The Numbers Don't Lie

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21:41George Kamel:you ever wonder what types of investments dave does and doesn't use well dave ramsey and myself we're going to show you at investing essentials our two-night virtual event happening september first and second the only place dave unpacks his playbook for investing and wealth planning We're going to cover the basics of investing from mutual funds to real estate, but we're going to go way deeper. All new content on reducing taxes, setting up wills, estate planning, real estate investing, giving yourself permission to spend, and so much more. Tickets start at$199 for two nights. That's four hours.

22:14George Kamel:That's like$50 an hour to get coached by Dave Ramsey. I'll take it. Get yours today. Go to RamseySolutions.com slash events or click the link in the show notes if you're listening on podcast or YouTube. And for all the naysayers. Dave doesn't really say how he does it. He doesn't really show why the, like, here it is. This is the opening of the books. Dave gets so nerdy that we're like, you sure you want to share the formulas for this, Dave? This is pretty in-depth. And he's like, this is what I do? Well, and I think – I'll be generous. It's nobody's fault. They just assume Dave is this old guy ripping from the hip.

22:54And I remember one time he was explaining something about the way bond rates interact with interest rates that affects the – and he said something along the lines of – and I kind of – my brain had melted by this point. But he said, all right, so algebra normally goes this way. I'm going to take it into, we're going to go. Another dimension. We're going this way. And I was like, you know what? I'm just going to say I trust you. All I have to say is for folks who think Dave is just an old boomer who doesn't get it and he's just ripping from the hip, this is a great opportunity to see, oh, there's a ton of method behind the madness.

23:31And it's got math to it. And it's formulaed out. And it's well thought out. and actually you begin to see the magic of the distillation into i'm going to make this as simple as possible for knuckleheads like me to follow these things called the baby steps but there's a method to this and here's the playbook and it goes deeper and we had to convince day people

23:50George Kamel:wanted to hear the nerdy stuff because nobody wants to hear this and the audience was like uh i would like to go deeper right it's become one of the flagship events now everyone wants to say okay where's where is this guy putting his money for real and why is he putting it there for real. The decision making, the mindset around legacy planning, because he's in that phase. It's really, really good stuff. So join us. And a lot of people ask, hey, what if I can't watch it live? There is a replay as well. So check it out, ramsysolutions.com slash events. Amberlee is in Salt Lake City. What's going on, Amberlee?

24:20George Kamel:How can we help today? Hi. I'm just calling for some advice on my situation. I'm 21 years old. I'm headed to college in the fall, and I'm trying to do it the right way. Back when I was in high school, I was able to get 55 college credits and a technical degree in automotive studies. I then served a mission for my church and used my savings from my technician job as a cushion when I got back. So I paid for another semester of college and bought a car in cash. I now have my associates and about$2 ,000 in savings, and now I've transferred to a new college to get my bachelor's in experience design and management.

25:03My question today is, how do I avoid debt in college and stick to a budget while feeling like I don't have that much money to work with while in the first place, but not wanting to burn out?

25:15George Kamel:Super simple. Yeah, you asked 50 questions there in one, Amberlee. I just want to say, hey, I'm really proud of you. The fact that you've made it this far, debt-free, it sounds like, is incredible. But not only debt-free, but you've also done something that was important to your faith. You've also kept your character about you. You've also got a vision for what you want to do. All of that. I'm proud of you. Just as an old man talking to a 21-year-old. Well done, dude. You're on the path. So let's look at the math of this. What is this school going to cost you each year and in total? Yeah, it sounds like you went to a Lexus dealership.

25:49You got in the car, and you're about to turn out of the parking lot, and then you're looking out the window going, how do I do this debt-free? Like, you've already enrolled in a thing, and now you're asking about the price. George and I would suggest you're doing that backwards. Like, instead of saying, okay, here's what I got. Here's how much money I have.

26:09George Kamel:Like, we save up for the car first, then we go car shopping. But we've already went shopping, we picked the car, we signed it, and now we're like, oh, we've got to pay for that. How do I do this debt-free without any stress and without burning out, right? You get what I'm saying? Yes. Okay. So is this a local in-state school? It is an in-state school, and tuition is going to be$3 ,500 a semester. Nice! That's very reasonable. That's beyond reasonable. Okay, so$7 ,000 a year. Are you living at home? No, I am renting. Renting. Okay, and are you working part-time, full-time right now? I do have a job.

26:47it'll pay about 18 an hour with room to improve about 33 hours a week fantastic

26:56George Kamel:okay and you can still do school while working those 33 hours a week yes I'm doing all night classes so that I can still work during the day Amberlee I hope everyone listening everyone who's over the age of 40 who thinks it's all going away because this young generation there's a jillion Amberleys out there who are Amberlee you're giving me hope for my kids So well done, dude. You're on it. Thank you. How much is your rent? $500 a month. Wow. This is incredible. Okay, so your gross income for the month, let's call it$2 ,400, you take home$2 ,000. Is that fair? Yeah, roughly. Okay, great. So$2 ,000 a month, your rent is$500.

27:36George Kamel:That leaves us with$1 ,500. Now we still have to cover other bills, so you got to eat, right? Mm-hmm. And you have$2 ,000 to your name. We're going to call that your starter emergency fund, and you have no debt. So right now we could sock away a little bit of money each month, right? Yes. How much do you think you could put away into a savings account if you worked really hard?

27:58I feel like I could put at least$500.

28:03George Kamel:Okay. So that's$6 ,000 a year right there. That's a good start. But we need to cover$7 ,000 a year just to cover the tuition. Okay. Right? Then I feel like I could probably do more. Or then you've got summer too. There's other levers. Yeah, you can work more in the summer. You could apply for scholarships and grants like a mad woman. Make that another part-time job every weekend. I'm going to apply for five or six different scholarships. And even if you get a couple out of that, that was still a pretty good hourly rate. And so that's the way to do it is go to affordable school. Check. You did that part.

28:37George Kamel:Work part-time. Check. Get scholarships and grants. Check. now you've got an actual system here to cover the gap so turn it into a little math equation know that my income will cover this portion and then get ahead of it so you know when is the next bill due and how much is that going to be do you know is it like september it's going to be due um yes i i believe so september so 3 500 bucks by september well i i don't i don't even mind you getting on a semester payment plan with your college. I'm going to pay you this much per month for this semester. I'm going to pay you this much per month. Usually they'll do it for 50 bucks or 75 bucks.

29:17They put you on a semester payment plan and just make that payment. If it's 600 bucks a

29:20George Kamel:month and for a couple of years, and you can factor that into your monthly budget, that makes it simpler for you. Okay. Awesome. And Amberlee, I want to get to the question beneath the question that you asked, okay? Can we be honest and say you're 21 years old, you've been working hard since you graduated high school, and you've largely been working. Somebody else has been telling you what to do. And now you're entering into a phase where, quote unquote, you're free, and now you got two other knuckleheads saying, well, actually, you got to keep doing living like this pretty pretty low we're not out of the woods yet right like just like burnout is not being honest with the reality that you're in and you're very honest so if you if you are able to metabolize i got two more hard years of scratching and clawing ahead of me and i'm going to choose joy at work when i'm doing whatever i'm doing 33 hours a week and i'm gonna i'm gonna find not drudgery, but I'm studying a thing that I actually want to go do in the world.

30:25And I'm going to choose to walk into those classes with a smile on my face. Not every day, because not every day is like that, but I'm going to choose gratitude walking into that thing. And I'm going to keep a calendar. I know this ends in two years. Man, that's going to keep you from that bitterness, that resentment that I just want to break free and do whatever I want, whenever I want. It's just going to keep you on that path for two more years.

30:48George Kamel:I'd rather you do this now than the back end where you're trying to make student loan payments while trying to live your new adult life. That's right. So set up a sinking fund. $600 a month in that thing covers me no matter what. You're crushing it, really. We're proud of you. Automate that, and you're going to graduate completely debt-free, making good money. So proud of you. This is a success story in my book.

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32:49George Kamel:Kayla is in San Francisco up next. Kayla, welcome to The Ramsey Show. Hey. Hey. How can we help? Hi, I'm calling. So I'm calling because I would love a professional opinion. I'm 26 years old, currently living with my parents and paying rent to them. I desperately want to buy a house and move out. So my parents keep telling me to wait for interest rates to drop, but I don't want to. I work full-time, and I have worked full-time since I was 18. I have no debt. I have a pretty good credit score, and I'm trying to figure out what the best next steps are for myself. Wow. Well, you asked for a professional opinion.

33:30George Kamel:We can only give you amateur ones, but we'll do our best to guide you. So you said you're desperate. Where is this coming from? Do you want out because you don't like your living situation? Are you tired of mom and dad's thumb on you? What's going on? Not so much that. I just feel like I'm a little bit behind for my age. I mean, I'm going to be 27 next year. Oh, my goodness. I didn't do the math. 26 does lead to 27. Yeah. Okay. Gosh. So you're behind who? Medicare is kicking in soon. How many 26-year-olds do you know in the Bay Area who are homeowners that you're behind? Well, I'm less in the Bay Area.

34:09Yeah, I'm more in the Central Valley, so not quite San Francisco. Okay, any 26-year-old in California, how many of them own a home? Probably not many, but I'm an ambitious 26-year-old.

34:19George Kamel:Okay, I just want to make that clear that you're not behind anyone. You're behind your own self-imposed goals. Yeah. Okay, that helps us just clear the decks right there. So you have a goal to be a homeowner in your 20s. Your parents are saying the interest rates are high. You should wait. And you're saying, I don't want to wait. I just want to go buy a house. Pretty much, yeah. Okay. How much money do you have saved outside of an emergency fund for this house down payment? So I have about$49 ,000 total checking and savings. And that counts your emergency fund? That's kind of all the cash to your name?

34:54George Kamel:Yeah. Okay. I have$20 ,000 and a 401k from my last job, but other than that, that's... And how much is a house that you would want to buy in your area? Right now, probably between like$400 ,000 to$500 ,000,$550 ,000. Okay. And what do you bring home? What is your after-tax monthly income? Don't include the 401k in health care, but kind of after the government takes its part, how much would you bring home every month? Probably about$36 ,000 to$3 ,800. Okay. So our parameter here at Ramsey to avoid you being house poor and avoid you making a regretful decision is 25 % of your after-tax monthly income going towards housing.

35:38George Kamel:That includes the principal, the interest, the property taxes, the insurance, the HOA. Because what happens is, Kayla, you go out and buy a house and you're like, I did it. That house is$2 ,800 of your income out of$3 ,800. Now you are broke. Right. That's what we want to avoid. So I'm just crunching the numbers here to show you, even with 20 % down, that's$100 ,000 down on a 15 year at the going rate, which let's call it 5.8 % on a 15 year, you're talking about$4 ,000 a month for that mortgage. So my question to you is, I love that you have this goal. The math says we can't do it right now. Right.

36:19And I'm trying to figure out like, I maybe get a second job. I can also, I don't really want to rent. I feel like renting doesn't really make sense, especially with, I mean, that's pretty much half of the mortgage every month too.

36:35George Kamel:Okay, but there's also a lot less risk involved with renting. You don't have to cover the HVAC going out. You don't have to cover, you know, you're covering rent and that's buying you time and patience. And so I'm not saying that to crush the dreams. I'm just showing you the math of it going, I know it stinks to rent. It may be the wisest thing to stay at home for now and keep saving for another year. I think you should go out and get your own apartment. And, and I'm saying this intentionally, not a fancy one, like the least expensive one you could buy that's in a safe location and, and practice.

37:10And it sounds so cheesy to say it like this, but practice the daily expenses, practice the bills coming every month and they just rely on you and practice. Here's what it costs. Here's how much money I'm going to have at the end of every month and practice. I can't go out to eat or I get to go out to eat or whatever. Like it's getting your feet underneath you. You're like an amazing freshman in high school basketball player. Who's like, dude, I'm just going to skip it all and go to go to the, go to the draft. And everyone's like, Hey, you could play your sophomore year in high school, maybe go to college, get some good coaching there and then head to the NBA.

37:45I mean, you're, you're a go getter and you are clearly good at safe, man, 26. I was so underwater with how much I'd spent. That's not you. Like you're, you're on it, but there's a, there's just several steps to take, but I can't, I can't parse how much of this is pent up. How much would you feel unshackled from this obsession with, I got to get a house, I got to buy a house, I'm behind, I'm behind to I'm 26 and I got a full-time job and I have 50 grand to my name and I have 50 grand in my name and it's in cash. And my mom comes down and says, you need to clean your room, right? Like how much of it is if I just got away from my parents, got my own place, got my own place, settled that in, did my own laundry, made my own meals, went home for Sunday afternoon breakfast or Sunday afternoon lunch, whatever.

38:32That would help this sense that you're behind. Because I do think at 26, you're behind because you still live with mom and dad making the kind of money you make, but you're not behind when it comes to home ownership and all that.

38:45George Kamel:Especially in the area that you're trying to buy a house. So that will scratch the itch of independence if you desperately want to get out, go rent. But please, please, please don't go out and buy a house. I don't think you'd even qualify at this point. But even if the bank said, sure, we'll give you a loan, it's going to be$3 ,000 a month out of your$3 ,800. Getting a side job is not a sustainable path to home ownership. You are going to burn out and call us back going, I need to sell this house. It was a mistake. And I'll tell you, I bought a fancy house here in town. And I just last, like, was it two or three weeks ago now, had to replace the whole central ac unit that passed inspection that was good to go and it just died and that was super expensive and if you've burned every bit of cash you have just to walk in the front door you're in a real real mess when the roof needs to be repaired when the sidewalk's got to get fixed when the foundation has an issue when they're and we're just saying this is just part of owning a home and it'll appreciate over time but man there can be some acute challenges you have that if you don't have the cash for it, people, George, people beat us up for the 25 % thing.

39:49It's us trying to say, Hey, we care about the fact that life happens.

39:52George Kamel:We still want you to like invest and go on vacation and enjoy your life and not just have to pay the home payment. That's all you can do with your life. So I hope that helps bring some clarity to it. And I'm going to give you my free home buying course, Kayla. So hang on the line. Our team will make sure you get that link. I hope it gives you some, some clear next steps at least, because I think right now what you need are just some facts. Because if I give you a goal, Kayla's going to go get it. Yes, you will. And I think that's all we need right now. And it's a lot of just emotion. And I just want independence at all costs.

40:22George Kamel:But I don't think the next move is to buy a house. And just the napkin math scared me looking at that. And that's the reality. So I would not wait until interest rates drop. I think your parents are wrong on that one. You should buy a house when you're financially ready to buy a house. And that's the parameter. A quarter of your after-tax monthly income will help you make sure that you're making the right decision. And if you're California, again, this isn't us being fun ruiners. This is just us caring about you. It's a math problem. And so if we're telling you, hey, get it down to 25 % of your take home pay, that means you're going to have to move into less of a house and you're going to qualify for no question.

40:58That also means you're going to have to double and triple and quadruple down on your down payment to bring that total of the house you're buying down.

41:06George Kamel:Which might mean I got to work on my career and figure out how to make six figures in order to make this goal happen. Or I got to ask myself, do I have to live in California? Because there's other places in the Midwest where I can buy the same house for half or a quarter of the cost. Yeah. I grew up in Boston. And at 20, I moved. Not because of the cost of living, but part of it was I don't know if I can sustain a life here in a high cost of living area. What kind of life do I want? And if home ownership is important to me, I got to migrate south to where I can get myself a nice little townhome and afford it.

41:37George Kamel:And that's what I did. Right. And now I'm on my fourth home in 13 years just because I followed these principles. But having too much house is one of the worst things you can do for yourself financially because you will not sleep well in that house. Yeah. And you'll hit that goal and go, that wasn't the goal. The goal I really wanted was freedom. And this house is actually shackles. Yeah. There you go. and your own house becomes a prison that you lock on the inside and man i don't want that for anybody and then the hvac breaks exactly and it's a prison nightmare it's a hot hot prison ouchie thanks for the call yeah for anybody wanting that free first-time homebuyer course we're going to drop a link into the description of this episode so wherever you're watching go to the description we'll drop a link there so you guys can check that out for free appreciate the call

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43:56George Kamel:Welcome back to The Ramsey Show in the Fairwinds Credit Union studio. I'm George Camel here with Dr. John Deloney taking your calls. Mark is in Des Moines up next. Mark, welcome to the show. Hey, thanks for taking my call. Absolutely. What's going on? So my wife and I, together, we make about$250 ,000. That's a combination of her income, my income, and then some VA money we have coming in, which we've been skating by things have been easy um however we have no debt other than our mortgage however she is burnt out at work and is looking at going back to school um her going back to school be covered by the gi bill so i'm not concerned about cash flowing that just trying to figure out um how to or where to pull back we've been going like crazy trying to get our house paid off um and squirrel away as much money for retirement as possible.

44:52And I'm just kind of worried, you know, where I pull back.

44:56George Kamel:Do I pay less in the house? Do I invest less money? Do I put less into my kids' college funds? Where do I go? So you guys are in baby steps four through six. You're out of debt with the emergency fund. You're investing 15 % in retirement. You're putting some money away for college, and you're putting extra toward the mortgage. And you're saying, hey, if my income goes down to$120, what does this plan look like then? Correct. What will the income go down to? About that. So she makes$125 ,000 and she would be, yeah, going back to school for two years. Okay. So new question, can we live and accomplish all of our goals making$125 ,000?

45:36George Kamel:Have you done the math on that and done a budget based on that to see what sacrifices must be made? so looking at it i do think i mean i think we've yeah it looks like our expenses are about seven thousand and off of the you know 125 130 we're bringing in just shy of nine a month great so you still have some margin you can still put something in college you can still put something toward the mortgage correct and this is also assuming your income doesn't go up with your job. And she's going to be out of school eventually, right? Working again. Right. So really we're looking at a temporary dip in income.

46:16George Kamel:Can we live off 125 for three years? Correct. That really helps clear it and go, okay, we're not losing this forever. We can make sacrifices for a couple of years for her to go to school. What does she want to do? She wants to go more into the therapy side of things. What is she doing now? uh she's medical so it'd just be kind of a different specialty okay my only fear and john will be perfect to speak to this is that she goes with her and if she's burnt out now doing this who's to say she's not going to get burnt out doing therapy which is also a very difficult field right yeah i'm trying to hear for the question beneath the question do you not do you not think it's wise for your wife to go back to school i have no problem with her going back i just we've been working so hard to try and you know try and do everything right and i feel what what makes this step feel like you're not doing something right because if you if you moralize it and make it a right or wrong issue you can get sideways real fast if you're trying to solve for i must get on a track and never get off this track till the end of time that's that's a recipe for a pretty rigid life you created sort of your own prison there yeah and you locked it on the inside If you're creating a life with somebody, y 'all are co-creating this thing, and what do we want it to feel like?

47:38What do we want it to look like? We've been busting our butt. Because you can flip the – like what you've told us, you can flip the whole thing around and say, we worked our butts off for this exact moment when one of us just has to say enough and tap out and go get another – stop doing boxing and go do jujitsu for a while. It's not like we're quitting. It's we're going to retool for another exercise, right? And so we've done all this for this exact moment. That's what I'm trying to get to the thing beneath the thing here. Because it sounds like you all have worked your butts off. This is a perfect time to go back to school.

48:09Somebody else is already paid for.

48:10George Kamel:It's like checking every single box. So I think the hard part for you is you saw the marathon time and went, dude, we're going to make great time. And now that time is going to double. It's going to take a longer time to save for college and to pay off the house. That's the part I think you just need to grieve and go, man, that would have been cool to pay off the house in five years. It's going to take eight now. But you know what's going to be more awesome than that? Having a wife that loves the skin that she wakes up in every morning, having a wife that's got her spirit back, having a wife who's engaged in the thing that she really loves, that's worth it 100 times out of 100, right?

48:44Absolutely. I appreciate it.

48:46George Kamel:And that's the one thing I would make sure she understands is the grass may not be that much greener on the other side. I hope it is. I hope she loves therapy. But I would have her go talk to people who are doing the things she wants to do to get a full picture of it, not just what sounds like relief. And Mark, when y 'all are talking about this, I want to, this doesn't get talked about very often. And so when you're sitting with your wife here, I'm going to use you two as the example, but for everyone listening, your wife has this feeling, this emotional set, like this physical, like I've got to be done with this.

49:25And I feel like I want to go back to school. I want to get trained and become a therapist. The world needs more therapists right now. Like, great. Those feelings are real and valid and good. And your feelings of frustration and I wanted to hit this goal and we had a deal and suddenly like we were both going to like to use what Georgia said, we were both running this marathon and then you stepped off the curb and broke your ankle, your feelings of frustration and annoyance and, oh, dude, those are real too. And they're not equally valid. One's not more valid than the other. They're both valid and they both have space on your kitchen table.

50:05And so when your wife says, I've got to be done, here's a great opportunity. We've set ourselves up for this moment. That's true. And you saying, I'm going to be all in a hundred percent. And if I'm going to be fully in this secret world we call our marriage together, just you and me, I also have to be honest about my feelings. I'm frustrated because I really wanted to get out from under this house. Both of those are true, right? So we're not fighting. We're not competing. It's not my feelings versus yours. It is both are true. What's the right decision for us moving forward? And the way you've painted it, it sounds like the right decision is to have a whole and healthy wife, to take advantage of this opportunity to have free tuition.

50:43And it's not like she's just saying, I'm burnt out. I just want to stay at home and stay off into space for the next three years. It is, I'm going to actively be participating in building something because we do have this shared vision of our life. We both still are two independent people who go to our own jobs and work real hard to serve other people. And then we come home and do this thing called life. Like, like those things all work together, but both of your feelings count. Does that make sense? It does. I don't want you burying half of yourself just to keep the peace in your house. I want you being honest about what's going on in your heart and mind and then saying, and because I value us, we're going to go do this thing.

51:16Or she might say, okay, what if in two years, what if we cut our spinning to the bone and got this house paid off and then I went and did it? I can suck it up for two more years, right? That's how couples make united decisions when they're both honest and they can both hold space for each other's feelings, however uncomfortable those things are. Perfect. I really appreciate it, guys.

51:36George Kamel:You got it, brother. You got your homework. And big thanks to both of you for your service. Oh, absolutely. And not only service in the military, but service in your medical careers, service to go be a mental health therapist, like all that. Like you've dedicated your lives to helping hurting people and I'm grateful for you. And it's cool to think they're more present because of the plan they followed. That's it. That's it. That's what I want from my therapist, from the person, you know, performing a medical procedure on me. I don't want my doctor to owe anybody anything. Yes. I'm not saying that you're a bad doctor if you have loans.

52:06George Kamel:I'm just saying it's nice to know that you are fully present and focused because there's nothing else on your mind. Stressing you out financially. 100%. That's pretty cool.

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54:10George Kamel:Michael is in Indianapolis up next. Michael, welcome to the show. How can we help? Yeah, great, guys. Thanks for having me. So my wife and I actually won the lottery this past weekend. Literally? We won. Yeah, we won$400 ,000 off a scratch-off ticket. Whoa. Nice. Was this a goal you guys had? Like, was this a regular kind of habit and you finally hit it? Yeah. So, no, we were on vacation. I found a$5 bill on the ground and went and bought a lottery ticket with it. The second time I'd ever played the lottery and here we are. Wow. Dude, I've seen this movie. Literally, that's what we've been saying.

54:50George Kamel:And it's a verified winner. Yeah, it went today and actually they verified it all and should be paid out in about four weeks. What's the payout? It's going to be close to$300. Wow. Do you owe taxes after that? Because I know they withhold a forced amount, but you will likely owe taxes on top of that, right? Yeah. So they think it's estimated to be around$275 ,000 is what we'll see at the end of everything. But we're working with a CPA and financial advisor to hopefully figure out all those details so we don't make any mistakes. Oh, good. So what do you need us for? Real quick, Michael, I got to ask you this.

55:28It's a personal question. Just you and me and a couple million people listening, okay? Here's how I think I would handle this. If I got a scratch-off ticket, let's say for$400 ,000, and then I took the cash-out option, and then there was the taxes. If I scratched this thing and it said, you won$400 ,000, and my take-home, what deposited in my account was$275 ,000, my first impulse, and I'm embarrassed to say this, would be like, oh, man. You know what I mean? I would first be like, oh, dude, I lost$125 ,000. even though I just got$275 out of nowhere, right? Is that how you feel, or are you a better person than me?

56:08To be honest, we're ecstatic about it because we were hoping to buy a$250 ,000 house in the next five years, and so we kind of saw this as a literal gift from God. Like, hey, here's your house five years early. Wow. There's somebody just stumbling around right now wondering where their$5 bill is. I hope you're happy, Michael. Dang it. I'm just kidding. I'm totally kidding. All right, you're a better person than me. All right. Get to George's question.

56:30George Kamel:You're a CPA and a smart investor, so they're going to handle the tax stuff and investing if you're going to do any of that. The question is where are you at in the baby steps from a scale of we got consumer debt to we are investing 15 % and saving for our kids' college? Yeah, that's what I'm calling you. So we obviously want to buy a house, but we've been paying off our debt. We actually just became debt-free three months ago. We paid off about EDK in three and a half, four years. So we're completely debt-free and we're saving towards retirement, saving towards a kid's education. And now we're just trying to build up our savings for a house.

57:05And so we had about$15 ,000 saved up for it. And then obviously now with this money coming in, it's going to change some things. And so that's just kind of what I wanted to know from you guys is, hey, what would you do with this money? Would you use it to pay off the house in full that we're going to buy, you know, whenever that happens? A house in cash?

57:21George Kamel:100 % in cash. 100 % down plan. Okay, you would. And if you have money left over, you can enjoy some of it. You can give some of it. But investing some of it at this point, you're probably going to burn most of it just on this house purchase, and that's okay. You've got plenty of time to build wealth. What do you guys make in a year? I make about$110,$115. And how old are you, too? And my wife stay at home. We are 26. Oh, my goodness. So making six figures at 26, completely debt-free with a paid-for house, how much are you going to be investing a month? a couple grand um yeah i don't know you're gonna be just fine i'm not even gonna use the investment calculator because i think it'll break with that many zeros on the end from 26 to 65 i'm gonna tell you something to that i would recommend you do that i would not have listened to me at 26 okay we've already established you're a better person than me and you're wiser than me and so I'm hoping that this would sink in.

58:21If you and your wife have been, had a goal for a$250 ,000 house and that was your dream and y 'all had a plan for it and suddenly the world drops$275 ,000 in your lap, I would stick to that$250 ,000. I'd buy that house and I would give that$25 ,000 away because I think that's going to mark this is the kind of people we are. Yeah. Yeah, that's it. Because the temptation that I would have had at 26 is, I want to buy a$250 ,000 house. Suddenly$275 ,000 drops out of the sky. I'm going to buy a$500 ,000 house. I'm going to put$275 ,000 down. That's what I would have done. And that would not have been a couple of action steps towards the man I want to become in my 40s, 50s, and 60s.

59:12And so you and your wife saying, let's stick to our original plan. We literally won the lottery. and now we're going to bless another family, another whatever with this 25K. And then we're going to wake up the following day and have a house with no bills. And we're going to be right back in the same situation, making good money with the life we want to have. And we're going to have real demonstrative action steps towards the couple we want to be, which is a generous couple that doesn't owe anybody any money. That's what I would recommend you do. You don't have to do any of that stuff I just said, but that'd be pretty rad.

59:45I love it.

59:45George Kamel:And if you already know how to manage the money you have, then getting more of it is not going to crush you. No, it magnifies. If the people who can't manage money and then they get a huge pile of it, well, now they're really screwed. They make a huge mess. That's why we see so many lottery winners lose it in the first year or two. So way to go, man. That's awesome. All right. Let's head out to Harrisburg, Pennsylvania. Brian joins us there. What's going on, Brian? Hey, how's it going? Good. How are you? Good. So I guess I don't have a lot of time, so I'm going to ask my question. My fiancé has student loans.

1:00:17I don't have any, and I'm budgeting right now to put as much money, spare money that we have, towards a student loan. But I'm wondering if maybe I should try to split it between the student loan and savings or just put it all towards student loans.

1:00:31George Kamel:Well, number one, are you applying it to the student loan, or are you just saying I'm earmarking this in savings? What do you mean? Well, I don't recommend, we wouldn't recommend you paying off someone's loans that you're not actually officially legally married to. Yeah, so we're getting married in two months, and I'm planning this for after we're married. Okay, that's what I was going to say. I would put it in a high-yield savings account, and you guys get back from the honeymoon, you've got the pile of money, let's apply to the student loans. So it depends on where you're at in the baby steps.

1:01:03George Kamel:We would say have your starter emergency fund,$1 ,000. Obviously make sure that the wedding is cash flow. You got that? I have$5 ,000 in an emergency. Sorry, I didn't mean to interrupt you. No, you're good. So you got$5 ,000 in cash. And is the wedding all paid for, honeymoon paid for, all that? Yeah, pretty much, yeah. Okay. I want pretty much to be, it's for sure paid for. We're not going to put the gap on a credit card. I have the money set aside for the last stuff we need. It's just a matter of signing the check. Okay. And then once you guys are married, we're going to just make a list of all of our debts.

1:01:36George Kamel:Is it just your fiancé's student loans, or are there other consumer debts as well? No car, like no other debt on my side, and she didn't have any either, so. Great. So it's just her student loans. What's the balance? 30 all in about. Cool. So her student loans become y 'all's debts, and y 'all pay them off. So I would not, you said, should I split some into savings? Should I split some over here? We would say just attack the debts. Do nothing else but focus on these debts. And once those debts are paid off, now we can stack cash. You freed up all of those payments. That puts you in baby step three, where you get three to six months of expenses saved up in a high-yield savings account.

1:02:14George Kamel:So how long will that take you guys based on the current trajectory? I'm putting about – or my plan is about$1 ,000 a month towards the loans once we're married. And so it'll probably be two and a half years. Is she working too? Yeah. So together, y 'all can only put$1 ,000 in? That's all the margin y 'all have? Yeah, or at least that's what I'm budgeting as of right now. What will your household income be? Mine is before taxes about$60, and hers before taxes about$20. Okay. Is she working full-time? Yeah, she'll be full-time. Making$20? Yeah. I'm confused by that. That's like$9 an hour. Yeah.

1:03:00Sorry, no, that's after taxes. Sorry, I did. I don't remember what the math was before taxes. Okay. Yeah, sorry.

1:03:08George Kamel:Well, I would aim to try to get them paid off in less than two years. The average we see is 18 to 24 months to get rid of your consumer debt. And if it's just the student loans,$30K, I would try to up that income once you guys are married. Have her making$40K, you're making$70K. Now we can knock this thing out way faster. Because$1 ,000 a month for 30 months, that's a grind. Especially if that's all the margin you have. Put 18 months on the calendar and have a what must be true for this to come to fruition conversation and see if y 'all can make that happen.

1:03:58Thank you.

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1:05:16George Kamel:The Ramsey Show Question of the Day is brought to you by YRefi. If you keep putting off dealing with your private student loans, now is the time. YRefi helps borrowers explore low fixed rate refinancing options and affordable payment plans. Go to yrefy.com slash Ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey. May not be available in all states. Today's question comes from Jill in Minnesota. Jill writes, our son graduated high school last year and has not worked for the past seven months. He says he's applying for jobs, but he stays up all night playing video games and sleeps all day.

1:05:50We've tried to help him and have given him plenty of time, but nothing has changed. We wrote up an agreement that gives him two months to find a job and start paying rent. If rent is late, his phone service and Wi-Fi privileges will be suspended. If he doesn't pay rent for two months in a row, he'll get a 30-day notice to find another place to live. When we reviewed the plan with him, he became angry and hurt, and I'm struggling with intense mom guilt. I don't want to enable a lifestyle that isn't preparing him for adulthood. Are we being reasonable?

1:06:20Here's the problem with this question. is I don't want to enable a lifestyle that isn't preparing him for adulthood, and I don't want to feel uncomfortable. And those two things can't coexist. Our mutual friend, Henry Cloud, has a great story. It's very similar to this, that when the parent was talking to Dr. Cloud about the situation with their kid, he said, Dr. Cloud wisely said, What your kid needs desperately from you is problems because your son has zero incentive to do anything differently than what he's doing. He has free rent. He has his free schedule. He has nothing, no responsibilities.

1:07:04He's just doing what a natural inclination, this oozing through life because there's a place to ooze.

1:07:10George Kamel:He's on an infinite summer break right now. Correct. He graduates high school. What do 18-year-olds want to do? sleep all day and play video games. He's living the dream. Right. And the greatest gift he could get, the greatest gift a young man like this could get is responsibility. The, the idea that I have to do a thing because there are real consequences if I don't. And so, um, I think you're not only being reasonable, I think you're being overly generous because now it's going to turn into a year, um, where there's any true consequence here. I personally, this is just me. I haven't worked with people of this age my whole career.

1:07:47Getting into the phone service and Wi-Fi privileges brings him back to a middle schooler and you back to I'm grounding you from your fill in the blank. And so if we're going to truly do a tenant, like a tenant, like a homeowner agreement here, we're not going to do little – we're not going to insert little mom and dad pokes in here. you pay your rent or you're out bigger than this i it almost feels like just to say hey you know what we were wrong on this deal we need you to move out like we want our house back we want you to fly little birdie fly and it's time to go make it happen and then he's gonna have to go and you're gonna have to be the adult emotionally intelligent emotionally mature adult and say i am gonna feel um sad i am gonna feel upset that i did a thing and my son's mad at me that's part of being a parent and but i know this is the right thing yeah right now it sounds like every time you talk to

1:08:45George Kamel:him you just sound like his landlord and i think at 18 you're transitioning from parent to friend and so what he probably needs is just some guidance someone to care about his future and show him a path out and go hey i noticed you're really into this have you tried doing this over here yeah but it's like i'm an outside mentor for seven months and he's like i just want to play video games. Yeah. Not happening. Not happening. But I know at 18, like there's things I love doing, but no one showed me that, oh, there's a job that I could actually do some of these things. So that's where I go. Maybe he needs an outside mentor, a friend, a third party to kind of step in and get him excited about life.

1:09:21Here's the way I like to frame this. Um, less like if you don't do this, then I'm cutting you off. I'm cutting off your relationships. I'm cutting off If you're home, I'm cutting off these things. I like to frame these, especially with all kids. But when you're talking to an 18-year-old, here's the choices in front of you. If you want to go to college, if you choose to go to college, here's how we are going to support you. If you choose to go get a job, here is how we're going to still open up our house on Sundays for you to come over for lunch and you can sneak some laundry in. If you choose to do nothing, you are choosing to move out.

1:09:57You're choosing to fill in the blank. And as a parent, I can say, I can't stand that you're making that choice because I want to be right here with you the whole time you're choosing to leave. I don't like that choice, but that's a choice you're making. And I want to always hand the choice, the responsibility, or another analogy I use a lot is I want to hand the weight back on the bar that is life back to them and say, you've got to learn how to lift this and get stronger because that's how life works. I'm not going to be there to clear the deck for you all the time. And if you've waited until 18 to start enacting this, if mom guilt has haunted you his whole life, man, it's going to be an abrupt lesson for both of you.

1:10:34It's going to be really rocky for a season, no question about it. That's a tough one, Joe. I'm not going to have a high school graduate just living in my house. Freeloading. Yeah, playing video games all night and sleeping all day. As cool as it sounds.

1:10:50George Kamel:All right, Teddy is in Los Angeles up next. Teddy, what's going on? what's going on you guys uh thanks for taking my call you got it brother what's up uh so my wife and i would like to get your opinion on if leaving california in pursuit of a lower cost of living and eventually buying a home would be the best decision for our family that's a big decision for two random guys yeah we don't know you that well you tell us so you're saying you value home ownership over your current location yeah i think so and just like the uh the future of what our lives could be in like our family now you're talking now you're talking yeah so there's a bigger picture here and you're going here's what we really want and none of these things mean we have to stay in california you're willing to make a sacrifice which is wise because we always tell people you don't get a pass on math if you can't afford to have the thing there you don't automatically get it and you might need to move to a lower cost of living area if your current income can't support it?

1:11:57I'm right on board with that.

1:11:59George Kamel:Where do you guys want to move? My wife is down with Tennessee and I am down with no state income tax. Okay, so any state with no income tax, you're like, that's fine with me. And so Tennessee could be it. Texas, Tennessee, Florida, Nevada? Yeah. Okay. And do your jobs transfer easily? So I work full-time as an EMT phlebotomist in the ER right now, but I'm in school debt-free at my local community college getting my nursing degree. Oh, boy. And my wife works full-time as an assistant manager at a clothing store. Okay. Awesome. So both of you would need to find jobs before you make the move. And do you have family nearby in California right now, or are you already kind of on your own?

1:12:49yeah that's kind of the thing that's keeping us here is you know we got another kid on the way in january we're having our second baby and our family her parents and my mom they all live around us so it's like if we need to do something we can drop our daughter off and it's it's free

1:13:08George Kamel:and we trust him you know yeah sure that that's the thing i wanted you to weigh because a lot of people underestimate how great their life is until they move away from family. And they go, oh my gosh, I didn't know that was such a lifeline until we didn't have it. My wife and I did that. We had two young kids and we moved halfway across the country. And both of our parents lived within a few hours from each other. It was tough. And what it meant was kind of like we always say, you don't get a pass on math. Me and my wife did not get a pass on new relationships and we didn't get a pass on new friends and new mentors and things like that.

1:13:43We just had to go, we had to go not use the default settings, which had been our parents and our neighbors. And we had to go, we had to go dig in. And I'll tell you on this side of it, leaving family has been really hard and some parts of it have been amazing. Right? So there's no, there's no Scott free, but the thing that we wanted, like you're talking about is we wanted financial freedom. We wanted water to fall from the sky occasionally. We wanted these giant green things called trees. Like we had some things in our mind that we wanted for our kids and for our family solving for peace. And that came at it does come at a cost.

1:14:16But on the whole, man, it's been the greatest thing we ever did.

1:14:18George Kamel:So once you make the decision, just make peace with it and don't go, man, but remember in California, just go, this is our new life. We said, this is it. We're going to move forward. And so it must be true here. Exactly. And so you might need to start budgeting for some child care with that newfound higher income thanks to less taxes.

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1:16:20George Kamel:If you make good money and you got nothing to show for it, I have a solution for you. It's the EveryDollar budgeting app. It'll help you find extra money every month, helps you build a personalized plan to beat debt and build wealth. And in just 15 minutes, you're going to have a clear plan for your money. You're going to find thousands in hidden margin, and it will feel like you got a raise. You're going to be in control again. So don't live normal. Live like no one else. You can start EveryDollar for free in the App Store or Google Play. David is in Lexington, Kentucky up next. What's going on, David?

1:16:49Hey, how's it going? Great. What's your question, Tim? I just kind of have a question about how the fastest and best way to get out of debt. Me and my wife, we've been married for four years now. It took us about a year. We spent way too much money on our wedding. We realized that after about a year, after we'd been married, and started trying to fight our way out of it. We paid off a little over$30 ,000. And fast forward a couple years, we bought a home. We still didn't have all our debt paid off at the time. bought a home now we have two kids and we have right at 40 42 000 in credit card debt um we have 20 000 and she has 20 000 student loans um 13 000 in a mower uh i think i still owe 13 000 on my truck no 14 000 on my truck um i make roughly i we i do four different i have four jobs and a mowing company of my own, hence the mower.

1:17:54I think we're going to, and she has a little party business where she does parties all together. I think we're going to clear right at a hundred thousand this year. And we're just like, we're still not getting anywhere on the debt.

1:18:04George Kamel:So you guys make a hundred thousand dollars and you have about 89 ,000 in debt? Yes. Plus the mortgage. Yeah. The mortgage is$1 ,656 a month. We owe$215 on it. Okay. So let's ignore the mortgage for now. We're going to walk through a process called the baby steps. Do you guys have$1 ,000 for a starter emergency fund? We do. Great. Baby step one, check. Baby step two, we're going to knock out all of this consumer debt using the debt snowball method. So you ask, what is the fastest way to get out of debt? The one that has been proven to actually work, the one that we recommend that's caused millions of people to do this thing is called the debt snowball method, where you list the balances, smallest to largest, and you ignore the interest rate, which is really hard to do when you see that interest adding up.

1:18:51George Kamel:But the goal here is momentum and progress. And you're going to knock out that smallest balance really fast with all the margin you can muster up selling stuff, working those four extra jobs. She's hustling on the weekend with her side business. And once you free up a debt, you free up a payment. Now you apply that payment to the next debt. And so if you do that, making 100K and you got 89 in consumer debt, that's still going to take a while just based on the debt to income ratio. So now we You go, okay, what can we sell? Well, you got a mower and a truck. Could we sell those things and get cheaper versions of them and get out of those payments?

1:19:23Or how much do you make on your mowing business on the side versus the - So far, if I don't pick up any other customers this year and I just stick where I'm at, I'm going to make 22, but as you take taxes out, it's going to be about, well, not taxes, but gas and supply and the payment on the mower. I got 0 % interest for 48 months. I don't have any interest on it. Are you trying to impress us, David? trying to sell me on a mower uh but uh we have so all that together should be right at 15 000 cleared okay so you basically bought a depreciating asset that is a hundred percent the valuation of your company right and so i would say mathematically and psychologically and time wise and to young kids, if you stop mowing and sold this tractor, there's 0 % chance you'd get a 13 grand for it, but let's pretend you did.

1:20:16And you just said, I'm not in the mowing business anymore. You actually come out net neutral, which in your situation is net positive. Because if you just went and got an, like for the time you mow, if you just went and got an hour, a minimum wage job, you'd come out net better when it's all said and done. You get what I'm saying? Mm-hmm. So how much is the mower worth? It's brand new. I just bought it this year.

1:20:41George Kamel:Oh, boy. It's a 2026. Yeah, it's 2026. I've already put 120 hours on it. Oh, jeez. Guess how many of your customers care if you have a 2026 mower versus the 2022 edition? I have two nice mowers at my place. What kind of— This is like the Maserati. It's a Skag Tiger Cat 2. Okay. Good gosh. So you wanted a nice toy, and you said, I can justify it with my side business. That's fine. Kind of, yeah. What's your main business? I work for Walmart Distribution Center. Okay, what's your second business? I do the maintenance owner church campus, which is a total of four different buildings. What makes you the most money per hour?

1:21:29Per hour is whenever I do landscaping jobs. So could you just work at the distribution center and cancel those other jobs and just start hustling more lawn care jobs? I could, but it's very flexible with my other three jobs are all here on the church campus. All of them are here. I took the place of four other people. Whenever I took on all these positions, there was four different people doing them. I took all of them on. It's very flexible. I maybe work here 20 to 25 hours a week, give or take a couple hours. What do you make per hour? And I bring home, I think it was$17 an hour. It's$1 ,400 a month after Social Security and taxes are cut out.

1:22:08George Kamel:But we're saying if you make$50 an hour doing landscaping, even with less flexibility, you'll come out ahead. Right. But I'm worried that I run into the risk of not having a client, having the proper amount of clientele in order to fulfill all the area. Because this is year-round I'm getting paid for everything. I got you. But here's the thing. You're in an emergency situation. You're 100 % leveraged without your house. Right. And my screen says you're$109 ,000 in debt, which is$20 ,000 more than I factored. So where's the other$20 ,000 coming from? What is it now? You got$42 ,000 in credit cards,$20 ,000 in student loans,$13 ,000 on a mower,$14 ,000 on a truck.

1:22:47George Kamel:Is there anything I'm missing? Yeah. I said$20 ,000 in student loans, correct? Yeah. Yep, no. Okay. Everything. What is a truck worth? You owe$14 ,000 on it. What can you get for it, private party? I think I know what I need to do. I think I need to sell the truck, but everybody in my family is like, if you're working that much, you need a reliable truck. It's worth 20. I think I can get 24 out of it. So you will net 10K in which you could go get a truck for 10K. Right. That's still reliable. That's what I think I need to do. But so many people that I've relied on all my life. So many people are broke, David.

1:23:21George Kamel:Yeah. You're asking broke people for advice. You're going to get broke people answers. Right. We're trying to show you a path out, and you're trying to justify it with reliable transportation. And so what's your truck payment? $315 a month. And then what's the mower payment? $316. No, I'm sorry, they dropped it. It was$282 a month. Okay, but between the two, you just gave yourself a$600 net raise if you sold both of those things. Mm-hmm. Now you've got some margin to knock out the student loans. Right. Because now you're only$62 ,000 in debt, so we can start knocking out the next mow's balance.

1:24:02So even though I would clear more money a month, having the mowing business, you're saying I would still come out.

1:24:09George Kamel:You could go get a mower on Facebook Marketplace and charge$50 a yard. The only thing I'm worried about on that mower is that you could resell it for$9. Right. Could you get your$13 back out of it? No chance, I bet. I think I could probably get$10 to$11. Okay. So you could save up the difference and you'd still be better off. If you came up with$3 ,000 in cash to get out of that loan and sold it, it's still wise. So don't have the sunk cost fallacy of, well, I'm underwater in the mower, so I can't sell that. I can't sell the truck because I need reliable transportation. That's the kind of stuff that's going to keep you in debt.

1:24:42I can't give up this church job because it's flexible. Yeah, I fully believe I can sell the truck. I don't have an issue selling a truck. It's just been trying to listen to other people I trust, but I see what you're saying 100 % there. So you're saying I should give up the church job and the mowing business and sell my truck and then just pick up a part-time job? No, I'm saying if you're going to keep this tractor and keep this mowing business, because it sounds like you're really good at it. It sounds like you're actually making some headway. You've reached that saturation point where the amount of jobs you're willing to go get barely covers your costs.

1:25:14but since you've barely covered your cost if you found time if you found another 22 hours in your schedule could you fill that time with mowing jobs that would then cash flow this business in a powerful way get that truck i mean get that tractor paid off in three months and now you're off to the races right you know what i'm saying so don't do all three of those like because then you'll just be sitting at home with one job no truck no no lawn mowing business no side hustles You got to work extra jobs. I just want you to say like you've got to pick a few things and go laser focus on them instead of trying to do everything and keep a lifestyle and keep flexibility.

1:25:49It's just too much. Yeah, you're spreading yourself thin.

1:25:51George Kamel:So you asked us what's the fastest way out of debt. We just gave you a path out of this thing real fast. Now you got to decide if you're going to go do it.

1:26:15George Kamel:Welcome back to The Ramsey Show and the Fairwinds Credit Union Studio. I'm George Camel, joined by Dr. John Deloney, taking your calls at 888-825-5225. Jeff is in Seattle, Washington. What's going on, Jeff? Hey, what's up, George and Dr. John? I have kind of a strange financial living situation, and I have a question basically about what to do next with my savings. All right. John is no stranger to strange. Hit us.

1:27:09move into a sale, buy and move into a sailboat in November. Um, but I don't know if this is like a stupid financial mistake and, uh, whether or not I should sort of spend more money on my life. I'm not really doing anything with my savings and I don't have any children or a wife or anything. Tell me, tell me about this kind of nightmare. What was so nightmarish about being a homeowner? okay so i first time i ever bought a house um i bought it well within my means it wasn't a huge amount um it ended up being 350 total i think i ended up owing 200 when i sold it and i lost about 85 grand so the reason it was a nightmare was there was a negligent survey during the closing process that led to an absolute legal nightmare between me and the neighbors and during that process, I was hit by a hurricane and that denial of my insurance claim led to basically a lawsuit against the largest title insurance company in the country.

1:28:13And it basically took up all of my free time and it was just like destroying my life. So I just figured, you know, you only get one life and I'm going to lose 85 grand. That was not fun, but. But you have 900 in savings now. How'd you get$900 ,000 in cash? Well, so$800 of that is in the stock market. I guess I'm using the wrong terminology. Like a brokerage account? Non-retirement? It's in a brokerage account, yeah. I'm lucky enough to have a family member who's a portfolio manager, so it's been great to not have to pay fees when I invest, and he's just really good at it. And so I've been putting money in there since I was 18, right?

1:28:53So 20 years of that. It's about$900K. I have a bunch of money in crypto that's like really, I don't even add any into it. And then I know you're supposed to have less in your savings, but I have like a hundred grand in my checking account just because I am lazy, I guess.

1:29:10George Kamel:Okay. So what drove you to live in your car? Pun intended. Like why not rent somewhere? That's a very strange decision to go. I'm selling my house. I have$900 ,000 and I'm going to choose to live in my car. You have more than a million in liquid money. More than that? I mean, you've got$900 in the stock market. Plus you said crypto. You've got$100 in cash plus crypto. Yeah, I guess you're not liquid. I have$800 in the stock market, yeah. Okay, so why the car? Why not rent somewhere? Why are you scared of renting? I think maybe I'm having a midlife crisis. Basically, I'm not just sitting in my car in an empty field.

1:29:50I'm driving around the country and using Starlink to work and I'm just like seeing all the things I've never seen before like I've been to I don't know every national park and you know just beautiful so this is an intentional adventure for you yeah but to be honest like when I first went into it I said okay listen you're basically rich for your age why don't you like treat yourself and buy a van or an RV or something and I just don't do that I'm like using my car I already owned. And even the sailboat, like the sailboat I'm planning to buy in November, it's$25 ,000. And so, I mean, the stupid financial decision in my mind is I could buy a catamaran that's about 20 % of my total net worth.

1:30:34But, you know, people do dumber stuff like that all the time. Like the last guy bought a lawnmower that's worth more than his house or something. I wasn't fully paying attention, but it wasn't that bad. I just feel like I'm, yeah. But I wouldn't

1:30:46George Kamel:You want to make your life decisions based on what's less dumb than what other people would do. It feels like right now you haven't been making the super intentional decisions. It's just sort of been like, that sounds fun. I'll try that. So what are you really after? Like five years from now, where does Jeff want to be? Is he still living in a sailboat? Well, to be honest with you, maybe this is like past the scope of this conversation, but I don't think in five years I'm going to have a job because of AI, right? I know this is like a national conversation and nobody really knows where it's going, but I don't think I'm going to make it to 65.

1:31:20Like financially or employment-wise, or you think you'll be dead by 65? No, I'm in good health. I think that my profession, I work in software. I am not sure that I'm going to be able to work to 65 if I wanted to. I think that I could be laid off in five years. So let's say I 100 % agree with you. That's a very real possibility. And so I'll take you back to when I was part of a think tank with higher education and there was six of us on the team. And I think within six months, five of us had sold our house. Like we saw the math on the problem that was higher education. We're like, oh, this ends real soon.

1:32:05So two things happened. One, here I am this many years later and colleges are still kicking. Right. And I was also right. Like it's on not a great trajectory. But in addition to selling my house, I also use that as a time to get my finances order, go back to school, get trained as a mental health professional, and to begin to expand what could then come next. And so if you want to get on a sailboat and just ride the seas and just say, the end is coming for me and I'm not going to do anything else about it, you can do that. Or this could be an amazing – it could be an amazing runway for you to do your software job and go get retooled in a totally different profession and into a totally different uh skill set for somebody else you can help for the next 20 or 30 or 40 years of your life one of those feels like it's cashing out and one of those just feels like i'm looking at a potential reality in front of me and so i'm going to while i'm writing this thing as long as i can because it sounds like you got a great deal ahead of you what could be true in an alternative world, right?

1:33:16I see. And I know a lot of people ask you calling about how to get out of a money pit, but there's this saying that people say you can't take it with you, right? And am I just going to die with$900 ,000 in the bank? Why did I work? I think about this all the time.

1:33:34George Kamel:I think you need a deeper purpose than just my work and my next toy. Do you want to have a relationship? Do you want to be married? Do you want to have kids? What kind of life do you want to build outside of, okay, you have, because here's the thing. It's not dumb to buy a sailboat in cash and have that adventure. It's dumb to make all of your life decisions based on the fact that it's all going to come down eventually. So why even try? It's just a nihilistic thought. And by the way, like, I don't blame you. Like, between the media and this emergent new technology we have and the national debt, like, there are some real challenges.

1:34:08is. I just told my son recently, I think your generation, the hardest thing you're going to have to fight is rage, not anger. Anger's right. But rage, this impulse to, you know what, what's the point? Nihilism. Let's just burn it all down. And so, yeah, like give yourself a picture in five years. So you're laid off. You had a five-year runway and a million dollars worth of salary over those five years to go retool and become this man that you want to become. What is that picture? Let's aim for that. And it should include relationships.

1:34:41George Kamel:Whatever you're looking for, you will find. So be real careful about what you're looking for.

1:35:02George Kamel:you should not feel uncertain about investing and you don't have to that's why we created Investing Essentials, a two-night virtual event where George Camel and I walk you through my playbook for investing and wealth planning. We'll simplify everything from 401ks and mutual funds to passing on wealth so you can invest with confidence. Tickets start at$199. Get yours today at RamseySolutions.com slash events or click the link in the show notes. Okay. Perfect.

1:35:51all right hey george i want to um talk about that last caller for a second the existential crisis yeah because i think that young man tapped into him he's 38 um i all of us have to be honest about about the, there's a band and I'll say 50 to 20, 50 to, you know, my son's 16, he's experiencing it. There's this, this pervasive, um, the air we're breathing. We were told a story that wasn't true. We were told a story. If you just go do these things, if you just go make money, if you just go get this degree, if you just go get this dream job, that suddenly everything, not only works out for you, but that you don't have any worries.

1:36:38And there's this, this, it's not growing, it's roiling already, just a rage and a trapped feeling of life is happening to me. I have no agency in this thing. What's the point, right? And throughout history, these moments have happened and they've been flashpoints when there's big technology advancements that happen all at the same time, right? It happens at the Industrial Revolution and before, when it's real easy to give into the rage. I feel like I'm Obi-Wan Kenobi right now, right? Like you give into the rage and it shoots you off into directions of nihilism, of blindly following something, of wanting to burn everything down.

1:37:22And I get it. I'm in the middle of it, right? And I've got a young son, I've got a daughter, I'm in the middle of it and I feel it and I get it. And also my plea is to not let the rage take over and to exhale and to say, there's things in the world that we hate. There's things in the world that should not be this way. And anger in those moments is right. The question is what are we going to do with that anger? Are we going to direct it to, okay, here's what I can control here. Here is what I'm going to stop listening to. I think a great gift for people in that young man's situation is, again, responsibility.

1:38:03Who depends on you, right? And that means I got to be vulnerable and I got to allow people into my life. I got to allow relationships. I've got not even just romantic relationships. I've got to allow other people in. And that means I've got to let myself out. I've got to have people that count on me and that I count on. And we have to find value in doing this thing called life together. And from that comes a shared sense of purpose of, oh, I matter. I got to show up here. My life can't just be about how much money I have in some stock market account somewhere. Because as he said, you just get to a point like, what are we doing?

1:38:35If my job's going to go away someday, which by the way, all of our jobs are going to go away someday. We're going to go away someday. Harsh reminder. The job I have right now didn't exist when I was in college. There's no such thing as a podcast. There's no such thing as YouTube, right so the job i'm doing now who knows what this many years later is going to look like who knows it's easy to just get trapped in that and instead of saying okay you're right things might change someday so do i have my home taken care of right and and i mean that's kind of the base of the show you can't control what the government's doing with x y or z you can't control what this other country's doing you can't control what this politician's doing i can control i'm gonna have a group of guys over once a week.

1:39:16I am going to control, do I owe anybody any money? And I can control, you know what? My job is looking more and more fragile by the day. I'm going to start, I don't want to, I don't want to be doing this, but I got two years of night classes and Saturday classes so that I can get retooled on a whole different career or a less fragile career. Like those are things we can choose. And man, I just want to implore people, don't give in to the rage, because rage always, you end up in a place that you never wanted to be, right? And so feel that anger and then sit back and say, what can I control here?

1:39:53And how can I best use the time, the relationships, the resources I have to go create the life I want? And for me and my house, I say it all the time, we sell for peace. What is the least chaotic world that me and my wife, our kids, our close friends can create in a world that's chaotic, right? And that just guides our investing decisions, that guides our purchasing decisions, that guides the, hey, you know what? My daughter's at a church camp this week. So me and my son and my wife were like, dude, let's go see the Odyssey. Three hours, late show. Let's just go late. We did. And we stayed up past our bedtime, which screwed up my workout routine.

1:40:30We had a blast. The movie was awesome. We laughed as a family. We ate too much. It was, we're solving for peace, right? And it almost always comes from relationships and this idea, this question, who do I want to help with my job, with my giving, with my resources, with my time? Who do I want to help lift up? And will I allow myself to be lifted up? That was beautiful. I couldn't have said it better myself.

1:40:58George Kamel:Please, please. You know what? I should have recommended a book for him and it's not a modern self-help book. It's the book of Ecclesiastes. I think that is the best book. If you're going through an existential crisis, it'll help you reveal what matters. Because here's the TLDR, the big quote of the book is everything is meaningless and meaningless does not mean a lack of meaning. The actual root word is vapor. It's temporary. It's quick. So then you go, okay, if everything's temporary, does nothing matter or does everything matter so much more? So much more. You get to choose. Yeah. You could read that as, well, nothing matters.

1:41:28George Kamel:Financial nihilism it is. Or you could say, you know what really matters? Relationships, people, meaning, purpose in my work. That's the book. So go check that one out if you're still listening, my friend. That's a tough call, but I relate to what he's going through. I relate to it. And not only do I relate to it, I hear it all over the place. Like that question, what's the point? May not be, I have a million dollars and I want to live on a sailboat, but the root of that is what's the point? What is the point of any of this? Yeah. And not only what's the point is, not only what the point is in the present, but if it's all just gonna dot, dot, dot down the road, why even, right?

1:42:03And man, I get that. and find meaning where you are. And that's my plea. Beautiful.

1:42:12George Kamel:Rant over. Tom is up in Jacksonville, Florida. What's going on, Tom? Hey, how are y 'all doing? We're doing great, man. Just having an existential crisis over here. How can we help? Yeah, not sure I can follow up with anything more meaningful than that speech. But my question, I want to call. So me and my wife are starting to look for purchasing our first house. And so I live in Florida and there's townhouses everywhere. And I wanted to see what y 'all's opinion is on buying a townhouse versus a single family home. You know, you can get probably a little bit nicer of a house in a townhouse and for less, but I sometimes worry about, you know, you don't own all four walls.

1:42:49George Kamel:You know, you have that shared wall. So what do you all think in terms of that? Townhomes are moronic, Tom. I'm totally kidding. I just said that because George is right next to me and he lived in a townhouse for a long time. My first two homes were townhomes and I have no regrets. And if that gets you your foot in the door with home ownership, lovely. And I think townhomes, people poo-poo on them for really no good reason. Sometimes it's a slightly higher HOA fee. So the key really is location. Is it a neighborhood that's going to give you decent appreciation, whether it's single family homes or townhomes?

1:43:23George Kamel:Does it make sense for your family based on the space you need? We had a three-bed, two-and-a-half-bath townhome with 1 ,900 square feet. That's like twice the size of my childhood home. And so townhomes are bigger. They're nicer than ever. They get the nice countertops. And so if that's what you guys can afford and you don't want to wait to jump to the single family home, then go for it. How much is it? um a lot of them start in the high twos so like if we're looking at a decent single family home in the area you're looking kind of upper threes and you know trying not to go too much past four but you can get a pretty decent townhome for upper twos low threes and so you know especially with trying to not you know go above the 25 percent take-home pay it's um that's kind of one of the big things but one other concern is what do you what do you see on appreciation versus that i know i feel like i've read that townhomes don't appreciate maybe the location like you said, is one of the biggest things.

1:44:15George Kamel:Yeah, the location will matter the most. They might appreciate slightly slower if you looked at the data, but I'll tell you the numbers on our townhome. Obviously, this was during like the COVID boom, but we bought for like 300 and it sold for 529, which is insane. Wow. And so to say that townhomes don't go up in value is BS. And the key is it was a very desirable neighborhood. A lot of people wanted to be in that neighborhood regardless of what kind of home it was. And so that's where I would caution you to work with your real estate agent to go, what is a great location with good schools that's going to have decent resale value that we can afford?

1:44:48George Kamel:And so once you look at across the board, you're going to make a smart decision that's not going to leave you wondering, well, we could have made 4 % more. You're not doing this to make the spread. You're doing this because you want a place that you can call your own. And you're going to build some equity in the meantime. And what we did, we paid it off. We took that 100 % equity, rolled it into the next one. And that's what will happen instead of you just renting for the foreseeable future instead of waiting for that single family home. So I hope that helps anybody out there wondering, should I do it?

1:45:14George Kamel:Should I not? Especially for young people, if you want to get that first home, a townhome could be a great option.

1:45:44George Kamel:Hey, guys, Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to RamseySolutions.com and try Ask Ramsey today. That's RamseySolutions.com.

1:46:31George Kamel:Buying or selling your home is high stakes because one bad deal can cost you tens of thousands. You don't want to overpay for your next house or sell your current home for less than it's worth. That's why Ramsey Trusted connects you with vetted real estate agents who have the experience to guide you step-by-step to make smart decisions, not expensive mistakes. You can find a local Ramsey Trusted agent who has your best interest at heart for free at RamseySolutions.com slash agent, or click the link in the description if you're listening on YouTube or podcast. Katie is in Milwaukee up next. Katie, welcome to the show.

1:47:01George Kamel:You made it. Yeah, thanks. Thanks for taking my call today. Absolutely. What's going on? So my husband keeps using debt to finance our lifestyle. We are not in debt. We are network millionaires. But whenever we go to buy something, like a car, or looking at buying our first time together, he's like, well, just get a loan for that. I'm like, why? Why would we do that? So you have the cash to pay for the whole thing outright, but he would prefer to take on the payment and use his cash elsewhere? Uh, we're not using his cash elsewhere. Like, what's his logic behind it? Uh, I think it's because that's what people do.

1:47:46George Kamel:So he doesn't know any better. He's just like, well, you get a car payment. You don't, who pays full price for the car in cash? That's crazy. Is that his mentality? Yes, yes. How long have you guys been married? We've been married eight years. And this has been like this the whole time. You guys have misaligned values when it comes to money from day one. Yes, we were married and we moved countries. We had a baby all very kind of close together. So I was kind of elsewhere, kind of focused. And now I'm kind of like, wait, we do what now? So I'm just kind of starting to pay more attention. And we've had the conversation about it, but I haven't kind of had all the numbers in front of me to kind of go, wait, why are we doing this again?

1:48:31And now I want to kind of work towards our house. and I know he's going to be like, we'll just put down a small amount and we'll pay it off.

1:48:39George Kamel:Yeah, he's busy taking on debt. He's not trying to pay some off right now. Yeah, we don't have any debt, so that's nice. The beauty of the conversation y 'all have is it's actually not a numbers conversation. You can't outnumber him. He's going to always have, well, you're not seeing this picture. Well, and let's be honest, it's worked out for him. Yes, he's been very fortunate. They have great jobs. they've financed a bunch of his bachelor years he's had great travel lived all over the world yeah so lucky and he has invested i give you that but we're making big decisions now because we don't have a house with neither he has not ever bought a house i have before in a previous relationship and yeah i think he's a bit scared of there you go and that's that's what i'm saying like the conversation to have now is the bachelor life you had is over.

1:49:30And in fact, the first marriage that we had when we had, we didn't have a kid. It was just us traveling around the world, doing what like that marriage is over. And now we have a new marriage, a new life that we're both co-creating together. Who do we want to be in that marriage? And that's when you, we're not talking about why you take a loan and we got the cat. Cause that gets, that gets to be a proxy war gets to be a distraction. from the conversation, which is I want to live a life with just you where we are never beholden to anyone, where we are always constantly free. And so anytime we take out a loan, we're now, they're our boss.

1:50:13This mortgage company is our boss and this car company is our boss and this credit card company is our boss. I want you and me to be the drivers of our destiny. and because you're a millionaire y 'all can do that right but this is about you saying here's what i want here's the life i want to build what life do you want to build and y 'all put that out on the table and discuss that because y 'all are otherwise you're just going to get distracted and he's going to actually be right because all the data he has in his life up until now is it always works out right and so you trying to fight that is is a futile game because for him it's always worked out it's the only life he knows and yeah because i've got the budget and i'm kind of going because i don't know has he ever looked at the budget in a meaningful way has he yeah

1:51:02George Kamel:um or is he just like hey cool nice for you that you have the budget but i'm gonna keep living my life he's kind of like we should go to portugal that'd be great i'm like well how much are we going to spend he's like well it doesn't matter okay probably does well so well so also part of this conversation is you haven't been part of the lifeblood of your home you've probably taken on responsibilities that he's had a majority voting share yeah and he takes care of this part of it and now you're saying hey i want us to do our life together that's a total sea change that's a new marriage right and i said to him you know we've got every um dollar budget so i'm kind of starting to record stuff just so i have visibility and i said to him that doesn't mean that i'm going to take all the decisions away from you not at all and i don't want to do that But I just want to have visibility so that we can say, well, we just spent 40 grand last year on travel.

1:51:51Is that OK? Or do we want to spend 20? And so then when he's like, do you want to do this trip? Yes, I want to feel confident making those decisions rather than be like, can we really afford this? I mean, we can, but also I want to afford a house.

1:52:08George Kamel:But you want to do it intentionally instead of just he's the free spirit and you're the nerd and you guys have never really called that out. I'm guessing you guys don't have combined finances in every area. That is correct. And that's the other thing that I've been battling for the last couple of years is, hey, let's just pull in the money we have from our previous country into this one. He's like, well, how much is that going to cost us? So he has his savings. You have your savings. There's one kind of checking account that you can both pay bills out of together. Is that what happens? Yeah. So how much does he have in savings?

1:52:40I just wrote it down. I looked at all of our bank accounts together.

1:52:43George Kamel:So you have access to all of his bank accounts? I can. Yes. I can see it now. We have$582 ,000 in cash. Wow. No wonder he's like, let's go to Portugal. We've got money to burn. And you're going, hey, I'd like to own a home. That money could go there. And so you guys really have different, you're going in totally different directions. Yeah. It's a tug of war. Visibility is one thing. And the shared decision making. I do want to be confident in making the decision and not just leaving it to him. And we had this conversation a little while ago, and he's like, well, why do you care now? And I'm like, well, when we moved here, and I'm not from here, when we moved here, I was 30 weeks pregnant.

1:53:25I had a lot going on. I was finishing our house. I was living in a new country. Yeah, I didn't care. It was not on the radar. But now that we're kind of like, okay, we've settled in and we're, you know, living life. and I've been working for a couple of years, not right now.

1:53:42George Kamel:Well, his line of questioning was just defensive. Well, why do you care now? It wasn't, oh, I love that you want to be involved. Let's create some goals and vision for our life together. And also, Katie, you have to be honest if you're a fun partner to do life with when it comes to these things. Well, I want to be a fun partner. That's the thing. He's a fun personality, and I want to be able to be, yes, let's do that. Let's have fun. Let's do those crazy things. Let's go on the helicopter, right? Right. But I'm not sure how much we're spending. I'm not sure, you know, about a few of these things.

1:54:20And I just kind of like, until I have the full visibility, I don't feel like I can be that fun person.

1:54:27George Kamel:Have you shared that with them? Like, hey, I'm not trying to kill the fun. I just want to make sure that we're planning for the fun because I'm more type A and it gives me peace to know ahead of time and what we're going to do. Yeah, I don't think he believes me necessarily because I think he thinks I'm going to put him on a leash. Do you put him on a leash in other ways? Have you put him on a leash before? Nope. Okay, then that's him just projecting out. He's making up stories, right? Right. But there's something to be said for the honesty of your biggest fear is that I put you on a leash. My biggest fear is that we have no leash and we run out.

1:55:05well it's not even that we run out it's just that we don't make smart decisions i.e if i want to spend let's say we find a house that's 850 000 because our neighborhood 850 is not unreasonable and he's like i only want to spend 650 based on what well that's cool i want to be able to be like okay we can't afford 850 because of a b and c wouldn't that be awesome let's make that decision together rather than the fear of not being able to afford it because we don't really have a good plan.

1:55:37George Kamel:So he can justify it when he wants to use the numbers against you and weaponize it. Yeah, I have a good example. He made an investment. Okay, go ahead. He made an investment with a friend in a hotel. Without telling you? 200 grand. No, no, no. Okay. He told me. Over time, but it started out with 50 grand and then more and then more. We're at 200 grand with zero return in six years. Oh, my goodness. you guys probably need a counselor more than you need a budget, but I'd recommend both.

1:56:25George Kamel:Hey, what's up guys? It's Jade Warshaw. Listen, summer spending adds up so fast between vacations and road trips and camp fees and events and all the extra gas and grocery runs. Money can get tight before you know it. To really get your money under control and keep it that way, you're going to need a plan. And that's what you'll get with the Every Dollar Budget app. It helps you track your spending, free up cash to put toward debt and savings, and it's the simplest way to make a plan for your money before the month begins. So no more wondering where your money's going. You're telling it where to go.

1:56:58George Kamel:Download EveryDollar in the App Store or Google Play and start for free today.

1:57:13George Kamel:Our scripture of the day, Philippians 1-6. God, who began the good work within you, will continue his work until it is finally finished. Michael Jordan once said, some people want it to happen, some wish it would happen, others make it happen. How's that motivation for you? That's a good line. I like that. Meredith is in Raleigh, North Carolina up next. What's going on, Meredith? Hey, yeah. So I am a recently divorced single mom of two kids, and I've discovered the baby steps to kind of help me get back on track. And I'm at the point where I'm almost ready to start investing my 15%. Awesome. However, I'm in real estate, and I own a property management firm on the side.

1:57:56And so every month, my salary changes. So I'm just curious, like, what's the best way to go about calculating my 15 %?

1:58:06George Kamel:Well, you know what a bad month looks like. You know what a good month looks like. Have you had any$0 months? What's been your lowest month in the last, say, 12 months? Yes, I have some zeros, but I run myself as an S-corp, so I pay myself a monthly reasonable salary. So I don't know, like, do I use the 15 % from that salary? or? Yeah, what'd you report on your taxes? How much income? Like 140. Great. So I would base it off of that or whatever you're going to, you know, have this year. So you go, all right, 140, 15%, that's 21 grand a year. Every month, I need to be doing 1750 into some type of retirement accounts.

1:58:50Okay, so just pick a number and like stick to it every month.

1:58:54George Kamel:And then whatever comes in, the other way to do it is, hey, if I got it, whatever comes in that month, I'm investing 15 % of that. If nothing comes in, nothing gets invested. If 20 grand comes in, 15 % gets invested. And do you do that based on the growth or do I like subtract out all my business expenses? Well, if it's business expenses, you can, because whatever you're actually taking home is what you want to factor the 15 % on. So whatever your gross income you're taking home, you want 15 % of that. Okay. And then should I have like two separate savings, like two separate six months account, like one for business expenses and one for personal?

1:59:32Or is my like emergency fund only like personal?

1:59:35George Kamel:I would keep your emergency fund and a retained earnings account with your business. So if you know there's expenses coming up, I don't know what kind of overhead you have. Some businesses don't have much. Some, you know, I need to invest in this. I need to replace this. I need to cover the taxes here. So you can figure that out with your CPA if you have one on how much you need to set aside for your specific business. But I think having both and separate is wise. Business checking, business savings, personal checking, personal savings. Okay. Absolutely. And this is good for anyone with a regular income out there.

2:00:07George Kamel:I always recommend having sort of a peaks and valley fund outside of your emergency fund. If you know you're going to have a great month, well, you know, you're going to have more than you need for your expenses. So set that money aside in savings so that when you have a low month, you can then pull money out of that without dipping into the emergency fund. it's how farmers have lived for centuries centuries yeah yeah they know like i'm not i'm gonna get the harvest once a year once a year and i need to put that money away to cover my expenses for the rest of the year yeah live like a farmer live like a farmer george means farmer in greek fun fact fun fact i always try to give you one john that didn't feel as fun as i was hoping it would it's fun to me i never said it was fun for you just fun for me there you go Caleb is in Phoenix up next.

2:00:48George Kamel:What's going on, Caleb? Hey, guys. I want to thank you for just everything you do. My wife and I started following the baby steps three months ago, so it's completely changed our perspective on money, and you guys are awesome. Love to hear that. Yeah, so my question is I'm in a lease car right now. I hate myself now after listening to you guys, so I'm 4 ,000 miles over it, and I've got 13 months to go. I'm just trying to figure out what I should do, whether save up money for the car, save up to pay the fees at the end, or buy a car now to put miles on it. Ouchie. Out of curiosity, what is the fees for going over your mileage?

2:01:25George Kamel:It's 25 cents a mile. Oof. Yikes, homie. And we're just going to continue down this road, literally, because you're just driving too much. Yeah, my work commute's about 40 miles a day, and that's just accumulated over the time. hmm well there's three ways out uh none of them are fun all of them are painful there's early termination which is the most expensive way to go there's the lease transfer where you find someone else to take it over good luck with that and there's the lease buyout which is the most popular one where you need to come up with the full amount so have you figured out the early buyout i haven't i put a significant amount down and i know i only check like oh like six thousand left on it.

2:02:09George Kamel:Yeah, but that's not what the early buyout is going to be. I would contact them and say, hey, what is the early buyout amount to get you out of this thing? And then that becomes the number to save up for. If you want to then own the car, then you can decide, I'm going to sell this car. I'm going to keep this car. Got it. So my payment's really low. I actually traded in a paid off car for this. So I put 10 grand down. So my payment's only$240. If I terminate this early, is that going to hurt me because I don't get that$240 payment for a little bit longer? Is that the$240 payment? Your balloon at the end of this with penalties alone is going to be thousands of dollars.

2:02:47Right.

2:02:48George Kamel:That's the number that really matters versus the payment. So how much do you make? About$100 ,000 a year. Okay. And how many months are left on the lease? 13. Okay. So I would at least find out from them, if there's only 13 months left, you may be able to afford it. Do you have anything saved? No, I just paid off a bike, and I've got like$2 ,000 left in savings. Okay. Well, we need to figure out the buyout price, and that will give you the homework to figure out if this is going to be worth doing. If you're going to do it, the lease buyout is the best option, financially speaking, because then at least you own the car, and then you can sell that car for what it's worth.

2:03:31George Kamel:So, the hope is that you find out the buyout amount is let's say twenty thousand dollars fifteen thousand dollars but the car is worth 30 so now you buy it out and you then sell it and you have all that money to go buy yourself a different car in cash got it okay that's the fun way out uh yeah my wife's car we only owe like 19 000 on but that's it caleb i gotta stop you i don't want to ever hear the word only in front of dead ever again it's only 240 bucks a month it's only 19 000 you're right you're right that's that's us justifying our decisions i know you've done this on the back of a napkin how much are you projecting in fees in mileage fees are you gonna have to pay oh it's gonna be bad well my work commute's gonna get short here in the next couple months so i don't know what it's gonna be i just know i can i'm gonna stop driving this car as soon as our like work location changes is what I was planning on.

2:04:30I'm just wondering if it's cheaper to Uber to work every day.

2:04:37It might be. I'm not sure. I'm actually, funny enough, the bike I have, it's a dirt bike, and the new shop location that's opening up is so close that I can actually take the desert to drive there. I was going to ride the bike to work. Wow.

2:04:49George Kamel:That's pretty desperate. I mean, based on your payment,$240 in 13 months, that's a little over$3 ,000 remaining in payments. so I don't think it's going to be that big of a number, and I'm hoping the car is worth more than$3 ,000. It definitely is. Plus the$10 ,000 you've already put in it, so let's say$13 ,000. There's a real chance you call them and they give you a smaller number than I have in my head right now, and the number I have in my head is dramatic and caustic because that's kind of how I do life. That's what's happening in John's brain. Right. You might get a$3 ,000 or$4 ,000 or$5 ,000 number, and that would be worth scratching and clawing and just buying this car and taking that.

2:05:29I mean, think about how stressed it is. You can't drive your own car just to go run down the street or to go to a buddy's house and you have to calculate, oh, it's going to be$8 for me to go to my friend's house because of just in fees. And there's too much wear and tear, so we're going to ding you for that.

2:05:44George Kamel:So these are, leases are my least favorite. And if you're thinking about it, you're going, well, it seems like a good deal. The payment's lower. Well, that's because you own nothing at the end of it. You're just prepaying the most expensive section of depreciation and then handing back the car. And by the way, tell me if I'm wrong here, George. By putting 10 grand down on a lease, you just wrote them a check for the depreciation. Oh, they're very happy to get some money up front. You gave them cash for the depreciation. They're winning on every side. And it's why you're going, well, if they know it's the best, people go, George, it's so smart.

2:06:18George Kamel:Because they're covering everything. All the maintenance is covered. They're happy to sell you that dream, but the truth is they're making so much money on it. It's why they push people towards leases. And they take the car back after you've paid for all the depreciation after two years. They've maintained their vehicle. Now they have an asset to sell on top of that. Then they call it certified used and resell it at premium price and minus the depreciation that you gave them cash for. They've changed the oil on their car and now they've won twice. That's a genius scam. Man. That puts this hour of the Ramsey show in the books.

2:06:50George Kamel:Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.