Rock Bottom Doesn’t Have to Define Your Financial Future

26:37Everything is now on the table. And so I want to pull a credit report and not just look at his account. I want to see who he owes money to. And I want you to pull your credit report. And this is going to sound caustic. I want you to pull a credit report on all of your kids using their social security numbers. Because when people call into the show all the time and they don't realize how bad it is and people start gambling or people get in over the head and they pull a credit card out on their nine-year-old and use that social security number to get a quick thousand bucks here or a quick$2 ,000 there.

27:11And so that will give you the big picture of who you owe to what, who your family owes to what. Hopefully, you have nothing on yours and your kids have nothing on theirs and his is minimal. And what this is was a scared, embarrassed husband that took the easy way out and he is ready to stand tall, take his medicine, and y 'all can rebuild trust. Worst case scenario is you're in a way bigger mess than you know yourself to be in. but you can't you can't go to an untrustworthy person and demand that now you be trustworthy and think you're going to get any sort of nervous system stability from that because they've proven themselves to be untrustworthy over a long period of time and so i need to see this stuff with my own eyes

28:02so how do i get a credit report done like i don't know how to george has it's a simple

28:09George Kamel:website. It's all free. It's annualcreditreport.com. And you can pull free weekly online reports from all three major bureaus. It's Equifax, Experian, and TransUnion. And so you'll just go through the steps, enter it. You never pay for this. This is free. So just go to that website and you can get that all done, annualcreditreport.com. And that, like John said, that will be the full truth and nothing but the truth. So I really don't care what he says. I want the reality of the situation. And again, if he's unwilling to do that, that speaks to much deeper things he's hiding. There's an alternate life here.

28:43George Kamel:And that tells me he doesn't want healing in this marriage if he's not willing to come clean. Right. And let me say this. I want to applaud you for, what did you say? You were calm so that he could feel safe enough to come forward. I want to applaud you for being in control, feeling big feelings, but being emotionally mature. but you don't owe him dishonesty either. Okay. Yeah. You're right to be enraged. You're right. You're right to be sobbing at the table because this man lied to your face into the face of his, of y 'all's five kids. And so you don't also owe him a silver platter that he can gently put out his receipts on.

29:32Right. And so what I mean, be you're responsible for the emotional, like mature next right action. That means I'm not going to hit him. I'm not going to swear at him. I'm not going to punch a hole in the wall. Everybody deserves dignity and respect, but you you're dang well going to know I'm pissed off. Yeah. You're going to know that everything in my life, I'm questioning it now.

29:53George Kamel:Right. And you're not crazy and you don't owe him a false sense of yourself so that he feels comfortable coming forward with it, right? Yeah. That's not your responsibility to massage his ego through this also. Do you guys share an account or is everything separate? No, he wouldn't share it. So you have no access to anything financial. He pays the bills? So he does pay the bills. We do have a joint, but he has his own as well. So 60 % he diverts to the joint account, 40 % diverts to this secret account. That's his. Yes. Yeah. Okay. Well, starting today, he's going to divert 100 % into this joint account.

30:36Okay.

30:37George Kamel:Or you separate if he's untrustworthy and he's going to destroy your financial life further. Yeah. And Betty, that's a great point that George brings up. You need to get really clear on your, what I call your or what statement. because if he looks across the table from you tonight and says, I'm not pulling a credit report and I'm not giving you access to this account, period. You have to have your or what statement ready. Or me and the five kids are going to my mom's house. Or, well, okay, then I'll just have to live with it. And you mentioned we have to fix this and stay together because we have five kids together.

31:13I need you to say that's the picture y 'all created. and that picture is over because of his financial infidelity. Now y 'all have to rebuild something new. And I hope it includes him and you and those five kids in the same house all working together to build something amazing. I hope that's the case. But you have to have the courage to say, or what comes next? And then be willing to live into your own boundaries there if he looks at you and says, I'm not playing.

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33:13George Kamel:Sarah is in Jackson, Mississippi up next. Sarah, welcome to the show. Hi, thanks for taking my call. Absolutely. How can we help today? So me and my husband got married two weeks ago, and we are debt-free. Thank you. How was the honeymoon? Did you guys go on a trip? Not yet. We've both been at work. We're both in the military. And so as soon as we get a time where we can take some leave, we're planning on taking a little honeymoon. I can hear you smiling through the phone. Well, thank you. We're both still very excited. I love it. Dude, I'm so happy. I love, love, love. I just think marriage is good.

33:56So good for you. So what's your question? Thank you. So we have$98 ,000 in cash combined. We just finished combining our checking accounts and savings accounts. And so we have that$98 ,000 in cash. And currently, we're bringing home$53 ,000. And we're trying to figure out how much money we should spend on a vehicle. We really need to upgrade one of our vehicles. So out of that$98 ,000, we're trying to figure out what is a good amount to put towards a vehicle.

34:31George Kamel:And your annual income is$53 ,000 a year between the two of you? Yes, currently, but we're expecting it to go up within the next six months. Okay. Do you know an exact number, or is it just sort of you're not sure yet? In about six months, we're expecting to start making$100 ,000 between the both of us. We're anywhere from$100 ,000 to$110 ,000. Wow, that's awesome. So you're about to double your income. Yes. Okay. And what's the urgency of the purchase? Does this need to happen tomorrow or six months from now? It can happen six months from now. So, like, currently I'm driving a 2005 Honda Odyssey, and it's great for getting me to and from work.

35:14And he has a 2014 Dodge Charger. And we just know that, you know, they're both having some issues, and we know that it's soon going to cost more to repair the vehicles than they're worth. So we've just been shopping around. I would like you to know, I just learned about this in Sunday school, women who marry men with Dodge Chargers get a express pass to heaven. My husband's going to love to hear that. Because generally men with Dodge Chargers are not marriable, but you did it. And so congratulations. And debt free. Yeah. That's impressive. I'm just playing, but congratulations.

35:51George Kamel:Here's the parameter for cars. Number one, you pay cash. You're going to do that, right? it? Yes, we are. Number two, we're going to buy used unless we are net worth millionaires to where we can stomach that major hit on depreciation that cars experienced in the first few years. Okay. And then number three, you want to make sure that all the things with wheels and motors in your life don't add up to more than half of your annual income. That's why I was digging at your income. And if it's going to go up, well, that changes the numbers drastically because right now you should have no more than$26 ,000 in cars as far as their value goes.

36:28George Kamel:But six months from now, that number can change because it's a smaller part of your world. So now you could have$50 ,000 worth of cars sitting in the driveway. So that's where I'm trying to go, okay, can you wait six months to where you can get a nicer to you car? Because you have the money to do it. It's not going to hurt. You're not going to even dip into this 98K if you go spend 25 today. so what are you guys wanting to get because that really basically what is the car you can afford in cash today that you think would last you at least the next five to seven years okay so we um we found the reason we started asking these questions is we found a um 2001 ford bronco with 12 000 miles on it for 32 grand um and so it's a little bit more than that 26 $46 ,000.

37:19But it's, you know, we've got the$32 ,000 for it. We just couldn't decide if, you know, it kind of hurts whenever you let go of$32 ,000.

37:26George Kamel:Yeah, I mean, it will hurt. And that's why I actually like it. Too many people, we've lost friction when it comes to purchases. And all you see is a$400 payment that the car salesman worked out for you on his paperwork. What you don't see is the interest you're paying, the length of the loan, how you got screwed on the purchase, the extra warranties they threw in there because you're not going to feel it in your payment. And when you write a check for$32 ,000, you go, okay, let's treat this car differently. We're going to treat this purchase differently. We're going to go slower. What is it about an 01 Bronco?

37:55Has it been redone? I'm sorry. It's a 2021. I'm sorry. Yeah. Okay. I heard 2001. 2021. Okay. Wow. That's an expensive Bronco. It must be completely redone. And those guys who go redo Broncos, they do amazing work. They're awesome.

38:12George Kamel:2021 Bronco,$32 ,000. here's my catch. I would wait until your income actually goes up and this becomes sort of a celebration of your newfound income, but I would not buy it today because there's just too many variables. Okay. Yes, that's some good advice because we're both so undecided about it and I told him, I was like, if we're having this much doubt about it, maybe we should wait. God, he won the lottery marrying you. Yes, yes. And hey, George, tell me if I'm wrong here. I find that I get in trouble when I say I'm going to I have this much money to go I'm going to date myself I have this much money to go spend at the mall I've got 500 bucks to spend at the mall I need to get a pair of pants and some shoes and a shirt I will figure out how to spend all 500 dollars where I've seen success is I have a boundary I can't go beyond this 500 bucks but I need to go buy a pair of shoes and some jeans and a shirt And then I only spend a couple hundred bucks.

39:13You get what I'm saying? And so I would love for you guys to dream about what kind of cars do we want, actually, and what cars are going to last us for a while. And then over the next six months, you can keep your eye open for – because you might find this exact car in two months for$19 ,000 or$18 ,000. and instead of saying, okay, we have this much to spend because you'll figure out when it comes to automobiles, especially how to spend exactly 50 % of your income. And that's like a stretch goal, right? You don't have to spend that much. And you two are awesome at driving used cars. That's your life.

39:49It looks like your identity isn't in them. And that's awesome. I would sit down and say, what do we actually want to have together? And then plan that way. Okay.

40:01George Kamel:And let me tell you, a$3 ,000 repair, as much as it would suck on a really old car, is still so much cheaper than$32 ,000. And so that's what I want to encourage. Too many people go, well, I had repairs. We had to get a new car. Didn't want to deal with the repairs. And they just justify it in their minds, thinking this thing's a clunker. So even if you have to buy yourself some time for the next six months until your income goes up and this becomes a no-brainer, it's worth the patience to do it right and go slow. but all things considered, it's all green flags in my book. Okay, awesome. Well, I'll be sure to tell them, and thank you all.

40:35You all definitely brought some clarity to the situation for me.

40:38George Kamel:Happy to do it. Thank you for your sacrifice and service to both of you. Oh, thank you. We are so glad we get to do it. Yeah, and the last thing I'll tell you is you got the Honda, so you're probably going to be driving that until the apocalypse. I do have one rule in my house. The wife should be driving the nicer car. I just don't like it when the guy drives a nicer car. I'm with you. That's always, I've always had a weird thing about that. It just feels odd. Always, always, always. So especially if she's, you know, toting the family around and the guy has like a sweet sports car that's just for him.

41:08George Kamel:I'm like, all right, you're a grown man. Dude, 1000 % with you. The other thing is, and John, people get screwed on this. They go to the dealership and the dealer says, hey, you know, for five grand more, we can get you into the brand new one. You got on the lot, look at this, got to these extra features. And hey, if you do the financing, we'll knock a thousand bucks off. now all of a sudden you are buying a brand new car that was way more they suckered you into the warranty in the paint protection package and are the giant dock fee dealer fee they just throw on there and you're so starry-eyed you just want to get out of there after six hours and go drive this thing and by the way that five thousand extra you spend on the new one you might as well set it on fire because the moment you drive it off it's gone you just lost it it's now worth what you were about to pay for the used one right yeah new car will depreciate 10 the moment you drive it off a lot.

41:56George Kamel:There you go. And within the first five years, 60 % on average. Yeah. That's pretty wild. I love, love, love buying cars that are five years or older because the depreciation has burnt off so much. Yeah. My last car, one owner, 4 ,000 miles on it. And I got 26 % off of what I would have bought it brand new. So I'm like, all right, I'll deal with that. I'll take it. And I, you know, I could have bought it new. It would have been fine, but I just like going 25 % off It feels pretty good. And I've got cash, so I'm not afraid to walk. You've got to have walkaway power. That's the key. You walk in with a check of here's our budget.

42:30George Kamel:Either make it work or we'll go down the street. And eventually, if they want to feed their family, they're going to go, all right, we'll take it. Don't let them bully you. Focus on the out-the-door price. Have your principles and values. Stick to it. And you will make a wise decision when it comes to those cars. Love it.

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44:11George Kamel:Welcome back to The Ramsey Show in the Fairwinds Credit Union Studio. I'm George Camel, joined by best-selling author Dr. John Deloney, and we're taking your calls at 888-825-5225. Rochelle is in Sacramento up next. Rochelle, how are you doing? I'm doing well. How are you too? Fantastic. How can John and I help today? So my husband and I are considering purchasing a new home. Our house is currently up for sale. We've identified a property that we would like to purchase. With the equity from the sale of our current home, we would have a rather sizable down payment, looking to put down at least 50, if not 60 % on a new house.

44:51My husband has brought up the idea of getting a first lien HELOC with a sweep account versus a conventional mortgage. And he's explained to me that with this first HELOC with a sweep account, rather than getting into a 15 or a 30-year loan, we would be able to pay off a$400 ,000 mortgage in eight years.

45:16George Kamel:So I was wondering, sorry, no, the speaker came on his phone. I apologize. Oh, it's all good. So I was wondering, it sounds great. I've never heard of this before. So I was wondering what you guys thought about that. So this in the, in the TikTok world is called velocity banking. He may have heard about it on social media. I don't know where this is, but it's a trend where they call it like a mortgage accelerator. And the idea is there's this revolving line of credit, almost like a big credit card that's secured by your house, but it's your only loan on the property. So you're right. It's your first lien in that there is no mortgage there.

45:58George Kamel:And so then what you do is you dump all of your income into this HELOC, draw it out for expenses. And if you do it perfectly, you can save a little bit on interest, which supposedly pays off the house faster. So that's what he is wanting to do. There's still a lot more risk with it, and it sounds sophisticated, and it's more complex, and that doesn't make it better. So have you guys priced out a traditional 15-year mortgage on this? We've priced out a 30. We have not priced out a 15. Okay. I would price out a 15 and see if you guys can afford that payment where it's a quarter of your after-tax monthly income.

46:40George Kamel:And if not, it tells me the house that you're looking to buy is too much house. So your recommendation would not be to do a first-lane? No. I wouldn't do it. With a sweep account? No. And I think the way he found this was probably online. And there's a bunch of people out there who are proponents of this. and again it's called velocity banking you can look this up on social media and it's going to be some slick dude telling you how this is the hack here's the only hack that works you get a 15 year mortgage which is going to have a lower interest rate than either of these and then you pay it off aggressively here's the thing that if you take out uh if you have a four hundred thousand dollar mortgage and y 'all put down 50 and you have two hundred thousand dollars left there is no secret loan that makes you not have to pay back$200 ,000 plus interest.

47:33And so the only true way, like, so like we can do a 30 year note, but we can pay it off in eight years. You're still going to pay back that money plus interest. And so if y 'all want to pay it off in eight years, that's amazing. Pay it off in eight years. But that just means every month you're going to be paying more towards the principal balance to pay it off faster. But there's not like a secret loan you can do that you pay back$100 ,000 to pay off$200 ,000. You get what I'm saying? Like the whole hack is technically you can get a lower interest rate, and technically you can take that lower interest rate that you're paying and pay off more principal.

48:11But the same thing applies to just paying it faster. Understood. The way he was explaining it to me, and this is kind of where my brain starts to shut down and my eyes blaze over. Same, girl, same. It's even more of the finance. Yes. He's more of the finance person. He was explaining to me that it gets paid off quicker because they compound the interest daily.

48:32George Kamel:Yeah, the way it's calculated. That's where the interest savings come in. But there's still all of the elements of a HELOC, which is a variable interest rate, which means the payment can go up. The banks can freeze or call the line, which adds more risk to it. It's a revolving line of credit secured by your home. And so all of that just makes me go, why are we doing all this? Why all this gyration to maybe save a little bit of interest. I, I a hundred, especially with all the volatility in the world right now, like go back 10 years in your life. Can you have imagined now, right? No, none of us could have.

49:07And so with all the volatility in the world, the chances of me touching a variable interest rate is zero. Right. Right. And so you can get it. If you got in today and the banks and suddenly Jerome Powell comes up tomorrow and says, hey, because of X, Y, or Z, we're raising interest. Like, man, y 'all are on the hook for it. Right.

49:30George Kamel:And there's far more of these ending up in foreclosure versus a 15-year mortgage. And so that's where I go, okay, why aren't we doing a 15-year mortgage and just putting extra on the principal? It's the exact same thing without all the extra risk and complexity. And I'll go one more. I'm putting my baggage out in the world, so this may not be you and your husband, but if you give me a revolving line of credit and suddenly I don't like my floors, I'm going to get new floors because it's not real money. It's just coming out of the revolving line of credit. Oh, we need to fix this cabinet. We need to get a new fridge.

50:03Let's just go ahead and do it. It becomes not real money. And yeah, I'm just going to lock myself in and pay it off. And if I want to accelerate and pay it off faster, I'm going to do that.

50:15George Kamel:I don't know that we can convince your husband, but I hope we convinced you, which I hope puts enough of a wedge between you guys that you don't do this. And here's my rule of thumb, George. If somebody's explaining something to me, you know who I learned this from, of all people? Ashton Kutcher. Not on my bingo card. And here's why. He was talking about, somebody was asking him once on a panel, why do you seem to have so much success with these companies you invest in as an angel investor? And I forgot all, I think Airbnb and Uber. He got in on the ground floor of all these things. And he said, I think he dropped out of high school or maybe he finished high school but didn't go to college.

50:54And he said, his one line was, explain this to me like I'm a high school dropout or explain this to me like I'm a high schooler. And if they couldn't do it, I didn't invest. And so for me, when somebody's trying to explain to me a thing we're getting into and, hey, Deloney, I want you to invest in this thing. If my eyes start glazing over, I'm out. if you can't explain it to me very simple, here's why, here's the terms, here's the payout, or here's the risk we're all going to take together. If you can't do that in a sentence or two, I'm not going to participate in it.

51:24George Kamel:Yeah. Because, because it's not, it's not worth all the complexity because now the more variables, the more fragile the whole system is. And the more dependent it is on other people to do what they said they're going to do. And that what those other people said they were going to, I'm out, I'm out. It's too fragile. Yeah. Well, there's a lot of people that talk about these things and I see very few people actually doing it. I've never heard of someone saying, yeah, the way I paid off my house early was I did velocity banking. I know zero people who have told me that line. There's a lot of people talking about it though.

51:52George Kamel:And so that tells me something. It gets the clicks and the views, but it doesn't work in reality. And you don't see the people who foreclose on their home. They're not sharing that on Instagram. They're only sharing the wins. And so I'm always very cautious with any financial advice on the internet that I don't understand. And we always tell people, don't invest in anything you don't understand. The same applies to crazy mortgage hacks. Here's a hack. Get as small of a loan as possible on a short of a term as possible and pay extra towards it. I can understand that. I could explain that to my toddler and she would get it.

52:24George Kamel:There you go. So the real question is, how are you going to approach this with your husband in a way where you come to a compromise? And I hope that compromise is go with the thing that you both understand. that you both can handle.

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54:13George Kamel:The Ramsey Show question of the day is brought to you by Y-Refi. If your private student loans are in default and you're not sure what to do next, Y-Refi can help you explore refinancing with a low fixed rate and a payment plan based on what you can actually afford. Go to yrefi.com slash Ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey. May not be available in all states. Today's question comes from Carlos in Texas. He says, my preteen son has his own YouTube channel and he's on pace to earn over 5 ,000 bucks a month soon. Should he be tithing on this income? How much should I encourage him to save or invest versus spend?

54:49He understands taxes, so we've got that part down. Left to his own devices, of course, he's a preteen kid. He would buy all the Legos in the world. Yes. Of course. That's awesome. This is fantastic. That means he's a good, regular preteen kid, and he's an adult in his life to help steward how he spends his money.

55:09George Kamel:Yeah. So he's making, I mean, if he's on pace to do five grand a month soon, that's 60 grand a year that a preteen is making. Right. Which tells me he's what, 11 or 12? Possibly. That's pretty nuts. That's great. So like right off the top, we can just do the math real quick. And some people, and I'm assuming tithing, it means you're a person of faith. And so tithing, some people tithe off the top line, meaning you would tithe at 10%, 6 ,000 bucks a year if you're making 60. Some people tithe on after taxes are gone, what am I bringing home that I can spend? They tithe off that. Every one of those things is a matter of you and your spirit.

55:49But I do, George, think it's important to teach kids. we save a piece of our money we give away a piece of our money even if you're not a person of faith generosity has all i mean it's wired into us it's it's part of our psychological and emotional and spiritual health and you have money to spend and george i like the idea with a pre-teen kid when it comes to spending so after you've saved a chunk of money after you've given a chunk of money. I like to let young kids, my kids kind of buy what they want to buy because they, that's the way they learn. Oh, I wish I had that a hundred bucks instead of that completed Lego set.

56:30Or maybe they get that completed Lego set and it's great. And they learn what they like and don't like, but man, watching my 10 year old navigate, I got$50 and I want to go buy a thing. are you sure yeah i really want to buy it and then the next time she wants to she earns saves up some money she wants to buy something then we could say hey where's that thing you bought last month or two months ago or three months ago oh yeah do you really want that no i don't want they

56:58George Kamel:sort of learn so you they learn temporary effects of stuff yeah telling a preteen you don't really want those legos they're like yeah i do and so i like letting them when they have their spin money kind of let them buy what they want to buy, unless obviously not grant theft audio or something, but like within your family's values. But I like them to learn that lesson, but they should be saving some, they should be giving some, and that's going to be a personal decision. Yeah. And at this age, it's less about, you know, you got to be legalistic about these percentages. It's more about, hey, are you kind of budgeting this money like a business, like a profit and loss statement?

57:32George Kamel:So I would have him, you know, jump on every dollar, make a free account and put his$5 ,000 there and say, all right, I'm going to give 10%,$500 to the tithe. I want to invest$1 ,000. Before I ever get to enjoy the money, I'm going to sort of eat the vegetables, do the things I know are good for my future, good for me now. Invest$1 ,000. Maybe you save$2 ,000. He probably has some goals to get a car one day when he's 16. And I would spend $1 ,000. I feel like it's a reasonable amount out of five grand for a kid with no expenses. Let him do it. Let him see what's actually worth putting his money into and what's not, and even reinvesting into the business.

58:05Yeah.

58:05George Kamel:And maybe you want to upgrade equipment. That's right. There you go. And for a young kid, especially, I think for adults too, but for a young kid, I think it would be valuable, let's say he's 12, to say how much, if you make 60 grand, which by the way, if you're living off YouTube, they change their algorithm every other week. And so best of luck to you. But college, would we want to put$150 ,000 in a college fund? So let's reverse engineer that by month. what would we need to start saving now that would get us that amount of money? You want a car when you're 16, you're 12 now, so that's four years away.

58:40Let's say we want$20 ,000 for a car. What would we need to start saving now? So creating long-term sinking funds will teach him at a young age, like, okay, if I want something big like college, like a house, like a car, I got to start planning now for those things when I get there.

58:54George Kamel:And if you can teach him about taxes, about quarterly estimated payments and self-employment tax, it's an extra 15%. You've won. Like as soon as that check hits his account, 30 % goes into a savings account earmarked for taxes. Yes. If he learns that now, he's never going to be calling in saying, I owe the IRS 150 grand because I didn't realize I owe taxes on this money. Adults call into the show doing that. So if a 12-year-old can figure this out, he's crushing it. I think I heard Dave say this once that one of the greatest tricks the government ever pulled was the automatic tax deduction. That if every American had to write a check every month for their taxes.

59:27George Kamel:At the tax office and hand over a check or cash. We'd be paying a lot more attention to what the government spends. We'd be throwing some tea in the harbor again, I think. Correct. So you want to change culture? You want to create a generation of libertarians? Have your 12-year-old start making some money and saying, oh, you made$5 ,000 this month,$2 ,400, not yours. Like, why not? Well, you know. Ouch. We got to keep these pet projects going. That's a great problem to have. And again, we don't know how long this is going to last. So enjoy the ride while it lasts and make sure that he keeps his head on straight and watches his mental health because YouTube can be a wild place.

1:00:05George Kamel:All right. John is in Orlando up next. John, welcome to the show. Hey, thanks for having me, guys. How are you doing? We're doing great. What's your question today? Okay. So I'm 52. I have a 9-year-old son who I have 50-50 custody of. I make about$65 ,000 a year. 25 % of that is being garnished, and that will be going on for another about a year and a half. I have an additional$25 ,000 in IRS debt and$25 ,000 in credit card debt. I have just come upon and found these trading cards, baseball cards, that I had put away, and they are now worth a lot of money. They're liquid up to about, I'd say, over$200 ,000.

1:00:50Wow. I don't – yeah, they're like Shohei Otani rookie cards that are signed. I don't have any savings. The divorce was bad. Based on what you just told us, you went through a pretty rough season, huh? Yes, it was really bad. I lost my dad. I lost my job of 12 years. Then I got divorced. My son was born in, I don't want to give the exact date, but in December. I lost my job the following January. I bought my first house six months before that that we moved into. And then I got divorced two years later. It was just I lost my dad nine months before my son, ten months before my son was born. So it was a bad time.

1:01:42So anyway, though, I made bad choices. The 401k was emptied out when I lost my job. I stayed at home. The best thing that happened was I stayed at home with my son for nine months. and that was a great time, but we went through my 401k at that time. And due to that, and because I was in a different state at that time, they wanted the taxes on that money from the 401k distribution. That was early. And I had also inherited some money from my dad, which they wanted from that too. Unfortunately, I wasn't in Florida at the time, or else I would have been fine from what I've learned. And so anyway, what I want to ask is I have this debt.

1:02:25I have these cards that are probably going to be even worth more money down the line. But I have this debt now, and I want to leave something for my son. And I can't just keep living paycheck right now. I'm like just at the end of it. I just can't do it anymore. Yeah. I'll tell you this, John.

1:02:44George Kamel:I'm going to solve for peace in the present, not go, man, what could I have if I hung on to him for five more years? I'm paying off the debt, all of it. That's 50K. I'm setting up an emergency fund for myself of six months of expenses. I'm going to fully fund a Roth IRA for the year to set myself up for the future. And then maybe you have some leftover to enjoy and spend and set aside some for taxes because you're going to have capital gains on that. Yeah, my work does offer 4 % match, which I haven't signed up for yet because I didn't know if I was going to go bankrupt before I realized what I had.

1:03:18George Kamel:Not anymore. This is your fresh start, man. I would pay off the debt. They offer the 401k pre-tax or the Roth IRA up to 4 % to do the Roth IRA. I mean, I love the after-tax option because then it's going to grow tax-free for the rest of your life. And so I would definitely pay off the debt, get the emergency fund, get the 4 % at least, fund a Roth IRA. And if you hang on the line, I'll send you my book, Breaking Free from Broker. They'll walk you through that whole plan. But I would sell these cards to give yourself a fresh start. And never look up their potential future value again. sell them and be done.

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1:05:20George Kamel:buying or selling your home is one of the biggest financial transactions of your life so you want an expert in your corner who's fighting for you to find the best deal for the right price and the ramsey trusted program is the only way to find a top agent you can trust who will help make your home a blessing not a burden super easy you can compare agent profiles interview them, and choose the right one to work with. You can find a local Ramsey trusted real estate pro for free at ramseysolutions.com slash agent, or click the link in the description if you're on YouTube or podcast. Jordan is in Miami up next.

1:05:50George Kamel:Jordan, welcome to the show. Thank you. Thank you. Sure. How can we help today? Hey, I'm just trying to figure out how I get out of this momentum of just wanting to keep going just with my life in general. I'm at like a point, I'm at like a breaking point in my life where I'm currently stuck in the city I'm at with a job I just, I'm not good at. And I'm 3 ,000 miles away from home. So it's kind of getting a little hard for me. Yeah. Hey, do me a huge favor. Talk right into the phone, brother. Why are you stuck in Miami? um so i recently bought a car from a dealership that they claimed had no problems up in idaho and i had a friend who does door-to-door sales and he's like hey let's do some sales with me i'm like you know what's gonna hurt doing that i reached nebraska my car has transmission problems i take it to subaru they can't buy it off me so i had to leave of the storage unit fly out down here with the rest of the money I had.

1:07:02And now I'm just struggling with sales. I'm just lost of what I need to do. Plus, I'm in debt. But, I mean, when you say stuck, can you legally move tomorrow? Yeah. Could you get a bus pass or could you just suck it up and call your parents and say, I need a bus pass home and go home? I don't have parents. Okay. could you work really hard for the next 30 days and get a bus pass and go home and get out of this mess?

1:07:37That's the issue. It's like, I feel like everything I do, for the past week, I've been busting my butt. I've been out there 10, 12 hours a day trying to make these sales.

1:07:51George Kamel:Doing door-to-door sales? Yes, sir. What are you selling? Pest control. Are you making money doing it? What's your average week or month look like? So the average week is around$4 ,000. That's just in like sale commission, which is like$1 ,000 personally. $4 ,000 a week? For like the market. It's based on the commission. So we'd sell$1 ,000, but that's for the company. Okay, what are you taking home though? What ends up in your bank account at the end of the week? $1 ,000 a week. A little less, probably like$600. So you're making about$2 ,400 take-home pay doing this? Yes, sir. Okay. And that's going to stay that way for the foreseeable future.

1:08:45George Kamel:I mean, this is you busting it. Yeah. For$600 a week. What's stopping you from going to find a different job in Miami? Um, well, the way they have it around here is there's a five, it's like a hotel room with three rooms. And it's just a rent problem. And I don't have, if I tell them like, hey, I need to find them a job. I don't know if they're going to want me to stay. So it's either. So you're living rent free as part of the deal? No, it's 800 a month. So you could find a couple of roommates and go elsewhere. Yeah, this is like a denture of servanthood, man. Right. I don't think you're as stuck as you think you are.

1:09:30George Kamel:I think you're just depressed. Yeah. And you don't have the energy to get unstuck. Right. Where's your parents, brother? What happened to them? They passed away. When did they pass away? Last year. Okay. Do you have siblings? They also passed away. So you lost everybody in your family? I was a hit and run with a drunk guy and he bites in my truck. Man, I'm so sorry, brother. You got any friends in the area? I'm with my best friend. He's the one who's kind of like, because I've been working in Idaho just as a manufacturing company doing AR triggers just for a 16-hour. and it was miserable. And he was like, dude, we got to get you out.

1:10:29We got to, you know, get some life back into you. And I was starting to believe him because it's Miami. I mean, who doesn't have fun in Miami? And I was just like, yeah, man, let's do it, whatever. And then as life can't get worse, this dealership screwed me over with my dream car that I saved up a lot to buy.

1:10:48George Kamel:What do you owe on the car? $21 ,000. And what's it worth? About$25 ,000. Is that in its current condition it's worth$25 ,000? No, in its current condition it's probably worth like$8 ,000 because there's transmission problems. And you can't afford a new transmission, obviously. No. What other debt do you have? It's currently in a storage unit in Nebraska. What other debts do you have? I have a personal loan for about three grand. I was hoping to use that to kind of just get me a little push forward while I'm in Miami. I mean, so far, it's not going horrible. I just need to find a way to get myself out of this mentality where I'm not good enough to, or where I feel like I'm not trying enough to make these sales or keep going.

1:11:49Bro, I know you feel like you're at the bottom right now, but I'm telling you right now, I've been doing this for my whole career. You had a massive loss in your life, and you got to go sit down with somebody. And I know you can say you don't have time or you don't even have the resources. I'll give you six months free with BetterHelp, but I think you're going to need some in-person sitting with somebody to metabolize the amount of grief and loss you've experienced in the last year. Right. it. And I'm just telling you, therapy changed my life. I'm still here because of it. And it's worth it. And you're worth it.

1:12:24But you got to go sit down and talk to somebody. You're not going to be able to power through this because there's nothing to power through. Right. It's kind of like treading through my own list. That's right. That's right. And another loan is not going to get it. A dream car is not going to get it.

1:12:37George Kamel:Even another job isn't going to heal it. Yeah. 16 hours. Another job might give you some margin. It might keep you from feeling like you're living a failure factory, right? I couldn't do, I would be terrible at door-to-door salesmen. I would do it if that's the only way I could feed my family, but I'd be terrible at it. I don't want you doing something that you're terrible at that is just compounding this vision of yourself in the mirror. Yeah, and it's like, I do have a dream. I want to help people. I always talk to my parents about this because they've always noticed it about me. I want to help people, especially literally the situation right now like that's what i want to do i want to you know be able to tell my story or yeah you know help them so i want to be a psychology that's awesome but listen you you can't give what you don't have and so the best therapist i know as friends and colleagues myself the people who are best at helping others have had their own journey getting the help they needed right right and it's you just opening your hands up saying okay i've tried a new car i've tried a new job i've tried a new state i've tried a new location um it's time for me to get with a professional and face this head on right right but i would tell you i don't think you're broken i think your body is trying to take care of you man and it's just saying hey we got a lot to metabolize and a lot to process and a lot to walk through.

1:14:11It's so, so much, brother. Right. Okay, so hang on the line here. I'm going to hook you up with six months of BetterHelp licensed counseling so you can get started today. You can reach out to them today, and then hopefully they can connect you with some resources in your local area.

1:14:27George Kamel:I'd also like to get them a copy of your book, John. Yeah, I'll send you Building It on Inxious Life. I'll send you the audio book and the regular book. Maybe you can listen to it while you're walking door to door, but it's not going to be the thing that fixes you in this moment. I don't think you're broken. I don't think you need fixing. I think you need healing. And I think you need somebody to sit with you for, for a season. Um, but man, we're, we're praying for you and we'll be walking along. We'll give you the resources we got. We'll send you every dollar too, to get you, get to help you get your money screwed on straight.

1:14:55But, um, man, for as hard as you're working for 600 bucks a month, maybe a fast food job or something would help.

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1:16:34George Kamel:Sean is in Daytona Beach up next. Sean, welcome to the show. Hi, thanks for having me. Absolutely. How can we help today? All right, so I'm a merchant marine. I've been a merchant marine for about 20 years. Hey, Rich, do me a huge favor, Sean. Talk directly into the phone for me. Sure. There you go. I am a merchant mariner. I've been one for about 20 years now. Awesome. I have multiple jobs, but my primary is being a merchant marine. My other is I'm an over-the-road trucker, and I do construction and that sort of deal, too. But basically what ended up happening to me was I was married for 10 years, and I had moved up pretty high on the ships.

1:17:25I was doing about$110 ,000 a year for myself, And then my ex-wife was doing an additional maybe 50 or so. So we had the bills associated with$160 ,000 a year households. During COVID, I got forced to step away from my job because I didn't get vaccines because I didn't trust it. And also, I wanted to retire to be home with my young child. Um, so basically I forcibly retired with about a hundred thousand dollars in the bank. Um, and then we got hit by a hurricane and, um, I had to do a second mortgage on the home from the SBA to, you know, pay for the roof, the fence and everything that got destroyed.

1:18:21And then we got talked into the solar panels. and while I was home I was working 10 jobs and making about an eighth of what I was making on the ship. So my ex-wife decided that because, and this is what she said to my face, because I was making less than her, she lost all respect for me as a man and then she cheated on me with someone who made way more. And yeah, so the divorce happened. just settled in the middle of last year, and I went back to the ship because I was not mentally healthy. And in order to keep my kid through the divorce, I basically had to swallow all of the bills for$160 ,000 a year household.

1:19:14And by stepping away, I lost my promoted position. So now I've gone from about$110 ,000 a year personally down to about$74 ,000. So I have about$250 ,000 worth of debt, and almost all of it is in the household.

1:19:40I'm just so stressed. Yeah. All right. So you've been through a lot. How can we help? Well, I just think I might need somebody to tell me that my five-year plan is somewhat workable and that I'm not an idiot.

1:20:02George Kamel:Five-year plan to what? What's the goal for you? To be able to actually retire and actually go see my son. How old are you? He's six. but he is barely in the past. I'm 37. Okay, why do you need to retire in five years or else? Where did that come from? Well, I don't need to. That's kind of what I would like to do. At least retire from this career and do something. When you say retire, you mean you have enough assets that replace your income to cover your bills and lifestyle. Correct? By retire, I mean be able to shift into a career where I can remain in the area of my home. Got it. So you just want like an encore career that keeps you local.

1:20:57Right. Okay. I mean, currently I'm an over-the-road trucker and a merchant mariner. Okay. Here's the thing. Again, I know these conversations are really compressed. And so what I'm hearing is, and none of your plan is going to work unless you make this change, okay? Right. You have to take ownership of all the choices you've made. Because the way you told that story, other than your wife being like a horrific human, right? Other than that, every choice you made from I had to get a second mortgage, I got talked into the solar panels, even though I had$100 ,000 in the bank, I had to do this, I had to do that.

1:21:47I want you to take ownership of I made some choices that have landed me here, or I made some choices that gave me no margin, and then boom, I got hit with a literal hurricane and a hurricane inside my marriage. And I had no cushion because I made some choices. And when you take that level of ownership, this is all neuroscience, brother. It puts you back in the driver's seat of your own life.

1:22:21I'm fully aware that I made some mistakes here. Okay, awesome. So I'm hard-pressed to believe that a guy that works as hard as you do, that has the skill set you have, could not find a$75 ,000 a year construction job or a building job in your local community. Am I crazy? No, you're actually – that doesn't work. I have looked. There's very few jobs in my area that would pay that without forcing me to go get an entirely different skill set.

1:22:57George Kamel:Okay. You have like seven skill sets. Get an eighth one. Yeah, yeah. What's stopping you? That's what I'm saying. Like, the picture you had of your life, it's over now. It's ended. Right. And so the question before you is, do you want to keep living a life where you won't see your kid until you're 11? And I'm not judging that. I just want you to take ownership of, this is the choice I'm making. or I'm going to sell this house and get a one-bedroom apartment because this dream is over. Well, I didn't really get to that part, but currently the house is on the market. Okay, great. It should sell somewhere between$215 ,000 to$230 ,000, which would give me roughly about$10 ,000 to$15 ,000 cash in hand.

1:23:41Amazing.

1:23:42George Kamel:Is that after you pay off the solar, pay off the second mortgage? Yes. Awesome. Okay, great. Amazing. I'm proud of you for that. That gets rid of a large majority of the debt. What other debts are there in this$250K? I just managed to pay off$25 ,000 worth of credit card debt while I've been out here. Amazing. That's awesome. So I've still got an additional$5 ,800 worth of credit card debt. My ex-wife's car loan is still in my name, but she pays on that, thankfully. um but basically um what i'm seeing for my future here is i need to be a merchant marine because it is for my child's health insurance free of charge no nothing got it okay so i i personally i i personally like you just laid out a map and i'm i'm hearing a man stand up and get in the driver's of his own life.

1:24:41I'm going to sell this house and I'm going to have 15 grand in the bank and I'm going to pay off this$1 ,500 credit card. I'm going to owe nobody anything. And then, dude, if you go make$50 ,000 as a school teacher, it will come with health insurance. Personally, I would choose less money and more time with my kid than I would never see my kid for this quote-unquote free health care. That free health care is coming at a major cost to your relationship with your son, to your psychological well-being, to your overall financial well-being. And so you make some sacrifices like you're making right now.

1:25:20I'm going to be a one-bedroom apartment dad right now. That's the world. That's the cards I've got. And I'm going to be a teacher. And on the weekends, I'm going to drive trucks. And in the evening, I'm going to repair, I don't know, people's front porches or something because you've got that skill set. I'm going to do what I got to do to scratch and claw. I'm telling you, man, that kind of hard work gets rewarded over time. But again, you're making some amazing sacrifices. And also, another foot is still trapped in this, well, I guess I got to. And dude, I've got personal family and friends who are locked into a forever blue-collar life that's killing them because I get a good deal on health insurance or whatever.

1:26:02And that's just not a trade.

1:26:04George Kamel:This$160 ,000 lifestyle, your income got cut in half. You have a$74 ,000 lifestyle now. And so you're going to have to make changes to your life, your budget, your career to have this life you want. We're rooting for you. We think you have more agency than you think. Yeah, and you're doing it. You're doing it.

1:26:29George Kamel:Welcome back to The Ramsey Show and the Fairwinds Credit Union Studio. I'm George Camel here with Dr. John Deloney, taking your calls at 888-825-5225. Carson is in San Antonio up next. What's going on, Carson? Hi. Thank you for answering my call. Sure. So I learned about Dave Ramsey last year, and I've been following the debt snowball. I paid off over$40 ,000 of credit cards and wedding debt last year. Congratulations, man. Oh, thank you. Just bring by that. Thank you. I only have two dead left, but these are really big. So I have$180 ,000 of student loans and also$180 ,000 of mortgage. They're both at 5.875%.

1:27:14So it's a bit of a marathon to pay these off. But I did learn that my family has a history of cancers, like lung cancer, thyroid cancer. My dad actually went from seeing oncologists telling him that he doesn't have cancer to battling stage four lung and brain cancer a year later. Oh, I'm sorry. It's okay. But also his cancer was all genetics. So I guess my question is, I'm a little bit scared, or I guess I'm scared to death that something might happen to me before I finish this marathon, right? And I do want to leave something for my wife and daughter. I know Dave Ramsey wants, he says to pay off all the debt besides the mortgage first.

1:27:57I just wanted to know because a federal student loans would potentially die with me if something happens to me. So I just wanted to see if it's reasonable for me to potentially pay off my mortgage first before my student loans. Wow. That's actually – you know what? That's a good question. I will celebrate that question. That's an interesting dilemma that you find yourself in, especially because the numbers are so – like they're exact, right? Right. Interest rates, dollar amounts. How much do you make a year? I make$130 ,000 as a pharmacist.

1:28:36George Kamel:And how old are you? I'm 28. What ages did your family get diagnosed? So my dad got diagnosed when he was 50, but I also have other family members that got diagnosed a lot sooner, like in their 40s and so on. Okay. Because my hope and prayer is that you never get diagnosed, but also that if this was to happen, this is a decade or two or three from now. And therefore, your student loans will be paid off. If you stay at the pace you're going for, would the student loans be paid off in four years? Yeah, I hope so. I'm trying at best here. And then the mortgage is another three to four years as your income is probably up by then?

1:29:17George Kamel:Yes. So we're talking about seven years, you're completely debt-free housing everything by 35. So that's the kind of goals I would be setting versus which one should I pay off. I still feel like the debt snowball because of you probably have multiple student loans, right? It's not one giant one. Yes, that's correct. So freeing up those payments along the way makes me, I'm still team student loans, but I totally think your logic here is justified to grapple with it. I assume you don't have term life insurance. Did you try or did you not qualify? No, I haven't tried that yet. I actually just heard about that not too long ago.

1:29:56I was looking into it. Today.

1:29:58George Kamel:Go to Xander.com and apply and be honest with your health situation. We're not asking to commit fraud here, but if you can get term life insurance, you have solved the problem of what happens if something happened to me, how would my wife pay the mortgage? Boom, problem solved. 10 to 12 times your income and term life insurance on a 15, 20 year policy will do the trick. So you make... It just makes me feel like it gives my life a little bit of meaning if I were to have left something behind, you know? Did your dad pass away? Not yet. He's still battling cancer right now. So I want you to remember what I'm about to say for the rest of your life, okay?

1:30:40Are you a good husband? I try to. Are you a good dad? I try my best to, yes. Then you've left something amazing. Thank you. And we have a, no pun intended, but we have a cancer in our culture, which is we ask somebody, what are you worth? And we answer that with a number. And I think that's insane. it would be it would be amazing to be 35 38 and owe nobody anything and have a paid for house for your family that would be awesome and the truth is you dug 180 000 hole for your family in pharmacy school so i think you have a responsibility to knock that out okay also this is me playing devil's advocate all across the board, okay?

1:31:33I also don't trust in 10 years that that's still going to be the case. At some point, the United States is going to have to deal with a$2 trillion hold that is student loans, and they're going to have to deal with their$30 or$40 trillion deficit. It would not surprise me in the least. They've already made student loans not dischargeable by bankruptcy, it would not surprise me if they stopped them dead on, I mean, that they go away if you pass away. Okay, that I've never even heard of that being a possibility. But here's what I'm trying to get you to do. Projecting 10 years out on what might happen is a good idea.

1:32:17But to drag 10 years from now, the crisis that might exist in 10 years and try to solve it in today, that is what we call that anxiety. right? And so the fact that you're a good husband, the fact that you're a good dad, you've been burning through this debt, getting your family taken care of, and you're on a trajectory in seven to 10 years to owe nobody anything, including your home, that is a huge, huge win. And you have some signals that you're going to pay attention to. So you're going to be one of those guys like me that goes and gets cancer screenings every year. I'm going to pay extra close attention to my blood work.

1:32:55And I'm watching the AI advancements on cancer detection close, very closely. And they're getting astonishingly good at catching stuff really, really early. So I can imagine a world in three years and four years where you're able to know in 10 years and 15 years, I've already got signs that we weren't able to detect now. All that to say is if you're going to imagine the worst case scenario in 10 years, The honest thing is to also imagine the best case scenario and then make informed choices in the present. Do you get what I'm saying? Yes. Yes. And so, man, recognizing I have a heightened risk of cancer because of the set of genes that I got.

1:33:35That is you being honest with reality and I'm going to take every responsible measure I can. Also, not counting on the government to do a thing in 10 years. That's two elections from now, brother. You tell me, right? Who knows, right? So I'm going to see that I'm not going to rely on that either. And I'm going to get really good life insurance with George and I both have with Xander. I was with Xander before I started working at Ramsey because I trust him, right? And I'm going to work really hard and get this stuff knocked out. Okay, so I suppose I will pay my stand-alone first. And here's one other variable.

1:34:16What happens, and again, I'm just being ridiculous now, but what happens if your pharmacy closes or sells? If you have to move to Nebraska to do pharmacy there, the beauty of a pharmacy degree is you can do it anywhere, but that student loan is going to travel with you. Your mortgage won't. And so let's take care of the thing that's going to follow me around the longest, and let's knock that sucker out, and then let's get our house taken care of. But man, really great, insightful question.

1:34:45George Kamel:So your homework, one thing you do right as soon as we're done with this call, go to Xander.com. You're looking at one, one and a half million in a term life policy, 20 to 25 years. Get as long as you can with the health history of your family and that you'll sleep well at night knowing your family's taken care of.

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1:36:04George Kamel:Up next, we've got Courtney in Miami. Courtney, welcome to The Ramsey Show. Hi, thanks for taking my call. Absolutely. How can John and I help? Yeah, so I have a question, I guess, about what household contribution amount should be. So I've worked really hard. I paid off my student loans. I bought a car in cash. I bought a house. And I paid off the house. Whoa! Yeah, so I've worked really hard. Congratulations. That's an understatement. I can't wait for the other side of this question. Oh, gosh. Okay. Yeah. So I guess the question is, I am engaged. There are no plans right now for a wedding. We've been together nine years, but we're together and committed to each other.

1:36:54And I guess the question is, I've saved up enough to move to a more desirable area, and I can buy that new place in cash as well. And so what is, how do you divide the bills? Like we're, you know, yes, you split utilities and I know this is a weird situation. Like what's the contribution? You know, obviously he doesn't live with me for free, but what is that number? And we just, I could use some help. You're not going to like the help that we give you.

1:37:27George Kamel:so he's been living with you this whole time essentially yes we've been living together how does it work now uh so he basically pays essentially rent he doesn't like the word rent but you know we split the utilities and the bills and it's he pays about you know splitting the utilities and then like five hundred dollars but we're moving to a much better area obviously the house is much more even though I'm paying for it. I don't know how to divide it. Here's the thing. I have spent the last two years of my life down a dark rabbit hole studying romantic relationships. Okay? As long as you're his landlord and as long as you're his bank there is always going to be inequality in your romantic relationship.

1:38:21okay there's no way around that even you saying he doesn't like the word rent of course not because it's a daily reminder that y 'all are unequally yoked and the more you talk about how hard you've worked you've been with him for a decade so you you leading the question with how hard you've worked infers to two just random dudes you're calling he hasn't worked that hard which is not the case i know i know but it's it's the posture with which you're entering into this and so the reason that we tell everybody to get married is twofold one your individual stuff becomes y 'all stuff and if you're not ready to do that then you're then the romantic relationship you think you have is not what you think it is after nine freaking years the other reason we tell people to get married, besides the spiritual stuff, like take the Sunday school stuff and move it aside, is because there is a legal separation baked into that, meaning there is a contract you all sign.

1:39:29George Kamel:There's some financial protection. And you're protected. And so I can't in good faith tell you to do this thing when I know the data, and this is secular psychological data, I mean economic data, says if you all get married and your stuff and his stuff becomes y 'all stuff, the it's ROIs in a spectacular way because you have two people hanging on to the same anchor point and allows two people to take bigger swings at life with margin. But as long as he's paying you rent and he's Venmoing you for the Arby's meal y 'all split last night, it's always going to be yours and mine. And making a romantic relationship work that way long term.

1:40:15Even the data says that cohabitating couples who live together over a long period of time, they don't do as well health-wise, financial-wise, happiness-wise, as those that say, all my chips are on the table, I'm all in. Yeah. And if you have hesitancy to go all in with him, that's a huge flashing red sign for me. Red flag as the kids say.

1:40:38George Kamel:Okay. In your own words, why haven't you guys gotten married? Forget a wedding and all that. So, yeah, so there's, I guess, a past with him. So he was married before it didn't go well. There's some financial stuff on his end, past addiction issues that I'm not ready to tie to. And I don't know if I ever will be. Then you need to have that conversation with him. because otherwise I mean I'm trying not to be ugly I'm trying to like know that I'm on your side we are team Courtney but y 'all are playing house right yeah and he knows let me tell you he knows in his nervous system that you're not all in and that makes you more his mom than his fiance that makes you more his landlord addiction specialist than his wife yeah and i don't want to blame you for that i want you to trust your gut but i want you to trust your gut all the way in either direction you get what i'm saying yeah yeah that's hard but yes it's real hard it tell me push back on me am i wrong no no yeah no you're right i just i think i'm thinking of it as like we are we are together but separate to an extent You have a great roommate with benefits.

1:42:08Mm-hmm.

1:42:10George Kamel:I don't think you should make this move until you've solved this piece. Yeah, 100%. And I'll tell you, I think you're worth being in love with somebody that you can go all in on. And honestly, I think he's worth that too. Yeah. And if you know right now, I'm never going to fully get there with him based on his past, based on the things that flare up now. He deserves that honesty. as opposed to a Venmo reminder, you owe me$500 every month. Yeah, yeah. I guess this is it. Yeah, and I was approaching it like, what's the dollar amount? We disagree on the dollar amount. Yeah, I call that a— That's the least of your problems.

1:42:49Yeah, I call those romantic proxy wars. That's not the real issue. Yeah, for sure. Okay. Thank you. Yeah. And financially speaking, can George and I just both celebrate you? Amazing job. Thank you so much.

1:43:03George Kamel:To do all of this on your own is really impressive. Yeah. How old are you? Thank you. I'm 39. Awesome. Well, please also don't have the sunk cost fallacy of, well, it's been nine years. Like, this is all I know. I basically grew up with this. Now I just got to stay in it because it's easy and comfortable, which I'm sure it is. And I'm sure he's a great guy. But you guys both deserve, if you're going to live another 50 years, let's do it with some intentionality and some commitment and build wealth together instead of having this, yeah, we're together, but not fully. I just don't think that's a way to live life.

1:43:39George Kamel:And so I would solve for that before making the move. And I hope that if you do make the move, you guys are married on paper at the courthouse, you combine finances, there's no more rent. I married somebody in my yard once. They came over and my daughter was like the flower girl. I mean, you don't have to have a, and we did it for free. Like you don't, my manager took the photos. Like you don't have to do a big elaborate thing, right? But there is legal protection there. And if there's a red flag you can't move past, it's okay to call that out and say, hey, it's been a great run of a decade, but I think we both deserve somebody that we can fully commit to.

1:44:11George Kamel:Yeah. Okay. I know that's not the answer you wanted. The rent amount. I wish I could have been like, well, it should be 60 % versus 40 % based on the numerical man we are funruners.com today george oh man and i mean i am rooting for so hard i like courtney as a person and i want to see her win and i'm so proud of her and the truth is she's proven to herself that she can build wealth regardless of the relationship and what's on the other side but man it's just so much more fun to do it with a true partner a ride or die dude a ride or die yeah this is our money this is our life this is our goals instead of yeah well we don't combine because I don't trust him to accomplish this financial goal that I have.

1:44:57Yeah. I trust you enough to live here and not murder me. I trust you enough to fill in the blank, but I don't trust you with all of me. Yeah. Yeah.

1:45:05George Kamel:Oh man. This is, this is not one conversation. This is going to be a series of conversations, maybe even some counseling to get to the root of this, to get to the fork in the road. Honestly, Courtney was so honest. And I mean, That's a brave thing she said. I don't know that we need to get to the root. I think she's at the root. The hard part is, am I going to take that next? Honest. It's just so scary. It's just like free falling into this next chapter. But you're worth it, Courtney. Thanks for the call.

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1:46:50George Kamel:The Ramsey Cash Giveaway is officially here. You can enter every day from May 1st to the 31st. One grand prize winner will get$10 ,000. Plus, there will be one$500 winner every single week, and you can enter daily to increase your chances of winning. Plus, be sure to check out our sale going on right now. You can kick off your summer with books and assessments for just$12. Go to RamseySolutions.com slash giveaway to enter. No purchase necessary to win. John is in New York City up next. John, what's up? Hey, how's it going? Great. How are you? I'm okay. I'm calling with not the most concerning financial issue, but something I'm torn about.

1:47:29George Kamel:I could use a first world problem right now. Yeah, yeah, yeah. I'm trying to decide if I should keep my pet insurance for my cat. The monthly premiums are going up from$70 to$105 a month. Whoa. And I know. Why is that? You know, I mean, she's about 10 years old now. I got the insurance right when I got her, and it was like relatively cheap. It was low. It's steadily going up. And, you know, last year when it went up to 70, that was a big jump. It went from maybe like 45 to 70 bucks, and now it's 105. Yeah, that's pricing in the pet insurance world. Yeah, and, you know, I've been paying this for years.

1:48:14Have you calculated how much you've paid out over the years? No.

1:48:19George Kamel:Between out-of-pocket costs plus the insurance? I'm guessing you'd throw up if you did. I probably would. I probably would. I've actually never used the insurance. Exactly. You've never used it. I would love for you, just for your own emotional well-being, just to map out how for the last 10 years, how much you've spent on pet insurance and what would have to happen to a pet to justify that cost. And by the way, George and I are split on this. We disagree on this. And so, but I like to just look at it, just the math. And I know like, I love my dogs a lot, a lot, a lot. But just looking at the math, does it play out?

1:49:12Right, right. Or let me ask you another question. How much would you spend? Like there's probably going to be a max, right? Is it$3 ,000 or$5 ,000 max they would cover? The health insurance? Yeah. The pen insurance? There's actually no cap.

1:49:29George Kamel:Okay. So they'll cover, if it's a 20 grand surgery the cat needs, they'll cover it. 80 % reimbursement. Okay. That's the deal. So what is your, do you have a magic number that you would spend on a thing with a cat? I mean, I can't see spending more than like three grand for some, and even that, it's just, it's a lot. Yeah. For a 10 year old cat, a$3 ,000 surgery, like, and I would look into quality of life. Are you keeping that cat alive for you or for the cat, right? So there's all those kind of questions I want to ask. Right. What's your financial picture look like? Do you have any debt? Do you have savings?

1:50:16George Kamel:Yeah, no, financially, great. It's great. No debt. Got plenty of savings. Okay. So you're self-insured as far as this cat goes. If something happened, you could fork over$3 ,000 if you chose to. Yes. So the question is, is it worth paying now$1 ,300 a year for the just-in-case to avoid paying potentially$1 ,000,$2 ,000,$3 ,000? So that's where I go, I don't think this is worth it at this point. You're better off socking away$100 in a savings account at this point to cover if something happened, maybe a sinking fund for just pet needs in general, vet bills, all of that. Because as they get older, there's a higher chance there's going to be a vet visit.

1:50:55Which is insurance companies never lose, right? So that's why they keep raising the premiums. It's all about risk.

1:51:02George Kamel:Their risk is higher as that pet gets older. So I personally would cut it in your shoes. Yeah. Is this your only pet? Yes. Are you single? I have a girlfriend. We live together. Okay. Does she like the cat? Yeah, she does. As though that matters. I think it matters. She hates the cat. That's even more reason to cut the insurance. But I personally would, John. again, this is not a make or break for you. Now, if your pet had like a history of health issues that were costing you a lot of money and this insurance was a lifeline that was saving you a lot, I would get rid of it. But in general, our recommendation on pet insurance is just to self-insure, sock that same amount of money away in a sinking fund, an emergency fund, if there was an issue.

1:51:51Yeah.

1:51:52George Kamel:Because the insurance, it's like the house always wins. And there are rare occasions where someone goes, no, no, there was a one time where my dog needed a surgery and it actually really worked out. And so it's more about peace of mind. And I think at this point with the age of your cat, at this point, just let it ride. And when things come up, cashflow it. And if you decide you don't want to cashflow it, then you let that ride. And if it's the pet, you know, the cat's time, it's the cat's time. Cause I have seen friends who they'll pour unlimited amounts of money to keep their, their pets alive.

1:52:21George Kamel:And I'm like, man, this is, it's getting to a dark place where you're like, to John's point, are you doing it for you or the cat? Yeah, totally. I definitely don't want to be in that scenario. You know, yeah, I definitely don't see myself being in that scenario. Yeah. And here's the thing. There's been a lot of talk. Arthur Brooks has kind of led the charge here about the role suffering plays in our life. I can count on one hand, the number of times I cried harder than when I put down, when my dog got so sick, and that was the end for her. It was devastating, like literally devastating to me. That dog was my original ride or die.

1:53:09And what I got on the back end of that hurt and that grief was, that's what commitment feels like, and that's what love feels like, and that's what deep relationship feels like. And sometimes we try to put these dollar amounts. When it comes to your family, yeah, dude. No question about it. When it comes to our pets, it's like you enter into a short-term relationship, and that thing looks to you for love and care and support and all that kind of stuff, and it's amazing and awesome. But there's going to be grief on the back end of that, and sometimes there's people out there who want to sell us things and try to extend that or push that off or pretend it's not coming.

1:53:44It's coming. It's part of entering into a relationship with a pet, however hard that is to hear. And so preparing yourself for that emotionally, that day will come. Hopefully it's a long time from now. And then getting a number in your head, this is what I'm willing to invest in this pet of mine. And I've always got to check myself and make sure I'm not – my pet isn't living miserably so that I don't have to deal with this grief that's going to come.

1:54:10George Kamel:Right, right. That's a good word. So, John, what are you going to do? America wants to know. you know honestly i think i knew what i should do which is to cancel it but i just sort of needed the uh needed somebody to tell me to do it you know um i just yeah i know it's the logical thing um like my theory that like i cancel it and then like tomorrow or you know like in a couple weeks something does happen that isn't going to be like this you go dang it why did i cancel it It would have covered this. I know. I feel like that's been how I felt all 10 years I've had this insurance. Yeah. But now it's at 105 bucks a month.

1:54:51Yeah. And that's the sunk cost fallacy. You're like, I've already put this much in. I might as well keep going, right?

1:54:57George Kamel:Yeah, there's a real mental component to this. Yeah. Yeah. It is more mental than financial. And that's the hard part to grapple with. Or it's not mental. It's emotional, right? Yeah. And the financial part, well, let's talk about insurance for a second. The whole point of insurance is to transfer risk. so you can't bear the burden of your house fire taking your house, and now you've got to replace it. So we get homeowner's insurance. And so that's the point of insurance. And at one point, you're self-insured or the risk is so low, and the insurance companies will just know, hey, we're going to make money on this because the risk is so low.

1:55:30George Kamel:And pet insurance definitely falls into that category. And there has been a change in the last decade, John, where people just care about their pets more than our parents' generation did. Well, we're getting lonelier and lonelier as people. We're not getting married, but we have our dogs. Pets are filling that gap of human disconnection. Or we don't want the burden of kids and paying for kids, but we'll get a dog. Yeah. Or we don't want the burden of leaving our house to go meet strangers to become friends. And so I got a dog that will come in and love me. Yep. And this is speaking to my heart as a guy who gave more money to the emergency vet than I've given to any one place in my life.

1:56:04George Kamel:I could have furnished my house with the amount. I helped them get a second home, I think. So they love us. but French Bulldogs are, as I've told you, John, are born broken. So we kind of knew going into it, you're kind of picking up a project here. I should have got a dog from the pound. That was a very expensive project. A dog from the rescue never has any issues. They live to be a thousand, happy, healthy. These purebred dogs, man, they'll get you. So hug your pets today, guys.

1:56:39you

1:56:44Hey guys, Dave Ramsey here. Every day on this show we help people work through real money problems and figure out what to do next. Now you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to RamseySolutions.com and try Ask Ramsey today. That's RamseySolutions.com.

1:57:36George Kamel:Welcome back to The Ramsey Show. I'm George Camel here with Dr. John Deloney. Open phones at 888-825-5225. Our scripture of the day, Titus 2, 7, and 8. In everything, set them an example by doing what is good. In your teaching, show integrity, seriousness, and soundness of speech that cannot be condemned, so that those who oppose you may be ashamed because they have nothing bad to say about us. I like that. Be above reproach. Warren Buffett said it takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently. Amen. Kelsey is in Atlanta up next.

1:58:12George Kamel:What's going on, Kelsey? Hi. Thank you so much for taking my call. Sure. How can John and I help? Yeah, so I am currently leasing a vehicle, and I am so excited to get done with it. My plan was to buy a beater car once the lease is up, but I have another 11 months to go on it. I'm currently 5 ,000 miles over already what I'm supposed to be. What are they dinging you for that? What's the fee? It's 25 cents a mile. So by the time I figured on average how much, yes, on average how much I drive, by the time I turn it in, I'm looking at an extra$5 ,000 I would pay for the overage on the mileage. So my question is, should I go ahead and buy a beer car right now?

1:59:03I'm thinking in the range of$5 ,000 to$6 ,000 and go ahead and park my leased vehicle. Go ahead and just let that ride out. And then I'll have pretty much I'm allocating my money to spending it on a beater now instead of giving it to a dealer at the end of the lease. Would that make sense? That's a great question. Could you go buy the car outright? Yeah, what's the early buy-out amount? I could. It would be a little north of$40 ,000. Goodness gracious. What are you driving? Right now it is worth$29 ,000. It is an EV, and so it's depreciated immensely.

1:59:45George Kamel:Ouch. So you'd have to pay$40 ,000 to get it, but then if you sold it, you're$11 ,000 underwater. Correct. Immediately. Wait, they're charging you$0.25 a mile on an EV? Yes. Wow. That should be illegal. That should be. Okay, what EV is this? What's the make and model in here? It's a Volvo C40 Recharge, and it's a 2024. Oof. All right, I'd probably put this in the stupid tax category. But you're saying, hey, instead of paying$5 ,000 in penalties, because you're going to continue to go over the mileage based on your commute? Absolutely, yes. You're saying just park it. I'd rather just use that five grand to get me a beater car so that when all is said and done, at least I have a working vehicle.

2:00:35Yes, that's kind of where my mind's at. Of course, it kind of breaks my brain a little bit to have two vehicles at the same time, but circumstantially, this is kind of where I'm at.

2:00:44George Kamel:Yeah. I mean, that is a pretty wild solution, but it makes sense in my head, and I'm trying to think if there's other scenarios. I'm trying to go through, like, what are all of the options, and then what's the one that sucks the least? have you talked to the dealer about this so i haven't talked to them about this scenario specifically i have looked to see if i'd be able to have someone else take it over and they will not allow that okay um by the time i what's the early termination out i don't know the fee to be honest i haven't looked at it because i'm just assuming it's so unreasonable so i could look into that.

2:01:23That's probably a great assumption. Gosh. I still can't get over, like, on an engine, a gas-powered engine, there's going to be wear and tear that's unique and different than on an EV. I just can't believe they're charging you 25 cents a mile. That's, whatever I think they can't get worse, they get worse.

2:01:45George Kamel:It's impressive. Right. Leases are definitely my least favorite way to have a vehicle. I was going to say own a vehicle, but you don't even own it. You're just renting expensive. What's your lease payment? It burns even more. It's$663 a month. So you're going to have to pay that for 11 more months while it's just parked. I'll have to pay it for 11 more months while it's parked. I would try to level with them at the dealership. Not that they're competent, nice people, but I would explain the situation and say, hey, listen, if I buy it out, I'm 11 grand under day one after already forking over 40 grand that I assume you don't have in cash right now.

2:02:19Correct.

2:02:20George Kamel:The other option is the termination, which I would find out what the early lease termination fees are in case, this is a wild in case, in case it's the cheapest option, the lowest amount of stupid tax you could pay to get out of this thing, since they won't let you do a lease transfer, because the buyout is not an option. And so therefore, you might at least then sort of get rid of the other options to go, okay, my best option is just hang on to it, pay it, stay under the mileage, and save up for a beater car in the meantime. Do you have$29 ,000? Do you have$30 ,000 to buy it from them? I do not.

2:02:56Okay.

2:02:56George Kamel:How much do you have? So right now I have$6 ,000, and that is a sinking fund, knowing that I am going to potentially have to pay that in fees when I turn it in. And I'm very aggressively paying down student debt. So I just don't have that cash on me. No, that's great. What do you make a month?

2:03:21$6 ,584. Okay.

2:03:24George Kamel:I love the specificity. That's great. And what other debts do you have? So I've got a student loan and that is$21 ,844. And that's it? Student loan and the lease? Yes. Okay. Yeah, I mean, it's going to be hard to do both, to chip away at the student loan debt, pay the lease payment, save up for the beater car. But I like the idea of limiting the damage in fees we're paying on this lease, at least if you do nothing else. And then I would see what your options are with the dealer. I would do a whole lot of research to find out, you know, what your rights are, what your options are before you make any big moves.

2:04:02George Kamel:But my guess is it's pretty ironclad. I mean, you signed the contract. Here's the fine print. And they're going to say deal with it. Right. Yeah, and I'm definitely going to take your advice to see if there's any way I can have some wiggle room that I just am assuming I don't have right now. But if that is not an option, would you suggest I just park it and drive a beater? Yeah, that's what I would do. The math says that might be the best option. That's the wild part. As much as it hurts your soul to pay$660 for parking a car. yeah oh my gosh i'm so sorry it's already hurting my soul i'm like if this can minimize the damage i'm all game well the good news is you'll never lease a car again oh you you better bet so that might have been worth all the fees in the world if it means uh you're avoiding a bad money decision so i'm rooting for you you're you're gonna survive it and it'll be a fun story you tell your kids one day.

2:05:01Kelsey, give America who's listening, give them your opinion on the lease. Is someone sitting there like, I don't want to buy a car. I want to go lease it. What would you say? This is your opportunity for a commercial. It is the most financially irresponsible way you could possibly operate and quote unquote, not own a vehicle. Do not do it to yourself.

2:05:25George Kamel:Thank you for that. Very helpful. Appreciate the call and it's a good reminder on leases, John. So a car lease, people say, well, John, it's not debt technically. There's no like loan. It's just a contract where I have to pay this amount and there's no way out of it. If that's what you want to tell yourself that it's not debt, even though there's a monthly payment attached that you have to pay, I'm going to call it a loosely a form of debt. And the depreciation is built right into your lease payment. So you're paying the most expensive part of depreciation to the dealer. Well, and so think about, I always like to ask myself, who's getting rich, right?

2:06:01It's the reason I quit using airline miles. And, you know, I've talked about this off air, but like, I remember getting a credit card with a ton of miles on it because I had to make a huge purchase that I was going to immediately get reimbursed for. And I remember thinking, hey, they're not my, this company's not my friends. Who's paying for these flights I'm getting or these hotel points? and it was people who found themselves in financial straits and I was like, I don't want single moms who are struggling to put food on their table to pay for my free flights. I'm out of this program. So that is what got me inspired to say, who's getting rich off what I'm doing next?

2:06:36And the lease is one of the greatest inventions for a car company. They get a brand new car. They give it to you for two years. You give them, you basically buy down all of their depreciation. you give the car back to them they have a gently used car that they have contractually kept

2:06:56George Kamel:now they can sell that they still make a profit they sell a gently used car that's got very low miles that's perfect with no depreciation on it because you've paid it right? it's brutal well that puts this hour of the Ramsey show in the books remember there's ultimately only one way to financial peace and that's to walk daily with the prince of peace Christ Jesus

2:07:19you