It’s Time to Face Your Financial Reality

28:49Not every year will be like that, but 11 % for the past couple of years is a little bit of a conservative number to use. It would grow to over$2 million. Oh, wow. So that would be in five years? In five years. And then if you just want to do rough math, that money will double every seven years. So if you didn't touch it, which I know you might because this is what you guys are going to live off of, but in seven years, that 1.2 is 2.4 and then so on and so forth. So the growth that you guys can get and live off of is something that I would highly, highly consider. And CDs and things like annuities and all of that, they're just very conservative.

29:30I mean, I would say, quote unquote, safe, but they suck as an investment. Like your money could be doing so much more. And I know that probably isn't going to change your mind completely, but I want you to talk to your advisor. And if he continues to tell you to put in CDs, I would look for a SmartVestor Pro. You can find one of those on RamseySolutions.com because these are trusted people that are in this world of investing. And there's something powerful about saying, yeah, you're a young 60, Candy, young 60. You're a young 60. You're not 85. If you're 85 and you're like, I'm scared to death, I'd be like, girl, do what you got to do to sleep well and right off into the sunset.

30:08But you still got some years ahead of you. A lot of years. That this money could be working for you and for it just to sit in CDs. Yeah. And I mean, I feel like. Go ahead, Candy. I think the reason he suggested CDs was because of us. We were like, you know, we're not ready to put it into anything because we don't really know what we want to do or put it in, you know, was just unsure. So that's the reason he suggested. And that would be the right thing to do. I mean, he shouldn't invest you in something you've said no to or don't understand. And so I think I can respect why he did that. But let this be the jumping off point for you guys to really dig in and even sit down with him or, like we said, another SmartVestor Pro and just say, help me understand because I, I do know that I'm missing out on returns and I don't want to keep missing out, but I want to understand it.

30:57I don't want to just get in because the people that I listened to the radio told me to, or because, you know, whatever his name is, because Bob told you to. And it is scary. I mean, if you're watching the news and you know, we bought my ran and it's like, Oh my gosh, the market's got right. Like, I mean, like, it's just like, it can, it can seem scary. And that's the frustrating thing is if you're, if your investment advice is coming from the news either side of the aisle. Yeah, absolutely. You're not getting, you're not getting the, the, the wins. They don't, they don't promote that because it doesn't give ratings.

31:27What gives ratings is scared doom and gloom moments, um, that they can point the finger and blame the person across the aisle. So you have to really look at the facts when it comes to this. And it is so much, um, more positive than I think you realize, Candy, but I want you to do that research and figure it out and ask good questions. And hopefully he has the heart of a teacher.

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33:17Well, if you are a listener of The Ramsey Show, we're so grateful for you. And if you're wondering why we keep mentioning the baby steps, it's because they're the foundation of everything that we teach. So if you're new here, we want you to start there. Or if you've been listening for a very long time and you still haven't started working the plan, we want you to start there. Start with the baby steps. That's the best way to work the plan that we teach. All right. Tyler is in Minneapolis, Minnesota. What's up, Tyler? Hey, guys. How's it going? My aunt and uncle have offered to do a contract for deed with me for their house.

33:54And I can't tell if this is with my income and debt, if this is something that I should consider or if I should just kind of pass on that opportunity. Tell us more about your income and your debt. So I make about$23 an hour. And then I graduated college with about$75 ,000 in debt. I have roughly 35 grand left on that. That's great. Yeah, good job. So 35 grand left in student loans. Any other debt that we should know about? Nope, that's everything. And how much money do you have saved?

34:36That's kind of where I feel like I'm looking for help is because I've been kind of throwing everything that I've had. I graduated four years ago. And so everything has gone towards the debt. I haven't really saved up anything. And then I feel like, you know, without health insurance or, you know, something comes up with my car of just like I have about four grand probably between savings and checking. OK. And you feel like it's a good idea to be a homeowner? um well so i moved back in with my parents um and back to my hometown and so i just don't know to me it seems pointless to go and rent when my parents house is an option and then on top of that my aunt and uncle uh who are offering me the house they go to texas every year for the winter and so i've actually been living there on and off for the last four years just taking care of that property What's the value of the property?

35:31Like what would the terms be? Yeah, so I would say that if they were just to sell it on the market, it'd probably be$450 ,000 to$500 ,000 in that area. Now, I would say that they're set up, you know, pretty good. So I don't know if they'd necessarily be looking to make like a whole lot off of me, you know, as I pay into it. So there's no deal. They're doing this for market price? Well, I haven't talked the details of what that contract for deed would look like. I would assume that it would probably be as low as possible. Or if that was the route I'd go, what would I be looking for in that deal?

36:20So, Tyler, what happens when the HVAC system goes out after you've bought this home and it's going to cost you$8 ,000 and then there's some mold in the basement that's another five? What happens? That's a great question. Yes. So, I mean, the point I want to make is that you're broke. You don't have any money. And so people who are broke that buy homes become broker. and it's not a good thing. It actually adds to a lot more stress and a lot more debt because you can't keep up a home. I mean, one of the cheapest days of a homeowner is the day you buy the house and everything else the rest of the next couple of years is you putting money into it.

37:08And when you don't have the money for it, there's no emergency fund, you still have this debt. You're just not at a financial place. And I say all this because I want you to become a homeowner. And it sounds like you have some good living situations that you can live there for a little bit and take care of it. Like, I mean, there's time. There's no rush. I mean, you're what, 20, 26? 25. 25, yeah. So I would highly suggest continue to do what you've been doing. You've paid off$40 ,000, which is amazing, Tyler. So I wonder if there's a way you can up it because you still have 35 left, and I don't want that to take you another four years, right?

37:47So I'm wondering if you can do some extra work, do something on the property, you know, they pay you. I don't know what it is, but if there's some extra flexibility in your time to get this debt paid off ASAP, I mean, an extra, you know, thousand bucks a month, you know, you're getting this paid off in more like two years, two and a half years versus four years. And if you do an extra, you know, if you do$2 ,000 a month, like you can start to see it actually, you know, see a lot of progress, but it's going to take you changing and being a little bit more intense because after that, then saving up some money, um, you know, for an emergency fund, having some money set aside for a down payment, at least 5%, like all of that is the order at which I would do it, which is going to take you probably all of that another four years before you have a owner, but that's okay.

38:37Cause you'll be 29 and, and there's no, there's no rush. I mean, I think you would regret this decision a whole lot faster. And then the whole thing with the deed is, is that like a, like the seller financing is what it's saying. So they would become the bank, which I would not do that either. I'm just curious. Do you have money saved that you were even considering this? Do you have a chunk of money at all? $4 ,000, right? So yeah. And they've kind of just proposed that to me as we're coming into them leaving again down to Texas. And so I would probably We try to save up whatever I could throughout the winter and then.

39:14Yeah, but just to put this in fair terms, what you're talking about, if anybody on the streets were going out to buy a$450 ,000 to$500 ,000 house, and let's just say they gave you a deal and they did it for median listing price is right now. Let's say they did it for$424 ,000. Most people, in order to get that payment at a fair part of their take-home pay, they'd be putting down like 50 % of their income. In your case, making$23 ,000 an hour, you'd be putting down like 63 % in order to make this a fair amount. And we haven't even talked about do they own this property free and clear or not. Because if they still owe money on it, depending on their interest rate, they're at least going to want to cover that.

39:58Do you see what I'm saying? so what they're going to be able to offer you would be limited anyway I do know that they own it 100 % and we also know that's good that they own it 100 % but we also know that you don't have any money to buy this 100 % and honestly I was kind of hesitant about it it just seems like such a good deal and not that they would be mad if I turned it down or anything like that I just wanted to look into it fully Yeah. No, that's totally fair. No, I so appreciate you calling and asking the question because families do this a lot. We get this call a lot that, you know, a grandmother or an aunt and uncle, a parent, and they have this home and they want their child, their niece or nephew, their granddaughter to buy it.

40:45and you know and and again i think it's because it's that family tie it feels like okay i'll get a better deal with this family and just because it's a good deal doesn't mean it's a good deal for you right and so you really do have to separate and take the emotion out of it to think am i going to miss out there's going to be other deals well there there's going to be other houses that you can buy and that may not even be the house you want well that's what i was going to say is like that's that's the whole thing is if if they had not come to him and said hey we might have a deal for you I I don't think that he was like you want to know what one day I want to buy a house you know whose house would be great my aunt and uncle's that's the house I want to buy yes that probably wasn't on his list of things to do it just presented itself and it was like oh this is in front of me maybe I'll do that you know that's right exactly and that's how these deals happen and for a lot of people they walk right into them and then they get two years in and they're like, oh my gosh, I have no money.

41:39And then if you're the seller financing and you lose your job, then you can't pay the mortgage that month. And then you have to go to aunt and uncle and say, sorry, you know, and if they had a bad situation, which it doesn't sound like they do. I mean, it just can be a domino effect that's not clean. And the cleaner something is, the more peace. Agree. There's going to be more control because we do want you to own a home. Like that is part of the baby steps. Like we want you in the market, but not when you're broke. Yeah. And you have no money. Broke people don't need to be owning homes because, oh my gosh, like it is so expensive.

42:10It is so expensive to keep up with it. And there's time, you know, I think the most recent data said that people are not buying homes until their 40s. Like that's when they're making that first purchase. And so I think that's, I think that's okay. You know, it's very different from what we're used to because real estate's just more expensive now. It's more expensive for people, but I think it's okay. You know, I tell people all the time, Sam and I waited 10 years to buy our first house and we're still here. And you're going to be okay. Yes. But we're going to be okay. Nothing's going to happen.

42:39And the house doesn't fix your problem. So if you really are paycheck to paycheck, you don't have savings. You have a lot of debt. Owning a home is not going to make your situation better. No, it's not. It's really, really not. And so have the patience. Have the patience. It may take you longer than it did six years ago, but it is so worth it to have that peace of mind.

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44:08Welcome back to the Ramsey Show and the Fairwinds Credit Union Studio. We're going to go right back to the phone lines where we have Nicole, who's in Portland, Oregon. Hey, Nicole, how can Rachel and I help today? Hi, I've spent like the last minute just jotting down notes and stuff because I know that I'm going to be a jumble mouth. But right now, the biggest thing that I am crazy about is my husband and I. Last year, he was making over$100 ,000. and we lived, you know, a somewhat cushiony life. Like we had our finances, you know, we lived within our means. Like if we wanted to buy something, we could go buy it.

44:45So up until February last year, he had lost that job and I was a stay-at-home mom. And so I remember I was in Tennessee at the moment visiting my parents. And so I had went back to work, which is fine. Like, although it's hard with a child, you have to do what you have to do. So I did that. He got a job as a car salesman. He is only making about three grand a month, which is not really that great. The way they do things there is just so weird how they pay, but they basically essentially pay you to sell eight cars. And after eight cars is when you start getting like the commission. And I was making like three grand a month as well.

45:29um but we so i don't live in portland i live in um sweet home which is an hour and 40 minutes from there and it's a very small town i don't have family here and we have a child and i had someone watching my son but that babysitter had to be dropped and so now i'm working and i'm making a thousand dollars a month um i am trying to find ways to like clean people's houses and stuff i guess my biggest thing that i'm slowly i think i'm learning is like our monthly income right now is 4 ,800. Our total bills are 3 ,900. And although that isn't what we used to have, because we have a cushiony life, but I think I'm worrying about stuff that is out of my control right now is what I think I'm realizing.

46:14And it's taking a toll on my marriage, like the financial piece. My husband and I, we just can't see eye to eye. It's not that we're fighting, but I'm just like top tier stress. What are the biggest stressors that you're feeling just not having the margin? Are you stressed that you're having to work? Are you stressed that you don't like his job? What's the number one thing that's eating your lunch? So I think the biggest thing right now is because we only have my husband's family to rely on and childcare, it's really hard, especially with the location that we're in. And I am afraid at some point it's going to be like, okay, like we have no other people to watch our child and I will have to be a stay-at-home mom.

46:53But I am choosing, this one thing I did learn, I am choosing to deal with that when we get there. So as of right now, we do have childcare. But it doesn't give you the hours that you need to be able to work. It's limited. Right. Okay. And tell me again, is that because the town is so small and there's just no one to rely on or is it strictly, are you strictly going to family for childcare? So I'm strictly going to his family. I don't have family here. I don't want to say too much, but we did just have a babysitter, but found things out about her, police got involved. And so this town is just not a good place to have, find just random people off Facebook.

47:34Well, maybe, maybe, maybe let's not go straight to that. And I think that could be, I want to say this, you have a bad experience, it will put a horrible taste in your mouth. But I don't want that to turn into the first girl that we used ended up being bad. That means everybody in this town is bad. I don't want it to go to that because now you're putting yourself in a corner and you're really limiting your options. How old is the child that needs childcare? Three. Okay. Three. And I just wonder, I'm wondering about his job, Nicole. Yes. How long has he been doing this? He has been doing this for about five months now.

48:14There was a couple A couple months where he did bring in like a$3 ,600 paycheck alone. Okay. Which was nice. Well, maybe I wonder if that's part of it too, of you guys agreeing on kind of a timeline to say, hey, can we reevaluate, you know, give them nine months or I'm making up a timeframe, nine months in this role to really get the cycle and to, and to know how to do it well. Right. You need some reps. You don't want to just like pull the plug 90 days in. But I wonder if you both could agree because your uneasiness is that your income is having to supplement what he was making. And I think a goal of yours, I'm assuming I may be putting words in your mouth, is that he would bring in an income that was to stay in the household and you don't have to work.

49:03Then you don't have to worry about child care or anything. That would be like the ideal situation, right? Right. Yeah. So I do wonder on his end of, hey, can we reevaluate our situation every couple of months just to give you an outlet for you to reevaluate to Nicole and to say, okay, it's been 90 days and we've done this. We've survived. Like what is working is working right now. We're okay. Nothing's on fire. Or for you to have a place to be like, no, no, no. This is not working. It's horrible. It was horrible. And you know what I mean? I mean, like, I don't know, for him to be able to have an out to in this specific job, if there's something else that he could plug into, he may not make 100 grand again.

49:44I don't know. Was he in sales when he was making 100 grand? What was he doing? He was a supervisor for like Georgia Pacific. What's Georgia Pacific? Is that trucking? No, it's in Halsey, Oregon. It's going to sound so funny, but it's where they make toilet paper and paper towels and they wait for Costco. So like a factory. It's like a manufacturing. Manufacturer. Is there, have you guys considered looking outside of your area? Because it feels like just from listening to you, it feels like you're in a very small bubble and you're limiting your options because of this bubble. Can he look for management jobs at manufacturers across the country?

50:24And can you guys open up your scope? hope and and if you say oh well what about child care there's child care everywhere like everybody or family do you guys you do you guys want to be near family um so right now we own our own home so we can't I mean we can't just pack up and like move um the job thing for him um one thing that I think is the biggest problem for me right now it's like it's just been nothing but like excuse after choose like oh I don't want to go back to manufacturing job oh I don't want to do physical labor. Oh, I don't want this. Oh, I don't want that. And so it puts me in a spot of like, okay, well, I'm just going to say it out flat, but it puts me in the headspace.

51:02It's like, okay, well, you just want things handed to you. That is probably the biggest thing right now. So he didn't like the job that he was doing. He doesn't want to go back to that. That's good to know. Does he like this current job? Does he like it? He loves it. And I love that for him. Like, I love that he has found a job that he really loves. So explain the handed to him part. He loves this job do you feel like he loves it but he doesn't work hard at it what do you feel like is happening there um I feel like in a point in time in life and although maybe he doesn't see our finances the way I do and maybe he's not freaking out about it because honestly it's not really that big of a deal but for him like I'm sorry what was your question just for what part of it you said he just wants things handed to him and I said you said that he really loves his job does he love his job but he's lazy at his job is that what you're sensing or does he love his job and he's working really hard, he's just hitting a salary cap.

51:53Like, what's happening? I mean, he loves his job a lot. I would say that I know the people he works with, and he's been working hard. I mean, there has been months where he's sold 14 cars. Then I think there's something else at play. I think you're perceiving something that may not be true because you don't like the situation. I think that's it. I think she wants out. Yeah. And I think that's fair. I think you're feeling like, hey, I didn't sign up for a situation where I was going to have to leave my kid with a sitter and work. And yet that's where you find yourself. That's where you find yourself.

52:28That's the reality for now. And so that's why I think some check ins periodically so that you can you don't hold it in, Nicole, and the resentment builds on your end. Right. And to have a place, even if it's a counselor, you know, counselor or therapist, a place to be able to talk about this freely, I think is going to be really unifying for you guys.

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54:22So you've probably noticed that in the majority of the calls, we love the solution of EveryDollar because it's the budgeting app that we created here at Ramsey Solutions. And it's the best way to work the plan that we talk about. It's the best way to work the baby steps. You have to have a budget in order to work the baby steps. And so it's for you. If you have been listening and you have not downloaded EveryDollar, you need to start for free today. You don't have to live paycheck to paycheck. You don't have to live feeling broke. Our EveryDollar Budget app helps you find extra money. It helps you every month.

54:54It helps you build a personalized plan that's just for you so that you can beat debt and build wealth. It takes 15 minutes. You'll find thousands. I'm telling you, in hidden margin, you'll feel like you got a raise. Don't live normal when you can live like no one else. Start EveryDollar for free in the App Store or Google Play today. All right, Diane is in Raleigh, North Carolina. Hey, Diane, how can Rachel and I help today? Hi, thank you for taking my call. I have been following Dave's program since 2019. I'm out of debt, got good retirement. I've had an old car that I'm trying to hang on to a bit longer.

55:28I'm trying to wait to get another car until I'm closer to retirement, and hopefully it'll be about 200 ,000 miles. It's about 127 ,000 miles on it now. It's a 2019, but this year when it hit 120 ,000 miles, it has gotten expensive between maintenance, repairs, and I got some really good new tires. I have spent$8 ,000 on this car, and I am guessing myself that I should have kept it this long. What's it worth? What's that car worth? Probably around$9 ,000 or$10 ,000 until Subaru, and until 120 ,000 miles, I was pretty happy with it. Do you have money saved up? today. Do you have money saved up that you can just upgrade car?

56:11Well, I do. It would kind of wipe out my savings on my emergency fund. And I have a, I'm going to have to get a new roof for my house here sometime soon. Um, but what's your margin every month? Pardon? What's your margin after you guys pay your bills? What's the margin that you have available? Oh, I have lots left over. Um, I'm making double payments on my house right now. Cause I'm at less than eight, 11 ,000 of my house. So could you just, could you just slow it down a little bit and start stacking a couple of thousand? It sounds like you got a lot. I don't know how much a lot is, but if you could put, you know, half of that aside for a car and in six months trade up, does that, is that workable?

56:51I probably could, but like, I'm trying to get like a, another used car and I was looking at kind of the same car with only 50 ,000 miles on it would still be like around$20 ,000. yeah but if you sell this if you sell this for 10 can you save up another 10 can you save two thousand dollars a month if you slow down on the house yeah just make your mortgage payment for five months could you save ten thousand dollars yeah i could do that which actually i could take ten thousand on my account and still have my emergency fund that's what we're saying do that yes i could still do that i think you're just like going fast you you're like i gotta get this mortgage paid off this is like cramping my style right now I don't want to deal with it so close to and I'm doing better my retirement than I originally had thought I was doing and so I'd like to reward myself too which was another question I wanted to ask but not this time but so my car though because it is a good car it's just it's costing all right now it's too much it's worth nine it's worth nine thousand and you've put eight thousand in it this year and the year's not even finished it's it's time to upgrade and you have the ability to yeah so I would and sell it while it's all fixed yes you know for the for the 8 000 that you've put in with the new tires and everything else happens i mean seriously i probably would because if something else breaks you're going to be like oh my gosh that's going to cost 2 000 is it worth putting 2 000 you know you're back to the same conversation so while it's going well go ahead and sell it and get get as much as you can out of it because you've put a good investment into it you know that's what's one good thing to highlight you know here we we do teach a lot of people's potential is lying in their vehicles when people are trying to get out of debt.

58:28We're telling them to sell off their cars and drive a beater. We don't like car payments. We want you to own your car scot-free. But there is a moment where you can transition out of driving that beater car. And she's definitely at the point where it's like, I can upgrade my vehicle. It's at no detriment. If you're making double and triple mortgage payments, heck yeah, it's time. yes absolutely yeah it is yeah we don't want you driving a crappy car for the rest of your life people that is for a season while you're getting yourself in a place where diane is diane diane upgrade the car you're good do it all right thank you so much for the call dan let's go to marie who's in los angeles california again hey marie how's everything out in cali hi jade and rachel it's actually starting to finally cool down but I'm 27 years old as of today.

59:18Happy birthday. Thank you so much. I work full-time and I'm going to school part-time. I'm in baby step four and five but technically I'm not saving for my kids college I'm saving for my own and so I'm preparing to cash flow veterinary school in about three years. So my question is, where do I store the cash while I'm saving for the three years? Well, a good place to always keep short-term money that's not, you know, less than five years is in a good high-yield savings account. You'll get probably maybe close to 3%. So you're not trying to make a ton on it because you're going to be using it and you want enough time that if you had invested it, there may not be enough time for it to have the ups and the downs of the market to actually get some pretty good gains.

1:00:10So really anything less than four to five years, a high yield savings account is great. And Fairwinds Credit Union, we've been partnering with them and they're amazing. There's something called the Smart Bundle. If you go to fairwinds.org slash Ramsey and you can get a no fee monthly checking account and then up to 10 high yield savings accounts. Not that you're going to need 10, but one of those can be earmarked for vet school. And then if there's any other savings you're doing, like to upgrade a car or something else, you can open up more. But yeah, to answer your question, simply a high yield savings account is where I would go.

1:00:41Okay. And do you recommend putting any money in the 529 or just everything in the high yield? Yeah. I mean, this point for a 529, I don't think it's probably going to be worth it because it's only three years and you're waiting for that growth again, that money will be invested in the 529. And so back to that, you know, point that it's, I don't know, there's just, there's some risk there if it's that short term in the market that if something does go down and genuinely I think about election time like you know like these years like they can get a little unstable and if you needed some of that money and the market was down and you feel like oh my gosh I you know it's going to feel like you lost some money if you have to pull it out there so so yeah so 529s are really good for long-term planning for college but for this short term three years I think I would just do a high yield savings yeah I think that's a really good question And I think that's one that the broader audience wants to know about.

1:01:36You know, it's like when is when's a good time to throw the money in a high yield versus investing it? And that five year mark really is, you know, the way it's calculated is from inception. If you take a snapshot at any five year point, it doesn't necessarily have to be consecutive like these specific years. But if you take any five year snapshot, you can see that there was enough time for the market if it dropped to fully recover and then and then some. so that's kind of where that comes from and I think that that's a really good smart rule of thumb. Yes, yes and I say all this and then you know Marie if you do look at the market the last three years have been amazing it's like oh my gosh I could have taken advantage of that but you just don't know.

1:02:15You don't know. So leaving some time is usually wise because the worst thing is putting money in and having to take it out in two years and you know and it's at a low and you know and you're thinking oh my gosh I'm gonna it's gonna I am losing money if you pull money out at that point you really are yeah um so keep locked in have it have it right right i love it love it so much all right a couple of questions you guys sometimes send us questions from facebook from the baby steps community keep doing that because we like to get them this one is tim from instagram we have a team that will be driving soon what are your recommended car brands that we should look at that will provide safety and still be economical oh that's a good question yeah i i'm gonna be honest i'm not i'm not very knowledgeable on every car brand and safety no feature and everything but um but yeah i would say obviously a used car yes and if there's anything that they can contribute financially it's always a good thing especially for a car because they are so invested in their car at 16 so like that's a good place for them to be putting some money so they feel they feel some of that purchase and responsibility yeah but yeah anything anything used i mean at that point and i'm looking at what's been on the road i'm like when i look when i look out on the horizon give me a toyota yes give me a toyota a honda i don't see a a lot of uh jeep compasses anymore you know what i mean like there's certain cars like don't get that yes do not get that do not get uh oh gosh there's a lot of them i guess i can't think of them because they don't exist anymore they didn't stand the test of time.

1:03:52They didn't.

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1:05:36if you are a listener of the show we would love it if you would like subscribe and share this episode or really any episode that is your favorite and go ahead and join the conversation in the comments we would love to hear from you okay guys cindy is in louisville kentucky she's on the line next hey cindy how can we help today i don't know if you can but i figure if anybody can it's you guys we'll do our best i um i own my house outright okay and i have no debt whatsoever all right i've never had i've never had credit cards i don't believe in them if i can't pay buy something, I don't buy it.

1:06:23My problem is I want to get equity out of my house to put on a new roof and to do some floors in my house. I adopt senior dogs and cats and my carpets are shot. I've only been here two and a half years. I came from Maryland. I've only been in my house two and a half years, but my carpets are shot and I want to get hardwood floors. How much does that cost? I figure about$30 ,000 total for everything. I have no credit. I don't have good credit. I don't have bad credit. I have zero credit. Good. So Cindy, you said nobody will give me money. Well, you mentioned that you're in baby step seven. You have a fully paid off home.

1:07:10You said you've never had debt. You've never done it. What have you done with your money? Haven't you saved it up somewhere or invested it somewhere? No, because my husband was very sick for 30 years. He got sick very, very young. And we lived hand to mouth our whole lives. And so we weren't able to save money. um when i sold my house in maryland to move here i put it right back into a house so there there was no there was no money to save we lived on his social security disability our whole lives what are you living on now your social security okay and how much is that every month and uh 1780 okay and i pay my bills everything's automatic because i don't want to you know i don't want to forget anything but it's but there's no nest egg no savings anywhere no cash no no there's a couple couple few thousand dollars that's it but how much is a couple few thousand dollars and where is it it's in a savings account it's like three thousand dollars okay and that's you know that's it and i what i did was i got a home i got um i have a home warranty so that god forbid of something that'll pay to fix anything okay could you use that for the roof no no no no it's just something it's just something breaks, you know, the furnace, the dishwasher, the washing machine.

1:08:56Oh, for appliances. Okay. Okay. No, it covers my plumbing. So if you just moved, though, two years ago, how much equity is in the home if you just went from, I don't know, a$300 ,000 house to that? My home paid off 100%. No, I know, I know. But I'm saying if you, how much is your house? How much is it worth? $240 ,000. Okay, so you had$240 ,000 in Maryland. You took the$240, bought a house here. So then for two years. Yeah, my house was worth a little bit more in Maryland. But the problem was I had to pay to move. Right. But we're saying how much. I'm just saying, do you have a lot of equity in the home to pull from in the first place?

1:09:38Yes. But nobody will give me the money because I have no credit. How much equity is in the home? $240. the house is 100 paid off okay okay i got you i got you i got you i got you yep yep so i bought the house with cash yes the house with and you're like hey i just want to get out some of this 240 thousand dollars of equity and you're trying to get some of that to i'm trying to get 30 000 to put a roof on because my roof i'm not sure how old my roof is the the people i bought it from were flippers and they didn't know how old the roof was. I'm a little before I have a problem before I have a problem I just don't want to have a problem.

1:10:24Cindy here's what I'm here's what I'm thinking. I'm a little concerned at with your situation because to your point you've just got the social security. You can't afford home repairs. You can't afford if the law if something happens in your yard a tree falls. You can't afford that. I wonder if a better purchase. I have no trees. One second, Cindy. One second. I wonder if a better purchase for you would have been a smaller condo where there's other things. No, because I couldn't buy a condo. I had to buy a house because I adopt senior dogs and cats. Okay, so let me speak to that because there's a lot that's true here.

1:11:03You've got senior dogs and cats. You want to provide a sanctuary for them. That tail is wagging the dog. And that's where the problem is because the math here, I mean, that was a pretty good pun. That was a good pun. The math doesn't lie here. You don't have any money. And I'm not saying that in any judgment against you whatsoever. It's simply true. and the longer you live in that house, there are things that are gonna come up that need maintenance. The AC is gonna go out at some point. It's gonna need maintenance. The roof at some point is gonna need to be repaired and you don't have the monthly income coming in to take care of those things.

1:11:39I realize you just purchased this house but if I were you, Cindy, I'd be thinking about a condo. Or a townhome. Or a townhome. Yes, that's 175. Yes. And you bank 75 ,000 on this other side. Yes, you need to, you have to. Yeah, to have some buffer because it's all real estate heavy at this point. And that's not a great plan long term. You need cash for things that are legitimate, like you're saying a roof and everything. And so if you go to RamseySolutions.com and check out our trusted pros and find a great real estate agent and have them run some comps in the area and hopefully you get, you know, 240 out of it or maybe a little bit more.

1:12:18If you've been there two years, maybe it's gone up 4%. I don't know. A little equity to pay the commissions on all of it. and find something that would fit your situation, like what you're talking about. And a townhome usually is probably gonna be the best bet, but it's gonna be smaller, but that's okay because you will have margin financially that I think is gonna cause way less stress and that you're not strapped for cash where you're having to go pull equity out of your home. And that's the really hard part about this conversation. I wanna pull that out. No one is saying that we don't care about pets.

1:12:49We're not saying that we don't care about the things that you want, But the truth is sometimes there's forced priorities on our list. And for you, cash and having a little bit of diversity, which is what Rachel was talking about, not everything in real estate, is a number one priority for you. Whether you like it or not, it is the best thing for you to have a better foundation going into your later years. Yeah. And you got to think, Cindy, if you're going to be doing this with all these pets, more carpet is going to be destroyed. destroyed so you have to replace it again in 18 months and you need cash to do that right so if you want to cash flow this lifestyle which is fine it just has to be realistic to your numbers and and it's not been so um and maybe you can go volunteer at a shelter like find other ways to scratch that itch if you end up living somewhere where you can't have as many pets i just there's more than one way oh gosh i almost did it again there's more than one way to skin a cat oh no That's wrong, isn't it?

1:13:46That's not right. Tail wagging the dog. Cats over here. I know. I'm doing the best I can. We love you. We love you. We're pulling for you. And the best thing is, with all of it, Cindy, is that you do have a paid out of the house. Your hard work and diligence has allowed you to maybe make a different move where you have cash in the bank and you own something still, right? Yes. Yes. So it's a positive where you're at. It's not a mortgage. You know, that's what I was thinking in my head as I was trying to pull up the equity. I'm like, you don't have equity. There is no mortgage. So yeah, you are free and clear, which is, that's a gift.

1:14:22So use that to your advantage. And you've lived a long life with a sick spouse and, you know, that month to month feeling. You're used to that. But we're saying change it up. Do something different where you do have some buffer. I think it's going to give you a lot of peace in the long run. Yeah. Well, thank you so much for the call. and what she's accomplished truly is it it's a part of what we teach we want people to go into the later years of their life we want you owning your home for most of us that line item the rent or mortgage is the biggest line item on our budget and if you can have that solidified by having a paid off mortgage it's one of the number one things that you can do to really solidify your financial future and she's done that yeah and with retirement along saving for retirement that Maybe set four, 15%.

1:15:07So you're having both in tandem. So you're not in a situation where all your assets are in one thing and there's no cash. Absolutely.

1:15:27This show is sponsored by BetterHelp. I know a lot of you out there are trying to keep it together all the time. You show up to work. You pay the bills. you smile at the right times, but then no one sees you snap at your spouse or lie awake all night running through everything you'd wish you'd done differently during the day. Just because you're functioning doesn't mean you're okay. Talking to someone else is a great way to process what's happening in your life and get to the root of your challenges. That's where BetterHelp comes in. BetterHelp matches you with one of their 30 ,000 licensed therapists, someone you can be real with and finally put down some of the weight you've been carrying and come up with a plan for getting well.

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1:16:49All right, let's head back to the phone lines. We have Alan, who's in Jackson, Mississippi. Hey, Alan, how can we help today? Hello. How are you? I'm good, thank you. You bet. Look, I've got a problem with my home. I've had it on the market since the first of the year. I've actually gone through two realtors on it. The home is worth$265, of course. I owe$177. The other one's wrong with the pricing I've had listed on it. Problem is, nobody's biting. Nobody's made an offer or anything, and we moved out of it before we put it on the market. We were suggested to move out. We were told if we moved out, it would sell faster.

1:17:32So my wife decided to move us out. I still pay the mortgage, still pay the water and electricity. I still pay a yard guy to go by there every two weeks. It's a really nice subdivision. I don't know what to do with it. I'm paying on it, and nobody lives there. It's in a subdivision. Are the other houses in the subdivision selling? They are here and there. They've been kind of running into the same problem I have been with them being on the market for a long time. Do you know the average days on market in your area? Your realtor should know that. I was told it would be 90 to 110 days. Yeah, national average median right now, I should say, is 60 days on the market.

1:18:22That's nationally. So, you know, depending on where you are, that could be different. So for Jackson, Mississippi, it could be longer or shorter. But not nine months. Yeah, it's been on the market for about eight and a half months. So in your area, we just pulled it up. It's actually 70 days on market in Jackson, Mississippi. So that, I'll be honest, Alan, that's telling me that there is something. It's either the price. It's either the location, what it's next to, what's in the backyard. The house itself. The house itself. Conditionalized. If you had to be brutally honest. Or you have terrible realtors and you're just getting people.

1:19:00I would go to RamseySolutions.com and check out our trusted agents because these are really high-driven individuals that we recommend. So I would look and probably interview one or two of those in Jackson. And I would switch realtors too. Yeah, 100%. If there's nothing glaring that's super obvious that something's wrong like what Jade's saying. no uh and the only feedback that i've gotten because my first realtor yeah i didn't do a great communication job so i just kind of cut that one loose and just moved on and we we uh went back to the realtor we used we bought the house to begin with but if the only feedback you got was to empty the house out my next thought would be let me let me finish the biggest feedback I've got is nobody likes that all the bedrooms are upstairs.

1:19:51That is the biggest complaint I'm seeing. They like it. They love it. You know, price is great. It's not, you know, because my price is not astronomical. I'm not looking to make it kill. And I don't even have a list for what it's worth. Well, I really, I think that the bedrooms upstairs. What Rachel said, I think is the exact thing that you need to do. I think you need to talk with one of our real estate pros and they're going to be able to crack the code for you. There's plenty of houses I know that all the bedrooms are upstairs, right? And so when I get that may not be everyone's preferences, but also I'd want to know how many showings.

1:20:23I mean, I bet out of 50 people, you're not getting 50 of those comments, right? I mean, so yeah, there's... Something's going on. There's not enough activity happening is what I would say. And they can help you actually pull some comps because maybe in the area, I don't know, of Jackson, it's maybe values have stayed, you know, consistent and you need to drop it a little bit. I don't know. So yeah, they'll be able to pull some comps and help you. Absolutely. Thank you for the call, Alan. Let's go to Allison, who's in Harrisburg, Pennsylvania. Hey, Allison, how can we help today? Hi. I was a public school teacher for 10 years.

1:20:58I've since left the field to raise our kids. We'll be homeschooling them. Don't feel like I will ever be going back into public school teaching, but I have a pension that's sitting there and wondering if I should pull that. I'm only 42, so I would get dinged in that area. But if I should pull it to reinvest it in our retirement that we have, which would get a better rate of return, or use it to pay off our house. I'm just kind of wondering if the ding that I would get would be worth the value of those things. I would not use it to pay off the house since it's retirement money. I am interested if you pulled the lump sum to reinvest.

1:21:42Is it a 10 % penalty? What, what, what's the penalty? Uh, I think it's 10%. I don't know the exact number. I didn't look that up. Okay. Yeah. So I, I would look at that. I always hesitate to pull out long-term investments that have that penalty because, but, but pensions, depending on where your investments are within the pension is going to make a difference. Cause sometimes some, some, you know, districts, they do it great. Yeah. And it's well invested. Yeah, and it's fine. But if you pull the numbers and see the investments and think, oh, my gosh, I could be getting so much more because they put you in a really conservative type of investment that's not making a ton.

1:22:21And you run the numbers because you are so young that that ding now, you could make up for it, you know, in the market. Or if it's doing fine, a part of me would say you could leave it and then pull it all if you have that option at retirement age. And reinvest it then. Reinvest it then. Do you know what the return on it is? They target 7%. Oh, yeah, that's not great. And like I said, it's just kind of like sitting there. We're not contributing to it since I'm not working. Right, right. And I don't plan on going back. And we have other retirement investments that we have on the side through my husband's work.

1:23:00And then private things that I had invested in 403B, we had rolled over to an IRA. What's the lump sum of it right now? that you would receive? It's 65 right now. I don't know what the penalty would be on it, but that's what's sitting in the account. You know, I might sit down with a smart investor pro to see what their thoughts are on it because I agree with Rachel. 7%, I'm kind of like, I don't know. If you pulled that out, you would take a tax hit, the 10 % penalty, I'm sorry. But then after that, you'd be invested in making 10, 11%. And so you would make back the loss, you know, pretty quickly.

1:23:39I think I just, uh, I'd want to sit down with somebody who knows more of the ins and outs on that, but that's what I'm leaning towards. I can tell you, I would not pull out that money and put it towards paying off my house because the truth is that money is earmarked for retirement. And that would be like us telling somebody to cash out their 401k to pay off their home. And we just wouldn't, we wouldn't recommend that you need, you need that diversification going back to one of our previous calls. You want, you want that money there. Um, that's a very good question. Was there anything else? No, that was it.

1:24:10All right. We love you guys. We love listening to you guys. You guys have helped us out mentally. So thank you. Oh, I love it. Thank you so much for the call. I love that. All right. Let's take one last one. Renee is in Nashville, Tennessee. Hey, Renee, we're a little against the clock, but I think we can do it. Hello. Hey. Hey. So my question was if if I if me and my husband takes a$89 ,000 HELOC on our home and use 45 ,000 of it to pay me and his debt off does it make sense and we have 20 we have like 23 ,000 stays in our savings but we didn't want to touch our savings the total debt that you guys both have is 45 ,000 yeah so why would you take out an 89 000 heloc what's the rest of that money going towards so i didn't want to do another heloc so the the plan is to pay the debt off and eventually pay down on the on the on the 45 000 debt on the heloc but still have the extra money because we want to eventually rent our current home in Nashville out and move to Dallas and buy another home and use some of that HELOC to put on a down payment.

1:25:35Oh, gosh. Oh, Renee, you guys are doing way too much. And I think if you do that, it's actually going to cause you to go backwards. If I were in your shoes today and I've been in your shoes with$460 ,000 of debt, I would take the$23 ,000 that you have saved. I take 22 of it and I would throw it at the debt, cut it in half and then you and your husband if you work like crazy people for the next year you can have the rest of that 20 some odd thousand dollars paid off and you'll be completely debt free and you will have not borrowed against your equity yeah the problem with that renee is you start to move when you move debt around you feel like you've done something and you haven't and then sell your home in nashville okay use that money then to buy something in dallas rent in Dallas for a year, sell your home in Nashville and that time.

1:26:23Don't be a long-distance landlord either.

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1:27:50All right, welcome back to The Ramsey Show here in the Fair Ones Credit Union studio. I'm here, Jade Warshaw next to George Camel. If you were listening, I was with Rachel, but now I'm with George. Some call it an upgrade, some call it a downgrade. I'll let you choose. I'll call it a comeback. Let's go to Violet, who's in Arlington, Virginia. Hello, Violet. How are you today? Hello. Hi. I'm on Baby Step 2. First of all, thank you for taking my call. Yes, ma 'am. Um, I'm on baby step two. I started in December, 2025 and I am, but I've got 37 ,000 paid. I'm now almost done with all my consumer debt except for my student loans.

1:28:30Wow. Yeah. That's awesome. Yeah, I'm really excited. Um, but my student loans are really big. There's a lot and, um, and, but I'm ready to face the music and I'm have a plan and it's going to take me a number of years, but I can do it and I had some questions around it. My balance right now is$225 ,000. The balance had ballooned because I had it in forbearance for 20 years. So it's really my fault that this happened. But I'm ready to face the music. I've been listening to the show. I heard your story, Jade. I know this is possible. I can do this. So I am going to start repayment next months. Way to go, Violet.

1:29:12Thanks. I'm really proud of you. Just that alone, I really am proud of you because a lot of people would stuff their head in the sand and kind of ostrich this situation, but you're like, you want to know what? It's time to go. It's go time. So I'm really proud of you. So$225 ,000 in student loans. Tell us about where did the loans come from? Like, are you in your degree? Are you earning a good income? Tell us about it. I am 43 now. I'm a single mom, so I am Working for myself, I am earning in my degree like I'm a consultant in the work in the field that I've completed. So I have been burying my head in the sand, but I am able now to pay$3 ,750 a month on this.

1:29:53And I think I can get it done in five years. but my questions are that the first one is that I have been hearing a lot from others online that their repayment or their payments have been lost by their loan servicer and so I wanted to ask if like you experienced any of that or what kind of like best practices did you engage in when you were making payments just to track all your payments and make sure that they were all counted I've not experienced that. The areas where I've found people experience that were on public service loan forgiveness where certain payments didn't count or the payments were lost in that way.

1:30:34Like, hey, I thought I made this amount of, I thought I made 100 payments, but it's showing that I only made 70, so 30 payments were lost. Like, I've heard it in that framework, but I've not heard it in just my normal month-to-month bills. I'm making payments, and they're just not being applied. I have not heard that. However, I do think that with what you're doing, you're not just paying minimums. You're actively paying well above the interest, and you're hitting that principle. you should be able to calculate and see that math actually happening in real time. And so I think that gives you the advantage to just be, you know, hitting it with an onslaught of payments and just, yeah, continue to track it.

1:31:17Well, that leads to my second question. So the$225 ,000 is comprised of nine separate student loans, and I'm going to debt snowball all of that. Great. The first four are between$10 ,000 and$14 ,000 each. So I know this sounds maybe against the principles of like the baby steps and the debt snowball, but I wondered if it would make sense for me to save up like, you know, over two to three months to like make a lump sum payment and just pay that entire$10 ,000 or$14 ,000 just for those first four loans. I guess I'm worried that my payments are going to get lost. I just don't want to pay this thing twice.

1:31:56Well, they're not going to get lost. You have bank statements showing that money leaving your account. So that on top of just save the PDF from your loan servicer each month showing that your payment history. And you can always request a payment history as well from the servicer via email. So I think it's a I think it's I'm not going to call it paranoia, but I don't think it's the real issue here. I don't want you to kick the can down the road any further based on, well, what if the payment doesn't count? Let's just start throwing as much as we can every month instead of saving up lump sum and then hoping that we actually throw it at the debt.

1:32:30Yeah. And I mean, you can, again, to combat this, when you make your initial payment, make your initial payment first that satisfies the interest and whatever little bit goes towards the principal. And then make a separate principal only payment within that same statement period. And that way you can physically see the loan lower by that amount. And like George said, with your statements, you're totally covered. um i think that you are i don't know but i think that you're looking at this mountain and you're like how can i tackle this and it's like part of your brain is creating an excuse and the other part of your brain is like i'll feel better if i just pay off a couple of lump sums at once i think you're just trying to find a way to like deal with this in your mind is what it sounds like and honestly just minimum payments on everything attack the small what is the smallest loan right now.

1:33:21You said between 10 and 14, but what's the smallest loan? The smallest is around 10 ,000. It's 10 ,500. Okay. So you're going to be done with that in three months and you're going to be cutting into the next smallest one. I mean, that's really, really cool. And what you can start to do, Violet, is just these little mile markers that celebrate those small wins. And I think you probably already have it like this because I can tell by your personality, but have it tracked out ahead of time. So you know, okay, the first loan is going to be done. When are we? September, October, it's going to be done in November.

1:33:52In November, I already have on the books that I'm going out with my buddy and she's going to buy us both a cocktail and we're going to celebrate that and then have it tracked for the next one. And those are things that you can do to really fire yourself up and get excited about this because that momentum is what's going to carry you through because five years is a long time. And George, let's talk about this for a minute because it's worth saying. Most of the people who do the baby steps, they're through baby step two. it's like a year and a half to two year deal for most people. That's the average.

1:34:24But, and when you're doing that in two years, a year and a half, yes, year balls to the wall. You're cutting, you're cutting everything out of your budget. You're living scorched earth. It's totally possible to do that. When you start creeping up on five and six years, you have to be strategic because you can't live in that state of mind for five years. It's very, very difficult. So maybe you do this, Violet, and you're like, I'm going to do a one and a half, two year sprint and I'm going to like sprint, just run it all off, leave it all on the court. And then after two years, I'm going to, you know, do something for myself.

1:34:59Maybe it's something that you need to upgrade. Maybe it's something that you need to do to just kind of feel your income a little bit. And then you do another year sprint and then you kind of take a little bit of a breather. But five years of scorched earth, it will take a toll on you. So you need to be thoughtful and set those milestones ahead of time. And you tend to speed up on the tail end. Oh, yeah. And so know that just because right now on paper, this is what it looks like, you're probably going to make more money. You're probably going to find ways to sacrifice deeper. And so all of that can speed it up.

1:35:28So I would go, okay, what does a four-year plan look like? Well, that's$46.80 a month going toward these loans. What does a, let's say I wanted to do it in 36 months, three years,$62.50. So now you're going, well, I bring home$10.00. Can I live off of$37.50 if I really got intense? I think you might find the answer is yes. and the shorter the sacrifice, the more likely you are to finish this thing. Also true. Yeah, that's so good. Anything that you can do to shorten this, if there's opportunities that come up, if you're like, you want to know what, maybe my rent could go down or maybe take those opportunities because to George's point, if you can shrink this thing by a year and a half to two years, that's everything.

1:36:06Get your life back.

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1:37:30Well, George, you already know this, but the people need to know that Ramsey is taking over an entire cruise ship. It sounds violent when you put it that way. I know. It's like we're pirates. It's a mutiny. It's not. We're not pirates. We're just taking a cruise together. It's called the Live Like No One Else Cruise. It's going to be so much fun, guys. March 14th through 21st. Next year, it's seven nights in the Western Caribbean. We're going to the Bahamas, Jamaica, Grand Cayman. Cozumel, so much fun. It is a full Ramsey takeover. This cruise is going to have everybody on board. Myself, Dave Ramsey, all the Ramsey personalities, George Camel, George Camel's wife.

1:38:08It's going to be a party. My husband. Who isn't going to be there? It's a shorter list. I know. And what's fun is there's no strangers on the boat. It's all like friends we just haven't met yet. Yeah. You know? We've all got many similar things in common, but we're going to do the largest debt-free scream, which that was one of my favorite things that we did on the last cruise. Obviously, guys, there's going to be lots of great content there. Dave's going to be doing some new wealth building content. There's going to be live tapings of your favorite Ramsey shows. So much more. Remember, guys, this is the only place that you're going to be able to experience this level of Ramsey.

1:38:42So if you're a super fan. This is the most Ramsey you can get. It really is. And remember, it's a limited. How can I say? Like it's an exclusive party. Yeah, not all are invited. Yeah, this is the negative sell. This is not for you. If you still have debt, you don't have your emergency fund. But if you are consumer debt free, you just have the mortgage left. you're in baby steps four five six seven you are welcome we want to celebrate the hard work that you've put in the milestone let's mark the moment a lot of people don't get to do that yes you pay off the mortgage and then you go all right get something back to work tomorrow oh we don't like that you need to celebrate with a cruise and for those of you who are in baby step two let this be aspirational for you to go you know the next year the year after that uh but if you're interested go to ramsey solutions.com slash events to book your cabin all you need is a 600 deposit to secure your slot.

1:39:34All right, let's go to Elena in Harrisburg, Pennsylvania. Hi, Elena. How can Georgia and I help today? Hi. My father-in-law established a trust for our son when he was young, and we know very little about it except that it's for his college education. My father-in-law is very private with his money, and he hasn't given us any details on it. My son is in 11th grade now and he does not know about the trust and we don't know when we should tell him about it and also we don't know what all we should know about the trust at this point. Well George I'm sure you guys covered so much of this in investing essentials I feel like you're the one to.

1:40:17Yeah there's a setting up a trust is a pretty aggressive move to say for a kid's college so what why did he set it up in the first place did he talk to you and say hey I'm going to set this up for college and this was back when he was a baby? Pretty much, yes. Yeah, he was two years old. He just basically told us that's what he was going to do. And we know that he did set it up and that's all we know. So no clue how much is in it, what's even in there. Is it cash? Is it investments? Like, we have no idea. Exactly. And if you talk to him and just said, hey, dad, he's a junior now. We're looking at colleges.

1:40:55We want to make a game plan to make sure that he goes debt free. Can you let us know what's in the trust and how we access it? He would say none of your business. I don't know if he would say that. I think it would be a very awkward conversation just because he's so private. He doesn't like to share. But he made the trust for your son. And that's the part that I would push on because this is your boy and you kind of have a right to know about something that has the potential. I don't know, but it seems like it has the potential to have a major impact on him because you don't know how much is in the trust.

1:41:28You don't know when he would have access to the money. If it's 18, you need to know those things. And I also don't like that your son would be blindsided because if there's, I mean, I don't even know if you can guess, Elena, but are we talking hundreds of thousands? Are we talking millions? Like how much wealth does your father-in-law have um he he's very well off he he definitely can afford to do a trust if i had to guess i would i would guess around a hundred thousand but i i really have no number to go off of but the part that worries me is that you're scared to even ask him about this yeah i mean and why isn't your husband ask him.

1:42:14Yeah, that's another good question. It would be, we would both go to him and ask him. And we could. Just say, hey, we're starting to look at colleges. We know you set up a trust for his education. Can you get us a copy of the trust document? Can you tell us who the trustee is? Can you tell us if there's distribution triggers, anything we need to know as we make plans? Then you can also pick a school. You can pick a school that he can afford. Everything is predicated on knowing what's in the trust. Because if there's$10 in it, well, we got to make a plan for ourselves. And if there's a million dollars in it, that changes the type of schools we look at.

1:42:48Absolutely. Okay. So I would just, I mean, he set this up for your son. So there's no, this is private. You involved, he involves your son. Yes. So this is your business. Okay. And the time is of the essence here because your son is about to be looking at the colleges. Right. Right. And I don't, that's the other thing. I don't know when to tell our son. I don't want it to dictate whether or not he goes to college. I would wait until you know more info about the trust because you don't want false promises of, hey, granddad has a trust for you. Everything's going to be great. Yeah, that's the order.

1:43:24Yeah, let's talk about that order of events. I think George is right. The first thing is you guys need to get the information. And the truth is, regardless of that information, we kind of need to treat that as like, if it's here, great. If it's not, great, because we don't know anything about it. but it shouldn't stop the conversations that you guys are having with your son regarding further education, whatever that may be. You do need to have, I mean, you said he's in 11th grade. So hopefully the conversation has already opened up about, Hey, if you are choosing to go to a university, here's what the options are.

1:43:57You know, here's what your mom and what mom and dad have. Here's what we expect from you. We expect that you have a part-time job and that you will contribute, you know, a certain percentage of what you make. We're expecting you to start applying for scholarship, like whatever those expectations that you guys have for him, we're going to do community college for the first two years. You guys need to start saying that to him now. We can't wait until it's time to start applying for schools and then him be like, well, he gets into the dream school and realizes we don't have the money. So I would, I mean, if he's a beneficiary of the trust, he should have a legal right to the basic information of the trust.

1:44:35And so if your dad is unwilling to talk about it, say, hey, is there a trustee or a state planning attorney we can talk to about this if you are uncomfortable for some reason? Because we need to get to the bottom of this before we can make our plans for college. Okay. Have you guys saved up on your own or were you all banking on this being his education funding? We have not saved up. Like I said, my father-in-law is definitely capable of creating this trust for him to cover his college. So that is a little scary for us because we don't know. And that's why we want to start the conversation now, which is hopefully not too late.

1:45:18But if we do need to give money to it, then we know. Yeah. That's what you want. You just want the basic facts we can move forward. That's all you're asking of him. Mm hmm. Now, is your son, I mean, he's in 11th grade, you might know this by now, maybe not. Is he the college type? Are you seeing him as the type who will go to universities? Or is he more of an entrepreneurial, more of a trade school? What do you think? At this point, he doesn't know. And he kind of goes back and forth between talking about going to college and not. And I think he's leaning more towards not going to college. And those are some of the other things that I'd want you to be able to talk about with the father-in-law, which is if little Jimmy decides that he doesn't want to go to college, what are his options?

1:46:03Because we don't want him to feel pressured to go a route that he wasn't going to go or to feel like this is the only. Does that make sense? Those are all questions that you guys are. And they're just questions. They're not you trying to tell him what to do with his money, the father-in-law. It's just, hey, we just want to know what's going on. This is crazy. This is some chaos he's created. It is. I mean, we talk about all the time. I know Dave says all the time when you're estate planning, you have to bring the others into the conversation. You don't want anything to be sprung on them. It's unfair.

1:46:35And then it's kind of like everybody's left to figure it out. And you're, you know, having a nice sleep. Yeah, we're not asking for like private information about your life. That's fine if you want to remain a mystery man. But you don't set something up for a kid with him as the beneficiary and then keep it in the dark until the very last second. that's not fun

1:47:23Hey guys, Rachel Cruz here. And I'm so excited to tell you that the brand new 2027 Ramsey Goal Planner is available now. Guys, this is the only planner with exclusive monthly content from John Deloney, Jade Warshaw, and me to help you set clear goals and actually stick to them all year. But here's the thing. These sell out every single year. So don't wait. Order your new 2027 Ramsey Goal Planner for$49.97 at ramsaysolutions.com slash store. That's ramsaysolutions.com slash store.

1:48:08All righty, our Ramsey Show question of the day is brought to you by Why Refi. Sometimes the hardest financial step is the one you've been avoiding. If your private student loans are past due Why Refi can help you explore a low fixed rate refinancing option and payment plans that are tailored to your circumstances. Go to whyrefi.com slash Ramsey. Remember, it may not be available in all states. Today's question comes from Dylan in Delaware. I'm 25 years old and my income is commission based. This year I should earn close to$350 ,000. I have roughly 100 grand in student debt, about five grand in credit card debt, and my girlfriend has roughly 11 ,000 in student loans and credit card debt.

1:48:49She wants to get engaged soon, but as financially unstable as we are, it doesn't make sense to me to take that step yet. Should we wait until we're debt free to get married or get married and pay our debt off together? Goodness gracious, this is hilarious. It's a quandary. Making 350 grand and you're unstable? I know. Average Americans would like to have a word with you, sir. I know, that's right. At 25 years old. He's killing it. That's why I said cha-ching earlier. Can I be honest? I don't think he wants to marry this girl. He might not. he's maybe looking at her going making excuses because the truth is he could knock out all of his debt in a year making$350 and he's got what$105 ,000 in debt that's gone in a year and his girlfriend's debt is gone if they get married let's say they do want to get married they get engaged, they get married, her debt is gone in two seconds as well.

1:49:38He's going to burp$11 ,000 and pay off this debt once they're married so yes, if you want to get married to her, get married, get engaged get a ring you'll do that next paycheck yeah and get engaged and get married and by that time honestly you'll be debt free and the day you come back from the honeymoon you can knock out her debt so let's discuss that for a minute because i i think especially he's young and i think if there's people listening who are you know in their early 20s and they're like i love ramsey solutions and they haven't found that special person yet some people sometimes think that we're very um if this person has debt don't marry them or if you both have debt you need to wait to get married and And it's actually, that couldn't be further from the truth.

1:50:17I think the bigger thing to think about when you're dating someone and you have a very clear financial perspective is to get to know what their financial perspective is. Yeah. I mean, it's very telling, honestly, if the other person has debt and it's starting to change your mind. Now I get if it's hundreds of thousands and you're like, I know what I'm signing up for. But it's beautiful when you meet a couple in the debt-free stage and they said, yeah, we got married and she came in with all this debt and we just attacked it together. Yes. I'm like, great. That couple is going to make it through anything.

1:50:46Because if you are willing to take on your spouse's burdens financially, what aren't you willing to do for them? That's such a big thing to do. Absolutely. But if you don't have the conversation and you're just thinking, oh, we'll get married, I'll pay off her debt, and you never found out that he or she was a princess to begin with, and now you're fighting the fact that they just keep spending and spending and spending, it's like, well, you never got to know their financial philosophy. Yeah, you got to make sure you're on the same page beforehand. Too many people go, we've been married for three years, and I guess we're talking about money now for the first time.

1:51:19Yeah. Like, this is a huge problem. Talk about it beforehand, because those values are hard to align after you're married. Yeah, we say it all the time. Religion is a big one. You want to know, like, what do you think? Like, what guides your life? That's a big one. Kids, how do you see parenting? Do you want them, and how many do you want? Yep, how many do you want? Do you want them? How do you view parenting roles and things like that? Money is a big one. Am I leaving anything out? Family, in-laws, all of that. Gosh, maybe today's world, maybe politics. I mean, that's where if you think about most of the calls where there's dysfunction, they're around some of those things.

1:51:53Yeah, absolutely. I love it. All right, let's go to Rose, who's in Washington, D.C. All right, Rose, you're on the line. How can we help? Hi, guys. Okay, so I recently purchased a very expensive home. I rushed into it it was an emotional process I didn't have the best agent and I got a little bit of awful advice but also I should have been a little bit more patient and so but anyway I'm in this expensive house that I can afford and I am wondering if I do I kind of cut my losses and sell this house in two years, stay in there for a little while? Why two years? Because I just moved in a few months ago.

1:52:53It hasn't even been a year. It hasn't even been six months. Okay. And I'm now discovering that there are these very expensive repairs that need to be done. In the house that you just bought? In the house that I just purchased. Tell us the numbers. Tell us what you paid for the house. Tell us what your mortgage is every month. House is$750. My mortgage is$5 ,200. And what's the mortgage balance? $750. You didn't put any money down? I did, I did, I did. I lied. I'm sorry. $712. Oh, you put the bare minimum down. down so the mortgage is 712 the more what i owe i put i put about 66 000 down where's that money i own i have i have okay so part of it was just money that i saved and then i took about 33 000 i borrowed 33 out of my retirement which i'm paying back right now okay but if you're telling me you put$60 ,000 down on a$750 ,000 house, I'm expecting the mortgage to be less than$700 ,000.

1:54:08No. Well, my mortgage is$52 ,000. I'm talking about the full loan. Not the monthly payment, the balance compared to what you paid for the house. So sales price versus mortgage balance. That's what we're talking about. Right, right, right. I thought it was about seven. Oh, maybe it's a little under seven. A little under seven. Got it. That's your mortgage balance. Okay. What do you make every month? What is your after-tax monthly income? So I'm averaging about$16 ,000 a month. I am commission-based. I'm in sales. Okay. Okay. That's good. So I don't make anything under$200 ,000,$225 ,000 a year.

1:54:49So ideally you'd be making$20 ,000 a year for this to feel. Or$20 ,000 a month. I'm sorry,$20 ,000 a month. Thank you. And again, here's what I want to check. Is this after tax only or are you doing after taxes, after investing, after? Healthcare premiums. When you get to that$16 ,000 number that you gave us. After taxes, after insurance, after the little bit of retirement that I'm putting away right now. So if we add back in your insurance premium, if we add back in what you're putting aside for investing every month, not quarterly, but by month, what will that turn that$16 ,000 into?

1:55:35Probably about... 18? 18. Great. Okay. So now this is not too bad. Yes, there were mistakes made. You're frustrated with yourself. You rushed into it. The agent was looking for a commission. You didn't do your due diligence on inspection repairs. Let's put that in the past and just look toward the future and go, what's the next step? So do you have savings right now? I do. How much? I do. I have a pretty good, like I have six months. Well, because I'm in sales, I was like, that was my priority. Good. So I have six months worth of my mortgage saved up. Wow. Just of the mortgage. Okay. Well, that's good.

1:56:15So you got like 30 grand sitting in savings? Yes. Okay. What are the repairs going to cost? Have you got estimates on that? Oh, my goodness. Different bids? So, yes. Yes, yes, yes. So, I got anywhere between$7 ,500 to$8 ,000. Great. So, you could write a check today and get the repairs done. Okay. That's a pretty – I mean, I feel like you are real hard on yourself. You have the money to pay for repairs. Yes, the mortgage is a lot. I'd like it to be slightly less, your income slightly more. but you don't have to rush into selling this thing off. And I don't know that you need to sell it off if you like the house.

1:56:52I don't know, and tell me if I'm wrong, Rose. My guess is this is the most expensive house you've purchased. This is the first time you've had a mortgage that's this high. And you're like freaking out because you're like, this doesn't feel right to have a mortgage that's$5 ,000, but you're taking home almost$20 ,000 a month. Like that's your pay. way and so ratio wise it's a fair amount if we're close to the 18 19 that we think we are ratio wise is it's a totally fair amount I think you're just feeling like oh my gosh what if something changes in my situation what if my job changes what if yes I think that's what you're feeling and if you are feeling that and you reevaluate in two years like you said and you're like you want to know what I would feel more peace if I just downsize I think that that's a totally fair place to be.

1:57:40Or just aggressively pay it off over the next seven years. Yeah. That'll give you some peace too.

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1:58:44All right, back to the phone lines we go. We've got Carson, who's in Dallas, Texas, on the line next. Hey, Dallas, George and I are here. How can we help? So I am a freshman in college, and my brother is a software engineer in Fayetteville, Arkansas, and we want to start a Christmas site installation business. And I was wanting y 'all's opinion on it. Okay, why Christmas lights? So this past summer I pressure washed and I made a lot of – I played football in college and I needed some money to save up to come down here. And I pressure washed this summer and I made a lot more money than I was expecting to make and I really enjoyed it.

1:59:46What did you do with the money? Saved it. Nice. How much you got in savings? Not much now. I think I have like 1 ,300 left. Okay, so what happened to the rest of it? I mean, I saw books for school, then traveling. I live, it's like four hours from home, so when I actually do go home, gas and then food, all the living expenses. Okay. So do you have any debt right now? No, I don't. Fantastic. And so you want to start this business with your brother, who's a software engineer. How does that play into the Christmas lights? Was he, you gave him this idea and he was like, yeah, I'm in. We'll install these together.

2:00:35So we've wanted to start something for quite a while. And we've researched a lot of different things and talked about a lot of different things. and Christmas lights was something that came up because we were talking about pressure washing because I would go up there and visit with him in the summer and we would talk about how much money I'm making and what I'm doing. Yeah, why not pressure washing? What made you land on Christmas lights? Yeah, because it's not all like the business for pressure washing is down a lot in the wintertime and so that's when Christmas lights are up the most from like so would it be both would you do one is it seasonal we do pressure washing on the other part of the year and then the christmas lights yes yes got it okay now we would do both what does it cost because i mean i kind of have in mind what i'm thinking i have a couple of thoughts here why do it together why not one of you just say hey i'm why wouldn't you just say hey yeah i think i want to start opening up this business and it'd be cool if my brother wants to work with me or work for me on it for a while versus it's got to be a partnership.

2:01:46We've got to do this deal together. Like what's the benefit to you of linking up with him on this? Um, so I would have somewhere to live. I would stay with him. And, um, also he would also keep his job for as long as he can and depending on how much we scale the business um is whether he's gonna just completely drop his job income you do know christmas lights is like a one to two month gig so i wouldn't be dropping a full-time job for a one month to two month situation what if you just started out what if you just moved up there and you started with the pressure pressure washing and you just said, hey, can I stay with you while I start seeing how many pressure washing clients I can get?

2:02:38And you just make it your full-time job that I'm gonna get as many pressure washing clients and I'm gonna just build slowly using the cash that I have. I'm gonna start with the pressure washer I have and once I get enough clients and I can save up a little bit more money and just go very, very slowly and then as the pressure washing part starts to take off, now you have cash flow, now you can start saving up for whatever infrastructure you need to do the Christmas lights. And I would largely be doing this on my own. I wouldn't hitch my, what is it? Hitch my wagon to someone else's cart. Is that right?

2:03:12Cart to the wagon? I wouldn't hitch myself up with someone else if I don't need to. And I don't think you do. I think partnerships make this get really muddy really quickly. Because what happens when he wants out? Because he's tired of it or would rather focus on software engineering or gets a promotion or moves. Yeah, because there's two people you have to be paying. Buy him out? Yeah. So that's the part where you really need to look at forming a partnership agreement if you're going to do this, so you're both on the same page with all the what-ifs. Yes. And then what must be true to start this business?

2:03:41How much is it? Looking into it to start it, it would only be around like$4 ,000 to$5 ,000. Okay. Where is that money going to come from? He has money saved up. He has that money, but after that. So now how does this work? He put in all the money and you didn't. Carson, I got to be honest with you. So it's already lopsided, right? I got to be honest with you. I feel, and I'm not trying to point a finger, but I feel like you're kind of leaning on him for your deal. You're like, I got to move up there where he lives. I got to move into the house with him so I'll have a place to live. He's got the money to do this.

2:04:20So it kind of feels like, hold on a second. It just kind of feels like you're too leaned on him for something you're trying to do with your own life. And he's got a job. He's a software engineer. Yeah, it sounds like he's doing fine. He's going to have to leave his thing to do. Does that make sense? I just don't feel like this is set up. The foundation of this doesn't feel set up in a fair sense. And I feel like you're too leaned on what he can do for you versus you going out and doing something for yourself. Is that fair enough? Yeah, I understand where you're getting to, but where I am right now, I am in a town of 2 ,000 people, and the closest place is Pine Bluff, which is an hour and a half away.

2:05:05Okay. And there's 30 people there. So why are you out there? What are you studying? I'm studying finance, and I play football down here, and the reason I came is because I get a large amount of schools paid for. Okay. So I think then let's tackle one thing at a time. If you're there to go to school, go to school. Like play your sport, do that thing. Pressure washing is not going anywhere. If you want to do some side hustles like that, but I wouldn't go just starting a business willy-nilly. I would just make it a side hustle, try out a few people's Christmas lights if you want this winter, get a feel for it.

2:05:43And then if you love it and the margins are there and you're like, I can scale this thing, do it with your own cash before you bring brother into it as the sort of financier. Yeah, I agree. It's just going to get, we've seen it get messy too often and make sure you do it properly if you're going to do it. You need to form an LLC. You need general liability insurance because you're up on ladders. You're messing with people's gutters on houses. You need to make sure you're protected. Yeah, absolutely. And I tend to say, I'm sure there's plenty of partnerships out there that are doing just fine. But honestly, if you can just do this on your own, it's your first business.

2:06:19Do it on your terms. That way everything is operating according to your values. You're not happy. Because what if your brother gets this grand idea that requires debt and you're like, I don't want to use debt. And now you guys, do you see what I'm saying? Everything has to go through each other. And it's, well, Carson's doing all the work. Brother's not getting on the roof. He just wants to be part of the business. And so now it's like, well, I'm putting in all the hours and you're just doing some accounting on the back end or whatever it is. It's going to feel unfair at some point. Rarely does it feel like we're both putting in 50-50.

2:06:48Yes. Generally, each partner thinks they're pulling the other's weight. That's a very good point. And that's where it gets messy and resentment bubbles. But it sounded like a great idea up front. Yes. Like, this will be fun. It's a way for us to bond. I'd rather you bond over going golfing or something. Absolutely. Cleanliness is what we're after, a nice, clean plan. Well, let me go back and read the scripture and quote of the day because I opened up hour four, George, without doing it. People were wondering. I know. I broke the chain here. I hope there's no bad luck or something in that. It's fine.

2:07:18God is a gracious God. He's a gracious God. As a matter of fact, Psalm 1832 says, it is God who arms me with strength and keeps my way secure in spite of the fact that I did this incorrectly. And then Sarah Blakely said, I think failure is nothing more than life's way of nudging you that you are off course. And so I have just been nudged that I did go off course. You've been humbled. I have been. I love it. Oh my goodness gracious. All right, George, I love these quick questions from social. They're just a quick way to say something, you know, just a little shout out. What's the recommended dollar amount percentage of take-home pay that you can budget for fun money after you complete baby step three?

2:08:02Oh, I'd make it reasonable. I'd be in agreement with my spouse. And you know, if it's$1 ,000 out of your$3 ,000 take-home pay, that's bad. Yeah, it's not a percentage. It's a vibe. Exactly. All right, guys. Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.