It’s Time To Stop Surviving And Start Winning With Money

25:20Nobody really knows exactly, but people are kind of just saying, we can't really afford to go anywhere else, so we kind of have to wait and see. but I kept telling my husband like if we take the wait and see approach then we're going to be the people that are stuck not having a place to go like what are we supposed to have have you listen there's a couple ways you can go here you could yeah tomorrow put the house up for 40 ,000 less and hightail it out of there or you could say I really care about this neighborhood I really care about what's going on here I'm going to pull my neighbors together we're all going to go down to the church together and say we love what you're trying to do we just wish you could do it not here and start opening up the lines of conversation.

25:55Has anybody tried that? Talking to these people? That's been tried. Community liaisons have tried, and the pastor is very insistent on the fact that he owns this plot of land and he wants this to go there. He has whatever deal he has, and this is his plan. So I guess, I don't know. We're so lost here. Well, there's no crystal ball to say, hey, if this thing is well run, the home prices may rebound. We just don't know. And so I don't think we can say across the board, if there's a homeless shelter in any residential area, the market tanks there forever. And so I want you to get some facts around this.

26:29I would have your real estate agent actually pull comps in areas where there's a homeless shelter near residential homes. And then track it to see what happened with the home prices there. Did they stabilize? Did they rebound? Depending on the shelter in the area, that'll actually help you get some facts because right now it's just all emotion and rage. And so I think that'll help just go, okay, there's not a worst-case scenario. The market's going to continue to increase. So if we stick around for five years, we'll probably get our$40 ,000 back and be able to sell for what we paid for it or a little more.

26:59Versus no matter what, if we stay, it's going to be terrible. Okay, and if we decide to go, how much of a mistake is it to go back to renting? I don't think it's a mistake. I think that— We'll call that a stupid tax that was out of your control. We had to pay, you know, it costs us, you know, because you're going to pay realtor fees on the back end of this and closing costs just to get out of this on top of the lost, you know, missed ROI of this, all the renovations. So, yeah, it might cost you guys a pretty penny and might slow down your next home buying purchase. But if it's going to cause you to lose your piece for the next 40 years, then I don't think it's worth it.

27:35I think you should get out now. And even though we want to be able to necessarily save as fast as the houses would appreciate in this specific community. I think that's what you guys have to decide. I mean, there's not a right or wrong answer here. The answer is, what is it? Because you called in and said, I don't want to live across from a homeless shelter. So if you don't, then you need to decide, okay, what are we willing to risk on the timeline here? Do we want to hold on to this a little bit longer, say another year? Do we think that's too risky? Are we starting, is the word starting to get out on the street that this is happening and we're getting, you know, you're going to have a better, understanding of what's taking place in your community than George and I are.

28:17But just understand there's not a wrong or right answer here. You get to decide where you're going to live and you get to decide how big of a problem this is going to be for you. I'm just sitting here thinking about it and I'm like, is there any way that this could be a really nice facility and all the kind of things that you're concerned about really be contained? And I'm having a hard time seeing how that could be contained. And that's where the research is going to help you. There's lots of homeless shelters in Boston. That's where I'm from. And so I would go, what is the real estate market like around those shelters?

28:49And now we can see, okay, it stabilizes. Yeah, it goes down for a little bit. Nobody loves it during construction. But then once things are up and running and if it's run smoothly, things bounce back. That would give me some peace to go, all right, we're going to stick around for five years and see how this shakes out. and then what about like the safety piece of just not wanting to live there i guess that's our own that's my point that's you're you're exactly saying my point rebecca is if that's messing with your piece and you're saying i don't want to live here you can move and just understand that you're going to take a financial hit and to your point it could take you longer to buy again like that is going to set your timeline back it's not saying that you're making a bad choice or a dumb choice or anything like that it's just i am making a calculated choice and i understand that when i do this.

29:31This is the hit that I'm going to take financially. This is the hit to my timeline it's going to take. It sucked that this happened but here we are dealing with it. Right. What would you guys do if you were in my shoes? I think I'd move. Really? I'm not saying I'd move today but I'd be watching and if I see that this is seeming like it's going to happen I'd probably try to get out of there. That's just me. I have two young kids. No matter what whoever is going to move there is probably going to find out this project is going to be happening in the foreseeable future so they either go yawn okay we'll deal with that not a big deal or they get spooked by it and so someone's going to want to buy a house in the boston area regardless of what it's near that's just how it is in a in a very you know populated metro like boston can you tell us what area this is uh i don't want to get some specific you said it's pretty far out though like is it in city limits yeah okay okay yeah i mean i it's if you're right across the street if it's the next house over or is it around the block?

30:30Like all that matters. If it was right across from my front door, I'd probably be out of there. Yeah, if I'm on the front porch staring at it, that's different. So again, I would do all the research before making any decision if I was in your shoes and then I would have a conversation with my wife. We would be aligned and then we would do it regardless of the financial implications. We'd go, all right, this is what it's costing us to make this move. Sorry that happened. That's a tough battle.

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32:37the all-new every dollar is here and now it's way more than just our world-class budgeting app we've got advanced features to help you make faster progress with your money and the average person finds thousands of dollars in margin in just the first 15 minutes so check it out start every dollar for free today. Get it in the App Store or Google Play. Henry is in Phoenix, Arizona up next. What's going on, Henry? Welcome to the show. Hey, guys. Thanks for having me. Absolutely. What's your question? Hey, my question, I'm just getting started with baby step number two. So looking forward to all the pain and stuff that Dave talked about.

33:13I guess my question is around staying motivated as you're going through this baby step, especially with my situation. Just there's external circumstances and stuff like that that are pretty demotivating. Like what? My wife had intrusive brain surgery back in the end of 2021 that left her disabled. And it kind of took away all of our hopes and dreams of our future life together and stuff like that. So it's kind of like part of us is wondering, like, why even, you know, go through the baby steps and stuff if there's nothing to live for at the other end, you know? Oh, my gosh. I'm sorry. That is that is very tough.

33:53So let me ask. Let me just reverse the question back to you. Why are you doing this? Why is this important to you? I have been a person that's always been on top of my payments. And just because of the depression, shame, whatever you want to call it, over the past couple of years, we kind of accrued the$45 ,000 of debt now. And the past two months now, I haven't been able to pay my cards. And it's embarrassing. And I just don't want to deal with that anymore. So I got the second job, and it's starting this week. And we're just going to grind through it. Nice. What's your household income? um so my day job i make uh 59 a year with a 10 bonus at the end of the year and then i picked up a restaurant gig in the evenings and from talking with my different training people um they make 150 a night on weeknights and then right around 250 to 300 on the the weekends so i'm probably if i can pick up enough shifts i'm i'm low estimate of 1500 a month okay for the next couple months while it's restaurant season here in Arizona.

35:02So, I mean, no question, your picture of life has changed and you're probably still struggling to see what that's going to be and what that looks like. I'm not mad at you finding something to focus on, especially something productive like paying off$45 ,000 of debt. I can only speak for me, George, but sometimes having something like that to focus on when everything feels out of control, This is one thing that you can control. Sometimes that's just what you need to power through a season like this. And on the other side of it, there'll be some peace because this debt will be gone. And it kind of clears the deck for you to say, okay, what is our life going to look like now?

35:40What does it mean for me working? What does it mean for her care? All of these different things. So I think this is worthwhile for you to do for the same reasons that other people do it, right? There's still going to be peace on the other side financially for you. Now, as far as the motivation, are you concerned that the working the extra hours at the restaurant is what's going to wear you down? Is that kind of what you're talking about? Yeah, the exhaustion from that and then also just the extra time away from my wife because she's home alone, you know. Yeah. And I mean, you're going to have to balance that because there are some extraneous circumstances here for you that you're going to have to say, I might have to pull back in certain seasons.

36:22And I think that you can navigate that and judge that for yourself. What's the timeline when you put these numbers into every dollar? What is it telling you? How long is it going to take you with this money? About 20 months. Okay, 20 months. So yeah, I have found as a person who walked a debt payoff journey of seven and a half years, I kind of found that there's moments where you're pressing on the gas, you know, pedal to the metal, and then a life moment happens and it causes you to take your foot off ever so slightly. and then you recalibrate and then you put the pedal to the metal again. And so that's a lot of times what it looks like.

36:56That's just the reality of it's not to say that you've done anything wrong. And I'm sure that that'll pop up in your circumstance too. So start out with the intent of I'm gazelle intense, come hell or high water. And then if something happens with your wife or something happens when you need to pull back, that's okay. And then you hit it again strong as soon as you can. Awesome. Yeah, that's great. What were some of your dreams and goals that are now off the table that have left you guys kind of feeling just cynical toward the future? Children, just a normal life. We were both artists pursuing our different stuff out in L.A.

37:29for a bit. Then we had to move back to being your family for help. And she was a very, very gifted musician. Now she can't play or sing at all much. So, you know, it's just hard to see and hard to not be able to do the things you love. Yeah. Man, that's so tough. Are you guys still wanting to become parents in the future through other means? Possibly, but with just neurological fatigue that she experiences on a day-to-day basis, I'd have to make enough money to either work from home and be there to help out or hire a stay-at-home nurse or something, you know? Yeah. Nanny. How fresh is this? Oh, the surgery was about four years ago, end of 2021.

38:12Okay. Um, and like I said, we've just been going through a lot of like just depression and just grieving the loss of our lives. Absolutely. Um, uh, and you know, we've, we've been doing therapy and that type of stuff and trying to get through it. Um, but I think it's fresh right now because her, her mom was just got into, uh, she, her mom just had brainstem surgery for the same disease. So, um, so she's in ICU right now. So it's kind of, it's kind of just why it's fresh. I'm so sorry. Was this like a Chiari malformation or something like that? Yeah. CCM, a cavernoma, a lesion. Yeah. I'm so sorry, man.

38:52Well, you're taking the right steps. I'm proud of you. It's hard to just like to wake up and go to work and face the day. And I want to send you a copy of John Deloney's book, Building a Non-Anxious Life. It's got six daily choices. And one of them is, you know, choose reality. And you guys have grieved what was. And now it's like, this is the reality of what is. and it'll also help you start to dream and create a new picture that you both are aligned on. But I'm with you in the fact that it's hard, and I'm against you in the fact that I think this gives you a much deeper why of why to do the baby steps.

39:23You have more reason than almost anyone to do it because you can create financial peace in your home to where you have flexibility to be there for your wife instead of being stressed out about the debt, working 90 hours a week forever. I'd rather you suffer for 20 months and sacrifice than 20 years of just kind of mediocrity, carrying this debt, carrying the shame. There's still a lot of life to be had, even if it's not the picture that you guys had. And so I want to encourage you with that and get you a copy of that book. But, man, it's not easy. There's no sugarcoat in this. And working those nights, knowing your wife is at home, I mean, it's going to be a grind.

39:56But you can do anything for 20 months. You guys have already been through the hardest of this. Yeah. Yeah, that's awesome. Yeah, thank you guys for that. So it's a great new perspective and a great way to look at it. Yeah. Thanks for the call, Henry. Appreciate you. Hang on the line. We'll get you a copy of John's book. All right, man. I just got to take a moment to breathe after that one, Jade. Yeah, that's tough. I mean, your life can change in the twinkling of an eye just in a split second, man. Yeah. It's tough. And it's one of those reasons, you know, people who don't follow the baby steps because they feel like life is going well.

40:26You know, they're not at a like rock bottom where they're like, I need to clean a mess up. Yeah. That's where you can't show them that. You can't show them the future where life's going to happen to you. So would you want to have financial peace in the midst of that or have financial chaos all while trying to deal with the things life throws at you? Right. And it's not about like being like fatalistic or having like this glass half empty point of view. But the truth is life does happen. I mean, it could be as simple as, oh, my gosh, I tripped down the stair and I broke my leg and now I'm out of work.

40:55You know, emergencies happen. Life happens. Diagnosis happens. You know, marriage shifts happen in the form of divorce. I mean, we hear all the time and you just never know. No one sets out for the day and says, I know today is going to be the day that the doctor calls with bad news. Right. But you you do want to prepare your life in such a way to where if the worst does happen, you've set yourself up for success in the best possible ways that you could have success. Yeah. Right. Because what he's facing feels very, I'm sure, very dark. but to have this one thing that's like, okay, but I did this and because of this, now I can go home.

41:29I can have a little bit more peace than I would have had elsewise, right? And for our world, that's not owing other people money. Not having to deal with that payment while you're also trying to figure out finances for the future. If there's a job loss or a health scare, having an emergency fund to cover you so you're not having to swipe that credit card or take out that personal loan or do the HELOC. Investing for the future so that you do have that nest egg built up so that in case you can't work one day, you have money to cover your expenses. That's why we do the baby steps, not because life's going great, because we don't know what life will throw at us.

42:00That puts this out with The Ramsey Show and the books.

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43:49Welcome back to The Ramsey Show in the Fairwinds Credit Union Studio. I'm George Camel, joined by my co-host, Jade Warshaw. Open phones at 888-825-5225. Oliver is in Davenport, Iowa. Up next, what's going on, Oliver? Thank you for having me. I'm about to get into about a million dollars worth of debt, and I'm not sure if I'm doing the right thing. Have you done it yet? Have you signed any paperwork? Can we talk you off the ledge? I'm sorry? Well, let's see if that's the way to go about it. Okay, so what is the million dollars for? So, until about a year ago, I lived by the Ramsey rules, religiously, both me and my wife, haven't had a single dollar in loans, and about a year ago, I started a business, and we killed it this year.

44:45I have more than tripled my income, and we're doing fantastically. However, I now come to an opportunity, which requires an additional about$450 ,000 investment into the business. And I just found out that my wife's pregnant, so we are also building a house. Okay. You got to have room for that. The baby, you know, a six-pound baby needs an extra 2 ,000 square feet. They take up so much room. That's the law in America. Yes. So tell me, let's start with the house. So what are you spending on this house and have you already made an offer? Is it a done deal or is it too late? So we've already started it.

45:28We've already signed the paperwork and we started building it. It should be finished in February. What'd you spend? And at that point, we will be taking out a loan to purchase it. Okay. And what's the total spend on the house? It is$560 ,000. Okay. And did you do it following the Ramsey principles with the payment and everything like that, the down payment and what the mortgage is going to be? We have put 25 % down payment and we're not spending more than 20. I don't remember how many exactly percent of our income on it. Okay. 25%. No more than 25 % of your take-home pay every month, including HOAs, taxes, and insurance.

46:06Okay. Good. That's a green check from me. I'm not mad about that. So let's talk about this$450 ,000, quote, opportunity. You should go watch on YouTube later, Oliver. I threw my hands up in the air because just during the break, I told Jade. I said, Jade, every time I hear the word opportunity, it's someone about do something real stupid. And so you just hit my trigger button. So that's kind of where I'm at. So I started this. I've been doing this my entire life pretty much. I'm a CNC machinist with all sorts of fancy degrees. But I opened an aerospace and medical device company. So all we do is make components for other people.

46:48And we've only opened our doors in February. And now we're up to making$13 ,000 to$15 ,000 a month. And that's not very consistently, even though I still have a full-time job on top of that, just for security purposes because it is a new business. When you say per month, is that like top line revenue or is that net profit? That's net profit. Okay, good job. Amazing. What are you making with your full-time job? I make$175, my wife makes$85. Awesome. So you already had a great income before this business. Yes. And how did this opportunity present itself for you to go half a million in debt for a business?

47:28Well, I have multiple customers that I work with right now, and we currently have only one machine that we work on, and we cannot supply the demand. And buying an additional piece of equipment will allow me to probably triple my income, if that. Probably even more, because right now I'm paying a lot for rent. So if I can put more machines into my shop, I can make more money, right? So the machine costs$450 ,000? That's including all the installation fees, tooling, etc. So that's all things considered. So I'm always going to suggest that you move at, you know, the speed of cash on things like this.

48:07But my question is, is there is this any is any part of this incremental or is it like I must do it all at once? Four hundred fifty thousand bam on the table. It's all or nothing. OK, what happens if you don't do it in the next two years? well if i don't do it in the next four months i lose the business that that i have lined up for that well not really lined up but the opportunity that's lined up for it because i do have specific orders that are coming down the pipeline that i can put on it and if i hold off for another year those orders are not going to be there so can you go probably won't find any ones but can you go on a different growth track like can you go in another direction that'll continue you building this$15 ,000 profit a month, plus your other income with you and your wife, what is that, around$260 ,000?

49:00Is there a way that you can capitalize another area of your business, continue to grow that until you can afford to make some of these upgrades? Not really. I'm topped out at the moment. We're already running two shifts and running through the night just to try and keep up. So what was your original business plan? Of scaling the business? You just start. Got you. And then figure, well, I had a couple of orders lined up just to get started, but really it was start going down the pipeline and start doing it. And it's going to work out and it really did. Did you have the thought in mind? Because I'm trying to understand when you first started this business, did you have in your mind, I'm starting this business.

49:48I'm not going to take out debt for it. I'm just going to grow it, even if it's slow and steady. Or did you have in mind, I'm going to start this business and I'm going to be one of those people who, you know, takes on investors and takes loans. And who were you when you started this project? I was planning to, if needed, I was planning to take loans and grow exponentially if that's where I needed to go. So it's just right now, I never expected to be in this position a year from starting the business. I thought it was going to be a much more slower and gradual growth rather than all and everything all at once.

50:25And all of the tariffs that are now happening are definitely helping out with that because we're having a lot of people who used to order from other countries and now they're coming back to the U.S. So here's my take. I think the opportunity will still be there. You might lose some in the meantime. but I don't want you to get too starry-eyed and go, well, if we had seven machines, we could 20X. At some point, there's not enough money in the world to make the stress worth it, especially with the baby on the way. And so I want you to think about just the reality of your situation. You're about to move.

50:55You got a baby on the way. Do we also want another half million in debt? Now there's real pressure on this business to succeed. Now you have to be there working overnight. And what if she decides to stay home once the baby's here? Well, what does that do? That might put some strain on this financial situation we've created because we owe a lot of money now. Fair point. So that's the part I can't show you on paper. That's just the reality of life. But I would say, can we make a plan to save up and pay cash for this thing in less than two years? I think that's a reality. If you guys are bringing home, you know, I don't know, 25 grand a month and you can live off seven, let's throw 18 into a high yield savings account.

51:33And two years from now, we have 450 grand in cash. now that thing's cash flowing beautifully instead of having a$4 ,000 a month payment on it. Yeah, there's nothing on fire here unless you make it on fire. And that's the beauty of what you've done so far. You're a brilliant guy. And so all I'm saying is the opportunities will be there. People want good, honest, quality work done from smart people. And I think that opportunity will still be there two years from now. And I hope you call back and you have a multi, multi-million dollar machining business that is paid for in cash. And I think that future is very much possible for you guys.

52:10It's going to happen sooner than you know it, but I wouldn't try to leapfrog it with debt right now.

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54:19Philip is in South Dakota. Welcome to The Ramsey Show. Philip, how can we help? Hi, thanks for having me. So me and my wife have been living paycheck to paycheck for quite a few years now. At one point, we managed to get out, but that was when I had worked a job that paid me more. And then I unfortunately lost that job. And then now I'm a custodian at a school that pays me once a month. um we just had our our second kid and um she's not working right now but i'm fine uh to to really make this this money uh stretch um and then i i i don't know how i'm trying to make our money stretch but also not with paycheck to paycheck yeah how much debt do you guys have well uh I'm thousands for health care.

55:24So you got medical bills? Yeah, medical. And then I know that she's in debt with medical too. You got car loans, credit cards? No, we do not. Actually, I had a credit card when I had moved up here, and I think I paid it off because they haven't bothered me since. I wasn't terribly in debt with the credit card, thank God. Okay. So I'm hearing some uncertainty in your language, which lets me know that you haven't really gotten your head around your finances. You kind of know that there is some debt, but maybe you don't know how much it is, and hopefully it's gone, like that kind of situation. What I'd like is for you and your wife to sit down tonight and pull out everything that you think there might be.

56:15surrounding this. And you can pull your credit reports to help. You can go to annualcreditreport.com and pull all three from the three credit bureaus for free. That'll give you a real clear picture of what's out there. Then you can actually write down these numbers and we'll, before you get off the line, we'll make sure to give you every dollar for free for a while so that you can get your, your, your head around this. Because I think part of the problem when you're living paycheck to paycheck is you don't know what the problem is. There's debt. I don't know how much I'm just making the payment.

56:41You know, you're just barely getting by. You don't have a budget. And so when you don't have a plan, it's really hard to be in control of your money. And so if we give you every dollar, that's going to be the plan going forward. But you guys have to do it. You got to plug the numbers in. You put your income at the top, which by the way, what are you making as a custodian? What do you bring home every month? Well, I get paid$17 an hour,$2 ,300 a month. I get paid once a month. I think that rounded up to$31 ,000,$32 ,000 a year. Okay. Is there money coming in from anywhere else or is this the only money to you guys' name every single month?

57:19Is there anything else? If she goes back to work, she'd be pulling in money too. I think she makes around $1 ,000 every two weeks. What about your living situation? What are you paying for rent? We pay about$1 ,000 for rent. So that's half your income, just about right there. Yes, sir. To pay$1 ,000 in any other circumstance isn't bad, but when you're only making$2 ,300, it's impossible, right? So the key here, this is an income problem, and I think that you realize that. When will your wife start working again? Well, like I said, she had her baby about a month ago. So I would assume maybe in a couple weeks.

58:09I told her when she's ready to go back in. So I don't want to throw her back in the work if she's not ready. Which means that you're going to have to have like four jobs. Okay. And I hate telling you that because it's your baby too, right? And you're like, I want to be home with a newborn. I want to see this baby, you know, grow every day a little bit each day. But you don't have that luxury right now. You've got to have the custodian job and three others while you're online and knocking on doors to find another main job that pays more. You've got your work cut out for you, Philip. What were you doing before?

58:48Well, before I was working at a gas station and that paid, I think,$13 or$14 an hour. Well, you said you were making more money and then you lost that job. I'm sorry. I was making more money two years ago when I was working at an ethanol plant. I was making about$22 an hour, and I was getting paid biweekly. How old are you? That was pretty good. I'm 25. Okay. You're still a young guy. What I think we need to do is find ourselves a career instead of just a job, something you can really sink your teeth into, grow in, and that'll get you making 50, 60, 70, 80. I think you're a guy who's got a lot of skill and a lot of work ethic and a lot of integrity and that's 90 % of the problem in today's world.

59:36That's who people are looking to hire. So what kind of skills would you say you have that you could apply to another area? Are you good with your hands? Are you pretty handy? Yeah, I don't mind getting my hands dirty and doing grunt work. That's what I've been doing most of my life. I worked in construction before I moved to South Dakota. us. So I did that for a long while there. Sorry, you broke up on us. What I'm going to do, Phillipa, send you a copy of Ken Coleman's book, Find the Work You're Wired to Do. I think this is kind of a, this new baby has given you new motivation to find yourself a career that's going to help you get out of debt and stay out of debt.

1:00:15Because right now, truthfully, we can tell you the plan of, you know, debt snowball, but when you don't have, you know, nothing but a hundred bucks left at the end of the month, it's going to be hard to do the baby steps. So we do need to increase that income ASAP. And if your wife can get back to work and make, you know, 35, 40 grand, and you can start making 45, 50 grand, well, now we have a plan to get out of this a whole lot faster. Okay. Yeah, I like that plan for you. And I, you know, I think sometimes people think they've got to have a college degree, they've got to have this college education, and that's not always the case.

1:00:45So I think that Ken Coleman's book is really going to help you get on the right path. Yeah, hang on the line, we'll get you every dollar and Ken's book, find the work you're wired to do. John is in Houston up next. John, how can we help today? Yes, sir. So we're, my wife and I were expecting to get a baby on the way and we're looking at moving here in the next year. Now her family is giving us a section of land and we're looking at putting a double wide on it and we're going to be there for, you know, that's our going to be our forever. My real main question on this is I have the opportunity to go through with the VA home loan like my current home loan, but I don't know if I want to or if it'd be a good idea to pair the land in the VA home loan because that's what it's going to require or keep the land separate and do what they call a chattel loan.

1:01:47And that's just like a high interest personal property loan. Pretty much, yes, it is. You triggered me again. I don't know how long you've been listening this hour, but you say the word opportunity, and I get my fists are up ready to fight. Because what you're about to set yourself up to is get a depreciating asset at a very high interest rate. Right. And so it's a bad plan all around. And the VA loans, they can be an okay deal in some cases if your disability rating is high enough. But, man, it's riddled with fees. The closing takes forever. There's really strict requirements, and it gets people into houses with nothing down, which is not a good thing because all that means is you have 100 percent loan and you have no equity.

1:02:30Right. Correct. So we would still take our current equity, split that in half, pay off the truck and pay – actually still do a down payment. How much debt do you guys have? uh i we only have the the house which we owe 110 and the truck which is 38 and then about a thousand on a credit card and why why would you go from the house which is appreciating to a mobile home yeah what's well it is a it is a current mobile home with land but it has the land has appreciated and my agent you know i talked with her the other day she told me what we could list and what everything's selling at and I would have equity in it.

1:03:11Yeah, but what's the rush? I don't think there's a rush around this and I don't like what you're rushing towards. I agree with George on this. Plus you still have debt. Yeah. What's your household income? Mine is anywhere per year from 76 to probably about 80. My wife's is about 32 right now. She's in school and we're paying for cash-wise, and she'll be making about$50 to$60. Okay. And then VA... You guys have a strong income, Andy. I would just go slow and get out of the house. I would not move to another mobile home that's going to depreciate. I don't think the land's going to appreciate fast enough to make this a good idea.

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1:05:37Today's question of the day is brought to you by Y-Refi. If your private student loans are in default and you feel stuck, you're not out of options. Y-Refi specializes in helping borrowers like you find real solutions with low fixed rate refinancing. Go to Y-Refi.com slash Ramsey. That's the letter Y, R-E-F-Y.com slash Ramsey. Not available in all states. All righty. Today's question comes from Toby in New York. He says, if I have two full-time jobs and the second income is currently going towards investing in my retirement. Oh, let me read that again. If I have two full-time jobs and the second income is currently going towards investing in my retirement fund, do I still need to have an emergency fund since this second job effectively insulates me from the loss of my primary job?

1:06:23I would like to invest as much as I can now while I'm young and worry about the emergency fund later. I'm debt-free other than my mortgage. Oh, Toby. What? Sweet Toby. Okay, so I hear what you're saying. I understand your logic, but there's several holes in your logic. Number one, an emergency fund for those who are new to this, we suggest the order of events with your finances are first you just set a quick$1 ,000 aside. Then you pay off all of your debt. That's baby step two. All of your debt except your mortgage. and then baby step three. Yeah, you save up three to six months of an emergency fund.

1:06:59After that, you start investing. So that's what Toby is talking about. Toby, the problem is emergency funds are there for more things than job loss, right? That's one of the emergencies that could come up. Or another emergency you could have is, you know, you get in a car accident, you can't work for a while or all sorts of other things. So that money is there for a plethora of reasons. So that's hole number one in your reasoning. The other idea is, well, if something does pop up and you don't have an emergency fund, you're going to need money from somewhere. And if you don't have an emergency fund, you're going to do one of two things.

1:07:34You're either going to unplug your investments, which if you do that, that's to the tune of taxes and fees and all of this, or you're going to turn around and take out debt. So you're not setting yourself up to win. The reason that we teach the baby steps in the order that we teach them is because it's a system. and systems build on one thing after another in order for the system to function properly. So I'm not just talking to Toby right now. I'm talking to anybody who thinks that they can kind of hack the baby steps and switch them around to suit their order. When you switch the baby steps around, they don't work anymore because you have to have the foundation in order to start building the wealth the correct way.

1:08:12And so no, Toby, I would not do that. I would do your emergency fund first. Since you have two jobs, You can do this so fast. I'm just still confused at the two jobs. I'm like, this is one of those situations he calls in and goes, hey, I lost both jobs because I found out I was two-timing them. Right, right. How can you work two full-time jobs effectively? That's a question for another day. Are you sleeping? I don't know. Are you circular breathing around the clock? I don't know. Sounds like. And you don't have a, I mean, you're not God. So you can't just push all of your emergencies to when you're retired.

1:08:42That's not how it works. Right, right. So like this idea, you're going to get the emergency fund later. The emergencies are going to come before you're ready for it at this point. They always do. I would pause investing and just stack up cash for three months, keep it in high yield savings. You'll do it so fast. Don't invest that money. Keep it liquid and you'll sleep better at night. If you're sleeping at all, Toby, we don't know. No, he's not sleeping. He's left us with more questions than answers. He's an android. Goodness Christ. Is this when he has like two laptops and he's like on Zoom calls on both and he has like a little stick figure of Toby over here to fake it?

1:09:13He has an AI Toby. That's sketchy. All right. Stephanie's up next in Louisville, Kentucky. what's going on Stephanie hi Jaden George um thank you so much for taking my call um my question is so we just finished baby set number three me and my husband um I went into my 401k contribution to bump that up to 15 percent um while we were planning out our budget and we immediately got like bummed out because it wiped out all of our extra cash that we were planning on maybe kind of increasing our spending or having a little extra money to throw at the house or save up for a new mom van because I'm currently driving a 2005 Honda Odyssey with only one working sliding door.

1:10:05So that's where we're at right now. We're kind of bummed and I don't know where else to go because I don't think we really live outside our means. What are your total expenses versus your take-home pay? Our take-home pay is about, well, pre-tax is$3 ,800. After taxes, it's like$3 ,200. Okay. So then we've got like... How much is your mortgage? I guess the 401k. It's about, that's the one thing that I think we might be able to have legal room on. Our mortgage is$1 ,500, but it's a 30-year, and yeah, it's about 20%, I think, of our pre-tax. Well, that's where your problem is. Is your monthly take-home pay$3 ,200, or is that biweekly?

1:10:55Oh, that's biweekly. Oh, okay. I was about to say, well, there you have it. You gave us a heart attack over here. We were like, that's all of the problem. Okay. So$6 ,400. $6 ,400. Is that after the retirement contributions are taken out?

1:11:12The$7 ,700 is our before-tax monthly income. Okay. Yeah, I'm just trying to figure out how much margin is really there after the 15 % and health care premiums. All of that comes out, and you're saying, hey, we got nothing left at that point. Yeah. Are you guys, do you do 10 % tithe, or do you do a higher percentage of giving? What's your giving look like? um our giving is about like five percent okay so 401k is at like 15 taxes i guess are another 15 the mortgage is 20 groceries is 10 eating out is about five do you have daycare anybody in daycare no health insurance is about eight no we don't have any daycare we have diapers and i mean all the normal things, oil changes and home maintenance.

1:12:02Do you have a bunch of sinking funds? No, I guess we have a Christmas budget. We had to bump up recently that's$200 per month, but that's just so we can be prepared for Christmas. The reason I ask is sometimes a bunch of sinking funds can kind of drain off margin if you have them set year round and you're just doing a little bit, but you're doing a bunch of them. I mean, I'd want to take a look at your budget because obviously, yeah, mortgage should be no more than 25%, 15 % for investing, 10 % giving, that's 50, that's half gone right there. So I'm wondering how much those, all those other little odds and ends that are eating into this and how necessary, like how, how necessary they are at the current amounts.

1:12:46And that's what you're going to have to go through with a fine tooth comb. There are some things, time of life that can really play into it. Like if you have kids in daycare or kids in private school, things like that can really eat into that margin after 15%. But I don't hear that here. So I think it's just a bunch of like death by a thousand cuts. Because if you guys are bringing home about$6 ,400 and the mortgage is$1 ,500, well, there should be$5 ,000 disappearing somewhere. And yes, it gets eaten up by different things. But I think it might not be one big thing, but like Jade said, that fine tooth comb, kind of nickel and diming each thing.

1:13:19And maybe you can squeeze out 50 bucks here, 100 bucks there to where it adds up to a thousand bucks we freed up by doing a very detailed budget well now that's 12 grand a year towards this minivan goal what do you spend on food every month uh groceries is about 200 a week so 800 a month and then eating out is about 100 a week so it's like 1200 total that's not bad um anything else we should know about i mean you could put you could squeeze some of that your a family of four though, right? Five, yes. Oh, yes. Groceries, food is good. Yeah. Like you said, I don't think anything's out of control here.

1:13:59I would also reshop your insurance and see if you can save. That's one of those weird areas where you're like, oh, we've had whatever, you know, for 20 years and we just never looked into it. And so I would jump on a ramsysolutions.com and start reshopping your insurance because that's somewhere you could shave off hundreds just overnight just by realizing we've been overpaying. And then on top of that, there might be a season where you guys need to increase your income to save up for this van or increase the income. If your lifestyle is just way up here, we need our income to match it. And so one of us or both of us need to work a little more, get that promotion, start scaling up in our career.

1:14:33I think both of those are going to help you long term and both should happen. But right now, the thing you can do tonight is start going through that budget, going through every transaction, every bank statement going, where can we do better? And I think that'll help you find some margin right now. But you're doing all the right things. The money's going to the right places, But I agree there should be a little bit more to save up for that car upgrade, to put money away for college, to pay off the house early. So I hope you guys will get there in due time. Thank you so much for the call.

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1:16:36All right, here are the top questions people have about online wills. Number one, how do I know if I need a trust or if my estate is too complicated for an online will? Well, if your estate is worth less than a million bucks, getting a will online, good option right now. What do I need to start my will online? Answer these questions. Who do you want to get your stuff? Who do you want to take care of your minor kids? Who do you want to make decisions if you're incapacitated? Is it legally valid? Yes, but it's got to be state-specific to match your state laws. And finally, why would I do an online will versus traditional made with a lawyer?

1:17:05Well, online, it's going to be less expensive, more convenient, and take less time. So to take our quiz, go to RamseySolutions.com slash Will's Quiz to find out if an online will is right for you. Kevin is in Philly up next. What's going on, Kevin? Hey, guys. I'm just wondering a little bit of a moral financial question. Do I morally owe my dad's girlfriend money from his estate? Okay. There is so much context needed here. My dad's girlfriend. Tell us more. Well, number one, did you borrow money from your dad's girlfriend? I did not. So why would you owe him money? Well, they've been together for quite some time, a little bit over 20 years now.

1:17:50And he passed away about two months ago. And they were living together at the time. And now her daughter is now pressuring family members on my side to somehow come together and financially split the money from his estate once we get it. Why are you getting it? Did it all go to you? No. So it goes to me, my brother, and my half-sister. He did pass away unexpectedly without a will. And they were never married. Okay, so I was going to ask, was there a will that said it went to you or the courts just decided this? No, there was no will. And the money will be split between me, my brother, and my sister.

1:18:45And how long was he with the girlfriend? Just north of 20 years. 22, 23 years, something like that. And they lived together? Were their lives combined as though they were married? Basically, yeah. And the daughter, is that your dad's daughter or that's the girlfriend's daughter from another relationship? Correct. Yes. Ooh, that's messy. Boy, oh boy. What does she want? What was his wishes? Did he have a will? Your name was on everything legally. No, there was no will. So it was just a next of kin thing. The government just goes, all right, give it to the kids. Correct. What are they requesting?

1:19:24What's the girlfriend requesting, and what's her attitude? Like, what's her demeanor been? Well, it's more her daughter is requesting. It's not necessarily her. She's trying to fight on behalf of her mom to go, Mom, you're owed something. You were with this guy 20 years. This is crazy. How old is the daughter? Just over 30, 30, 31. And what's her, tell me about her, if you know anything. Is she doing okay financially or does this have the ability of like a lever that she's pulling to try to get something? No, she's not financially set. She lives with her boyfriend. They actually have a baby on the way.

1:20:08They are just kind of living their lives. And I mean, I can understand where they're coming from with trying to get money back into her. And they're only really pressuring my youngest sister, my half-sister. They're only pressuring her. They won't come and talk to me. What are they asking for specifically? They're basically asking for her to either split and or give up her portion of the issue. Give up? Well, she's not going to do that. What is the rationale for her giving up her share? uh because uh because her mom put all this time and money into the the house basically okay so is the house split amongst the three of you now uh whatever we have to sell the house so whatever or whatever we have on top of that basically once all the debt gets paid um once the house gets paid off once it's paid so the girlfriend has to move out the girlfriend has to move out so you can sell the house is that right or she wasn't living there among among other things yeah so I I was actually so I was renting a house that my grandmother owned um and since uh since they had since we had we found out we have to sell the house um they all needed a place to live so I packed up me and my family and went and rented a different house so that way they can move into that house.

1:21:37Oh my gosh. This is so messy. My grandma has owned that house for like 55 years. So she's owned that house and that way they can all have a place to live and that way they're not struggling to jump around and find a place to live. It's my grandmother, her, and her brother, or a full brother and a stepbrother. Yeah. So it was just a decision me and my wife made. Can I recap that and make sure I understood it? So you were living in your grandmother's paid for house with your family and you said, I'll leave that house so my dad's girlfriend and daughter can move in there free and clear, right? Well, it was basically all the people that lived at my dad's house.

1:22:20So it was my grandmother who had just moved in in February. Who else? His girlfriend. I have a stepbrother, which is her son. Oh my gosh. and then my full brother. Okay, so... They all have a place to live. So the girlfriend and the daughter are not displaced is what I'm saying. They're taken care of because my thought... The one thing I did wonder about is like, okay, she's been living with this man for 20 years. It does feel like the rug's being pulled under her, out from under her. If she has to move out of the house, she doesn't have a place to go and she doesn't have any money, right? So it does make me feel better that she's got a place to live indefinitely.

1:22:55She's not on the streets. She's not on the streets. And this is in Pennsylvania, all of this? correct and and the the the if there's a silver lining to this it's that i mean they move into a house that is paid for there's no rent there's no mortgage there's no there's basically living who pays the taxes who pays the taxes my grandmother will be paying the taxes okay so but i'm but rent from the other three people that are living in the house will pay for their taxes Great. Okay, great. And does girlfriend have to pay rent? I don't know their financial, the way they're handling that house right now.

1:23:33Okay. And did she have to, I'm just trying to understand, when she was living with your dad, did she pay or did he pay for everything or you don't know? So they, he basically paid for everything. She did work. She really only worked to, so that way they can have insurance because he didn't have insurance for his company. So he basically held everything financial down. She kind of only worked enough to pay for insurance. I don't think that you guys are on the hook to do anything here. This is what happens when you don't have a will. This is what happens when you don't estate plan. When you don't get married and have a house.

1:24:06And when you don't get married. So there's a lot of things that went wrong here and it's very complicated. But morally, legally, ethically, I don't think you owe anything. And here's the problem. If you guys do give them a dollar, they're going to come at you for the next dollar and the next hundred dollars. And so it's going to open a door and I just would keep that door closed personally. Yeah, that's what I was on the phone with my youngest sister today, just kind of going over and explaining that to her. But I just kind of wanted to get a little bit of a second opinion. Well, there was never a commitment.

1:24:38And that's what I'm going to base my answer on anyway, is if you want a commitment to getting money out of a will, then you have to start with a commitment through marriage. and so that I'm going to keep that same through line of a commitment was never made and therefore a commitment does not have to be fulfilled. And that's kind of, some people might be like, well, dang, Jade, like the woman was living there for 20 years. And I get that. I hate that. For me, being okay with it is the fact that y 'all didn't displace her. You made sure she has a place to live. She's, she's taking, she's okay on that end.

1:25:11And my other part is she had a role to play in this too. It wasn't just that your dad left her without anything. She also could have said, hey, I'm here. I've been with you. Do you have a will? Is everything taken care of? So both parties have something. For 20 years to not even think about this is pretty wild behavior. And so she put herself in a very risky position and now is reaping the consequences of that. But from what I've seen under Pennsylvania law, she has no right to any of this just as a girlfriend. She's an unrelated person in this and it's going to go to legal error. So I would consult a lawyer if you want to cover your bases, but morally just based on feelings, you're going to feel guilty because this is not a good situation, but you did nothing to cause this.

1:25:52And I don't think it's your problem to solve either. So, so sorry you're going through this. I mean, goodness, if I'm you, I'm like lesson learned. I don't want to put my family in the situation. Let me simplify and not intertwine family finances and non-family and are we or aren't we just keep things very, very clear.

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1:27:04Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. I'm George Campbell, joined by bestselling author Jade Warshaw, and we're taking your calls at 888-825-5225. Marcus is in Columbus, Ohio. Marcus, welcome to the show. Thank you. What's going on today? So I have a bit of a question around whole life insurance, something I know there's a lot of opinions out there about. and I'm considering a whole life policy in addition to a term life policy. And I have a bit of a unique case in the reason why I'm considering it. And I'm curious to get your thoughts and opinions on it. Okay. Yeah, what's brought you to this point where you think you need it?

1:27:53So just a little background on myself. I'm 39 and I just started consulting a year ago. I'm married. My wife isn't working. but she's helping out a little bit, but she's priority is managing our two kids, three and five. So we're considering two policies, the term life being 40 and then between now and 60, having that term life insurance there available in case anything happens. And then looking at a whole life in terms of being able to access a certain amount of dollars. Now, certain dollars between now and 60 to where I can't touch a lot of the investments. What do you need access to the money for?

1:28:37I'm confused. So the thought is that I have$10 ,000 I'm considering putting into a policy. If I was to need a certain amount of money between now and 60 or towards cars or whatever expenses may come across, I want to be able to have access to my own money and also be able to kind of still have it grow separate from what it is. You can do that in a savings account. Yeah, or you could invest it in a – Or an investment account. Yeah. So why not just have your own emergency fund or sinking fund or even side investment account if you're trying to build wealth for the future? Why do it inside of a super expensive whole life policy where you make someone rich while you stay broke?

1:29:19Yeah, with a bad rate of return. So the return is what I was curious about is the return. So the return being low and, of course, the savings having, you know, barely anything. So not looking for an investment on these dollars, but something that I can actually. So the idea with The Whole Life is that you could borrow against the dollars that you put in. And so with that thought, I was wondering if I was to put in dollar, you know, say$10 ,000 into this and be able to kind of continue contributing to it and have the benefit of borrowing back to myself. Why do you need to borrow back to yourself?

1:29:57But do you not say that sounds insane. Why not just take money out of your savings and replenish it? Or it's the same thing without interest that you're paying. Yeah, or use the$10 ,000 that you started with for whatever it was that you needed. So if the$10 ,000 was used to pay off, say, a car or something like that, or to pay off whatever expenses, then it goes away. Not if you invest it. What if you invested it? Invest it. Let's just pretend. Forget the baby steps, what baby step you're on right now. Let's say you have$10 ,000 and you say, I want this to continue on for me. Yeah, I probably won't put it in a high yield because the rate of return is not enough to make it grow at the rate that I'd like.

1:30:37So you say, okay, what if I just drop it in an index fund? That's got an average annualized rate of return between 10 and 12 % if I invested in good growth stock mutual funds, or if I do just a regular index fund, I'll get that, right? So I drop it in there and I say, okay, I'm gonna let that grow. Yeah, I wouldn't suggest putting it there unless you're gonna keep it there five years or more, but we're talking investments, right? So that's across the board. So why wouldn't I just drop it there instead of dropping it into a product that's inside of life insurance that has a poor rate of return?

1:31:08Why would I choose something with a lower rate of return if that's the point? So, yeah, so the poor rate of return is what I'm thinking about here. So I have investments. I have other Roths and other accounts that I'm investing in, and I get that poor rate of return piece. Yeah. So my thought here is I could keep it. Yeah, of course. And a savings and access it when I need it and try to replenish it. I'm probably not going to be able to replenish it as fast to ten thousand dollars. So that's why I was considering, is there a place to access money as I need it, but still keep it there as accessible?

1:31:43Yeah, you want to borrow it as as debt. Right. Right. As my own debt. And I'm saying, why? Why are we having to do that? Why are we having to make things complex? Especially if you're not saying, Jade, here's what I need the money for. You don't even have an idea of what you're going to use the money for. So why are we making it complex in that way? So the idea is that I'll always – so right now I am consulting. So I'm building a business. And so there's not kind of that constant, consistent income. Are you doing that full-time or do you have a full-time job? I'm doing it full-time. And how much are you making?

1:32:24$100 ,000. Oh, nice. As a base and growing from there. What kind of business is it? What kind of consulting? Energy consulting. Very cool. Where did this whole life idea even come into your brain? Because this feels like something somebody sold you on, like a friend called you up. Yeah, yeah. So, no, I've considered it before, but I wanted to get more thoughts on it outside of just kind of writing it off. So I want to get more thoughts on understanding because it's not that I want to invest in it as an investment. So I get that it's not going to be an investment case, but being able to access my own money and then pay myself and then build it as my own bank.

1:33:06So I've done zero interest credit cards. I've moved money as I needed it responsibly. I've kept my credit score above 700. So I've operated responsibly with my money. But I'm saying, is there a vehicle I can use that allows me to access it as I need it, as I grow my business? Yeah, we've told you, Marcus. And here's the thing. You are playing – you're playing a different game. You're in the financial maze rat race of going, I have a good credit score. I can borrow money. I do the 0 % cards. I've just never met somebody who is wealthy and successful who plays all of this game. And wealthy people just have their own bank in the way of savings.

1:33:43So just build up an emergency fund. And if you need money outside of that, you can build up a sinking fund with your amazing income. And so I don't think you need to play a scenario out where you need to borrow from yourself and pay yourself back with interest for some kind of benefit. I don't think that's ever going to make sense unless this whole life insurance person sold you on this as far as some kind of tax benefits or otherwise. Yeah. So you said – what's the other one that you said? Savings? Because I thought about this as well. you know just have a savings and you know build it up that way but you said another sinking fund so high yield savings account is great for liquid money you might need in the next couple of years right so that's going to be your emergency fund you're saving up for a car whatever it may be anything that's beyond four or five year timeline or horizon you could invest now you could invest in retirement and if you want to access it earlier you can invest outside of retirement just using an index fund in a brokerage account but you don't need to do that through an insurance policy it's the most expensive and stupid way to do it.

1:34:40And the only people who advocate for it are the people who sell it. And you're limited on what you can invest in. So that's what I was trying to get at, who talked you into this? Because this is not something that's common sense. Common sense would say, have a savings account if you need money. Yeah, yeah. And I wouldn't necessarily have been talked into it. This is me exploring it. I've looked at, you know, I wanted to hear it out. And so this is the opinion that I'm looking for, is what are the, you know, the supports? Because the three that I've heard from your show is, you know, you're losing money the first three years.

1:35:12I get that. And then lower death benefit per dollar and then the low return on investment. So those I get that. Do you have life insurance right now at all? Yeah, he has term. I don't. I thought you did. You said you were looking at term. That's the one that I'm looking at. I'm setting up that in the process of setting up. Insurance is made for one thing, to protect your income. That is the reason for life insurance. We don't use it as an investment. I would get term life today. I would stop fooling with it because if something happens to you tomorrow, your family's in a real lurch, man. Get it today.

1:35:39Check out Xander.

1:35:52Hey, what's up, guys? It's Jade. You know that moment when you check your bank account and think, wait a minute, how is my paycheck gone already? Yeah, not cool. You work way too hard to feel broke like that. And the truth is you deserve better than just not feeling broke. You need more margin, more breathing room. And that's what our Every Dollar Budget app helps you find. Most people free up an average of$3 ,015 in just the first 15 minutes in the app. Just imagine how much you could find to pay off debt, stack savings, and just breathe easier with that money stress gone. Things might seem tight.

1:36:26I get it. But I promise you, you've got way more margin than you think. And with Every Dollar, you'll find it. Download it for free today in the App Store or Google Play today.

1:36:56All right, Jade, let's talk about real estate. Do it. Buying or selling a home is a big deal. With all the clickbait headlines and conflicting data out there, it's hard to know what's really happening in the housing market. So let's make the trends easy to understand. Median home prices dipped a bit last month to about$426 ,000, a typical season shift as we head into the fall. So buyers have more options and negotiating power. Sellers may face more competition. And maybe in your area, the houses could be sitting a little longer. Mortgage rates dip slightly to 5.5 % in September, giving some buyers breathing room.

1:37:27But since rates are unpredictable, the best time to buy is when you're financially ready, not when you hope rates drop. That's called timing the market, and it's risky. So to learn more about housing market trends and get free tools to help you buy or sell with confidence, go to ramsysolutions.com slash market or click the link in the show notes if you're listening on podcast or YouTube. Joe is in Minneapolis. Joe, welcome to The Ramsey Show. Hi, how's it going? Great. How are you? Great. Better than I deserve. I love it. That's what we like to hear. What's that? So I was wondering, I'm in Baby Step 2, and I was wondering if I can go on a trip, like a trip for Christmas, to see family living.

1:38:11I mean, no, I've got family in Hawaii. I don't know if I'd call it vacation. I mean, kind of it is, but it's like also like just to visit family. I mean, my mom lives out there, and my nephews and nieces. That's my main question. It's just you? Yeah, yeah. I'm a single guy. What's it cost to go? I'm thinking, like, I've seen tickets. Like, I've gotten tickets for, like, 500-round trips. But around that time, it would probably be, like, maybe 700, 800. So I'm thinking, like, cap the trip at, like, a grand. And I've been Ubering on the side. During the day, I work as a quality engineer. I make 90, but I've got like$20 ,000-some thousand in debt.

1:39:01But I've been moving around the side to kind of get out of debt faster. What are you making from that? Well,

1:39:12I've been trying to figure that out. I'm thinking like$300 in my pocket a week is a good target. but I'm trying to hit like 500 a week if I can to like get my uh baby set two and three done by next May but I'll definitely get out of debt by next May though so I mean so you're you're did I hear you say you're earning 90 ,000 from your day job yeah and the debt is 20 ,000 like 23 yeah 23 I I feel like you could go faster than that but maybe and it's just you what's your when you get your check every single month how much is it um it's like after my i guess my benefit stuff is like 20 uh 20 25 25 per check so it's five grand a month are you investing no i think like it's like close a couple hundred goes to uh do like benefit stuff or insurance or whatever but um i think it's like across the year it's like 2 ,600 per check okay across the whole year and then um okay great and then you did the 300 per week how much do you pay for rent i feel like a lot i pay like 15 1600 for rent utilities so Okay.

1:40:40Are you on a budget? Yeah. Yeah. I mean, I've been trying to kill things in my spending so that I can be like, not Ramsey-ish, but like really doing this. So I'm like, I feel like I sort of like probably got a failing grade the last couple months. But this month I feel like I'm more like on track, like serious about like, not just kind of doing it, you know. Yeah, that's what I was going to ask. When did you start? What I'm trying to understand is how serious you are about this. Did you just get serious this month and you're like, all right, I'm doing it? Or have you been kind of lollygagging for like six months and now you're finally like, okay, I'm doing it.

1:41:19Because here's where I'm struggling and George, you can chime in. On the one hand, I'm like, you're here all by yourself. I'm not going to tell you to spend Christmas alone. I kind of feel bad about that. I would be okay with you saving up the money and doing this in cash, knowing that you're going to be debt-free in May. But I am interested in your demeanor on this debt and what your patterns have been. And if a pattern of yours has been, I'm going to get serious about my debt. And then something that looks good to you comes up and you stop and you take your foot off the gas. If that's a pattern for you, I don't want to say yes to that.

1:41:53Yeah. There's a lot of tempting things. My friends, they just come out of the woodwork. I'm like, I didn't always least friends that want to go out to eat all the time, you know. Do you have friends locally that you can spend Christmas with that you would love to spend Christmas with? I mean, I have a lot of church friends, but like a lot of them are older than me because, and which I think is pretty cool because they're pretty wise folks. But I mean, I mean, I don't know if I'll hang up and like spend Christmas with them or nothing, but I got a lot of church friends and community though. Do you have anybody, do you know anybody who's done this Ramsey plan that you're close to?

1:42:33um no i haven't i haven't found anybody and how old are you joe i know maybe one guy at church but um i'm i'm 30 you're 30 okay yeah man i'm on i'm on the fence here i'm not super convinced that this is like a one and done i think this is one of many things that are going to trip you up on this debt-free journey and you make a lot of money now i'm just i just feel like i would be okay with you missing one Christmas. We're not saying never have fun again, but if you didn't go, I've, I've done this here where I was an orphan one Christmas and some friends here said, Hey, just come over for a Christmas dinner.

1:43:10And I go hang with them. And that way I'm not alone. And I also didn't blow a thousand bucks to go on, you know, on a, on a vacation. I also, listen, people are gonna, we sound like the biggest Scrooges. I also, I'm gonna tell you what else is starting to play into my, my thoughts here. If you were like, and I'm not saying that This is a great idea. If you were like 23, I'd be like, oh, man, this guy's got to go home for Christmas. But I'm like, you're 30. You're kind of in your own life. You don't need to go home. Have you missed Christmas yet? Are you a I go home for Christmas every single year no matter what?

1:43:45No, no. I mean, I really want to, honestly, like a big part is I want to go see my nephews and nieces. And there's like multiple of them that are like five and younger. And they're just like so much fun. When was the last time you saw them? uncle and they're like uh i've seen him i've seen him what uh i think i've seen him i think recently i can't crap my my memory's terrible like this year like this year okay okay well here's my thing i wonder if we do like a delayed trip once you're debt free then we go in in the springtime and that lights a fire under you to get out of debt faster versus slowing down your progress yeah i was kind of thinking about that so that's my heart behind it it's not so joe has a sad christmas it's so joe gets debt free faster and then does this thing completely debt free with no guilt no shame no debt to come back to and you're a free man come summertime i mean you could spend three weeks there have a great time yeah yeah i've done that a few times it's pretty nice.

1:44:48Yeah, because the longer you stay in Hawaii, the more money you spend. I'm guessing it's like$150 a day just to live in Hawaii. You just leave the house and spend that. I would even or let me add this one to the mix. It's October so you have two months and a week. I would give yourself a challenge since you're driving Uber too. I'd say I have to have X amount of dollars of debt paid off if I'm going to take this trip. I have to have I like the compromise I have to have uh well you know let's see your rent is 1600 uh I I try to replace my rent and side hustles that's what I try to do and I would say okay that's the goal do you see what I'm saying then you're you're getting the both the best of both worlds you're getting to be there with your family for Christmas but you're also really going hard and you're giving yourself a clear goal so that you're not kind of like I get to go I can kind and pull my foot off gas.

1:45:43I would do that. I would challenge yourself to have like, I don't know, the majority of this paid off. I would go crazy. I'd be like, I'm going to pay off like $12 ,000 or$15 ,000 of this debt really, really fast. My goal is put$5 ,000 on it in November, $5 ,000 in December, and then another$2 ,000. Do it. I like this plan, Joe. I like the compromise. I think we just wanted to feel some fire from Joe. Just get crazy with it. Just not hot enough. It's just lukewarm right now and looking for the next trip. But I'm rooting for you, man. Let us know if you end up going. We want to know where are they now.

1:46:17Mm-hmm.

1:46:40When you're tired of feeling stuck with money, there's just one solution. To get different results, you have to do something different. No one accidentally wins with money. You have to have a game plan, and that begins with our Get Started assessment. Go to RamseySolutions.com slash start, answer some questions, and we'll show you what steps to take next. Don't stay stuck. Take control of your money starting today. Go with RamseySolutions.com slash start.

1:47:27welcome back to the ramsey show on the debt-free stage we have the pleasure of speaking with jeff and danielle how are you guys we're great we're doing great thanks for making the trip to be here where are you from tucson arizona thanks for having us lovely okay how much debt did you pay off? $329 ,000. Wow. That'll do. And how long did that take? About 12 years. Wow. Quite the journey. And what was the range of income over 12 years? We started at 155 and last year was 327. Wow. Nice job. What do you guys do for work? I'm a pilot. I work for a big company out in Memphis with a bunch of purple tails.

1:48:02Oh yeah. I've seen those. And I'm an office manager for a concierge Physicians office. Okay. Awesome. I'm getting a sense here about this 329. I like it. Okay. Tell us what kind of debt was the 329? 33 ,000 was our truck, which we still have. And the rest was our house. I knew it. I knew it. It's almost 300 grand on that mortgage. And you guys just plow through the truck and then go, you know what? We're pretty good at this debt payoff thing. What if we just kept going? What was this journey like? We had a lot of life between 12 years. We financed with their scholarships and their hard work, three kids through college.

1:48:40Oh my goodness. Yeah. All useful degrees. Yeah. Awesome. You raised some great kids along the way. That's no easy feat. Yeah. We just kept rolling, walking through the baby steps. What got you connected to the Ramsey plan? Well, about five years before we actually started the plan, I brought the idea to Jeff. And at that time I was a stay at home mom and our income just perhaps didn't support it in his eyes. so I think his suggestion was we should just stop buying stuff. That's a good suggestion. And then five years later, he came to me with the idea. Then it was right. Wow. Then it was the right time.

1:49:18So this was like early 2000s? Probably, yeah, like maybe 2008 or so the first time I brought it up. Yeah. You've heard of Dinks, right? Dual income. That's right. We were Oinks. One income, numerous kids. Oh, my goodness. So you were feeling the stress. For sure. You heard about Dave, and then five years into this thing, you go, I think we know what we need to do. Yeah. You know, our big problem is we've been in our house a long time, so it was appreciating, so we kept refinancing it. It's the American way. We bought a rental property, you know, and vehicles, and we did put in a really nice pool and a yard.

1:49:52You know, our house isn't like the gathering place for our family. That's awesome. Yeah. Yeah. Wow. And so what was the journey like when you got started? Was it a hard shift? We moved through two and three relatively quickly. And then we were on track to pay it off by my 60th birthday, which is about a year and a half. And then fortunately, my parents just passed away in May and June. So we inherited enough to go ahead and finish it up. So how much of this was the inheritance that helped you finish? Just$64 ,000 or so. Wow. Like I said, we were on track to do it about a year and a half from now.

1:50:26Wow. Well, sorry for your loss, but what a legacy to leave. Thank you. 93 years old. It's like they were looking down going, we got you. We're proud of you. So how does it feel? Kind of unreal still. It's only been a couple months. We're still trying to get used to not having a house payment. And all that money sitting in the checking account. I'm sure. What do we do with that? That's a good problem to have. I'm sure the kids are like, I think we have some ideas. We've got some trips we'd love for you to take us on. Yeah. Are you going to do anything to celebrate? Yeah. I don't know if you've heard this, but it gets hot in Tucson.

1:50:58It does. It does. Man. So when it starts getting hot in 27, we're going to get a newer camper and we're going to go north to Idaho, cross to Maine, and then down the East Coast and back home. Hit all the states that I've never been in. I'll still be going to work. You know, I'll jump seat to work from wherever she's at. Sure. She'll hang out and volunteer at the Humane Society or go see the kids or whatever. And I have a sinking fund going to go to dog training school. Oh, wow. That's one of my passions. So when I can hang up the full-time job, that's my plan. The encore career. Can you train my French Bulldogs?

1:51:29I will do. You could be number one on the list. If you can train them, you're like Cesar Millan in my book. You guys are an inspiration. Were the kids watching this whole time? Because you've got grown kids seeing this journey. Was that weird to bring them into it? No, not at all. They were in high school when we started. And they've been, yeah, I mean, Dave Ramsey might be a swear word and invoke an eye roll around our house from time to time. Did they take to it? Like, are they like, hey, we want to live debt free now? Or are they like, ugh, gross. No, they're all on board. Well, they're here now, so it'd be awkward if they were used cars and everything.

1:52:00Wow. And how old are the kids? Our oldest is 26. He's married in the Air Force, so he couldn't be here. Then our next son is Andrew. He's 25, and our daughter is 21. Wow. Way to go. And they're looking at their parents like, that's pretty cool that my parents did this. While many Americans out there hang on to their mortgages until their dying breath and then leave their kids with a mess to deal with. Oh, my goodness. Was anyone around you doing any sort of plan like this, or were you kind of on an island? We supported each other, but we hosted FPU. That's when we went through it at our house with some family and neighbors in church.

1:52:37And then I hosted it. I used to work for the Department of Homeland Security. So I was flying for them, and I did the government addition at work. Holy smokes. That's awesome. Yeah, it was good. Okay, so what's the house worth? About$600 ,000. Woo! And what do you guys have in the retirement nest eggs? combined. Go ahead. 1.7. Hey, okay. Way to go. Okay, so well beyond Baby Steps Millionaires. You guys were there a long time ago. Yeah. But now this just adds to it with no payment. So what's the Baby Steps 7 look like for you guys? What are you looking forward to doing across spending, saving, giving?

1:53:13All above. Yes. I'm going to build an airplane in my garage. Whoa. So I've got the wing kit, or it comes in kits. How big is your garage? It's a good sized garage. Okay. How do you put a plane in there? Eventually, you'll have to go to the airport. You'll be in a hangar somewhere. That's exciting. So she's going to be dog training. You're going to be building airplanes. And we hope to be real generous with our grandkids in terms of their education when that time comes. Oh, that's fantastic. I love that. Well, you guys are who I want to be when I grow up. Very inspired by your story. What would you tell people the key to becoming debt-free is?

1:53:47Eye on the prize. Yeah. It can be a long journey. As you see, it took us 12 years. I think most of your families pay off their mortgage in about seven, but we started the path just in time to help kids get through school and life happens. So I would say give yourself a little bit of grace too, because there are going to be bumps in the road. Just rely on your partner. And stick with the plan. You know, the plan works, you know. Wow. That's fantastic. Well, I'm honored you guys decided to join us today. We've got some parting gifts for you. Okay. Two every dollar premium subscriptions. So you can use those.

1:54:16You can give them to maybe one of the kids who's on the journey. It's up to you what you do with that. Okay. As always saying thank you for being out here. Awesome. All right, I'm excited for this one. You guys ready? Yeah. I think we're ready. All right, it's Jeff and Danielle. $329 ,000 paid off the truck, and then they kept plowing through the mortgage in 12 years, making$155 ,000 all the way up to$327 ,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! We're debt-free!

1:54:52Oh, that warms my heart. Never gets old. Yeah, that's awesome. That's so awesome. I love this is a couple who went, hey, this isn't going to happen tomorrow. But if we're just focused on this goal, it's going to happen within a decade. We're going to be around in a decade. So do we want to be debt free or do we want to keep refinancing as the offers keep coming in? We can get a bigger line of credit on the house. It's crazy how much will come at you during the steps on the financial journey of people trying to come at your money and come at your equity and move you backwards. Yes. And you've got to stay alert and proactive just to stay forward.

1:55:26That's right. That's right. And eventually that's exactly what they did. I mean, consider the fact that the average American mortgage is a 30-year mortgage. And then we say, hey, be different, get a 15-year. And then they still turn around and pay that off in 12, I think is, I think that's great. I think if you can pay off a mortgage in 12 years, that is a win in life. That is a win in my book. And all it takes is you're doing a little bit, just a little bit extra, right? This is not you being intense, intense. This is just intentionality. I have a little bit of extra money. I'm going to throw it on here.

1:55:56Maybe it's an extra half payment. Maybe it's an extra full payment. Maybe it's once a quarter. Maybe it's every month. You get to decide what that looks like. And before you know it, you're standing where they are. Yeah, if you're in their shoes, you're in that four, five, six territory. I encourage you guys, jump on RamseySolutions.com. Use our mortgage payoff calculator. We'll put it in the show notes. And you'll be shocked at how just an extra payment a year makes a difference. How much interest it saves you. How much closer it gets you to freedom. And then what I found is it gets addictive and you go, what if we did two payments?

1:56:23Yeah. What if we did a thousand extra a month? What could that do? And then it just becomes we learn to live on what's left and we learn to be content. And that level of focus gets you debt free really fast. Baby steppers do it on average in about seven years. Yep. And the average millionaire on our millionaire study, 10 years. Wow. So let that be your goalpost to go, can I do this within seven to 10 years? Can we be completely debt free? And again, if you give yourself some grace, maybe it takes 11 or 12. you're still so far ahead of the game you can do this guys and they're living proof you

1:57:30Our scripture of the day, Hebrews 1034. Let's keep a firm grip on the promises that keep us going. He always keeps his word. Norman Vincent Peale said, Promises are like crying babies in a theater. They should be carried out at once. Hey. Wow. Listen. I love that. As a guy with a newborn in the house, let me tell you, that really speaks to me right now. I love that quote. I can't really carry him out because I'm with him, you know. I do the AirPods trick, though. I got noise cancellation on to keep my cortisol levels low. when they're just I'm just like you know what I do when I go on flights if I see that there's a mom with a baby I'll sit next to them because you're an angel well because it's like I'm used to it it doesn't bother me yeah God bless Jade's just a better person than all of us I'm like how many rows can I get away from the baby no I'll try to be nice because it's it's not fun when you're the one with the screaming baby and you're sitting next to somebody who's so annoyed and they're so mad and you're like I'm doing the best I can here.

1:58:34Yeah, I'll take that over a toddler, though, because they'll be kicking that seat. Bro, a toddler? Yeah, that's different. I'm not trying to fight a toddler today, but you better put that baby in check. Don't be kicking my seat. All right, let's go to James in Harrisburg, Pennsylvania. What's going on, James? Oh, not much. How are you doing? Better than we deserve, my friend. How can we help? I'm calling on behalf of my parents. My parents recently asked me to attend their financial advisor meeting with them. and I'm not sure. I've been listening to Dave Ramsey for a while and it doesn't seem like it's what Dave would recommend or what you guys would recommend.

1:59:11So they're roughly right at like half a million dollars or$475 ,000. And a third of that is in an annuity fund that will, once they start retire, they'll start paying out X number of dollars, like 10 grand or something a year. Yeah. Yep. What kind of annuity is it? Do you know? I don't know if I can say the name or not. Is it like a fixed annuity, variable, index? There's all kinds of types. Yeah, I have no idea. I assume it's growing value of some sort. Like the cash value is much like 156 of it is cash value. They pulled it out and there's like 220-some actual value in it. Well, in general, we are not a fan of annuities.

2:00:01They may have a time and place. I can tell you Dave Ramsey has zero annuities. They make sense for very few people. And the issue, one of the biggest issues I have with them is they're expensive. They make the advisors a whole lot of money. And so that's my only fear. I'm not saying they're a bad person. They may have a reason to do this, but I have a lot, my red flags go up. My spidey senses start tingling when I hear that someone's getting pushed into annuities. Did your parents want this for a reason? Like, are they scared of market risks? Because that's usually who this is for. Yeah, I think, I don't know that they're necessarily scared of market risk.

2:00:39It's more they want to be able to sustain through their retirement. Okay. My mom's 62. She's not planning on retiring today. Like, she's going to work a a few more years and retire, but they want to move the whole thing into this. And it just doesn't seem, it's like you have enough money in my eyes to sustain off interest because they live a super, super within their means lifestyle. Yeah. Are they in baby step seven with a paid for house, no debt? Correct. Yep. Okay. James, how's your financial situation? my wife and I are in baby step two where we basically have a truck to pay off yet and that's it so I I love that you're going with them on this and that they invited you to go to this meeting um I would the hard part about this is you're not where they're at yet and to offer advice in that area could could be tough unless they're asking you James what do you think we should do um are they yes they they definitely asked me for advice they asked me to come along because i've been ranting raving to them about you guys for the past two years and how i'm excited to get debt free or my wife and i are excited to be debt free and and they're like well we they really weren't involved in their investment i feel like they they received some money from my grandma when she passed and they just kind of took the financial advisor's word for it and said just here here's money.

2:02:10So if you suggested and said, Hey, you know, I came with you guys, here's what I heard. I'd love for you guys to get set up with a smart investor from Ramsey to get a second opinion. This is the people I've been getting advice from that I've been telling you about. Do you think that they would do that? Yeah. And I already recommended that to him. I said, I want to sit down with someone else. Like I don't, I don't trust your advisor, but I want to get someone else's opinion type thing. What'd they say to that? And, and my mom's, my mom's all for it. So my dad's not in the best hell. So he's not fully, fully involved with leaving to go meet with people, stuff like that.

2:02:52So, yeah. So you, you know, if she's open to it, you set her up with the smart vester. Maybe you sit in on that conversation too, if your dad's not able to sit in. And I think that's where you take it from there. The great news is that they're open, which I think is wonderful, maybe a little too open with the other advisor. Yeah. We always say don't invest in anything you don't understand. And so until they fully understand it, and I would not just trust the advisor's explanation because they're clearly going to do a good job selling them on it. But I'll tell you this, fixed annuities, if that's what they're in, barely keep up with inflation.

2:03:25If it's variable annuities, it's one of the most expensive and complicated financial products out there. And then indexed annuities is another form. And it's similar to index universal life insurance where it's tied to an index. And so the returns are tied to that. And there's caps on gains and protection against losses and all that. But the key here is with that one, subpar returns and super high fees. And that's always my concern when you're trying to mix this insurance product with investment. So not to say there isn't a time or place for it. If they really want the guaranteed returns or the estate planning benefits and they're in baby step seven and they have amassed a serious amount of wealth, maybe it's an option if they're super spooked by the market.

2:04:03I don't think that's the case here. And so your spidey senses are right. I would get a second opinion and try to advise them against this. Do you know what they're invested in right now in this portfolio? I do not. No, I literally sat down with their advisor like two weeks ago. This was the first time they actually left me into their finances or brought me into the loop and asked for my opinion on things. Well, that means they also had a little bit of a red flag. That's right. and so if you if you want to see them retire dignity i would stay away from this annuity based on what you've told me and you can jump on ramsey solutions.com and get connected with a smart investor pro that can give you that second opinion but you're a good son man or at the very least just leaving it as you know leaving it as it is you know don't fix it yeah if it's not already in the annuity good mutual funds and all that and good you know equities and i wouldn't mess with it but diane is in chicago up next what's going on diane hi thank you so much for taking my call.

2:05:01I love you guys. I started listening to the Ramsey show about six months ago. My son actually got me hooked up with you guys. And you guys ask a lot of times about people's net worth. And I understand the concept of assets minus liabilities, but I'm a retired police officer and I receive a defined benefits pension. And so I didn't know if that should be considered as an asset, and if so, how to quantify it. You know, there are some fancy, complex calculations you can do to kind of find the present and future value of your pension. So that might be one way to do it. The other way is just to figure out what is the actual cash value today?

2:05:42Is there a lump sum? If you took a lump sum, what would it be? There isn't that option. Okay. So you can go online and use a pension calculator and find out what the value actually is, and you can add that to your net worth. Net worth is one indicator of how well you're doing financially. It doesn't present the whole picture. And so you can add in what you've put into the pension as a way to calculate it into your net worth and use that. But there's no simple way to say, well, my pension is, you know,$4 ,000 a month, and so it's going to be X added to my net worth. It doesn't really add to the balance sheet in a perfect way, but you can use calculations to get you an idea.

2:06:21The key is, are you going to be able to retire with dignity based on the income streams you have from your investments plus pension? Yes, I'm currently working now. I have an encore career now, and that has a 401k that I've been putting 15 % into, and between my pension and my investments, I think I'm going to be fine. Yeah, what's your net worth without the pension? $640. Awesome. And you still got a ways to go in the workforce? About five years. Awesome. You're doing great, Diane. Yeah, I'd keep climbing. If you can get that net worth and nest egg to a million bucks plus a pension, I think we're in good shape, Diane.

2:07:00And you can get connected with a SmartVestor Pro to help you calculate that as well. That puts this hour of the Ramsey Show in the books. Until next time, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.