Today's Habits Create Tomorrow's Progress

22:42And, yeah, we had a contractor come by and, you know, put some plywood up. And so now, of course, Mom thinks, oh, okay, this is great. It'll last another year. And I'm like, Mom, this is so unsafe. How old is she, Mom? She's 78. And when you've said to her, I feel like our options, Mom, or we can start to do the work on this house or we can sell it. What does she say? She says, where am I going to go if I sell it? Yeah, that's what I want to know. Well, where she would go is my sister has offered to let her live with her and her family. My husband and I have room. Or we could find her a nice little apartment where she doesn't have to stress over these issues.

23:24But it depends on the day, honestly, when I ask her. Is she well? She's just, oh, yeah. Oh, she's very well. Okay. She's, yes, active. Yes.

23:36George Kamel:But she has no money other than Social Security? She has$2 ,200 a month from Social Security and about$500 a month from an annuity. I started her on a budget, and she's got about a$400 a month margin. I mean, she's just, yeah, she doesn't have the money to fix it. She's asking if we want to fix it, and then we get the house when she passes. What's it worth? The value on this Dallas County Central Appraisal District is about$265 to$270. Is that if you fixed it? Correct. That is if we fixed it. She's received a couple of, you know, these Internet offers, which I tell her to stop looking at. Oh, gosh.

24:19We'll buy her house in cash today. Exactly. What would be the as-is price? Have you talked to a realtor about that? Well, I've talked to two of the contractors that have been out who are builders, and one of us gave us an offer of$140 ,000.

24:34George Kamel:Okay. So all is not lost. You could walk away from this with$120 ,000 probably after fees? I think that's about what I figured. I'd still have a realtor look at it and make sure, because, I mean, that guy might have just been trying to take advantage of a situation. I'm not saying he's a bad guy, but he might. At least we have a floor. Yeah. We know someone will give you$140 ,000. Barely. So now I'm going to go who's the highest bidder and work with a pro real estate agent who can get rid of this thing. I personally don't think it's worth all of you chipping in all of your money to hopefully get this thing back to working condition so that one day we can keep the sentimental value of this house.

25:10Okay.

25:11George Kamel:I don't know who's going to want it at that point, who's going to live there, or are you going to turn it into a rental? Because at that point, how sentimental was it? Well, it does have – she has a lot of – what am I trying to say? It's a big lot, so if a builder did tear it down, he could probably build two or three homes, the corner lot. Wow, so you might be able to get a nice offer on this thing because the land is worth more than the house that's sitting on it. A hundred percent. Interesting. I don't think it's worth rebuilding. This is a lot of hassle, a lot of siblings' money tied up in this thing.

25:43George Kamel:Everyone's going to want to get their money back out, so now it's going to be a fight of when are we going to sell this so I can get my share out. I think is going to cause more familiar harm than it's going to be, you know, precious sentimental family time. Let me let me ask you this, because I would wonder, these are the questions. If I were in your shoes today and I were making the decision, I would want to know exactly what the house plus the land would be worth. And I want you to really do your due diligence on that. I'd want to know with the fix and without the fix. and then take that margin between the two amounts and go, okay, how much money do we truly have to invest into this?

26:20And if it really is a fraction of the amount that you would bank off of getting it fixed, then I'd be asking myself the question, can I do this in cash? Do I need to even include the siblings? Because that might make it easier. And to just know, hey, later on, I'm getting my, this is what I put in, I'm getting that money out, plus whatever our split is or whatever, and maybe not involve as many people. Because if there's a, if you find that there's a lot of money that's going to be left on the table, there might be something that's worth doing in cash if you can afford it. Now, if you can't afford any of this, it's a moot point.

26:58Well, between the three of us, we can afford to do it. My brother has expressed interest in buying the house. But my point to him, well, if we fix this house up, then I want my money out. If you get this house, I want my money back. I just called it.

27:13George Kamel:I knew this would happen, Chris. This is what happens when siblings get involved financially. But now there's so much emotion wrapped up in it. And what would mom want? So because of that, and here's the problem, you might put a hundred grand into this and some builder comes along, couldn't give a rip about it. He's going to tear it down anyways. So you don't ROI on it. He probably would have given you the same offer if you had done nothing to it. So that's why I would do all of my homework, like Jade said, figure out, here's what it would truly cost to rebuild. Here's what we could then get for it.

27:42George Kamel:Here's what a builder would be willing to pay for it. Here's where we're going to put mom. Here's where we're going to put her money to afford that and come up with a game plan all together as siblings. Okay. The harder part, of course, is the sentimental part of it. It's just hard for her to do that. And that's, you know, that's emotional and that's something we have to work with her on. So, you know, as they get older, they have their routine. They know where everything is and they like what they do and they don't want to change anything. Just imagine, though, she's in a place where the roof isn't about to fall on her.

28:10George Kamel:That's pretty comforting. She says, God will provide. And I'm like, Mom, God provided you a sign by having the roof cave in. It's time to go to the ceiling. It's time to go. And she just says, we'll keep praying on it. But I love her. Sometimes God provides with wise counsel to avoid us bringing harm to ourselves. So it looks a lot of different ways. So that's, I can't help you convince a 78 year old woman to let go of a home. That's beyond me. But I think what you can do is show her all the facts and say, Hey mom, we're not going to put all this money in to fix it up. And here's what we can get for it.

28:44George Kamel:Here's what we're going to do with that money. We found you an awesome place. Let's go check it out together. Or you're going to go live with, you know, one of the siblings and she's going to have to make peace with that because this is the life she's built for herself. I will say, I do want to add to that part. I think you, the siblings do have to be careful. So let's say you sell the place as is, that's her money. And so taking that, what I want to make sure doesn't happen is, well, we want to preserve as much as this money as possible. So let mom go live with sister. And that way we don't have to spend money on an apartment or something like that.

29:15I don't want you guys to be thinking too much about what it is that you want out of this deal. I want you to be thinking a lot about what really will be good for your mom, for her to keep having independence, for her to feel good about her day-to-day life. Because the truth is, today it is her money if you guys have not fixed the house, right? Whatever equity is there is hers. So just keep that first and foremost. And don't spend the money before it's yours, if that makes sense. It does. Thank you both so much. I really appreciate the insight.

29:43George Kamel:Absolutely. That's a sticky situation. Yeah, that's not easy. I can't imagine. But there is a piece of this too. If you've got to think about long-term care expenses, if she's in her 80s and she needs medical attention and we need to put her in an assisted living, that could cost you$100 ,000 a year. And someone's going to have to pay for that. Yeah, that is a good point too, George. And so we need to be thinking about what assets do we have at our disposal to make sure that we can take care of her in the best way possible. Maybe they want private in-home care. Yeah. That's going to cost a lot of money too.

30:13George Kamel:And so I like the idea of selling this thing, getting a whole bunch of money out. That is now, let's give her the best life possible. Instead of having her sitting in this place that's literally falling apart. It's dangerous where she's at. It sounds like it is. Yeah. I'm going to go, the memories I will carry with me. It's not in the studs of the walls. Yeah. It's in our hearts. And that's a hard thing to sell to a 78-year-old woman who's, this has been her whole life. Yeah, yeah, yeah. But she don't have any money. It's tough. Thank you.

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32:45George Kamel:Gigi is in Chicago up next. What's going on, Gigi? Hi, thank you for taking my call. Absolutely. How can we help? I'm a 20-year-old college student, and I was just wondering how much should I have in my personal savings account before I start putting it into a high-eld savings or mutual fund. You are the most mature 20-year-old I've talked to in a long time. Congratulations. You won the prize. That's awesome. How much do you have in savings? About$7 ,000 right now. Wow. Awesome. Are you debt-free? Yes, I am. Fantastic. Well, you're doing better than 99.9 % of America at 20. Let's keep it that way.

33:23George Kamel:For real. So we always recommend having a three to six month emergency fund of your expenses, not income. And so once you have that, anything beyond that, I would utilize towards either short-term goals, sinking funds, or investing. Okay. So how much are your expenses per month right now? Right now, like probably$250. Dollars? Dollars, yeah. How are you doing this? Do you live on campus? Yeah, I'm on a scholarship, and everything is paid for. It's a full ride. That's so awesome. Wow. So are you smart or talented or both? How do you get this full ride? I'm a golf caddy, and there's this scholarship, the Evans Foundation, and they pay to send the urban caddies to school.

34:08So I caddied my whole life and I got it. That's amazing. That's really great. So how much time do you have left in school? Two years. And after school, I'm hoping to get a job, obviously. But, you know, I don't know if I'm moving out of state to get an apartment. Right. I'm looking to maintain, you know, enough liquidity so that I'm like, if I need a down payment or something, like I have the ability to do that. Yeah. So that's why I like, I don't want to put too much in an account where then I have to pay to take it out. So I just don't really know how much I should be putting in. And yeah. I really like a high yield savings for you because there are in two years, you do have some real expenses.

34:47You're going to want an apartment. So first and last month's rent is going to be there. And then suddenly what George talked about, your emergency fund is going to have to take up because, well, now you have rent and maybe, you know.

34:58George Kamel:It's not going to be$250 a month anymore. It's going to be$2 ,500. Exactly. And probably that$7 ,000 is going to be right on for what you're looking for. There might be moving costs. There might be a car upgrade. And so for that reason, for a 20-year-old who's going to graduate in two years, there's nothing wrong with just stacking it up in a high-yield savings account because you have so much time on your side to invest and have compound growth work in your favor. And if you start off completely debt-free with a bunch of money in the bank making a good income, you're going to be able to invest 15 % or more the rest of your life.

35:31Okay, great. Thank you.

35:33George Kamel:Yeah, I don't know that I would invest at this stage until you have full-time working income and you're planted somewhere. And then you'll know how to allocate that money. I've never heard someone complain that they started their adult life with too much in cash. So I'd love for you to have that problem, Gigi. Great question. Way to go. Who knew a golf caddy? I know. Full ride. I wish I had a time machine. Half the parents out there are trying to get their kid to play golf. I'm like, hey, maybe you helped the golfer. Maybe just be a caddy. That's the ticket right there. All right. Madison is in Atlanta, Georgia, up next.

36:04George Kamel:What's going on, Madison? Hey, I had a question about investing for my kids. Sure. Specifically, they have where they get, you know, they're only five and three, so they get minimal income. But they do a little flower stand and they earn their own money. I make sure that they tied with it. And then I have been putting some of it originally like their birthday money and stuff like that. We would put in my husband works for a employee owned company where they do stocks. So we were doing that, and then I started listening to you guys and realized it's not good to put all their eggs in one basket too.

36:37And so now I've gotten them like a 529. I mean, not a 529. I've gotten them an S &P 500. But I was curious if it's better to, like, go ahead and do them a 529 or, I mean, I know it sounds silly, but they can even do like a Roth census income as long as I don't put their birthday money in that. So I was just curious what your thoughts were and the best course of action for them.

37:02George Kamel:Great question. I love what you're thinking about this for a five and three-year-old. A lot of parents out there struggle with this. Either they don't know what to do, so they do nothing, or they do the wrong thing, or they try to do seven okay things. So here's how I see it. If you're looking at education, which I would be starting with, the 529 plan is your best bet. As far as retirement goes, it's awesome if you want to kickstart a little retirement for your kids. they should be okay if you raise them right on that regard. But school is a much bigger price tag and it's coming much sooner than their own retirement.

37:32George Kamel:So most people go, well, my kid might not go to school, so let me not save anything. And now you have all this money stuck in a retirement account while your kid goes 400 grand into student loan debt. So I'd rather you fund the 529 first. And if they don't use it all, you can change beneficiaries at any time. You can roll over up to$35 ,000 over to a Roth IRA over time. So that becomes a retirement account for them, essentially. And it has way better tax advantages. Okay. And then if you put in a 529, because I haven't looked into it in depth, because I'm just now kind of getting started and listening to you guys and all that.

38:07If I do a 529, am I able to invest within the 529, or does it just get there and kind of grow? Okay.

38:13George Kamel:It's just like an IRA. There's going to be a bunch of options for funds there. And there's a lot of bad funds you don't want. So I would personally avoid things like bond funds, target date funds, you want to stick to 100 % equities because they're young, they got a lot of time for this to grow. So let's stick with those growth stock mutual funds and index funds. Okay, perfect. So just chunk it all in a 529 and call it a day. And here's what I do, Madison, as well. If you have the 529 on lock, and you know that, hey, based on the average stock market return, we're going to have enough to cover, let's say, an in-state school for four years.

38:45George Kamel:If you want to save for other things, like let's say cars, wedding, a future down payment, you can use that parent taxable brokerage account to sock away money there and that money will be super flexible. Okay. Okay. Gotcha. Yeah. I know that I won't have a hold of it forever. So I just wanted to take advantage of it while they would let me use part of their money to go ahead and invest. They will thank you later. They will. Whatever toy they could have bought is that that's going to be like 70 X if they just let it ride in retirement. So I like there to be a split. I think it's great to teach a kid that money is an amoral tool and it has three uses, give, save, spend.

39:22George Kamel:So let's teach them to do all of it. If you just teach a kid how to save, they will become a maniacal saver and have a really hard time enjoying their life. No, that's what we do with our kids. They have their chart where they can check off the chores that they've done and they get paid at the end of the week. But the rule is you can't spend your money on payday. Oh, I love that. Yeah. They have to wait until the next time so that it's not like, I got my paycheck, I go spend it. And it's gone. Yeah. It's a little delayed gratification. Uh-huh. They have to have delayed gratification. And so that's the way it works.

39:54But yeah, we teach them. They have to put 10 % aside. They have a jar that they put their savings in. They have a jar that they put their spending in. And yeah.

40:05George Kamel:I love it. Great question. And Madison, hang on the line. I'm going to send you a copy of Rachel and Dave's book, Smart Money, Smart Kids. It's really great to walk you through sort of the age-appropriate conversations and tactical things you can do to help your kid understand money, because that's every parent's goal. Especially if you follow Rams, you're like, how do I get my kids on this? I want them to get it early. And we already got budding entrepreneurs at three years old. She's got a Roth going on. I mean, that's pretty impressive. Yeah, that's so good. And it's a good reminder. If your child has legitimate earned income, we're not talking tax fraud here.

40:36George Kamel:But if they have a little business, let's say they do any modeling, or acting, something like that. They work for your own business. You can pay them above board and they can then invest up to that amount in the Roth IRA. And can you imagine 60 years of compound growth from five years old to 65 years old? I know, that's right. That's pretty impressive. It wouldn't take much to cause you to be a multimillionaire. It wouldn't. And as long as you're doing that 529 first, you've kind of got both bases covered, which is really nice. And there is a new option now with these Trump accounts. They're technically called the Section 530A accounts.

41:10George Kamel:if you want to make it apolitical. But all it is, the government said, hey, we're going to create these accounts so that you can invest for your kids. Anyone can contribute up to five grand a year. And if your kid was born 25, 26, 27, or 2028, the government will seed it with$1 ,000. That's money that you didn't put in. Just a thousand bucks sitting there at that age to grow into retirement. And at 18, it basically converts to a traditional IRA for the child. So it's a pretty cool thing. There's nothing bad about it. Yeah. The tax treatment is the only terrible thing because you use after-tax dollars and you pay taxes on the way out.

41:46George Kamel:But there's a cool hack that I'm exploring where you can convert from traditional to Roth. Once that kid's working at their tax rate, it'd be super cheap to convert. Now you got tax-free money. I like how your mind works. Very nerdy, very in the weeds. And if you want more info on this, I'm going to be walking through exactly how that works in Investing Essentials. It's a virtual event. Dave Ramsey and I, September 1st and 2nd. Investing Essentials. You can get tickets at RamseySolutions.com slash events if you want to join us.

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43:54George Kamel:Welcome back to The Ramsey Show and the Fairwinds Credit Union Studio. I'm George Camel, joined by Jade Warshaw. Free call at 888-825-5225. Jacob is in St. Louis up next. Jacob, welcome to the show. Hey, guys. How are you doing? Doing well. How can we help today? Hey, so my wife and I are on Baby Step 2. We currently have$24 ,000 left to pay off. We've paid off$76 ,000 over the last 22 months. Way to go. Yeah, thank you. Thank you. Yeah, we've really been able to make a lot of progress. The main thing is because we've been getting free child care for our three kids. How do you do that? Family?

44:35George Kamel:Well, yeah. Well, my mom was a director at a preschool that was kind of part of her contract. Oh, perfection. So you got a built-in blessing there. Yes, it was amazing, and we made the most of it. So the bummer is that kind of ended. So coming into the fall now, we're going to be paying for child care. So it's going to cost us about$2 ,400 per month. And that is eating up pretty much all of our margin. And it's really slowing down the snowball here. I bet. Yeah. Is that for all three kids or is that two that are in daycare? So, yeah, actually, yeah. So our oldest is starting kindergarten in the fall.

45:19So it's going to be for two kids. And I mean, that's a fair price just for anybody listening. You can easily pay$1 ,200,$1 ,300, even$1 ,400 depending on the age. The younger they are, the more expensive they are. It can be up to$1 ,500.

45:33George Kamel:That's the going rate, unfortunately. So what is your after-tax monthly take-home pay? After-tax, it's about$9 ,200 a month. Okay. That's a great income. And so you're saying your bills after daycare is paid from that$9 ,200 pretty much leave you with nothing left to throw extra at the debts? Yeah. We have a margin. We went through it and laid it out. Our margin's probably about$200 to$400 right now. How much is your home payment? Our mortgage is like$2 ,700,$2 ,800. Okay. How much are you paying in minimum payments? um minimum payments are let's see like 700 like 750 that's not a lot so i i'm finding that there's still quite a bit of money here what what happened where's it going um great question i i i figured you'd say that because i was going i was going through all of this um so like just our our needs like our monthly needs, excluding daycare and mortgage, I have it like$3 ,200.

46:45Right. And that's the chunk that I want to know more about.

46:48George Kamel:Like if you ranked them from most expensive, would it be, you know, we spend$1 ,000 on food, then we spend$800 on this. Where is that money going? Yeah. I think like food is at like$625 a month. Okay. um so i'm showing i'm showing that you still have 2725 to go okay and i mean obviously yes you have utilities uh but if you're telling me hey what the two items that i actually thought were going to be really high were really low you said 625 on groceries stupendous you said 750 on your minimums i mean obviously i wish you had no debt but that's not that bad right so there's there's money going somewhere, I would challenge you to look to where that is because I think there's probably a lot of things that are nickel and diming you because generally the big ticket items, it's either the mortgage is too much or yeah, daycare could be sucking up whatever margin you have, but I actually don't think daycare is the culprit here.

47:47George Kamel:Okay. Because I mean, even after daycare is paid, you guys are taking home well above the median household income. So that's where we're going, well, there should be more, but I think this is going to take you to sitting down doing a very detailed budget. And instead of going, let's see if there's anything left over and said, let's make a goal. Hey, we need to find two grand a month to put towards these debts with minimums plus extra two grand. So that's 1300 bucks we need to find in this budget. Where are we going to find it? And you guys take turns going, all right, I think I can slash this down here.

48:16George Kamel:I can reshop insurance here. Oh, you know what? You're doing your 401k. Let's pause that. Let's get some money back in. And if you start doing a budget audit and getting real creative, I think you're going to find way more margin than you thought. Okay. And I'm going to help you with that. We're going to give you every dollar premium, and it actually gives you personalized recommendations now based on your goals, where you're at, what your actual expenses are, and we'll make those recommendations just like Jade and I would do on the show. Now, are you guys still investing? No, we did pause that.

48:45Okay, that's good. Yeah, I think it's probably the devil's in the details, you know. It might be things that pop up that maybe you didn't budget for and you look up at the end of the month and it's like, oh gosh we did do doordash or we did go to target would do a target run or all those little things coffee um i'm trying to think it's the little things maybe you have a lot of subscriptions do you if you have hulu netflix disney paramount plus amazon prime fandango instacart instacart

49:13George Kamel:you just keep going everything's a subscription everything's a subscription um so my point is I'm talking to myself because that's me. So cut half of them off and I think you'll find some money. When everything is 15, 20 bucks, you don't feel it in the moment, but it can add up. So I hope that helps you start to navigate this. It's a hopeful situation because you have a great income. There's not a ton of debt left. You guys have made crazy progress. So I just don't want to see you lose all of that momentum just because of the childcare. Now for those who are listening, and maybe you don't make$9 ,200 a month, maybe you make somewhere around$5 ,600 a month and you're like, I have kids in daycare, Jade and George, my margin.

49:55The truth is daycare, I do feel like sometimes the baby steps can really be impeded by seasons. If you're in a daycare season and you're not making, maybe you're making the average income, you're going to feel that stupendously. And you're probably going to be a person who has to go out and side hustle and supplement your income in order to make that work. But the good news is, and if you've ever stopped to think about it, George. The good news is if you can pay for daycare with two kids, you can pay for college when it's time. You can cash flow it. That's true. Because it's basically the same.

50:27$36 ,000 a year, you know, you could go to a state school.

50:31George Kamel:So once they're at a daycare, just reallocate that daycare payment to their future. Yes. You're basically paying for college twice. I don't know why anybody, nobody talks about that. You know, that's a life hack there. It's a life hack. There's hope. If you can pay for daycare, you can pay for college. I just told you, you'll never get rid of this payment. They're like, there's hope yet. But there is truth in that. And a lot of times people do make really good money and they go, well, I don't have any margin. And I always want, I wish I could sit down and look at their bank statement, look at their every dollar budget and help them.

51:01George Kamel:But luckily the every dollar app now does that for them. So I always point people to that. It's such a great tool. That plus Ask Ramsey, which is our AI chat bot. If you combine those two things. You will feel like you got a raise. You could sit there for two hours and go, hey, give me more recommendations. Hey, here's how much I'm spending on groceries. how do I cut this down? Hey, here's how much I'm spending on my utility bills. How can I get this down? And you know, it's going to be through a Ramsey lens. So I love that. But insurance is a sleeper. People don't realize that they're overpaying for insurance.

51:28George Kamel:So I always tell them to reshop using an independent broker. And again, we have an awesome coverage checkup tool that walks you through all the ones you need, making sure you don't have too much insurance. You don't want too little insurance. But a lot of people will reach out and say, oh my goodness, I just save 300 bucks a month just by re-shopping because I always had whatever XYZ company for the last 10 years. And then check your Amazon. Go through there because sometimes it just becomes a catch-all and you can look at the end of the month and just go, what have I done? What have I done? It's like the little sticker on the gas station pump.

52:01George Kamel:I did that. Yeah. It's your own face pointing at your Amazon account going, how did we spend$2 ,000 on Amazon? How much of that did we need and how much of it was just retail therapy after the kids went down? Man, it'd be like some real questions to ask ourselves.

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54:04jesse is in modesto california what's going on jesse hey george j thanks for having me on um get straight to the point so my wife and i we bought a house about four years ago and um since then i started listening to the show a lot more and we talk about buying a house on a 15-year fixed at no more than 25 % of your take-home. Well, ours is a 30-year fixed, and it's about close to 40 % of our take-home. And the question I have is, would it be wise to look to downsize from our current home, even though interest rates have risen since we bought our house? Or should I try to find more work to bring up our income?

54:48I don't know if you guys have any advice on a good approach for that. I'm glad that you're realizing the problem that this is. If you said to us, I see a long-term play where my income can go up and it will stay up, there might be a way to keep this if that's happening in the near future. But what I wouldn't want you to get sucked into is maybe I can side hustle my way out of this because side hustles are temporary fixes. And so that's kind of where the rubber meets the road on this. Is there an upside for your careers that you do think you could get to fairly soon that would be sustainable for this?

55:31I don't think there's anything like within the next five years that would drastically increase to where it's going to put me up closer to that 25%.

55:40George Kamel:Give me the numbers on this. I'm curious. What's the mortgage payment and what is your after-tax monthly income? Our take home is probably$9 ,000 a month. Does that include, and that's just after taxes or does that include? That would be after our health insurance and our, I invest 10%. Okay. So let's remove that out. That'll help our numbers here. That is a confusing point. When we say 25 % of after tax income, we're just saying after your taxes are paid, but don't include healthcare and 401k because that can skew the numbers. that might force you to go, hey, you know, we're actually at 28%. This is not a fire.

56:21Gotcha. Okay.

56:23George Kamel:How did you calculate it? That's just all that comes out prior to I getting the deposit into my checking account. So you did it based off the$9 ,000 that comes into your checking account? Correct. Okay. And what's the mortgage payment? It's about$3 ,700 a month, and that's just mortgage. And how much goes out of your check for investing and how much goes out for health? I have about 10 % set for investments and then health is not much. It's a couple hundred bucks. Okay. So you probably, it might be like, let's say, let's call it 10-3, for example, 10 ,300, which brings you to 35 % of take-home pay.

57:08Okay.

57:08George Kamel:So it's not great, but I wouldn't say this is on fire where I'm telling you, hey, man, you got to sell this thing. Now, the question is, do you have enough margin to do the baby steps, live your life, create sinking funds, all of that? Yeah, I mean, I would say we have a decent margin. We have no debt. Good. Besides the mortgage. I think that the only thing that after listening to your show that I started to realize is, you know, I could go up to 15 % on my investments. But I want to invest, you know, we have three kids, so I want to start investing for their education. And as soon as I start thinking about all the things, I'm like, I don't know quite where we're going to get all that margin.

57:45And part of the reason, you know, I'm putting it all together, why we want to be around that 25 percent is so you can have those margins to make those investments.

57:53George Kamel:Yeah, that's true. You're getting it, man. That's exactly it. We want you to be able to live your life. And that's not because we're trying to be super legalistic and you're a bad person if it's 30 percent on a 30 year. We've just found that you're going to pay that house off in 15 years. Worst case scenario, you're going to have extra money to cover the vacations, the car repairs, the kids activities, whatever it is. And so that's where I'm I'm wondering if you keep this thing for another year or two and see where we can shave, how we can make more. And then later on down the road, you can decide, hey, this is there's not a sustainable path.

58:26And I mean, you can run real numbers on this today to get your head around what the future would look like. So I would go ahead and I would plug into my budget. How will my paycheck change once I invest the full 15 %? Because the truth is, if you have no debt and you have an emergency fund, you should be doing that today. And then I'd say, okay, ideally, in my ideal world, what I'd be putting into the 529, so I'm going to, you know, 300 bucks a month. Okay, great. Subtract that. And then I'd like to be making extra mortgage payments. In my ideal world, it'd be, I don't know, 700 bucks a month, whatever you decide.

58:59and then see the margin and you and your wife decide, how do we feel about this? Is this enough to take the vacations we wanna take? Is this enough to be in the lifestyle that we wanna be in that we've worked hard for? And I think that will inform a lot of your decisions looking at the real numbers around it. Gotcha. Just to real quick, I guess the reason it felt more of like a urgent fire situation because you guys talk about a 15 year fix and we're on a 30 year, you know, well over that 25 % of the take home. I mean, I do think that a little more stressful. It is because a lot of times people will do a 30 year to be able to afford the house that they want.

59:38And if you're telling me that even on the 30 year, it's still 35%. Yeah. You bought more house than you should have. I mean, there's no question about that. I think that you bought more house than you could afford.

59:48George Kamel:Can you guys reasonably downsize? What would that look like in Modesto area? Yeah. I mean, we could probably find something. I think our house is probably worth around$600 ,000 right now, and we have about$130 ,000 in equity. We could probably find something in like the$500 ,000 range. So it's not like a major downsize. I never ran the numbers on what a 15-year fix would look like. Yeah, my guess is it would be a whole big chunk of your take-home pay, and you got to think about all the fees involved with moving, selling a house, buying another house. So I don't know that I would go down that road until I know for sure that this is unsustainable.

1:00:32George Kamel:But right now, I'm the first guy to tell you, if I felt heart palpitations that you should sell your home, I would let you know. It's not on fire. It's just something to be thinking about. And you do live in a high cost of living area and that's just part of life there. You just kind of have to make more money to have a life with some cushion. So I would be looking at your careers going, okay, can I work overtime temporarily if we need some extra margin? But long term, what does it look like to get the core income up? Do both of you work right now outside the home? I work full time. My wife works.

1:01:04George Kamel:It's a per diem job, so it kind of fluctuates. Okay. So if she got something that was more stable, that paid higher wage, that could be your ticket to make an 11 or 12 grand a month. All of a sudden, this mortgage payment is a nothing burger. Yeah. Yeah. Okay. Good luck, man. It's a fun math equation that life is. And I think you highlighted a good point, George. You know, our rule of thumb, I think everybody knows it, but we'll say it again. 15-year fixed rate mortgage is what we would suggest. And obviously you want a mortgage where the take-home is no more than 25%. But sometimes, you know, people run into the Ramsey principles after they bought a house.

1:01:45And so they're looking at their mortgage and they're going, oh gosh, mine's 29 % or mine's 32 % or mine. And it's not to say that you have to run and sell your house and get it to 25.

1:01:54George Kamel:Lightning will not strike if you're at 28 % and you can still go to heaven with a 30-year mortgage. So don't worry about that. And we're not telling you, if you have a 30-year, you need to refinance to a 15-year right now. We're not telling you that at all. But we are saying that if you're wondering if it feels tight and you're wondering why, that's something that you can look at and go, okay, now I understand why it feels tight. It may not be that my income's the problem per se. It just, I have a little bit more house than maybe I should have bought. And then you can decide the way you want to solve the problem.

1:02:24But if you're looking at your life and you're going, you know what, we're kind of doing the things we want to do. Maybe we don't have as much margin as we want, but we're ticking off all the boxes and we're going in the right direction. Yeah. It's not on fire. It's just something that be aware of.

1:02:37George Kamel:Yeah. And it's a good reminder. If you're following the baby step, sometimes it feels like you're living paycheck to paycheck because you've given every dollar a name and that can feel like, well, there's not an extra 3 ,000 bucks laying around because I allocated it toward kids' college savings, this much is going to savings, and I like to automate it personally. So by the time the money hits my checking account, it's already gone to all the different things, and all I have in that budget is the spending money left because all my savings stuff is gone, the giving stuff is gone, and so it can feel like that money's gone, but I like it because I'm human.

1:03:08George Kamel:I'm going to be tempted to spend it if I see extra. Yeah, I mean, you don't, you don't, you should not be spending everything you get. You should be doing the things that make you a financially responsible adult. Good luck, my friend.

1:03:41Thank you.

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1:05:15George 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 YRefi.com slash Ramsey to learn more. That's the letter Y-R-E-F-Y dot com slash Ramsey. May not be available in all states. All righty. Today's question comes from Tyrone in New Jersey. He says, my wife and I have$34 ,000 of debt and$12 ,000 in savings. I'd like to drain our savings to pay everything off, but it's hard to get over the fact that we will only have$1 ,000 in savings and we really want to buy a house.

1:05:55This feels like a step backwards. can you give me some encouragement about pulling the trigger okay uh this is fun well here's some

1:06:05George Kamel:here's some reality you guys have a negative net worth so let's not talk about a step backwards we're already in the negative yeah we can't go much further back so you would take your let's say 11 000 of the 12 keep your starter emergency fund the thousand bucks and you would knock that debt down and you'd knock out a couple of payments along the way probably absolutely I mean, I think the biggest thing is what he's talking about is it feels cushy to have$12 ,000. You feel exposed. It's a security thing. And what I, you know, on my sheet here, it says, can you talk me into using savings to pay off debt?

1:06:38Yeah. My talk into it is mathematical because the person who has debt and then says, but I have$12 ,000 in savings. I'm like, math says you don't have any money. Math says you actually owe$22 ,000. That is just basic arithmetic, which is my favorite type, by the way. Arithmetic.

1:06:55George Kamel:I haven't heard that word in a while. Basic arithmetic. And so when you look at it for what the numbers actually are, you realize, oh, crap, I'm actually putting my security in something that's false. And so that's kind of my way of thinking about it, George. I mean, I don't know if you're saying it. Well, it's funny. As a guy who likes the numbers and likes the math, I think this one is the best emotional play in all of the baby steps. We switched chairs. Okay, go for it. Here's why. When you have$1 ,000, you are a little bit scared. You're like, whew, okay, we got to get out of this debt real fast because I want to get that emergency fund real fast.

1:07:30George Kamel:I want to build it back up. And so that's why I actually like this one. It causes people. It lights the fire. Yes, it causes people to move faster. And part of the problem is when you've got 12 grand sitting in savings, you have comfort. And when you're comfortable, you move a little bit slower. Yeah, that's a good word, George. There's a lack of urgency. And so I like the fire this thing lights under your butt when you got a thousand bucks to your name. And here's the good news. Most people in a given month could cash flow any given emergency. There's very few things other than like, you know, the HVAC or like a roof needing to instantly be replaced where you need to come up with 20 grand on the spot.

1:08:03George Kamel:Right, right, right. Think about your last couple emergencies. It's likely the flat tire. It's the dental emergency. You have health insurance for that. So as long as you have good insurance in all places, you know your deductibles, you could likely pause the baby steps and cash flow of that emergency in any given month. That's a good point. Yeah, I think that's a good point. And then when you think about, okay, once the debt's gone, how quickly with all those freed up payments, how quickly could you stack back$12 ,000 and then some? And you do the math on that and you go, oh, you want to know what?

1:08:32This is actually a really great play. We say around here all the time your biggest wealth building tool is your income. That's your biggest wealth building tool. And so let's do what it takes to free that up and stop giving it away in monthly payments. And when you do that, that's when you start winning with money.

1:08:47George Kamel:I hope Tyrone was listening. If not, this was a big waste. I'm kidding. I'm sure it helps somebody out there. There's a lot of people in that spot. Yes, I think that's a very normal way to feel. And I think there's a little personal pride attached to it too. Like I saved$20 ,000. I'll tell you this though. When someone tells me I went down to$1 ,000 and I had this much in savings before, I go, oh, they're actually doing it. They're going to get out of debt. Mad respect. I'm convinced because now I'm willing to pause the 401k. I'm willing to do the side hustles. This means something to me. I'm prioritizing this.

1:09:16George Kamel:So to me, it's more of that I'm putting a stake in the ground, lying in the sand, more than it is a financial equation. Arithmetic, if you will. Arithmetic. That was fun. Thanks for indulging me. You're welcome. Donald is in Eau Claire, Wisconsin. What's going on, Donald? I was wondering if my wife and I should sell our truck to pay off two-thirds of our debt. Wow. What's the truck worth? It's about$21 ,000. $21 ,000? And what do you owe on it? $8 ,800. Okay. So you owe about$9 ,000. It's worth$21 ,000. So you could walk away from this thing with about$11 ,000,$12 ,000? Yes. Okay, and then you would use that money to buy a different vehicle?

1:10:04George Kamel:Do you need a different vehicle right now? No, we have two vehicles at the moment, and I would probably use it just to pay off most of our debt. Wow. Okay. What's the other debts? We have$9 ,000 in a personal loan,$8 ,000 towards my student loan, two credit cards, they're around$2 ,400.

1:10:35George Kamel:Something else in there? Possibly. Okay. Yeah, because you said the$21 ,000 was two-thirds of the debt. Okay, so we're about there. Yeah, so you don't even need this truck. You could sell it, profit$12 ,000, and knock out some of these smaller debts with it. Yeah. Speeding up the process by, I assume, several months. Yeah, we'd probably... I did the math, and we were on$10 ,000. Wow, what's the payment on the truck? 266 feels like a no-brainer free up a payment you get 12 grand to throw at the smaller debts you don't need the truck i'm going sell it today yeah why would why would you not sell it just because you like it yeah okay yeah i mean that is part of the the sacrificial nature of the baby steps is you let go of some things that maybe you you like or you you wish you could keep but it's the greater good, right?

1:11:27You're doing it all for the greater good, so I would do this deal. How much do you guys make? $7 ,800 a month. Fantastic.

1:11:38George Kamel:So if you sold the truck through that amount of the smaller debts, you have that debt remaining with your income, how quickly would you guys be out of this whole thing completely debt-free?

1:11:51Probably four to six months.

1:11:53George Kamel:Wow. Love that. We're talking like by Christmas. Yes. Christmas is going to hit different. And then by the springtime, you'll likely have your fully funded emergency fund, right? I would hope so. Think about that, man. By summer of 27, you guys have no consumer debt. You got$20 ,000,$25 ,000 sitting in a high-yield savings account. How quickly could you go save up and go buy yourself a nice truck? Probably within two or three months. I mean, we're talking like one year from now, you're in a totally different phase of life. You're a guy who happens to life instead of life happening to him, and you can save up two grand a month and go buy a$20 ,000 truck 10 months later.

1:12:39George Kamel:That's crazy.

1:12:43George Kamel:You see that future ahead of you? Yes. And we paid off about$80 ,000 or$70 ,000 in the last two and a half years. Oh, wow. So this is a home stretch. Yeah. So this is just you going, hey, let's not make this any harder than it has to be. Let's get rid of this truck. There's more trucks where it came from. So I feel real good about you selling this thing. It's not a horse. It doesn't have a soul. It's got horse power, though, I'll tell you that much. You know, I just love calls like this because it reminds me, I read a book by Hoda Kotb. It's called Jump and Find Joy. Anyway, in the book, she's talking about how you can be going through life and you can just stop and go, you know what?

1:13:26I don't wanna keep going down this path. I just wanna stop and make a change. And I love stories like this because this guy, he was going through life and he was like, you wanna know what? I don't like this. Let me stop. Let's just throw all the cards up in the air and start going down a different path. And now you look, he's paid off$80 ,000. He's about to sell a truck. It's you can just stop and go, this doesn't feel right. And I want to go in a different direction. And I just love that. And we have the plan to help people do that. And they do it every day. And I always like to say the time is going to pass anyway.

1:14:03So you have the luxury and you have the option to do that. Where do you want to be two years from now?

1:14:06George Kamel:You want to still be in debt? Yes. God willing, you have two years in front of you. And if you can do the same, you can, you could be the same. You could be worse off or you could be better. And all of that has to do with people in a moment just going, I'd like to make a change. I'd like to just stop. I'd like to get off this ride and I'd like to get on this ride, please. This ride is not fun anymore. Is there a different one? Is there a different one? This ride is making me sick. I'd like to get on a better one. It's the same person in the mirror who made all those bad decisions. Same guy's going to make the good ones.

1:14:35Yes, yes. Please do it. I love stories like Donald and the calls we've gotten earlier. It's so worth it, guys. You can do this. And somebody out there

1:14:42George Kamel:is going to get a sweet truck from Donald at a great price. At a great price.

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1:16:22George Kamel:Paul is in Las Vegas. Up next, Paul, welcome to The Ramsey Show. Hi, George. Hi, Jay. Thanks for having me. Sure. How can we help? I had a question. So I'm just getting into baby step number six. I paid off all my consumer debt. I'm doing the emergency fund, and I'm investing for my retirement. Way to go. Here's the situation on my house. I bought this house three years ago. It was from my in-laws at the time. They're no longer my in-laws. I bought the house from them. They had solar put on the house prior to me buying it. When I bought the house, I told them, I said, I'm buying the house. I don't want to assume the solar loan, though, and we'll keep the solar in your guys' name.

1:17:02George Kamel:I'll continue to make the payments on it, which I've been doing. Now I'm entering baby step six. I did a title search on my house, but after I purchased the house, the solar company put the lien on it for the equipment on the roof against my former in-laws. I owe$32 ,000. Well, the solar loan is$32 ,000. I owe$92 ,000 on my house. I'm wondering, do I pay off my house or do I pay off the solar since regardless at the end of the day when I go to sell the house, I'm going to have to pay off the solar anyways. What's the situation with the ex-in-laws? Do you still communicate with them? Here and there.

1:17:40George Kamel:I mean, I have it set up to auto pay on the solar account every single month, so I don't really have to deal with that in the aspect of sending them money, but I'm still on good terms with them. Okay, but you're making the payments? Correct. So what was the deal with them? It sounds like they got the best deal here. You're making the payments. There's a lien on your house, but it's in their name. But there's really no risk on their part because the lien is against – the collateral is your house. It's an equipment lien, so it's not against the house. It's just against the equipment on the roof.

1:18:15George Kamel:So they could come repo the equipment? Why not? Theoretically. I have like a moral obligation, and I made that agreement with them that, hey, I'm going to make the payments on this. I'm just not going to assume it. And that's where I'm at right now, and I continue to make those payments for over a year and a half after the divorce. I'm guessing they don't have the money to pay this off. Correct. They do not. I'm trying to understand why. I know it's spilled milk, but I'm trying to understand why you would agree to make the payments, like why you would go that far, but not say, I don't want anything to do with it.

1:18:53Period. Do you see what I'm saying? Yeah, I get that.

1:18:58George Kamel:And it was the at the end of the day, when I went to purchase, I tried to see if I could get out of the solar agreement. I couldn't. I didn't want to assume it to put more debt on my own myself and put more stuff on my credit. And so I just at that time, you know, I was I was good with them. I was good with my ex-wife at that time. I was like, yeah, I'll just I'll continue to make the payments on this. And I made that agreement with them. I have a lot of a lot of respect for them. the marriage didn't end on bad terms or anything. And I don't want to screw their credit over by saying, screw it, I'm done paying it.

1:19:30George Kamel:Do you know if this lien is actually real and recorded on your home? Because sometimes they use this as a scare tactic and it's not actually valid. It is real and it's recorded on the home because I owned a couple of properties, a couple of parcels. And when I split and sold one of my parcels at the beginning of this year, it was an issue on it. And they were trying to say, well, you can't sell it until you pay off that lien. And I was like, well, it's an equipment lien. And then they ended up letting me sell the property that was attached to it. So now when I go to sell the house, it's going to be an issue with selling the house.

1:19:59George Kamel:When do you plan on selling the house? Probably in the next two to three years. I kind of think you have to think of this as though you bought the house in any other way other than the way that you bought it. If you bought the house in any other way, you would have assumed all of this and it would be on you to take this over anyway. So I think I'd have to just treat it that way. So you have the money to pay this off? It would drain my emergency fund. How much is in there? And my emergency fund is around like 38 to 40. Some of that's in a high yield savings. And then some of that is in, I have an account that I just have like for my house or all my bills for my house go out of it.

1:20:39George Kamel:I put money into that every month. Okay. I think it would simplify your life. Yeah. I would just pay it off today and then rebuild the emergency fund and then begin attacking the mortgage with any extra margin. You may not have to pause investing. It sounds like you could do this all pretty quickly and kind of just restart from scratch here. Yeah. I'm just curious. What's the percentage on that loan for those solar panels? And that's the other thing. So my home loan, I own$91 ,000. My payment on it is$1 ,000 a month. I have nine years and four months left on it. And so that's a four and a half percent.

1:21:12George Kamel:The solar is$32 ,000. It's 2.9 percent. And I don't know exactly. The maturity date is in 2046. Yeah, it's like, let's get this out of our life. I would. Okay. It stinks, because you worked hard to save all that money up. You had an agreement with these in-laws. Then there were the ex-in-laws. And I'm guessing there was nothing in the divorce agreement about the ex-in-laws loan, right? No, there wasn't. It was just sort of a verbal? Kind of verbal part of the thing. And that's where I'm like, I know I could just stop paying it tomorrow if I really wanted. And I don't feel right doing that. I looked into trying to do like a solar exit company and I couldn't find one that was like really a reputable one that I didn't get like feel like I was getting a scam vibe from.

1:21:58George Kamel:Well, here's my thinking, because my guess is they act like a debt relief company where they tell you, hey, stop making payments and then we'll negotiate with them. It'll take your credit, but you can get half off, something like that. So I'm wondering if you can negotiate with the solar company at this point and explain the situation and see if they might settle for a lower amount. yeah well that's the other issue is the solar company it's out of business so now it's through it's just through the lending company which is still in business so it's it's yeah it's a even with the less you might see if you can negotiate yeah and say hey i sort of you know adopted this solar loan here was the agreement if you're willing to take you know 25 grand i'll pay it off today write you a check it's worth a try yeah i would at least try that worst they can say is no.

1:22:46George Kamel:Correct. So that would be the route I go, but I would not make extra mortgage payments until the solar loan is taken care of. And I like your point, it's too much to rob you of your piece to go, well, I'm going to let it get repoed and be on my roof, taking down the solar and infecting my credit or whatever it would do. Who knows? Oh, that's messy. Ex-in-laws. That's about as messy as it gets. James is in Baton Rouge up next. What's going on, James? I have a we're in the middle of our debt payoff and we have a car and I guess basically my question is from kind of the Ramsey perspective if interest rates matter or if it's just best to get rid of the debt Yeah, there's two prime methods that people tend to think about when they're paying off debt One is an avalanche method where they are thinking about the interest rate in terms of which debt to play off first.

1:23:42And then there's the snowball method, which is the one that George and I and everybody at Ramsey suggests where you're looking at the debts in term of balance, full balance owed. And so when you really look at a person who is interested in paying off all of their debt, the data does show that the debt snowball method is the way to go. And people have the most amount of success in paying off all of their debt if they use the debt snowball. And the reason for that is you get small wins quickly. And so that's what I would say when it comes to paying off debts. Tell us about yours. Well, me and my wife, we started our payoffs or our debt journey about two years ago.

1:24:27We reached the point where we paid off everything but the house, the student loans, and the car. Okay. And we built up about six months of an emergency fund. Why did you go back? Why did you stop at why did you stop without doing the car and the student loan? Oh, well, it's not that we stopped. We're kind of in the middle of that. But you stopped to build up the savings is what I'm saying. Yeah. Well, my thought process on that was all of those are with percentages that, you know, we started our journey in the secular world. I was getting most of my advice from other financial people. And so in our mind, it was get everything paid off that we can't beat in the market, right?

1:25:20George Kamel:And then build from there. So how much do you have in savings? Savings, about$15 ,000. And what's left on the student loans? The student loans are actually fairly fresh. My wife just graduated last year. I was working her through school. What's the balance? About$30 ,000. And the car loan? About$18 ,000. $18 ,000. Okay. I'd get rid of that car loan and use most of that emergency fund and just follow the baby steps as is, and it's because they work. And I know it's scary to lose your savings, but what you're really gaining is traction on the debt-free journey. Let's give them a copy of the Total Money Makeover to read.

1:26:04Hang on the line. We'll send it your way.

1:26:06George Kamel:Thank you.

1:26:18George Kamel:Welcome back to The Ramsey Show in the Fairwinds Credit Union Studio. I'm George Camel here with Jade Warshaw. Stacey is up next in Tampa, Florida. What's going on, Stacey? Hi, George and Jade. Thank you for asking my call. Actually, basically, I'm trying to keep from going back to a shelter. Oh, my goodness. A homeless shelter? Yeah. I recently got out of it about three or four months ago. I managed to save$500 since I got out of there. But I owe the IRS in child support, and child support has already put in, as I call them, I made a mistake to call the IRS and child support, thinking that this child would pay for them.

1:27:10But now they're wanting each one with$750 a month.

1:27:14George Kamel:So IRS wants$750 a month and child support is$750 a month? Yeah. Okay. When you called them, what were you hoping to do? I mean, I figured I could maybe$200 ,000 and the other one maybe$300 ,000. Okay. So you thought it would be a much lower payment, and they said, nope, this is what it's going to be. Yes. Wow. Are you working right now? I am. Okay. What are you doing for work, and how much do you make? I'm a front desk for a surgeon, receptionist. and I make$2 ,500 a month after taxes. Okay. Is that 40 hours a week? Yeah. All right. What's your living situation right now? I'm currently renting a high-efficiency house.

1:28:16George Kamel:How much is that a month? That's all I can afford currently. A thousand. Okay. So$1 ,000 a month, and then if you owe this child support and IRS, that's$1 ,500 extra, which is all of your income gone, and you haven't even put food on the table. Or my phone or my bus pass, because I don't have a vehicle either, so I'm trying to save money. How are you getting to work right now? I'm literally trying to take the bus route. Okay. Oh, my goodness. I'm so sorry. What happened that got you into this situation originally? Mental health, nervous breakdowns. I have 39 years of trauma. So I unfortunately keep going into depression and attempt suicide.

1:29:07George Kamel:Do you have medical support right now? Yes, that's the other thing I need to break it into. I have to go to therapy every week to keep me going. that's the reason I came to Florida to run away from all my trauma I literally came to Florida about six, seven months ago no, about a year actually now that I think about it like eight months in the shelter so yeah it's been tough but I refused to go back to the shelter I never want to do it again that one time was more than enough and I need to I get mentally healthy and pay off my debt. How much debt do you owe total? Give or take about$35 ,000 between the IRS and the child support.

1:30:00Okay.

1:30:01George Kamel:And is there a judgment against you for these? Yes, because in the divorce, my husband owed property taxes, so they gave them to me, and he took my 401K, my pension, my house, my car. He took everything. because of a nervous breakdown. Wow. So your wages are being garnished for these payments to the IRS and child support? Not yet. They are in the process of it. Not with the IRS. I'm the IRS right now currently. I'm trying to make like$50 payments here and there whenever I can. So they can remove me from the, what is it called, where they don't give you, it's when I was in the shelter. I was desperate and I called them and told them my situation.

1:30:47And they put me on something where they do not charge me interest for a little bit while I was in the shelter. Like a deferment? Mm-hmm. Yeah. But when I started saving money in a one minute, you know, get started and catch up on everything, I called them up and I told them, okay, so I'm currently working. I want to make payment plan that I can afford so I can pay off this debt. But they removed me from that no interest thing. The gentleman that I spoke to, he told me that he was going to do it. I was like, you know, don't do anything right now. It's like I'm literally just out of the shelter.

1:31:21I'm just not getting on my feet. I need a little bit of time. But unfortunately, the gentleman went ahead and removed me from that. So now I'm starting to create interest once again on the IRS. And with the child support, I called them. and I told them that was in a payment plan. And they told me, and I also modified my child support because obviously I cannot, no longer have$400 or$500 a month.

1:31:49George Kamel:Yeah, that's a huge chunk of your income. So they should adjust that, and I would fight for that. Can you get that before? I tried, but this is, you know, they said 2028 is when they can do a modification because they sent the paperwork to the shelter. However, the shelter either returned it, misplaced it. I don't know, but I did not get the paperwork. So now they're saying because they sent me the paperwork to the shelter, and I never responded. I'm no longer eligible for them to modify my child support. Okay. Do you have a social worker that you're connected to? Employer the shelter? Yes, I do have a social worker.

1:32:27George Kamel:I would lean on them to see what resources are available, what programs are available to help you get your head above water right now. and even fight for you because you're doing a lot. You're doing a lot to just try to fight these things, pay what you can, go to work every day. So in my mind, number one, you got to take care of you because if you don't have your mental health and physical health, you can't go to work. And if you can't go to work, you don't have an income. If you don't have an income, we're going to be back in the shelter. So that's how I prioritize it. And you need to put food on the table first.

1:32:57George Kamel:So here's what you need to focus on with your 2 ,500 bucks a month, the four walls, food, utilities, housing, transportation, like your bus pass. And that might mean we don't have a car for the foreseeable future, but at least we can keep the bills paid, the lights on, we can eat. And beyond that, insurance. Any insurance you have to pay, let's make sure we have that covered. And if that means you can't pay whoever else, that's tough cookies. And we can deal with the ramifications of that later. But the IRS is the one that is not going to go away. And so we want to get them off our back and see if they can lower that payment.

1:33:33George Kamel:It sounds like you've tried to talk to them. They haven't been super reasonable, but you simply do not have the money to pay. So at some point, they're going to have to give in and go, all right,$300 a month is what we'll take on a payment plan. And same with the child support.

1:33:49I did, when they sent me the court documents indicating that they were going to start subrogating, I mean, my check from child support, I did appeal for it and explain my situation once again. So I'm still waiting on that. I just did that last week, the appeal. I would keep fighting. I'm waiting on that. In the meantime, look for whatever extra work that you can be doing. That's within walking distance. That's within bus pass distance. even a couple hundred extra dollars in your pocket is going to go a really really long way to make you feel a little bit more secure in all this.

1:34:28George Kamel:Even asking at work is there extra work I can do overtime come in on the weekends anything to bring in a couple extra hundred bucks that is breathing room for you. We're wishing you the best.

1:35:06Hey, 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.

1:36:17George Kamel:Thank you. choices and pick the right one for you. So you can go to that website, ramsysolutions.com slash agent for free, or click the link in the description if you're on YouTube or podcast. Christy is in Washington, D.C. up next. Christy, welcome to the show. Thank you. Thank you so much for having me, George and Jane. Absolutely. How can we help? Well, ultimately, our question is about paying for college for three kids. First, we want to thank you. We want to thank Total Money Makeover back in 2009. My husband and I paid off$92 ,000 in debt in 22 months. Wow. Amazing. That snowball. So thank you.

1:37:00That set us on a pretty good financial path, but not perfect. Because like I said, our question is about paying for college. We have three kids. One is in our second year of college, one is going to be a senior, one is a freshman, and we're doing, we're okay right now, but we're going to run out basically. So our question is ultimately, what's the best path? We have some investments and we want to know what the best path would be.

1:37:32George Kamel:All right. Are there any scholarships involved? Are they working? Tell us all the components that need to come together, aside from just you guys' cash? Sure. Our oldest is in, she'll be a sophomore. She did get a number, three scholarships, smaller scholarships, but basically we're paying almost full price. And our middle daughter did get a nice sports scholarship. She'll be a senior in high school. Okay. But we already know she has a nice sports scholarship, which will pay for a little over half, but it's out of state. So it's still going to be out of state. Yeah. OK. They're going to be around 20 per year.

1:38:18And then our son is a freshman in high school, kind of unknown. So we're just going like when we run the numbers, we're just like we're paying. We're in Virginia. We're going to pay, you know, basically full. we're just trying to be conservative and assume we're going to pay full price. Okay. So the biggest thing, the biggest thing here is college choice, right? So going out of state, although there's a scholarship there, that's a big, that's a big deal. And so I'd want to know, are there any other schools offering anything, you know, cause once you have, as an athlete, I can tell you, once you have one school, it kind of does kind of open up the doors, uh, with some other schools of the same stature.

1:38:58So I would be looking into that. Okay. And then the other thing is... We are in state nothing as of now. Okay. Keep looking because if she's also a good student, she might find that she can get academic schools and then walk on to the team that she wants to do. I had that option too. So if sports is a thing, but she's also smart, I think there might be other ways you can play that to where she can still play, still have better scholarships and be in state.

1:39:24George Kamel:because if in-state is 15 a year and you're paying full price that's still cheaper than you're half off out of state school right and i gotta say this when it comes to sports if she stops playing she can lose her scholarship like if she goes does freshman year she's like mom it's too much i or i hate the team i hate the coach whatever it doesn't play now she doesn't have any money and she's in an out-of-state school so i just want to make all those things there now with the freshmen coming up obviously we need to start looking at maybe can we do community college first and do those gen eds there.

1:39:56Right. So I think there's some things that we can tweak with the senior and with the freshmen so that we're not spending way more than we need to. And we won't run out of money as quickly. And then there's another part where it's like, can they work a little bit? Can they start saving up a little bit to put towards this and have some skin in the game as well? Yes. And they, and they actually are, they Good. Actually, all three have jobs. Okay, good.

1:40:21George Kamel:So how much do you guys have that you could utilize that is non-retirement money? Okay, so well, that's our question. So long story short, after we did our debt snowball, we're in a good financial position. We moved from Connecticut to Virginia, and the house we bought was a foreclosure because it was a good deal. We fixed it up. We did pretty well on it. And building our dream home became possible because of that. And so what we did was kind of Ramsey inspired, not kind of, totally Ramsey inspired. We sold the house that we had fixed up and we moved with the three. They were really little then, so it was much easier, but we moved into a two bedroom condo while we built our dream home.

1:41:09And this seems like a long story to tell us something simple how much do you have christy not that we don't want to hear it but for college

1:41:19George Kamel:just in general because we can just look at your assets and go okay how much do you have that is non-retirement that we have access to that could be stocks that could be savings whatever it is well um could you sell a property is that what you're getting at well yes that's kind of what i was getting at the condo that we lived in we kept and we have rented for the last 11 years It's been wonderful. Great investment. It is worth$415 ,000, and we owe$130 ,000 on it. Okay. And so our question is, should we sell that condo? And basically, I mean, we would have more than enough to pay for college at that point.

1:41:58That'd be a college fund.

1:41:59George Kamel:Uh-huh. You'll walk away with, like,$250 ,000. That becomes the college fund. Right. Or it's been a very good investment. Where's the condo? Is it even in Virginia? Right nearby us. Oh, it's by you. Okay. What is it cash flow after all expenses and the mortgage is paid, all of that? We get about$1 ,000 a month. Okay. Where is that money going right now? To college. Okay. So when you say to college, where is the current college savings? 529s. Great. How much is in the 529s across all of them? Okay. After we paid for our first year of our first daughter, we are down to about$20 left. left and that will get us through that plus what we're putting in we're we're putting in the thousand from the condo plus from our monthly budget another thousand so between the two we can pay for another full year and then our second daughter goes in and we can get about halfway through that year and then we're going to run out of that 529 okay it almost feels like a bit of a no-brainer i think to me because knowing that there's two behind you that are coming i would you know and the condo is cool it's cash flowing it's not like it's like changing your life the thousand dollars a month but in many ways this is the college fund that you should have been building from the beginning yeah so i know you love it and now what you can see is hey this was kind of a secret blessing because this helped us cash flow college none of the kids are going to have student loans but that also means we need to reset the conversation with the kids that we're not about to walk into the mall and just buy whatever we want right we're going into this store with a shopping list.

1:43:38George Kamel:Here's what we can do. Here's what we're not going to get. Because if you give a kid carte blanche to go anywhere in the world, they're going to choose anywhere in the world. When you tell them, hey, we're going to cover four years at an in-state school, and you're going to work your tail off and apply for scholarships and grants. Now we're all in agreement on what the plan is. You guys set the budget ahead of time and make them align to the budget. Because my guess is you probably want to take some of this money and chuck it towards your current home, right? Get that paid off. And your freshman's not going to be happy about this because he saw the other siblings get to do whatever the flip they wanted right there's going to be a little bit it's not fair right why'd they get to go out of state yeah no i got you and and that's definitely we are we are already having those conversations yeah good and here's the math on this christy you sell that condo you pocket 250 in a high yield savings account even that'll net you about 700 bucks a month just from the interest off of that with no hassle, no landlording, plus your 250 principal.

1:44:37And then just take from that and pay as we go?

1:44:41George Kamel:Exactly. Now you could shovel a lot of that into the 529. It doesn't have a whole lot of time to grow and have the, you know, compound growth, but it's still nice to have that grow for the next four years for your high schooler. Right. And we get a tax, we do get in Virginia, a nice tax break. That's great. On top of the tax-free withdrawals for qualified education expenses. That's personally what I would do. And the 529 plan is great for that because there's no income limits. The contribution limits are virtually unlimited. And so that becomes your glorified college savings account, that condo.

1:45:12George Kamel:So I would grieve it to say goodbye to the condo, get rid of the renters as soon as you can and enjoy debt-free education for all three of those kiddos. It'll be worth it.

1:45:47George Kamel:Hey, George Camel here. We often talk about how being normal sucks when it comes to your money. But guess what? Normal isn't so great when it comes to your job either. Normal is staying in a job you hate, dreading Mondays, and working for people you don't even like. Sound familiar? Well, the good news is you can break free from normal because Ramsey Solutions is hiring, and we refuse to settle for the ordinary. In fact, we are anything but normal, and we are proud of it. And right now, we're hiring for technology, sales, marketing, writing, copy editing, and creative roles. So head over to RamseySolutions.com slash careers and apply today.

1:46:32George Kamel:Ask Ramsey is our free AI tool that's built and trained on proven Ramsey principles. And today we're going to break down one of the questions we received this week. Here it is. Why should I set aside 15 % to retirement before paying off my mortgage? I love this question. We get this a lot. And one of the reasons is compound interest is really time sensitive, right, guys? and your mortgage isn't going anywhere, but the time in the market is going somewhere. We want you to capitalize on that and spend as much time in the market as you can. A dollar invested today is worth far more than a dollar invested five years from now.

1:47:06So, so important there. And the truth is your mortgage has a fixed payoff date regardless of when you attack it extra hard. Of course, we want you to do that at some point, but...

1:47:16George Kamel:Yeah, because the thing is, if you just made minimum payments on your mortgage on a 15-year, it's gone in 15 years. Which is still way better. So we need to be investing because there's no guaranteed sort of fixed forced savings plan there like there is with your mortgage. That's right. So it is wise to do both and the Ramsey plan lets you do both. We recommend investing 15 % once you're debt free with an emergency fund. Any extra money you can put towards college or extra on the mortgage. And if you do it our way, you have a reasonable house payment, 25 % of take home, you'll have extra to do all of this stuff with.

1:47:50George Kamel:And then once the mortgage is paid off, you can invest 20, 30, 40, 50 % to your heart's delight and maximize your wealth. The problem is if you skip investing and you pay the mortgage faster, you arrive at a paid for house, which is kind of nice. But then your retirement is very thin and that doesn't feel very good either. So you're scrambling to catch up. So there's a way to do this, guys. And the Ramsey plan lets you do both. So check out Ask Ramsey. It'll walk you through your financial goals based on your specific situation. do it at RamseySolutions.com or you can use the link in the description if you're on podcast or YouTube.

1:48:22George Kamel:Braylon is in Austin, Texas up next. Braylon, welcome to the show. Hi, thank you so much for taking my call. My boyfriend loves this show and I've been debating back and forth on a life update, upgrade I would say. A car upgrade. Okay. Specifically. Tell us more. So I'm really wanting to upgrade to a luxury car. I do work in real estate so clients see my car from time to time. Right now, I drive a 2021 Toyota Camry, and there's quite nothing wrong with it, and I do not have a car payment, but I've had a really good year the last two years in real estate, and I'm wanting an upgrade, so I wanted to hear y 'all's thoughts.

1:49:04I want to know the number one driver. Is the number one driver, I have the money to do this and I earned it, or is the number one driver, I'm a real estate agent and I want people to think that I do really well, so I want to drive a really nice car? it's honestly split 50 50. Like when I get in a car, I want to feel like I'm in something really updated and I have worked really hard and I know I deserve that. Um, and there's a little bit of that too. Yeah. I do want people to know that they're well taken care of and you know, I'm a great real estate agent.

1:49:34George Kamel:Okay. What's this car going to cost? Around 70 K. And what do you make in a year? So far this year I've made 280. Whoa, good job. Thank you. Last year I did 428. So you didn't need the car to smash it at real estate. There's people driving luxury cars that suck at real estate. I just want to let you know that. You did it in spite of that. Good job. I don't want you to think that the car is the difference maker, that you're going to get clients. You're already doing it in your Camry. So clearly nobody's reaching out to you because of your cool car. That's what I'm trying to say. So I want to free you of that.

1:50:10George Kamel:No matter what car you drive, you're just a really good real estate agent who helps people. Yeah. The question is, do you have 70 ,000 saved? I, my net worth right now, my boyfriend does all my investing for me. So shout out Joe. He's listening right now. Did you say your boyfriend does all your investing for you? Yeah. Just as a guy or is he, uh, is he just like a finance nerd and he's like, hey, I'll get you set up. No, he just loves investing. He works in investment properties. And do you know how it's being invested or you're just like, here you go, Joe, you got it. I do. I'm sat next to him when he does it.

1:50:46He's teaching me. So I've got my friends too. Okay. I'm a little concerned, but let's move on to the next topic. So yeah, what is your net worth? My net worth is at$380 right now.

1:50:57George Kamel:Good job. Your total, okay. So where did all the money go? What do you mean? Because you said you made$428 last year, but your net worth is$380. We had some big purchases last year, I guess. I'm not quite sure, to be honest. Your net worth is$380, or you have$380 invested? I have three. No, my net worth is. I don't know. This would be a Joe question, to be honest. Well, that's why I wanted to make sure because I know Joe was helping you. Net worth is assets minus liabilities. He says my net worth is$380. I told him I was calling today. I was like asking him all these things. So you said we had big purchases.

1:51:34George Kamel:What does that mean? I bought him World Cup tickets for his birthday. Wow. But that's not. Okay. That shouldn't be. I mean, it's expensive, but to George's point, if you made four, you know, four something last year. Like, where did all that go? Say again? I had to pay taxes. Taxes. Yes, that's true. Okay, so let me ask you these questions. How much do you have in liquid cash?

1:52:02I'm not sure. See, this is why I don't like Joe doing this, because you need to know your numbers. If you have to go, I've got to ask Joe for how much I have in checking, we have a problem. Yeah.

1:52:13George Kamel:What is in your checking slash savings across those two? Probably around 70 right now in my checking. Okay. But then I have about 40, maybe 80 invested into Roth. 40 or 80? I'm writing on the numbers right now, and I don't have the sheet in front of me, but we have a sheet of it. Okay. Braylon yeah this is what I'm gonna say to you uh this is aside from the car I really want you to know you work really hard you're really good at your job you make a lot of money for a single individual you should know where all your dollars are especially if you're saying you want to buy a luxury vehicle one of the caveats to being able to to really spending that kind of money and feeling good about it is knowing that I am a keeper of the funds like I know how I'm spending my money I know where every dime is going.

1:53:01There's, you want that backing this purchase because that lets me know that you, not Joe, but you are a financially responsible adult. And so I want you to have that clarity on your numbers to feel really good about it. I don't want you to have to go to him and say, Joe, what do you think? I want you to be able to look at the number. You know what I'm saying? You deserve that with all the work you've put into this. Okay. And this is, this is new. Like, I just started this the last two years. So I am still learning. And I didn't learn. Like, no one taught me about money really growing up. Yes, I totally get it.

1:53:34I totally get it. He's the first one. And it is overwhelming, you know, working as much as I do and then having to learn about all this. But two years. We're in the process. But I'm going to push you on this. I'm going to push you on this. It doesn't take two years to do a budget and be able to look and say, here's how much I have in savings and here's how much I have in my checking. That doesn't take two years. I want you to know those numbers tonight.

1:53:53George Kamel:And you help people with numbers all day long in real estate. You know how much your clients have in savings, but you don't know how much you have. Okay, wait, he sent it to me. He's listening right now. Good old Joe. Okay, like in my checking, I have 50. Okay, good. In high yields, I have about five. That was a deduction because of tax. We had to move stuff over to pay. I obviously had a big chunk to pay on that. Robinhood is actually$300 ,000. $300 ,000 invested? Yes. Okay, I thought so. I thought that that was your retirement number. We're not going to touch invested money. So let's use future income.

1:54:29George Kamel:But here's the parameter. You're not going to buy a brand new car right now, even if you had$70 ,000 to spend on it. That was my question, too, is leasing, financing. What are your thoughts on that? No chance. No lease. You're going to pay cash, and you're going to buy a used luxury car. and it sounds like you've got maybe around 45 to spend because what i'd want for you if you said 50 and checking five and high yield savings and the rest is invested i'd be thinking okay i want three to six months of expenses that's liquid so i would move whatever six months of your expenses are into that high yield savings that's an emergency fund and then whatever is left that's kind of your car fund and i would separate the two open up a different high yield savings account called Car Fund.

1:55:15George Kamel:And once you have, let's say, 40, 50 grand in there, you go buy yourself a nice used luxury vehicle. So what kind of car are you looking at? I'm sure you already know exactly the make, model, and trim level. I really like the Mercedes GLC Coupes or the GLE Coupes. Listen, I like this for you. So that's 70 grand new, right? Yeah. Here's the good news. Mercedes go down in value heavily. So you can go buy a 2022 version of that. That's still super nice, low mileage, and you can go pay cash for that once you have the money. But you got to get your money in order. Right now, it's a mess. You make great money and you got nothing to show for it in savings.

1:55:54George Kamel:So let's get control of that before we start buying super nice things. Yeah. And we'll give you a copy of, we'll give you every dollar. We'll give you a copy of the Total Money Makeover. Read that. And you don't need Joe for that. You can do that on your own. And you should. Take a back seat, Joe. She's got this one.

1:56:24George Kamel:The problem with online investing advice? You hear so many different opinions and you're left wondering if you're even doing it right. And that's why we created Investing Essentials. Join me and Dave Ramsey at this two-night virtual event to learn Dave's playbook for investing and wealth planning. We'll break down 401ks, mutual funds, passing on wealth, and more. So join us September 1st and 2nd. Tickets start at$199. You can get yours today at ramsaysolutions.com slash events, or just click the link in the show notes.

1:57:08George Kamel:Our scripture of the day, Matthew 6, 26. Look at the birds of the air. They do not sow or reap or store away in barns, and yet your heavenly Father feeds them. Are you not much more valuable than they? Mary Kay Ash said, Aerodynamically, the bumblebee shouldn't be able to fly, but the bumblebee doesn't know it so it goes on flying anyway. Is that true? I didn't know. Is that true? I figured it must have the aerodynamics. Built in. You really think it's sitting there thinking about it? I don't think so. I don't know Mary-Kate. All right, I'll take it. It's an interesting thought. It's an interesting thought.

1:57:44George Kamel:I get the principle underneath it and I respect it. There we go. There we go. Speaking of which, Kay is in Houston, Texas. What's going on, Kay? hey thanks so much for taking my call today i appreciate it absolutely uh yeah so i am going through a divorce um after leaving an abusive marriage and i'm underwater every month and i'm sorry it's okay i have two kids two in ten months and i'm just trying to figure out how to manage all the costs coming at me It's a lot. So sorry, Kay. I'm about$5 ,000 in the hole a month after doing my budget. Once the divorce is finalized, I'll be okay. I'll be, like, right at where I need to be each month.

1:58:28But right now I'm having to cover my rent on my new apartment plus my old mortgage and the bills at my marital home. I had to move out of my house. Why are you having to do rent and mortgage? Is he paying anything to the mortgage? he pays half i'm just giving him half of everything right now that's what our county's standing orders require that i pay half of all of our bills until something else is

1:58:53George Kamel:in place so everything is 50 50 until the divorce is processed and final okay uh just until there's a temporary order in place so we're working on that with our attorneys but he's dragging his feet you know and making things drag out longer and getting more expensive is there a cap on it at yeah I'm hoping to have it set in September mid-September um so I'm hoping by mid-September I can get some clarity on like okay maybe I can stop paying the mortgage and stuff and then that would give me at least that um but at this point I'm just I just yeah okay who's got the kids I do I have them full-time okay so of the 5 ,000 that you're underwater tell us how much money that you have to your name that you can spend on the things that are not half of the bills uh like cash would have cash on hand yeah I mean is is is the income being split or is it just the expenses being split no so I it's just the expenses so we each like our income like I like I'm paying half of the mortgage on the website.

2:00:06Understood. But you don't get half of the income that you guys shared? No, no. So I actually make more than him, so I just stopped giving him money, essentially. Okay, so how much are you bringing in every month?

2:00:20George Kamel:How many do you get two paychecks or one paycheck? Yeah, I usually get two. I stop my retirement, so I'm getting$42.40 a month, or every two weeks, sorry. Okay. So I've got$8 ,400 a month. $8 ,400 a month. And then what is the mortgage costing you? You're half of it. $3 ,000. Wow. And then your rent? So right now my rent is$2 ,000 because I did a short-term lease, but I'm hoping that'll go down a little bit when I find something longer. Okay. So you've got$3 ,400 left after that, and then you still have all the bills to pay? Mm-hmm. And that's probably on his, on the house, let's see, it's$415 about, you know, that's average.

2:01:10And then on me, for water and internet and electricity, it's about$450 right now. But that was because, long story short, it should go down a little bit. Okay. Who's living at the house? I'm sorry?

2:01:24George Kamel:Who's living at the house right now? Is he still there? Just, yeah, just my spouse. That's it. Just your stuff? Just my spouse. Oh, your spouse. Okay. So I want to make sure I understand. Towards, aside from the mortgage, the other bills that you're on the hook for are$415 for the old house. And then$450 is your kind of utilities and bills for the apartment. Yes. And we have two car payments. Sorry. Okay. So one car payment, half of the car payment. And tell us what that is. So his is$750. So half is$750. And then my total car payment is$1 ,300. And I'm paying that on my own right now. Oh, my goodness.

2:02:06And why isn't yours part of the half split? Why are we splitting his car but not splitting your car if this is decided by your state? It hasn't been finalized yet. But the end, like hopefully by September, he will end up covering the home and his car. No, no, no. You said earlier that whatever the decree was said that you needed to pay. You guys had to split the household expenses, which sounds like included the cars. And I'm saying why only his car and not your car? Yes. So I was paying only half, and then he told me I needed to pay for my own car. Okay, so no, no, no. Either the state says. If you have to follow the law, so does he.

2:02:58George Kamel:Why does he get to decide right now? Yeah. No, that's a good call out. Because here's what I'm wondering. You said you're$5 ,000 in the hole, and you make$8 ,400 bringing in. That means your expenses are over$13 ,000 a month?

2:03:14Um, based on what I put in every dollar, that's what I was getting out. So what are the other, let's, okay, let's pretend the 1300, let's split that up now because let's, let's go ahead and do that and say, okay, yeah, we're both on 650 on that. Then what's the other major big ticket things that we're missing?

2:03:31George Kamel:Are there a bunch of other debts that aren't accounted for yet? No, I only have two cards in the house, the mortgage. There's only two debts. Oh, I have a credit card that I have currently, but I'm paying the minimums on that at the moment, which the minimum on that is$500 because that's where I've been putting my attorney fees. Okay. Is the car in your name only? And the loan? No, unfortunately it's not. Okay. Cause I'm trying to think of a way to get you some breathing room right now and selling that car is a one. But you should have, you should have breathing room. Cause if I go through everything that you told me and I take all this out, there's still$1 ,135 there.

2:04:10Now granted, We haven't done groceries yet, but I'm nowhere near. I am going to counseling regularly at this point. Okay. That's fair enough. Yeah. That's 800 bucks a month. 800 bucks. Right now. Okay. So now we're starting to get in the red. Sorry, daycare. That was the most important because I did not have that cost prior, but now I have to pay for daycare and he will not pay for half of it. But again, we did not have daycare before. But here's the thing. We're either going to play by what the state – if you have to do what the state says, he has to do what the state says. So it's your children.

2:04:48I'm going to get you to just take out daycare that I'd be paying towards that house.

2:04:53George Kamel:I would be talking to your attorney and saying he's not playing fair. He's not playing fair. And so it's on them to force him to play fair. It can't just be you texting him saying please pay. No, no. Absolutely. No, no. And that's what we're working on. So let's get with the attorney and then redo the budget based on what you actually have to cover. And that will give you at least a clear picture. And then 45 days from now, we're going to know. And in the meantime, I would be talking to my attorney to see what financial moves I can make legally to try to free up some breathing room. What I can sell, what I can move around.

2:05:25George Kamel:Because going five grand a hole in the hole every month is not going to work even for another month and a half. If you do what George said you should do, which is split everything and do it fair, you're going to be right at zero. You're not going to be far below, but you're going to be right at it. I do think counseling is really, really important for you. $800, though, right now is really, really high. I'd be trying to see what I can shave off there or even speak with them and say, hey. And sometimes even your insurance might cover partial or full. and so maybe go through them and see and maybe cut it down to two or three instead of four or five just things like that go through the entire budget and see what we can trim right now just to get by that's all we're trying to do is just break even yes and to your point go ahead go ahead i was going to say the things that i would if you've calculated this is my half this is the dollar amount for my half yeah how you want to allocate it to make sure that you're doing the most important priorities, I think you have the right to do that at this point, because if he doesn't pay his half of the mortgage, that's on him.

2:06:31If he doesn't pay his half of the car, that's on him, right? But you need to make sure the kids get to daycare, right? So I would prioritize it in that way.

2:06:40George Kamel:That puts this hour of the Ramsey Show in the books. Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.

2:06:54hearts.