Managing Money Well Matters At Every Income Level

11:46Ken Coleman:Let's just pause. Okay. And I appreciate we're honored that you called for our opinion. And believe me, we have opinions and we'll give them to you. But before we get there, let's just let's just go where you are. Where are you at? What was your knee jerk reaction? What is your feeling right now, what decision do you think is right for you? Tell us. So my ideal situation would be to, I told them when they moved, I'm like, if I'm going to be paying everything, I'm paying the property tax, basically my own landlord. Why not just give me the gift of the home of the apartment,

12:23Rachel Cruze:which they didn't do. My immediate reaction would be have my mom move in, though it would be, you know, a big change because I, I run a business out of my house.

12:35Ken Coleman:So it's going to be a little bit tighter. Um, but my mom is very like pushing me to move into the house because she feels like we will be able to get into another house. Pause real quick. I'm sorry. And this is because I'm not really clear and I don't want to confuse you or the audience. So you're saying apartment and house, you're currently living in a place and you said your first reaction was for mom to move in with you where you are now, correct? Yes, because they just moved out of the apartment, which they own that I'm living in, to move into their house. So they took on a$400 ,000 - Yeah, not your problem.

13:17Ken Coleman:It's not your problem, though. I don't even care about that. And the musical houses is confusing. So you think the best move is for your mom to move in with you, but it comes with some headaches. That's what I heard. Correct. All right. So if you think that's best, we start there. And I can tell you, Rachel and I just said, her house is not your problem. And mom is trying to manipulate you, my viewpoint, to move in to help her with a mortgage that she can't handle. There's no boundaries. She's leaning on you almost like a second. She wants to break up with a boyfriend. Him move into your place.

13:51Ken Coleman:This is wacky.

13:52Rachel Cruze:Yeah. Is your name on any of these properties from a legal perspective of owning? is not on any property. Okay. And then they're going to break up. So Alyssa, I mean, this sounds extreme. I almost, which would probably piss your mom off, but I almost would just move out, get out of the middle of this triangle and just go rent an apartment, be a complete bystander in this, and then be able to help and coach your mom of, hey mom, yeah, these properties, because I bet both of their names are on, right, on the apartment and the home, which is going to be a mess for your mom because they're going to have to possibly refinance to get one name off the loan.

14:29Rachel Cruze:I mean, it's just going to be, it's going to be a disaster. And so if I were you, I see disaster playing out with unhealthy mom with no boundaries. And this would be a harsh move, but it would to say like, hey, I have to step away. And then from your point of strength, be able then to come in and help where you can and where it's appropriate, but not out of this desperation of your mom because she can't get her act together. That sounds mean, but...

14:58Ken Coleman:May I add one more thing?

15:01Rachel Cruze:Sure. Yeah, absolutely. I don't think... They've been together for over a decade.

15:07Ken Coleman:So with that said, I don't think that one of them are going to go through the headache of taking each other's name off. Like they trust each other enough, although they shouldn't. They trust each other enough and they know that they're both stable enough to...

15:20Rachel Cruze:Yeah, so they may not. But that's...

15:22Ken Coleman:How does that change? Okay, great. How does it change what we're telling you that you should do?

15:28Rachel Cruze:No, that doesn't change. I just...

15:31Ken Coleman:You just what? My goal this year was... Well, I just... I mentioned the refinance. I have$30 ,000. Yeah. So I'm not paying that much. I pay about$2 ,600 a month in total with everything. And my goal this year is... I'm like in the baby steps. And my goal this year is to pay off my$30 ,000 in debt, which is more than possible. Yeah. So I just don't know. I mean, it's just going to be more difficult, but I guess... Why? Why is it going to be... What's going to make it more difficult?

16:00Rachel Cruze:If you move? If I move.

16:03Ken Coleman:Why? Yes. Give me some evidence. You may be right. I think you can find it. What? In my area, it's probably going to be more expensive. I am going to need a two-bedroom at least in order to continue running my side business. What is your side business?

16:18Rachel Cruze:I am a waxer.

16:20Ken Coleman:A waxer. Oh. Yes. Sorry. Got that one a little late. Okay, great. But I mean, why? Appreciate the service. But that's great. But I mean, all you need, I mean, okay, two bedroom, that's fine. But you could get a roommate, split a three bedroom. You know what I mean? You could, I would challenge you to find some small studio. I would just look into it. Yeah. Do you know what I mean?

16:43Rachel Cruze:Because, and the reason to do all of this is not really a financial move. It's more of a boundary play because.

16:48Ken Coleman:Yeah, you got to get out of this mess.

16:50Rachel Cruze:There's just a relational entanglement. or you either have to just have a have a strong boundary with your mom at some point in your life right i mean it sounds like she's you're just like the third wheel and and you're the safety net for her when things go south and and and that's just not a that's not a blossoming relationship you know what i mean from a from a daughter to a mother so i'm just yes yeah i would

17:16Ken Coleman:have gotten used to living by myself so i don't really want to sit with her yes and you don't have to by the way that's going to create a problem and and and mom's going to try to manipulate you i have a good feeling that if you tell mom or you do what we're suggesting that mom's going to throw the darts at you am i right or wrong that's right okay so are you prepared you don't have to be on this call but i mean how prepared do you think you are to be able to stand up to that i think i'm prepared. Okay, I hear the emotion. I trust you guys' judgment. Yeah, what emotion? What are you feeling? Fear?

17:55Ken Coleman:Sadness? What's going on? Sadness to leave her on her own, but I mean, I've told her a million times, you know, my goal is to pay off my debt this year, and I've been doing a great job at that. And this is just kind of going to, it's kind of something in the middle of that. I'm going to take on a lot more expenses, a lot more stress, but maybe farther from work, the job that actually pays me good and that I'm on track to make a hundred thousand a year for. So it's just, it's a lot. I know. Well, first of all, you're a good daughter and there might be some thoughts that enter your head that I'm not a good daughter.

18:40Ken Coleman:Maybe your mom, I'm not saying that she will, but she might throw some statements at you that make you feel that way. And I want you to, before you leave us, to know that you're a good daughter and you are making really good decisions for you and your future. And you can't, Rachel, how many times have we taken calls with children and adult parents where you really aren't going to be able to fix mom's stuff?

19:02Rachel Cruze:And this is what Deloney says all the time is, you know, when you put the boundary up, if the other person on the other end throws a fit and decides to, you know, from an extreme standpoint, end the relationship or stop, that was their call. You didn't ask for that. You're not wanting to break a level of relationship with your mom. You're just trying to set up your own life. Alyssa, how old are you? I'm 23.

19:26Ken Coleman:Oh, you're okay. You are young. Oh, bless you. You are young. Yeah, this is a great move. Alyssa, listen.

19:30Rachel Cruze:This is going to be a pattern that you set for the rest of your life, you know?

19:35Ken Coleman:I know you're sad right now, but I would rather you experience the sadness of this necessary ending than deal with madness. For years. And this is setting up for that. And I don't mean just the angry feeling. I mean like some insanity of this revolving relationship between your mom and this guy. and it's so commingled that I think the further you get away from this and set up financial and emotional boundaries, I think you're going to be great. I'm going to recommend a book by our dear friend, Dr. Henry Cloud. It's called Boundaries. Read it and then follow that up with necessary endings. That's your one-two punch.

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21:41Ken Coleman:All right, let's go to Tiffany next in Phoenix, Arizona. Tiffany, how can we help you today?

21:46Rachel Cruze:Hi, hi. My name is Tiffany. I own two properties that are income-producing.

21:56Ken Coleman:one I have perpetual problems with that cost me at least a thousand dollars in

22:00Rachel Cruze:repairs and the other one has been vacant for over six months and I just lost my job and I can't keep up with the payments and I don't know what to do.

22:10Ken Coleman:Okay, tell us about the properties. Property one, let's call that one broken, the broken property. What is it? What kind of property is it and what do you think it's worth and what do you owe on it? Give us some numbers. It's a duplex. It's worth

22:25Rachel Cruze:probably around 320 and I owe about 260 on it.

22:32Ken Coleman:Okay. And then let's call the second property, the vacant property. Give me the numbers on that one. It's a triplex and I owe like 406 and

22:47Rachel Cruze:they say it's worth 500, but I don't think it's worth that much. Who's they? A real estate agent told me that it was worth$300 ,000, but I don't think that's true either.

22:57Ken Coleman:Well, you just told us$400 ,000, then you changed it. I'm sorry, I'm sorry. I wrote$500 ,000. You said that they said it's worth$500 ,000 and you owe$406 ,000. Did I get that right? That's correct. Okay. So why did you throw$300 ,000 out? There's a big gap there. The real estate agent that I spoke to said I need to, he told me, because it wasn't selling, to drop it down to$300 ,000. But it's not worth that. It's worth more than that. Okay. Well, then you need to interview several real estate agents. Go ahead. That's the third real estate agent that I have tried to get to sell the property. Have you tried any of the Ramsey – well, they're not Ramsey Realty.

23:42Ken Coleman:They're real estate agents that are connected to us in our – Ramsey Trusted Program. Ramsey, thank you. Ramsey Trusted Program. Have you tried any of those? No. Okay. Go to our website and the Ramsey Trusted and talk to some real estate agents. You don't have to take those three opinions. And at this point, you've got some urgency. So let's find somebody that really knows the market and that is really aggressive. The challenge that you've got is the duplex and the triplex. I mean, those are not your most favorable properties. And I'm guessing that you're probably in an area where real estate is slowed down.

24:19Ken Coleman:Is that true or false? Well, the real estate agents I talk to say that it's good until they put it on the market. So I presume it's pretty good. I know, but see, here's the other thing. You've got to go get your own data, right? This is not hard to find. You've got to get your own research in this thing. And by the way, this is readily available. Like, you know your zip code. You can go pull this information from realtor.com, other reputable sources. And let's just get a knowledgeable, some comps on these triplex and duplex. But you definitely need to get rid of these. But my hope is you don't...

24:56Ken Coleman:Go ahead. I have done that. The comps that I have for the vacant home was$480.

25:07Rachel Cruze:And then for the broken home, the comp was at$320. Okay. I mean, I checked on PropStream. I've done the research. Great. Okay, great.

25:18Ken Coleman:Great job.

25:19Rachel Cruze:And how long have they been on the market for? Well, so the vacant home, I pulled it from the market. It was on the market for about a month, about two months. Okay.

25:32Ken Coleman:But I pulled it just to see if I can get a renter because I can't keep up with these payments. And then the duplex. Okay, let's look at your income really quick. That's out on the market. Okay, so let's... I lost my job. I know. So what was your income prior to losing your job? About$90 ,000. What were you doing? uh work and marketing okay so what happened laid off fired what happened no i got i got fired for burnout and stressed out and what was causing you stress my mortgages right okay uh i think this is a both i've had i've had evictions i had three

26:14Rachel Cruze:addictions last year. I still have one. As being a landlord. Like you having to do it as a landlord? Yes. Yeah, totally. That cost me. I had to do turnovers. So how much is each payment per month? My complex is$2 ,600 and the triplex is $3 ,400. Okay. So yeah, that's$6 ,000 just in those payments. How far behind are you? I'm not behind you're not behind okay that's good so Tiffany right now average days on market and this is across the U.S. not in the Phoenix area specifically is about 78 days okay and we're about to go into a season of of real estate right everything kind of starts opening up after the winter and you're you're May you're April all of these months really start generating people that are looking to buy.

27:11Rachel Cruze:Now, this looks like, I mean, I'm assuming you wouldn't be able to sell like the duplex and the triplex as separate units. It has to be all probably within one unit. So are you looking for like an investor? Would an investor be the type of buyer? Because it wouldn't be a single family, like it's not a single family home, right? No, that's correct. It's not. Okay, so that that is going to make it more difficult because it's more of a niche, buyer that you're looking for. But average day, so I would give yourself 90 days to 120. It may have to go through the summer, but the problem is if you start getting behind, then yeah, I mean, a short sale may have to come into play if you can't get these off.

27:55Ken Coleman:Well, that's why we need to look at the money right now. So the income. So are you on a severance right now? How long have you been out of work? I just found out this week I have a month severance. You have a month's severance. Okay. And let me go back. And this is somewhat of an unfair question, but I think it's important. If we had 30 days ago sold those two, let's call these properties, okay, if we had sold those properties, do you think you would have gotten fired?

28:26Ken Coleman:Probably. You do think you still would be fired? This has been going on for about two years. Okay. And so the stress, and I want you to be really honest, because again, we're protecting you here, but we need to be gut level honest. Is that the single source of you just simply you couldn't get the job done? You were almost a zombie because you were so stressed out. Is that what I'm understanding? Yes. Okay. So I want to go back then. Had we not had the stress of these properties, do you think you would have been in a state that would have led to you getting fired? Yes or no? Right. Repeat that again.

28:59Ken Coleman:Okay. If these properties didn't exist in your portfolio and you didn't have any of this stress, do you think you would have gotten fired? Let's go all the way back for two years this has been going on. Would you have gotten fired? No. Okay. My point is you aren't broken, but you are burdened and that's what's going on. So we got to remove these two burdens. And I'm going to tell you what I do. We have short time here, but I'm going to tell you two things I think you got to do. Number one, I think you need to go get a really aggressive real estate agent, keep finding, but I would not rely on them.

29:31Ken Coleman:I would, is there anybody that, are there other duplexes and triplexes around these properties? They're not single standouts, right? No, that's correct. There are other ones in the industry. I would be knocking on doors and finding who owns them and say, I'm willing to make a deal. Yes. And the deal is up to a point that you don't have to pay anything, but you can get out of these things. I don't even care if you profit$1, but as long as you don't owe anything on these things anymore, and we remove these from your life, it's like taking a giant millstone that's been hanging around your neck, and you've been out there treading water, and that is going to lift from you immediately.

30:08Ken Coleman:That would be step one. So I would take it on myself to go cut a deal. Hey, I got these properties. I screwed up. I'm stressed out. this is the bottom dollar that I'll take, but I'll take it today. And I would go try to do the deal on your own while trying to get an agent. Now, we've got to move to income. You are going to get free of these things. So you have to summon up every ounce of energy and strength that you have, and you have got to get back on the horse. You've got to maybe go back to your current employer and say, I'm going to fix this. I would take that stab. Give me one more shot.

30:42Ken Coleman:Maybe you don't have it. And I understand that may be unrealistic, but I'd put everything on the table. And you've got to get out there if you're working from home, whatever it is, but$90 ,000 is not going to be replaced by some odd jobs. You're going to have to go back and get into marketing and get in as quick as you can. Or you're looking at four to five jobs. That's your reality right now because you've got one month before your world gets really, really bad. So I hate that you're in this, but here's the good news. I believe in you. You can't get out of this, but this is going to have to be like, like everything you got to not get broken by this.

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33:05Ken Coleman:Hey, if you're sick and tired of working so hard but having nothing to show for it, don't get too down. It's normal, but normal is broke. Our Every Dollar Budget app is going to help you find extra money every month, that it's going to build you a personalized plan to beat the debt so you can build wealth. In just 15 minutes, you're going to find thousands in margin that's hidden from you. So go start every dollar. And you can do it for free in the App Store or Google Play. All right, Eric is up in Dayton, Ohio. Eric, how can we help? Hey, guys. How are you guys today? Great. How are you, sir?

33:40Ken Coleman:Good, good. Hey, I'm looking for some advice on how to convince my wife that it's a smart idea to sell one vehicle that we have paid off that's worth about$32 ,000 to pay off the other that we have and not have any car payment. And your wife is not on board with this? She's not. You're trying to sell her car? It is her car. My car is paid for. Oh, okay. It's a 2020 Silverado.

34:13Rachel Cruze:Yeah. That's a hard uphill battle, Eric.

34:16Ken Coleman:It is. It's paid for. Yours is a truck, and what does she drive? Yes. She drives a Durango. And you want to sell her Durango? I thought you said you wanted to sell your truck. Yes, I want to sell my truck and pay off her Durango. Oh. And that's why I'm confused as to why she's not for this.

34:37Rachel Cruze:Oh, I thought you were trying to sell her car.

34:38Ken Coleman:Well, she thinks basically the difference of what my truck is worth compared to us paying her car off is about$8 ,800 to$10 ,000. So she's afraid. What I would like to do is take that$10 ,000 and go pay cash for a used car. She is just afraid of what comes with the maintenance and upkeep of buying an older vehicle. Got it. Okay, now I'm up to date. Okay, so this is all about vision casting, Eric, right? You got to cast a vision, and you got to do it in a way where she goes, aha, because she's got some fear, okay? And who among us, Eric, are really clear thinking when we're afraid? Yes, you would agree?

35:24Ken Coleman:Yes. Okay, so nothing wrong with your wife. She's got some fear, and it's clouding her ability to see your plan. So you have to come at it that way, all right? So this is the way I would come about it. What is the payment on her Durango every month? Well, we're paying just shy of double payments on her Durango now. So her insight is, well, why do we need to make this drastic decision? If we can just pay it off. How are we going to pay for it? Maybe she's right, but you've got to answer my question. I'm going to walk you through it. Maybe she's right. So what are you guys paying? I know it's a double payment.

35:59Ken Coleman:What are you guys paying every month on the Durango? It's$550. Okay,$550 a month. That's what the payment is. All right, and if we continue to do the$550, double payment, when would the Durango be paid off? In about just over two years. Oh. Okay. That's more information. The way I would come about it is, what are you thinking? Because you made a funny, scrunchy face. and I really want to go to you. I want to go to you immediately.

36:25Rachel Cruze:No, no. What are you thinking? It's not off the top of my head. It's just that's so long. That's too long. Yes. All right.

36:32Ken Coleman:I just wanted to make sure.

36:33Rachel Cruze:Cast the vision.

36:34Ken Coleman:So here's what I would do. I would say, babe, we're paying$550 a month, and at that rate, it's going to take us two years to pay this off. Okay? All right. So you do the math on that and just play it out. Show her the numbers. So that's 24 months at$550 a month. Multiply that.

36:50Rachel Cruze:A thousand. because he said double payments they'll haven't paid off in two years.

36:54Ken Coleman:No. Yes. I thought the double, okay, hold on. The double payment I thought was$550. No, no, no, no.

36:59Rachel Cruze:That's the single payment. No, no, no.

37:00Ken Coleman:That's the single payment.

37:02Rachel Cruze:Well, I think you asked for that. He didn't give it to me.

37:05Ken Coleman:I said, what's the double payment? You said$550. Eric, I'm following you, Eric.

37:09Rachel Cruze:But he didn't give me the numbers.

37:10Ken Coleman:So it's$1 ,000 actually.

37:12Rachel Cruze:Yeah, they're putting away about$1 ,100.

37:16Ken Coleman:We're actually paying$975 a month. But in all fairness, I did ask for that number. I said, what are you paying? It's okay.

37:24Rachel Cruze:Eric, I can't ask how much is the payment. And you gave the payment number.

37:28Ken Coleman:And you said double. And I said, what's the double payment? Here's the deal. Anyway,$1 ,000. It's$1 ,000. For two years. For two years. You got to show her those numbers. Versus your plan. Which I did. Well. I actually made a spreadsheet. Oh, look at you, Eric. I made a spreadsheet. Okay. So my anticipation was to have it. we would pay this car off right now. So let's just get to her fear. Her fear is... But I'm going to address it. Here's the deal. I'm trying so hard to get here. You got to show her that the thousand bucks a month that we're paying is easily going to cover any kind of mechanical issues that she's worried about.

38:05Ken Coleman:Oh, I know. Kid's not a village idiot after all. I got you, Ken. I feel like I'm talking about teenagers between you two. Oh, Ken. I mean... No. The vision casting is you're afraid... We're going to be fine. That we're going to have mechanical problems. So then you tell her, I'm going to buy for$10 ,000 a Toyota or a Honda or something, or X amount of miles, and I can do research and show her that the average mechanical cost on a car like this is whatever. Yes. And between our emergency fund and the savings of almost$1 ,000 a month, we would be able to cover the mechanical, and now we're out of debt.

38:42Rachel Cruze:Eric, have you shown her any use?

38:46Ken Coleman:cars for ten thousand dollars i i haven't really okay i've seen a couple that are locally like there was like eighty eight hundred dollars that's like a toy or a camry yeah so i think that's i

39:00Rachel Cruze:think that's always a shocking thing for people people hear used car and if i'm her and she's just like that just means it's a beater it's gonna be crappy we're gonna have to deal with maintenance all the time you know what i mean like that's kind of the stereotype but when you actually go and look at used cars they're fine really i mean there's some there's some that are rough that you're like okay that's probably not gonna be great but you go get a mechanic to look at it you make sure there's no big issues going on and i'm telling you yes and i and i think for her that's where the ken's vision casting could come in is her actually go car shopping and see what you what you're talking about oh look at this ken's pulling it up that's what i do that's what

39:36Ken Coleman:do i do look at you ken uh look at gmc acadia we got a 2016 gmc acadia for 8900 only 120 000 miles gmcs aren't expensive to fix they got all the parts uh let me give you uh there's a oh my gosh you're about a 2015 subaru these things run forever uh and let's do one more just for fun oh here we go uh let's go the 2016 honda honda civic 182 000 miles yes but that car's barely getting started it looks great the paint's nice they're asking 8900 for it you walk in there with 7500 in the hundred dollar bills and you walk out of that yeah that's just a quick quick search so again i know it took us a while she needs to be along it was painful but we got to show her no more spreadsheets.

40:26Ken Coleman:Just here's the deal. We just free up a thousand dollars a month in our budget. We can easily cover. And this is for a short term. And we save up Rachel. Yes. For the next twenty thousand dollar cash car. I even I even I even tried to show her that taking this what what a payment of five fifty seven plus what we're paying and putting it to the house after this car is paid for, we would then pay our house off within the next five years after that. Oh, my gosh. And she didn't go for that? So is really her fear, Eric, is her real fear just a used car?

41:05Rachel Cruze:Is that what she is scared of for real?

41:06Ken Coleman:It is just keeping up the maintenance. She doesn't think we're, she asked me, she said, do you really think we're in that bad of shape? We're not at all in that bad of shape. No, but it's just the level of intensity you want out. Yeah.

41:20Rachel Cruze:So that's how I would go about it though, Eric, of what it's doing to you. It's stressing you out. You hate this. And so to her, she may not feel the pain as much. She's like, is it really that big of a deal? Oh my gosh, Eric, you're being so dramatic. All of this. You need to, yeah, you need to verbalize exactly what you're feeling and what you're thinking. And it's almost this like, hey, this would be a gift to me and my sanity and my peace. Like, you know what I mean? It's more of that for you because she's not rattled by this.

41:49Ken Coleman:which is fair she can pay she does she does none of our finances okay so then that's part of the crazy question actually eric this is for you and rachel okay so i got it apparently it's you and i against well it sounded like it earlier until america realized where i was going all right serious question in this case is it okay for your marriage to just do it i don't think you're going and buying anything, you're selling your car. I think you go, we're at an impasse, but babe, I'm going to do it anyway. What say you? Does that bother you? Yeah, that's a terrible idea, and I would not do that. She would kill me.

42:27Rachel Cruze:She'd freak out. Okay, then don't do it. That's why I asked. She's got to come to the table. You guys need to be doing a budget together every month. Y 'all are, you're running on two separate tracks, and you're by yourself in this. You're isolated and stressed, and that's the core issue here for you, and that's what she needs to hear, is that her husband is not at peace.

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44:06Ken Coleman:Welcome back to the Ramsey Show and the Fairwinds Credit Union Studio. I'm Ken Coleman alongside Rachel Cruz. Excited to be with you all. 888-825-5225 is the number. Nate is up in Colorado. Nate, how can we help? Hey, guys. I'm just calling because I'm not really sure how to move forward. Had a very serious health situation and depleted all of our savings. And I'm not sure how to move. I've got four kids and a wife. I'm not trying to move forward.

44:40Rachel Cruze:Oh, my gosh. What happened?

44:42Ken Coleman:Getting out of debt and everything. Long story short, I was in the Army for a long time. Okay. And doctors were trying to help me recover from long-term injuries. And too many doctors got involved. And I ended up on 19 different medications for multiple years. Oh, my gosh. And it was just killing my liver. I had heart attacks. And it was really bad. and technically I'm not even supposed to be here. We're literally planning my funeral.

45:16Rachel Cruze:Oh, my gosh.

45:17Ken Coleman:And now I'm here and I don't know what to do. Yeah. Well, when we say here, where does that put you physically? Are you able to work? Are you on disability? You know, we've got to walk through kind of your realities. Let's start with those two questions. so i worked through the you know i was supposed to be in the hospital but i i worked through it all wow through god's help i was able to maintain myself enough to work um do you still have that do you still have that income yes sir i still work i make um just over a hundred thousand dollars a year. Okay, great. And you foresee, God willing, health allowing, continuing to make that money, correct?

46:07Ken Coleman:Yes, sir. The damage is permanent. There's no fixing it. You can prevent further damage, but what's done is done, basically. Do you have any other income that's coming in from your military service or anything like that? That's part of the income. Yes, sir. That's part of the total income i gave you okay gotcha okay is there one last question here and we'll start walking through the debt uh do you have opportunities where you are or potentially in the same industry to get a raise to where that number goes above a hundred thousand

46:42Ken Coleman:um i believe so i mean i i mean technically yes i you know that depends a lot on the company you work for. I understand. But the reason I'm asking, that needs to be a part of this strategy. In other words, you don't have to answer that question on the call, but your homework assignment is, what can I do to increase my income? I'm going to school currently, full-time and working full-time. For what? To try to finish my degree so that I can get out of trucking and do accounting. Okay. Okay. So you want to move into accounting. How much school left do you have? I will graduate next May. Not this May, but next year.

47:27Ken Coleman:It's 2027 May. All right. How much is that costing you? Or is it covered? It's free from the VA. In fact, I actually get paid to go to school. Perfect. Oh, wow. Okay, great. All right. I want to bring Rachel in here and let's talk about the real debt. Yeah.

47:40Rachel Cruze:So how much debt do you guys have?

47:43Ken Coleman:So my wife is two months away from being debt free. We have two credit cards left. That total one credit card is$9 ,487.

47:54Rachel Cruze:Okay.

47:54Ken Coleman:And the other credit card is$4 ,619. Okay. And actually tomorrow morning, that credit card, the smaller one will be paid off.

48:05Rachel Cruze:The$4 ,000? And then, yes, ma 'am. Oh my gosh, amazing.

48:10Ken Coleman:And then April 1st, I'm sorry, between April 1st and May 1st, we will finish off the$9 ,000.

48:18Rachel Cruze:Okay, amazing. Now, why did you say my wife is almost debt-free? What do you mean by that?

48:24Ken Coleman:Well, when I got sick, I was actually running my own trucking company.

48:27Rachel Cruze:Okay.

48:29Ken Coleman:I'm sorry.

48:30Rachel Cruze:No, you're fine.

48:33Ken Coleman:I was doing really well.

48:34Rachel Cruze:Yeah. Yeah.

48:37Ken Coleman:And to keep our family afloat, I just kind of went into survival mode and I just said, OK, well, if I die, I don't want my wife's credit to get destroyed. So I just focused on making sure the rent was paid and her bills got paid. But my credit, obviously, I couldn't I couldn't make anything. I mean, we were barely living.

49:06Rachel Cruze:Okay, I hear you.

49:07Ken Coleman:And so I was able to salvage hers, but my credit is just destroyed.

49:10Rachel Cruze:Okay, that's okay. Yeah, I'm not worried about that right now. So are the two credit cards, are those under her name or yours?

49:17Ken Coleman:Yes, ma 'am. They're under her name. They're hers. Okay.

49:20Rachel Cruze:So is that all the debt that's in her name?

49:23Ken Coleman:Yes, ma 'am.

49:24Rachel Cruze:Okay, wonderful. And then what debt do you have?

49:29Ken Coleman:It's not an overwhelming amount. it's just a lot of small credit cards that have been in default for like two years that's great are they in collections yes yeah yes i'm sure they are i just nobody's contacted me about it that was weird okay so what i'm not like getting phone calls it's just yep okay so in a way it's

49:49Rachel Cruze:kind of a good thing because when they hit collections you can negotiate and you know get out of them so so total you said it's a bunch of little ones so probably a total of what five $10 ,000, or what are we talking?

50:00Ken Coleman:It's just under$14 ,000. Right now it's just$13 ,913.

50:05Rachel Cruze:Okay, and they're all defaulted and probably all in collections, all$14 ,000. Yes, ma 'am, everything you want. Okay, so here's what I would do. I would pull your credit report and see the last company that held that debt and try to contact them and try to get any real time of who owns these debts because they're probably even sold off. So it's kind of like a, it's going to be a part-time job for you to kind of like go through the spider web of it all. But where you can get that. And then in the meantime, after you guys pay off her, I'm going to say her, I'm going to say both of you. Because we'll talk in those terms.

50:38Rachel Cruze:Once the$9 ,000 credit card is paid off in April, then I would save, because you guys are amazing at what you're doing. The fact that you guys are snowballing this so fast. I would save, you know, five, six thousand as quickly as possible and then contact the collections and see what you can negotiate. Because I bet they'll take half or even less than half of that fifteen thousand. OK, so I want you guys to do that. So once that's taken care of, is there any more debt?

51:05Ken Coleman:No, ma 'am.

51:06Rachel Cruze:No. OK. Yeah.

51:08Ken Coleman:Can I just tell you just it was just terrifying trying to think.

51:12Rachel Cruze:Oh, I can't imagine trying to stay alive. And by the way, you're a hero.

51:16Ken Coleman:I'm having a hard time. Yeah, I'm having a hard time finding life insurance.

51:20Rachel Cruze:Yeah, you might.

51:22Ken Coleman:I've got a$100 ,000 policy. We just had a baby girl that was not planned.

51:28Rachel Cruze:Yeah.

51:29Ken Coleman:It's just, I'm just... You're a good man. Hey, you're a good man. I really are to take care of my family. Yes, you're doing a great job, Nate. You're doing so well. The fact that you guys are going to pay this debt off in the next two months. And Rachel just gave you a step-by-step plan. Don't stress about that collection stuff. That is secondary. You're going to be fine. You're going to be okay. You just keep showing up for your family the way you have. You're a good man who's been through so much. By the way, you served our country and you sacrificed so much. You're a great American, too. And we appreciate you.

52:09Ken Coleman:you're going to be fine you're doing a great job you guys the next step is get that emergency fund in place right and then to begin the investing and i believe it's all going to work out you just

52:21Rachel Cruze:one day at a time hold on the line nate we're gonna pick up during the break because i do want to mention something about when you mentioned life insurance i do want to talk to you about that we can talk off air but hang on but yeah do an incredible nate

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54:25Ken Coleman:Brian is up in Denver, Colorado. Brian, how can we help? Hey, nice to be with you both. Thank you. What's going on? So my grandfather passed away. Oh, I'm so sorry. I don't know about that. Yeah. Hey, 96 years old, he crushed it. Oh, wow. That's a great life. Yeah. Yeah. He did a lot in his life. And I inherited some stuff from him that I wanted to talk to you about. Okay. Including a giant Alaskan salmon that he caught in 1986 that somehow got left in the will for me. So I'm trying to figure out what to do with that. Like on a wall? Not why I'm calling you guys.

54:59Rachel Cruze:Like on the wall? Can I just tell you? Oh, I was like, is it still in the freezer from the agent?

55:04Ken Coleman:So it came with a plaque, and he named the salmon Big Hog. And now I have my grandfather's Big Hog, and I don't know what to do with it. Ken is loving this right now. I'm so excited. Let's go ahead and get this one out of the way. This is the least important of the question, but we'll see. What do you do with it? You hang it in a place of honor. This is your grandfather's prized fish. He went so far as to name it. I would think patio, covered patio, would be a great spot. if you've got a man kind of a man's room in the house great spot i mean it's a story to tell and it honors your grandfather every time you tell the story and i would come up with a good story if you don't have a embellish a little bit i would embellish listen i i would stop the tape measure and found a perfectly suitable place in the living room no my wife not the living room reasons i'll never understand hated the idea well you haven't been married long enough i have i get Notice I didn't mention the living room.

55:59Ken Coleman:That wasn't on my, I know better than that. But whatever your man land is in your house, that's where it goes. Great story. And as Rachel said, create a good fish story. Yeah. Like he almost lost his arm or something like, let's get some drama in it. And then he was okay. And he got the fish, reeled it in, took him an hour and a half. I don't know. Something special. Sounds great. Good story. But anyway. This is the type of advice people need to call into their empty show for. I agree.

56:26Rachel Cruze:We can do more than just money.

56:28Ken Coleman:By the way, I got more where that came from.

56:30Rachel Cruze:We changed our lives in so many ways. All right. So now to the serious stuff. How can we help you?

56:35Ken Coleman:Yes. So I found out through his passing, and I'll say this once, very grateful, very blessed to be in the situation, that through the course of three different kind of life events in the future, I'll be inheriting a total essentially of$3.5 million from him. Wow.

56:54Rachel Cruze:Wow. Yes. How many grandkids are there?

56:59Ken Coleman:There's four of us. And it's interesting that you asked that question because one of them is through a$10 million generation skipping trust that some of his commercial real estate assets is in totaling about$10 million. So it gets put up four ways.

57:17Rachel Cruze:Your parents didn't get?

57:19Ken Coleman:Correct. Goes to you all. So my parents now get all of the income for as long as they're alive from those properties. but they're passed along to us ownership-wise in the trust once his children have passed along. So that's way down the line.

57:36Rachel Cruze:Wow. Okay. Oh my gosh.

57:39Ken Coleman:The other element is that he's leaving me$100 ,000 now that I will receive at some point within two years of his passing, which will be two Mays from now. So I don't know when that would be coming. It could come today. It could come in a year and four months. And then the other element of it is that when my grandmother passes his wife, I'll be receiving a$1 million municipal bond that pays out a lousy 2%. But I'll be getting that when my grandmother dies that they worked out through their estate that she gets once he passed. And then I'll get that when she passed. She's 90 and I hope she lives 30 more years.

58:17Ken Coleman:But that's the third element of it. So the reason I'm calling you is I didn't anticipate any of this. and since 2020, I've been building up my own brokerage account with stocks and ETFs and that account now has$155 ,000 in it and my plan was to never touch it, just keep it growing. However, now that I kind of have these other things coming in the future, my question for you is, is it okay or is it still stupid to be able to pull out money from that brokerage account to pay for some home improvement projects that straddle the line between want and need. If we have a second kid down the line in a couple of years, we could really use another bedroom.

59:04Ken Coleman:And so for me, and we're doing home construction work here coming up soon, so it would be ideal to get it all done in one slew while it's happening as opposed to having to move out a couple of times. So is it okay for me to pull 40, 50 out of that now, pay another 10K in capital gains taxes next year, given I know what's coming to me? Or is that still a bad idea? Yeah, no, I think that's fine.

59:29Rachel Cruze:I would say you could pull 40 or 50 out of 150 in a brokerage account anyways, regardless of the inheritance. I mean, that's cash for you all to use now or later, or like you said, never touch it. I mean, yeah, you get to make that decision. The whole idea of just never touching that account was something that you, that was a role you put on that money. No one, you know, forced that. So I would say I would be a little bit more flexible with it. And I'm assuming you guys don't have any debt and have an emergency fund in place and everything, correct?

1:00:02Ken Coleman:Yeah, about$40 ,000 emergency fund. The only debt is our mortgage for a thousand a month,$500 ,000 left on the loan. What kind of retirement savings do you have at this point? I know you're a young man, but I'm just curious what your 15 % is looking like in Babyset 4. uh yeah it's it's it's it's i don't know normal i'm i'm 36 years old i worked professionally for the first half of my professional life not making much money so there wasn't much there sure um but over the past five years i've had a pretty good job and have been contributing four percent to it

1:00:36Rachel Cruze:for the last five years okay that's great yeah so i would um are you just doing four percent is that the match?

1:00:43Ken Coleman:Yes.

1:00:43Rachel Cruze:Okay. Yeah. So I would, I would be investing 15%. So I would be upping your retirement. I would totally use some of this money in this account. And then that will be replenished with a hundred grand cash that's coming to you in the next year. Now the, the rest, the bond, I'd understand that. But the, the other big chunk, the 2.5, that's in, that is in real estate, correct? That's not...

1:01:08Ken Coleman:Yeah, so that's the current valuation of what is commercial real estate properties in Los Angeles. Perfect.

1:01:14Rachel Cruze:Okay, wonderful. So yeah, that's exactly what I would do, Brian. I know that's... What a beautiful legacy that your grandfather just...

1:01:23Ken Coleman:Love that guy.

1:01:24Rachel Cruze:Built up, passed down generationally, and still has grandkids intact, right? Like, Brian, like, you know, you've stayed out of debt and built up your own emergency fund, your own brokerage, like you're you're doing it and then that's the beautiful thing is that what money magnifies and when money magnifies great habits and stewarding money well like that's a that's a wonderful thing this money's not going to ruin you it's actually going to continue you're going to pass that down generationally through your kids and so on so um wow that's amazing absolutely amazing so yeah um i would use part of the 150 to cash flow some home renovations and it's okay if it's a once that's totally fine you guys have the cash for it you're in a position to do it And then when that$1 million bond comes, when your grandmother does pass, yes, I would probably, yeah, cash that out and invest that.

1:02:14Rachel Cruze:And that$1 million sitting in a brokerage account long term is going to be a beautiful thing, too. That's in the future, which is awesome.

1:02:20Ken Coleman:That's huge. And that's going to fast forward your retirement savings. And obviously, if you continue to be as smart as you've been.

1:02:26Rachel Cruze:Yeah, don't slow down your stuff.

1:02:27Ken Coleman:You guys are in great shape. But act like none of it's coming is the idea here. And then you've got a big decision to make. We got to find out where we're going to put that salmon. I think America wants to know, by the way, how big of a fish is it? Did you measure it? Yeah. Well, the weight, thank you. First of all, thank you for all that. I appreciate it. The weight of big hog is listed on the plaque. I don't know much about salmon. I asked my friend who's a big salmon fisherman. He told me if it's 25 pounds, that's a huge salmon. The weight of the salmon says 73 pounds. It's huge. Oh, it's like three times.

1:03:02Ken Coleman:What's the size? What is it? end to end. Do you have any idea? Oh gosh, I haven't measured it. What would you guess? Big enough to struggle to get through the doorframe. I can tell you that. Oh, so basically a yardstick, at least a yardstick wide, if you know what a yardstick is. Oh yeah. Okay. Yes. Holy smokes. Ken's more excited about that fish than when you walked in the house. Well, you know, listen, I've heard people talk about millions all the time. When was the last time you heard anybody talk about a 70 pound plus salmon? That's pretty special. Yeah.

1:03:30Rachel Cruze:Not like a tuna, a salmon.

1:03:32Ken Coleman:A salmon.

1:03:32Rachel Cruze:And they're not saltwater, right? Same or freshwater. So that's in a river somewhere in Alaska. That could beat me.

1:03:39Ken Coleman:Where did he catch it? That's crazy. Tell us real quick. Where did he catch it? Yep, Alaska. Oh, there it is. Unbelievable. You know, and what's funny is there was a giant bear that had been stalking that thing. Big hog. Brian's grandfather got it. And a bear came looking for him. He's no longer there. Where is he? Grandpa got him.

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1:05:07Columbus.

1:05:08Ken Coleman:Oh, I'm sorry. Couldn't hear myself in my ears, everybody. I'm not having a, you know, attack of some kind. The cord got pulled out. I was like, yeah, I can't hear myself. The wire shorting out. That's what's happening. So that's, let me see if I can manually adjust that. Okay. There we go, folks. All right. It's live, folks. You got to keep pressing through. Joseph is up in Columbus, Georgia, and I can hear myself and hopefully I can hear you, Joseph. How's it going? All is well here in Columbus. Just had a couple of questions for you. Okay, go for it. Thanks for taking my call. Sure. Yes, I am married, 67.

1:05:45Ken Coleman:My wife is 68. And we both are retired. And we both enjoy traveling. Her a lot more than me. But we got a question about getting a credit card for using those lounges, the Sky Lounge and all those things, the Centurion Lounge. Yeah, I got a question about getting a credit card for those purposes. You don't want to sit among the people. You want that private experience, huh? Well, at first my wife wanted it. But then when I experienced it, I thought I was pretty good as well. So, yeah, I don't carry any credit card debt. But I wondered, I know I did the Dave Ramsey program back in 2011. And she did it a year before me.

1:06:36Ken Coleman:And we both have been debt free since that time. And just wanted to get your opinion on what do you think that's a wise idea to try to get a credit card for that purpose?

1:06:49Rachel Cruze:Yeah, so the way I would look at it is, you know, choosing to do that. On one hand, you know, some people it's like, it's just not a big deal. You pay it off every month, you get the privilege of being in the airport lounges and whatever. And then on the other end of the spectrum, it is kind of saying, hey, I'm going to shift my philosophy around how I do money. And I'm going to choose now to spend on a card that I'm going to have to pay off every month. And what we have found data wise is that you do end up spending more when you spend with a credit card. And so there is something to be said of, hey, I'm going to shift my financial philosophy for an hour once a month in a lounge.

1:07:33Rachel Cruze:And so to me, not worth it. They're nice. I've been in them before with friends and yeah, they're fine, but they're also just fine. You know, I could sit at a airport restaurant and get a glass of wine and a dinner and call it a day.

1:07:48Ken Coleman:You know, you are a woman of the people. You like to be out there among the folks.

1:07:53Rachel Cruze:No, but I, yeah. So to me, Joseph, it's, it is shifting into an industry that I just have a lot of disgust for. I just don't like the credit card industry. I don't like playing their game. I don't like the fact that a lot of miles and cash back and everything, the way they make their money is off of people who can't pay their bills and end up, you know, having to pay interest and all of it. It's just, I just don't like the game. And so I choose not to play it.

1:08:20Ken Coleman:Honest question, Joseph, because it's been a while since I've done any of the lounges, right? I don't even – but isn't that a function of how many miles, air miles you have? You don't have to have the credit card to have access to those, do you or do you? Some of them you do. Some of them, if it's named by the credit card, I've seen those. But if it's – Like a Delta lounge. That's what I'm saying. That you can accumulate if you're flying Delta and you're near, obviously, the world headquarters. So you don't have to have a credit card to experience that, certainly if you're flying Delta. I would look into it, but that's just a function of you're stacking up miles and then you get privileges.

1:08:56Ken Coleman:Okay. All right. Yeah. Well, that sounds good. I appreciate your insight on that. Yes. Thanks for calling. Appreciate your call.

1:09:03Rachel Cruze:Have fun traveling.

1:09:04Ken Coleman:Oh, I love that. Sarah's up in Las Vegas. Sarah, how can we help? yeah my question is um my husband has a potential job promotion opportunity within the next few months along with that is a requirement that we have a five-year-old or newer four-door vehicle that we have to supply which we don't have right now and the only way for us to get that would be to use our almost fully funded emergency fund So the question is, do we forego the promotion completely because we can't do that? We can't provide the vehicle. Or do we use our emergency fund and get the vehicle if we get the promotion?

1:09:51Rachel Cruze:How much more will the promotion be? Well, it's base plus commission. So I don't really know. But your boss is hopeful and optimistic that it could be up as much as double.

1:10:06Ken Coleman:explain to me um why the four-door vehicle that's required for this oh he because the job would be an outside salesperson and he would likely need to use the vehicle to transport things to job

1:10:20Rachel Cruze:sites or whatever it's just a requirement for the company okay got it and do you guys have a current car you could sell and put some cash towards it we do but it's not it's it's already a really old

1:10:33Ken Coleman:beat up car.

1:10:33Rachel Cruze:It wouldn't be a significant contribution, but we could. Yeah. Because if it has to be a five year or newer, if you went on the five year, how much money are we talking? Are you seeing that you're like, okay, this is how, how much we'd have to spend on this car? The research that he's done so far, he's found things in the 13 to 15 range, but it would be nice to go up as much as 20, but that's, that's more than half of our

1:11:01Ken Coleman:fund. I just want to look at this from every angle possible here. So when would he have to take this job or when would he start? In other words, actually, the better question is when would you have to have the car if he takes this? That's not a hard and fast deadline. We don't really know. The job could start as soon as two months from now. The vehicle requirement could maybe be fudged through the end of the year, but we don't know. Okay, whoa, whoa, whoa, whoa. So when can we know that answer? I don't know. A lot of I don't know. I appreciate the I don't knows, but I'll tell you what I would be doing if I was in your shoes.

1:11:45Ken Coleman:I would be getting the answer to that question. They've offered him the job. I have asked that question, but I haven't received the answer myself. Well, who'd you ask it of? My husband, when he was telling me about this in the first place. Hubs needs to get these answers. Here's why. It already sounds as though we have a gap here to where, I love how you used to fudge, right? But if they're going to give you a little bit of leeway, you can't be the only people that have ever been in this situation before.

1:12:11Rachel Cruze:That's where they don't give you any allowance or anything.

1:12:13Ken Coleman:Let's just assume it's into the year. Okay? Yep. Could you guys, I got to believe you guys could scrape together$13 ,000 to$15 ,000 between now and into the year.

1:12:22Rachel Cruze:Yeah,$1 ,000 a month.

1:12:23Ken Coleman:Yes or no? no we well actually maybe what if you sold some stuff frachel and i came over and we're around your house looking around what could we yard sale and could we could we sell enough stuff to make

1:12:40Rachel Cruze:twenty five even if the car's three thousand dollars you know that's three thousand out of

1:12:43Ken Coleman:thirteen you know the other car right that's my point what well here's here's the exercise okay what you and your husband you sit down tonight and go what do we need to do to come up with $13 ,000 to$15 ,000. And the other thing is he needs to start giving you some answers on how much time he has, because if he can double his income and it requires us to sacrifice and scrape and sell and go do extra jobs between now and that, I would absolutely do it.

1:13:11Rachel Cruze:Yeah. But I wouldn't consider this an emergency, Sarah. I agree with that. Yeah. So I would have a really hard... And I don't either. That's why I'm in this place. I would have a hard time because now if it was in the next 30 days and it's guaranteed, I'd probably pull some money out to get this done. But you guys have to the end of the year. So you have plenty of leeway and runway to be able to save and pay for this car. Now, if you've got to take a thousand bucks out of the emergency fund to round it out. To double my income?

1:13:37Ken Coleman:Sure.

1:13:38Rachel Cruze:Yep, exactly.

1:13:38Ken Coleman:I think there's some flexibility within the spirit of it.

1:13:41Rachel Cruze:I would push hard to say, I don't want to touch that emergency fund and what you guys could do. Do you guys have debt at all, Sarah? Just our mortgage. Okay, good for you guys. That's awesome. Yeah, so I mean, I would see this as a season of sacrifice.

1:13:55Ken Coleman:I think it'd be a fun adventure to go, how can we - We need$1 ,000 a month.

1:13:59Rachel Cruze:How do we get it?

1:13:59Ken Coleman:Yeah, how do we do that? How do we generate that? I actually think that's fun. I think it's worth doing. I would talk to hubs about that tonight. And I think in the counter offer, by the way, Rachel, go, hey, listen, I want this. I could do this. You got to give me just a little bit of leeway. Here's my plan. Here's what I'm doing. And I think if they want him, sounds like they do, they can play ball with you.

1:14:17Rachel Cruze:But it sounds like a good deal. I would buy a$13 ,000 car to double man. To double man come?

1:14:21Ken Coleman:Sure I would.

1:14:22Rachel Cruze:Yep.

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1:15:57Ken Coleman:If you have a simple tax situation, like you haven't had any major life changes or big investments, you need to use Ramsey Smart Tax. It's affordable, it keeps filing simple, and it has the built-in support in case you need a little bit of help. So filing early means getting the best deals and you get that tax stress off your shoulder. So go now to RamseySolutions.com slash smart tax. RamseySolutions.com slash smart tax. Brandon is up in Salt Lake City. Brandon, how can we help? Hi. Well, I just want to start by saying thank you for taking my call. You have put out such amazing content and this one, which you know is appreciated.

1:16:35Ken Coleman:Thank you. Yeah, so I have a pretty complex question, but I'll keep it simple. And then you guys can ask questions, I think, and I'll fill in wherever you need. But ultimately, my question is, you know, I and my wife are both physicians and we're pretty financially sound. And my father is not. He has a pretty well-paying job, but still lives paycheck to paycheck and actually got into some trouble this last year and had to borrow money from me. He's actually collecting Social Security now. He's in his 70s, and he has no ability to retire whatsoever, and so has quite a lot of debt. And I'm imagining inheriting these troubles very soon.

1:17:13Ken Coleman:And I'm just kind of curious how you guys would recommend I would go about planning for the future. Well, let's address what you mean by inheriting his troubles. What are you going to inherit? Well, I think, you know, ultimately, I think either health is going to catch up to him, or he's kind of made some morally ambiguous decisions. And I'm worried that something like the, you know, the eggs are going to come home to roost or whatever. Well, his debt is his debt. So whatever he's done there from a debt standpoint, that's not coming to you. Now. Yeah, in terms of like just taking care of him, though.

1:17:47Ken Coleman:Yeah, that I understand. Yeah, he's going to be. Sure, I understand that. Yeah.

1:17:51Rachel Cruze:Are you married, Brandon?

1:17:53Ken Coleman:Yeah, yeah, yeah. Okay. We're both physicians. We make a decent amount of money.

1:17:57Rachel Cruze:Okay, yeah. How much do you guys make a year?

1:18:00Ken Coleman:So I'm in my final year of training now. next year together about 500 ,000 a year that's great

1:18:08Rachel Cruze:this is always a hard one because on one end of the spectrum some people put up pretty tough boundaries and they're just like I'm sorry your decisions are your decisions and I'm not going to have to be responsible for those and then on the other end we're not going to let our parents be homeless You know what I mean? Like, like, like there is a, there is a, um, a balance in all of this. So what I would probably do is you and your wife need to sit down and run worst case scenario. And I would, um, and then I would kind of play out, Hey, what, what would this look like? How far would we go? And then also put up some boundaries where I don't like that he's borrowing money from you.

1:18:55Rachel Cruze:I think that either needs to be a gift because it's probably never going to be repaid right I mean oh yeah yeah and that that's that it was a gift I have no okay okay okay yeah so gotcha gotcha yep um now that can be a leaky faucet for a long time unless you unless you put on you know put up a a boundary of dad I'm we're not going to give you any more money or dad I will help pay your mortgage for six months and that's it or you know whatever it looks like but those are those are boundaries is I think in a plan that you and your wife kind of come together and decide, hey, you know, are we, what are we willing to take on?

1:19:33Rachel Cruze:Because you're right. I'm like, if he has no retirement and if something happens to him health-wise, he's not going to be able to work. So he's going to have no income coming in.

1:19:42Ken Coleman:What's his social security payment every month? Oh man, I don't know. I don't know what that is. I'd find out. The reason is, is to. I think it's It's a dicey situation because he's also a very private person. And for me to become invested in his finances, and I understand that can be a stipulation if he needs help in the future, that I have to be able to be invited into his financial life. But to do that right now, I think he would blow up. Great. So here's the deal. You know what happened? To get you guys like a – I'll go for it. No, I'm digging, and you just answered your own question. He's super private.

1:20:20Ken Coleman:He'd blow up or get angry if you weighed in. So you know what you and your wife do? Exactly what Rachel said. And that's it. Don't do anything else. Say, if there's no one else to take care of him, we will. And in that moment, you can do the best you can to guess what his social security is. But you go, OK, he's going to get that until he dies. Yeah. And that would be the only income he has. We can't assume that he has long-term care insurance. We can't assume that he has. We know he has no investment. We know that. So to Rachel's point, you plan for what you would do. You guys are doctors, so you also know the data.

1:20:53Ken Coleman:If he had to go into assisted living, what is the average amount of time someone lives in that setting? I mean, you can do some homework and go, okay, absolute worst case scenario, this is what dad's situation is going to be. And if no one else can help pick up the bill, then that's something we got to plan for. And I think you can – it's almost like planning for your kid's college here. You may have to invest some money.

1:21:21Rachel Cruze:Where's your mom, Brandon?

1:21:25Ken Coleman:No, they're not together.

1:21:26Rachel Cruze:Okay, they're divorced. Do you have other siblings?

1:21:29Ken Coleman:Yes, I do. But my other siblings are not capable of assisting financially, unfortunately. What kind of debt do you guys have? Me and my wife? Yeah. So we don't own our home, but are planning on buying a home next year. But we're currently, we have student loan debt, but our savings and retirement are greater than any debt we have. We have no credit card debt. We have no car payment. Walk us through that. What's your medical, I mean, not medical, medical school. Student loan. Student loan, thank you. Student loan debt. What is that? There you go. Yeah, so$300 ,000 for the both of us. Okay. And then what do you have in savings?

1:22:08Ken Coleman:So we have about$120 ,000 in savings. Okay. And about$250 ,000 in 401Ks. 401ks.

1:22:15Rachel Cruze:Great. So yeah, I wouldn't touch the 401k, but obviously doing the Ramsey plan is to pay off that student loan debt. So half of it is in savings. And then what you guys, you'll make 500 ,000 so you could pay it off in six months, you know, so making sure that you get all that taken care of, of course, before you try to take care of that. Yep. Yeah. So making sure that you guys are in a good spot, which I think you will be pretty quickly if you do that stuff, um, and rebuild your emergency fund. Um, but yeah, this is always, yeah.

1:22:42Ken Coleman:Can I ask how, when he, like, if you know, uh, like the debtors come to collect and he can no longer afford his apartment, if I end up paying for an apartment for him, does that, does his debts in the apartment that he lives or the car he drives that all goes away, but whatever I provide for him is not a part of that equation uh if it's in his name then it has nothing to do with you debts leases all of it

1:23:09Rachel Cruze:yeah but you could furnish an apartment under your name i'm assuming however the apartment complex does that um so yeah so like that but it's not really an asset because he'd be renting but they couldn't come after him in any way with that because it would be under your name

1:23:24Ken Coleman:that's right okay yeah i guess that was kind of my fear that yeah his debts would make it It prohibitively difficult for me to take care of him. That's right. I hear what you're saying.

1:23:33Rachel Cruze:Yeah.

1:23:33Ken Coleman:It's kind of independent.

1:23:35Rachel Cruze:Does he own a home?

1:23:37Ken Coleman:No, no, no, no. He, no. He, and just to get like a scope into this, he actually tried to go back to school in his seventies and took out student loans to do that and then ended up not going to school and just using that money to buy a car.

1:23:49Rachel Cruze:Stop it. Oh my God. How much debt do you think he has?

1:23:53Ken Coleman:Oh man. If he told me$500 ,000, I wouldn't be surprised if he told me$10 ,000, I would be surprised. geez yeah well it sorry you're sorry you're carrying this bird it's terrible brandon oh yeah but i would tell you this i want and i say that but i want to quickly say make sure you understand what you're supposed to carry and what you're not okay you're the only sibling that's going to be able to take care of him that's a burden but you do not have to worry about his debt you don't have to worry about his mistakes you understand what i'm saying like once you know All that stuff will be written off.

1:24:29Ken Coleman:He didn't have a pot to pee in is the old phrase. And so none of that's going to come back on you. That'll get wiped out. So you only have to carry the burden of taking care of dad when he can no longer take care of himself. And that's the medically. And so you can plan for it, but clean up your house first because you don't want that to be a stressor. It's already going to be a potentially resentful burden.

1:24:51Rachel Cruze:And I want you and your wife on the same page, too. I don't want that to be an issue. Yeah, yeah.

1:24:55Ken Coleman:We're both very family-centric, and she's like, hey, whatever we need to do, I trust you. And we're definitely together.

1:25:02Rachel Cruze:Yeah, so if it does come to the point, and you probably know this, of you having to help financially, always give in terms of an actual item, meaning like don't give them cash, right? That if you end up paying the rent, you pay the rent and the utilities. get a gift card to the grocery store and it's like you get a hundred bucks or whatever it is, as much as not handing over cash because he obviously doesn't know how to handle that. So Brandon, you're a good son and a good husband. So yeah, we're with you guys.

1:25:56Ken Coleman:welcome back to the ramsey show in the fair winds credit union studio alongside rachel cruz i'm ken coleman excited that you are with us triple eight eight two five five two two five is the phone number eileen is up next eileen how can we help hi um i'm calling about uh a trust that my husband's family has. And we always thought when he passed, or if he passed before me, that I would be the one that would inherit his share. And we have found out that it would go past me and to my daughter. And we're just wondering if it would be ethical for us to ask her to split the inheritance if he predeceases me.

1:26:43Ken Coleman:So it hasn't, just to make sure, it hasn't happened yet? He has not passed?

1:26:47Rachel Cruze:No, he is still here, and we were just, we're in our cities now. We're trying to figure out what to do. But his wishes are for it to go to the grandkids.

1:26:58Ken Coleman:Well, it was set up, you know, 80 years ago. The people that are the primaries of the trust are the grandchildren, and my husband would be a great-grandchild, and it goes through the family name. Oh, so it's beyond even your husband's parents, a generation above them.

1:27:19Rachel Cruze:Yes, it's generations. Yeah.

1:27:20Ken Coleman:So he can't change it, correct? He cannot change it. It would just be.

1:27:26Rachel Cruze:Has it always skipped a generation? Is that part of it?

1:27:29Ken Coleman:It doesn't skip. It just follows the family name. So he gets a trust check, as does everybody else in that generation of the family every quarter. But it's and the generation that currently is on those trusts, when they pass, it ends and the money would be distributed. Right. But then the money is distributed to skipping a generation, skipping a generation. Only those with the name. With the name. Exactly. It wouldn't skip. If my husband's alive, he would receive it. If he is only if he pre-deceased them. What about your daughter if she were to get married? it would still be she would still be the family name she's the the got it okay i'm tracking now it's the it's the lineage it's following the name through okay got it yeah yeah no i i gotta tell you when you first said it i i was first gonna go well i feel like you gotta talk to talk to the old guy about it and let him weigh on it but it's not his call right yeah so it's already been

1:28:28Rachel Cruze:set in motion yeah they're trying to keep it in the blood yeah and it feels yeah and uh i don't

1:28:33Ken Coleman:want to speak completely on behalf of my colleague here, but we both had a kind of gross face when we heard you say, is it okay to talk to my daughter and say, hey, I know this is supposed to come to you by the bylaws and in stone, but how would you feel about cutting us in? I personally would feel gross about doing that. That's my take.

1:28:53Rachel Cruze:Yeah. I would say, Elaine, that you and your husband need to set you guys up that if something happens to him, that he has life insurance and that you're taken care of and that you don't need this trust because you guys are in a good spot, you know?

1:29:06Ken Coleman:Yeah. Yeah. We never had it. And it wasn't until we were in our sixties because we always assumed and had never checked how this passed. Yeah. That's how we. So you guys didn't do life insurance.

1:29:19Rachel Cruze:Is that what you're saying? Because you knew this money was coming. Yeah. So I wouldn't, that would not be how I would, I would function more independently of that.

1:29:27Ken Coleman:How are you set up for the future? What's your current retirement situation? You know, we probably have$3.50 maybe put aside between 401ks and savings, et cetera. And another, maybe the mortgage.

1:29:49Rachel Cruze:Did this whole trust issue, like, do you think it demotivated Joel?

1:29:54Ken Coleman:No. We were in a bad position for many, many years. Okay. Do you go in your home? We do. We do. We still have a mortgage, but we probably have$300 ,000. $99 ,000, I think. Okay, that's great. How much do you guys make a year? Only about, I would say about$89 ,000 combined. And what will the house be worth? If we sold it today, over$400 ,000. Okay. All right, so that's getting us near, let's call it$700 ,000. Okay. Any other savings or anything beyond the house equity and the retirement fund? Anything else?

1:30:39Rachel Cruze:I don't think so. I don't think I'm missing anything. Okay. And how old is your daughter right now?

1:30:45Ken Coleman:24. Okay. And how long do you guys feel like you're going to work? um you know probably well the the work we're doing now we'd probably like to stop by 65 67 and find something else we both have more physical jobs okay yeah and the reason i'm saying that is because uh based on history rachel knows this that you know that three how much did you say you had in retirement 350 combined maybe three yeah uh two so over the next 350 all right so that should double over the next seven years. Okay. And then if you look at your home, so you start adding the numbers up. Okay. And so now you're looking at, uh, what do we got?

1:31:28Ken Coleman:400 on the house. So what? 1.1 million in seven years. Uh, I don't know what your social security situation will be, but you start stacking all that up and you know, whatever you guys can do over the next seven to 10 years to invest a lot of money, uh, that's going to help you be far more comfortable in your 70s and 80s.

1:31:49Rachel Cruze:And when you think about it, Elaine, and again, all the, your call's hypothetical, right? Your husband has not passed. None of the, yeah, nothing has happened. Totally. Yep. So again, hypothetically, you know, if, if, if the grandparents are still living for another, I don't know, 10 years, 15 years, you know, you're such, and then your husband passed, if he passed away, then technically you would have probably at that point, a half a million,$600 ,000 home that you can sell and downsize, put that cash with the investments and you'll have well over 1.5-ish million. You'll be fine without this inheritance is what I'm saying.

1:32:28So yeah, I probably wouldn't worry about it.

1:32:32Rachel Cruze:And I do feel weird saying, yes, ask your 24-year-old daughter for her inheritance. I don't know.

1:32:39Ken Coleman:We don't even want her to know that that's the possible amount because we don't want it to, take her in any way.

1:32:47Rachel Cruze:That's fair.

1:32:47Ken Coleman:Take her drive. Remind me, what was the amount? Probably around$2 million, but at$24 million, that could be, you know, you could blow through that. If that were something that happened, but of course that's hypothetical as well.

1:33:02Rachel Cruze:They would have to pass and your husband would have to pass.

1:33:04Ken Coleman:Yeah, I appreciate the question. That's where we stand on that. But I think more importantly, your focus needs to be, hey, we can actually finish well, But we should probably get some intensity and see what we can do from an earning standpoint, certainly tighten things wherever we can tighten to invest as much as we can at this stage. And over the next 14, 15 years, that's going to turn into a sizable chunk for you guys that should allow you some dignity and some comfortability. That would be my main focus if I were you. Sounds good. Yeah, thank you so much. Yeah, that's a good question. Yeah, thanks for the call.

1:33:35Rachel Cruze:That's a hard thing. I hear that with wealthy families passing on generational wealth that it stays within the family. And I get that in one sense because it is like, what if dad remarries some crazy woman and she, you know, he passes and she takes all the money. You know, it's like kind of a drama moment of a movie. Feels like I've seen that a few times. But you also want there to be like a little bit of an addendum of like, okay, if you've been married more than 30 years, the wife can get the money. I don't know. Do you know what I'm saying? Like, I don't know what that looks like.

1:34:05Ken Coleman:That's very interesting. I mean, you give her an out after 30 years, she cashes out.

1:34:11Rachel Cruze:Well, that Elaine would get the money, like if her husband had passed. I see. Like in the will or in the trust. If she passed.

1:34:18Ken Coleman:I thought she meant like, you know, I've done my time. I'm out. I'm checking out. It's been a good run, but I'd like to be on my own and travel. I thought that's what you were talking about. No, I get that. I like that.

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1:36:16Ken Coleman:That's RamseySolutions.com slash market. Elise is up next in Virginia. Elise, how can we help? Hi, Ken and Rachel. Thank you so much for taking my call. Can you hear me okay? Loud and clear. Perfect. In December, my husband's Roth 403B was incorrectly transferred into a traditional IRA account and has since made$1 ,000. Is there any way to transfer the money to the correct Roth IRA account without paying taxes on the whole account all over again? Who did this? Who made the falsely transaction? So we opened up an account with a financial institution and selected rollover, but it did not say traditional or Roth.

1:37:08Ken Coleman:and then indicated to the first financial institution that it needs to be a Roth rollover, but the number listed was a traditional account. Instead of not going through, they cashed the check, and when we're doing our taxes for this year, found that it was not Roth. It was traditional. Okay.

1:37:37Rachel Cruze:Has he fixed, has he gone in and fixed future contributions or have you guys not even funded for 2026?

1:37:45Ken Coleman:We just stopped funding the account as a whole until we can figure out what we're supposed to do.

1:37:52Rachel Cruze:Yes. Okay. Well, there is something called, um, recharacterizing the contribution. And so you may be able to do that without penalty or tax before tax deadline, which is in April, it's coming up. Do you guys have a tax pro that you're working with?

1:38:11Ken Coleman:We do, but I'm not sure how much I love our current tax person because they're saying there's no way to do it. And the one financial institution is potentially recommending an excess removal of funds, but I'm not sure if that would trigger taxes on the cost basis of the account.

1:38:31Rachel Cruze:Yeah, I would get a because there is a there's a small lane at which you can do this because it is from a time period perspective so quick. And it's only, you know, I mean, the amount, I guess, doesn't really matter. It's more the time frame that you're looking at. So I would probably go get a second opinion. If you go to RamseySolutions.com, you can check out one of our tax pros that's in our trusted program. And I would I would get on the phone with one of them and ask. but also if if if that can't happen if you guys can't be in that lane and you do have to pay

1:39:04Ken Coleman:taxes is it just a thousand dollars no the cost basis is 82 000 and then 1 000 of growth so i don't mind paying taxes on the 1 000 of growth yes but it'd be like a 20 000 tax bill yeah totally

1:39:18Rachel Cruze:yes i would i would contact a ramsey trusted um tax pro and again go to ramsey solutions.com but But yeah, to recharacterize the contribution is a way you would do that if you can. But I'll be honest, I'm not 100 % sure.

1:39:35Ken Coleman:Me either. And again, I appreciate your spirit of saying, well, I don't like our tax person because they said we can't do it. But let's get a second opinion and a third opinion. If all the opinions line up, you don't have to like it, but it is what it is. It's unfortunate. Hopefully, you guys can undo that and not take too much of a hit. But unfortunately, you may just be stopped. What's that? If we do have to, like, we can always leave it in the traditional account, but we're 34 and 35. So by the time we retire, it'd be like 1.6. Totally. Yeah.

1:40:07Rachel Cruze:So yeah, if you have to end up paying taxes on it, I eventually would. You can roll over some per year so you're not hit with an entire tax bill of 20 grand. But I would eventually convert all of that 82, yes, to a Roth eventually. So, again, you can break it up year by year if you need to from the tax perspective. But I'm with you. Yes. If you're in your early 30s, I would get it to a Roth. But that's so frustrating. I'm hoping there's a way out for you guys if you get a good tax pro in your corner.

1:40:36Ken Coleman:And silly question here. Do we know whose fault it was? And I hate using the word fault. But was it you guys clicking on the wrong button or was it a mishap, a mistake made by the institution? So our accountant says that it's the financial institution's error and it's their responsibility to fix it. Okay. The institution says it's on our tax person to file the correct paperwork that indicates XML was a cost basis. Okay. And your tax pro is not willing to do this? Either yes or they're saying it can't be done. because they switched it to where you can't recharacterize the entire account. But I do think you can recharacterize maybe a contribution like Rachel's talking about.

1:41:26Ken Coleman:I just am not 100%. Well, here's my point. I don't know about that. Might be worth looking to a lawyer, you know, who specializes in this area.

1:41:37Rachel Cruze:Because someone – Because the tax bill is a tax bill.

1:41:39Ken Coleman:And if it's on the financial institution, I would want to get two or three opinions that are legitimate. That would say, yeah, it's on the financial institution. At which point now you have, you know what I mean? That's where I would be going right now. I would exhaust that and, you know, not have to take this on yourself.

1:41:59Rachel Cruze:That's so frustrating. I'm so sorry. So sorry, at least.

1:42:02Ken Coleman:I'd fight, though.

1:42:03Rachel Cruze:That human error and all of it ends up costing you money.

1:42:07Ken Coleman:Bruce is up next in Charlotte, North Carolina. Bruce, how can we help? Hello, Rachel and Ken. Thank you for having me. Sure. I'm a 62-year-old disabled Air Force veteran and a retired social worker. Today, I just bought my 62-year-old fiancé an engagement ring. Hey, congratulations, Bruce. Thank you. She doesn't know it yet. I'm going to ask her later this year to marry me. My question is, I earn about$52 ,000 a year, and she earns about$150 ,000 a year. We both are homeowners separately, and so I would like to come under one roof eventually. I live very inexpensively. She has a much larger house, costs a whole lot more, and her interest rate is a whole lot higher than mine.

1:43:01Ken Coleman:I live on that income. I live about$1 ,700 or$1 ,800 a month with everything. I have no debt besides my house. She has no car payment herself, but probably 20 grand in credit card debt. So with that, I would like to know whose house do we sell first? How do we make this? You know, how do we come together on the one roof? I don't want to live in her house permanently, and I don't mind if she lives with mine until we sell it. Why don't you want to live in hers?

1:43:35Rachel Cruze:I'm just curious.

1:43:37Ken Coleman:Her house is very much hers. She loves having me there, but my preference would be for us to sell both properties. And buy something together. Yes, ma 'am. I would like that. I do a what-if conversation between now and the end of the year before I pop the question.

1:43:55Rachel Cruze:What does she want to do? Have you guys talked that far?

1:43:57Ken Coleman:We have talked that far. She really, really, really loves my house. In fact, she does not want me to sell it because I live on a man-made lake and it's very pristine and beautiful and peaceful and all of that. But it is small. It's three bedrooms and two baths, but it's small. Does she want to live in that house? She would love to live in this house, but then when we talk about it, she wants to make it larger and do things that I'm just don't see the need. You got a bougie girl, Bruce.

1:44:29Rachel Cruze:I'm telling you. You got a spender. And I appreciate that. That's going to be me at 62. I'm going to be like, listen. Yeah. So what I would do is, yeah, I would come together and have this conversation and just say, hey, there's probably going to be a middle ground. And I think finding a new home for both of you could be great. Selling both. We don't really talk about prenups a lot, but that would be something as you're older and if you guys both have grown children, be thinking about your assets in that way. Yeah. So some things to think about for sure, Bruce. But congratulations. We are. Yeah.

1:45:01Rachel Cruze:we're excited for you. But combine the money as much as you can when you guys get married and become one.

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1:46:08Ken Coleman:The Ramsey Show Question of the Day is brought to you by Why Refi. When your private student loans are in default, your progress stalls out. Why Refi helps you restart by refinancing defaulted private student loans and a low fixed rate payment that fits your budget so that you can stop spinning your wheels. Visit whyrefi.com slash Ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey. It may not be available in all states. All right.

1:46:34Rachel Cruze:All right. Today's question comes from Marissa in Louisiana. My husband and I disagree on what non-essentials to eliminate, on what non-essentials to eliminate while paying off debt. I think cutting subscriptions like Netflix, along with purchasing sodas, eating out, coffee shops, stops, pet treats, et cetera, will make a big difference in paying off the amount of debt that we have. My husband thinks those are small in comparison to the debt that we have, and we should not cut those things out because they make us happy. What is your perspective on this dilemma? Oh, man. Well, there's just an overarching philosophy that is just true mathematically that the more you sacrifice and the more you don't spend on things and the more you put it towards debt, the faster you're going to get out of debt.

1:47:24Rachel Cruze:So what does that look like in a process? You know, Jade Warshaw, her and Sam paid off, you know, gosh, half a million dollars and it took seven years. So Jade would say there were certain seasons of that seven years of like, hey, we need a little bit of a breather here or there. But they were pretty gung-ho the whole time. But there were things that they did to survive for seven years, right? So if it's a long-term play, like a major marathon, and I'm talking three, four, five, six years, there may be the little things here and there that cost, you know, nine bucks, but it just gives a little joy through it.

1:47:59Rachel Cruze:That's great. But if you can do this in nine months, I'm like, cut everything and get it done. Does that make sense? There's a little bit of the longevity approach.

1:48:07Ken Coleman:I agree. I think everything on this list I'd cut except for the pet treats. And I'll tell you why. I've got two doodles. I love my doodles. You and George and your dogs. But listen, everything. Okay. Netflix. Sure. Sodas. I would pay for a soda.

1:48:23Rachel Cruze:No, pay for a soda.

1:48:24Ken Coleman:It's not healthy for you. Too much sugar. Eating out. Absolutely. We know what Dave says. You don't see the inside of a restaurant unless you're a waiter. You know, that whole deal. Okay, here we go. Coffee shop. Overpriced coffee. Make your own. But the pet treats. Let me tell you why you keep the pet treats. Your dog will be fine. No, they won't. Because my doodles every morning. I get up before everybody else. These dogs, I let them out, I let them back in, and I'm getting my coffee ready. I got a whole process. They would drive me to the brink of insanity if I didn't give them their treat in the morning.

1:48:56Rachel Cruze:Joe knows. Everyone's nodding in the booth. No. Give that dog a little peanut butter on a little cracker and call it a day.

1:49:04Ken Coleman:Call it a day. Now all of a sudden you're Mrs. Cut the budget on the dog treats.

1:49:08Rachel Cruze:Call it a day.

1:49:09Ken Coleman:Peanut butter on a cracker?

1:49:10Rachel Cruze:Sure, that's a treat. That dog doesn't know it's a dog.

1:49:15Ken Coleman:that's true my doodles totally think they're human completely and by the way doodles do think they're they act like it they act like humans and i love them for i love my doggies all i'm saying is everything else i would put the doggy treat in the grocery budget and don't go crazy with them yeah no i hear you don't compare me to george i hear you that's a that's a bridge too far uh logan is up next in dallas texas look oh what did i do oh no oh boy you hung up on logan i hit the wrong button.

1:49:45Rachel Cruze:You got so flustered. Hold on.

1:49:46Ken Coleman:I'm so flustered about the doggy treats. I'm up in arms. I got it. All right. There's Logan right there. Logan, I'm sorry I pressed the wrong button. How can we help? No, all good. I think I may be the first person in Ramsey history that y 'all hung up on. You know, most of the time it's people hanging up on y 'all. That's true. You know, I've never hung up on anybody.

1:50:07Rachel Cruze:Actually, Dave hung up on someone on Monday.

1:50:09Ken Coleman:Next to me. Yeah.

1:50:10Rachel Cruze:He was feisty and he hung up on somebody.

1:50:12Ken Coleman:And I got to tell you, I enjoyed it. It was fun to witness, but I won't do that to you. Logan, we will not hang up on you. I'll be on my best behavior. I promise. We'll see about that. What's going on? I am calling with a question. My wife and I had our first child in October. Congrats. Thank you. And I thought we were being very responsible and started saving when we figured out we were pregnant up to our out-of-pocket maximum with insurance. Well, we have now gotten to where we have met that out-of-pocket maximum, but still are receiving hospital bills. And these hospital bills are to about the tune of$1 ,400.

1:50:56Ken Coleman:So I'm a little bit conflicted with how to handle that. I have the money to pay it, but I don't necessarily feel like I should. You're right. I'm looking for some guidance. All right, you are right. If you are saying, if what you're saying is true, yeah, I'd be the worst nightmare of my insurance company until they got so sick of hearing my name. Because if the policy is the policy and you've hit your out of pocket, then hold your ground.

1:51:26Rachel Cruze:And look, I'm not shocked. The billing within the medical world, everything, it's horrible. So honestly, it's probably an administrative error, to be honest. They probably didn't even hit something in a computer they should have.

1:51:36Ken Coleman:Wait a second, he's got a retort. Oh, what is it? So we have been down a few rounds on this. My wife's talked to the insurance company. I don't even want to know how many times. I've been on the phone with them a couple. She has a lot more patients than I do. But all of that to say, they are claiming that the reason for the overage is that this hospital, which is in their network, exceeded the amount for a private room that they allocate on the policy. However, this hospital that, again, is in their network does not have any other option. It's not like we opted for some sort of an upgrade to get the fancy room.

1:52:17Rachel Cruze:It's just the rooms there that cost that much.

1:52:20Ken Coleman:See, that's between the hospital and the insurance company, and I would just absolutely fight to the end on that. This is the kind of crap that the American people are having to deal with. I'm so sorry that you're having to deal with this. I guess the question is who do I need to fight? Point me in the right direction. Both of them. Is that the insurance company? Is that the hospital? Both of them. I'd go to the hospital and I'd say, you aren't going to get paid on this from me. So this is where you guys go to the insurance company and fight it out with them. Yes. So I did that and they could not help me over the phone.

1:52:55Ken Coleman:Of course not. I could not get a hold of somebody who had the authorization to settle the amount. I was told to send an email to some very generic billing email address. So I, you know, got on ChatGPT and got some help with professional wording that was maybe a little kinder than what I would have written. I'd show up. I'd show up. Okay. Show up. Show up and just, okay. Just go, hey, here's the deal. I got an outstanding situation. You guys want to get paid on this$1 ,400 bill. Let me tell you where I'm at. And you've told me to do all this. And I've done it, by the way. I can show you my record of sending the email.

1:53:32Ken Coleman:Go in there and make the case and go, hey, I'm not mad. I'm not going to threaten anything. I'm here because I need you guys to get together and insurance. And I would, you know, I just wouldn't pay him a nickel is my point. Yeah, I would not pay him in. It's frustrating because, I mean, there's a lot of people, I have friends now and I don't necessarily agree with this, but they just don't pay it because supposedly it doesn't count against you financially or credit scores and all that. but that doesn't necessarily sit well with me like i don't want to just well you want it you want it resolved eventually i'm not saying when i say don't pay it i don't mean just you know put your head in the sand but i'm saying i would fight and put it on them and say guys i'm not going to pay something and here's why you all need to figure this out my policy says this i've done everything that i can do and you two need to get together hospital you sent the bill Insurance won't pay it.

1:54:29Ken Coleman:That's y 'all's problem.

1:54:30Rachel Cruze:How long, Logan, have you guys been dealing with this?

1:54:33Ken Coleman:So our daughter was born in October. So since October the 8th. Well, I say that. Well, when did the bills start coming in? Two months to even get the bills out. So, yeah. So, I mean, those started showing up probably late December, early January. Okay. Yeah. I'm going to double down on what I said. And let me tell you why. Because if you go talk to somebody and you're nice and you are a nice guy and you just go, hey, I'm here. I'll wait. I got two hours today. I got an hour next Thursday. I'll be here. Count on it. And here's what I want to do. I want to show you everything because you all, it's your bill.

1:55:04Ken Coleman:You have to explain to my insurance company that we didn't get an upgrade. We didn't get the corner suite with the couch pullout. This was the room you gave us. And I think if you're kind and civil and you just show and say, this is your problem, I don't owe this. And so they've got to figure this out. This stuff happens all the time. You know what happens? I believe deep down, Rachel, this is a conspiracy theory probably. Love it. I believe they just love to not deal with it, knowing that people eventually give in. And they'll just pay it. And I think if you just say, I'm not giving in.

1:55:36Rachel Cruze:It's the fight. And you hear this all the time with medical stuff. It is. The billing, all of it, it's exhausting. But for that and for your ground, if you want to stand on there, do it.

1:55:56Thank you.

1:55:59Ken Coleman:Hey guys, George Camel here. Do you ever feel like insurance companies only care about your money and not what you actually need? Well, there's a better way. When you go to Ramsey's Insurance Resource Hub, you'll start feeling confident that you're getting the right coverage that's truly best for you. You'll find helpful info on everything from life insurance, health insurance, identity theft protection, and more. And when you're ready to get the coverage you need, you can connect with a Ramsey-trusted insurance pro who will only get you what you need at the best price. Go to ramsaysolutions.com slash insurance, ramsaysolutions.com slash insurance.

1:56:45Ken Coleman:Our scripture of the day comes from Philippians 3, verses 13 and 14. One thing I do for getting what is behind and straining toward what is ahead, I press on toward the goal to win the prize for which God has called me heavenward in Christ Jesus. Our quote today is from C.S. Lewis. Getting over a painful experience is much like crossing monkey bars. You have to let go at some point in order to move forward.

1:57:10Rachel Cruze:Oh, that's really good.

1:57:12Ken Coleman:It is. Now, quick question before we move on. Are monkey bars still on children's playgrounds? They are.

1:57:18Rachel Cruze:They're there.

1:57:19Ken Coleman:Okay. I'm happy about that. Me too. My wife and I were talking recently, we were looking through some old photos. And I'll never forget the first time our oldest, who's now 20, we did monkey bars. And I got in trouble because I let him fall.

1:57:32Rachel Cruze:Oh, gosh, Ken. Sometimes they're super high.

1:57:35Ken Coleman:It wasn't. How old? And they were wood chips below, so it wasn't concrete. And when I say fall, he wasn't like panicking or freaking out. He was just letting go. Yeah, just let go. And I was right there. Yeah. And I kind of guided him as he felt, because I wanted him to go, it's okay.

1:57:50Rachel Cruze:Yeah.

1:57:51Ken Coleman:And it was not okay. Oh, no. Stacy was nearby.

1:57:54Rachel Cruze:Stacy was not happy. She's like, Ken, what are you doing?

1:57:55Ken Coleman:She had a word.

1:57:56Rachel Cruze:What are you doing, Ken?

1:57:57Ken Coleman:Uh-huh. He could have broken his leg, his arm. All for a little monkey bark.

1:58:00Rachel Cruze:All for a lesson.

1:58:02Ken Coleman:On the wood chips?

1:58:03Rachel Cruze:On the...

1:58:03Ken Coleman:A lot of wood chips. A splinter, yes.

1:58:06Rachel Cruze:Might be able to bounce.

1:58:08Ken Coleman:Anyway, I learned my lesson there. So, dads...

1:58:10Rachel Cruze:You remember that 20 years later.

1:58:11Ken Coleman:Get the hands up and let them fall.

1:58:14Rachel Cruze:A little bit.

1:58:15Ken Coleman:But catch them.

1:58:16Rachel Cruze:Right before.

1:58:16Ken Coleman:And then they're going to learn some trust in you. I was trying to do a deeper life lesson. Did not go the way I thought. Not for the three-year-old, Ken.

1:58:22Rachel Cruze:There it is. Be careful of the monkey bars.

1:58:24Ken Coleman:Amir is joining us now in Philadelphia. How can we help? Good afternoon. How are you? I'm doing well. How are you? I'm good. Thanks for asking. Sure. I wish a lot better, but I'm doing good. Thank you. Okay. How can we help? So I'm about$50 ,000 to$55 ,000 in credit card debt with another$20 ,000 on top because of my car. And I just needed some advice on how to get out. Okay.

1:58:57Rachel Cruze:Oh, man. What's the credit card debt? What caused you to go into$50 ,000 of credit card debt?

1:59:04Ken Coleman:um well i'm i was divorced about three or four years ago now okay and um i was just distraught after that i wasn't paying attention to where my money was going okay so it was just kind of lifestyle spending grief spending just in the in an unhealthy place in life and money was a little bit of an outlet to yes medicate better absolutely i don't drink or smoke but it again just not being as responsible as I should have been.

1:59:34Rachel Cruze:No, that's fine, yeah. What kind of income do you make?

1:59:38Ken Coleman:I make about$60 ,000 to$65 ,000 annually. What do you do? Truck driver, semi. Okay. And any opportunity for overtime right now, or are you capped? Absolutely. How much? It's kind of hit or miss. There's no... Okay. To give you a direct answer, maybe once a week, once or twice a week. All right, let's go once or twice a week. We're just kind of ideating for a second, okay? Once, twice a week, over a four-week month, how much extra income would that bring to you? Over a month, it would bring me maybe$200 to$400 extra dollars. Only$200 to$400, okay. Is this open road or is it local driving? Local.

2:00:30Ken Coleman:Okay. So how many hours a week are you putting in driving right now? Right now, anywhere from 40 to 50. Okay. And do you have the capability? I don't know what's going on in your relationship life, but do you have the capability of driving an additional 20 hours if you picked up a second truck driving job that had a good hourly rate? I'm thinking 20 plus an hour? That's the thing. I have a daughter. Okay. And we do have a child custody arrangement. Okay.

2:01:04Rachel Cruze:How often do you have her? Is it every other week or is it certain days of the week?

2:01:10Ken Coleman:Yeah, certain days, three days out of the week, and then every other weekend. Okay. You get where I'm going. One of the things you have to do here is get more income. And that's going to allow us to pay off$75 ,000 worth of debt. Tell me about the car really quick. How much do you owe? Well, you owe$20 ,000 on the car. What is it worth? Yeah, it's about$20. I'm not sure what it's worth. It's a 2015. It's in kind of good shape with 90 ,000 miles on it.

2:01:38Rachel Cruze:Do you think you could get$20 out of it or more? No, I think I'd be lucky to get$16,$17.

2:01:47Ken Coleman:What's the car payment every month? $600. Do you have good credit? Absolutely not. Okay. Because what I was thinking there, Rachel, is do we go to a credit union and try to get out of that car?

2:01:58Rachel Cruze:Yeah, so I would, Kelly Blue Book, this car, okay? And let's just say it's$17 ,000. Amir, what I would say is my first goal would be to get$1 ,000 emergency fund. And then I think what I would do is start to save and stockpile and see if you can make, you know,$1 ,000,$1 ,500 extra a month, okay? And within six months, you'll have six grand. So you'll get, you can throw three of that,$3 ,000 of that at this car. And so when you sell it, you'll be clean of it. And then you'll have another$3 ,000 to go buy a really crappy car when that sells. And then that gets you$20 ,000. So now you're down to$50 ,000 of credit card debt.

2:02:38Rachel Cruze:And then you can start really attacking that credit card debt. And again, with what you're making and if you can work extra, it may take you about two years to climb out of this credit card debt. But you can do it.

2:02:51Ken Coleman:however long it takes I just need to be pointed in the right direction and I'm pretty dedicated like once I get the ball rolling I just need to be told that I can do it you can, listen, let's get real numbers here if you did$3 ,000 a month now this is going to be extra income and life is not going to be fun you're going to be working like crazy but if you can do$3 ,000 a month that's going to get you out of this debt in a year and a half you gotta have that 3 000 extra on top yes what i'm or or i mean well if you play rachel's plan here like she's talking about we get rid of this car then you've got the 55 of credit card debt i'm

2:03:35Rachel Cruze:talking about that number and if you freeze up your car payment too mirry that's 700 bucks right there so out of that 3 000 700 of that for kinsmath yeah it's part of that right so really you're trying to find two extra thousand dollars or a thousand dollars right so anything extra with that car payment that you're not paying that car payment anymore because you've sold the car that's going to really free up a lot and you really will start moving and what's crazy too is um you know we talked to so many people when you're on a journey that's you know that two to three years um even four years you know you may get a raise in the meantime you know stuff stuff happens in that length of time and any extra money that you have you throw at this credit card debt.

2:04:15Rachel Cruze:And how many credit cards equal the 50 ,000?

2:04:18Ken Coleman:Five.

2:04:19Rachel Cruze:Five. Are any of them in collections?

2:04:22Ken Coleman:I think one is.

2:04:23Rachel Cruze:One is. Okay. Because if any are fall into collections, there's a good chance you can negotiate that down as well. So if that's even a$5 ,000 out of the 50 or whatever it is, 10 ,000, you could probably negotiate that for half or even less than half. But yeah, But where I would start, Amir, is I would get a thousand dollar emergency funds. Do you have a thousand dollars right now?

2:04:46Ken Coleman:Yes.

2:04:46Rachel Cruze:You do. Yes, ma 'am. How much do you have saved? I'd say about maybe twenty four right now.

2:04:54Ken Coleman:Twenty four hundred.

2:04:55Rachel Cruze:Twenty four hundred. OK, amazing. Not a lot. No, that's great. No, that's awesome. So, yep, I would keep a thousand as an emergency fund. I would have that other fourteen hundred as my get get money saved to buy a new car and to pay the difference of this car that you're in. um, get that rolling, right. Get the car situation done and give yourself five months to do that. Say, you know, by, by July or whatever it is, right. I have a timeframe and say by July, my car is going to be sold. I'm going to have enough money saved up to, to do the difference and buy a crappy car in the meantime. And then start in August, I got a two year journey to pay off this credit card debt and cut up the credit cards.

2:05:35Rachel Cruze:Don't go near them and really start, moving forward. But if you stay on the line, Amir, we're going to give you the Total Money Makeover book that'll walk you through the baby steps and every dollar. We'll give you a year subscription. That's our budgeting app that also you can plug in all of your numbers too and that can help you through the process. But we are here for you. Call us back if you need us. But that's where I would start. And you're doing great. I mean, genuinely, the first step is the belief that you can do it and that you can start something new and change your habits, which making this call is that first step.

2:06:08Deb?

2:06:10Ken Coleman:Oh, listen, remember this, everybody. There's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.