One Decision Can Change Everything

12:13George Kamel:If you're too rich later on, you can call me and yell at me. I'm okay with that. No one's taking me up on it.

12:17Rachel Cruze:You can blame us. People yell at me for worse things. Way to go. I know. I have someone to blame. So great. Well, well done, Sarah. That's awesome. The work ethic is there. The income is there. Those are the questions we want. Well, and the fact she's working 30 to 40 hours. Usually the side hustle comes into play for a lot of people on that baby steps one through three. They're building up that first emergency fund. They're trying to get out of consumer debt or build up a fully funded emergency fund. So we usually see that. But it sounds like the way her life is structured. It's sustainable. It's sustainable.

12:48Rachel Cruze:It's not going to burn her out to do this. Yeah. I was going to ask if she was working like 60 hours a week. I'd be like. And if it went away, they're still okay. Yeah. It's not a big deal. So that's a great place to be. Well done, Sarah. All right. Let's go to Elle in Cleveland, Ohio. Hi, Elle. Welcome to the show. Hi, thanks for having me. Absolutely. How can we help? Well, I wanted to get your advice on where to allocate my funds.

13:14George Kamel:I am taking on a new licensing in my career. It doesn't necessarily guarantee an increase in my salary, however, career growth.

13:29Rachel Cruze:there are six more modules I need to take and they're about 850 each and it's monthly and then there's a review after that that's 1500 I currently have 18 ,000 to pay off in credit card debt and a mortgage about 180 ,000 due on the house okay so as a single mother a few kids you know, just wanted to know where, where, what do I do? Do I slow it down? Do I hold off on this until I'm in a better position? How soon will this advance your career? Like how, how, when do you have to, cause you said it's not an immediate raise financially. Financially, no, but at the same time it is, it is part of a,

14:19George Kamel:part of the deal of this position that I took about a, you know, couple years ago.

14:24Rachel Cruze:So it's required goals for me to obtain this. Yes.

14:27George Kamel:Okay. And they're not going to pay for it. Well, I get reimbursed after I pass the final exam up to 5 ,000, which doesn't, I will still be short a couple thousand dollars. Yeah. I mean, you said it's 850. You got six more plus$1 ,500 for the exam, right? Yep. Okay. So that's$5 ,100 for the classes and an extra$1 ,500. So basically you're just paying for the exam when you think about it that way. So in that regard, it's not necessarily, it's slowing down your debt-free journey, but then you get that$5 ,000 reimbursed, you can slap that on the debt, right? Yeah. Yeah.

15:01Rachel Cruze:And it's somewhat required for your position too, right? So I see this as like a, it's a...

15:07George Kamel:Non-negotiable, I have to do this. Yeah, for your career.

15:09Rachel Cruze:so I would go ahead and make sure, number one, can you cash flow it? How much do you make a year? About 115. Oh, good. Fantastic. Well, you could probably do both of this.

15:22George Kamel:Yeah, do you have enough margin to cover the school plus throw money at the debt? Yeah, I think in some months it might be short, but most months I might be okay. I guess I just am like, should I get this debt paid off faster so that I'm free of it? you know, and just slow down how, cause I, I can push back the exam. It's offered a couple times a year. So the exam portion could be, cause once you, once you go through the classes, you can get reimbursed or is it only once you pass the exam? Once I pass the exam. Got it. So that money sort of locked up, you sort of already paid that. How long would it take?

16:00George Kamel:Let's say you didn't do the courses and you just went full throttle on the credit card debt. How quickly could you pay that off making$1.15? I think I could. I think I could pay it off rather quick, and I'm fortunate. Well, kind of. I had rolled it into 0 % about a year ago, and I know I had that transaction fee, but I think long-term I knew it was going to save me money based on what I could do. So I think at this point I could knock it out within, I don't know, maybe 15 months. When is the 0 % period over? One of them, there's 7 ,000 that I have seven more months on.

16:42Rachel Cruze:And then, oh, I'm sorry, 7 ,000 that I have 13 more months on and 10 ,800 that I have seven months on.

16:51George Kamel:So we need to get this done real fast.

16:53Rachel Cruze:Yeah, I was going to say, 15 months.

16:55George Kamel:Because you already paid 5 % for the balance transfer. Now you're going to pay the 25 % interest once it pops back up.

17:01Rachel Cruze:Look out. They were 3%. But yes, there was a fee.

17:06George Kamel:3 % for the transfer out of your$18 ,000. Then in that case, I would, if you're saying, hey, I can push this off. It sounds like you're not dying to get these courses done. It's not urgent, yeah. But I would use this as fuel to get out of this so much faster and make it. Can you do this in seven months? I was going to say seven or eight months, yeah. Well, I don't know with what I currently have. Are you bringing home nine grand a month? No. Eight grand, seven grand? What is it? About, I think it's about a little under seven. Okay. Yeah. So 2 ,500 bucks would get you done in seven months on the credit cards.

17:45George Kamel:So out of your seven, can you find 25? That's your goal when you make your every dollar budget tonight is go, what can I shave? Do I need to sell stuff, make more, liquidate some savings over here? Do you have anything like that? Any liquid cash you could use?

17:58Rachel Cruze:I have my emergency of about$1 ,500 right now.

18:02George Kamel:Okay. We'll leave that there and just use your future income then if there's nothing to sell. But that would be my goal now. You kind of have it set for you by the credit card companies. Seven months,$2 ,500 a month.

18:12Rachel Cruze:It'd feel good, you know, spring of 27. Yeah. That you're completely debt-free. You save throughout the summer and you can retake or take this test.

18:21George Kamel:And then time it to where the courses kick back up, right?

18:24Rachel Cruze:Yeah, absolutely. Yeah. and I think where I can cut would be some food I mean I try to keep it minimal but

18:30George Kamel:yeah I'm crazy with family coming in and out but um also do I I mean tight would be the other area

18:36Rachel Cruze:going by my budget so I am trying to do 10 percent sure for tight yeah I would keep generosity in there I think there's something yeah I don't want to give that just yeah no I wouldn't investing at

18:48George Kamel:all I wouldn't no well other than what goes out of my paycheck into my 401k I would pause that for those seven months and even until you have an emergency fund because that's going to give you even more margin how much are you investing right now what percentage five five percent okay so here's the math on that out of your 115 income you're talking about freeing up 5700 bucks okay so that's almost 500 bucks a month that you could be putting towards this credit card yeah absolutely now you need to find 2 ,000 because you just freed up 500 but if you can find the 25

19:21Rachel Cruze:add this that's 3 ,000 you're out of debt even faster so it's a yeah it's kind of just that math game and i'll remember during this period it is beans and rice rice and beans so we talk about but it is that scorched earth mentality where um even like aldi is a great grocery store super inexpensive food right so you can do that i mean like you find your ways just to push through yes to get creative and it's just for a couple of months it's not forever and christmas may look a little different this year for you and that's okay everyone's gonna survive but being debt free that's going to be your key.

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21:36Rachel Cruze:When it comes to buying or selling your home, it is high stakes because a bad deal could cost you tens of thousands of dollars. And listen, you do not want to overpay for your next house or you don't want to sell your current house for less than what it's worth. And that's why Ramsey Trusted connects you with vetted real estate agents who have experience to guide you step-by-step to make smart decisions when it comes to buying or selling your home so you don't make expensive mistakes. Now listen, connecting with an agent is very easy. And what's great is every agent has a profile so you can compare profiles, you can interview your top choice and pick the one that's right for you.

22:13Rachel Cruze:So to find a local Ramsey trusted agent who has your best interest at heart for free, go to ramseysolutions.com slash agent or click the link in the description if you're listening on podcast or watching on YouTube. All right, up next we have Caitlin in Indianapolis. Hi, Caitlin, welcome to the show. Hi, my name's, oh, you already said my name. I'm so sorry. No, you're great, you're great. Thank you for having me on. Yes, absolutely, thanks for calling in.

22:40George Kamel:Yeah, we purchased our home in May of 2025. We are up to date on all payments. We don't do badly at all.

22:47Rachel Cruze:However, we discovered there are about$100 ,000 in structural damages to our house foundation-wise, and it's also resulting in our electric bills being around$1 ,600 a month. It's not really feasible for us anymore to keep living here with how it is. However, we did find out that through my hairdresser, she was actually apparently under contract by our house before us. And her inspector found all the structural damages and reported it to the seller. So the seller never disclosed it to us on the seller's disclosure, which is fraud.

23:21George Kamel:So we have an attorney set up and everything. We already paid the retainer and sent demand letters. However, our attorney is wanting about$30 ,000 to proceed with this case. So our options kind of right now as it stands are spend the$30 ,000 to sue the people who sold us the house. And if we win, then we would profit about$250 ,000 to$300 ,000. If we lose, though, then we're$30 ,000 in debt, and we still have the$100 ,000 in structural damages that would be unfixed completely. and we can't sell our house because of how much is wrong with it, we would end up losing about$30 ,000 on it right now as it stands as well.

24:02George Kamel:So we don't really know what to do. Is this an okay situation to put ourselves into debt? What's your financial situation? How much debt do you guys have outside of the mortgage? About$3 ,000. I know it is debt, but it's nothing absolutely astronomical. And how much do you have in savings? About$1 ,000, not much. Have you contacted other lawyers? We have looked around everywhere in our area, and everybody's running about the same exact price. It's about the$400,$450 an hour. They all want a$7 ,000 retainer, and they're saying that it's going to cost anywhere from$20 ,000 to$30 ,000 to get it done, start to finish.

24:48George Kamel:Man. Yeah. I'm trying to think if there's any lawyers that would do it sort of knowing that they'll collect on the back end. My uncle's a lawyer in the area. He doesn't practice this type of law, but he said that that's not really a common thing in this area. Because it sounds like if you guys pursued this, you would win. I'm confused how it happens. You can prove the seller's new because you have the previous inspection report. And so at that point, I don't know how they go, yeah, we're not going to pay this.

25:19Rachel Cruze:right exactly i i what worries me is that they're saying that they're not going to pay it and they may not have it either right that's my guess is they don't have the money to pay it either yeah so my fear would be they're not they aren't poor either these are people who are flipping

25:36George Kamel:houses for a living i mean they they live in a massive home i don't think that they're poor i just don't think they have the hundred thousand dollars straight up front to pay it yeah probably

25:46Rachel Cruze:not. They're probably leveraged in all areas. So that would be the thing. They would be forced, I guess, from a lawsuit perspective, either to come up with the money in an amount of time, or they would sell an asset, you know, their primary home to pay. I don't know. It does feel like, it still feels like a gamble to me that you're going to get that much money out of the situation. So I would hate for you to go$30 ,000, risk that. So the next option is, if you were to sell it, you said you would lose probably$30 ,000 on the home sale. Is that with the structural damages like being up front with those?

26:26George Kamel:Yes. Since we would have to legally disclose all of the structural issues to the house that we know about. Our house, we bought it for the$200 ,000. Our home wouldn't be worth anything more than$120 ,000. We'd maybe get$150 ,000 out of it, as a couple of realtors have spoke to us about.

26:41Rachel Cruze:And have you had any contractors out to look to see if you were to rehab it? what that would be, what that would cost? $100 ,000. $100 ,000. How many bids did you get? How many people did you talk to?

26:54George Kamel:We have spoke to probably 10 to 15 different companies. And they're all around there? Yes,$100 ,000 was actually the cheapest we could find. Wow. Well, I wouldn't give up on the search, because right now your best case is still finding a lawyer who can do it on contingency. And so I would ask around, call more real estate attorneys, and say, hey, do you take concealment, non-disclosure cases on contingency? The other thing I would do is check if your title insurance or a home warranty would cover a portion of that and dig into the fine print.

27:25Rachel Cruze:They said that they wouldn't.

27:26George Kamel:Nothing would cover it.

27:27Rachel Cruze:And your inspector, Caitlin, didn't find all this? Yeah, our inspector didn't cover the supervisor. Sorry. What was that? I'm so sorry. No, you're fine. Did you have an inspection? Yes, we did, and our inspector missed it. And missed it.

27:38George Kamel:But the previous one caught it somehow.

27:40Rachel Cruze:Yeah, so it's documented somewhere.

27:42George Kamel:Yeah, can you get a copy of that inspection report?

27:45Rachel Cruze:Yeah, we have it. My attorney already has it.

27:48George Kamel:Okay. So they've seen this all. They know there's a case here, but they're going, hey, based on my hourly rate, this is going to cost you this much.

27:55Rachel Cruze:Yes. Man, I'm so sorry.

27:58George Kamel:It's a brutal place to be.

28:00Rachel Cruze:It's not a nurse ball.

28:01George Kamel:It's just a bad situation. It is a bad situation all around. Yeah, my husband makes about$100 ,000 a year. So, I mean, I don't even think that we could financially budget for$30 ,000 over the course of a year with three kids as well.

28:15Rachel Cruze:I just don't think that it's feasible for us. We would 100 % have to take out a loan. Right. And I wouldn't advise you in good faith to do that. So I would either continue calling attorneys and maybe some that aren't even local, right? I mean, like maybe you hop over to another city or something, you know, still in the Indiana state. Somewhere in the area. Right. But what I I mean, I think I would slowly start trying to probably fix it because selling it then puts you a negative thirty thousand with with no equity, nothing starting over versus like what stages over the next three years are we going to fix this house?

28:53Rachel Cruze:Right. And it's a slow process and you fix it little by little. And then you you might get in there and do maybe half of what you feel like you need to do. And it actually ends up fixing a lot of the problem. And you know what I mean? Like you could you could get in there. But I would that's where I tend to lean.

29:11George Kamel:And on the other side, if you want to save up and pay the retainer and go, hey, we're going to pay you the rest once the case is closed. They might be willing to do sort of a partial contingency there if you cover the retainer. So that might mean we are selling stuff. Once the kids are down, you're going to get a side job. He's working an extra 20 hours a week so that you can come up with that money. Because that's still your best case scenario as far as the financial damage.

29:36Rachel Cruze:Absolutely.

29:38George Kamel:The joys of home ownership. As all the parents go, kids, you're throwing away money on rent. Go buy a house. And then you see situations like this.

29:45Rachel Cruze:Yeah. But that's the other frustrating thing. Just immoral people that they know that there's an issue, the homeowners. and they don't disclose it. I mean, complete fraud, completely illegal. You cannot do that. And every part of me wants that justice, but also I can't tell, I mean, I couldn't advise you to go$30 ,000 in debt for still a little bit of a gamble of if you win or not or what that looks like.

30:09George Kamel:Because then it's just insult to injury. Now you're just in a way worse place. So there's not a lot of good options here. Where I would rather you be putting your money

30:15Rachel Cruze:towards something you know is healing the situation rather than a guess, right? It's more in your control. Yeah, unless they can take the retainer, ask for the$7 ,000 up front and say, hey, we can pay this.

30:25George Kamel:Yeah, that feels like enough to where I would go, all right, I'm willing to at least lose the$7 ,000.

30:28Rachel Cruze:And maybe$1 ,000 a month, you know, over time to get the rest. I don't know what kind of deal you could work with an attorney to figure that out.

30:36George Kamel:Just find an attorney with a heart. There's got to be at least one out there.

30:39Rachel Cruze:In Indianapolis. Help Caitlin. Help her.

30:41George Kamel:Good people of the Midwest. Where are they?

30:53Thank you.

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32:44Rachel Cruze:Up next, we have Derek in Los Angeles. Hi, Derek. Welcome to the show. Hey, how's it going? Hi, we're doing great. How can we help?

32:54George Kamel:Yeah, so just a quick question. Just learned about you guys, I'll say like last year. And I've been doing some studying and now I'm at a conundrum in life. I'm about$15 ,000 in debt. I have zero savings. And I'm just living paycheck to paycheck. and just trying to wrap my head around how I can get out of the rat race, you know, purchase some property, and, you know, just set things up for my children.

33:26Rachel Cruze:Yeah, absolutely.

33:28George Kamel:Do you have kids? I do. I have three sons. Okay. Are you married? I'm not. Okay. So you got three kids. Are you single dad, or is it shared custody? Shared custody. Okay. And what are you doing for work? I work at an after school program at a local school district. All right. What do you make doing that? Well, during the summer months and vacation time, I don't make anything. But on average, I'll say about$40 ,000 to$48 ,000 a year. Okay. And what kind of debt is the$15 ,000? The$15 ,000 is mostly consumer debt, a few credit cards and stuff. And I also have a housing eviction for$12 ,000. Oh, boy.

34:18Yeah.

34:19George Kamel:Is this from a past house that you didn't make payments on? Yeah, I took over a lease when my mother passed away. Didn't realize what I was getting myself into. And by the time I did realize, it was kind of too far gone. Are you current on your rent payments now at your current place? Yeah, yeah. Okay. but you still owe the 12 on top of the 15? No, no, that's part of the 15. Okay, cool. So 15 total, we're making 40 to 48.

34:48Rachel Cruze:$3 ,000 in credit card debt then.

34:50George Kamel:Yeah.

34:50Rachel Cruze:Okay, gotcha. That's a better picture. Yeah. I was about to add that to your 15.

34:55George Kamel:Is it like a payment plan on the past due rent for the eviction? How does that work? I have not started that payment plan. It just recently popped up on my credit report, And so that's what kind of got me like a little worried here.

35:12Rachel Cruze:Derek, what have you been doing this summer for work since you said vacations and summer you don't get paid?

35:22George Kamel:I haven't. I've just kind of honestly blew through my savings and just, you know, just spending time with my children, vacations. And I kind of look at now, like, you know, I could have used a couple grand for some other things.

35:36Rachel Cruze:Yeah, yeah. Yeah, well, the biggest glaring piece of the situation that I see is income. How many hours a week do you work when there is, like, during the school year when you're actually doing the after-school program? Is it a 40-hour-a-week job?

35:54George Kamel:28.

35:55Rachel Cruze:Okay. So yeah, I mean, I see there's a lot of time available and opportunity available for you to fill out at least till 40 hours getting a side hustle. Because if you can make Derek another$1 ,200 a month, like that, that's a game changer for getting this debt paid off. Like if you could get this debt paid off in one calendar year and I'm, and think about working 40 hours a week during next summer too, right? if you're thinking about the full calendar year through June and July of 27 when you map it out, there's a great chance that you could be debt-free in a year.

36:33George Kamel:Because$1 ,500 a month, you're done in 10 months. And so now the goal is, okay, where do we come up with this? And it's going to be partially spending less, partially making more, probably mostly making more. Because if you're in the L.A. area proper making$40 ,000, that's a tough way to live. Yeah. Are you in the city? Just outside the city. How old are you, Derek? I'm 36.

36:58Rachel Cruze:36, okay. What's your dream? Like if you could look forward five years, what would you be doing? And let's say you're making 70 grand and you are loving life. What would that job be that you would be excited to get up and go to work in the morning?

37:16George Kamel:Well, right now working in education, I love working with the kids. So I'm in school for kinesiology.

37:22Rachel Cruze:Okay.

37:22George Kamel:trying to become a PE teacher, in essence, a football coach. Yeah. Oh, that's awesome. And you're in school right now, you said? Yeah. How much does that cost to you? It's community college, and it's basically free. Okay.

37:38Rachel Cruze:Yeah, good for you. That's good. What would you be making when you're done with that degree? And if you got a full-time job doing that, what would that bring in a year?

37:46George Kamel:I have seen some postings at different high schools in the region around$80 ,000. Yeah.

37:53Rachel Cruze:That's fantastic. Okay, so Derek, that's great. There's hope.

37:55George Kamel:When are you done with this program? I have another year and a half.

38:00Rachel Cruze:Okay.

38:01George Kamel:Okay. So in the meantime, we've got to clean up this debt before then. So how cool would it be a year and a half from now, you're done with the program, you have no debt, and you have a fully funded emergency fund? That's what you need to put on a bathroom mirror. Like, that is the goal. Nothing's going to stop me from being there 18 months from now. which means 10 months from now I'm debt free another eight months from then I've got 25 30 grand in the bank that's the goal and however much work it takes to get there we're gonna get there so what is your schedule with the kids right now uh at the school or my children your your kids oh um it's kind of fluid um I'll have them a week week on week off okay that's what I was wondering Because if you're the week that you don't have them, I would be working like a madman.

38:50George Kamel:So that's going to mean I'm selling stuff. I'm flipping stuff. I am, you know, doing the delivery apps. I'm going to be walking dogs. I mean, there's a lot of people go find some nice neighborhoods and go, what do they want done that they don't want to do themselves? Pretty much everything.

39:05Rachel Cruze:And sometimes, you know, these side hustles, you want to, you know, be the next kind of step into the next career in your situation. But you already have that. I mean, you'll have that in a year and a half, regardless of what your side hustle is. So I would find the thing that pays you the most.

39:19George Kamel:For your time.

39:20Rachel Cruze:Yes, absolutely. Yeah. And I'm doing some calculations here, Derek, because I want you to think long term. Because you said, I want to have a house for my kid. Like, I hear this in you that you're like, I want my life to look different. I want my kids, our family tree to be changed. I want my kids to see something different. And here's what's wild is if you, because investing for me is such a game changer for future Derek. So if you graduate this program, you become debt free, exactly what George is saying. You get an emergency fund. You got a down payment on a home, at least 5 % to save up, which will be a little bit in that area because I know Southern California is expensive.

40:02Rachel Cruze:And then you do the baby steps, which you start investing 15 % of your income to retirement. and as in your income will continue to grow throughout your throughout your life but let's just say Derek for 25 years you work and then you invest$1 ,500 a month you could retire with 2.3 million dollars oh wow so there's something powerful about I want you to map out what future Derek is going to look like, right? And you may have to work past 59 and a half, right? I mean, I put in 25 years. If you go to RamseySolutions.com, you can pull up the investment calculator. These were just numbers I was just putting in saying that you have nothing in retirement right now and you invest 1500 bucks a month.

40:46George Kamel:Even in your late thirties, which people feel like, wow, I don't have time now. I should have started at 20. That's right. You still have time.

40:53Rachel Cruze:Yes. And it would be you working a little bit longer. But man, I mean, that's, what's wild about all of this is starting today, things are going to change, but that means your life day-to-day is going to have to change. It's going to have to look different, meaning you're going to be working more to get yourself out of this consumer debt so that you can save for a house, you can start saving for retirement, and so forth.

41:16George Kamel:Understood, understood. You got the marching orders. As far as saving for a home, how does that look? But the same way you would save for your emergency fund, once you free up that debt, you've got some freed up payments. Now we're just trying to live on less than we make. So if you make$40 ,000, we've got to try to live on$30 ,000. If you make$80 ,000, we've got to live on$60 ,000 and bucket that other$20 ,000 into high-yield savings, for example. If you just put that in a high-yield savings account year after year, five years at$20 ,000 is$100 ,000. So now by$41 ,000,$42 ,000, you have six figures for a down payment.

41:55George Kamel:So there's no magic wand for this.

41:57Rachel Cruze:No, but if you go to ramsysolutions.com slash realestates, there's kind of our perimeters around when buying a home, how to do it wisely. But yeah, you got some big goals ahead of you, Derek. If you actually stay on the line, Christian will pick up and we're going to give you a copy of Dave's book, Total Money Makeover, because it walks you through the baby steps. And this is exactly where you're at. Like you are starting off. And if you start today, man, Derek in 20 years is going to love Derek today.

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43:36Rachel Cruze:Welcome back to The Ramsey Show in the Fairwinds Credit Union Studio. I'm Rachel Cruz here with George Camel, taking your calls at 888-825-5225. Up next, we have Amanda in Dallas, Texas. Hi, Amanda. Welcome to the show. Hi. Hello. How are you? I'm good thank you great how can we help today okay so um a couple of months ago my last parent

44:05George Kamel:passed away and I have received a substantial amount of money and um my fiance so so I immediately did you know the recommended steps well my fiance is wanting me to help him pay off his debt he has about 18 almost 19 thousand dollars worth of credit card debt and of course i'm willing to help him i don't expect the money back um because i know in the long run it's going to help us like our family but my fibulation was per the rules you know close your credit card account once i pay these credit card accounts you have to close the account and he is saying that i'm

44:50Rachel Cruze:financially abusing him because I'm requiring him to do that.

44:55George Kamel:So I just, I don't know.

44:57Rachel Cruze:Oh my gosh.

44:58George Kamel:That's like saying, well, I'll pay for your rehab if you stop using drugs right now. And he's like, hey, come on, that's abusive. Let me enjoy my life. So why is he anti-closing the cards? Is he still using them? He still is using them. Yes. He pays, he pays about, he gets a payment from his disability, his VA disability. He pays$1 ,900 off each month. So I know that, you know, he would pay it off soon. He started at a crazy amount of debt, like$60 ,000. And he's got it down to like$1 ,800,$1 ,800. But we also, he's looking to get a new vehicle and he wants to start saving for that. And so he's like, this fast tracks everything.

45:44George Kamel:When are you guys getting married?

45:48Rachel Cruze:October of next year. Okay, so a little over a year. Yeah. Well, it sounds like you guys are not really aligned with financial goals or values.

46:02George Kamel:It has been a process. We've been together for nine years. How old are y 'all? I am 31, and he is 34. Okay. How long have you been living together? Five years. Okay. So he sees you guys as a married couple where it's like, hey, we're already doing life together. Just go ahead and pay off my debts. What are you doing?

46:28Rachel Cruze:Right.

46:28George Kamel:Okay. Well, the fact is you're not married.

46:31Rachel Cruze:And it's harder to tell someone to change because they haven't had to change.

46:33George Kamel:Yeah. I mean, it's been a lot of comfort here of just you guys kind of doing life together without the actual commitment and financial and legal protection here. So that's my biggest thing is if you're going to ever pay off his credit card debt, please don't do it until you guys are legally married.

46:52Rachel Cruze:Okay.

46:52George Kamel:That's number one. Number two.

46:54Rachel Cruze:He's really not going to like that.

46:55George Kamel:I would not pay his credit card debt if he's going to go back into credit card debt. And it's not that you're financially abusive. It's we are misaligned financially. And so I can't in good faith from my values do this knowing that you're going to go back into debt with a car payment the next day. Right. Yeah. So, okay. I don't, I think he's a, he's a little bit beyond a skis here saying that it's abuse. I can't put that in that category.

47:20Rachel Cruze:No, no, no, no, no, no. That's like so offensive to people that actually.

47:24George Kamel:But I think he sees, he feels a little bit emasculated that you're stepping in to sort of save his butt with stipulations like, you know, it's mom with rules.

47:34Rachel Cruze:Well, and the problem is it, is it does sound like, cause it is, Hey, there's a condition to what I'm going to do. And I believe, I mean, I don't think you're wrong in that, Amanda, but I think the biggest red flag, if you dig a little deeper, is that this is going to, if you guys don't get aligned on this, this will be a tension point in your marriage going forward. And it's going to be really hard to build wealth. It will. And we see it all the time that, you know, the wife, husband or wife, you could put either one in the scenario, but you're wanting to get out of debt. You're wanting to save for retirement and do all of this.

48:09Rachel Cruze:And he's like, well, I'm just going to go out and get a truck payment for twelve hundred bucks and not tell you because you would just shame me and make me feel bad. I'm going to go do right. Like there's a it's this it's a level of immaturity on his part. Personally, is what I think. So I would get I would be aligned. And you don't have to be the same person. I'm not saying that you don't be the same person when it comes to money. Winston is very different than I am with money, but our overall household values are aligned. And so when we have to make big decisions, you know, for the most part, we kind of have these these guardrails that we make the decision within, which is so helpful.

48:47Rachel Cruze:And I'm scared there's no guardrail for you all. It's just it is what it is. And it's been like that for five years in your relationship because, you know, you guys have been acting like you're married. And so that's when these habits and these patterns really start to play in. And then the moment it changes and you start to feel like, oh, my gosh, we are going to be a married couple. and oh my gosh, this windfall of money happened or oh my gosh, he lost his job. Oh my gosh, I lost, whatever it is, right? Life starts happening. It starts to magnify the situation. And so I would get with a marriage counselor or something.

49:21George Kamel:And I would go through Financial Peace University as well.

49:23Rachel Cruze:Yeah, and I would do work just on your relationship as a whole, Amanda, too, because I do wonder what patterns have creeped in for you all that you want to look different in marriage. And one of those is probably gonna be money. Yeah.

49:36George Kamel:Yeah, I definitely feel like at the beginning of our relationship versus, you know, now nine years into it, that there's been a lot of mental change about the way that he views money. My parents were very frugal and they taught me what to do and his parents did not. And so it's been a big, more of a learning curve for him. I have faith that, you know, he's going to get where he needs to be.

50:03Rachel Cruze:but also like you said it it raises all my red flags yeah it should i mean you're nine years into this how much did you get with your inheritance um just shy of a million dollars okay yeah have y 'all talked about what you want to do with that have you even had the discussion with him um yes and no um i got it everything wasn't liquid so i got um my parent like

50:33George Kamel:my parents IRA and then they also had a brokerage account and then they had CDs and then they also had checking and savings account so they had a little bit of everything and um I'm keeping the brokerage account as is I'm not going to touch it I'm just going to let it keep growing and I'll put you know invest into that um as far as any of the liquid cash I don't know we do have a house together. So I was thinking about maybe paying the mortgage off. Is that in both of your names? The mortgage? Yes. And the deed as well?

51:13Rachel Cruze:The house deed?

51:14George Kamel:Yes. Like this is legally y 'all's house.

51:19Rachel Cruze:The ownership. I'm sure it is. Usually it's a mortgage. So I wouldn't touch that asset. I would not pay that off now. I would wait until you guys are legally married.

51:29George Kamel:And I don't know why you're waiting until October of next year now. Are we waiting until the 10-year mark? What's the goal with the October 2027 wedding?

51:38Rachel Cruze:We had a specific venue that we wanted to use, and that was when they were first available. Yeah. That's what we did. Wow. Just not urgent. Well, Amanda, I would not combine it. I would not touch his finances, and I would not pay off this house. I would not do anything until you are married. And I'm telling you, if you guys don't get to the root of some of this stuff, it's going to be constant conflict. And you may look up after you get married and this$900 ,000 of inheritance may be spent very quickly.

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53:46Rachel Cruze:up next we have lance in louisville kentucky hi lance welcome to the show hi how are you all hi we're doing great how are you i'm doing well so essentially a year ago i

53:59George Kamel:I bought my first house. And shortly, a couple months after I bought my first house, I wanted to get some work done in the backyard in the parking area. So I hired a contractor to do that. And then they worked on it for a little bit and then eventually just stopped coming out and then left my yard a mess. And then I had put$10 ,000 down on that. And it had really actually detracted some value from the house. And so it's been a little over a year that I've been dealing with that now. And I'm about six months into a lawsuit. and for the last six months I have been sort of funding the legal fees month to month on this lawsuit just out of cash flow of margin that I have in my budget.

54:38George Kamel:But I've essentially stopped a lot of my extra savings. I'm still contributing to my 401k, but I have a lot less peace with having to contribute to this ongoing legal expenses without a clear idea of when it might wrap up. And so I'm wondering, how can I get some peace in just waiting for this to wrap up, knowing that I've kind of had to pause my savings while I'm paying legal fees month to month? I'm 29.

55:06Rachel Cruze:29. Okay. Has your attorney told you somewhat of a timeline of, hey, this is going to be another 18 months? Because, I mean, it's hard to have hope when there's no end in sight, right? Have they given you any level of timeline?

55:21George Kamel:I should know whether it's going to potentially settle or go to trial within the next two months, but there's not a clear idea because even if I get a judgment at trial, you know, there can take some time to collect on that from then.

55:33Rachel Cruze:For sure. Yeah. And do they know where, do you know where the guy is? Have they been able to contact him?

55:39George Kamel:Yeah, so there's an ongoing lawsuit against them, so. Oh, you're not the only one. Just slowly.

55:47Rachel Cruze:Man.

55:47George Kamel:Just go full class action. man this really sucks well how much have you spent so far fighting this thing uh it's about eight thousand dollars in legal fees um to recover the 10 grand is but um so the good part about this is is anything that i put in in legal fees if if i win the lawsuit i can get it out because it's one of those special circumstances to where i can recover legal fees so you'll get your 10k plus whatever you spent legal fees i'll get yeah i'll get anything that i spent legal fees out of it

56:17Rachel Cruze:Are they going for 10K? Is that it?

56:21George Kamel:I mean, so theoretically, when we consider, you know, how much extra it took to get the project finished and that it detracted value, I mean, I could be looking at getting like a 40K.

56:32Rachel Cruze:Okay.

56:32George Kamel:Like a payoff from this because of between legal fees and how much extra it costs to have the project done. So, I mean, it's a high risk, high reward type of thing, you know, if I win. But, you know, so it kind of feels like anything that I put in legal fees is a little bit of a savings account that I should eventually get out. But there's always a small chance that I can't recover it. I'm just looking to get some peace, you know, and paying legal fees month to month and feeling like I've had to pause my savings and I can't really like get back onto the path in life that I want to be on in terms of aggressively saving.

57:07George Kamel:Sure. Well, you know, it's hard to find peace when you're in the middle of a battle. But I'll give you hope that this is not going to be forever. You are still going to be okay financially later on in life. And you'll look back and go, man, don't miss that era. That sucked.

57:22Rachel Cruze:Yeah.

57:22George Kamel:Remember when I had to spend 20 grand to fight this guy? And maybe I got it. Maybe I didn't. But how old are you right now? I'm 29. Okay. And how much do you make? I make about 150 a year, 120 base. And then I'm a part-time professor. So incredible. Take classes. And you have no debt and you have an emergency fund? Correct. Awesome. So there's the good news is that there is an end in sight and you'll be a 30-year-old making$150 ,000 with no debt and an emergency fund with plenty of time to invest and retire with dignity.

57:55Rachel Cruze:Yeah. Is it the short-term savings you're discouraged about, Lance, or is it retirement and investing?

58:03George Kamel:So I would say that for the past six to seven months, I haven't really been able to save like I had. I haven't paused any kind of 401k contribution.

58:12Rachel Cruze:Okay, so it's just short-term savings, and you're like, man, I make so much, and I haven't been able to.

58:16George Kamel:Yeah, it bothers me not seeing the money go up on a monthly basis, or it is by the time I cover the legal fee, that it's like, okay, there's no money left to save here. Sure. What happens if this contractor's broke, even if they do have the judgment against him? So they do own some property. So we know that there's property to go after ultimately at the end of the day. And so that's not going anywhere. So we're feeling fairly confident about that.

58:46Rachel Cruze:And its value is obviously more than 40. Yes.

58:49George Kamel:Well, I would just keep on fighting the good fight. There is a level of sunk cost if you wanted to set a ceiling for like, hey, here's my timeline. Here's the financial ceiling I'm willing to pay in before I move on with my life. But it sounds like you're so deep into this thing, you're just going to see it through to the end. out of sheer anger.

59:07Rachel Cruze:Yeah, but I would not let this drag on. We see this a lot with people going through a divorce. You know what I mean? There's just in that grind of the legal world and dealing with attorneys and being in and out of cases. It just wears on you so much. So Lance, I probably would have a timeline and say, I can't take this any further than, I don't know, you make it up, 18 months, two years. And I would just prepare myself. Okay, so what would happen in 18 months if nothing came about this? And I've paid this much.

59:46George Kamel:Like emotionally take yourself there? Yes, I would. So that you're prepared.

59:49Rachel Cruze:Yeah. And just to be like, okay, so then what would my life look like financially at that point? And, you know, run some numbers and say, okay, if I start saving, then I can get, I can save this much a month and that's going to go towards this next goal. Like paint your life of what that would look like and then paint your life 18 months from now or whatever I'm just making up a timeline that you got 40 grand um what what's gonna be happening what are you gonna do with that right and so I would probably paint both scenarios because as much as you want the law on your side uh but as sneaky as people are like that I'm like they're not yeah doesn't always follow through the

1:00:24George Kamel:way you want it to not always a happy ending there but I wouldn't let it live rent-free in your head I think at this point it might be consuming more of you than it should, which I understand. I'd have a hard time not thinking about this every waking second, but it's for the best.

1:00:38Rachel Cruze:All right, let's go to Sarah in San Diego. Hi, Sarah. Welcome to the show. Hi. Hi. Thank you for having me. Don't be too excited to talk to us. How are you?

1:00:48George Kamel:Isn't that just my normal tone? We love it. I'm fine. I'm just overwhelmed and, you know, very anxious about my financial picture. Okay, what's going on? So essentially I was doing fine, you know, had a really good job. And then this bug bit me that said, you need to, you need to start a business. So I started a business, um, about two years ago. Um, and the miss of starting that business, I started taking on, taking out loans for it. Um, and so like right now, so my husband and I combined, I would say we make roughly around 250, right? Yep. But we have, oh man, let's start from the beginning.

1:01:28George Kamel:I have a personal loan,$35 ,000.

1:01:31Rachel Cruze:The interest rate's 9.9%. Was that for the business? It started at$50 ,000. Yeah, I took that for the business. Okay. Another one that's$95 ,000. The interest rate's about 7.7%. For the business? For the business, yeah.

1:01:48George Kamel:Is that like an SBA loan? What is that? No, they were just personal loans. And I started through the SBA route, but the rates were better on a personal side. And so my goal is just to pay them off early, right? But then I think I just got in way over my head.

1:02:04Rachel Cruze:Okay. What else? Give us the total amount since we're up against the clock.

1:02:08George Kamel:What's the total amount of consumer debt you have? Right now, okay. So I have, let me see, 85, 95. So that's$180K. And then that$35K, so what's that? $215K. $215K. $215K. So$215K. Okay. And then I have 401k loan, which I recently did, which is$23 ,000. And then I have student loans,$60 ,000, because we had$220 ,000 forgiven, thank God. A mortgage, which is$290 ,000, and then a car loan for$29 ,500. As far as income, like I said, we make about$250 ,000, but all our money is wrapped up in debt. Yes, it is. We have about$10 ,000. We've got a lot to unravel here, Sarah.

1:02:51Rachel Cruze:So, Sarah, if you'll stay on the line, we have to go into a break right now. But we'll come back to you in the next segment and try to look at this. I don't want to say dumpster fire, Sarah. Well, I just wanted to say I got a complicated order.

1:03:06George Kamel:That's how it feels.

1:03:07Rachel Cruze:It's starting to sound like that. No, we're going to help you, Sarah. We're going to make a plan. And you're going to go from overwhelmed to feeling in charge and really tired because there's probably going to be a lot of work that's about to happen. But it's going to be great.

1:03:22Thank you.

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1:04:59Rachel Cruze:All right, we're going to go back to Sarah in San Diego. So just to kind of recap, I think, Sarah, if all of our math was correct, you have$327 ,000 in consumer debt. You and your husband together make$250 ,000 a year. And most of this debt, a bulk of it, was because of this business that you started two years ago. Is that correct? Okay, what kind of business is it? The vending machine business. A what?

1:05:28George Kamel:A vending machine business?

1:05:29Rachel Cruze:A vending machine business, yeah. Where did you get this idea? Social media. The internet.

1:05:34George Kamel:TikTok, yeah.

1:05:35Rachel Cruze:I knew it. I've seen this.

1:05:37George Kamel:I've reacted to many of these videos, and they were like, oh, if you just get 28 vending machines, how many vending machines do you have currently? 15. 15. And they're all leveraged. Not doing well. Yeah. Okay. Yeah, it's hard to make a profit, you know, 75 cents at a time on a Reese's bar, so.

1:05:57Rachel Cruze:Okay. So let's walk through this. Are we, and you're keeping it running. It's still happening. How much does it make a year?

1:06:06George Kamel:You know, after the expenses, maybe$45 ,000. Okay. So it does spit out a profit, even after all of your payments? Yeah. Let's factor in? Okay. Wow. What other assets do you guys have? Like if we said, hey, let's pull everything we can to pay this off quickly. so we have 111 000 in an investment account uh retirement or non-retirement non-retirement okay that's good then we have about i said 10 but i guess it's closer about 15 000 just in personal checking and state um in retirement we have about 400 000 Okay. All right. So how badly do you guys want to get out of this jet? Badly. Okay. You're willing to do anything.

1:06:58George Kamel:Is your husband on board? He is. He is. Yeah. That didn't convince me.

1:07:05Rachel Cruze:You know, I mean, there may be a little more conversation around it. Sarah's like, give me some time. Okay.

1:07:12George Kamel:What would it take for you to get out of this business? Could you sell all the vending machines? Or sell the business as a whole? You know, we actually talked about that. We talked about that. I'm open to it, but the thing is, I didn't want to do anything until I got out of debt, you know? Well, this might be your key to getting out of debt.

1:07:29Rachel Cruze:Have you priced it out, what you could get out of this business if you sold it?

1:07:35George Kamel:No, I haven't. And, you know, we kind of bought it from a company where you buy them in bulk, and then you pay that company a big dollar amount, right?

1:07:42Rachel Cruze:It was terrible, terrible. Okay. What do you do for work outside of this? I'm a PA. Okay. And how much do you make with that? I mean, base pay about$165 ,000. $165 ,000. And what does your husband make?

1:08:00George Kamel:I would say about$50 ,000. He's a supervisor at the hospital. So the$250 ,000 includes the$45 ,000 in profit from the vending machine business? Right, right. Because it varies.

1:08:12Rachel Cruze:I mean, I said on average$45 ,000. $45 ,000 may be on the lower end. Okay. Because a part of me is like, this is spitting out 50 grand. If you did keep it going, you know, in four years, you know, that's helping take a chunk of this 200 off of your 325 plus your investments.

1:08:31George Kamel:Yeah, I definitely would be selling those investments to knock out a huge chunk of this. And I would just list all of these debts out smallest to largest balance. Have you done that yet? I have. I guess I was just kind of thrown off with the one that's like the 9.9 % interest rate. Sarah, we need to just ignore the interest rates right now. That is the least of our problems. Because if we were doing the math, we wouldn't be continually going into all this debt. Well, it was 7%. It was a good deal. We need to start looking at all debt as the enemy, regardless of the interest rate. So what is the car worth that has$29 ,000 left on it?

1:09:07George Kamel:I want to say maybe$35 ,000. Okay. Is that – do you have two cars in the house right now? We do. One's paid off. Okay. because I'm wondering if you got rid of that car payment, that leaves a little bit of room. You got six grand from the profit. Take a little bit from your savings. Go get you a$10 ,000,$12 ,000 car. Get you from A to B. Knock out 10 % of your debt. We actually did talk about that. It makes sense. The thing is I drive a lot though, so I just have to make sure I get a car that's worth it. I promise you there's$12 ,000 cars that run that are fuel efficient, probably more fuel efficient than what you drive right now.

1:09:43George Kamel:Because if you take your 327, minus 111. Now you're going to have to pay taxes on some capital gains on that investment, right? Right. And that was the part, yeah. That's okay. That's still worth, it's still worth liquidating. And then we take out that car loan, we're going to sell that, make a little profit and buy something in cash. Now we're down to 187 ,000 while we're still making 250. And we freed up a whole bunch of payments. And what if you learn to live on 100 ,000?

1:10:10Rachel Cruze:God forbid. God forbid. Yeah, we have a very low-key lifestyle. There you go. I think I'm working with like$1 ,800. Okay, so if you could throw. Yeah, and I know after taxes and stuff,$250 goes down. But, I mean, if you could throw an extra, gosh,$75 or so a year at this, you guys are looking real good in about three to four years.

1:10:34George Kamel:Do you guys take home about$15 ,000 a month? um maybe a little less maybe about 13 because i also do have another side job too i forgot about goodness you're busy which i yeah what is that i make about 25 i teach on the side oh great that sounds stable because i'm wondering like what is the maximum amount you think you could actually throw with these debts if you did what we said you freed up a bunch of payments now you're down to 187 by knocking out some of those smaller debts how much could you throw a month at this thing. Could you throw eight grand at it, nine grand? I think so. And the big thing too, is I need to, so we've been maxing our retirement, which we probably should not be doing right now.

1:11:19George Kamel:So guess what? If you pause that, you know what happens? You just gave yourself a raise to get out of this debt faster. And guess what? You guys are going to be okay. If you make this kind of money and you're debt free, imagine how much more you could be investing.

1:11:31Rachel Cruze:But Sarah, you and your husband, number one, you'll have to be on the same page. This is not going to work. If you go and do all of this and you cash out 110,$111 ,000 out of a brokerage account, then you guys get right back into it. Like you both have to really, really be on a team and say, this is what we're doing. It's going to be really hard to do it without him. And if you feel more stress because of all of this debt than he does, you have to, you have to explain that to him and you have to tell him how important this is. He needs to tell you what he's feeling. I mean, this is like a therapy session, right?

1:12:05Rachel Cruze:We're getting it all out because I want you guys so united. And this is a, this is an extreme situation, Sarah. I mean,$327 ,000 in just consumer debt. Like that's, that's a lot. That's a lot. And I know you feel that, but that means that, that extremeness has to be swung the pendulum the other way in how you handle it has to be extreme. And that's why you're selling stuff. You're selling investments, you're selling cars. You're lowering your lifestyle completely. You're throwing so much at this. He's working extra at nights. You guys can still be doing, I guess, the vending machine stuff if you want to keep it.

1:12:44Rachel Cruze:I would use maybe that 45 again to throw at this debt. I mean, whatever you are doing, but you guys are working like crazy. You're living on nothing. And it's got to be extreme because the numbers are extreme.

1:12:56George Kamel:Right. So how quickly do you want to get out of debt? If you said here's my timeline how many months until you guys want to be debt-free i would say max of 36 months how about we do 18 split the difference i love it i love it well here's here's how that works you do what we said you cash out the investments sell the car buy something cheap you're at 187 and you put 10k a month toward it because remember you paused investing too so now you're bringing home 15k you live off five throw 10 at the debt you're done in 18 months that's a that's a dream 18 months so now you both know we said 18 months we said 10k a month no matter what that means we're going to live on way less than we make we're going to make sacrifices work extra but if you both do that hand in hand rowing in the same direction you will be shocked at how far you will go you're going to land on that shore in no time and to have just the no

1:13:49Rachel Cruze:stress sarah you guys are you have 400 000 still in retirement right now you'll press play on that after this is all done. You guys keep funding retirement. You're going to be fine at that point. But for you, it's the emotional stress. If you had no payments in the world, girl, you're paying out your ears every month. I mean, I don't even know how you keep up with it from a detailed perspective.

1:14:10George Kamel:I mean, if you told 18-year-old Sarah, hey, one day you're going to be making a quarter million dollars. You'd be like, what? And you're like, and we are broke. Yes. She'd be like, what? Come again.

1:14:18Rachel Cruze:I know. You worked too hard, Sarah. You worked too hard. So you called in feeling stressed and just, I don't know what to do. We gave you a plan. And if you do it, the peace that comes with that, and you guys make an incredible income. You guys are going to do fantastic. But you have 18 months ahead of you. That's the sacrifice.

1:15:07Rachel Cruze:So, you know, what's so interesting about that last call, George, is, you know, you hear the income, like$250, amazing. But your habits, what you do with that money says everything. And it either says you can make a great income, but you're still broke. You can make a great income. You could still be middle class. You can make a great income and use that income and build wealth. Or you can make an okay income and build wealth or be broke, right? So much about it is our behavior. It's habits. It's our habits around it. And so we talked about this on Smart Money Happy Hour, but your habits can really put you kind of in three categories, broke, average, and wealthy.

1:15:48Rachel Cruze:And there's some clues, if you will, about what category you might. You might be in, so be thinking to yourself, do I qualify for these things? Or maybe you're like, oh, that used to be me and now it's not.

1:16:01George Kamel:It's kind of like the old Jeff Foxworthy. You might be a redneck if this is, you might be broke if. That's good. So you tell us, think about your own financial situation, take a look at your own spending habits. And if you do these things, this is not a judgment call. We're not mad at you. We want the best for you. but it might be a good reality check as to how you're doing financially and if you're on the right track.

1:16:24Rachel Cruze:That's right.

1:16:24George Kamel:Okay.

1:16:25Rachel Cruze:Let's just start with the broke, shall we?

1:16:28George Kamel:Broke people habits.

1:16:29Rachel Cruze:Okay.

1:16:30George Kamel:This one is probably the saddest one on the list, which is payday loans and title loans. You see these in low-income areas. They look like abandoned pizza huts. They're open like 24-7, and these are high-interest, short-term loans that spiral into a debt cycle or cost you your car.

1:16:46Rachel Cruze:And high interest, 100%. I mean, like, it's insane. Because they don't disclose it.

1:16:50George Kamel:It's just, well, it's a$20 fee to go get 500 bucks. You don't realize. That's right. That's 4 ,000 % interest.

1:16:56Rachel Cruze:I mean, all of those. And they prey on the lower class. They do. They go into these low-income areas, and it's evil. It's horrible. It takes advantage of people that do not need to be taken advantage of, and it's just awful. But when you get stuck in that cycle, you're paying high-interest debt, and you just feel like you can't get out of it. and that will keep you broke if you stay in that life. So next is rent to own and cash advances. I just mentioned kind of that.

1:17:24George Kamel:Yeah. And it seems like a smart thing. Well, one day I'll own it or I'll get the cash advance now. I'll pay it back when that paycheck comes in. But these deals are loaded with hidden fees, exorbitant interest, and it keeps people stuck in this really a cycle of poverty. That's right. For a lot of people.

1:17:39Rachel Cruze:Yep. And last but not least in the broke category, lottery tickets. Yeah. So per zip code, if your state has a lottery, you can see it's usually the low income zip codes is where the highest amount of money is paid to lottery tickets.

1:17:56George Kamel:And it's out of desperation.

1:17:57Rachel Cruze:That's right. It's like this. It's this false hope that, OK, this is my ticket out. I'm going to win and everything's going to be OK. And people end up spending so much of their paycheck on this. And it is sad because it is stealing from people.

1:18:09George Kamel:And it's statistically impossible odds. But you tell yourself someone's got to win. and when you're that hopeless, you turn to these terrible habits. So those are broke people habits. If you can break out of that, you probably then turn to the average person habits, which are not much better. This is sort of middle-class America.

1:18:26Rachel Cruze:Yep. This is what we see all the time. We'll start with chasing credit card rewards. So you live on the idea that I'm going to be able to travel. I'm going to be able to do these things because of what I spend on my credit card. And when that is your mindset, you get stuck in a cycle of credit card debt. And we see it probably because we host this show and people call in with their problems. But the one credit card that was supposed to be, I paid off every month, turns out to be the thing that catches when the job is lost and there's no paycheck because there's no savings. And then they look up and they're$18 ,000 in credit card debt.

1:18:59Rachel Cruze:And so what ends up happening with this so often is that broke people who have to pay interest and cannot pay the full balance end up -

1:19:07George Kamel:Subsidizing the rewards.

1:19:09Rachel Cruze:Yes. Credit card companies can do it because of it. So no, no way, no.

1:19:14George Kamel:I mean, half of the people don't pay off their balances. And America is now 1.2 plus trillion dollars in credit card debt.

1:19:21Rachel Cruze:Yes.

1:19:21George Kamel:So sure. I would love a perfect world before the fall of man where we could all just swipe our cards and no one goes into debt.

1:19:27Rachel Cruze:We all get the airline miles.

1:19:29George Kamel:But if there's a 50-50 chance you fall off the cliff, I'm not going to go near the edge. No. Save them and pay for things. So don't play this game.

1:19:34Rachel Cruze:So yeah, the game keeps you there. New car payments and leases. Ouch.

1:19:40George Kamel:Yeah. This is where someone goes, well, I want the newer car. And the dealer said he can get the payment down to where I can afford it. And then you get into this cycle where you never get out of these. You're paying top dollar for a depreciating asset. So you paid 50 grand for a car. With interest, you end up paying 60. And that car is only worth 20 by the time it's paid off. That's bad math.

1:19:59Rachel Cruze:That's a classic example of making someone else rich, right? You're making the credit card companies rich, the car dealers, the banks. and you're paying interest on something that's going down in value versus actually making interest for yourself, which will be a little bit of an economy. That's what other people do. But yeah, the idea of staying in a cycle of debt and car payments keeps you average. Brutal.

1:20:21George Kamel:And then you have the bigger category of just consumer debt. So think HELOCs, student loans, buy now, pay later plans. These are all really used to fund a lifestyle that people can't afford or the home renovation that you really want, but you can't cash flow, So the student loan for the degree that you may or may not use, that may or may not ROI, and then the buy now, pay later, which is a lot of the younger generations are falling for this one because it seems better than credit card debt. Right. Well, it's a couple of payments and I'm done. There's no interest until there is, until there's fees, until you miss the payment.

1:20:52Rachel Cruze:And until you just buy more crap than what you need. I mean, that's the craziest thing about that. It's a psychological mind game. It is, where you're like, oh, I don't need to pay that. Well, I'll buy a couple extra more things. No, you're spending more money doing that. So cutting that all off and, yes, living within your means is so crucial. One of your favorites, George, last but not least, whole life insurance.

1:21:11George Kamel:I just got a DM today and they were like, hey, my financial advisor is really pushing this index universal life insurance thing for an investment. What did you say to George? I went, I'm like, I don't want to be harsh. Fire him immediately and run far, far away. That is not a financial advisor. That's an insurance salesperson. That's all it is. So whole life insurance, permanent life insurance, variable, universal life, anything that has those words in it, it's a costly hybrid that tries to do both things, insurance and investments or cash value. And it is a terrible return and costs you so much more than term life.

1:21:45George Kamel:So keep it separate. Get term life insurance to cover your income in case something happened to you and invest separately on your own. You'll be better off.

1:21:52Rachel Cruze:Yes. The Ender Insurance is a great place to check out for your term life. And everyone needs term life insurance. Hear me. Everybody needs their life.

1:22:01George Kamel:All right. Finally, let's get to some good news.

1:22:03Rachel Cruze:Well, sorry, unless you're self-insured. I guess the asterisk is if you become in the next category, the wealthy category. That's right. And you're self-insured.

1:22:09George Kamel:If you've got a couple million bucks.

1:22:11Rachel Cruze:Yeah, you're good to go. You may not need it at that point. But for a lot of people, you guys, that's key. Okay. Wealthy category. I said it earlier and I'll say it again. You're earning interest, not paying it. So you're looking at you have more things invested. You have things that are actually paying you or making you more money versus debt companies, right? Banks and car dealerships, all of it.

1:22:33George Kamel:You're not going backwards here. We're moving forward. So next up, investing in assets. So you have assets and liabilities. Liabilities are the debts. Assets are things that actually hold their value and make you money. So think stocks, mutual funds, real estate. These are not going to depreciate and lose value. And that's how you actually build wealth. You can't save your way to wealth, you need to invest in assets. And really all you need is something like a 401k, an IRA, mutual funds, and your primary home. That's what we found in our millionaire study. Most people just had those things.

1:23:04Rachel Cruze:Yep. And that's, again, that's what wealthy people do. That's what they end up buying into. And they're not worried about status symbols, including their cars. So one of them is that they buy used cars. You know, they're probably nice, like a nice, you know, truck or something. It doesn't have to be a beater. It doesn't Let someone else take the depreciation when they drive it off the lot. I'll buy a two-year-old car and we'll be good to go. I'll pay significantly less because of it. And they're just smart when it comes to their purchasing. And they're not worried about what everyone else. For a lot of wealthy people, they're not very insecure.

1:23:37Rachel Cruze:There are some that are. But in general, with their money, they're thinking more in a sense of what's going to make me more money. And they look at a car and they're like, oh, no, not that. So I'm not going to put my money into it.

1:23:48George Kamel:Amen. And then next up, debt-free housing. They actually pay off their home early, which frees up cash for more investing and giving.

1:23:55Rachel Cruze:And last but not least, living below their means. So budgeting what they've earned. They have a plan for their money. They know what their retirement self is going to do. They know what their next goals are. They really live intentionally, including a monthly budget. You know, they say, hey, here's here. Some people, you know, depending on, I think, your net worth, there may be more broad categories, if you will. but the idea that you just have a plan, you're intentional with where your money is going is so key. So if you wanna know how your habits stack up, check out our net worth calculator.

1:24:28Rachel Cruze:And if you have a negative net worth, hey, listen, you may wanna look at some of these habits again and say, is this me and what can I do to get out of debt? So we'll drop that calculator in the show notes, a link to it, so make sure to check it out.

1:24:59Rachel Cruze:Welcome back to The Ramsey Show and the Fairwinds Credit Union Studio. I'm Rachel Cruz hosting this hour with George Camel, and we're answering your questions. So give us a call at 888-825-5225. All right, kicking us off, we have Jamie in Portland, Oregon. Hi, Jamie. Welcome to the show. Hi, thanks for taking my call. Absolutely. How can we help?

1:25:22George Kamel:I need some guidance as to what to do from here. This January, I filed for divorce after 19 years of marriage from an emotionally abusive spouse. And I also come to find out how he's been neglecting our 8-year-old autistic child. Oh, my gosh, Jamie. So I've basically just had my wits end and called it quits. He refused to help. Not to mention we had a whole bunch of marital debt that when I asked him, can you please step up? Can you work extra shifts? Can you get a side job? Can you help in this manner so we can pay off credit cards, medical bills, cars, trucks, all the stuff that people get? he refused to do it and basically said that i've worked hard my whole life i'm not going to step up anymore you're the breadwinner you make the money you work um so i'm a pa so i make 170

1:26:22Rachel Cruze:what's your what did your attorney say how did you guys battle it out in court yeah it's so we

1:26:28George Kamel:haven't gone to court uh we had a date originally but that was canceled by his counsel because they wanted to, quote, settle. But his idea of a settlement is my paying him an exorbitant amount

1:26:40Rachel Cruze:of money plus$2 ,000 a month. Yeah, no, we are going to continue on to make sure that you're protected. And not to mention pay him$2 ,000 a month. Well, he lives in an alternate universe. So what did you, what did your...

1:26:55George Kamel:He doesn't get to decide. Yeah. That's the good news. Yeah.

1:26:57Rachel Cruze:So what's...

1:26:58George Kamel:My attorney said, basically, that's not going to work because I have sole custody of our child and we have split 70-30 so I have 70 % of the time. I've been paying the child on my health insurance. I pay for everything. I arrange all his child care, his appointments, everything. His father has not helped with any of that. Sure. What does he make? He makes$80 ,000 a year. Okay. And what do the debts look like? So we've owned a house that I've financed solely under my name last year and decided to sell it because I wanted to get out from underneath the debt and moved into a rental.

1:27:46Rachel Cruze:Has it sold, Jamie?

1:27:48George Kamel:It has, yeah. So it's sold and I paid off quite a

1:27:51Rachel Cruze:I paid off like$90 ,000 in debt. Okay. I just don't want you paying off this debt if it's going to be split eventually because you're throwing a lot of money at it.

1:28:01George Kamel:Have you figured out what the split is and what's his debt versus yours and how that's going to shake down? That's what we're waiting on. My attorney said we're going to go before a judge and let them figure that out. Yeah. But so far it's like what his debt is a 401k loan that he took out to pay for his attorney and then his student loan, which is like$19 ,000. Okay. What else is left? What's left is my debt, which my student loan is$115 ,000. and then there's credit cards and consumer loan debts that I've had to take out in my name because he refused to help and I was trying to consolidate everything I fell for the consolidation thing so I'm going to be stuck with those and that's say that say those totals again for us you had 115 in student loans 115 in student loans there's uh two consolidation debts one's at uh 40 000

1:29:00Rachel Cruze:And then another one's at$35 ,000.

1:29:03George Kamel:Okay.

1:29:04Rachel Cruze:And there's about$15 ,000 on credit cards. Okay. And remind me, or clarify this. You said I had to take this out to pay for everything, or what was the cause for these?

1:29:16George Kamel:So we were trying to, well, I was trying to get one lump payment by consolidating everything. so um we tried to i i took out the loan up by myself because he refused to step up and help

1:29:30Rachel Cruze:and this was just living above your means like this was all in the marriage and it was there was nothing specific it's not like there was a small business that one of these loans went to

1:29:38George Kamel:okay no no businesses but it's yeah we i would say that we were living well above our means okay and he got grossly comfortable living that way sure and now that i filed for a divorce he thinks that he deserves to continue to live that way.

1:29:53Rachel Cruze:Sorry, there's a helicopter outside my house. No, you're fine. How much do you make, Jamie, in your job? $170. $170, okay.

1:30:01George Kamel:And what's your rent right now? You said you're renting after you sold the house? Yeah, my rent is$1 ,400. Great. Okay. So you have plenty of margin. Once the dust settles, and we know exactly how much debt's going to be yours, now we can formulate a plan as to how we're going to pay it off. Okay. Is that what you're wondering? I started doing this on my own without his help or input. I have$3 ,000 saved in a high yield savings account that he can't touch for the emergency fund. And I've been doing every dollar to put everything towards paying my debts. And I had three credit cards originally down to zero, but now that I happen to pay frequently for the attorney.

1:30:46George Kamel:Yeah, I would just stop the whole debt-free journey, which I know sounds crazy coming from us.

1:30:50Rachel Cruze:I would too.

1:30:51George Kamel:But you're in the middle of a storm. We got to pay lawyer fees.

1:30:53Rachel Cruze:Yes.

1:30:54George Kamel:And anything beyond that, I would just stack up on a high-yield savings account. And once the dust settles, we're done. There's a divorce decree. There's a judgment. We know exactly what's next. Then we can start pushing play on Jamie's new plan for her new chapter.

1:31:06Rachel Cruze:Yeah, Jamie, the$90 ,000 that you got out of the sale of your home, did that all go to pay off debt?

1:31:12George Kamel:Yeah, so it paid off the truck. He borrowed money from his truck. That was nice of you. Yeah, I know.

1:31:24Rachel Cruze:It paid off money that his mother gave him. So you need to document all of this, Jamie, because these are his assets.

1:31:33George Kamel:I would use that to negotiate 90 grand less that you're going to pay him.

1:31:37Rachel Cruze:Yes, yes. All of that needs to be used. Yeah, my attorney has everything. And it's all in the bank records as to everything that was paid that was his. Listen, you need your number one priority is to take care of you and your son and get through this divorce. OK, the debt free journey can it will happen for you. But you you you have had your heart broken. You've been in a horrible marriage. Gosh, the amount of energy, even with your son having autism, I mean, all of it. You have a lot that you're carrying. Okay. So you need to just don't make any more big moves financially. Okay. Stay current where you can stay current and that's it.

1:32:17Rachel Cruze:You need to be stocking up cash on the side, that$3 ,000, you need to keep adding to that. So when these attorney fees hit, you have the ability to pay them in that you have money saved. Right now, cash is going to be your friend's more than anything because everything is just so chaotic. Does that make sense? Yeah. That's going to give you stability for now. And then what George said is exactly right. Then once everything is settled, then you can say, okay, now I'm going to take that amount of cash after attorneys are paid and everything. I'm going to apply it to my debt for what's left because that judge may give him some of that debt, Jamie.

1:32:55Rachel Cruze:So don't be paying on stuff because it may be going to him. And then you'll have a ton of cash sitting in the bank, hopefully that you can actually throw at this debt and get some big progress starting it and then you're going to just chip it away little by little but um but yeah there's a lot swirling for you so i think simplifying and just stacking up cash is going to be huge for you right now and I'm so, so sorry you're going through this. It's horrible.

1:33:46George Kamel:All right, let's cut to the chase. it's easy to get discouraged about crazy house prices and interest rates. But when you have the right real estate agent to help you buy and sell the right way, you'll have confidence to make smart decisions. Ramsey Trusted Agents aren't just experts who guide you through buying or selling. They're people you can trust to have your back from the first call to closing day. Find a Ramsey Trusted Agent near you at RamseySolutions.com slash agent. That's RamseySolutions.com slash agent.

1:34:30Rachel Cruze:We wish that we could get to every call and question here on the show. But if you have a money question, make sure to head over to our website and use Ask Ramsey. Our Ask Ramsey is our free AI tool, and it is built and trained on proven Ramsey principles. and you'll get the answer that you want the Ramsey way. Just like if you called it on the show, you don't have to worry about Dave yelling at you. You just get your question answered.

1:34:54George Kamel:In this case, you'll be disappointed. It's going to be a little bit nicer.

1:34:57Rachel Cruze:A little nicer, no. But yeah, make sure to check it out. It's awesome. People have been talking so much about Ask Ramsey.

1:35:03George Kamel:Yeah, they'll DM me. And then by the time I get to it, they went, oh, never mind. I went to Ask Ramsey and it was great. I was like, oh, okay, I'm useless.

1:35:08Rachel Cruze:It's great. Go to RamseySolutions.com and check it out. We'll leave a link in the show notes if you're listening on podcast or watching on YouTube. All right, let's go to Veronica in Detroit. Hi, Veronica. Welcome to the show. Hi, Rachel. Hi, George. Thank you for having me on. Absolutely. Thanks for calling. How can we help?

1:35:28George Kamel:So back in 2021, my husband's brother asked me and my husband to co-sign. Actually, my husband really, he asked him to co-sign on a loan for a condo. Oh, no. And since then, he has been paying on the condo, but he stopped paying his HOA over a year ago. And now we just got a letter saying that there's going to be a foreclosure on the condo because we owe 10 grand on fees for the HOA currently. Oh, no. What time period was this over that he didn't pay? Since April of 2025. Okay, so over a year. Yeah, he had made some payments last year, like a few times. He paid here and there, but it's almost$500 a month, every month, you know, plus$25 fee.

1:36:25George Kamel:And quarterly, they have like an additional$1 ,000 fee. Have you talked to him? Yes, we did. Three months ago, he said that he will make, at that time, it was$6 ,300, almost$400 that he owed. And he said that he will make a lonesome payment of almost$3 ,000, like next month. And at that time, we were like, okay. Yeah, he didn't do anything since then. So what's he saying now? I'd be calling him every day. Well, he said three months ago, we haven't been in touch. Yeah, we just got the letter last night, and in the letter it says that we have to come up with the payments before July 31st, which is tomorrow.

1:37:10George Kamel:Yeah, I was going to say, we got a couple of hours before that happens.

1:37:14Rachel Cruze:Do you guys have any money, Veronica?

1:37:17George Kamel:So the situation is that he's been trying to sell this condo, and it's been on the market for 81 days. And it's just had five showings, which is ridiculous. I don't know how to communicate with the guy. Is it overpriced? Why is it not selling? It's underpriced for what he paid for it. I think he paid for it$220 ,000, and right now it's listed for$215 ,000. Oh, wow. But yeah, honestly, I'm willing to just part with it. Well, you've got to come up with the MAGA underwater on to get out of the loan.

1:37:54Rachel Cruze:Yeah, so currently left to pay is$172 ,000.

1:38:00George Kamel:Okay.

1:38:01Rachel Cruze:Well, I would do anything to stall this foreclosure, right? I would much rather...

1:38:07George Kamel:That's my question. I would like to know how to stall it because this is the first time we're facing somebody like that. We always pay everything on time with my husband. We don't really have that much, you know... How much do you have in cash? Like liquid savings you could come up with by tomorrow? Well, if I was like in our checking account. Anything. Under the mattress and checking, an investment you could sell. Yeah. How much? Yeah, we're basically check to check right now, but I think we could save$1 ,000. I'm saying, could you write them a check for$5 ,000 to bide yourself some time and have the other$5 ,000 by the end of next month and negotiate with them?

1:38:49George Kamel:Okay. I see what you're saying If you go through foreclosure it's going to be much more Financial damage than this 10k

1:38:56Rachel Cruze:And you're on the hook for it because he co-signed The loan That's what we were thinking We were like let's sell this condo I want to sell it I want it out of it I don't want anything to do with it But it's just You do have something to do with it And I would take it over And I would look to see if there's a Ramsey Trusted agent in your area I'd get this thing sold Like I would take it on as if it's mine and be like, okay, step aside, brother. Cause you're obviously you and your agent doing nothing.

1:39:25George Kamel:Incapable.

1:39:25Rachel Cruze:No, I'm going to like get in there and do it because you would have much rather on the front end to go through the hard work and the misery of getting this sold quickly. I do have some like investment in stocks.

1:39:39George Kamel:Do you think it would be worth just selling my stocks? Yes, to avoid a foreclosure. Well, I have a, I have a 50 grand in stocks. In just a brokerage account? in like individual stocks perfect yes okay it's gonna hurt veronica you're gonna be pissed and

1:39:55Rachel Cruze:you're gonna be like i cannot believe i'm taking this money on investment space my brother-in-law believe me it's horrible i know but that is why and i pray your husband will never ever ever ever ever even entertain the idea of co-signing yeah i mean y 'all been burned burned we actually helped

1:40:14George Kamel:him a few years ago with his, he had a credit and he had a, you know, he took some credit cards out and he owed some money and we just took a, you know, the second mortgage while we were buying a car and we covered that up. And - Veronica, this is not help. This is enabling. This is enabling. Good patterns. This is enabling. So here's your homework. Let's make it very clear. You're going to sell off enough stocks to pay what's due so that you don't get foreclosed on. Then you're going to write up a contract with a real estate attorney to recoup that amount when this condo sells. So he will not see a dime until you guys are paid back for what you've put into this.

1:40:53Rachel Cruze:And then he's got to figure out how to get the difference after this condo is sold.

1:40:57George Kamel:Hopefully, if he has, you know, he owes$170K, you sell it for$215K, you guys can still walk away unscathed, even after fees. That's the goal. And if he makes zero profit, fine. But you guys need to get your$10K back at least out of this deal. And you can hire your own real estate agent to do this, you can go to RamseySolutions.com slash agent and you can find one that can actually sell this thing.

1:41:19Rachel Cruze:And tell them you're in a pinch. Well, thankfully, you do have the money to at least push off the foreclosure so it doesn't have to be very urgent. But we want this thing for your own peace of mind. Less about the foreclosure at that point because that'll all be paid, the HOA fees. But oh man, Veronica. As soon as you're

1:41:33George Kamel:off this call, go sell enough stocks to cover this because by the time you can get it into your checking account to then wire the HOA company the money, hopefully we can avoid this. But be proactive. Call them right now and explain what's going on. They're trying to get this money by the 31st. And hopefully you can walk out of this thing with just a slight burn.

1:41:53Rachel Cruze:Well, what's wild is, you know, as we're recording this show, it's Wednesday. You know what I mean? And it's hard sometimes with depending on the banks and everything. Yeah, the transfers. Yeah, so like business day. So business day.

1:42:04George Kamel:This is urgent.

1:42:06Rachel Cruze:Yes, absolutely. Oh, my gosh. Man. You know, guys, this is another.

1:42:10George Kamel:Got secondhand stress from that. reason.

1:42:14Rachel Cruze:This is another call. We could have a whole show about co-signers. This is why you do not co-sign. And it's because the person who is taking out the loan, the bank does not trust.

1:42:24George Kamel:I don't care how much you love them. No. Because here's what happens. Best friends. The relationship is destroyed forever. So how is that for loving them?

1:42:31Rachel Cruze:Yep. You know, we love the camels. And if you and Whitney ever came and said Would you co-sign for us? Yeah, I would say I love you I love you, George and Whitney. And then, no.

1:42:40George Kamel:that's all you gotta say no no no and i'm a people pleaser i want to be helpful and i still

1:42:47Rachel Cruze:wouldn't because yes and because it's not helpful it's not helpful to the person they're not at a good standing place to even be going into debt the lender said i can't afford a house but he said if you can promise that you'll pay it they'll let me have it yes oh man this happened and i mean it sounds like veronica's pretty much done with the brother-in-law but what's sad is that just that that it ruins it puts a bad taste in your mouth about the person he's not showing

1:43:12George Kamel:up to thanksgiving and then if you invited him yes and then if you didn't pay some of his stuff

1:43:16Rachel Cruze:back to them i mean like all of it it's just it's not good it takes a strain on a relationship it is not helpful to people okay so you are not mean if you say no no i will not co-sign we're not

1:43:28George Kamel:co-signing i'm sorry and if you co-signed on anything you better keep up with what's going on with that thing i would have known the hoa fee wasn't paid month one oh man i'd be getting

1:43:38Rachel Cruze:notifications and emails you can get out of it in any way if they can refinance i'd get out right if you are in one if there's a way to get out so uh make that all be a warning call out there so veronica i'm so sorry you're going through that but i think there's hope on the other end thank god you have that stock because that is going to help you guys um in the meantime but man that's tough.

1:44:20George Kamel:Hey guys, George Camel here. You ever feel like you make good money and still have nothing to show for it? You run into Target for one thing and somehow walk out$87 later with toothpaste and emotional support candles? Just me? Okay. Well, that's the problem. Most people don't pay attention to how they spend their money, so it does whatever it wants. And that's why we created EveryDollar. It's a budgeting app that helps you create a simple plan for your money. EveryDollar's simple, it's clear, and it helps track where your money's actually going. Plus, you get daily lessons, to-dos, and reminders along the way.

1:44:50George Kamel:It's like having a money coach in your pocket. Your money's been freelancing long enough, it's time to give EveryDollar a full-time job. Go download EveryDollar for free on the App Store or Google Play.

1:45:14Rachel Cruze:The Ramsey Show Question of the Day is brought to you by Why Refi. If you keep putting off dealing with your private student loans, now is the time. Y-R-E-F-Y helps borrowers explore low fixed rate refinancing options and affordable payment plans. Go to Y-R-E-F-Y dot com slash Ramsey. That's Y-R-E-F-Y dot com slash Ramsey. May not be available in all states.

1:45:38George Kamel:Today's question comes from Carson in Ohio. The only debt I have is$15 ,000 on a credit card. My card and student loans are paid off and I earn$65 ,000 a year. I'd love to know how to attack this while still being able to maintain my lifestyle, which includes playing golf weekly, seeing my favorite sports teams play, and going on dates. My friends and I are all in the same situation, and we need some help.

1:46:03Rachel Cruze:Oh, Carson. Sweet, sweet Carson. I still want to bro out and still get ahead financially and not have to make any sacrifices. I've got to have my golf. Okay. Can't make any sacrifices.

1:46:16George Kamel:Well, here's the hard truth. do you want financial freedom? Do you want to build wealth? Or do you want to keep your hobby temporarily, which is going to slow down those other plans? So you've got to figure out what the priority is for you. And it's fine if you want to say, hey, I don't want to lose my lifestyle. It just might mean you take 24 months to get out of debt and pay an extra five grand in interest. That's right. That's your prerogative. But if I were you, I'm going to go, you know what? As much as I love these hobbies, I'm going to have to say no to my friends and put pause on my favorite sports teams.

1:46:47George Kamel:It's going to take four months.

1:46:48Rachel Cruze:Like if he really buckles down. Yeah. I bet he can pay off 15 grand.

1:46:52George Kamel:65 grand a year. He probably takes home four grand a month is my guess. Oh, yeah, yeah, yeah.

1:46:58Rachel Cruze:That's what I meant. Yes, yes.

1:46:58George Kamel:And I don't know what his lifestyle is, how much margin he has. But if he can afford golf and seeing his favorite sports teams regularly and going on dates, maybe just pause the dates. Let's stay single for a little while longer. And pause everything else.

1:47:11Rachel Cruze:Okay, I was a little aggressive. I was a little aggressive on my four months.

1:47:14George Kamel:I talked to you like if you were my friend, Carson. I hit you straight. So that's the honest truth. $15 ,000 on a credit card is an emergency. That's like 27 % APR you're paying for the privilege of carrying that balance. So I don't care if it's the only debt you have. I want you to treat this like a crisis, which means we are only covering the four walls. Food, utilities, housing, transportation, insurance. Every other dime that comes in, including you working extra, is going to go towards knocking out the debt, getting an emergency fund. then we can bring back in some of our hobbies.

1:47:47Rachel Cruze:Yes. It's not a no forever, but instead of paying extra on all the money you're working for on interest, get out of debt. And if you want to check out EveryDollar, that's a great place to look and to see where the most of your money's been going. And then you can like delete categories and say, okay, I used to spend it on this, but if I take that out, that's more margin. And so that is one thing I love about EveryDollar. There was actually a fan quote that said, I love this app so much, makes it super easy to budget with my husband. We have implemented this practice since our wedding day and we have zero money fights and full transparency.

1:48:17Rachel Cruze:We are on the same page. So that's what's great about it. Take notes from

1:48:22George Kamel:this married couple, Carson. I know.

1:48:23Rachel Cruze:But you just have not any transparency with another person, but yourself, you know where your money's going. And then you can say, Carson, what if I add some extra income at the top of every dollar and I went and got a side hustle, right? When you're young and single is the time to do it. Yes. Bring in an extra two grand. You add that on the income line item there on your every dollar budget and you get to see it all trickle down so uh carson come on dude you got this way more of attractive on the dating circuits that's right when you say you're financially responsible women love it we love security so that's what you're proving out there so hope that helps carson and you guys if you want to check out every dollar you can go download it for free in the app store or google play all right let's head to miami welcome to Miami.

1:49:10Rachel Cruze:We got Brian on the line. Hi, Brian. Hey, how are you guys? Hi, we're doing great. How can we help?

1:49:17George Kamel:Hey, so I'm relatively new to you. And I think you answered this question in the segment about 30 minutes ago, but I'm going to ask it anyways. After when I get paid each month, after expenses, I put money in my tax account and giving. I've got about$3 ,000 that I've been investing every month. Nice. My question is, I just talked to somebody about permanent life insurance as kind of diversifying some of my portfolio. So instead of giving$3 ,000 a month into my mutual funds and IRA and all that, they talked about possibly doing$750 in a permanent life insurance and then$22.50 in investments. So by diversify, they meant, can you give me a bunch of that money in commissions?

1:50:14George Kamel:I brought that to my financial advisor. He said, please, God, don't do that.

1:50:18Rachel Cruze:Oh, what a great financial advisor you have.

1:50:21George Kamel:Well, here's your second financial advisor, me saying, please, God, don't do that. I would rather get cyclospora than get a permanent life insurance policy. Okay, I'm curious. I haven't been listening to you guys. I am curious to why your thought is that way.

1:50:36Rachel Cruze:George was made for this moment.

1:50:39George Kamel:This isn't what I do. My blood pressure went up.

1:50:41Rachel Cruze:This is where George is about to shine.

1:50:43George Kamel:The reason why these guys, I'm guessing, is it an old college buddy? It is not. No, this is actually, this is a family member. Oh, good. Even worse. It's a blood relative. Yeah, they've done well because they've sold scams to people like you, Brian. So here's the thing. These policies try to mix two things it wants, life insurance and this cash value portion, which grows at a snail's pace, way slower than your investments will grow. And they often make 50 to 100 % of your first year's premium and commissions. Goes to them. So they make all their money on the front end. And then when you try to get out of it, you'll lose most of what you put in.

1:51:22George Kamel:So now there's a sunk cost fallacy where you go, I might as well stay in. They told me I'll ROI if I stay in this thing for 15 years. and so you do not need life insurance if you're a single guy. Are you married? I'm married. Good. Do you have term life insurance? I just got term life insurance. Hallelujah. Does your wife have term life insurance? I just put her on term life insurance as well. Amazing. We both have$2 million each. Fantastic. Okay, so we have life insurance covered, check. Now let's do investments separately. And you're already doing that through what? Index funds in a brokerage account?

1:51:59George Kamel:or retirement accounts? Yeah, the majority is in, I keep 30 % in CDs, 60 % in a high-yield brokerage account, and then I invest in an IRA just for tax purposes. Okay. Well, I would keep your investing and insurance separate for the rest of your life, and there's zero upside to this, to you giving this guy$750 to then lose money on it. You will make so much more just putting in a high-yield savings account.

1:52:30Rachel Cruze:And no upside of having these CDs, Brian. Like, you need to invest. Have index funds. You can diversify within your investments, right? Get a good growth stock mutual fund that's 90 to 200 stock. I mean, what it can do from a return standpoint is going to be way more on your side by putting this stuff in. Again, something like an index fund. And is your IRA, is it a Roth IRA?

1:52:57George Kamel:It's a traditional IRA

1:52:58Rachel Cruze:Okay, so I would look into the numbers on that And maybe converting it You'll pay some taxes on it But converting it to a Roth Because you guys are so young The growth that's going to be happening in that account Is going to be astronomical By the time you're 59 and a half Most of what is going to be in that Roth IRA Is going to be growth And you don't want to pay taxes on that You can pay it now So I would look into a couple of things Is your financial advisor The one that we love Who said stay away from permanent life insurance is he looking at all of this with you yes and he's okay with all of it yeah he's he's good with it um

1:53:34George Kamel:my cds get capped so uh right now i don't add any more into cds it's uh i capped that at like 40 grand um and now what's the purpose of them what are you doing with that money mutual say that again what's the purpose of that money in the cds what are you doing with that um i'm gonna buy a house in the next probably two years okay so it's just money that i can take whenever got it has it fully matured matured yes okay i would i would personally move it to everything to high yield savings for short-term goals and anything long-term which is four or five plus years i would do in retirement accounts and index funds so hang on the line brian i'm going to give you a free ticket to our Investing Essentials virtual event where Dave Ramsey and I will unpack his personal playbook for building wealth.

1:54:26George Kamel:We're going to walk through all of the stuff you're talking about and probably steer some people away from ever getting a permanent life insurance policy.

1:54:32Rachel Cruze:Yeah, I'm glad you called in, though. It's a great question. And you're on the right path. You're doing so many great things, Brian. I think if you tweak a couple of these things from a mathematical perspective, it's going to be more on your side.

1:54:49Thank you.

1:55:05George Kamel:The problem with online investing advice? You hear so many different opinions and you're left wondering if you're even doing it right. And that's why we created Investing Essentials. Join me and Dave Ramsey at this two-night virtual event to learn Dave's playbook for investing and wealth planning. We'll break down 401ks, mutual funds, passing on wealth, and more. So join us September 1st and 2nd. Tickets start at$199. You can get yours today at ramseysolutions.com slash events, or just click the link in the show notes.

1:55:49Rachel Cruze:Our scripture of the day comes from Proverbs 11.25. A generous man will prosper. Whoever refreshes others will be refreshed. Richard Branson said, Train people well enough so they can leave. treat them well enough so they don't want to. Oh, I like that. That's a good quote.

1:56:10George Kamel:All right.

1:56:11Rachel Cruze:All right, let's head to Dayton, Ohio. We have Patrick on the line. Hi, Patrick. Welcome to the show.

1:56:18George Kamel:Hi, I appreciate you taking my call.

1:56:20Rachel Cruze:Absolutely. How can we help?

1:56:23George Kamel:I just, I've got a lot going on right now and I feel really stuck. Like I'm just spinning my tires and I can really use some wisdom.

1:56:32Rachel Cruze:I'm sorry. Yeah, what's going on?

1:56:35George Kamel:And so, well, my daughter's currently in the hospital. I've got two kids with kidney problems. The third kid has seizures. And, I mean, I've been doing the baby steps. I felt like I've been doing everything right. And I'm just, I'm not seeing any hope. We're not getting anywhere. I feel like I'm starting over every other week. Are you talking about financially or no hope as far as the medical sort of getting that under control? You know, that kind of stuff, I sort of made my peace with it and always been very positive outlook. But I guess it's more the financial. Yeah. Well, give yourself some grace, Patrick.

1:57:15George Kamel:The journey looks different for you. And it's OK if that goes slower and, you know, you don't see the progress that other people see around you. You've got a storm and it might be a longer term storm where you just have to batten down the hatches and have the bigger emergency fund and not be able to invest as much in a season. and that's okay. So what does the expenses look like right now? What's sort of stressing you out financially? So, you know, when she's in the hospital for a week at a time or two weeks at a time.

1:57:48Rachel Cruze:Is it dial? What's going on? What's her treatment?

1:57:53George Kamel:Well, she already had the transplant, but now she's on immunosuppressant, so she's always getting sick, every little thing. Well, right now she's got salmonella real bad and septic shock and everything. And we just got over that and I guess it just came back. But that's just one instance where with all three kids, we're just always in the hospital. And obviously while I'm here, I'm not making any money. I got my wife's at home. It's more than an hour drive from here. She's got the other two kids and, and yeah. Okay. So what is little things just always popping up?

1:58:24Rachel Cruze:For sure. What is your work life look like right now? How much are you making? And is it sustainable from like a remote perspective? if you're able to help with the kids or what is, what is that going to look like?

1:58:36George Kamel:Well, I do construction, so I've got to be there. There's nothing remote. What do you guys make in a given year? I mean, if I never missed a day, I guess I'd be getting like 39 K. 39 ,000 a year? Yes. Okay. And your wife stays at home? Correct. Okay. So$39 ,000 is a best-case scenario for what we're working with here. Right. But with the doctor's appointments, the sicknesses, the, you know. Yeah, because you're getting paid per day on the construction site. Correct, per hour.

1:59:13Rachel Cruze:So what do you think you'll bring in this year? If the top's$39 ,000, what is?

1:59:19George Kamel:$25 ,000 if I can get back to work. What are your expenses every month? Because that's$2 ,000 a month you have coming in. Yeah, that's, I mean, I would say we probably could get by with like$2 ,400 bringing in. So there's definitely a deficit. So your expenses are$2 ,400 a month. So we need at least that coming in. Do you guys have any debt? Yeah, I still have one in the house. Just a mortgage? No consumer debt? Correct.

1:59:51Rachel Cruze:Okay, that's positive.

1:59:52George Kamel:That's good. And any savings? Anything in cash? I mean, no, I'm wiped out. I'm telling you I'm starting over from zero. I put our last money in the gas tank to get her down to the emergency room. Yeah. Do you guys have health insurance? Yeah, it's like through the state, you know, Medicaid. So I don't have medical bills. That's never been an issue. I've never had a credit card, so that's never been an issue. So that's one thing we don't have to worry about is how are we going to pay for this medically.

2:00:20Rachel Cruze:It's huge, yeah.

2:00:21George Kamel:Now, the goal is to make enough money that you may not even be eligible for that, but you have good health insurance, a better job, you have margin left over to invest and save. Because while this is a blessing right now, the long term of you never having any money left over is a major problem. That's what the issue I'm running into is because I took a$5 an hour pay cut in the year 2022. I left a good job that wouldn't want me to miss a day. And I took this job for much less money so I could have the flexibility of always being here with my daughter. For sure. And then I have no problems at that job with missing work.

2:01:00George Kamel:You know, we're like a family there. They don't, they don't, they understand my situation.

2:01:04Rachel Cruze:That's amazing.

2:01:05George Kamel:But I'm not getting paid while I'm not there.

2:01:06Rachel Cruze:That's right. Yeah. And so she's there a week at a time is what you said. I'm just wondering if there's a predictable, if there's any predictability to her condition of when you're going to be at the hospital versus not in the days you're home. wondering if you can pick up something extra just to bring in some side income for a bit.

2:01:30George Kamel:Right. I work when I can and everything will be fine for a couple weeks. Then all of a sudden, you know, then her sister will be having seizures and I got to be down in the hospital. The predictability part is out of the question. Do you guys have any family nearby? Yeah, I mean, our parents live around. You know, we've got a pretty small town. Good church? Are you guys involved in a good church? Not really. But the town itself has helped us out before. At Christmas time, they'll give us something and our parents help when they can. Yeah.

2:02:08Rachel Cruze:I think my goal...

2:02:09George Kamel:The kids' condition is so demanding. It takes all my time.

2:02:13Rachel Cruze:I'm just wondering if there's... And it would be hard as a parent. I'm like, it's heartbreaking. But if there's a stint that you and your wife agree, and maybe with grandparents' help, and you guys just say, hey, we need, I'm just making this up, but six months where you, Patrick, are consistent on the job just for the goal of getting back an emergency fund, just to have some buffer. And it may take five, six months to get that. And maybe it's a grandparents going to the hospital or watching the kids while your wife goes to the hospital. or if there's some length of time for you just to focus on work and even work nights, work weekends, Patrick, I'm like just so much so that you can at least build up some cash flow.

2:02:59Rachel Cruze:Because I think the stress is now that there's no margin, there's nothing. And that, let alone all the health issues with your kids, I mean, that keeps you up at night. And so I'm wondering if, you know, having 10 grand in the bank sitting there, that changes your world financially at this stage of the game.

2:03:20George Kamel:It does. It would. It definitely would.

2:03:22Rachel Cruze:So I just wonder if you and your wife, and again, that's going to be so hard because I know you guys are in a rhythm and you're taking such good care of your kids. But where you both kind of look at each other and say, OK, for between now and Christmas or I don't know what it looks like, But it's during a significant period of time enough to get some cash in that's margin. And we're just saving that. That's our goal because we just need that buffer. That's I think that would would cause some level of peace. That could be your first step. Right. And then over time, like what George is saying, looking at your your career and getting to a point where, I mean, God willing, you're making 70, 80 in construction and a great job and you have great health insurance for the kid.

2:04:02Rachel Cruze:I mean, you know what I mean? that that's that's the ideal dream long term but for now um man just having some piece of buffer to fill up your tank and not have to and not have to think twice about it right to help to help your

2:04:14George Kamel:kids yeah what does the ladder look like for you if you were to step up into a different role in construction making 30 40 bucks an hour uh is it management It could be. Because if there's no long-term trajectory here, then I think we need to find a totally different field where your skills could transfer. Because if you're stuck making$20 an hour and you're an hourly worker, that's going to be really hard to climb out of this and get that margin long-term. Yeah. So that's another piece to look at. And I'll send you a copy of Find the Work You're Wired to Do. It has a Get Clear Career Assessment in there.

2:04:55George Kamel:And that will start to show you, hey, you know what? I do have all these skills. This is what I'm wired to do. and maybe it's not construction for the rest of your life. So we'll send you that copy of Find the Work You're Wired to do to help. But man, there is no easy answers here.

2:05:09Rachel Cruze:Yeah, we're so sorry, Patrick. Any quick wins you guys can get, I think is your number one goal today, just for you to kind of get through day to day.

2:05:15George Kamel:And lean on that community as much as you can.

2:05:17Rachel Cruze:Absolutely. Oh, thanks for the call. George, great show today. Thanks to everyone in the booth. And remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace. Christ Jesus.