My Girlfriend’s Pregnant and I’m Scared

27:26They can't come after you. And honestly, even for him, he has nothing to give. The only thing would have been that condo, but he's getting ready to sell it and there's no money that can come from it. So in that way, he's sort of. and they can't take his retirement. So I think at this point, it's just trying to minimize the future damage and make sure the four walls are covered for him. And the debt is a far, far away thing that we need to worry about. You wouldn't file bankruptcy? You would just stop paying everything and then let them come after him? I would get current on everything you can.

27:58We don't want it in collections if we can avoid it. But the credit cards, you might make minimum payments to keep him off your back if he can afford it out of his checks, but there's no way he's going to pay off 90K at this stage of life. Right. All the credit cards are current. The mortgage and the HOA are behind. And that's what we need to flip it. We need the mortgage and HOA to be current, and the credit card companies can kick rocks and pound sand. Okay. So that's your focus for him is making sure that we're current, we're not behind, we're keeping up with the four walls, and let's see what income we can get from where and how long this workman's comp is going to last and then what the next steps are.

28:36But it's going to be a day-by-day thing, man. This is a really difficult thing that you've been thrown into. And you're a good man and a good son for handling it. And should I try to settle these debts with the credit card companies in a year when they inevitably come after him? Well, if you stop paying now, the longer you wait, the more they're willing to settle. And so one year may not be long enough for them to go, yeah, we'll take$20 ,000 instead of$90 ,000. Eventually they will, though. But the truth is he has zero money to give them, so just let it play out. Okay. It's going to be the same.

29:07If you were to file bankruptcy, his credit is going to be completely decimated. It already is, I'm sure. And his days of, you know, getting a great income and buying a property or it doesn't seem like that's going to be happening. So for for him, like George said, four walls, whatever transportation he might need is really going to be what he has. okay unfortunately this is just sad decades of compounded terrible financial decisions and then yes you have the health situation on top of all of that which puts all this just straight to a halt and so there's there's nothing that you can do to undo the decades of bad decisions all you can do is help him take the right next step and make sure that he's got food shelter utilities and transportation yeah what's what's his rent and hoa and everything like that cost every month?

30:01The mortgage is$1 ,250. The HOA is supposed to be$450, but I've arranged to pay $700 because he's so far behind on that. And then he's also about a year behind on alimony to my mom, which is, you know, it is what it is. He doesn't have the money. Is there a living situation in his area that's less than$1 ,700 a month that you could get him into? No. No chance. In South Florida, I don't think it would be possible. Yeah, you're right. Where are you? Are you in South Florida as well? I'm in Fort Lauderdale. He's on the west coast of Florida. Okay. I'm just wondering, I mean, at this point, does he need to stay there?

30:42Can he move somewhere that is more affordable? I think he's best to stay there. He does have family there, and I'm only three hours. One more question I had, if I have time. Five seconds. Oh, okay. Well, I wanted to know if I start working on these credit cards, if I'm going to be liable for the debt. No, none of this is in your name. So it's not going to pass to you to deal with. So don't, if they try to scare you into it, say you got to pay, they're lying. That's not how the law works. If the debt's in his name, he's got to pay. If you co-signed or you're on that account, then they can come after you.

31:18But otherwise, you're safe, man. Best of luck.

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32:45Buying or selling your home is a big deal, and you want an expert in your corner fighting for you to find the best deal for the right price. And the Ramsey Trusted Program is the only way to find a top agent you can trust who will help make your home a blessing, not a burden. It's easy. You can compare agent profiles, interview them, and choose the right one to work with. You can find a local Ramsey Trusted Real Estate Pro for free at RamseySolutions.com slash agent or click the link in the description if you're on YouTube or podcast. Kayla is in Texas up next. Kayla, welcome to the show. Hi, how are you guys today?

33:18We're doing great. What's your question today? I'm just looking for some guidance on how to, what the smartest way is to utilize the remaining money that my husband and I will have after paying off our debt and putting money into an emergency fund. We're about to receive$200 ,000 from a trust from my grandparents. parents. We owe about$30 ,000 on the car, so we were going to pay that off and then put about$30 ,000 into an emergency fund, and so we'll have about$140 ,000 left over. So we were wondering, should we put that all towards the house? Should we invest some of that? A quick little add-on is we don't know that we want to stay in this house long term, so we're just trying to find out the the best way to move forward with that leftover money.

34:12Yeah. Well, you're speaking very wisely and you're filtering this through the baby steps, which is let's knock out the debt first, let's make sure we have savings, and then we can explore the options from there. Are you guys currently investing? Yes. Went to our retirement football. My husband is. He puts about 7 % in. And then his employer matches at 3.5%. I'm currently not, but my employer does contribute 11 % for me. So you guys would be in baby step 4, 5, 6. You already have a home. You have a mortgage. What's left on that? $320. $320. Alright. So, is the trust available now? No. It's going to do like the final paperwork.

34:57The rest of the beneficiaries are signing and then once all that paperwork is finished then the money will be distributed. So that is expected in the next probably a month to six weeks. Okay, and it is a lump sum. There's no restrictions, taxes, timelines. Like$200 ,000 will show up in your account. Yeah,$200 ,000. My uncle paid all of the taxes that were owed on it from the capital gains and the interest, taxes on the interest that was all paid already. So, the$200 ,000 that I will be getting is what is mine. Wow. So, tell us a little bit about the home you said that you're in this house but you might not stay tell us about what your plans are regarding possibly moving and when that would be oh my husband my husband's currently looking at other opportunities in other states that we can move closer to where my father is uh-huh and then to like the neighborhood um just kind of going in a direction that we're not truly happy with okay so um what's the timeline you might want to move um anywhere from i'd say one to three years i mean it depends on like if i had to get a job in you know six months or you know we a year we would we would move um there's also some kind of changes going on to maybe turn the neighborhood back around um but i don't know how long that would take to see okay if it starts moving in the opposite direction um i'm also wondering would you be trying to keep the same level of house?

36:35Would you be trying to move up in house if you were to move? House is probably the same level. I'm happy with this house. You know, it was about$340 ,000 when we purchased it. So, you know, we're happy with it. What's your household income? About$150 ,000. We bring home about$8 ,600,$8 ,700 after taxes and deductions, I think, with health care. Fantastic. Real quick, you said you bought the house for$340 ,000 and now you owe$320 ,000? Yes. And you're worried about the neighborhood going down? Yeah.

37:23I mean, if I were in your shoes, if you really are talking about a year horizon, I'd probably be inclined to just keep it in a high yield savings account until you want it for a couple of reasons. Number one, if you piled it all into the house and just for some reason the house took a long time to sell or it for some reason went down in value, that might make you feel some type of way. Number two, moving is expensive and it's just nice to have cash on hand to make a move. If I were in your shoes specifically, if you were on a year horizon, I'd keep it in a high yield and wait for the right opportunity.

37:55And then when you move, place this house on the market and you've got your down payment, that's readily available for you. Yeah, that's the nice part. If it's a short time horizon, that$140 becomes your down payment without needing to sell the house first. And so that puts you in a better position as a buyer. But if you're talking three years, put it into the house. The money's not disappearing. It's just a forced savings plan. And it stops you from using that money for other things that might not be as wise. and you want to be a good steward of this money and you guys becoming debt-free mortgage and everything is a great goal to have.

38:29And so$140K chunked at that$320K, man, the interest savings alone, if you calculate now how much more is going to principal versus interest, it would blow your mind. Yeah, we did that. It was, I think, upwards to the six-figure mark. So we have no issue with putting it towards the house. We just weren't sure with us potentially moving, Like, should we hold off just for a little bit and then see if we haven't moved by the end of the year, then just dump it all into the house? And you can enjoy some of it, too. There's nothing wrong going, hey, you're debt-free with an emergency fund. Maybe use some of it for enjoyment.

39:05And you go on a fun trip. I'd like to hear you say that because I'm definitely a saver. Yeah, I think because you're paying off the debt, you're stocking up the emergency fund, And it would be good to do something fun with some of this money as well. Not a huge amount, but you can take a$5 ,000 awesome trip and still have$135 ,000 left. And you can give some of that and then you can save some of that. And that includes paying down the house. That kind of fits in that category. And so I like this plan overall. I would just kind of keep it loose and put it in a high-yield savings account when you have it and just park it at 3.5 % right now.

39:43We're not trying to make a bunch of money off of this. We're just sort of buying ourselves some time to make the next decision. Awesome. So would you guys think about investing any of it into a mutual fund? I probably wouldn't because you are putting plenty of your paychecks aside. And remember, real estate is an investment too. So don't narrow your mind to think that just because it's not in the stock market, it's not being invested. If you guys had the house paid off, I'd say absolutely. That's kind of a baby step seven item is to then invest outside of retirement. And so you guys will get there, no doubt.

40:17You'll just use your future income to get there, and this trust is going to help you get rid of that house payment even faster. Then you can invest that amount. Way to go. What a blessing. Awesome, grandparents. Yeah, that's awesome. It is. It's fantastic. I have one more question, if I could. Sure. Real quick. We've got a minute left. Okay, so the emergency fund, does that count towards the maintenance of the house if something were to happen to it, or is that just simply, you know, if one of us were to lose our job, they were recovered until the other person, you know, gets another job? If it's an emergency that it can go towards household items that are emergencies.

40:53So if it's something that's urgent, if it's unexpected, and if it's necessary, that's what that's what an emergency is. So for instance, there's a storm and you didn't know it, it blew a tree onto your roof. Now you need roof damp and like roof repair, that would be an emergency. Dishwasher randomly goes out. But if it's just maintenance, just set up a sinking fund outside of that and just set it aside. I wouldn't put it with the emergency fund. It gets too convoluted. And so you can just set aside, you know, a hundred bucks a month, 200 bucks a month, whatever, you know, some people's homes need a lot more work and more maintenance.

41:25So buying new furniture, not an emergency. Yeah. I would just put it in a, in every dollar you can add. Here's what I do. I have a line item and you can mark it as a fund. And that way I can save a hundred bucks a month. And at the end of the year, I have$1 ,200 earmarked for the maintenance and repairs on the house or the car or whatever it may be. And that helps me not get spooked when I'm like, oh my gosh, what are we going to do? It's$1 ,000. No, we have it. I treat the emergency fund like I treat the HSA. I never touch it. You just don't want to touch it unless you really have to. I will cash flow whatever I can to not touch these monies.

41:57Well, it's amazing. Once you're not broke anymore, you kind of stop having emergencies. That's true. It just becomes inconveniences that you can cash flow instead of, oh my gosh, What are we going to do? Yes. So it's expensive to be broke. That's for sure. This is The Ramsey Show.

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43:56Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. I'm George Camel, joined by Jade Warshaw. And we're taking your calls at 888-825-5225. Emily is up next in Nebraska. What's going on, Emily? Hi. Thanks for taking my call. So I am a stay-at-home mom, and I'm trying to get out of an abusive marriage, an emotionally abusive marriage. My husband's basically abandoned us. I've got four small children. They're five years old and under. and I'm trying to figure out how to create some margin, hire a lawyer, and I'm just trying to figure out what's the next best move to file bankruptcy or take out a second mortgage on the house or something else.

44:38And I've got all my financial information written down if you want that. Is there any support near you, family, friends, church? My family all lives about three hours away, and they're doing what they can to help me. I live in kind of a unique area where there's not like I can't just sell the house and go rent. There's nothing for rent. Near me and jobs are few and far between. Is your house in your name? Yes, it's solely in my name. I bought it before we were married. Okay. How long have you been married? Since 2018. Okay. And what's your household income? Right now, I'm a disabled veteran and I'm receiving disability benefits of about$2 ,600 a month.

45:27Okay. And then is his income covering any expenses for you guys, or is he kind of cut off access? I think he's rerouting his paycheck someplace else. He's an over-the-road truck driver. He's an owner-operator. I've done his taxes forever. He'll gross about$225 ,000 from last year, and I was only able to move over$29 ,000 to help pay household bills. out of the last 13 months. I've paid for the entirety of the bills six months out of the year. Wow. Okay. So he just kind of up and left? Is that... He, well, being over the road, he's gone a lot, but he's not called me since September. He's showed up at the house unannounced a couple of times for a few days at a time, and it's just been weird.

46:16Like just to crash? Yeah, like over Thanksgiving and Christmas. Otherwise, he usually parks at a friend's house a couple of hours away. Oh gosh. I'm sorry that you're going through this. So tell us more about, so you've been covering the bills just out of your money. Correct. And is there, and is there any margin? Sorry, say it again. Oh, I received a lump sum back payment from the VA a year ago. How much is that? Uh, 42 ,000. Okay. And what did you, has that allowed you to be current? What did that allow you to do? I was able to, I put six months worth of bills and savings. You know, I had a cushion of six months.

46:59Okay. Emergency fund. And then I paid off some debt and I started a business in May and that's actually been helping a lot. Okay. So how much debt do you have left? I owe$34 ,000 on the house with about$58 ,000 in equity. I've got$41 ,000 in student loans,$22 ,000 in credit cards, and I owe$6 ,000 on my vehicle. Okay. And how much is in that emergency fund? I've got enough to fund February. How much is that? I'd have to look. I think it's down to$4 ,000 right now. So you burned through the emergency fund. So you got$4 ,000 left to your name, essentially. Yes, sir. Okay. $58 ,000 of equity,$41 ,000.

47:50Okay. And tell me again, did I hear you say, I wrote down a lot of numbers. Did I hear you say your income at this point, is it$2 ,600 a month? Is that what I heard you say? $2 ,600 a month. And then my business, I just started it in May. So the numbers have been different about every month, but right now I'm grossing about$1 ,600. and netting about$1 ,000 to$1 ,200. And I'm hoping that it just continues to grow, especially as we get into the summer. Okay, so fair enough, like around$3 ,600 is what maybe you could count on per month. Do you have your own bank account that is not at the same bank your husband has?

48:24I do, yes. Okay, good. Is that what you've been routing all of your money? That's correct. Good. What do you pay? What's the mortgage every month? What do you pay? $933. Good, good. Okay, so tell us right now what's on fire besides your marriage financially? What's the thing that you're like, help me understand this, Jaden and George? I don't know how to pay bills after February and I need to hire an attorney. Okay, so I think that you can pay the bills after February. Tell us how much the deficit is. When you take your 3 ,600, you pay the 900 in the mortgage, you pay your debts. You pay for food and transportation.

49:06Is there anything left? I've got life insurance payments and then, oh geez, what else? Oh, electricity and propane and normal stuff. So it's usually about, my budget's about$4 ,500 to$5 ,000. Okay. Okay. And that's in every dollar? I'm using, you need a budget at the moment. Okay. I want you to pop into EveryDollar because EveryDollar is going to help you find margin anywhere possible. You'll be able to tell it about your specific situation, and it's going to work overtime to find you money anywhere. So right now you're a$1 ,000 deficit every single month, so that's why this is dwindling so quickly, I can see.

49:50But there's also a path to get your income up, right, with the business? Yes. It's been very slow. So, I mean, it keeps changing, but I see it being capped at some point with the market becoming saturated. Okay. So what I don't think you should do, and I don't think that you need to sell your house right away. I think you're actually, you're paying a little less than$900 a month, I think I heard you say. You're in a good equity position with it. You don't owe a ton on it. I don't think you're going to find anywhere cheaper to live for a family of five. Do you agree or disagree? I completely agree.

50:27Okay. What I would do is change the locks. Once you file for divorce, I would change the lock so that he's not just coming up in there willy-nilly. Right. Okay. And then is there anybody in your community who can set you up with a good attorney or who could recommend a good attorney? I've been shopping for three months now. And we live so rural. I've been told that I live too far away. What's that mean? The attorneys don't want to drive to the courthouse in my location if they had to. Got it. Okay, understood. And are all the debts in your name solely, or is anything joint, or is anything in his name solely?

51:08The ones that I named are either in my name or are joint. He's got his own mess. He's been opening up credit cards for the last two years, and he's got— Have you frozen your credit yet? because my fear is he's opening debts in your name. I have frozen it and I check on it. Okay. Well, here's the truth. The faster we get through this process of divorce, the faster we can hope for some alimony and child support, which means you can breathe again, and that'll get you to fight another day and hopefully clean up some of these debts. Okay. Yeah, I wouldn't try to pay anything off just yet. I wouldn't try to sell your house or anything like that just yet because once this goes to court, who knows how this is going to get split, including the house, unfortunately.

51:50I'm not sure what the laws are in your area. He's been living there since 2018, so I'm not sure if any of that will be up for grabs. But yeah, change the locks, freeze the credit, and file for divorce and figure out how to pay for it because you got to divorce this guy. Great. I can't imagine. I'm so sorry you're going through this, Emily. This fact that this guy's not even covering the expenses for his own children and just abandon the family just breaks my heart. And I know you'll get through it. You're a survivor and a warrior, but it's going to be a process to get to the other side of this and see some light.

52:24Yeah.

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54:06Sarah is up next in New Jersey. Sarah, what's going on? Hi there. How are you? Doing great. What's your question today? So I am trying to figure out how much I need for retirement. I see where I'm trending right now in terms of my retirement progress, but I feel like it's falling short of what I'll probably need. Okay. So I'm struggling to figure out what I should aim for. I know I watched a segment where someone was at$3.5 million. I don't know if that's accurate or where it should be and what I would need to adjust to get there. Okay. Well, usually when we think about retiring, I'll tell you what's in my head.

54:47I'm thinking about my entire nest egg and I'm thinking based on my annualized rate of return, which is about 10 percent. Can I live off of 10 percent of my income and can it feel like the lifestyle I have now or better? Does that make sense? Yes. What do you currently have invested? um so i have uh let me see in terms of my 401k um i have about 146 000 okay um and then i have a brokerage account with like a couple of efts which is about seven thousand dollars um i have a separate roth ira which i just opened up that has a thousand dollars um and then the other money that i have is It's just an emergency fund.

55:34Okay. Do you have any debt? I have student loan debt. So I have a student loan that is in forbearance. But every other month, I make a$1 ,000 payment towards that. Okay. What's left on the balance? $130 ,000. And what's your income? It's$210 ,000. Good income. Is that just you? Yes. Way to go. All right. So how much are you currently investing? um so currently i invest via my my paycheck and so about 600 goes into my 401k every paycheck and then my employer matches that what's the match uh seven percent good okay so if you follow through i have three hundred dollars that i was putting into um i was putting into like capital which is like a money-saving app.

56:28I was putting like$300 every paycheck, but I just recently moved that into an EFT to start putting that into there. Okay. And why are you investing outside of the retirement right now into those ETFs, I imagine, is what you were saying? You know, I don't know. Okay. Just to feel like you're doing something. That's very honest. And then also the other thing too is that does it make sense to mess out the 401k? I think I've done it in the past, And the thing that I'm kind of most worried about is, you know, what are the taxes going to look like? And so if I can find some other place to do it where the taxes might not be as much, I'm just trying.

57:07So can we let George and I tell you what we would do? And as we're doing it, telling you that, you tell us your objections so we can help you get past it. Would that be all right? So I'm looking at what you're doing and I hear what you're saying. It sounds like you're just doing everything you can to feel like you're doing something. But I would argue that you're doing too much. And because of it, you're not making the progress that you want to make. The way I would do it, Sarah, is I would focus on clearing out these student loans first so you can have the fullness of your income and so that these things don't follow you into retirement.

57:44Because what a pain in the butt to still be paying off student loans when you're retiring. Right. You're not even working anymore. you're not even using the education anymore at that point. So I would really focus on that. And that's going to require a mental shift. That's why I asked, go ahead and tell us your, what your reservations are. But let me play out the plan first. So you pay off the student loans. Then instead of thinking about it as I'm going to max out my 401k, or I'm going to max out my Roth IRA, we just say, hey, let's just invest 15 % of our income. Because if you did that, you'd be putting$2 ,625 into retirement every single month.

58:21That's a lot of money. And if you did that, let's just pretend I know that you've got the student loans to pay off, but just let's say you did that for 20 years at the rate that you have now. I mean, you're going to be over$3 million at that point. Okay. So if we can kind of reverse engineer that to make that happen, it's going to start with, yeah, we got to have the student loans paid off. We've got to have some form of cushion between you and life, some sort of emergency fund. That way we can invest and not worrying about having to pull it out for emergencies again. Right. And now we've created kind of the sustainability.

58:56I mean, think about it. Making two hundred and ten thousand dollars a year with just you. How quickly could you pay off the student loans? I do have a toddler. I'm sorry that I was unmarried, but I do have a toddler. You do have a toddler. It is solely my income. Well, great. You and your toddler,$210 ,000 a year, how quickly, if you really got intense, because I think mentally you are intense about being prepared for the future, how quickly could you pay off that debt? I feel like I could probably pay it off in a few years. I think so. Two years. So here's the math on. $130 ,000, 24 months. You're talking$5 ,400 a month.

59:34Not$1 ,000 every other month. We're going hard in the paint at this debt. And here's what that does. 24 months from now, you're 50 years old, right? Yes. And you've paused investing for those two years, all investing, which scares you. But here's the truth. Now you have freed up so much of your income and focus and energy. Now from 50 to 65, let's say, you invest that 26, 25. That's 15 % of your income every month. Like you're going to have$1.8 million sitting in there in that one account. Okay. And that's at 65. If you want to keep working, you know, you ride this out till 67, you got 2.2 million.

1:00:10And like Jade said, you continue this down the path, you'll have more and more. And so retirement is not an age, it's a financial number. And so we don't just get to retire because, well, we're 65, it's time. A lot of people get there and go, I don't have enough to cover the expenses. And getting into retirement debt free is your best bet at reducing the amount you need in retirement. The only other thing, too, is that I've also been looking to purchase a home because I've been renting. And so trying to factor, you know, I don't want to delay purchasing a home because I'm finally in, I think, a good financial position to do that.

1:00:47But I don't know how that factors into, you know, kind of increasing what I'd be contributing to the student loans at this time. Well, I do love the idea of having that line item on your budget set once you're in retirement. I would hate for you to be renting then. So at that point, the order of steps would be still focusing on getting the debt cleared out first, because again, we don't want debt, especially that sort of debt following us into retirement. Then next, yeah, you still need some sort of emergency funds, some sort of cash position to keep you between, you know, a barrier between you and life.

1:01:23Then from there, yeah, now you could start to do both at the same time. You could start investing 15 % and start putting aside for a down payment. And I would really, at your age, I would fight in the budget to do both simultaneously rather than put off investing any more years in order to save up for the down payment faster. I would try to do them at the same time. So you're investing 15 % into retirement, and then any money above that goes into a savings account for that down payment. Even though that might make it go a little slower than you want, you're going to want the years, you're going to want that time of compound interest growing for you in your retirement accounts.

1:02:01Okay. I think that sounds solid. You've got a lot of great goals. We've just got to get focused on one thing at a time, and you'll clean this mess up fast. And if you keep making$210 ,000, I have no fear that your life is going to look very different a decade from now. Yeah, is your income going up anytime soon? I hope so. Good. I would plan for it to go up, right? Why would it go down at this point? You're kind of going into your highest earning potential years. So a lot of people in their 50s earn their highest amount. So really, really good. I'm proud of you, Sarah. Yeah, and I think that's been unpacked.

1:02:34Thank you so much. I appreciate it. So it's time to ratchet up those student loan payments. Because here's the truth. $130 ,000 at 6 % or 7 % interest, you're probably, if the balance is moving upward, even as you're making a$1 ,000 payment every other month, you might be accruing over$1 ,000 in interest every other month. Absolutely. So you really got to get ahead of it. And that means throwing huge chunks of money. And we get those calls where people go, hey, I owed 80 and now I owe 100 because it was in forbearance and I didn't understand what it meant. I just thought they were helping me out.

1:03:05Now I have an even bigger mountain to climb. Yeah, for some reason, student loans rest differently in people's minds. If you had$120 ,000 of debt and it was credit cards, cars, all these other things, you'd think, oh my gosh, I have to get a hold of this. But for some reason, when it's just one block of student loans, people tend to push it aside and forget about it. Society told us it's an investment in your future, and yet you can't bankrupt on the thing. It will just stick around until you decide to get rid of it.

1:03:35Thank you.

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1:05:25Today's question comes from Shannon in Florida. That's the Ramsey Show question of the day brought to you by Y-Refi. If your private student loans are in default, it's time for a plan. Y-Refi helps you refinance defaulted private student loans into a low fixed rate payment so you can get back on the baby steps and start making progress. Go to yrefi.com slash Ramsey to learn more. That's the letter Y-R-E-F-Y dot com slash Ramsey. May not be available in all states. Okie dokie. Today's question comes from Shannon in Florida. She says, what's your opinion on how much to help kids financially after they get married?

1:05:58My son and his fiance are getting married this summer. They're in their early 20s and have a young daughter. They're both in college pursuing degrees. Our plan is for them to live in our basement for free until they graduate and start working full time. I plan on continuing to pay for my son's college and provide help to his wife as well after they get married. I'm getting mixed opinions about whether I'm helping or hurting them by supporting them after they're married. Even if he's married, he's still my son. And I think it's my responsibility to help both of them get through college debt free if I'm able to.

1:06:34Friends and families say they need to be independent once they're married, even if that means going into debt to finish college and pay rent so they can live independently. What are your thoughts? So it sounds like they started a little earlier than most as far as having children. and because of that it's kind of set a course of events into into action a little earlier than maybe planned um so I'm with you Shannon on the education part I think that if it was your plan to pay for college especially for your son and he's still willing to go I think it's great if you're still willing to pay for um college now did it did I read you said that you were paying for hers too.

1:07:21I think you're just supporting her. I'm fine with you paying for college. I think that's great. Now, the living in the basement until they graduate and start working full time, if you tell me they're 20 or 21 and they have no money and they have a kid, I think that is okay. There has to be clear guardrails and time frames on this. It can't just be, oh, live in the basement and I'm supporting you financially until you're ready. And the part of you being ready is just kind of like this vague, ambiguous thing. Yeah, they're probably not leaving at that point. If mom's still folding my laundry and covering all of the bills.

1:07:57So that word independent is the key here. What does that mean? If they are codependent and now you're enabling the codependents, that's on you. And so we need to make sure that, number one, we're not artificially propping up their life. If this was a marathon, you don't want to be carrying them over the finish line. Now, if they're running and they're doing a great job and they've trained, it's okay to give them a little boost. And that's what you want to do here as a parent. It's okay to help them financially after they get married. I think that's awesome. If you want to pay for the wedding and you want to help them with a down payment and gift them some money for that, that's great.

1:08:32But only if they're already employed and working hard and able to take care of the bills on their own. Yeah, I think they should be paying you. I think you need to sit down and have something very clear here as far as what are they going to pay you in rent? Because if they're just living for free, that's not going to help them when it does come time for them to go into the world and try to get and try to lease a place. They're going to need to show some form of history of paying rent. And so that's good. Even if it's 500 bucks, come up with something so they have some skin in the game. Also, set very clearly how long is this agreement going to last?

1:09:05If he's out of college in, you know, two years, is that the cutoff point? Is it two years and six months? Like, be very specific. What are the parameters while they're there? Must both of them have at least part time jobs? Must they be paying a certain amount of rent? Right. Make that so, so clear so that there's no question. And when the time comes for them to, you know, leave the nest, they're not thinking that you're kicking them out. They're going, oh, yeah, this is exactly what we decided. So whatever you set, make sure you're talking about it early and often and make sure that you don't get caught up in this as the rescuer and their drama triangle.

1:09:47If you've never Googled a drama triangle, you should. The triangulation. Yes. All right. Good question, Shannon. Frank is in Boise up next on the line. What's going on, Frank? Hi, I have a question to ask you. I've been talking to a financial advisor here at Boise, recommended from you guys. And I had three 401ks because the contractor I work under, they keep changing companies. So it changes to a new 401k, and they're pretty small. So I think three, they total around$73 ,000. I want to know what to do. Should I roll them into the new 401k by this April, this month, or should I roll them into a personal IRA, which the financial advisor recommends that?

1:10:35And I brought them up, you know, about the large cap, mid cap, small cap, and the international companies that they ran, Ramsey recommends. but I'm 57 years old and they said they need to make a portfolio for me just for me because of my age that they would do it differently or something like that yeah I'm guessing they're saying hey you need to start including some bonds and sort of tone down the the aggressive investing as you get closer to retirement which is normal in the financial planning world uh you'll hear that a lot. So that is okay to do that. So I don't need to be doing large cap, mid cap, small cap, or international companies exactly like that.

1:11:15We still advise it. Dave Ramsey is a big fan of just keeping it 100 % equities and letting it ride. Because over the long haul, I mean, you could live to be 97. And so you're talking, you're still got 40 years of that money sitting there. And so they're just going to be a little bit of a drag when it comes to the bonds starting to enter the picture with much lower returns, but also less volatility. And so it's a really personal decision for you. And you can talk with your advisor on what they recommend for your situation. We don't have all the facts on what your expenses are and what the nest egg is going to be.

1:11:48So they may have the reasons there. But either way, you want to do a direct rollover to the new 401k or to the IRA. And so you never should touch the money and you want to keep it in kind. So if it's traditional 401k, you want to move it to a traditional 401k or traditional IRA instead of Roth, because that'll trigger a whole host of penalties and taxes there. So that's what I would do. There's nothing, if you have a strong 401k, you can just roll it all into there. My guess is the advisor is saying, hey, if you roll into the IRA, he can help manage it. They don't have access to help manage your 401k.

1:12:23And so he's basically saying, hey, you're on your own in that regard. Do you feel like you need help? He said there's more mutual funds in an IRA versus a 401k. You might have 20 options with your work 401k. An IRA, the world is your oyster. You have access to everything. So there are some pros and cons there. And so you do your own due diligence there. You're still steering the ship when it comes to investing and you do whatever you think is best for your situation. But there's nothing wrong with doing either, and so don't overthink it. Got you. Okay, then he says a 1.5 % advisory fee, and I did that off of$73 ,000.

1:13:07That's about$95 a month. Is that correct? Yes. I'm doing something wrong. That's normal in the financial planning world. There's something called AUM, Assets Under Management, and that's basically how they make their living, is managing these portfolios, and 1 % to 1.5 % is normal in that world. And so you're talking$73 ,000 if it just sits there, and you've got, you know, you're right,$1 ,095 a year divided by 12. And so, you know, that's the price you pay for making sure that someone is managing it for you and you have access to them, advice all year long, all of that. And so you really want to make sure your advisor is looking at a holistic picture, not just a fund picker.

1:13:45And so I would be utilizing them for way more than just helping you do this rollover. Okay, I got you. Which thing you recommended? I mean, if this guy, he's telling me, yeah, do this, do this. If I were in your shoes and I looked at my current 401k that's being offered and I really liked the funds and they were growing at a rate of return, that's what it should be. You might say, okay, I'll just roll them over to the new company 401k. But if you're looking at the options and you're going, hey, like based on what I'm seeing, this is really not performing well. I need access to the full market.

1:14:22then that totally makes sense to roll them over and let somebody help you pick some better funds. And sometimes the 401k has fees as well. So you want to look at that and see what that's costing you inside of the account. So a lot of homework and research to do, and it never hurts to have the pro look it over. But again, you're in the driver's seat. And so if you're like, hey, no, I don't want to give it all to the IRA and have you manage it. That's your that's your decision to make. But I'm proud of you for taking that step. Just don't let the money sit there. you want to move it and have it working for you invested and not just sitting.

1:15:30You asked and we listened, guys. The Live Like No One Else cruise is back by popular demand. This is your moment to celebrate your debt freedom with Dave Ramsey, all of us Ramsey personalities in the Western Caribbean. You can share your story with Dave, swap jokes with me, sing karaoke with Jade. I hope that's happening. Apparently it is. Although I didn't want to sing next to you because that's a lot of pressure. I know, but I always put on like my fake voice. The love boat. There we go. I don't do my real voice. You make others look good. Yeah. That's impressive. So here's who this cruise is for.

1:16:03It's not for everyone. If you're on baby step four or higher, meaning you have paid off your consumer debt, you've got the emergency fund, it's time to celebrate. You probably haven't marked the moment. Yeah. And a cruise is a really awesome way to do that. It's the Ramsey audience plus our team. It was incredible last time we did it. So join us March 14th through the 21st, 2027. So we're looking at almost a year out. Very exciting. You can save up to$300 this week only when you book by February 1st. Cabins are limited. So you can lock in your spot with a$600 deposit. That's all that is due now to just lock in your spot.

1:16:37And then you can budget for the rest and join us for the cruise. You can click the link in the show notes to learn more or go to RamseySolutions.com slash events. Tom is in L.A. up next. What's going on, Tom? Hey, how you guys doing? Great. What's your question? Yeah, I was just calling in. I'm a Ph.D. student over here, and my wife recently lost her job back in, like, July. and I'm just wondering and looking to get some advice on how best to get through this stage of my career and my situation, whether that is pushing harder and just getting out as quickly as possible. Yeah, or trying to work extra jobs.

1:17:22So, let me put some advice on that. What money is coming in with you doing your PhD? So, with being at UCLA, we have like a full stipend. It's about three grand. So in L.A., it covers about housing costs and a little bit of food. But beyond that, before, I had worked a full-time job as an engineer and saved up enough money where I haven't had to cover anything. So I have this little mess egg that's just dwindling down. How much? There's about$24 ,000. Okay. And you've been basically using that to float the gap for the last six months. What did your wife do? So she was a IT trainer over at UCLA.

1:18:08Okay. And so it's been since July. Has she gotten any bites? What's up with that, do you think? So she's gotten a few bites. In the tech center, it's just been really quiet for the past few months. And then she recently started working with some family members on starting up moving a business. They started over in Mexico, over here. And so she's not paid yet. And so they're just starting. And so I'm hoping that will she be paid when this is moved or how does this work? Because I wouldn't we're not doing volunteer work right now. Yeah, I think once it gets moved, it would be paid. I'm just not sure about I've been trying to get a good timeline, but it's very ethereal at this point in time.

1:18:58Has she looked at just other fields in the IT world that she would be qualified for? Yeah, so she's been applying around. I think that she's just very much kind of also chasing a bit of a dream of this job and this kind of like entrepreneurial spirit. And I want to appreciate that and also love that because also I'm kind of doing that. And I'm like, that's where I feel. Yeah, there's going to be seasons where it's Tom's turn and he's chasing this PhD. Now, I'm hoping this PhD is going to turn into a big pay raise on the other side. What's the goal with the PhD? So I'm studying bioengineering. So the goal is to hopefully, yes, have a big pay raise and be working for one of the big biotech firms like Neuralink stuff, things along those lines.

1:19:44So we're talking high six-figure salary once we're done with this. So when is the PhD done, and how soon would you be working after that? Yeah, so that's one of the decisions is I can hopefully be done by early fall next year if I really push hard. But the other idea is if I need to float is if I take some extra time and work like as a tutor and take an extra year, but float expenses. is. So fall of 27 or Tudor, and then it's fall of 28, 2008, 28. Oh boy. So, okay. Yeah. Let's go, let's go back to the wife then, because you were kind of on this path. I think you have to see it through at this point.

1:20:28I think for your wife, she's got to, it's one thing if you want to do a business venture, but you need to have solid, a solid business plan, something that she can look at and then be able to say to you, here's what's going to happen and we should be profitable by this date. And when we're profitable, this is the salary I should be able to draw so that you guys can make a plan and kind of have a go no go of, hey, we thought that we were going to be profitable by this date. We're not. So now, therefore, we're not going to continue on with this. And if she can't provide that, then that means there is no meat on these bones.

1:21:00It's just an experiment. And you guys are not in a time of life just yet where she can totally experiment. because you're going to look up and this$24 ,000 is going to be gone. What's your burn rate every month? Burn rate is about$2 ,000 a month. Oh, yeah. You're going to look up and be like, in two years, this money is going to be gone, which two years is not bad. I mean, you'll be graduated by then. Do you guys have debt? So we do have some debt, just one car loan and then her student loans, which are about, together, is about$20 ,000. Okay. That's total with the car loan? I think what's left on the car loan, it might be closer to$25 ,000 or$30 ,000, but definitely below$30 ,000 or above$20 ,000.

1:21:50Do you guys have kids? No kids. Okay. So what has she been doing for six months? Because I'd rather her do something, even if it's not in the IT field, just to provide some income and some purpose and meaning every day to go out there and do something, because it's easy to fall into a low-grade depression just sitting around going, I was laid off, I can't find a job, and you start to question your identity and self-worth. Yeah, just to earn the burn rate. Like, she could experiment, but she got to at least bring in the couple thousand. And she's too qualified and talented just to be sitting on the sidelines for seven months now.

1:22:25Yeah, that's what I try to – I've been trying to be encouraging as much as possible. I think it's just very disheartening for her, the current situation of applying and getting rejected and just feeling that she isn't as talented as I know she is. That's your job. You are her biggest cheerleader and you are also her accountability partner going, hey, you apply for that job, you get that coffee meeting with that person who works in IT. And so you can help her and support her during this time. But it's time to have the honest conversation of, hey, we are broke. like we won't be in the future. But right now we're in a season where we both need side jobs at night delivering Uber Eats and DoorDash.

1:23:05That's the reality because we can't burn through the savings and then be going into debt every month living in LA. It's an expensive life as you know. Yeah. A piece of homework you guys can do tonight that will feel proactive is if you can both sit down tonight and make a list of everyone you know that might know someone in her space that could be hiring, right? that could put in a word for her. We'll make sure that she has Ken Coleman's career materials so that she can really focus in and figure out how to do that the right way. But just reaching out to your network, because chances are there's somebody that's in your network that holds the key to her next job.

1:23:43Okay, yeah, that'd be very good. Right, yeah, try to make a list of 10 names. She has to create some inertia here, because an object at rest stays at rest, and so it's hard to even have the self-confidence to have the meeting or do the interview when you feel like, oh my gosh, here we go again. It's like dating. You're like, well, I've had 19 bad dates. What's the point? Love isn't real. It's easy to fall into that hole if you're not careful. But, you know, again, this is a season you guys will have an amazing trajectory in the future. And right now you're going to look back at this time and go, remember when we both had to do DoorDash on the side just to make ends meet?

1:24:18That was crazy. Yes, this is a very short period of time that most of us go through where it's just, you're just broke. You're broke because you're young at that point. Yeah. Not so much because you've made a bunch of mistakes. You're just young and getting started. But you stack on high cost of living on top of that. I mean, it's impressive that they've even made it work on what they're bringing in every month, even with the savings and the stipend. True, true, true. That's still a tough life. So the reality is we got to live like we're broke college students, which means we can't eat out. We're getting the discount groceries and stretching it and meal prepping.

1:24:50It is just rice, chicken, broccoli. Stack them. Go. That's what we're eating every single day for a year. You'll survive. No one's died from doing that, as far as I know. It ain't pretty.

1:25:30welcome back to the ramsey show in the fairwinds credit union studio i'm george camel here with jade warshaw taking your calls at triple eight eight two five five two two five reicher is up next in utah reicher what's going on hi how are you great how can jade and i help so i'm wondering on how to build a budget with such an inconsistent income that me and my future wife are going to have once we combine finances. What do you do that's so inconsistent? So my fiance is a hairstylist and so it just depends on what client she can get for her income and then my family owns a fencing business and a ranching business.

1:26:19And during the summer, I can make upwards to$10 ,000 a month. But during the winter, during ranching, I'm making zero. Okay. And what about her? What's her swing of income? Good to bad? Right now, right now, she just started three months ago, and she's making about from$1 ,500 a month to about$2 ,300 a month. Okay. Okay. So maybe say$18 is right there in the middle. Okay. So the way I would do this, when are you guys getting married, by the way? When does this actually start? June 20th. Okay. Good. So what I would do by then, by June, you're going to kind of see what her averages are. Hopefully they continue to go up, but you really want to plan your budget based on your worst month.

1:27:12That's what I would do is I would say, okay, first off, how much does it take for us to even, like, what's our bare bones budget? What does it take for us to operate, keeping the lights on, keeping food on the table, four walls, keeping our insurance, whatever that is. And then on our worst month, how far away from that amount are we? So you're kind of filling in the unknowns there. and then from there I would kind of stock up and say okay let's pretend we find out it takes three thousand dollars for our household to run and we bring in on our worst month thirty two hundred well that's great that means there's a little bit of margin there but it also means that you might want to keep an account take that two hundred dollars and over time stock up an extra month's worth of savings that's kind of there to float you in the rough months we call it kind of a peaks and valleys fund.

1:28:01So when you have a really great month, that's the peak. Well, we don't need all of that to cover the expenses. So let's move it over to a savings account so that when you have that$0 month, you can get by and not feel like, oh my gosh, what are we doing? And it's not your emergency fund. So don't get it confused. It's completely separate from an emergency fund. The real question is, what are you doing all winter long? So I do ranch with my dad all winter. I work probably six hours a day all winter. but for free don't get paid yeah i don't so i don't get paid for the work i i own cows in our herd i and i sell bulls and i sell beef but instead of me getting paid hourly i work off like feed and hay so i don't have to pay my dad back for hay and i just get the money from the animals instead of having to pay hand back for all the feeding and all the hay.

1:28:59So what are the zero-sum months? I don't do farm math, so I need to help you understand this. Which months do you on paper earn zero, and which months on paper do you earn the$10 ,000? So I can, so in about from April to November, I can earn$10 ,000. And then we sell bulls in April, and that's when I can make money off the ranch. But in between, so like mid-December to when we start fencing in April, I'm not making any money. But I'm getting ranch money during the summer when I'm working full-time as well. So really, if you spread it out over 12 months, you're making$6 ,500 a month. Yeah. Yeah.

1:29:48So that's not bad. It's almost like a teacher. You just have to account for the summer months. Yeah. And for you, it's the winter. And for you, it's the winter. Yeah. Can you go do something part-time or even full-time from January through April that actually pays? I could. We live in a really remote part of Utah. There's only 400 people in my town. and the nearest town, like we have to drive an hour to go get groceries. Not a lot of side hustles out there. Well, do any other places around you need help? I'm guessing those other people are a lot of farming. Is that kind of a farming town? Yeah.

1:30:30So, yeah, I could go and pick up a ranch hand job somewhere just right here locally. Yeah, it seems like. To help a little bit in the winter months. It seems like in a town, I think you just have to put your thinking cap on and think outside the box because it feels like in a town that small, there's got to be needs that people have because it's pretty remote. You can't get to the things you want. So I just spend some time brainstorming what is it that during the summer months, or I'm sorry, during the winter months, I would need help with that it would be nice to have that service. And maybe it's a service that you can provide for the folks who live around you during those months.

1:31:07Make sense? Yeah. Is your fiance in the same town? Yeah, we live together. Okay. Well, she's got enough hair appointments with a town of 400 to make this work. So she drives an hour to go to work. Goodness gracious. Wow. Every day? An hour each way? Yeah. Oh, gosh. Yeah, an hour each way, and she's working Monday through Saturday. Dude, she just set the bar, Ryker. Sounds like you're driving an hour into town for your side hustle. Yep. You hop in with her, and you go do something nearby. You drop her off and you go door dash. Yeah, you have quality time. So that's the key. If you want stable income to make this less stressful, go create some stable income during those months.

1:31:47Otherwise, you do the peaks and valleys side where you go, hey, I made$10 ,000. We only need$5 ,000. I'm going to sock away$5 ,000 over here knowing we might need to float some expenses in the down months. You're doing good. I mean, you're making$80 ,000 a year, which is pretty sweet. Yeah. Yeah. For small-town rural living. I hope you have low expenses. Yeah, we're only, we have to spend about$2 ,500 a month. That's not bad. So when I'm only 18, and when I'm able to, I'm hoping to get my CDL, and during the winter I was going to snowplow drive. Hey, there we go. I love it. There you go. That's a great idea.

1:32:24Can you start a Christmas tree farm too? I've seen that in every Hallmark movie ever. We probably could, to be honest with you. I like this. I'd get creative. You guys are young. You can sort of take those risks right now, quote unquote, obviously doing this all with cash. Are you guys completely debt free, both of you? Yeah, we're completely debt free. We own both of our vehicles and we're paying a thousand bucks a month in rent. Way to go. And then just food is the only other expense. This bodes well. Because if you have inconsistent income, you really got to be debt free and have that emergency fund.

1:32:58Because life is already a little bit stressful when you don't know what's going to come in. And so I'm proud of you for being a really hard worker at 18. I think this bodes well for your future together. And I wish you guys the best. Yeah. Knowing what I know about your income, if I were you, every time I got$10 ,000, I'd keep$6 ,000 and put the rest away. And that's kind of your winter month store until you can get something off the ground and roll it. And just tell yourself that you make$6 ,000 a month instead of$10 ,000. I learned a lot on that call. This was like Settlers of Catan. He was like, I'll trade you a hay for a brick, Dad.

1:33:29I'm like, all right, hey, whatever kind of arrangement you guys have, you figure it out. Whoever got the longest road wins. That game hurts my brain. But hey, I'm not a farmer for obvious reasons. I wouldn't survive one hour out there. They'd find my body. You're three feet from the house. Oh, boy. I needed my gluten-free snacks.

1:34:18If you've been paying off debt, working the plan, and have reached baby step four or beyond, you've done the hardest part. Now it's time to celebrate. The Live Like No One Else Cruise is back March 14 through 21, 2027. Join all the Ramsey personalities and me as we sail to Half Moon Cay, Cozumel, Jamaica, and Grand Cayman. Cabins sold out last time and they will again. Lock in yours with a$600 deposit at RamseySolutions.com slash events. That's RamseySolutions.com slash events.

1:35:04we're headed to orlando up next john joins us there john welcome to the show hi thanks for having me absolutely what's going on with you yeah so i currently yeah as i said i live in or i live in orlando and i have a pretty good job um but i have a potential career change and unique job opportunity that would take me out of state, but it would actually be a pay decrease. And another big problem is that I'm severely underwater on my mortgage. Oh, boy. You're not behind on payments. No, no, no. Okay, so how are you underwater? Like upside down? Upside down, yes, sorry. You owe more than the house is worth?

1:35:47Yeah, quite a bit. How did we get here? Yeah, so I bought this house about two years ago, and the market was really high. And I moved to the whole home buying thing, so I probably overpaid for it. Yeah. And then, yeah, houses in my area, they're really not selling well. The prices have gone way down since I've bought. So you're underwater on paper right now, as if if you sold today, you would take a big loss, and you need to come up with a difference. Yes, and that's the problem with this out-of-state job. Do you have any money? Do you personally have any money saved? Yes, I have quite a bit of savings, but I just don't want to dig into it for this.

1:36:34How much do you have? I have stocks that I get for my company. I have about$110 ,000. And then liquid cash, I have maybe$12 ,000. Okay. So the good news is, if you did choose to get out of this, because it's$70 ,000 underwater, is that correct? That's what I'm expecting, about$70 ,000. The good news is, if you had to bring the cash to the table to get out of this house, you could. However, my question is, why are you moving out of state for a pay decrease? Tell us more about the opportunity. That doesn't sound like an opportunity just yet. Yeah, yeah. So to give more background, I'm a software developer currently, and I do really like my job, and the pay is good.

1:37:25So this job would actually be a completely different career change, and it would actually be in federal law enforcement. Oh, wow. Okay. Yeah. So it's something I've been thinking about doing since I was a kid, and I finally got the opportunity to do it. But the process takes a really long time, and very few people make it through the process. So I wasn't really thinking about this the whole time. I was just kind of going through the process. What's the differences in pay? What do you make now, and what would you make? Yeah, so my total—so base salary right now is around$160 ,000. Okay. My total pay after stocks and everything ends up being about$210 ,000, maybe a little bit more.

1:38:07Wow. Because I get$50 ,000 in stocks. Yeah, and then this new job would start out around like high 80 ,000s. Okay. But it does go up after each year. Yeah, I would definitely, even long-term, like the highest paid people in the new role would make slightly less than I make currently. Yeah. Like slightly less than the 160 or slightly less than the 210? Slightly less than the 210. And I think the top people, like once you make the GS-13 or whatever, I think it ends up being around$190 ,000. Okay. And you're single? Yes, I am. I have a long-term girlfriend, but not married. You said the percentage was low to even get into this.

1:38:59What's the chances that you'll move and actually get into the program or get to take the next steps? yeah so right now so they they're wanting to get me set up for training right now so um around one percent of people who apply actually get selected for like training but i've actually made it all the way through to that stage okay so you made it you made it under the fence so what has what has to happen next what's the timeline um so i haven't fully um labeled so So, yeah, training would be about three or four months from now. They have to get me selected for a training class. Would you have to quit your job to do the training?

1:39:45I would, yes. Okay. Okay. And then the training – oh, go ahead, sorry. Well, I'm just thinking through this. So it sounds like this is something you really want to do, right? You've kind of decided you are doing it. I haven't made up my mind. And it would be different if I wasn't happy in my current role, but I do really like my current job. But at the same time, yes, this is something I've wanted to do for a long time. Well, the truth is you can always go back to software developing if this doesn't work out or if it's, you know, I had fun, but I'm ready to go back. So it'll always be there. I'm not mad at the pay cut if it's what you really want to do.

1:40:24You're going to have to just suck it up and go, these stocks are gone. I'm going to use this to, you know, get out of this underwater mortgage. you might owe some taxes and then you're going to move and that's going to cost money. And so just know it's not a financially optimal move, but we know life is bigger than just spreadsheets. Sure. Do you have any debt? Yeah. No debt other than mortgage. Okay. I mean, I think unless you have another reason that you haven't told us about, if the reason for you strictly is a financial one and, but I kind of like my job. I think we've given you an out for both of those.

1:41:02It's just do you want to go forward or not? That's true. In the grand scheme of life, the underwater mortgage is like, okay, that was kind of a stupid tax, something you couldn't super control. Now, you could have put more down and had more equity and got out of it unscathed, but here we are, and you're a smart guy. You make great money. You will recover. Okay, thank you. So financially, it's not the end of the world. It's just if it's more about my decision on what career I want to do. Yeah, I mean, I could ask you this question. I mean, there's a chance that if you stuck in this house for a couple more years, maybe you'd see it go right side up.

1:41:39But will this federal law enforcement opportunity be available to you in two to three years? We don't know. Do you know? We don't know, yeah. So there is an age limit. I'm 32 right now, and you have to enter training before you turn 37. So, the window's kind of closing, but it's not closed. I mean, you've got five years. So, if you said to yourself, I know I can wait three years and I want to do that, you could wait three years and see if you can get right side up on this. If you know for sure that that opportunity would be available to you and you wouldn't be the 1 % that doesn't make it to training, right?

1:42:24And would you just rent in this new area? If you got the job? Yeah, I would probably be the plan starting out at the new job is to rent for a while. Training itself takes about six months, and then, yeah, your housing is taken care of during that time, but then I would probably rent. Is the training paid? Yes, it is. Okay. And then the last question, I mean, it's not part of the financial discussion, but the relationship. Is it going to survive long distance? Um, probably not. That's another, yeah, that's another big factor in my decision. Okay. So you're, and you're okay with that, it seems. Uh, yes.

1:43:07Okay. I think that's, yeah, it's just something I'll need to decide. So I'm looking at all the factors. So the financial factor and then also the relationship factor and both of those, I think are going to influence my decision. Yeah. Okay. I mean, if she's the one, that changes the scenario. But if you're like, hey, it's been fun, but this career means more to me right now than the relationship, that's a choice you're making, and you just got to make peace with that. Yeah, that makes sense. Man, a lot of big decisions, John, but I'm excited for you. It does feel like one of those once-in-a-lifetime opportunities.

1:43:43Now, if he was in crippling debt, didn't have the stocks, he was going to have to do a short sale and wreck his financial life, this would have been a different conversation. That's true. I just want to make that clear that he's in a decent spot, all things considered, outside of being underwater on the mortgage. And that allows him to have this flexibility. And he's single, so no spouses or children are affected by this move. That's a crazy change, though, from software developer to federal law enforcement. I kind of know. I mean, if it's, you've got to be at age, there's age and only this many people get in.

1:44:12Is this like SEAL Team 6? I don't know, man. He's going to be knocking on some doors. I didn't want to ask because I felt like he wouldn't tell me. whatever it is none of my business I want to know more it's like a series it's like Jack Ryan he is Jack Ryan he's not telling us

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1:46:37Mike and Kim are up next in Kansas. What's going on? Hey, sir. How are you? We're doing great. This is a fun segment. You guys are not just random folks. You are baby steps millionaires. Is that correct? Yes, sir. We really are. And, yeah, it's really exciting, actually, that both of us come from very humble beginnings. And when we found your plan many years ago, I'll let the wife explain that. That kind of put us on this path. And, yeah, we can't thank you enough. It's just great. That's great. Well, hey, I did diddly squat over here while you guys did all the hard work. but we're honored to be a part of the story.

1:47:14And for the listeners, we like to do these segments to say, hey, it's possible for you. These are real people, normal people who just worked their tails off over a period of time and invested consistently, and we want to hear how you did it. So let's break this down. What is your net worth as a family? Well, we're north of 3.5. And to break that down, we got 2.7 in 401ks, IRAs. We got about 100 liquid in brokerage accounts, savings accounts, and a home that we purchased last year with cash is valued at$700 ,000. Good job. Amazing. How old are you guys? I am 57, and Mama is pretty close to that.

1:47:56Fantastic. Is Mama on the line? I think I hear her back there. Hi, Kate. I'm here. Yes. Hi. Hey. Fantastic. Okay, what was your worst year of income and best year of income in your working careers? okay 1987 my first year in the military i made eight thousand six hundred and ninety four dollars wow and best year so far this year will probably uh north of 300 and that's with that's with um six retirement checks coming in on top of my my wages way to go that's that's a glow up if i've ever heard of one wow yeah okay so what are your careers so we are both we are We're both retired military. And then we both went on to work for the military as civilians.

1:48:40My wife is retired for good now. She's retired twice. And I'm working on my second retirement. I could retire any day. I have the time. I'm enjoying my job. So in the next three to five years, I'm going to walk. Maybe you'll hit a world record. You'll have three retirements. Just keep it going. It's like that movie where the cop has one more mission in him. He's like, come on, get out of retirement. Liam Neeson? Well, thank you for your service. Yes, incredible. What were your degrees in if you got them? So I got a two-year in general studies, and then I'll let Mama take over. And I have a four-year degree in criminal justice.

1:49:18Fantastic. And do you remember your GPAs during that time? I think mine was 3.6. Yeah, mine was about the same. She's being humble. She was about a 3.8. I can tell she's the smarts here, and you're the bronze. That's awesome. I'm the Sherpa. I'm the Sherpa of the relationship. So how did you do this? What was, I mean, was this always on the radar, we want to say, for retirement? Or did you go through some valleys to finally make it to this being the goal? Tell us a little bit about the journey financially. So, yeah, like I said earlier, we both come from very humble beginnings. And we knew that we had great families and great values, but we wanted to change the money part.

1:49:58So we searched and searched and, like, trying to find a path. Like, how do we get there? How do we get there? And then from there, I deployed in 2008 for 15 months. And while I was gone, I'm going to let Mama take the conversation over, though. So we were stationed in Germany, and he deployed to Iraq for 15 months. So it was just myself and my daughter. And a friend of mine told me about Dave Ramsey, and she gave me the book to read it. And when he would call on Sunday, I would ask him, what are you watching on TV? Are you listening to any money people? And he was listening to another pretty well-known financial voice at that time.

1:50:39And I told him about Dave Ramsey and how the podcasts were free. It was just so easy to listen and get engaged. And I'd mail him a book. And sure enough, as soon as he heard Dave Ramsey, we both just fell in with both feet and dove into the program. It was exciting. It was new. It was invigorating. It was, you know, a way of money management that we were not familiar with. And it all made perfect sense. And, you know, with team effort and just intentional about where every penny went, we were able to become debt free and, you know, then start obviously saving money. So because of a good friend and because we both wanted a change for our future, Dave Ramsey really, really turned the switch for us.

1:51:33Wow. That's awesome. So this was like 17-ish years ago. You guys kind of got focused and went, all right, let's get out of debt. Let's start investing. We did. We went all in. I buy your books by the bundle and I pass them out. When I got here, I passed them out to my team that I work with. And I said, hey, guys, just read this book. All I ask is you read it and pay it forward when you're able to one day. We've been to the seminars down in L.A. We were signed up for the cruise. We were signed up for the previous cruise. The first one. Yes, but COVID put a damper on that. Yes, it would have been great.

1:52:07It was great when we did it again last year. Yes, and most recently we co-taught prior to leaving Germany. We got back from Germany last year. We co-taught a financial peace class with our chaplain, and that was great. That's fantastic. Did you guys inherit any of this$3.5 million? Not a penny, sir. No, sir. Fantastic. And then I got to know, what kind of cars are real-life millionaires driving? Can you tell us the year, make, and model of your vehicles? I am. The car I drive to work every day is a 2009 Honda Accord. That is so perfect. That's so spot on. Wow, wow, wow. Okay, and how about Mama?

1:52:45Mama's got a Honda Pilot in there. That's a 22 that we bought cash. There we go. We were there. Good man. The wife always drives a nicer car. That is the rule. That's the rule. Yes, sir. So, yeah. And, yeah, we've only bought three cars. We've been married 31 years this August. We've only bought three brand new cars over those 30 years. Wow. So, we just kind of— Papa's due for an upgrade, isn't he? Well, to be transparent, I got an upgrade last summer. I got a GMC Sierra with the Denali package, but it sits in the garage because I baby it, and I've never had a vehicle like that. Okay, okay. Makes sense.

1:53:26It's like too nice for you to drive. It's too nice. It's just a trophy at this point. It just sits on the shelf. Exactly. That's hilarious. I take it to the gas station, and then I detail it and back it back in the garage. So do your neighbors or friends and family know? your status and net worth and wealth? Because it doesn't seem like you flaunt it. If I drove by your house, I would be like, those guys are probably worth$3.5 million. No, they don't, no. And I was telling my wife, I was telling Kim, I was like, this is funny because we don't have to worry about our family listening to this podcast because they don't follow you guys like we do.

1:53:56That's amazing and sad at the same time. I hope they do one day and they go, hey, that's Mike and Kim. They didn't change their names. I recognize those voices. Wow, well, there's nothing to be ashamed of. That's the good news. If they're like, whoa, I didn't know, hey, we'll show you the way. There was no magic tricks here. You guys worked really hard. You served your country well. You invested for the future. Was this just 15 years of solid investing? Yes, sir. So in 2002, the Army came out with the TSP, and you're well familiar with that. Oh, yeah. So I watched that for about a year, and then I went all in in January of 2003.

1:54:33And then I kept that while I was in active duty. When I retired, I rolled it into my civilian TSP. And now it's just one big one now that's growing. And my wife, she did. And this is what I tell people, like, it's never too late. My wife worked 11 years civil service. The last 10 was consecutive. She dumped. She maxed it out every year with catch-up funds as well. And then she retired after 10 years. And now her TSP has grown to over a million dollars in 10 years of investing. It's crazy what some intentionality does and the alignment. that's the really inspiring part about you guys I can tell you're in sync I mean you're passing the ball to Kim she's passing it back to you Ali Youp you guys that speaks to a great marriage which then turns into a strong financial future so thank you for inspiring us and everybody listening and it's still possible 57 years old 56 years old or 3.5 million zero dollars in inheritance he's driving an 09 Accord she's got the 22 pilot as it should be I want to be them one day

1:55:37We'll be right back.

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1:56:39Our scripture of the day, John 16, 33. I have told you these things so that in me you may have peace. In this world, you will have trouble. But take heart, I have overcome the world. James Clear said, when you can't win by being better, you can win by being different. That's how I've got to where I am today, Jade. I knew you were going to make that about you somehow. Not the sharpest in the room, but I'm unique. You are unique. You're one of a kind. There's only one George Camel. There you go. All right. Mindy is in College Station, Texas, up next. What's going on, Mindy? Hey, how are you? Great.

1:57:18How can Jade and I help today? All right. So I have been debt-free. I have no student loans. I am a senior in college and looking into moving out within the next year, buying a house. and I have no credit score. And one of my professors kind of got into my head, I'm wondering how to best build a credit score without going into debt. Great question. And by the way, I'm so proud of you. You know how weird it is that you are debt-free and graduating college with no credit score? Absolutely. It's a good thing. Way to go. So what's your current living situation? Are you at your parents? Are you in the dorm?

1:57:59Where are you right now? Yes, I'm living with my parents at home. Okay. Are you paying them any type of rent or just totally? No, I lucked out. I am living rent-free, able to work only four hours a week at a practically minimum wage job while going through college. Okay. And what will your job be when you graduate? I'm looking into government agricultural work. Okay. And what will that pay? Somewhere around$70 ,000 a year. Okay, cool. So you're not technically ready to buy a house. You're just thinking about what you will need to be ready to buy a house. And is that the big reason for wanting a credit score, wanting to build it?

1:58:47Correct. So I'm in a deed of trust state, which means that no court if I default on a mortgage. and some of the mortgage companies are a bit more harsh. So I am wanting to have a good credit score when I graduate from college. Got it. But you're not going to be buying a house out of college. No, not directly. So you'll be renting for a while. Absolutely. Okay. And you can rent easily without a credit score. If you are employed, pass a background check, and you have enough money to cover a potentially higher security deposit, which you'll get back when you move out, they will rent to you. And so don't believe people who are like, well, you're going to need a credit score to rent an apartment still.

1:59:28I have rented many an apartment without a credit score. They just want to know, can you pay? Are you a criminal? And if not, they go, well, since we don't have the credit score, you'll pay a higher deposit. That way there's a little more skin in the game on your part. So don't worry about that. So then let's talk about the idea. We know you won't need it to rent. Let's talk about shifting you from the whole mindset of, well, I might need a credit score for something, Jade and George. and we're going to just suggest that you don't need to build a credit score for any reason. Because right now, I mean, think about it.

2:00:00You have no debt. There must be a reason that you decided to go through your life with no debt. And the only way to build a credit score would be you having to get into debt. Okay. And when you do get to that point of buying a house and getting a mortgage, there is a process that I've been through called manual underwriting. You may have heard about it. and here's what I'll tell you the exact things that are required because I did in-depth research for my book which I'll send you Mindy there's a whole chapter on credit scores and how to live without one where it's super nerdy and here's the exact step so here's what you will need to get a credit to get a mortgage without a credit score you'll need verification of income for the past 12 to 24 months so your tax returns which you'll have been employed at that point for a few years right correct you'll have rental payment history 12 months of documented on-time payments, you'll have that.

2:00:51You need 12 month history of your savings and bank statements, which you'll have that. And then one or more regular monthly expenses as an alternative trade line. So think utilities, cell phone bills, anything that you've had to pay monthly, that will count as well. And for anybody listening, who's thinking of the same thing, if you are self-employed, you'll probably have to show your, your tax return history for the previous year or so. There's a little more risk there with self-employed folks to make sure their income will stay that way. So that's, Mindy, that's all you need. And you can reach out to our friends at Churchill Mortgage as you get closer and they can help you in your area go, here's exactly what you need.

2:01:29And the truth is, here's what they do. They do manual underwriting, which means no computer runs it. There's no credit score. There's no automated underwriting. And so a real person looks at all this information to grant you the loan and essentially give you a quote unquote good credit score. Okay. So that's what happened to me. As long as you do a 15-year fixed rate mortgage with at least 10 % down, that's the other thing, is you've got to do it the Ramsey way, not going, well, I'm going to put 3 % down on a USDA loan on a 30-year. You're going to have a harder time doing that. But if you're a strong borrower, meaning you're 15-year and 10 % down, they go, all right, or 20 % even better.

2:02:07And so that's what I would be focusing on is just stacking cash since you're doing so good instead of worrying about, do I need to open a credit card and start building my score and keep up with it 100 do not i would spend your energy elsewhere sounds good thank you so much yeah thanks for the call and uh hang on the line kelly's gonna pick up we'll get you a copy of my book breaking free from broke which breaks all that down for you hunter is in arkansas up next hunter what's going on hey man how y 'all doing we're doing great we're running a little short on time so get right to the question let's see if we can help you.

2:02:39Yeah, man. So basically, sum it all up, I'm just trying to do better at trying not to live paycheck to paycheck. You know, I was going to see maybe if you guys have some tips on that. Now, the first thing, you know, paycheck to paycheck is usually a symptom of a bigger problem. You're just feeling the effects of something bigger. It's usually a spending problem or an income problem. So tell us a little bit about your income. Right. So this past year, I just cleared over 117 ,000 and my total bills for each month is roughly around 3 ,000 a month okay and uh so yeah i roughly make after taxes 1 ,400 a week so that gives me a little bit of uh once i move everything to my bills account i roughly have 550 to 600 a week after that to spend freely So you're bringing home$72 ,000,$73 ,000 or so, and your expenses are$36 ,000 a year.

2:03:35So you should have half your income sitting somewhere, but you're saying it's disappearing and you're not able to cover all the bills? Well, no, it's not necessarily that I'm not covering the bills. The bills are taken care of. I've got a whole other account where it automatically directs the deposit to my bills account, so those are all on auto pay. It's just more so the free spending money as well as trying to cut into me trying to save some of that as well. Do you have any debt? Yes. I got a truck payment, a side-by-side payment, student loans, and rent. Student loans? How much are the student loans?

2:04:12The balance is right at$11 ,000, and the payment is$121 a month. Okay, and what do you owe on the truck, and what do you owe on the side-by-side? The truck I owe$49 ,000, and the side-by-side I owe$23 ,000. Goodness gracious. There's your problem right there, my guy. Ding, ding, ding. We found a winner. Yeah. Dude, you got$73 ,000 in toys going down in value, and you make a little over$100 ,000. It's just simply way too much, which means I think one or both of these things should be sold to free up a whole lot of income. What's the payment on the side-by-side and the truck? The truck is$1 ,130, and the side-by-side is$575 ,000.

2:04:55And what's your rent every month? we split it so it's 475 so my part is 475 goodness your your truck payment is like triple your rent right do you see the problem here you're going hey i'm living a paycheck to paycheck it's like doctor what's going on i don't know why i'm in pain and we're like dude you got a knife in your back that's what's going on it's the truck on the side by side it's that and i mean for a guy who's making you know i don't know what did you tell me 1400 bucks a week i you're spending on something you do you have a girlfriend yeah i do all right do you have a budget uh no we try it's in my head it's a mental budget yeah that's i think that's your big problem i mean don't get me wrong this truck and the side by side are a problem you need to sell um one of them probably instantly and then do the work to pay off the other but uh you got to get on a budget first and foremost i think if you get on an every dollar budget you're gonna see where all this money is slipping through the cracks my guess is it's on social life i think you're at that it's like you get off work go get a drink with your boys take your girl out going out on the weekends all of those things door dash here uber eats there kelly's gonna pick up and make sure you get set up with every dollar so you can get back on track we're rooting for you man this is a solvable problem all right remember there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.