Small Steps Lead to Big Change

16:50George Kamel:You can't, I mean, I think it's honest to say, hey, I heard this like through the grapevine, like this, you know, the conversation came up, whatever it is, you don't need to say they told me. But they're probably going to ask like, hey, like, how did that come up? Because that can also mean, hey, we were quote gossiping. Yeah. You know what I mean? That can feel like that. So if I'm the leader, I'm going, why are you guys all in the break room? Well, I'd even own that.

17:13Jade Warshaw:I'd own that and say, listen, this is probably information I shouldn't know, but I became aware of it. And I, yeah. And that way you're saying, hey, you know, you know, we're not supposed to be chatting about this. But at the same time, if somebody just up and tells you something, they just up and told you. So it's like, it's not men in black. We can't just, you know, with the little pin, you know.

17:34George Kamel:But I would also be, if you feel like this is the case and they haven't been looking at it and been ignoring it, whether on purpose or subconsciously, I would also be looking for other positions. And the job market's tough right now. So it might be, you know, six months before you find something that lands. But if you feel like, hey, it's my time to go anyways, my heart's not in it here anymore, then I would be considering that. But if you love it there and all other things aside, you're like, no, I love it. I just feel like I should be paid what I'm worth based on marketplace value. That's a different conversation.

18:03Okay.

18:04George Kamel:That's very helpful. How old are you? Thank you.

18:07Jade Warshaw:I'm 35. Call us back and tell us what happened or leave the message. Tell us what happens. I want to know. Yeah. To be continued.

18:13George Kamel:Yeah, we never know what happens with these conversations. Okay. That'll be a fun report back. Hey, remember I called about that? Well, I got the raise. I know, right? I found a new job making more.

18:21Jade Warshaw:Are you hearing this, James?

18:23George Kamel:I'm making a note. Thank you. James is making a note. But I felt this, Jade. I've been at Ramsey 12 years now.

18:29Jade Warshaw:Yeah. And I've had six jobs. You've been here 12 years? Holy smokes.

18:33George Kamel:Yeah. I started when I was a wee little baby boy. A wee less. I haven't grown physically, but I have grown a lot emotionally, mentally.

18:40Jade Warshaw:I can see. Yes. You know?

18:41George Kamel:And so I feel like I know that feeling because I've been there. and sometimes it was a legitimate, hey, there was maybe some poor leadership. Maybe it was a poor timing. But a lot of the times it was just me. It was the guy inside and I was drinking my own poison creating a narrative that wasn't true.

18:59Jade Warshaw:About this versus that or me versus them.

19:02George Kamel:Why I'm not, you know, just this sort of like little man syndrome, fist in the air.

19:06Jade Warshaw:Do you feel like you fell victim to the little man syndrome?

19:11George Kamel:Well, I think there's just a level of it's never going to be as fast as you want and you're always going to feel like, well, I deserve more. I work hard around here. And then over time you look back and you're like, why was I so... Why was I like this? Yeah. I hear that. Just the way you approached it. It was like the problem was true, but the way you approached it, it's like your attitude towards it makes all the difference.

19:31Jade Warshaw:Been there. Been there, done that.

19:34George Kamel:I feel for her. Hope it goes well. This is The Ramsey Show.

19:55George Kamel:Life is unpredictable.

19:57Jade Warshaw:That's why I teach the importance of things like having an emergency fund,

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21:26George Kamel:Kiata's up next in North Carolina. What's up, Kiata? How can we help? Yes. I was calling. You know what? Thank you so much for taking my call, first of all. Absolutely. I was calling because I finally saw this into Dave Ramsey last month. Yes, I found y 'all on YouTube and was like, huh, this guy knows what he's talking about. I like this. And I decided to go ahead and pay off my credit card bill. Way to go. I took the revolving debt off my credit card bill, went to my local credit union, got another checking account and put all that debt to come out that checking account. Okay. Now I'm watching my credit score go down.

22:02George Kamel:Now, keep in mind, I still have school loans that's over$17 ,000. Should I put some of that revolving debt back onto the credit card?

22:11Jade Warshaw:No, no, no, no. So you've done a wonderful thing here, which is you found some knowledge that was different from the knowledge you had before, right? For the first time, you're hearing some guy say, pay off your credit cards, pay off your credit cards. And you go, you know what? What I've been doing has not been working. Let me try what this guy is saying. You pay off the credit cards, right? So let me give you another piece of information that is likely going to be very different from what you've heard. Are you ready?

22:36George Kamel:Yes.

22:37Jade Warshaw:We would tell you, and I'm telling you right now, you're concerned about your credit score, but you don't need to be concerned about your credit score. And I'm going to tell you why. The truth is, this is the truth, and I get paid nothing for telling you this, okay? The truth is you can do with a zero credit score all of the things that you can do with a high credit score. And if you continue the advice that you heard from Dave Ramsey, which is just keep paying your debt off, right? The truth is eventually the things that were informing your credit score, which was only debt, right? If you keep paying your debt off, your debt will be gone.

23:15Jade Warshaw:And what will happen also is your credit score will be gone because your credit score is only a debt measure. That's all it is. It's how much debt you have, how long you've had your debt, what types of debt you have, what percentage of debt you're utilizing of the debt that you have access to. That's all it's measuring. It has nothing to do with whether or not you, Kiata, actually have money, whether you, Kiata, manage the money that you have well. And Kiata, it has nothing to do with whether you can actually afford something. It is a made up thing for banks to get you to borrow money so that they can make money.

23:57Jade Warshaw:That's all it is. And the people sitting here at this desk have bought houses and lived their whole majority of their adult lives without credit scores. So it's 100 % possible you just don't hear about it. How does that hit you?

24:14George Kamel:Oh, that is nice. I did not know that. Imagine you never had to think about your credit score again. Would that free you mentally? Yes. That's what's going to happen as you become debt-free. And likely what happened there is, again, your utilization went down because you paid off the debt, and it's going to stabilize. And as you pay off the debt, it's going to get better. It might get worse. It might get better. and then eventually it's going to disappear once you have no debt whatsoever. And I can tell you from experience, I can tell you from all of my research, I wrote a whole chapter about this in my book, Breaking Free from Broke, in the credit cards chapter, explaining every objection.

24:48George Kamel:Well, I can't get an apartment. Yes, you can. Here's how to do it. Not that difficult. Well, I can't get a house. Yes, you can. Here's how to do it. Bada bing, bada boom. And so you're going to realize very quickly as you get out of the matrix how silly this game is because you can admit it is insane that as you pay off debt, which we can all agree is a responsible thing to do, your credit score goes down doesn't sound insane yes and i paid off part of my student loan so i'm looking at my loans right now and i have four of them left and i paid off one good and as soon as i paid it off i watched my score drop by 10 points here's the news don't watch it yeah

25:22Jade Warshaw:because one of the measures remember we said is how many different types of debt you have and how much utilization of the debt because because you went in the opposite direction and went the right way, they went, uh-oh, uh-oh, she's trying to exit the matrix. We don't like that. And so they dinged you to try to get you to come back and say, oh, wait, because you were really considering putting more money on a credit card just to satisfy their little three-digit number, which is wild. And so, yeah, say what you were going to say.

25:54George Kamel:Yes, because I thought that you have to have like revolving debt in order to qualify for like a house eventually. You have the credits to qualify for a house.

26:04Jade Warshaw:Here's what you need to qualify. I'm going to tell you the real story. So to qualify for a credit score, yeah, you need debt. But to qualify for a house, it's the same process, just minus the credit score. So for myself, when we did a zero score, meaning I did not have a credit score, when we bought our first house, they wanted to know, they wanted pay stubs for the last, I think it was three months, three months of pay stubs since uh i am self-employed they wanted to see our tax returns uh for a couple of years they wanted to see trade lines which is literally things like cell phones utilities utilities insurance i mean and then rental history have you paid have you paid rent

26:45George Kamel:on time every month for the last 12 months yes boom and that's called manual underwriting so

26:51Jade Warshaw:the difference between manual underwriting and buying a house with a credit score is manual underwriting. They're actually looking at your actual money. They want to see what do you get paid? How long have you been earning that money? To George's point, have you been paying your rent on time? Have you been paying your cell phone and utilities on time? Whereas you could go over to Rocket Money or whatever, and they're just going to look at a three digit number and they're going to go.

27:15George Kamel:The computer says, yeah, she's good.

27:16Jade Warshaw:Yeah. And meanwhile, you could really not have the kind of money you need and be approved way above what you can handle. And so that's how this works. That is the truth. And people don't hear that side. They only hear the credit side. And the truth is there's more than one way to skin this cat. And the way that we're, I feel like this is a terrible analogy, but I'm going to keep going. There's more than one ways to skin this cat. And the way we're doing it, there's not as much tears and suffering.

27:47George Kamel:There we go. We finished the analogy i'm gonna finish it out kiyot i'm cheering you on to debt freedom and i encourage you to cut up those cards and stop looking at the score you do you have like some kind of credit karma app or something or you log in to look at your score the credit card company sends me like the little chime thing on my phone like a little text message and you know what they're gonna say they're gonna say hey we miss you here's a new line of credit well up your line of credit girl where you been exactly I know their marketing and so I'm not going to trust a credit card company to tell me what to do with my money because they want my money and Kiara I'll tell you what happened to me

28:25Jade Warshaw:so uh as we my husband Sam we had at one point we had almost five hundred thousand dollars of debt and as we were paying it down yeah the credit score was dropping and we had finally paid off all the debt and I was checking my score I was going on credit karma to check my score and it was still like hanging out like six ten it was terrible and I was like oh my gosh when is it going to drop to zero because you're right. You can't do anything with a bad credit score, but with a zero credit score, you're winning. And so I was like, man, this doesn't seem right. And so finally I went on free credit report.

28:57Jade Warshaw:Is it free credit report.com? Annual credit report. Thank you. Annual credit report.com to get the real deal from Equifax, TransUnion, all that. And it actually was zero. And Credit Karma was reporting that it was low to entice me to get back into debt products. So please, please be careful. Because guess what?

29:14George Kamel:That's how they make money by partnering with all the debt companies and lenders to with affiliate links to get you to go sign up for their latest and greatest card. You see how much of a scam this whole system is? Wow. So I'm going to send you a copy of my book. It'll peel back these layers for you. If you'll read it, it's called Breaking Free from Broke. Hang on the line and just read the credit cards chapter. If you just got time for one chapter, read that one. And I hope it gives you some hope that you don't need to live this kind of way. I'm going to need the whole book. Yeah, I got you. I have to save up for a house and get stuff in the world.

29:46George Kamel:Yes, I'll walk you through all of it in that book and how to do it without a credit score, every single thing you need. And our partners at Churchill Mortgage, those are the folks who know how to do it. They're the number one in the country when it comes to these no-score loans with manual underwriting because the truth is most lenders are just lazy and they'd rather the computer tell them than have a real person look through these documents. They're trying to make as many loans as possible to make as much money.

30:07Jade Warshaw:And that's what you said, George, is so true. It is worth highlighting. Yeah, you might go down to your local bank and maybe they don't do manual underwriting. That's very possible. But there are plenty of places that do. And we're always going to recommend Churchill Mortgage because, number one, they're in almost all of the 50 states. So you can get your loan done. But, yeah, it just takes a little. All of this, George, is just that little bit of effort, a little more effort, a little more due diligence just to just look under the hood. You actually have to open the hood to look under it. That's a good idea.

30:36Jade Warshaw:You know what I'm saying?

30:36George Kamel:I'll give you one last one. The credit score, it's like watching a juggler, and you're like, wow, they're perfectly juggling all of this. And you're like, yeah, but that looks exhausting. Yeah. Like, yeah, but they're so good at juggling.

30:45Jade Warshaw:You lose focus for one second.

30:48George Kamel:Juggling has no— All falls out. Unless you're part of a circus, just drop the balls, guys. Live your best life. Enough with the debt. Enough keeping up with the three-digit number. Let's focus on our net worth and our life instead of making these companies happy.

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32:21George Kamel:Today's question of the day is brought to you by Why Refi. If your private student loans are in default, it can feel like nobody will work with you. But Why Refi was built for this. They'll help you explore a fresh start. So go to yrefy.com slash Ramsey to learn more. That's the letter Y, R-E-F-Y dot com slash Ramsey. Not available in all states.

32:40Jade Warshaw:Alrighty. Today's question comes from Claire in Nebraska. She says, I bought a van that I plan to live in full time. I bring home$30 ,000 a year and the van was$25 ,000, which I'm financing at$350 a month. My rationale for doing this is that I won't be paying rent except for the occasional camping fees. If I add my$95 a month car insurance, my total monthly payments are$433. I did borrow money to buy the van, but Dave is not against borrowing money for a mortgage, and I see the van loan expense as kind of being like a mortgage. Am I making a smart decision to set myself up for future success? Okay, so Claire, I am tracking with you on the idea of, hey, if I'm viewing this as a mortgage, then the debt, you know, wasn't a bad thing.

33:31Jade Warshaw:I can kind of get there with you mentally on how you made that transformation. I'm not saying I agree, but I can make that transformation with you. I think the biggest problem that I have with this is, and let me go a step further, I'm also tracking with you on trying to keep your expenses low. I respect what you're trying to do there. My biggest issue with this is it's something that is going to continue to go down in value. and it likely will be upside down before the time that you've paid it off. By the time you're ready to trade it in for another van, you're probably gonna have the problem with it being upside down.

34:07Jade Warshaw:So for that reason, the fact that it's something that's going down in value versus going up is why I don't like this deal. And my bigger question, George, for Clara would be, what's happening in your life that you're needing to live in your van and not get an apartment or that sort of thing.

34:26George Kamel:Yeah, usually people aren't making that kind of move out of a place of strength. Right. Sometimes it's, hey, we want to do something fun and wild and we're going to get the family to live in an RV. That's different. But usually it's, I try to justify it because I'm in a bad financial position and this feels like the best move when really it's a shortcut that doesn't lead you anywhere.

34:45Jade Warshaw:Well, she's not saying, and maybe this is here and you just forgot to write it. She didn't say, I'm an adventurous person and I just love traveling the world, you know, traveling the country and it didn't make sense to have a rent, you know, sure. I can get on board with that. You didn't say how old you are either. There's a lot here that I'd like to know if you're 65 and this is the move.

35:06George Kamel:Yeah. Right. I mean, I mean, it's Nebraska. Like I'm thinking about winter in Nebraska, living in a van. That just scares me for your, your health, your mental health, your quality of life. Right. So the bigger question is where does Claire want to be five years from now? If that's to be a homeowner. I just think we need to focus on getting our income up, getting the car that we can afford today in cash, rent somewhere that you can afford, and then let's focus on moving up. And right now, your biggest expense is an asset that's going down in value. And so that's the difference. The only reason we're okay borrowing a mortgage is because very few people are able to do 100 % down on a house.

35:44George Kamel:Dave would prefer it that way. So we're only okay in a 15-year mortgage on an appreciating asset like real estate. So I would get out of this while you can, while that van is still worth something, and just go rent somewhere. And if you need to get a roommate to afford it, that's fine. But I would stabilize your life in that way instead of living in a van for the foreseeable future. Thanks for the question. All right. Christina's up next in Juneau, Alaska. All right. Now we're getting adventurous. What's going on, Christina? Hello. It's my two favorite people. I'm so grateful to have gotten through.

36:18George Kamel:You're my favorite person so far. Aw, thank you. All right, here's my question. My husband is using our emergency fund as a bank. He's using the fund as a way to borrow money without a loan. He is paying the fund back, but he's been using it for non-emergency items as well as emergency items. And we've gone down from six months fully funded down to$1 ,500. Ooh. So if anything were to happen right now, we'd kind of be at the creek. And I know he fully intends to repay the fund, and I used it as well, so I have to repay the fund. But a little back story on that. Two years ago, our house went through a flood, and we lost the floors, like we have plywood floors right now, and we had to cut up all the sheetrock.

37:11George Kamel:So we have a whole bunch of house repairs that need to be done. Did insurance not cover the repairs? No, because we didn't have flood insurance. We were not in a flood zone. And the climate has changed. And actually, we live near a glacier that is letting out copious amounts of water. It's not something that we could plan on. And it's not something people saw in the future. and so we did not have fund insurance when the river that we live fairly close to

37:49Jade Warshaw:did its thing. But when you have an emergency fund, it is for emergencies. It's for when things happen that you did not foresee happening. And it sounds like, to your point, this money has been used for both emergency funds, which would be a green light, but it sounds like it's been used more so for non-emergency. So I have a question. How much was in there at the six-month point? $35 ,000. $35 ,000. And it's now down to$1 ,500. Is that what I heard you say? Correct. So I want to know what types of things has your husband, non-emergency things, what types of things has he been spending this on?

38:27Jade Warshaw:And I want to know, has it been done in secret or has he been saying, hey, I really want to do this. I'm just going to pull it from the emergency

38:33George Kamel:fund and are you like you're an accomplice yeah are you like no or go ahead as long as you pay it back tell us more about exactly how this is going down um the um i have known about every single time there are no secrets that's good um and i have a hard time saying no to him okay why why is that is that are you just like people pleaser or is he just like well i'm doing it anyway? Like, is he just very stubborn or both? I think it's both. Honestly, I have a hard time saying no because I just want him to have everything. Are these toys? Give us some examples of what he's used this money for that is not an emergency.

39:17George Kamel:Fixing up his truck, so

39:18Jade Warshaw:truck parts. Okay. Just bought a new TV. Okay, listen.

39:26George Kamel:What if we just separated this? Like, What if you had a different fund that was just like the savings fund to buy new stuff?

39:33Jade Warshaw:Well, we. And cash flow it. Before we get to that, though. I tried that. Because here's the thing. Before we even get to that, I want to say something that it's not an insult. I think it's just true. And let me frame this up by saying this is your money, right? This$35 ,000, whatever it started, it is your money. And the truth is you can spend it however you want. But both of you said we're earmarking this as an emergency fund. And both of you said that for a reason, you understood either we're working this plan or we understand the value of having emergency funds set aside. Right. So at that point, it becomes a personal integrity issue because you've both said, we believe that this should be this.

40:15Jade Warshaw:And then when you don't uphold it, that's a personal integrity issue to yourself of saying, I'd rather you just do what George said and say, OK, you know what? We've just decided we don't want an emergency fund anymore. We want a truck fund and we want a TV and appliance fund. And then just tell yourself the truth. But this business of saying one thing out loud whilst doing something else here, that is something.

40:38George Kamel:Cognitive dissonance. Yes. Discongruity there. So to Jade's point, I think we need to do some soul searching and have a come to Jesus meeting and say, we might need to move this savings to a different account that is less accessible so that you're not just dipping in there for everything. So that might be one solution. I don't like it as a long term solution, but right now it stops the bleeding. That's good. That's true. Because you're about to have a real emergency. Like that's when Murphy shows up is when you just bought the brand new TV and then your HVAC goes out and you got$1 ,500. And now you're taking out a personal loan to cover the HVAC.

41:11Jade Warshaw:And when that happens, that's when you're really going to feel like, dang it. And you're going to feel like, man, this is my fault. I didn't keep my promise to myself. And now because of that, here we are. Whereas if you can at least do what George said and say, okay, this is the slush fund money. This over here is the emergency fund money. We'll keep this much in the EF fund. and we'll keep this much in the slush fund and we'll have our fun, you know.

41:33George Kamel:Yeah, I would move it to a different savings account. You can check out fairwinds.org slash Ramsey and they've got a smart bundle for our fans and they have a Save Smart savings account with high yield. It's awesome. That might be a good temporary fix, but ask yourself these three questions. Is it urgent? Is it necessary? Is it unexpected? If it's not a heck yes to all three of those, do not touch it.

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43:37George Kamel:Welcome back to The Ramsey Show in the Fairwinds Credit Union studio. I'm George Camel, joined by my co-host Jade Warshaw. Open phones at 888-825-5225. You call us up. will help you transform your life. Donna is in Ontario, Canada. What's going on, Donna? Hi, thank you for taking my call. I'm 63 and retired, and my husband is a little bit younger than me, but he'll be working for maybe another three years. It's a second marriage for both of us and we both have two adult children. My husband funded my stepdaughter's dental school with our HELOC on our home and cottage for$600 ,000. And so now I'm a little nervous about this because it changed a little bit from the beginning.

44:36George Kamel:The beginning she was supposed to, We would fund her four-year dental school, and then she would graduate, get a job, and go to the bank and get a loan and pay us back. But then she did another two years. That's why it's$600 ,000 in total. Why did she do another two years?

44:56Jade Warshaw:To be a specialist. And you guys paid for that no problem?

45:00George Kamel:Yeah. During COVID, we reevaluated our cottage so we could borrow more money on that one. So it's a total of$600 ,000 on our home and our cottage. But now it looks like my husband wants to turn this into a mortgage because of the savings and the interest rates. And then the payments will also help pay down the principal faster. And now he's looking at buying life insurance to pay extra to buy life insurance while he's working in case he dies. that that money would be used to pay off her debts so that he said she doesn't have to deal with me.

45:45Jade Warshaw:What happened to the plan of her graduating and taking on the loan from you guys?

45:53George Kamel:Because they didn't have the right information. She's working in the States and she's not a U.S.

46:02Jade Warshaw:citizen. Right, but I understand. I'm not saying I agree with the plan, but wasn't the plan that she would then take out her own$600 ,000 loan and basically give you guys the cash so you were free and clear? What happened there?

46:19George Kamel:Yeah, that was the original agreement that I agreed to, but it wouldn't have been$600 ,000. It probably would have been$400 ,000 because it would have been only the four years. But she chose to do the extra two. What was the agreement there?

46:38George Kamel:Nothing had changed because she was still in school. But did she say, hey, I'm going to do these extra two years. I'll cover it through the future loan I get. Or was it, hey, we'll cover the extra two years. You go have fun. My husband said that we would cover the total. So you guys are on the hook for$200. She's on the hook, in theory, for$400. No, in theory, she's on the hook for$600 ,000.

47:03Jade Warshaw:Okay, and I'm saying, what happened? Okay, but I'm saying, did she do her part of the plan, which was now, when I graduate, I'm supposed to go get this loan for$600 ,000 and pay back mom and dad? What happened there?

47:20George Kamel:Because a bank will not give her a loan because she's... So a Canadian bank won't give her a loan because she works in the States? Well, because she doesn't have her green card yet. And I don't know if the bank would say, we'll give you$600 ,000 so you can pay off your parents. Okay. Is she making enough to pay the HELOC payment? Yes. Okay. Is she doing that currently? Yes. Okay. What's the payment every month?

47:52George Kamel:Sorry, I don't have the figures here in front of me. The interest rates are about 4.95 on the house and 5.45 % on the cottage. And if she was to turn it into a mortgage, it would be a savings of about$3 ,500 a year. Oh, a year. Okay. So like$300 a month is what we're talking here to do all this work. Does that include all the fees to make all this happen? There would be no fees. Okay. Yeah, I mean... Because we paid off our mortgage. It's not like a life-changing amount of money saved here, and it may make it more complicated because now it's all rolled up into your mortgage versus separated out.

48:38George Kamel:So it's clear how much is hers and what's y 'all's. Yeah, we don't have a mortgage. We have no debt. Everything is hers. Because the only thing is, is that it locks into, it's now all of a sudden it's become a long-term commitment. Yeah, versus the line of credit, which is the HELOC. I want you to rephrase that. You said you don't have debt. You guys signed on the dotted line for the$600 ,000, did you not? Yes. So if she skipped town and said, good luck, I'm not paying it, it's on you guys. I want you to remind you the risk is all on you right now, and there's no risk on her part. And so while that's happening, she's living a good life because she has no risk.

49:20George Kamel:As long as she makes the payments, you guys are happy. But I want this to get transferred to her as soon as possible. And that's what I would like, too. But my husband seems to want to take care of her, and he seems to be okay. What's your net worth? I think it's$1.2 million. $1.2? And the cottage just has the$600 ,000. Was it paid off before you took on the loan? We just paid off our mortgage a couple months ago. Okay. The HELOC on the cottage is$275 ,000, and then the HELOC on the house is$325 ,000. So we're going to pay off the lower, the lesser loan first, and turn that into a mortgage. which is the one for$275 ,000.

50:14George Kamel:Yeah, I know. And Canada's different with mortgages, and it resets every five years. Is that right? Yeah, in like a term, yeah. Okay. Yeah, I mean, if the interest works out in your favor and you want to save the$3 ,500, I think that solves one problem. It puts out one tiny fire, but there is a much bigger fire here, which is the 600 ,000-pound gorilla on your backs. Yeah, I'm a little worried about it. My husband doesn't seem to be.

50:39Jade Warshaw:I actually think that right in this moment, that's the bigger problem than the 600 ,000. Because as long as you guys aren't on the same page, not much is going to be done to solve it because he's OK with it. And so something's got to happen to where you guys either both agree, you know what, this is a gift and we're paying it off or this is not a gift. And we're going to be very serious about finding a way to transfer the risk from us to the daughter, which I just got to say, it's interesting to me how this played out because you're feeling this weight of this$600 ,000. You know, like this is not good debt to have.

51:20Jade Warshaw:did you know that did you have a debt were you averse to debt before you did this because it's weird that you would want to transfer this burden of debt onto a child or to a kid she's grown now I mean she's out of school but I mean my point is debt is not good for anyone especially someone

51:40George Kamel:who wants to retire in three years yeah while you've already retired it just puts you guys at risk that he's gonna have to keep working longer or you might have to sell the cottage if this doesn't play out perfectly, which it already hasn't. Let me remind you. So there's just a lot of risk here. I want to get this hot potato out of your hands as soon as possible. But if you want to refinance and save some money in the meantime, be my guest. Good luck, Donna.

52:25Hey, you guys.

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53:10George Kamel:It's a nationwide health cost-sharing ministry. It's Christians helping other Christians with their medical bills. with chm you get to choose your providers there are no networks no surprise bills and no insurance headaches whether you're just starting out as a family or you're looking for something that fits your budget better chm is where your faith and finances agree programs start at just 98 a month so go to chministries.org budget to learn more and take the leap of faith today that's chministries.org slash budget.

53:58George Kamel:Hey, if you're enjoying the Ramsey show or you ever have, do us a quick favor. Hit the like button. Hit the subscribe button. Hit the share button. The follow button. Just hit all the buttons. It really helps us out. It tells the algorithm that you're enjoying this and someone else might too. And that helps us spread some hope. Appreciate you guys doing that. all right jade what do you got for me you were supposed to set it up in a better way than this i got no setup jade said hey i want to do something and i went jade it's your show

54:25Jade Warshaw:i'm just living no you were supposed to talk about trs live and then i was going to segue

54:29George Kamel:oh that's true do the people know all right we're doing the ramsey show live on the road it's already sold out we've got chicago and orlando orlando on september 30th and october 2nd and we're pumped to hit the road and see what happens in a live environment and it's a fun

54:44Jade Warshaw:combination like your day you're the the chicago is different than orlando yes chicago will be

54:50George Kamel:myself rachel cruz ken coleman and then two days later we'll be in orlando with jade warshaw and dr john deloney it's good i'm excited me i'll be there too okay so this is my bad segue for we were

55:00Jade Warshaw:in so here on campus we have a an office that all the personalities are in and we were in there talking and somehow we started talking about the lion king the movie disney and we were saying if we were playing those roles who would we be oh and so ken got all hung up that he should be Rafiki oh and i was like oh okay even though i kind of saw you possibly being Rafiki and then we were talking about scar and i said john is definitely john is scar yeah he's got that dark humor yeah and so we asked we asked chat gpt to tell us if we were if the randy show should be yeah who's i feel like ken is timon interesting that i wanted to be timon you could be timon energy too yeah yeah i'm gonna tell you what chat gbt said okay of course mufasa dave right ken coleman rafiki oh good it says that he's full of wisdom and guidance that's what i was calling in purpose and a little eccentric at times okay george you're simba what it says the younger energetic leader uh he's the leader in training who's finding his place and

56:13George Kamel:voice that's beautiful and that means that dave ramsey is my father oh listen there we go the

56:19Jade Warshaw:parallel universe that's different rachel cruz is nala i'm not surprised by that that makes sense um john deloney timone oh that may yeah okay i could see that so i'm thinking oh my gosh I'm thinking I'm going to be Scar. Who did you get? I'm Pumbaa.

56:35George Kamel:Wow. They did you dirty with Pumbaa.

56:38Jade Warshaw:Fun loving, approachable, and totally authentic. She helps people feel safe being themselves and also being a young warthog. All right. Moving on.

56:47George Kamel:You lost me with the warthog, but everything else was accurate. That's what Pumbaa is, right?

56:50Jade Warshaw:Isn't he a warthog?

56:51George Kamel:Yeah. All right.

56:52Jade Warshaw:Just a little.

56:53George Kamel:That's beautiful.

56:53Jade Warshaw:Just a little fun segment there.

56:55George Kamel:That was fun. Yeah. We could redo the live action movie and cast us and see what happens there. Listen, a lot could go wrong. Yeah, I don't want to see Deloney and Dave, you know, go at it. That's a scary premise.

57:06Jade Warshaw:Well, if you're listening online, drop in the chats who you think it should have been.

57:09George Kamel:That's so fun. I thought I would be like one of the hyenas.

57:12Jade Warshaw:I thought you were going to be...

57:14George Kamel:Just laughing in the corner.

57:14Jade Warshaw:Remember Zazu, the bird?

57:16George Kamel:Yes. I thought you could have been him. So anyway. All right. That was fun. Thank you for that. Can't wait. Moving on. Keith is waiting in Georgia. He's going, what are they doing? I got a real question to ask you. Yeah, I know. Keith, what's going on, man? Welcome to The Ramsey Show. Thank you. Thank you guys for having me. So full disclosure, I'm a pretty big ball of nerves right now. I've never really called anything like that. Oh, dude, it's just me here. You couldn't have chosen better for a day to be nervous. I got you. Got it. So I'm hoping I can get a nudge in the right direction. So I'm in the process of trying to find a property to move into with me and my wife as a rental.

57:57George Kamel:The only issue I'm running into is I did have a home that was foreclosed on about three years ago. And since then, I kind of got knocked down again with losing my job, where actually the location I had closed. So it was, I didn't really have a choice in that. And I kind of took it upon myself to go to school, get my CDL. And I've been doing that now for about six months. But my credit's not going up as high as I want it to. And I'm trying to see what the best method is going to be to just getting into an apartment or a home. Because, I mean, to be honest right now, me and my wife are staying in a camper.

58:49George Kamel:So I'm kind of getting stir crazy. What about your wife? What is her financial picture as far as her credit look like? She's not much better off. So when we first got together, she didn't really have any credit. And then she actually ended up losing her job due to a similar situation around the same time I did. And this was November of this past year. So her credit was slowly climbing. And then when that happened, we kind of got behind. Her credit's actually a little bit lower than mine. So you guys are both working full time now? I'm working full time. My wife is working part time currently. She did recently just get a job offer to work as a director for a daycare.

59:35George Kamel:And she'll be starting out in November, which is good news. Yeah, that's great.

59:38Jade Warshaw:What will you be earning once with you, with your CDL, and once she becomes director at that daycare?

59:44George Kamel:So I've been working now with my CDL since March. I'm currently earning about$60 ,000 per year. She will be earning roughly$35 ,000.

59:56Jade Warshaw:Good. Okay, so really the big problem here is you're feeling like the credit score is keeping you from getting in that apartment. To which I'd say, you know, if I were in your shoes, I'd try to avoid kind of that big box apartment system.

1:00:12George Kamel:The corporate ones where they just run it on the computer and they go, well, it didn't go through. Sorry, you can't rent here. I would be looking for more of like a landlord or an actual human being who can sort of look at the whole picture. And I would just be up front with them. When it runs it, you're going to say, hey, if you run the credit, here's what you're going to find. We had a foreclosure. Here's where we're at now. Here's our income. We make about$100 ,000 a year. We have enough to cover that, you know, they might require a higher deposit. There might be some stipulations. But if you look around long enough, you're going to find a real human being who will allow you to rent.

1:00:45George Kamel:I see. And then the other thing that's kind of got me super anxious is, you know, when we're ready to purchase a home, and, you know, again, in a few years, I'm just so worried about how that foreclosure is going to affect me and what kind of hurdles I'm going to have to go through at that point. Do you guys have debt right now? We do. So we have about$10 ,000 in auto loans, and then there's about another$10 ,000 in collections currently. Okay. So you have a ways to go. By the time you're cleaning that up, get the fully funded emergency fund, save up a down payment, that's going to be a few years from now.

1:01:24Okay.

1:01:25George Kamel:And the credit – well, that foreclosure will likely stay on your credit report for about seven years from my research. Okay. Does that sound about right?

1:01:33Jade Warshaw:That sounds right. It's kind of in that way, it's like a bankruptcy. It'll follow you around for a while, but eventually it's going to let go of you and you'll be able to kind of have that fresh start.

1:01:43George Kamel:But your credit score should improve much faster than that. So as you pay down this debt and you get rid of it, that's going to help to improve it. And within probably two years, which is a good timeline for you guys to get rid of the debt, get the emergency funds and work on that down payment, I think you're going to find that your credit score has drastically improved. And it might even disappear by then, which could actually work in your favor. And you can go through the manual underwriting process at that point, especially if you've had 12 months of rental history, which hopefully you'll have by then.

1:02:11George Kamel:So I know it feels like, man, I mean, life has truly beat you guys down. The job losses, the foreclosure. I can just feel that you've lost your mojo. I just want you to know that three years from now, you're going to be in a completely different place. But in the moment, it feels like this is forever. Like, how are we ever going to crawl out of this? The last few years, it just felt like every day has been a struggle. The last few years, it just feels like I'm expecting something else, more bad news to come around the corner. That's part of why I got my CDL because it's like, well, at least I have this.

1:02:45George Kamel:I have a guaranteed way to work, and even if the job shifts down, I'll work somewhere else. It's not a huge deal. So that's given me a little bit of hope, but just given the past. Yeah, your income is going to create that stability, and that stability will create a foundation for you guys to get out of this situation. So it's all going to change, man. 2026 is going to be a very different year for you guys. I'm rooting you on to get rid of the debt. I'm going to send you our all-new EveryDollar. It's going to help you guys find the margin, give you recommendations, coach you along the way. And I can't wait to see the progress you guys make, Keith.

1:03:17George Kamel:I'm rooting for you, man. I hope we can get you out of that camper into a more stable living situation real soon.

1:03:26Thank you.

1:03:52George Kamel:I've been doing this show for over 30 years and some of the saddest calls I have taken are from situations that are completely preventable. Yeah, and what's so hard is I feel like one of those, especially the ones that I'm like, oh, it's terrible. People that call in and their spouse has passed away suddenly and they don't have life insurance. We actually took a question of a lady and she had three kids pregnant and husband didn't have life insurance. And I'm like, I can't even imagine. Or even if it was opposite, right? If a mom passed away, there's a dad with kids and trying to figure out how am I going to afford child care?

1:04:29George Kamel:How do I outsource some stuff that maybe she was doing? And it just takes the grief and the sadness of something like a sudden death to a whole new level. Like when you have to think through how am I going to pay my bills in the middle of all that grief. Like it's just, it is, it's terrible. So life insurance is the one thing, especially as a mom with three little kids that I'm like so big on for people to get because it's inexpensive. Xander is the place that Winston and I actually get all of our life insurance. And we keep re-upping it because I'm like, I just want it there. Like there's something about that safety of knowing that you have money if something suddenly happens.

1:05:04George Kamel:And it doesn't cost much because Xander shops among a gazillion different companies. It doesn't cost much. You just have to admit that someday you're not going to be here. You got to say it out loud. And you got to say, I'm going to say I love you to my family by taking care of them. and taking the time to put this stuff in place that costs us stinking pizza. It really is. So that is one thing to do to say I love you to your family. So we've used Xander for all of our family's needs for insurance for many years, including, of course, term life insurance. To get a free quote, go to 800-356-4282.

1:05:34George Kamel:That's 800-356-4282 or go to Xander.com.

1:05:57George Kamel:Anna is up next in Spokane, Washington. Anna, welcome to The Ramsey Show. How can we help today? Hi, I'm so happy to be speaking with you guys today. Thank you. Yeah, we're happy as well. What's your question? Yeah, so I'm kind of having like a midlife crisis. How old are you? I'm 50 years old. My kids are grown. So I was a single mom for 23 years. I've got 18 credit cards. I've got zero debt, zero retirement. I have great credit scores. No mortgage, no house. I do have$25 ,000 in savings, and I have a good car. My problem is that when I was raising kids, I never made more than$34 ,000 a year.

1:06:42George Kamel:when my kids were older and COVID happened and the job market dropped. I just kept going and getting a better, better job. And they were just taking warm bodies at the time. Right. And so I'm now in a job where I almost make 70 ,000 a year. Awesome. Now that the job market has switched again, the company, I'm in a tech company as a financial analyst, they're starting to lay off people. We just laid off seven people last week because they could not do their jobs. They were

1:07:14George Kamel:not able to, you know, not smart, basically not growing with the job. And I'm afraid I fit that category. I'm afraid I'm going to get laid off. My job is incredibly stressful. I wake up in the middle of the night with panic attacks. And so I did a lot of research in what kind of job I could get with my type of hobbies, things that I do really enjoy to do, not sitting on a computer.

1:07:41Jade Warshaw:Before you go to that, can I ask a question about your your anxiety and about you being afraid that you're on that list? Before you go to the job search? Is that what you're hearing back in your reviews that you're not? Is that what you're consistently hearing is that you're not quite hitting the mark?

1:07:58George Kamel:Well, I was so last week, when we laid off those seven people, that's when I was kind of told. So it's kind of like, hey, we laid off seven people last week, And I was like, oh, no, you know why? And they said, well, they were not meeting the mark and they're underqualified for the job. And it was kind of like you better like catch up or do something. Right. But what did they say?

1:08:25Jade Warshaw:They said so. I want to what I'm trying to find out is if you're just fearful or if something truly was said to you of, hey, Anna, we're making layoffs for people who are not, you know, up to par. and you're fitting that list. And so we don't want you to be one of those people, but right now you're headed down that direction. Have they said something clear to you like that? Not clear, but that was the undertone of the last message I got. Understood. Okay. And that's what's giving you the anxiety.

1:08:55George Kamel:What would it take for you to become qualified, quote unquote? I don't know. I mean, I, you know, I worked in admin assistant for a really long time And I kind of, you know, I got good in Excel and I worked my way up in that. But I've kind of always kind of switched and bounced around in my career. I've never really had a career. Before COVID, I actually became a certified yoga teacher. I worked in hospice before an admin and I became a full-time yoga teacher. I owned my own business doing indoor plants and aquariums. and I worked as a hospice caregiver. I was happier then than I'd ever been in my life.

1:09:41Jade Warshaw:So you're saying this job's sucking the life out of you?

1:09:45George Kamel:Yes, absolutely. I don't sleep. I don't have life because I'm so exhausted.

1:09:50Jade Warshaw:If you want to move on because the job's sucking the life out of you, that's very different from I feel like I might not be making requirements and I'm scared I won't be able to meet these requirements. Because then I'd say, hey. It's both. It's both.

1:10:03George Kamel:Yeah, even if you got the requirements, you're still like, I don't want to be doing this. And so for those reasons alone, I'd go look for something else. But I wouldn't just up and quit today. I would keep the stability you have while looking for the next thing. yes and so and that's where you know i have a lot of conflicting information from advice from other people and that's why i was calling you guys today because like i said i i did a lot of research on what type of job i could get that you know pays anything and you know then i'm looking at like getting student loans if i wanted to become like a ota or a physical therapist assistant you know that maybe I can you know the top end of that is 70 ,000 so I'd maybe start around 50 ,000 which I don't want to go down in salary.

1:10:49George Kamel:Yeah you can't really afford to at this point you told us you have no retirement whatsoever? Yeah no retirement so it's all up to you. Yeah my rent keeps going up so what I did find was a estate manager or like a live-in nanny type situation where I could actually start at around$80 ,000 a year and have all of my living expenses covered. Amazing. You could shovel money into retirement at that point.

1:11:18Jade Warshaw:And you like kids? Other people's kids?

1:11:22George Kamel:I do. Not only do I love kids, but I also have a son on the spectrum. And, you know, it's funny because I thought, well, maybe I'm not really qualified to do that because I don't have like an early education, childhood certification or something. You do have 23 years experience of raising kids and also having a kid with special needs. Sure.

1:11:44Jade Warshaw:I'd rather that than somebody with a piece of paper.

1:11:47George Kamel:Yeah. I think you're so focused on what am I qualified for. I want you to start focusing on what am I wired to do and what lights me up. Because I couldn't care less if I'm hiring you as my state manager. What's your resume? Do you have a college degree? I'm like, how are you with my kids? Can I trust you? It's all about integrity and work ethic. And would you treat my family and my house like I would? That's right. And so I think this is a great next step for you. And even if it's not the thing for the next 10 years, it sounds like you're just fired up about making that shift. And is this like offer on the table?

1:12:21George Kamel:You could go take it tomorrow? It's not, but I did. You know, the other thing is I live in Spokane, Washington, and my mom is in the Seattle area, and she's getting older. so I'd like to be closer to her, but it's a lot, you know, the living expenses are a lot more there. But I did find an agency that, you know, helps you as a nanny to find a job, and there are several jobs, high-paying jobs in Seattle area. That are$80 ,000, live-in, expenses covered.

1:12:53Jade Warshaw:Yeah. Great.

1:12:54George Kamel:I'd be exploring that, getting interviews, putting your best foot forward. Yeah, they even provide like a car and insurance and health insurance. a phone. So I would just have, you know, clothing basically as my expense. And then, of course, like seeing my kids, you know, maybe I'd fly them over. I think you've answered your question.

1:13:16Jade Warshaw:It sounds like you've put a lot of thought into it. You've, you kind of like started the dreaming phase of it, which is, yeah, I think you're really into this. The only caveat, yeah, is don't quit your current job until you have the offer and a start date. Like, you know that this other thing is happening. Otherwise, you could really jack yourself.

1:13:34George Kamel:And have they been doing severance packages with the layoffs? They have. Okay. That'll give you even more breathing room. If it does happen, there's a silver lining there that you've got some cushion. Yeah. I do have a three-bedroom home. I need to get rid of everything. And then that's my next step is trying to decide what to keep and what to put in storage. I already found I can get a storage unit for about 2 ,000 a year. Why even keep the storage unit? I'd be on Facebook Marketplace this entire weekend just listing stuff. Yeah, it's hard for me. I have some sentimental things I'm attached to, and I think mostly it would just be like keeping Christmas decorations.

1:14:12George Kamel:Of course, yes, keep that. Yeah, so I mean, it wouldn't be much, but just something too because my goal would be if this does work out that you know maybe I would buy like a tiny home or something in four or five years and that way I could if I don't you know do that then I would say okay the storage unit has to go kind of put a time limit on like you know okay kids you know take your Christmas decorations or you know or if I had a tiny home that I could you know, certainly move all my things into my home. Yeah. So.

1:14:52Jade Warshaw:I like the idea. I like where you're headed. I like the idea. You've got a clear idea for what you want to do being a live in nanny. It provides the income above what you were earning before. And to George's point, it gives you the time to start investing 15%. And you have the goal of one day, yeah, I want to put a down payment on a house and I want to pay live in a paid for house. I I don't know if I'd go for a tiny house, but you get the idea.

1:15:16George Kamel:Good luck.

1:16:01George Kamel:all right serious question hard question if you died tomorrow how would your family keep the lights on how would they pay the mortgage how would they afford groceries here's the deal if anyone in your life depends on your income, you need life insurance. The next question, how do you choose from all the options out there? Because the truth is there's a lot of garbage options out there. It's simple. Life insurance has one job to replace your income if you die. Not your baby's income. They don't need life insurance. You don't need whole life insurance or permanent life insurance. You just need term life insurance.

1:16:35George Kamel:It's the only kind that does that. It does that one thing only, replaces your income if you die. The other is like whole life, permanent life, they try to add in investing and they end up doing a terrible job at both. And you only need life insurance while someone depends on you financially. So if you're like most people, you need a policy worth 10 to 12 times your annual income for a term length of 15 to 20 years. Because think about that. If you follow the Ramsey baby steps, 15 or 20 years from now, you are completely debt free house and everything you've been investing for likely over a decade, you've got a great nest egg.

1:17:06George Kamel:And it should be a level term policy, meaning the premium stays the same. It's 50 bucks a month for that 20 year period. So if you want more info and resources on this, you can use our free term life insurance guide. Just go to Ramsey solutions.com slash term life guide, or click the link in the description if you're listening on YouTube or podcast. All right. Dahlia is up next in Chicago. What's going on, Dahlia? Hi. So I'm just calling to see about, do you guys have any ideas on how to find money for an adoption? Oh, wow. All right. What led you guys to this spot? Yes, my husband and I have been married almost 10 years.

1:17:46George Kamel:We have two biological daughters. Before we had them, we had been told we might not be able to have kids, and that was something we kind of prayed about and really felt God put on our hearts to our family through adoption. So we had our two bio kids and then still through all of that, we've really felt like this is something God wants us to do. Wow. And yeah, so it's been about five years. We're on the waiting for a match.

1:18:14Jade Warshaw:And then just about a month ago, we got a call that we got matched with a birth mom. Wow. Yeah, she's due in the next like week. Oh, gosh. So this is coming fast. I don't know. So you'll have to educate me a little here. What's it cost? What's it cost to adopt?

1:18:38George Kamel:Oh, you broke up on us, Dahlia, right at the juicy part. Are you with us still?

1:18:42Jade Warshaw:Hello? Okay, there we go. We're here. Did you hear my question, Dahlia? Yes. So we're right about the average, which is$40 ,000. Okay. And this is in two weeks. So what do you have laying around money-wise? Like what assets do you have?

1:18:57George Kamel:yeah so we have our house our home um we still owe about 320 000 on it um and then we had our savings which we had about 30 000 or like 20 27 000 um so we've paid already 12 000 like deposits that have been um requested as you know the date gets closer okay so we've paid about 12 of our own savings and then we had a big sale at church and raised about four um and then a few family members giving us some money as well so we're about at i think close to like 20 that we still need okay so how much do you have now yeah like on things you can liquidate that you could use toward

1:19:46Jade Warshaw:this i i mean others in the house i don't know so you have nothing in savings i thought you said So you had$30 ,000 in savings. Yes. So we have about like$16 ,500 left because we also have to pay.

1:20:00George Kamel:She's in a different state than us. So we have to pay to fly there, stay there for three weeks at least for all the legal process. So that's like Airbnb, car rental.

1:20:10Jade Warshaw:So that's been coming out of our savings as well. So let me recap this to make sure I'm tracking with you. Did you tell me it was, forget the Airbnb stay stuff, but just the adoption, you said it's$40 ,000. And did you tell me you've already paid 12? So you only owe 28? Yes. And then we've raised some money through church and family. Well, let's walk, walk, walk slowly with me. So you said 4 ,000 from church. So now you're at 24. Is that correct? Yes. Okay. And then we still haven't touched your, did the 12 ,000 come from your original 27 that you had saved? Yes. Okay.

1:20:47George Kamel:Okay. Now I'm tracking. How much are you down to across your checking and savings accounts?

1:20:52Jade Warshaw:Should be 15. Yeah, like 16.5, I think, around there. Okay, so we're about$10 ,000 off, right? Does that sound right?

1:21:00George Kamel:Yeah, what do you still owe versus what you have?

1:21:03Jade Warshaw:So we still owe the$20 ,000, about$20 ,000.

1:21:06George Kamel:Okay, and you have$16.5. Yeah.

1:21:09Jade Warshaw:Oh, that's better than I had. Okay.

1:21:14George Kamel:That's the math we're trying to solve right now, is we're$3 ,500 short, and we need this money in two weeks, you said? Or when is it actually due? Is all of it due in two weeks? Yes. So it's all due when the papers are signed. And because that's all we really have, obviously, if we have no choice, we will. But we're trying to figure out if there was like a loan or something because we obviously have, you know, small kids and we're a young family. And we want to make sure we have emergency fund.

1:21:44Jade Warshaw:Right.

1:21:45George Kamel:And you have a community around you. You've got friends, family, church, and you've tapped into that a little bit. You said there's a GoFund?

1:21:51Jade Warshaw:There's a GoFundMe? Yeah. Okay. And, okay. So, I would go to all extents to not take out a loan for this. And I don't know if that's you guys reminding people of the story that you're trying to accomplish here with this adoption through the GoFundMe. You know, and trying to kind of amp that up a little bit more.

1:22:16George Kamel:There's a timeline. I think people get more excited, whether it's a child or anything else on the horizon. When you go, guys, we've been placed. I'm sending an update to everyone I know. I'm writing letters to my neighbors, to my church, to my family. We are on the cusp of this and we are so close to our goal, but we're just so short. I feel like my heart just goes, oh my gosh, I want to give. I want to be a part of this. We're at the finish line here at the marathon. So I would do everything in my power to do all of that while doing side hustles for the next two weeks, while selling everything I can that's not tied down everything like act like this is the$3 ,500

1:22:49Jade Warshaw:debt that must be paid in the next two weeks yeah because this I mean really what's on this gets you your baby you know this gets you your family member so I'm like nothing's off the table I mean I'm not selling the house but nothing's off the table you know what I'm saying like so I would go ham on this and then there's also I don't know we didn't ask you your income but how much margin do you have at the end of every month after you've paid your bills and everything about 2 ,000 okay So that's I would be saying this whole Airbnb thing and bringing this kit. This needs to cost us two thousand dollars like this stay where you need to figure this out.

1:23:24George Kamel:Does somebody have a house that can let us stay crash there or use their Airbnb for free because of what we're trying to do here. This ain't no vacation. We're trying to get our baby home.

1:23:34Jade Warshaw:This is when you take you social you take to social media and you make sure everybody knows this story and what you're trying to do. and you're on a tight time crunch and see if people get generous. And I'd be doing everything so that I don't have to take out debt because this is something that's supposed to be exciting and joy-filled and debt just has a way of putting a damper on stuff like that. You know what I'm saying?

1:23:54George Kamel:Yeah, I can't in good faith tell you, just go take out a loan. I think it's going to make it all the more sweet and joyful when you guys cash flow this whole thing and you write that final check and you just get to go home and focus on that baby. Yeah.

1:24:07Jade Warshaw:Listen, send me the GoFundMe. Put me on. dm it to jade she's on it okay thank you nobody else though don't get any ideas guys don't be

1:24:15George Kamel:dm and jade all your gofundmas i remember it's dahlia from chicago if you're not dahlia keep scrolling okay that's so exciting we're so happy for you dahlia this is a very exciting time and you guys have done a great job getting prepared and what a wonderful thing you know the world it's a dark place and you get calls like dahlia and they're wanting to adopt really great two wonderful bio kids and they're going you know what we just want to get in there take care of another little baby who might need some love and support so good a beautiful thing and yeah a calling yeah 100 and i would be tapping back into that church i mean i would have zero shame at this zero no shame in that game there's this is not a selfish thing you're doing no that's why i said take to the interwebs get in there tell the story people i'd be finding facebook groups I love a story.

1:25:01George Kamel:Reddit threads. I'd be tweeting, X-ing, Instagramming.

1:25:05Jade Warshaw:And the timeline too. Like we only have 10 days left. Like, yeah.

1:25:08George Kamel:We're going to get this thing done, Dahlia. I can't wait. Thank you for sharing the story. Rooting for you. All right. That puts this hour of the Ramsey Show in the books. We'll be back. So make good decisions until then. Don't go anywhere.

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1:26:51George Kamel:Welcome back to The Ramsey Show in the Fairwinds Credit Union studio. I'm George Camel, joined by Jade Warshaw this hour and the number to call is 888-825-5225 if you want to join the conversation and pose your question for the good of the group and for the good of America Chris has chosen to do that, he's in Washington what's going on Chris? Hi guys, thanks for taking my call, I really appreciate it Sure, how can we help? So my wife and I, we're new parents well, relatively new, our son's nine months old I'm super excited about that. We made the decision to have her stay at home because daycare was too expensive.

1:27:33George Kamel:And we're just trying to figure out if you guys have any tips and tricks to, you know, managing our money going forward and making sure that we're setting ourselves up for success in retirement and setting him up for college and all that good stuff.

1:27:47Jade Warshaw:Yeah. So what was she making before she decided to stay home?

1:27:52George Kamel:She was making about$75 ,000 a year.

1:27:55Jade Warshaw:Okay. And what do you make?

1:27:58George Kamel:I currently make$110 ,000 roughly annually, and then I have a side business that I run that brings in anywhere from$20 ,000 to$45 ,000 a year.

1:28:07Jade Warshaw:Okay. So we'll just say that you're at$130 ,000. Do you feel good about that? Yeah. Okay. Yeah. And so have you guys done a new every-dollar budget with this$130 ,000? Because how much does that allow you to take home every month?

1:28:22George Kamel:you know that's that's been really really new for us um and so you know if i had to put a number on i mean our more we have our mortgage we have no other consumer debt um we've done a really really good job that all of our vehicles paid off and everything like that um and so you know our mortgage is roughly 2400 a month and then living expenses you know i had another you know 300 350

1:28:47Jade Warshaw:Yeah, I don't think your mortgage is going to be the problem. I think probably it's the unclarity.

1:28:53George Kamel:I'm wondering, it sounds like you have a little bit of regret, like, should we have done this? Things feel tight. So where is that coming from? Yeah, I just, I'm so analytical when it comes to, like, looking at our budget. And we've, you know, both worked really, really hard coming out of, you know, roughly$95 ,000 in student loan debt, you know, over the past three years. And, you know, we've just worked really, really hard. And I don't ever want to put our family in a place where we're in need for money. You know what I mean? and we've done a really, really good job of that. We have a bunch of money put aside already.

1:29:32George Kamel:Right. So are you following the baby steps to a T? Yeah, I would say so, yeah.

1:29:39Jade Warshaw:You said that, but you didn't answer the question when I said how much you're bringing home every month.

1:29:44George Kamel:Oh, yeah. I mean, we bring home probably, let's see,$6 ,800 a month, roughly.

1:29:56Jade Warshaw:So I'm going to challenge you for your own good, because you described yourself in one way, and don't get me wrong, it probably was the way that you were before you had an eight-month-old. You said, I'm very analytical and I'm really on this. But the truth is, right now, you're actually not on your numbers. you're kind of guessing at them. And I have a theory that the reason that you're feeling that that tightness or that feeling of like, you don't like the way your money is feeling. I think it's more because you don't know exactly what's going on and you don't have a clear path and plan for it.

1:30:30Jade Warshaw:That's why I asked about your, your every dollar budget. Because if you look at that tonight with your wife, once the baby's down, once you guys have, you know, had something to eat and you say, okay, we're going to look at every dollar tonight. We're going to plug in our numbers. We're going to log on HR and find out exactly what the check is. And now we're going to plug in the mortgage, everything we think we're spending money on. What does life look like now with an eight month old? How much are we spending on diapers now versus when the baby was first born? All of those things are going to give you a much clearer picture on what it looks like today with the new lifestyle that you're in today.

1:31:04Jade Warshaw:And I think that's actually going to help you because 130 ,000 where you live, I think you should be okay. Now, don't get me wrong, to lose$75 ,000 a year is a lot of money. But that actually led me to my other point of it's just one baby, right?

1:31:21George Kamel:Right.

1:31:22Jade Warshaw:And you're telling me that it costs$75 ,000 a year to daycare one baby. That's not true.

1:31:28George Kamel:No, no, it wasn't much of that. It was more so, you know, I want, A, right, it was expensive to do daycare, and B, for the amount of money it was going to cost us, you know, She wanted to stay home and wanted to raise our son. Which is fine. That's fine.

1:31:47Jade Warshaw:But the way you framed it was it wasn't worth it for her to go to work. You made it seem like it was more of a cost thing. So it's just personal values. Yeah. Yeah, I guess. Yeah, you're right. And that's fine. I think all of that, though, what I'm trying to get you to is clarity. And I think if you can clearly say we're doing this because we value mom being at home with baby, that is a whole different conversation than it's too expensive we can't afford daycare right so now you're talking about real things which is no this is a value of ours which knowing that is also going to reflect how you feel now about the budget being shorter because you've said no in our hearts we want this so now we're able to tackle a smaller budget or working with a smaller income do you see what i'm saying i'm just trying to get real i mean george you know how it feels to have an

1:32:34George Kamel:eight month old at the house oh yeah i got a newborn a two-year-old his life is chaotic and And that's where you and your wife sitting down looking at the budget every month and just going, okay, I want to bring seven grand in this month. And our mortgage is$2 ,400. We're going to have$1 ,000 left over. What are we going to do with this? And for you guys, you already have the emergency fund? Yes, we do. Are you investing 15 % out of every paycheck? We are. Okay. And then beyond that, how much margin would you say you have at the end of every month or is it disappearing into random spending? I would say more disappearing into random spending.

1:33:06George Kamel:I think that's what's making you feel out of control because you're analytical. You're going, the math ain't mathing. There should be two grand laying around and it's gone. And it's amazing. If you like to take all the receipts of all the money you spent, it'll make a little bitty book of the reasons why we feel that way. And so that's where budgeting with the new every dollar, with your bank connected, the transactions are flowing in, total transparency and accountability with you and your wife. And then you might decide, oh, you know what? Yeah, we need to be spending more. Because she's like, dude, I'm spending it on things the family needs.

1:33:37George Kamel:We just need to up the budget line item to account for that instead of going red flag, red flag, you're over budget. So I think there's probably just some discongruity with like what you're actually spending versus what you think you're spending. Yeah.

1:33:50Jade Warshaw:Your life has changed a lot. And I mean there's the kid and then there's, yeah, wife is at home. Money-wise things have changed and it's just like George said, reflecting your line items to – updating your line items to reflect that change. Yep.

1:34:05George Kamel:No, I appreciate that a lot. And that's something that we've actually embarked on recently is kind of combining our finances, just listening to you guys and kind of buying into that, buying into that idea of, you know, becoming a unit, you know, and we're, you know, working through those things. And so I really appreciate the feedback.

1:34:23Jade Warshaw:I love it. I think you're doing a great job. And I think that you're, you're doing better than you think. Uh-huh. And you're a reflection of the fact that this whole thing is a process. Like no one just in one day or in one listen or in one movement gets it all. It is like building blocks stacking on each other. And like you said, first we did the combined finance thing. Then we did that payoff thing. All of that is stacking up. And I just I think you're doing fabulous.

1:34:44George Kamel:Are you using a spreadsheet right now? Are you using a budgeting app? Yeah, we're using we're using a spreadsheet because that's that's how many times has she said, hey, can I look at that budget spreadsheet? That sounds fun. Zero. Thank you. Final answer, Your Honor. I'm case closed on that.

1:35:02Jade Warshaw:We're going to send you the brand new, all new, every dollar for you to have something that not only would a wife like to look at, but now she doesn't have to say, can I see that spreadsheet? You can just say she'll open the app. She'll open her own app and be able to see it.

1:35:15George Kamel:Here we go. That'll help get her on board on top of combining finances. Proud of you guys. You're making progress, man. That's all you can hope for.

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1:37:13Jade Warshaw:When you were saying that M &M's Lose Yourself was playing when you were like, you've just got this one chance. I was like, I heard the music in my head.

1:37:22George Kamel:That's the most jade thing I can think of. There's worse songs you get stuck in your head.

1:37:27Jade Warshaw:Oh, boy. I'm sorry.

1:37:29George Kamel:Mom's spaghetti. What can you do?

1:37:31Jade Warshaw:I know.

1:37:32George Kamel:All right. Let's go to Indiana. Anne joins us there. Anne, welcome to The Ramsey Show. Hi. Thanks for taking my call. Sure. My quick question is I'm in my early 60s, recently divorced. I am debt-free, but I'm used to supplementing my income versus living off all my own incomes. So my income is about$40 ,000 a year. And so I'm renting right now. I found this apartment that I can afford. And just trying to decide for my future, should I consider purchasing or just continue to rent? You know, I know the difference. You know, if something breaks here, they help pay for it versus being a homeowner and all those expenses.

1:38:24Jade Warshaw:So there's no debt. Do you have any assets? Do you have any money anywhere? Yeah.

1:38:33George Kamel:So I have like$150 ,000 in retirement. Okay. I've got my emergency fund of$10 ,000. Okay. And then I have another$45 ,000 liquid that I have access to. I've got a paid-for car, which is dependable. It's going to last me for years. Good. I do have grandma inheritance. I lost her this past year, but I have about$380 ,000 there. Great. Okay. So I just don't know, you know.

1:39:10Jade Warshaw:Yeah, I think.

1:39:11George Kamel:I'm probably going to work another five or seven years. Okay, great. What are you paying in rent? Right now my monthly expenses are about$1 ,800 when I consider rent, all the utilities, internet. Good.

1:39:28Jade Warshaw:I like the idea, Anne. A reasonable house for someone of your needs, what does that cost you? Because you seem like a reasonable lady who would give me a good answer or accurate answer.

1:39:42George Kamel:I just got a simple starter home. Or even a condo. Or maybe even a townhouse. Yeah. In our area, I'm probably looking at hopefully just under$200 ,000.

1:39:55Jade Warshaw:Okay. I love that as a goal for you. And I think that it's 100 % within your reach, considering you've already got a decent amount saved. You've got 45 liquid that's not really earmarked for anything. and you can continue to add to that over time to put down the down payment, or maybe that is enough of a down payment to get you where you want to be, you can log on to our home calculator and we'll put the link to that in the show notes for you. But see what it would take to put the right down payment on. Of course, we don't want it to be any more than 25 % of your take home. And then from there, if you do say my budget's$200 ,000, and then I'm going to work for however many extra years to pay this off.

1:40:40Jade Warshaw:I think you could do that. And if you got to the point where it's seven or eight years later and it's still not quite paid off, you could reach into that inherited money and that retirement fund that's been growing all this time and has likely doubled, and you could just reach in and take the rest of it out and pay off the remainder after seven years. Do you like that plan?

1:41:01George Kamel:I've toyed with that idea. Yeah, I just worry about, you know, if it goes out, if it needs a roof, you know. I don't know that I'm financially going to be in a place to feel comfortable taking care of all those.

1:41:16Jade Warshaw:Well, George can walk you through the numbers on that because you've got a good start here.

1:41:22George Kamel:Yeah, you can cash flow any repairs and expenses. You'll have homeowner's insurance to cover the big stuff. And so you're really worried about those little things and kind of just maintenance and repairs, which isn't going to be, you know,$25 ,000 a year. So I would buy a smart house that's not in disrepair. You don't need to go buy a fixer-upper. Oh, yeah. I would buy something that's – maybe it's a little bit newer and you know it's going to have less repairs and less ongoing maintenance. You know, it's not like a 1950s bungalow that you've got to keep up with. But I like the idea. Here's an option.

1:41:54George Kamel:if you paid cash for a$200 ,000 home today, you would still have like 220 grand left over that you could invest. Correct? Yes. So if you invested that on top of your 150, if you were able and willing to work until like 70, you'd have 750 grand as a little nest egg for you on top of having no mortgage that whole time. Hmm. So you could even, that's without you adding a dime to your investments outside of grandma's inheritance plus your$150 that you have. So I'm just trying to show you kind of the full picture of what your tradeoffs are here. Because the other thing is, homes are going to be more expensive if you wait five years.

1:42:34George Kamel:So that$200 ,000 home is probably now worth$275 ,000. That's right. And so it's a moving target. And I'd like to stabilize your biggest fixed expense, which is housing. And you can do that by buying a house. Now, you're always going to have homeowners insurance, property taxes. Those will always be ticking up slowly over time. but you'll have the cushion to to stomach that and i also want to go how can we get you making more money than 40 000 at your age with your experience what are you doing for work um well i retired from my full-time career but i'm i'm doing more of a medical assistant work it was just something i took time off to to tend to my grandmother while she was ill and so I was not working for several years.

1:43:20George Kamel:So getting back in the game in the medical field, which is just something I chose to change from, I used to be crisis social work. Yeah, you seem like just a person who has, like your heart is just to help people, take care of people. That's who you are. And you can make good money doing that. So I just want to tell you, you don't need to just settle and go, well, this is all I can get at my age. That's right. I would go, what are the caretaking type jobs that I could get that I'm able to do?

1:43:48Jade Warshaw:And what will, have you run it out? What will your, I'm guessing you're waiting to take, obviously take your social security. What will it be when you take it?

1:43:56George Kamel:When I take it, then it's going to be about, gosh, what was it? Three, a little over 3 ,000 a month.

1:44:08Jade Warshaw:Okay. So you'll have that coming into.

1:44:10George Kamel:On top of whatever nest egg you've built. So I feel good that you're going to be able to sustain – live a very frugal life, it seems. So if you can keep your expenses low like you have been, I think getting a house in the near future – I mean you have the money to do it and pay cash. That's what I would do personally and then invest anything left over. Okay. Are you working with a financial advisor right now to help you plan all this out? Yeah. Yeah, I am. Okay, good. I'm just trying to decide on a, should I just, I'm going to continue to rent for a year.

1:44:43Jade Warshaw:Okay.

1:44:44George Kamel:So that I, you know, just because. What's that do for you? After a life changing thing. Well, after a big life change, I don't want to make a decision.

1:44:53Jade Warshaw:I understand. That's wise. Yeah, that's very wise. So it's a year lease.

1:44:58George Kamel:So I'm going to stay here at least a year. Rent. And then I'm happy. I'm happy where I am. Good. and I can make it work financially. I am taking care of myself. Yeah, you are. I was scared I couldn't do that.

1:45:12Jade Warshaw:I would just caution you not to get too comfortable in that rental phase because George is so right. You want to stabilize that line item. As you age, you don't, you know, it's hard to control prices of rent and all that. So that's a fluctuating thing and we want to get you stability. So while I think it's great for you to stay there for the year, run out your lease, like you said, get a handle on what this new life looks like, but don't get so comfortable that you forget about the dream and the stability of owning your own home.

1:45:39George Kamel:That's good wisdom. How old was your grandma when she passed? 92. Well, and those genetics play out. You got another 30 years at least on this earth if you just do what grandma did. And so, again, 30 years from now, who knows what rent will be. I want to get you in something that you can call your own that stabilizes and gets rid of that payment every month. We're rooting for you.

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1:47:06George Kamel:Hey, are you staying on track with the baby steps? We've got a way for you to check. You can take a quick quiz to check your progress and receive a personalized plan built just for you. Simply head to the show notes on this episode. Click on the link titled, Are You On Track With The Baby Steps? And complete the quiz. Nick is up next in Austin, Texas. Nick, what's going on? Hey, Jordan. jade um thank you for taking my call absolutely i uh i so at the start of this year i had a wake-up call when i tried to take out another personal loan to pay for my shortages on my property taxes i also took a little bit extra for a trip but i realized i had no money to live on because i promised it all away with no interest or personal loans that's where i found you george specifically And with a little bit of time, I started following the Ramsey plan.

1:48:03George Kamel:I started working 60 hours a week and did that from mid-February to mid-August. I have attacked a get like a gazelle, like Ramsey teaches. And I can see myself get free from my home and everything in five years. But my question is, I'm tired. I'm exhausted now. How do I keep going and moving past this point right now where I feel like it's never going to end? Well, man, I'm proud of you. You've already made some serious progress and big changes in your life, and I'm glad you had that wake-up call this year. What's your debt remaining? um so i started the year with 82 000 roughly 82 500 in uh non-home debt um today i'm at uh about 50 500 wow way to go you knocked out 30 grand so far and you're like dude i'm not even halfway there.

1:49:14George Kamel:How am I going to finish this race? Exactly.

1:49:18Jade Warshaw:What's your income? What have you been earning during this time?

1:49:22George Kamel:So my take-home pay, or my, not take-home, but my, I guess, gross is I make$75 ,000 a year.

1:49:32Jade Warshaw:Okay. And, go ahead. So if I break that down, that's about, I didn't mean to cut you off, but that's about$2 ,200

1:49:41George Kamel:$2 ,200 every two weeks, so$4 ,400 a month.

1:49:46Jade Warshaw:Okay. And are you doing side hustles?

1:49:49George Kamel:No, but I was doing overtime. Okay, good. And so my take-home pay was like$7 ,500 a month. Wow. $7 ,500. Great. And you're saying you can't keep up with that pace. What pace would you say, hey, I can keep up with this for another year and a half if I do 50 hours instead of 60? that's what everyone keeps telling me i'm in the mindset of like it's all or nothing and so i think that's where i'm getting like defeated at i get that i'm an all or nothing

1:50:22Jade Warshaw:type of person myself um but the truth is if you get to that wall you're gonna have to here's the options all or nothing is i get to the wall which sounds like you're at now and i just stop and then And if I stop, that means I didn't accomplish my goal. That means I didn't do what I set out to do. And then I feel terrible about that, right? So it's important that you figure out how to be a person who can meet in the middle and say, here's what I can do. Here's the most I can do in this season. And then here's the most I can do in this season. And here's what makes sense for this season. So you've had what I'm going to call, you know, however many months, six, eight months of all out sprinting.

1:51:01Jade Warshaw:And now you're like, you know what? I just need to jog a little bit for a while. Let me jog. And then maybe that looks like to George's point, yeah, going down to 50 hours. And then you might get your wind back and then you're ready to sprint again. Do you see how that works? Yeah. And I think that's what's going to happen because you're still going to realize and get the feeling of, oh, my gosh, this debt is going down. I'm making extra payments. You're still going to get that high. You're still going to get that dopamine hit. But you're also going to, you know, keep your sanity intact at the same time.

1:51:30Jade Warshaw:And I'm telling you, that number is going to get to a point, that 50 at some point is going to get to 20 or 30, and you're going to want to sprint again.

1:51:38George Kamel:You'll see some light at the end of the tunnel. And the other thing I would encourage you to do, Nick, spread out the sacrifice. So maybe it's not all overtime. Maybe I'm willing to cut my expenses in this area, and that creates the same amount of margin so I can keep up the progress I was throwing at the debt. so have you looked at all of your expenses and done a pretty brutal judicious audit of like hey i don't need this i can live without this on top of i can make more by doing this so i i um i have a i george i purchased your book um like a month ago and then i purchased the audio book because i like listening to the book uh that you that you wrote but anyways um Um, um, I, I started, um, I think just a couple of days ago, I, uh, you, you did, um, a free trial for the, um, every dollar.

1:52:34George Kamel:There you go. Yeah. And, uh, so I logged in and, um, um, I've been trying to incorporate it, but I do an Excel sheet. Um, dude, have you used the all new every dollar, like with the coaching recommendations? recommendations um we just launched that i think that's going to be your ticket to give you a little fuel because there's so much and you can read i have a chapter in the book called margin is breathing room where i lay out a whole bunch of ideas well now the all new every dollar does that for you and it's personalized based on what you have told us and your situation your life and what you're willing and able to do so i think that's going to really help you on this journey but i want to encourage you this is a normal feeling you're gonna hit that wall you're like dude i I can't keep going.

1:53:18George Kamel:And then you're going to go look at the numbers, find some new ideas, do some new recommendations, and it's going to give you a second win like Jade said.

1:53:27George Kamel:And also your book, The Margins of Error, Our Breathing Room is chapter 12. Yeah, I'm still on chapter 8. Oh, okay. I'm not breathing, my guy. I don't want to give it away. I don't want to give it away. Everyone dies in the end. No, I'm just kidding. Oh, gosh. That would be wild if that's how I ended the book. Nobody dies. Only people find financial freedom. That's it. But hey, thanks so much for the call, man. I love to hear the progress and how our stuff is helping you get to the path on debt freedom.

1:53:53Jade Warshaw:He's talking about real things, though. The truth is it's difficult to sustain a certain intensity over lengths of time. And the longer the length of time for you listening, the harder it can be. Some people, I mean, we see on average, yeah, it's usually about a two-year span. You can knock it out. But some people are on a longer course on this, three years, four years. For Sam and I, it was seven and a half years. And whenever that moment hits, the option is never to stop. You can change the intensity at which you're going. And to George's point, you can start to find tradeoffs in other places in the budget.

1:54:28Jade Warshaw:Another thing I like to do, George, is especially if you're a person who's side hustling and you're like, if I deliver one more pizza or one more Instacart, I'm going to scream. Okay, quit that side hustle and get a new one. You know what I mean? Because there's always the side hustle that you dread and that you hate. And even if it might be making a lot of money, just put it on break for a while and do something else. So really get creative to keep things fresh in your mind. And another thing, yeah, if you need to scale it back and jog for a little while, that is okay. You're still making progress.

1:54:59Jade Warshaw:The point is making progress is not excuses. It's one thing if you make an excuse and you stop. It's another thing if you're like, hey, this is really happening. And I just need to slow down a little bit. Totally fine. I will never fault anybody or yell at anybody for that.

1:55:13George Kamel:I love that. And you got to think about this. What's more exhausting, living how you've been living for the next 10 years or just sticking it out for a year or two of grind where you're like, oh, my goodness. Because at least you're making progress. The other one is just mediocrity and giving up. So you don't look at the baby steps as a pass fail where it's like, if I don't go all in, then I'm not doing it at all. I'm going to heal all. if you get a B plus and you become debt free but it took you six months longer than you wanted it to dude you still won the like you did it right you did it right meanwhile some people are on

1:55:46Jade Warshaw:the treadmill and they're just walking at a breezy 3.3 and I'm like you need to click up the treadmill and see like they've got yourself sprint they've got a bunch of savings they could pay off

1:55:55George Kamel:the debt yeah I'm gonna keep my match with the employer I'm not gonna cut my investing not even breaking a sweat. Some of y 'all need to break a sweat. Jade's out here judging you. I just want you to know. If you're Ramsey-ish, get out of here.

1:56:08Jade Warshaw:Get out of here.

1:56:10George Kamel:That was a pretty awful accent. I expected more. Get out of here. The more you do it, the worse it's getting, and I like it.

1:56:18Jade Warshaw:What if I go up octaves?

1:56:19George Kamel:Get out of here. Actually got better. You got older and more curmudgeonly, which made it hit in a different way. I appreciate that. Only you could have brought that out, George. Thanks for playing. This is The Ramsey Show.

1:57:04George Kamel:Our scripture of the day, Proverbs 11, 24, and 25. One person gives freely, yet gains even more. Another withholds unduly, but comes to poverty. A generous person will prosper. Whoever refreshes others will be refreshed. trashed paul stanley of kiss said charity is not an option it's an obligation left field quote from paul stanley but we'll take it not what i would expect the sentiment rings true all right ann is in south carolina up next and welcome to the show thank you thank you for taking my phone call I am 71 years old, retired. My husband passed away last year. I still own the home of$114 ,000.

1:57:53George Kamel:I do have money in an IRA account. People are telling me, no, don't pay the house off. But I am taking money from that account every month to make the payment. So I'm afraid I will run out of money over time. So I don't know what to do. Should I pay the house off? The interest rate is 1.99 %

1:58:17Jade Warshaw:or just keep taking away from my IRA account. How much is in the IRA?

1:58:27George Kamel:Total with money market IRA, some gold and silver,$327 ,000. Okay. How are you living right now? You're needing to make the payment with the IRA money. Do you have other income? I do. I have Social Security. How much is that? It's$3 ,300. And what's that mortgage payment every month? Around$1 ,400. Okay, so let's... That's with taxes and everything. Okay, so if you paid off the mortgage, you would free up the principal and interest. So it's not going to be all$1 ,400. Would it be closer to$1 ,000? Yes. Okay, because you still got to pay insurance and taxes and all that good stuff. Correct. So you free up$1 ,000, which means you don't need to tap into the IRA, but you've depleted the IRA down to, let's do the numbers for you here, down to$213 ,000 if you paid it off today.

1:59:22George Kamel:Right. So the question is, could you still live a full life and have a great retirement with your Social Security plus$213 ,000 in the IRA that you now don't need to touch?

1:59:36George Kamel:uh well that's that's the question yeah so that well if you don't need to touch it then the money is just going to sit there and grow i would caution you to not keep it in money markets and gold and silver i would have it in the market working for you to at least beat inflation okay and so you can work with it you have a financial advisor that you trust right now I do. Okay. And he was telling me to move everything, or at least what I have in the money market, over to where he is and let him put it into... And actually invest it for you? Right, yeah. Okay. You said you're 71, and so if we ran the numbers out, by the age of 80, if you just let that 213 sit there, you'd have over half a million dollars in that nest egg.

2:00:25George Kamel:If you didn't touch it. Oh, that would be good. So you're saying you're just going to live off Social Security, but you have no mortgage payment, and you're okay with that. You're still going to do all the things you want to do? Well, probably not, but I'm to the point that I've done pretty much everything I want to do. You're not skydiving or anything fun? Yeah, do you have an emergency fund? I have some. I have about$6 ,000,$7 ,000. Okay, I would pull some from that money market and keep it in a high-yield savings and keep it liquid and maybe have$20 ,000 as your emergency fund to just protect you from all the things that could happen in your life, the home maintenance and repairs and all that stuff.

2:01:07Jade Warshaw:Right. What's your health like? It's pretty good. I do a little part-time job, but it's not, you know, not a lot. Okay, that's what I was getting to. I was getting to maybe having a little part-time job would also help supplement the$3 ,300 that you're getting from social. And that way, that's just giving you a little bit more pad. Like George says, you have that emergency fund. I really like that plan for you.

2:01:34George Kamel:Because even if you took, let's say you took$1 ,000 a month from that IRA, you're likely never going to run out of money if you do that. It's going to grow faster than you're depleting it. Okay. And so I just think the peace that comes with having a paid-for mortgage at your age is worth it, regardless of the spread you could have made because your friends are like, well, you have a low mortgage. You could just leave the money invested. You're way better off. Don't ever pay off that mortgage. Well, they don't pay your bills, and so I'm not going to give them the 100 % voting stock in your life.

2:02:04George Kamel:I would do what you feel is best for you, not just financially but for you emotionally and spiritually. And for me, that's not owing anyone any money and having more freedom. And you're likely going to be okay. You're not destitute. You don't have debt payments. You have a very low cost of living right now. And I would say you're going to be – I mean you can crunch the numbers with a financial advisor. This is just a guy doing napkin math on a podcast. But it looks like you're going to have a full and wonderful life paying off that mortgage and leaving the money invested. Now the key is invested.

2:02:35George Kamel:If you leave it in savings, it could get depleted while you're still on this earth. Okay. But if you take that 213 and invest it in the stock market, what we have seen over the last 50 years is about a 10%, 11 % return. And so your money would double about every seven years if you do that, hence my numbers of having half a million dollars if you just left it alone. Okay. Well, that's – to me, I feel like it would give me relief that this is paid for. I don't have to worry about it. I love it. And I tell you this like you were my mom. This is the same advice I would give to my own mother if she called in.

2:03:13George Kamel:And so I'm wishing you the best. You've done a really good job. I'm so sorry for the loss of your husband. How long were you guys married? Thank you. 30. Wow. 30 years. Yeah. It was not expected.

2:03:27Jade Warshaw:I'm sorry. What was his name? I'm sorry. What was his name? Michael. Michael.

2:03:36George Kamel:Wow. Sweet. Well, and I'm rooting for you in retirement, even if it's not the picture you had. You've done a good job preparing for the future, and I hope that you have a wonderful long life ahead of you and a great retirement. Let's move on to Alex in Raleigh, North Carolina. What's going on, Alex? Hey, George and Jade. I appreciate you guys talking to me. How are you? Sure. We're doing great. Calling today because my wife and I, we're longtime Ramsey listeners. We're on Baby Steps, 6 and 7. The only debt that we have is our mortgage. Awesome. And calling today because, you know, we have paid for vehicles with cash flow, house improvements.

2:04:16George Kamel:And my wife has decided that she wants to upgrade her Tahoe. And the discussion is, you know, we can, she's talked about getting a loan. And I have a bonus coming up here shortly that would cover the amount of the loan.

2:04:34Jade Warshaw:But my question is, I'm trying to determine kind of what is, how do you determine what the proper amount to spend on upgrading a vehicle is, given our, you know, where we are in the baby steps?

2:04:44George Kamel:And then also, you know, I'm pretty confident you guys are against getting a loan, period.

2:04:51Jade Warshaw:Yeah, I'm more concerned with the fact, I'm less concerned about you spending cash on a Tahoe. I think that you will be reasonable on that. I'm more concerned with her even suggesting a loan. What's happened there? Why did she get so desperate?

2:05:06George Kamel:That's the same question I asked.

2:05:10Jade Warshaw:Like I said, it's a nice vehicle. It runs fine. What's it going to cost to upgrade? It's going to be anywhere between$15 ,000 and$19 ,000 is what she's suggesting for the loan.

2:05:26George Kamel:The trade-in value on it or the sale value of it is about$20 ,000. And like I said, we finished up our fiscal year with the company I'm with here recently, and I have a bonus come and feel confident that it will cover the amount of that loan. I'm of the opinion, let's just wait until that money's in hand. Yes, you're not getting a loan.

2:05:46Jade Warshaw:I'm telling you right now. Y 'all are not getting a loan, Alex.

2:05:49George Kamel:That's just a value in our house that we don't borrow money, so it's an easier conversation. What's your household income? We're a little over two. Okay.

2:05:59Jade Warshaw:Yeah, there's no I 100 % think that it's well within the balance to spend 15 or 19 upgrading to a vehicle if you spend cash for it. My parameters on this are kind of, you know, it's all about the financially smart adult checklist. And it's five things to go through. You want to make sure you're a person who's budgeting, you're a person who's paying off your debt, you're a person who's saving, right? You've got your emergency fund, you're doing your 15%. You're a person who values generosity and you're a person who carries the proper insurances. If that's true, which it is, you're on baby step six, you can do this, but you cannot consider debt for this.

2:06:34George Kamel:Get the car, but do it the right way, my friend. That puts this hour of the Ramsey Show in the books. Until next time, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.