinner tonight.

1:25:04You know? Absolutely. Celebrate the fact that your wife is going to be so happy with this decision. Oh, eat it in the truck. It's a date night with the truck. In the new truck? In the old truck. I like the old truck because you don't want to get the old grease on the new seats.

1:25:39welcome back to the ramsey show in the fairwinds credit union studio i'm ken coleman george camel joins me uh if all of a sudden i can't talk sometimes i have that effect on people speechless it's your cologne it's uh it throws me off i think more of it it's a musk that's what it is triple eight eight two five five two two five is the number to join george and I. We're having fun today, as we always do, but we're going to help you in the process. Joe is up in Orlando, Florida. Joe, how can we help? Hello. How are you guys today? Oh, we're having a blast. How are you? Good, good. Well, I'm hoping you guys can settle a disagreement between my husband and I about paying off our mortgage.

1:26:24Okay. I believe we should use a mutual fund that we have to pay it off right now. And he would rather do it with cash flow. Okay. Give us the numbers. How much to pay off the house? The balance on the mortgage is about$29 ,000. Okay. And if we don't pay it out of the mutual fund, if we were to do husband's plan, What is the date? Is he attaching a date by which it's paid off through your normal income? About six months to a year. Six months would be really aggressive, and a year would be a little less aggressive, of course. How much is that? It doesn't matter, but I'm just curious. How much is the house worth?

1:27:14The house is worth about$700 ,000. And give us your retirement portfolio. you? We have about$850 ,000 in just retirement savings. And then non-retirement, what do you have? Well, we have the mutual fund that is worth about$37 ,000. And we have cash, about another $60 ,000 of other liquid cash between our bank accounts. Why not just use the cash? because we've got some other large purchases that we need to make this summer okay and what is what's the priority is it the large purchases this summer yes nothing's on fire with the mortgage it's getting paid off let's say it's going to happen within the next six to 12 months no matter how we do it can we agree on that yes now everyone's happy already yes so now Now it's just what strategy and tactic are we going to use to get there?

1:28:13Mutual fund, cash, putting extra through, future income. And then these future purchases, is this going to drain the savings or do you have another emergency fund? It wouldn't drain the savings, no. We just have to buy another vehicle for my son who's become of driving age. Well, what are we looking at? What are we thinking about spending on that? um well he's going to get his brother's older car and then we're going to replace that car about a 25 000 purchase is what we're looking at okay i'm just doing the math so that leaves us 35 right right okay and what's the other big you said you said plural purchases we may have to replace our roof okay what's that going to cost well probably about 15 Okay, so that gets us down to$20 ,000.

1:29:05And that's if we don't replenish it and put more money in there as we go? Correct. Okay. Do you have an emergency fund separate of this$60 ,000 in cash? No. Okay, well, what is a three - to six-month emergency fund for you? What's that amount? About$30 ,000. Perfect. So how about after these large purchases are complete, we replace the roof, we get the car, Anything above the 30 goes toward the house, and then anything that's remaining on the mortgage we take from the mutual fund. Deal? Deal. Then we don't deplete the mutual fund, which, by the way, here's my rub with what you guys – here's what happened.

1:29:44Here's what went wrong. You were investing money with no purpose. Or there was a purpose, and now you decided I want a different purpose than he had in mind. It's a very old mutual fund. It's a mutual fund that I started from a car accident money when I was quite young. So it's kind of just leftover. So it's been there for quite some time. Okay. So this is just sort of bonus money that's been sitting around. Obviously, you're going to have some capital gains taxes, so I would look into that. I don't think that's why he didn't want to liquidate it, but that could be part of the reason. But I will tell you, I'm going to throw a different scenario out.

1:30:23because you said if we got aggressive, we could pay it off in six months. If we didn't get aggressive, normal cash flow, this house is paid off in 12 months. I don't like taking a tax hit to do this. So I actually am in agreement with your husband. Because of these other expenses, George, I'm just going to stick to it. You guys have been very aggressive, being very committed to do this. I just wouldn't empty. I wouldn't take any money out of the mutual fund. I think I'd pay this off in 6 to 12 months out of our normal cash flow and have the cash for all the other things that you got to do. Don't touch the emergency fund.

1:31:00That's just where I'm at. But that's only because, George, I don't disagree with your opinion. I just don't want to use that mutual fund money for this. Well, that's why I asked them to calculate it because it might not be as much as you think. If they're only taking out$5 ,000 and the capital gains was$2 ,000 and then you're paying 15 % of$2 ,000, now we're talking a few hundred bucks. and so I don't think it's as scary as you know hundreds of thousands being liquidated but Joe I think there's a good compromise here I don't think either of you are wrong you guys are being very intentional with even paying this mortgage off now if he said I never want to pay it off then I would think we'd have a bigger problem here but it's really just about tactics and semantics and so I think splitting the difference I want you both to be a little bit feel like we both kind of lost and we both kind of won that's that's marriage but a great situation to be So good for you guys.

1:31:49Baby Steps Millionaire is about to have a paid-for house. So fun. It's a good life. Good problem to have. Steve is up in Virginia Beach, Virginia. Steve, how can we help? Hey, thank you so much for taking my call. Sure. I'm 36 years old. My wife is 31. We're on Baby Step number seven. We're debt-free. Our house is paid off. All of our cars are paid off. But we're thinking about buying a bigger house, something that's going to put us about$500 ,000 in debt again. How much did you have the first time? So our house is worth about$350 ,000, and we're not sure if maybe renting it out to get a little bit of extra income.

1:32:33No, we're not going to have a mortgage on the other house and have this investment property over here. I would say just sell it, use all the proceeds to put towards the next house. and you're talking about like a$750 ,000,$800 ,000 house? No, no, no. I was talking about a$500 ,000,$550 ,000 house. Okay. Well, if you put your$300 ,000 in proceeds that you'll get from selling yours, now we're talking about a$200 ,000 mortgage. Right. That you'll pay off how quickly? Well, my first mortgage was probably around$160 ,000, and I paid it off in seven years. Okay. Okay. Well, can you guys pay it off more aggressively in this case?

1:33:15Oh, yeah. Obviously, 10 years ago, we were not making as much as we are now. Okay. And what's your take-home pay every month as a household? Every month. So my yearly salary or combined yearly salary is about$150 ,000. Okay. Base salary is about$50 ,000 each, and then we get commissions, tips, bonuses from our businesses. So healthy six-figure income, you can easily afford a$200 ,000 mortgage and let's make a spit shake and go, hey, we're going to pay this thing off in three years. And that way you're not going backwards for a long period of time. It's not a sin to go from baby step seven back to six, but we don't want to hang out there for seven years either.

1:33:56So sell the house. Why the spit and the shake? I don't know. It just feels more official. That feels like a true bond. Coming from a germaphobe like you, I'm a little surprised. I would never do that. Just a good shake. If you kiss, you've already done it. I'm just saying. Oh, I see.

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1:35:34All right, New York City is where we're going next. Lee is joining us. Lee, how can we help? Hi, thank you guys for taking my call. So my question is, I live in my childhood home with my sister and my boyfriend. Last summer, we started renovations, and my sister decided to move out. So now I just want to know, is she still responsible for part of the renovation for the house? I mean, did we get her to sign anything? Did we sign anything? No. There was no agreement that, hey, yep, we're going to do these renovations. Well, she knew we were going to, well, she was here when we started the renovation.

1:36:18Yeah, but was there, we know there was no sign thing, but was there a conversation around the breakfast table to say, Was it 50-50? This is going to cost about X amount of dollars. Are you in? No. Is there any agreement about this co-ownership situation? no she's just on the the title she's on the title of the house it's our childhood house that um we got from our parents okay are these necessary repairs or are these like improvements upgrades yeah improvement upgrades and i have a sense that you were the one driving the train you were the leader the ideator kind of executed yeah here's the tough news if there's nothing in writing, you can't force her to pay for these improvements and upgrades.

1:37:03It's like an elective surgery. That's right. So if there was a necessary, like, hey, the foundation's cracked and we both own this house, I think you'd have an argument to go, we're going to split this. But if it's, hey, I just want a new kitchen and she was there when you started it, I don't think you're going to have a case here. In which case I would limit this if you can't afford it. Are you going into debt for this or are you cash flowing it? No, no, no, no. We have cash on, I just received a trust with my uncle about three years ago. So I'm using that. Okay. Here's what I might do. And I think is wise.

1:37:33You would, you should drop an agreement saying, Hey, I'm putting this much in upgrades. I'm going to get that much more out of the house when it sells. Right. That's fair. Okay. Have you already brought this up to her to say, Hey, you were here or are you just hitting this kind of bouncing this off? No. Well, what I was going to do is I was going to wait until I have the whole total. For the renovation, and then I was going to say this is your cut. So good. You haven't brought it up. So our point to you is you don't even have a common sense argument on this one, so don't burn any calories or create any tension with your sister on this.

1:38:10I think you bring it up in the form of what George said. Hey, I've decided to do this, as you know, and I think it's going to add this kind of value, but I'm going to get a realtor's take on this. I'm not going to make up a number based on all my receipts, and then I want to know if you're okay when we sell this. I think George's advice is great. Or we could split this 50-50 and nothing changes. We'll both get the same amount when we sell it. But it makes no sense for her to benefit from the appreciation. This house is going to be more expensive because of the renovations. And so therefore, she shouldn't get all the benefit when you floated all the money for it.

1:38:48But it's part of the mess when you co-own a house even with family. Right. It's just hard to not make it messy. So the other part is, what's the long-term game plan with this house? Are you going to live in it forever? Is there a plan to sell it? Can you sell it without her writing off on it? No, actually, there's no long-term. My daughter will probably inherit the house. How old's your daughter? 24. Okay. Has she said, I would love to have this house when you're gone? for now yeah she's not gonna be able to afford a mortgage okay it's almost paid off cool well um i would talk to your sister asap i'd get all the numbers as soon as possible and go here's what the total cost is keep it reasonable because there's a chance you don't ever get this money back and so i would limit right um what you're doing it's easy to go crazy when you're doing renovations and they're always more expensive than you thought they were going to be Of course.

1:39:49And it always takes longer. Of course. All right. Best of luck. Yeah, thanks, Lee. Thanks for the call. Let's go to Steve, who is in our backyard here of Nashville, Tennessee. Steve, how can we help? Hey, guys. Thanks for taking my call today. Sure. So my questions are all regarding just getting out of debt. So I work full-time, have a business that I do as well. And over the last five years, I've accumulated about$434 ,368 of debt. For the business? No, that's my mortgage. It's all my debt. I had a mortgage before the business. Okay, outside of the mortgage, how much debt do you have? It's$166 ,307.

1:40:42Okay. And what is that comprised of? It's my vehicles. I have two vehicles, my wife's car, my car, credit cards, and loans. What are you taking home from the business each year? Last year, I ended up clearing$37 ,000. That's not great. How long have you been running this business? About five years. Are you running any of your expenses through the business, or you're only getting$37 ,000? Yeah, I'm running all my expenses that I can through my business. We had about$99 ,000 in revenue, but paid taxes on the 37. What's your household income? Is your wife working outside the home? She does. She works somewhat of a part-time, full-time.

1:41:40She's making about$30 ,000 a year, and I'm clearing about another$80 ,000 at my job full-time. Oh, so you have a full-time job on top of that? Yes. Well, you buried the lead there. I was like, oh, my goodness. How are you guys surviving? So the$37 ,000 that you paid yourself is a side hustle. Yes, correct. Okay. I feel a whole lot better. I was like, this dude's been at it for five years full-time. I was about to tell you to shut the business down, man. It was going to get bleak fast. I'm sorry. So you guys are making$150 ,000 a year. That's before taxes. Sure. Yeah. Gross household income,$150 ,000.

1:42:16Okay, what's your question? Well, my question is that I'm overextended here big time. You know, all my payments and everything, you know, it's more about how can I get this cleared up and start actually making, putting money towards, you know, our retirement and things as opposed to just paying all these loans. Well, the answer is simple. You're driving your retirement right now. Those cars were your retirement fund, but you decided I want a nice car instead. What's your combined car payments?

1:42:53It's$1 ,752. Goodness gracious. What are these cars worth? $1 ,700? Did I hear that right? Yes. Yes. Well, there's your answer. Yeah, I've got one Jeep that I owe$56 ,000 on, and I've got another Honda car that I owe$23 ,000 on. And both of them are combined at$1 ,752. Yeah, so you've got about$80 ,000 in cars, and you make$147 ,000. So that's a major problem. And the parameter is no more than half your annual income tied up with things of wheels and motors, and so you guys are over that. and even if you weren't, I would tell you to sell these. You don't need a$56 ,000 Jeep right now to live your life, do you?

1:43:43No. Okay, so we're going to sell both these cars. Are you underwater on either of them? The one Jeep I am, last time I hit Carvana with it, they were offering$5 ,000. Well, Carvana's going to give you pennies, dude, because they've got to make a profit. Go to Kelly Blue Book, find the private party value, and sell this thing yourself. Facebook Marketplace, AutoTrader, get these cars listed and make sure that you have the difference in cash or personal loan from your credit union. And then you're going to need a little bit of money to get some beater cars. But is your wife on board that you guys are about to be living a very different life for a short period of time?

1:44:19Yeah, she's, you know, I've already talked to her. And, yeah, she's on board. She was, you know, the Honda is her car. I bought it in 24. And the car that we had, you know, it was paid. It was paid off. And she was like, I don't need a new car, you know. You just got excited and went, you deserve one, babe. No, there was a repair coming. Classic. And we had, it was a one-owner car. We bought it at Honda. Took it down there to get it repaired. and they gave us a good deal on it and wanted to buy it. So that's the way it went. Great deal. Leaving you guys broke was a terrible deal, my friend. So you can clean this up.

1:45:02Sell the cars, get aggressive, do the debt snowball, and then we'll attack the mortgage later on.

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1:46:59Lynette joins us in Denver, Colorado. Lynette, how can we help? Hey, guys. Thank you for taking my call. I love the show. I have paid off$37 ,000 in 15 months. Thanks to y 'all. Wow. I didn't do jack squat. Every day. I would have been sitting here the whole time. You guys are encouraging. So I appreciate y 'all. Um, so now that I'm in baby steps three, I'm trying to look at my emergency fund. Um, after this last year, um, I made 115 ,000, but after everything comes out, that includes my retirement that I was doing, I dropped me down to about 74 ,000. Um, and I'm now I've upped my retirement to 9%.

1:47:41I do get a 6 % match. So that brings me up to the 15%. I'm looking at doing$2 ,500 to$3 ,000 a month in emergency fund until now, until December. Because I'm single and by myself, I'm just kind of wondering, is that about what I should be doing? 25 % of my housing is about$1 ,400 a month, making sure that's correct, and just trying to get feedback from you guys. I'm also getting$30 ,000 from my dad in inheritance. I just opened up Fairwinds checking bundle. Awesome. heard about from you guys, but I haven't got the debit card yet, and that I plan on putting the $30 ,000 into a high-yield savings account with them until I get like$250 ,000 saved up for a future housing.

1:48:29So just kind of want your guys' take. So you've got like 17 things going on. Let's clarify. Do you have any savings right now? About$2 ,500 because I just paid off that$37 ,000. Okay, so let's go over the baby steps because there are some parts I want to clarify for you. So baby step two, you obviously did debt snowball. You're completely debt free. Yes. Now baby step three is next, which means we are not investing yet. Oh, I thought we were for the emergency fund. No. The emergency fund is separate. So emergency fund is three to six months of expenses in a high yield savings account. And until you get that, we're not going to invest a dime.

1:49:08Even the match. I know that you're like, oh my gosh, I can't give up the match, right? Right, right. But here's the thing, doing seven things at once is not going to cause you to make progress. And the good news is you're about to get 30K. Is that your emergency fund? Would that suffice? Yeah, I just was kind of hoping to put that towards a down payment because it's, you know, that's what my dad would have wanted was to put it towards a house. okay but this is all let's just look at it as a financial foundation he wants you to be financially stable and free that that's the goal right and so part of that is making sure we don't have all of our money in a house and no money in savings right because being a homeowner is one of the most expensive things you can get into and so the proper steps your plan if you want to continue on with the plan because it's been working for you then put the 30 grand in that high yield savings, that becomes your emergency fund.

1:50:03And then we can invest 15 % of your income, which means the match doesn't count. That is gravy on top. So you would ratchet up your retirement to 15 % and you'd get the 6 % match on top of that. Okay. That way you build the habit and consistency. And if you have a job one day that doesn't have a match, it doesn't matter to you. You have the habit of investing 15 % and living on the rest. Okay, perfect. I'm glad you clear to clarify. And then beyond that, you can save up for the down payment with any future money. Because now you have this foundation, no debt, emergency funds saved up, you're investing for the future.

1:50:39And now you can begin saving. So how long would it take you if you did it that way to save up a down payment? What's the number 250 ,000? Well, because Colorado is crazy expensive. Most of the houses are 385 to 400 ,000. And with just my income, I'm guessing I'm gonna have to get like half of the down payment to be in my 25 % of my pay. Okay. So how much could you save up each month if savings is covered and you're investing 15 %? How much could you throw into high yield savings for the down payment? About 2 ,500. Per month? Yeah. Okay. So doing the math on that, that's 30 grand a year, which means it's going to take you seven or eight years to get there.

1:51:20Yeah. And therefore we might need to go, all right, we need to up our income. We need to You compromise on the type of house we were going to go for. Maybe it's a smaller house further out from the city for now to get our foot in the door, those kinds of things. Or you make peace with the fact that it's going to take you seven years to buy a home. Right. And high yield is the best place to plant that. If it's going to take you seven years, I would say you can invest the money. Anything that's five-plus years in the market, you have a better chance of being in the positive the longer you're in the market.

1:51:54But if it's one to two to three years, high yield savings is a much better bet. Got it. Okay. But you're doing great. You have an awesome income. You're debt free. I would just sort of refocus because we got off the beaten path with the plan as soon as we got out of debt. That's why I was calling you. I mean, I just paid it off. Good for you. And you got the$30 ,000 already from the inheritance? It's going to be in a couple months. Oh, in a couple months. Okay. Well, in the meantime, any extra money you have is going toward that emergency fund. and I would pause your investing down to 0 % because it would light a fire under you and free up money to put in that emergency fund.

1:52:30Okay, just until I get the emergency fund and then I can go back to it. Exactly. Okay. All right. You're doing great. I'm proud of you, Lynette. It's awesome. Listen, don't fall prey. Listen, Lynette, don't fall prey to your friends telling you it's crazy that you even think about waiting seven years to buy a house. Don't fall prey to that because, again, what the advice George gave you, I know it's going to take seven years and that seems like forever. But you're still single right now. And how old are you? 38. Okay. That's okay. Listen. Average homeowner is what, 40 now? Yeah, and that sucks.

1:53:00The number's changed. And by the way, that sucks, and I hate that. It's going to be way longer for me, but that's okay. It's okay. Ken is way older than 45, so he can attest, and he's a young buck still. Thank you, because you just confused the entire audience. And I'm not way older. You think, what constitutes way? To Lynette, seven years is a lifetime. Right. I mean, it is. It's true. But I'm like, it is what it is. You know, I don't want to. Here's the truth. Income is going to go up over time. You could meet someone and then have dual income. And so this is not like a life sentence. Life is going to change.

1:53:34Your dreams are going to change. Your city could change. But in the meantime, just stack as much cash as you can. That's right. Big picture thinking, Lynette. All right. And let me tell you something. Let me tell you what you're dealing with. And I heard it in your voice. And I want to encourage you. because this happens to all of us. Great expectations, right? And when the expectations that we had earlier in life don't pan out, it sucks, right? And here's what happens. And by the way, this happens to all of us, relationally, professionally, physically, right? I think of couples that maybe want to have babies and it takes years and years and years.

1:54:14There's just so many examples of this. but but it's okay to allow yourself to lament that right okay but thank you yeah listen it's okay because i heard you go i'm 38 you know well because i mean i understand the first time i started doing retirement i know it's okay like 30k in retirement i know lynette someone out there is 58 feeling like they're too late someone out there is 28 thinking man i wish i got this stuff sooner. So do not beat yourself up for that. That's what I'm trying to tell you, Lynette. I heard it, and I want to encourage your heart. You're not, listen, yes, you need to adjust now.

1:54:53The expectations you had for your life in this particular area haven't been met, but it doesn't mean that life in the future cannot still be really, really good. And so that's the mindset you got to have, okay? Definitely. I'm just thankful to have the debt paid, honestly. Yes, ma 'am. Listen, you're in great shape. You have much to be grateful for. Okay? Write down all the things that you're grateful for through this discipline of getting out of debt. Write all that stuff down tonight. And how proud, by the way, add a line, add a column of what your dad would be proud of. Okay? And focus on that.

1:55:29Thank you. Yeah. Get your head up. God bless you guys. You too.

1:55:43Thank you.

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1:56:43all right our scripture of the day comes from proverbs 28 verse 1 the wicked flee when no one pursues but the righteous are bold as a lion our quote of the day from james clear the author of atomic habits. Your success depends on the risks you take. Your survival depends on the risks you avoid. All right. Thank you, Jim. I'll chew on that. Okay. Anna is joining us in Knoxville, Tennessee. Anna, how can we help? Thank you. Thank you so much for taking my call. I'm so excited to talk to you guys. Well, we're excited to talk to you. What's going on? well um my husband and i are hoping to get our income up and um he's been looking to make a career change um just been struggling with kind of the steps to take on that does he know i'm wondering if you had i'm so sorry yeah i interrupted you so i was going to ask does he know which path he wants to take um right now we're kind of trying to narrow it down a little bit.

1:57:47But we're pretty sure that he would be good in the field of technology. Okay. And so when you say try to narrow it down, are we talking about specific types of roles within technology? Yeah. He's applied for some positions with some companies and hasn't gone anywhere yet because we were thinking that it would be best to just get get some get some experience in in the field and then kind of what kind of tech jobs is he looking at because that's about the broadest category out there um so he's applied to some uh cell phone companies yeah but again i think we're asking are we talking about programming are we talking about engineering?

1:58:39Are we talking about... Sales. Yeah, like what kind of role in tech? So the last thing that he mentioned that he was interested in was coding. Okay. Has he taken a coding... Has he taken a coding course, class, boot camp? He was looking into that. Well, I'm going to tell you, has he done anything professionally? Has he ever drawn any paycheck for coding? No. Okay. So one of the first things I would do, and we'll kind of pause on this after I say this, is what good coding boot camps courses can he take that you can afford? And let's go get that because many times in those coding courses or co-ops or whatever, they have placement services.

1:59:29And so if he wants to get to coding, it might be a good idea to get qualified in coding and then see about the placement as opposed to I'm going to go get a job at a cell phone company and then tinker around with coding. Now, that would be one thing. But I want to pause here. What's your financial situation? Because you mentioned you guys need more income. So what's going on there?

1:59:54um so so we have a we have a one and a half year old and a baby on the way and so we're looking at just cost cost of living is going to be increasing um and so just uh i guess i should have asked the question that his paycheck doesn't change all the time okay let me run you through a couple quick things here so george can some plug in here what is your combined income your income his income give me both of those actually okay yeah so my husband's income right now is

2:00:35it's between like 2700 and 3500 a month it fluctuates a lot okay and and and what does he do uh he he delivers pizzas full-time oh that's his full-time job um it it's never really been a full-time job it's been between 30 and 40 hours a week sometimes less why is he not working more

2:01:10um he has had some medical uh some medical issues that have been a setback um and we're working through that it's been getting better okay are you are you making any income right now i'm doing doordash okay but i've had i've had some i've had different jobs and having kids. And do you guys have any debt? We have a little bit of medical debt. And that's it. How much is that? What's that? How much debt?

2:01:46It's a little under$3 ,000. Okay. So we definitely have an income, and that's the primary reason for you calling, is we've got to get our income up, and we do. but for him to get into tech, there's always a ladder, no matter the industry, right? And so with him not having any tech experience, or at this point he has no tech training, that's what I've been asking, right? So it's going to be very difficult for him to get on an actual tech ladder. He might go work for a tech company, not a bad idea, but maybe he's in the warehouse or, you know what I mean? He's adjacent, which is what sounds like he's been trying to do, But he's still going to have to get some basic training.

2:02:29So one exercise for both of you that you can do tonight is to get online. And in your area, you go on one of these job websites. There's national boards. Or you can go look at companies, the local companies, the neurotech companies. And you look at some roles. But what you're trying to do is research and see what is entry-level tech in coding look like. And then we could say what is entry-level work in security, like data security. or, you know, a data analyst, you know, all the things. Get a good view of the landscape and always look for what is the lowest rung on the ladder because that's where he's going to enter with no experience.

2:03:08So then we step back further and we say, what qualifications does he need? And we start with, does he need a college degree? And many times at these tech companies you don't, but you do need some type of fundamental training, okay? Okay, sometimes we're seeing more and more where companies have their own training program. That might be an option. But you guys as a young couple with one little one and another one on the way and very little income, and you guys are out schlupping pizzas and delivering food, and I appreciate the hustle. There's no shame in that. I don't dishonor that. But I am saying you need more, and you agree.

2:03:42That's why you called us. So this becomes an urgent research project. Are you with me so far? Anything that I said that you're not sure about? I'm with you. Okay. That's urgent. Like we are urgently figuring out what the plan should be and what the plan could be. In the interim, I would like to see him get a little bit more aggressive and I'm going to give him a couple of gifts. So we're going to give you my book, Find the Work You're Wired to Do. It has a career assessment in it, the Get Clear assessment. 20 minutes. It's absolutely worth it. Yes, ma 'am. It's got an AI component to it and it'll spit out suggestions.

2:04:20and that'll help verify or give him some more ideas. Step one. I'm also going to give him the book, The Proximity Principle. And he needs to read The Proximity Principle. By the end of Sunday night, he should be almost through with it. And this is about how to make good connections because it is connections that open up and unlock jobs and opportunities. You tracking with me? So those two books are my gift. But you guys need to do the research. George on the money piece, they still got some small debt here. I want to bring you in because we've got to hustle through that. Do you guys have anything in savings?

2:04:56Yeah, actually we do. We actually opened a high-yield savings account. We have about$25 ,000. You have$25 ,000 in a savings account? I guess I should have asked that. You buried the lead there. That's like almost your yearly income. How did you save that up?

2:05:25um well i've been doing i feel like you're not telling us the truth and the amount of pausing is giving me some pause yeah what's going on well i'm just trying to think through like i've i've had a lot of different things that i've done too um okay for the shortage of time i'm going to interrupt because george tell them what they do with the 25 000 you're paying off the medical debt today. Any debt you have is going to get paid without savings and anything left over is becoming your emergency fund. That gives you guys some financial cushion and some financial peace as he explores these new options.

2:05:57And so that's your ramp to get into this new field while he's delivering pizzas. And he needs to be working more if his health can support it. You need to be working more as well because this baby's coming and it is going to get more expensive, but it's not hopeless. We should get him the right steps and Ken's resources will do that. Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.