We’re $100K in Debt and Living in a Camper

26:28And now you're questioning that. So you see, this is the exercise. And I'm glad you called us because we can be objective. We're not related to them. it sounds like to me that this is a bad investment okay here's the underlying fear you don't help them move forward they just get comfortable for a while while you get super resentful because you're helping them and you're really putting putting yourself out there paying for child care for a whole year all for them to not make any progress well now the relationship's gone you you've lost all respect for them and so until they are at a breaking point, until they have enough pain in their life that they're going, I guess we should put on that financial peace thing.

27:08We are running out of options here. Yeah. I don't know that they're ready for it yet. I agree. That reminds me, George, of the old phrase, when the student is ready, the teacher appears. And this is tough with family. So George, I don't know where you're at. I'm going to say, John, I would not help until they say that A, they want help. And because they acknowledge they need help. And I think those are your two boundaries. And again, I would run through a similar exercise like I just walked you through. And my friend, you answered your own question. And I know it's a tough situation. I hate that.

27:41But you guys got your own financial journey. You got$38 ,000 to pay off. Let's go walk the baby steps, continue to do what you've been doing. Let's get out of that situation, make your life better, and let the chips fall where they fall with other people. Let's go to Jonathan next, who is in Fairfax, Virginia. Jonathan, how can we help today? Hi, long-time listener, first-time caller. My dad, actually, he's really a big fan of the show. And right now I've got a little question about how to find housing at my current stage of life. I just graduated college about two years ago, and I've been working as an RN for about a year and a half.

28:21I'm about to get a raise, and I'm still looking around, trying to find good housing without breaking the bank and just like being able to save continuously after that. And it just seems like a really big struggle for me right now. Give us some real numbers. I know the Northern Virginia area, if you're in Fairfax area, I know that area, that's extremely expensive place to live. Give us the numbers for George and I, what you're looking at for a rent. So honestly, I'd take, I'd take really anything. I'm really trying to reduce my commute as well though and um in the fairfax fair oak specific area which is where my hospital is it's around 1500 at base price as far as i've seen i've asked a few realtors but it comes to about there what have you been paying in this two years since you've been out of school so i've actually just been staying at home um my dad's very gracious he's allowed me to stay at home for 200 a month um additionally a few other utilities in there but what's your income now and you also told us that you're about ready to get a raise.

29:21So give us those two numbers, where you are now and then what your new raise will look like. Right now, I believe it's 90 a year. And further than that, in about a month and a half, I think it goes up to probably 93, 94. Do you have any debt payments? I do not, no. And you're worried about$1 ,500 a month? Just a little bit. Well, compared to 200, sure. But that's a false reality. Yeah, George is in the middle of this stuff. George, what do you think about$1 ,500 a month for this guy? Yeah, I mean, if you're taking home about$6 ,000 a month,$1 ,500 is right on the mark. We tell people 25 % of your after-tax income is what you want to stay in for housing, whether it's rent or a mortgage.

30:05Okay. And here's the other thing. That's for you living alone, right? Yeah, here we go. Tell him, George. Can I tell you? I don't want to pull out, you know, like I'm a pioneer woman or something, but I had roommates all the way up until I was married because I couldn't afford an apartment on my own. but you can but if we've already established you can afford it but to george's point if if it gives you a stomach problems fine if it's two grand for a two-bedroom and now your rent's a thousand bucks you'd feel a little better wouldn't you and you're splitting utilities as well i'd definitely love you if i could find something but you're right you're right i mean facebook groups all over for roommate finders and apps and ask around to your friends i mean you got young guys you work with probably.

30:47And so that's, that's, you got to put a little effort. You know where I'm at, George, on this. What's that? You've proven that he's fine financially. He's got a great upward path. He's got no debt. You know what? This is quality of life. Jonathan, I think you've got to focus on how much life is going to be better, not commuting way out into Fairfax. I know what that traffic is like. But it's scary to fly the coop, Ken. He's comfy. But once you start thinking about not driving in the seventh level of hell every day, there's a really nice trade-off. Life is about trade-offs, George. That's right.

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32:59All right, let's go to Kathy, who's joining us in Minneapolis. Kathy, how can we help? Hi, my husband refinanced our car, and now we have a 25 % APR, and I'm wondering what we should do. Oof. Oh, boy. What caused this refinance? So we had— What was the original APR? The original was 14, and he was trying to get money to pay some things and decided to take out$3 ,000 on top of the car loan, and that's what happened. Yikes. Why would he do that inside of the car loan? There's so many ways to get$3 ,000, even though it's a terrible idea to go into debt for any of it. But why refinance the car loan to get$3 ,000 out?

33:50i think because it was the fast well so he had originally applied for a personal loan but his credit wasn't very good and so uh they told him that he could do it through the car loan as like a secured i don't know yeah it's a secure debt he didn't involve me in the so they go if this guy can't pay we get a car out of it so we're willing to do it oh and by the way his credit shot so the apr is 25 because he's a risky borrower so i want to dig here because you're you laid it out for us very clearly and you said, what do we do? Is, is we involved here or is it just you? Cause it sounds like he made a really desperate move.

34:28Yes, he did. And it is, we involved. Um, but yeah, he, I wasn't included in that decision. So. Yeah. But he's now going, okay. Uh, I, I screwed up and I need some advice. Okay. All right. Any other debt? Because that helps us with this answer. Yeah. We have a credit card debt, student loan debt, personal loan. What's the total of all the debts?

35:00It's about, oh gosh, like just under, let's see, like$70 ,000. Okay. What do you guys make a year as a household? About$70 ,000. Wow. Are you guys both working full-time? No, I'm a stay-at-home mom. Okay, so he's pulling in 70. Yes, and 13 and 1 for the ages. You just got restarted again. Yep. All right, so I have to ask, because I think this is this kind of level of intensity, are there any type of skills, work experience that you have that would allow you to do some work from home? I know the one-year-old is, that's a full-time job, don't want to minimize that in any way. However, you got 24 hours in a day just like everybody else.

35:52Is that even possible, and what do you think you could do to make some money? Yes, so it is possible. I actually just finished school, so I'm going to be pursuing something hopefully from home. I also homeschool, so there's that as well. Is that going to be possible if you're working full-time? Probably not full-time. I'm hoping to find something part-time from home. What's your degree in and what will the job be that you're hoping for? Holistic wellness and I'm also certified in personal training, so something with personal training and health and wellness. So like your private coaching for nutrition, wellness.

36:38Okay, all of that. And that's a little more flexible. You can kind of do that on your own schedule. Well, I will point out you have to go get clients. That's a whole different ballgame when you're doing it for yourself. So I'm going to just point that out that that is difficult, not saying you can't do it, but I would give yourself some realistic goals. And if in a month or two or three months we're not signing up any clients, not getting anybody interested, you need to work for somebody else. and that's just a reality right now um you know if you guys got to bring in more income do you have any savings at all no what's left on the car balance after this refinance so he he just refinanced it so it's sitting around i think 17 18 000 okay what is the vehicle worth private party value?

37:297 ,200. Okay. So we're 10 grand underwater. So there's our number. If we want to get out from under this 25 % APR, which is going to cause the balance to balloon if we're not attacking it, then we need to get out from under it by creating this 10 grand, either by saving future income or taking out a loan from a credit union, which I'm guessing is not an option because he's tried that and his credit is shot. Is your credit shot as well? Are you tied to this? No. No, I'm not. I was on the original loan, but when he refinanced, I was taken off, I guess. Okay. I would see. Now, it's going to be tough because you don't have income.

38:06And so I don't know if they'll look at the whole picture if you're the one taking out the loan in your name. They're not going to allow him to be a co-signer, I don't think. But if you can go to your local credit union and get a loan for the difference, that at least gets you out from under this. Is there another vehicle that you guys can use right now? No. This is your one car? Yep. Okay. Well, the other option is you attack it with a vengeance. I mean, having an$18 ,000 worth of vehicles making$70 ,000 is not the problem. The problem is the behavior that got us here, adding to the pile, going back into debt, crazy interest rates, a lot of desperation.

38:40And it sounds like a lot of this was done without any teamwork. It was just kind of him on his own out of desperation and you were an unwilling accomplice? Or did you know about all this? Yep. No, I didn't know until after it was done. So the new loan, George, is$17 ,000? $17 ,000,$18 ,000 left on the loan at 25%. All right, so what does he do for a living? He drives garbage trucks. Is he handy? Yeah. I'm telling you right now, he's the one. Now, you've already said what you were going to do. And so if he were on the phone to be going, hey, buddy, you did this, you ought to feel a massive burden.

39:20I'm sure he does. but outside of driving that garbage truck if he's handy he's working in a warehouse he's doing whatever he can 25 an hour whatever he can he can haul just work in the neighborhood i tell you what the one-year-old needs you and i say this not knocking him but saying this as a father of three for the next year the one-year-old doesn't really need him that much he needs to be working and the truth is is he doesn't even work for a year it's like i would be circling eighteen $18 ,000 if I were your husband. And I would be going, how quickly can I make$18 ,000 outside of my$70 ,000 job?

39:54George, that would be my intensity. You agree and disagree on that? Yeah. I mean, does that change their life initially? Gets us out from underneath that massively bad loan that's just putting them in quicksand? Yeah. When your debt is the same as your income, I see there's a big problem here. Now, if your debt was 140 grand and you got 70, we could solve this within 18 to 24 months. And so what that tells me is we need to get aggressive, getting this income up. And that might be him getting two more jobs. That might be you getting a full-time job. And we put the kids in school, daycare, whatever we need to do right now to solve this crisis.

40:28And that's what it is. It's a crisis. That's right. But Kathy, you guys can get out of this, but it's, it's both of you. It's two points you want you to walk away with on this call. Both of you have to work more and make more. And both of you have got to be super aligned on a budget that allows for no extra spending on anything other than just the four walls. You got it? Got it. You up for it? Yep. Yeah. Okay. Game on. Because this is doable. George, what's your calculation if they were to do that? And I know you don't know. If they get the income up. Yeah. I'm saying if they get the income up.

41:05Two and a half to three years. If they stay status quo and try to do it with their current income, I think this would take four to five years. Yeah. And the balances would just grow with this level of interest. I mean, the credit cards are high interest. The car is high interest. And who knows about the personal loan and student loans? But there is debt surrounding us right now. And so we've got to get on that debt snowball. We've got to get the spending down. We're going to make some deep sacrifices right now. In your bestselling book, Breaking Free from Broke, you write a lot about traps. Of course, you coach, you sit here and co-host the show all the time.

41:37I think this is important. What is happening? What is the emotional trap that causes a guy like this to take such a crazy, desperate loan for only$3 ,000? What is happening? What do you know? Well, it starts with, I can afford the payment on this one thing. And while the student loan doesn't invest them in my future, and while the person alone will knock that out fast. And so it's a lot of good intentions and they're a little bit delusional and starry-eyed about the fact they can carry this. And then a spouse wants to stay home and they go, well, yeah, that's a very noble goal. You got to stay home.

42:12We'll figure it out. And then desperation leads to refinancing the car loan. And so it's not one thing. It is death by a thousand cuts that got us there and it's death by a thousand cuts that's going to get us out. And it's much easier to go into debt than it is to get out. That's the hard truth. The dealership will always be happy to refinance at 25 % APR. And so you're going to have to hustle. Both of you need to be a team, maybe for the first time in your marriage, to clean this up.

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44:20Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. Alongside George Camel, I'm Ken Coleman. Excited to have you with us. The phone number to jump in today, 888-825-5225. Georgia, take lead on your money questions. I'll take lead on your winning at work. If you're feeling stuck, a lack of balance in your life, feeling burned out, that's going to affect all your money stuff, too. So we can combine any of those calls. We'd love to hear from you. Let's start it off with Sabrina, who joins us in Atlanta, Georgia. Sabrina, how can we help? Hi, thank you for taking my call. So I'm a single mom.

45:00I had a retirement and a home and got scammed out of my retirement from my ex. He said he'd be in, I could make more money on investments and stocks. Now he was able to do that. And I pulled out 85K, which of course I had to pay a penalty. I'm 54 years old currently. recently and so now I'm basically starting from scratch. I have some, sold my home so I have some money saved and I'm just trying to figure out where I need to go from here. I do have a special needs child and I just want to make the right decisions going forward and really, you know building for my retirement because I am you know 54.

45:56How much do you have saved off of the sale of the home? So I had to pay a lot of debt back because my ex was a squatter for a year and a half in the home. So 35 ,000 in a CD if I dump that in a CD that matures in March. my high yield I put$10 ,000 in a high yield savings account and then in another savings it's$1 ,200 and then I have some debt How much debt do you have left? So$6 ,500 in credit card my car $13 ,000 it's worth$10 ,000 I got it during the pandemic so it's a little upside down um what's that before we go forward what's the car payment on that uh 486 a month yes let's stop right there and it's and it's 96 000 miles and i've already in the last year i've dumped 8 500 in repairs yeah but i mean that's it's still that's a car that you know i'm just i'm gonna jump in right there george because of the money she's gotten savings, if we could pay that off, that saves you$486 a month immediately.

47:19You would feel that, yes or no? Yes. Okay. Keep going on the debts, but I just wanted to jump in. That is low-hanging fruit because you've got cash today to pay that off. George, you don't have any problem with that, do you? I like that move. The CD is maturing in March, so today you can knock out the credit cards with your high-yield savings. Okay. And then as soon as it matures, I would use$13 ,000 of it and knock out the car. What else do you have? I have an attorney's bill for$10 ,000. Okay. Anything else? Oh, I have a term life insurance. I only pay$360 ,000 a year. It ends in 2031, and it's for$200 ,000.

48:06so I didn't even know if I should even stop that. Do you have any kids? You said you're a single mom. I'm a single mom, special needs child, teenager. Yeah, you're going to need that money. If something were to happen to you, I mean, even though it's$200 ,000, that's still money that can be used to help take care of your child. And eventually, you're probably going to need a special needs trust. Well, that's part of the$10 ,000. Okay. 5K for the attorney is for the court case that I had or have currently. And the other 5K was to hire a wills and trust attorney to set a trust and will. Because I need to protect my son.

48:50And I just, that's a priority for me right now. It should be. I love that. You've got term life insurance. You've got a will and a trust. You're doing some good things here. and the good news is you have any other debt outside of that i heard the three okay so you've got 30k in debt and you've got 45 000 essentially liquid yes have you been debt-free in your adult life before my ex yes so why don't we call this a new slate and say this is post ex sabrina she's starting a new chapter she's got a lot of life ahead of her we're going to go into this thing completely debt-free with$15 ,000 in the bank.

49:31You hear me? Okay. Yes. Now that we have a foundation, now we can begin investing for the future and rebuilding what we've lost. How sure are you that that money is gone? Did he spend it? What did he do with this money?

49:49Well, I can't get that answer because I've tried. And as soon as I stood up to get an answer, it became from oh i went to stocks oh no i went into a real estate investments now he's telling the attorneys that um it that i agreed on putting it in a business and that business went defunct but i'm dumping money to get discovery and it's not happening and i don't want to dump any more money on the attorneys when i know i have to take care and this guy's a piece of work then i would move on and just start investing with your current income which how much are you making a year? So I had to take up a W-2 to stabilize in the last two years of this for cases.

50:33So I make 50K gross with the W-2 and then I have my own business that brings in 75K in gross, but I only pull about 20 to 30. Okay. So let's say you make 80 grand a year? Yes. Okay. So you will be in baby step four if you follow what we told you. Pay off the debt, park the 15K, call that your emergency fund. Maybe you want to add a little bit to it to get to three to six months of expenses, maybe six months since you're a single mom with a special needs kid. But 15%, that's 12 grand a year you would be investing. So we're going to do a thousand bucks a month from 54. And likely, the truth is you're going to have to work longer than you wanted to, right?

51:16To maybe, let's say, 68 or 70. Is that fair? Okay. And you're starting with zero in retirement, correct? Yes. Okay. You could have over half a million dollars from 54 to 70 investing that grand into mutual funds inside of retirement accounts. Okay. I'd love to know more about the business. You said you're grossing 75, you're only taking out 20 to 30. Does that mean that you're stocking away what we would call retained earnings or that's all you have to be able to take out as a net? um well i i'm a little funny on those numbers just just just so you know because i'm new in the business it's like my third year in the business okay um so i do uh i do like owner draws that are not consistent okay is the business fairly healthy though what i'm saying is is it mostly profit for you or is it running really tight?

52:17It's mostly profit for me because I don't have overhead. What's the business? Tell me in five seconds what the business is. Professional home organizer. I help people declutter and organize. Isn't that fascinating? You're the professional organizer and you don't have a grasp on your own numbers. Get yourself a good bookkeeper. I'm not chastising you, but I am saying you have it in you. You want to know those numbers because I see a great path. The reason I'm asking these questions As you grow that business, George, I see tremendous potential for you to grow. Scale that thing? To scale it, pay yourself more after you run through the advice George gave you.

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54:34All right, Brandon is up next in Oklahoma City. Brandon, how can we help you today? Hey, first of all, excited to be on. Thank you guys for having me. Sure. Okay, yeah. So I'm in an industry, I'm in the oil and gas industry, and the job volatility in what I do is it's up and down a lot. I'm on step two, pay off your debt using the debt snowball method. But I already have three to six months of expenses set back in savings, and I'm ready to start paying down on some of the debts outside of the mortgage. I'm just having trouble taking that leap because I've been through this this cyclical thing of working for a couple years and then the oil and gas market dies and you lose your job for a year and then it comes back and you make good money and then you lose your job and so I'm ready to jump in but I just wanted to know what you guys take was on it and and how you think I should move forward in that situation.

55:40Well, I have a question first before George coaches you on what to do. This has happened to you before in the oil and gas industry, this idea of where everything's hot, making great money, and then the market changes, I'm guessing. This has happened to you more than once or just once? This is my fourth run. Okay. So here's my question for you. What would need to change? What would need to be true having weathered this before? If this happens again, what would need to be true? What would the new reality need to be to where you could weather that storm? You tell us.

56:23So the new reality would need to be, I mean, I think we would need to be paid down to where it was just our mortgage. And it would be a lot easier to survive in between those and or move on to something else. and not get in and out of the industry itself. Have you gotten into any of this debt while in this industry? Yes. Okay, can I just poke a little bit and have some fun? You can ask me anything you want. If you're truly scared of volatility, why would you go into debt? Because debt is risk, and it robs your income. And so if you know this income might not be there, that in your brain, the risk factor was broken.

57:07And you just answered my question by saying the thing that would make it easier is that we only had a house payment. Right. And we've been in that position before. What happened? We decided to buy the lot that was connected to us, and we built an office here at our house and made some investments. We felt like we wanted to continue to work remote and do what we were doing at the time. So based on what I've heard, Brandon, you presented to George and I that you're afraid of using the cash you have stocked up to pay off your debt when what you should be afraid of is investing in a loft next to you, investing in other things.

57:54Do you see where the fear is misplaced? Yes. Yes. You're choosing which risk you want to keep. And we're telling you, if savings is peace, you're right. You are half right. Having the savings there gives you peace. The problem you're forgetting is that debt equals risk. And the key to permanent peace is getting rid of the debt. And I think you're a little comfortable because you got three to six months of expenses saved. Why work that much harder? Why sacrifice that much more? We would be okay if something happened for a little bit. And I think getting rid of that savings and putting it on the debt will light a fire under you and it will expose the reality of your situation.

58:31And again, I want to remind you, Brandon, your words. If you emptied out the savings today and paid off all debt and you get laid off, you said that you could weather it based on three other times you have experienced. So you were speaking from experience to George and I. Yeah. Correct? Yes. So were you telling us the truth? Yeah, I'm telling you the truth. I fluctuated in and out of the real estate market in real estate sales as a broker here between those times where I've been in oil and gas, and I've had success in that also. So here's the key factor. You're not scared of hard work. So if something were to happen and you didn't have the savings, you would go work your butt off to cover it and then get back on the plan, get back on the horse.

59:18Yeah, for sure. So let's get tactical. How much do you have in debt, consumer debt, and how much do you have in savings? Okay. So total debt's around$200 ,000. That's with the house. Skip the house. Put the mortgage aside. That's a baby step six item. Yeah. So outside of that, I have$30 ,000 on a business equity line of credit that's attached to an investment property we own. And then I have$20 ,000 in a lot loan. So it's a piece of land that's attached to our primary residence. All right. And then I have 20K in a home equity line of credit. All right. So we're looking at 70K out of the 200? Yeah, and we have about 40K in cash.

1:00:07Great. You're telling me you can knock out the lot loan and the HELOC today? Yes. Do it. Double dog dare you. And the other thing is all of this is tied to your property. So you're putting your house on the block triple right now because all of this has collateral, doesn't it? If you don't pay, that's how the HELOC works. Yeah. And so for a guy telling me that you're afraid of risk, you've taken a whole lot of risk on. Yeah. So knock both of those out. You got 30K left. Use your future income, which how much are you making as a household? Sounds like you guys make good money from the oil field.

1:00:46Yes. So I make about$120 ,000 when it's going. And my wife, she got laid off last year. She's a medical coder. She got laid off last year to AI, but she's back right now temporary, and she makes about$40 ,000 when she's working full-time. Great. So for both hustling, we're making$160 ,000. We got$30 ,000 left to pay down on the line of credit at that point for that business line of credit, which will get knocked out within months making 160. I'm talking less than six months. Yeah. And I've got one more question for you guys. I was going to ask, what are your thoughts on as I'm doing what I'm doing right now in oil and gas, I'm trying to bust back into the real estate market again.

1:01:30So I have something to transition back into when the oil and gas goes down again. What are your thoughts on that? My quick take is you really can't win at real estate part-time. And so if you're talking about being a real estate. So then I don't think that's smart unless that's your goal long term. So if that's what you want to do long term, let's go. But let's do it after we take care of what George, we got the present. We need to win and let's use what income we have right now to get out of debt and walk through baby step three and then be in baby step four. And then let's look at transitioning to whatever.

1:02:09That's one year from now. Do you see that? You pay off the two debts today, you got 30K left, that gets knocked out in six months, another six months for your fully funded emergency fund to stock back up. Now we've got a real foundation. That's actual financial peace. I like it. And so at that point, you have options, man. And I really like how you guys are driving me towards it. Yeah. Yeah, I appreciate that. Yeah, absolutely. Listen, you've been afraid of the wrong things. Okay. There's no fear walking out the plan George laid out for you. None. No fear. Okay. There's some hardship. There's some sacrifice.

1:02:42Right. But on the other side of that is, to George's point, if you want to go into real estate full-time, then after I got this debt done and I got a three to six month, and I'd go six months, by the way, and then I'd go all in on real estate. Because you've got to build up a pipeline, but you've got some experience, you've dabbled in it, it sounds like, before. But now when I hear real estate— Yeah, I've been full-time in it before. I'm hearing sales, not you investing. I'm hearing you're a realtor. Is that what I'm hearing? Yes, I'm a real estate broker. Oh, okay, broker. property that we have a property that we bought.

1:03:15Oh, I know. We heard. Invested in a commercial piece of property. Right. Well, real estate people famously have their risk meter broken and any cash they do have, they want to immediately deploy back into investments because I can make way more money in real estate. But then it leaves us in a lurch here. So I think Ken is right. You've misplaced the fear. Your fear right now is what if I have a$30 ,000 emergency and I don't have the savings? The true fear is you have$70 ,000 in debt that is tied to your home. That's the thing we should be attacking. And you'll get there in no time, man. You work hard.

1:03:46You make great money. We just got to retool some things and clean it up. A year from now, you'll be in a very different place.

1:04:12Thank you.

1:04:25Statistics show that half of Americans don't have enough life insurance or they don't have any at all. I don't understand this, John. Why don't people want to take care of their family? They think they're going to die or something? Well, I used to be one of those guys. I didn't even think about it. And one of my buddies said, hey, the only reason to not have life insurance is if you hate your wife and kids. And I immediately went and got term life insurance. That's a gut punch. And you're telling me for decades, Dave, I've sat across people who've lost a spouse. They've lost somebody important to them.

1:04:57Me too. They don't know what to do next. me too i mean you're gonna have a crisis here and you know you got two options while you're sitting and talking to a young widow she's concerned about how she's going to invest all this money properly and not mess this up or she's concerned how she's going to eat tomorrow that's exactly the two options and take care of your dadgum family term life insurance can replace income pay off debts cover funeral expenses so your family can actually have the opportunity to just be sad yeah to just miss you that's exactly what it's supposed to be It's saying I love you to your family.

1:05:28Term Life Insurance. Jeff Zander and the team at Zander Insurance makes it easy and affordable. I've used them personally for 25 years. They're the only people I trust. Go to Zander.com or call 800-356-4282.

1:06:01If you're working the baby steps, the best and fastest way to do it is by using EveryDollar. It's more than a budgeting app now. This is the entire plan that we teach. The baby steps, all of it, right in the middle of this world famous now app. Oh, it's so fun. Track your progress, get personalized recommendations and coaching, actual coaching for your situation. to help you free up more money. It's like having one of the Ramsey hosts with you every day, showing you the next right step. Start it for free. Just kick the tires. Download it now in the App Store or Google Play. Let's go to Carol in Denver now.

1:06:43Carol, how can we help you today? My question is, what are your thoughts about using AI in tax planning and preparation? oh that's a hard pass for me george what what got you here what made you go you know what i'm gonna let chat gpt handle this one um i was presented with a um document from the accounting firm requesting that i authorize ai to be used and um some of it would be overseas and i'm apprehensive about that. Oh, so you're going through an actual tax planning firm? Yes. Okay. They're just using, they're just sort of speeding up the process by using AI. And we're going to see this everywhere.

1:07:32Almost every organization is going to start using AI to help move things along, you know, reduce the amount of resources they need. And so that doesn't worry me as much. I thought you were just on your own trying to do tax planning with an AI, you know, tool yeah no no and it's it's the accounting as well because the accounting firm does the tax you know taxes and therefore would they be using an oversee entity to be able to help well you just need to ask you know this is here's the thing we preach all the time on on any trusted ramsey trusted service we want people to understand what the firm or the the that the person is doing for them.

1:08:15So they explain it to you to where you go, oh, okay. So if you have questions about that, okay, how is AI being used in the preparation of my taxes? You know, if overseas, what's going on? Just ask those questions. And somebody with great service who really cares about you and values you as a customer certainly has the heart of a teacher is going to have no problem answering those questions. But George is right. I'm not sure you're going to be going anywhere in this country or any other country with professional services that have a decent amount of clerical administrative work where AI is not going to be used.

1:08:52Okay. Thank you. Yeah, absolutely. Thanks for the call. That's a good question, George. Yeah. And if you're not comfortable with it, just go, no, thank you. And you can reach out to a tax pro and you can find one of those at RamseySolutions.com and you can ask them, hey, what role does AI play in the way you do tax planning? And if you don't like the answer, you can move along to someone who does it old school. Yeah. All right. Real quick, fun question for our next call. Are you scared of AI or are you excited for AI? I'm personally not scared. Okay, good. And I'm going to stick to the positives and how helpful it can be versus is it going to take over and destroy everything?

1:09:28Maybe. All right. But until then, I'm going to just live my life. And you're a guy that operates with a decent level of anxiety. So people should take that with a serious shaker of salt. That is true. But I'm also very pragmatic, and I like to be efficient. Yes. And I think AI can be a great tool when used properly. Technology does not scare George Campbell. Stephanie is up next in Detroit. Stephanie, how can we help you? Yeah, about five months ago, my uncle passed away. I'm so sorry. My husband is home. Okay. Yeah, thank you. when he passed away we wanted to sell the home because it was only a two-bedroom home and it's like 30 minutes away from my kid's school and not in the school district and since then we've had issues with property boundary lines and we've been working with a realtor and now since all this we've started to love the property and i'm wondering what is financially the best decision to do either sell the home or do renovations to make it a little bigger okay let's play this out you love the home and so you started thinking about making improvements what would be the future of that why in other words why make those improvements why do you love it it's on a lake okay so would this be a secondary home we would sell where we're living now and move into there that's exactly what i was getting at so now it comes down to okay uh the boundary issues you brought up there's been some challenges is that an is that something that's easy to navigate and you now have some clear direction on it or is it going to be a headache ongoing we're not sure we're still in the process of it well i can tell you just company now i wouldn't i wouldn't think about selling my current home and moving into uncle's home no matter how much i love it and how awesome the lake is if there were some boundary issues that scares me to death george i would get clarity on that before deciding anything.

1:11:27Here's the key question to ask, though. Would you buy this house today if it weren't inherited?

1:11:35Let's say you had the cash, you knew what it was worth, you could pay cash for it, and you'd see the same spot. Would you say probably not? Yeah, probably not. Why?

1:11:47In an area we wouldn't really go to because it's out of our kids' school district. Then how would you move there today?

1:11:58well the schools and the way to my husband's work okay but it'd be a pretty big commute for him to get to work for the kids to go to school it would be inconvenient for your life as it stands today yes yeah you just answered the question george asked it as plainly as you as he could you just said no i wouldn't buy it if my uncle didn't give it to us so based on that yeah and the boundary issues. I would solve the boundary issues so that we could sell it. The other piece of this, do you have financial goals where if you sold this house, it could really solve some other problems? Do you have any debt?

1:12:37Do you have a mortgage? We have debt. We actually live in a trailer and we have about$60 ,000 in debt. Is the long-term plan to live in a trailer? no okay what could this house sell for we were told about 150 to 200 000 okay so think about it this way is that all cash coming to you does have any debt in other words on the house well we have about 30 grand on the home what do you mean on the home and the mortgage for the trailer no no i'm talking about uncle's house It's paid for. Oh, no. It's paid for. Okay. Great. Okay. So if you could walk away with$200 ,000, pay off your$60 ,000 in debt, pay off the$30 ,000 on the trailer, you still have$110 ,000 left potentially for a down payment on a home?

1:13:28That will go up in value, unlike the trailer? Correct. Game changer. I'm doing that all day long versus taking a vacation home that you may or may not live in. You guys have some priorities right now. So I'm going to take this inheritance as a blessing that puts you guys on a very different path than the one you're on right now. Okay. Because the current path is not a great one. Can we all say that out loud? Yeah. We're$90 ,000 in debt. The trailer is going down in value, which means you're probably upside down on it. And we need some stability. And what your uncle did is a huge blessing to give you guys a different trajectory for your financial future and for your family tree.

1:14:12yes and maybe one day you do buy a house on the lake but right now if you guys had no debt you had plenty in savings and retirement you were on track to be multi-millionaires i'd say just keep it and for fun for now and maybe in the future you use it but you guys aren't in that place and so i would sell it absolutely and get rid of it as soon as you can and use that money to pay down your debt get a fully funded emergency fund and use the rest toward a down payment okay yeah you got a good plan. Do you have a good real estate pro on your team right now helping you solve all those? Yeah. I'm telling you, get that solved.

1:14:48Priority number one is to get whatever boundary issues, get all that clear so that you can list this house and then follow George's plan to a T. You guys are going to be living it up. What a great position to be in. So sad that you lost your uncle, but boy, did he bless you. We want to make sure you maximize this blessing, okay? All right. Thank you. Thank you for the call. I love reverse engineering it like that. Would you do this today on your own volition versus it falling in your lap? And if the answer is no, you got to go, all right, this isn't the move. Yeah, I love it. As much as you could justify it.

1:15:20Do your shark tank. I love when you do that. Oh, and for those reasons, I'm out.

1:15:48I love entrepreneurs. Don't forget, guys, I started my company on a card table myself. So I know what it's like to have people counting on you, your team, your family, not to mention your customers. And when you're the one signing the paychecks, you can't afford to fly blind. But I'll be honest, early on, one thing that nearly sunk us was wasting time with spreadsheets that didn't add up because business units didn't talk to each other. I finally told my team, just fix it. And they did. We got NetSuite. That was years ago. And we've never looked back. See, NetSuite isn't just for tech giants. It's built for growing businesses like yours.

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1:17:20All right, today's question of the day is brought to you by Why Refi? Defaulted private student loans do not fix themselves, but they can be fixed. Why Refi helps you by refinancing defaulted private student loans into a low fixed rate payment that fits your budget. So you can clean up the mess and move forward with a plan. Visit whyrefi.com slash Ramsey. That's why R E F Y dot com slash Ramsey. It may not be available in all states. Today's question comes from Colin in Georgia. My wife and I recently started the baby steps and are quickly paying off debt. We purchased a home two years ago with a 30 year mortgage.

1:17:57Once we pay off our debts, should we refinance ourselves to a 15-year mortgage? The mortgage is currently 25 % of our take-home. We can put extra money towards the mortgage once we get past baby step three. What would you suggest? This would be a more information needed situation. I agree. Because it's not that simple. Now, we love for people to get the 15-year mortgage, but if you're already in a 30, it's not a, yes, go do this today. You got to look at the interest rates and how much the refinance is going to cost you to find out how quickly you would break even. So if you would break even on this loan in six months, then sure, go for it.

1:18:33But if it's going to take a while to break even because of the current rates and the rate you currently have, it's okay to keep the 30 that you got and just pay extra like it's a 15 or even better like it's a 5 or 10 and just get out of that thing as soon as you can. But if you want to crunch the numbers, call up our friends at Churchill Mortgage. They'll be happy to run the numbers for you to tell you honestly, does this make sense for you right now? Yeah, love that. Good advice there. Thanks for the question. All right, we're going to go to Jesus in Dallas. And it looks like our note's telling me that he's got a gigantic car payment, George.

1:19:05It might give you a little indigestion. So I've got the fake Tums over here ready to go. So let's see how we can help out there. Jesus, tell us what your question is today. Hello, good afternoon, guys. Happy to be speaking to you guys this afternoon. My only question is, well, I have other questions that we have time for, but my main question is how can I get out of the car loan that I have? It's$34 ,000 in total. My monthly payment is$830 a month. and I recently got it evaluated for$14 ,750 and my bank is maybe federal credit union and I basically asked them if I could get a loan for the remaining balance so I can sell it and they denied me so I was kind of left at a loss.

1:20:05I don't know what to do next. And they're the ones that are holding the loan? No. Okay. No, yeah. All right. So you said you got it evaluated. What do you mean by that? Who told you the car is worth$14 ,000? Kelly Blue Book. I haven't taken it to any place where they physically looked at it, but I put all the details. You're saying the private party value was$14 ,750. Yeah, if that's a good number to basically trust Kelly Blue Book. Yeah, I was just making sure it wasn't the trade-in value, which is always going to be much lower. Okay. Yeah, yeah. So you are$20 ,000 underwater. What other debt do you have?

1:20:46I have no other debt. I've been listening to you guys for close to a year now, and I managed to pay off my credit cards. I just have this car loan now. What do you make? $77 ,000 a year, and I'm a diesel mechanic, so my monthly changes are either under or higher, but that's what my salary is. Do you have options for not just regular overtime with your company, but freelancing, if you will, given your unique skills? I definitely thought about it, but I have not explored it because I'm so invested into where I work. I just work so much over here. How much is a lot? like 55 to 60 hours 60 hours would be like an extreme but normally 50 hours how much were you putting away towards the credit cards while you were paying them off what was the the most amount out of your monthly budget that you were putting on that debt on the credit cards yeah i i kind of wasn't putting i was just doing the snowball and when i at the end of the month um so it was the way I do it, I save to pay off the month first, and then anything extra I put towards the cards.

1:22:08And I just did that. Anything extra I had, I just throw it at the cards. Yeah, so what was the average amount extra that you had to throw at debt per month? A thousand? Two thousand? Thirteen? Thirteen hundred at the end of the month, yeah. Okay. Could you do more today now that those payments are gone? Yeah. Okay. I could not that much more. Maybe like fifteen, sixteen hundred a month. Great. So here's your options. Number one, you get a loan for the difference, which you've tried one place. They said no. You can always try a different place. The other option is saving the difference in cash in order to clear the title and sell it.

1:22:44Now, you still need more money to then go buy a different car, right? That's your only vehicle? Yeah. Well, I bought my fiancée a cash car here recently, like a week ago. Why'd you buy her a car? uh because uh i'm the reserves military and i do a lot of driving and when i'm away she has no way of getting to work or and also an important um part of information is we're expecting a baby girl oh wow congrats thank you so um for the expected days that i'm supposed to leave i leave like five days at a given time. Okay. So do you need two cars right now or could you survive as a one-car family? We can survive.

1:23:30We've been doing one car since we've known each other. Okay. So here's your other options and what I'll suggest. You can either save up the 20K real fast, aggressively. Like, let's say if you can save up 2K a month, we got the 20K in 10 months to get rid of this. Or you just pay the car off aggressively and keep it. Now, it's a lot of your world, but you've rolled over negative equity. So it's not a true picture because generally we say don't let your, you know, the total amount of vehicles, things with motors and wheels add up to more than half of your annual income. And with her cash car, you're probably there and we're a little bit over.

1:24:05But that's your other option. If you want to keep it, you pay it off aggressively. That's 34 grand. If you can put, you know, 1600 bucks a month, it's going to take a while, but you could do it. But because you only need one car, I like the plan of you throwing two or three grand a month of this thing and being done before the end of the year to get rid of it? Right. To get out from under this line. That's probably a good idea and everything. But what? But given that our baby girl is coming here late April, early May, I'm doing the stork mode. Got it. You're stacking up cash. Okay. How much do you have saved right now?

1:24:44I have about$3 ,500 right now, and I expect to have$7 ,000 by the time she's born. When are you guys getting married so that we can put those incomes together? So, well, we would love to get married immediately, but my mother, it's a situation with an immigration case, and the lawyers basically said it's not a good idea to get married yet. I really didn't challenge it from there. I just kind of said, okay. Because of your mother? Because of my mom. In an immigration case with her, I'm trying to get her residency, I believe, or citizenship. But what does that have to do with you two getting married?

1:25:32Well, I guess I don't know because I never challenged the state, and I didn't ask, why can't we? Okay. Well, I'll give you the math on it. Let's say you save up babies home and healthy. That gives you a pile of cash you can throw at the debt. Within six months after that, you could have the 20 grand saved to cover the difference for the loan and then sell it and clear the title. And then you go down to one car and then with our future money, now we're saving up to get a second car if you need one, or we're just stacking up the emergency fund if you're out of debt at that point. okay yeah there's no shortcuts here do not go further into debt the only reason i tell you to take out a loan from a credit union is if you can go down in debt and then get out of that aggressively yeah george i'm wondering why i did not hear you recommend this why not have a third option where he sells the car and gets the max he can get for it because it's going down in value yeah if they can truly survive off of one car which is her cash car why not well because when you're underwater you don't have a clean title and so without a clean title he's not going to be able to hand that title over to the person buying it.

1:26:31There you go. And so there's a lien against the vehicle with the lender. And so to clear that, you got to go to the bank, have the money, the difference. It's not as clean as it sounds. To pay off the loan. Yeah. So it's a process. And that's the problem. You can't be underwater on a car you pay cash for. And it's one of the best reasons to never go into debt for a car on top of many others.

1:27:20Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. I'm Ken Coleman. George Campbell is alongside. We're here for you. 888-825-5225. 888-825-5225. All right, let's go to Ryan in Salt Lake City. Ryan, how can we help today? Hey, how's it going today? Good, how are you? I'm looking at, I'm doing very well. I was just wanting to ask you what I would have to do at 28 years old this February to retire at 40 years old. Okay, you got George over here who does his magical computations. Yeah, we can talk about how to do it, and then I want Ken to talk about should you do it. I like that.

1:28:04What caused this goal? Well, I'm trying to go against the grain, and I do not want to work until I'm past 60. And I believe I have the income in order to do that and kind of break the streak and retire at 40. Okay. Okay. Well, there's a lot of variables we don't know, but let's start with what you make today. So last year I made$235 ,000. Awesome. And I'm projected this year, you know, that was with some bonuses last year. My pre-tax is supposed to be around$206 ,000 to$210 ,000 this year. Great. So we'll mark it a little over$200 ,000. About$147 ,000. Are you single? I'm married with two children.

1:28:52Okay. And that's the household income? Is your spouse at home? She runs our company that we opened a few years ago. She does consulting for construction companies, but that's her thing. I got out of the company when I went from 1099 to being a W-2. Okay. So is that additional income or is that part of the 235? That's not including my income. Okay. She's part-time and doesn't get, usually maybe get 10 hours a week or so, but I'm not factoring that in. All right. So what is your, do you have a goal in mind of how much you need to have saved in order to accomplish this to be work optional? I'd like to have at least$7 ,000 coming in a month,$7 ,000 to$9 ,000 for retirement every single month.

1:29:41Okay. Okay. So you're probably looking at at least$1.5 million or something sitting in an account that's invested heavily in equities and stocks. And so do you have anything saved right now or invested? I have$5 ,000 in Schwab and$15 ,000 in savings, and my checking account usually floats around$8 ,000. I just got myself out of a ton of debt. So right now is my time to kind of start the investment process in order to do the retirement. And I have two loans that I'm still working on. Okay, so let's walk through the process that I would personally walk through if this was my goal, which would be to pay off all of my debt.

1:30:25And that means liquidating most of the savings to do that, to speed this up, getting a fully funded emergency fund of three to six months. which if you're saying what's your burn rate every month right now, how much do you need to get by? Right now,$5 ,704.83. Okay. So let's call it$35 ,000 as a six-month emergency fund for you guys. So that's your next goal. Okay. Then we need to be investing 15 % for retirement because we want to take advantage of any tax-advantaged accounts we can first. And so if you've got a match, let's start there. Roth accounts, that's a great move there for tax-free growth, and then traditional accounts.

1:31:01then beyond that beyond the 15 if you wanted to put some money away in a brokerage account like is what you're that's what you're talking about with the schwab account yes and that's that epsx okay then if you want to put money there for it to grow and you put you know 50 grand a year let's say that would get you about 1.1 in 12 years so you'd be a little off the mark so then you you know, let's ratchet it up to 70. Well, I could see to 1.6. The other factor here is your mortgage. Are you guys, you guys own? Yes. My total housing is about 2828 and that's including 2123 mortgage, wifi, water, trash, and all that.

1:31:43Okay. What's left on the mortgage? We're at 338. Okay. I personally would attack the mortgage first before I was doing additional into the brokerage account. And you'll have time. What would that be? What's that? What would the benefit of attacking the mortgage first be rather than maybe get rid of a car payment, which is less than the mortgage? Oh, no, you need to attack the consumer debt first. Hear me say that. So we talked about knocking out the consumer debt, getting an emergency fund, investing 15%, then anything extra. We're putting some toward college, paying off the mortgage, which means we're probably going to be delaying this plan.

1:32:25okay once the house is paid off now we can invest beyond the 15 put money into the brokerage account because here's the thing if you got rid of that mortgage payment it really reduces how much you actually need in that fountain doesn't it i have something to throw at you okay so if my if my housing is 2 ,828 a month but my vehicles is 2265 a month i can i can pretty much free up the same amount if I paid off the vehicles a lot quicker than the house because it's not that big of a number. Yeah, dude, I'm telling you, follow the baby steps. Consumer debt goes first. Did you miss that part? So the cars are going to get paid off ASAP.

1:33:07Then the emergency fund gets stacked up. Then you start investing 15 % into retirement accounts, then some money to college, then we throw the money at the mortgage. So I'm not telling you to pay off the mortgage before your cars. Gotcha. And by the way, a guy who wants to retire early should not be carrying$2 ,200 in car loans. Right. I agree with that. Okay. Just want to make sure because that is flying in the face of your stated goal of financial freedom. Now, I want Ken to quickly hit on, should you do this? Because I have followed the FIRE movement and seen what's happening over there, and it frankly worries me.

1:33:40Yeah. Are you a fan of the financially independent retire early? That's the FIRE movement? uh i'm not i'm not aware of that yeah okay well here's what we found and this is all documented the guy who started who's credited with starting this movement the idea was work like an absolute maniac don't live life don't enjoy anything until you're 40 and you stack stack stack stack stack and the guy who actually is considered the founder of this actually went back to work uh two or three years into it uh for a couple of reasons number one he thought in his mind that he had not actually saved enough, given how the cost of college was going up.

1:34:19That was one of his stated concerns. Also, the guy was bored out of his skull. And, you know, there's nothing wrong with retiring. And I love, by the way, whenever I say this, people always come at me in the comments and come at me because I'm not going to be in there. George will tell me. I'll fill them in. I'm not saying that there aren't certain people who can retire at any age and never work at any life and be as happy as a clam, fishing, hunting, whatever. But what I am saying is, is that we know from research that it has negative effects on us because there is this built in desire in our spirit, in our soul to make a contribution.

1:35:00So I'm not saying you got to work 40 hours a week until the day you fall over. I am saying that it is, it is proven that it is better for us mentally, emotionally and physically to have some type of purpose outside of just play uh as we age right so but i will tell you i love that you called us and threw it out there but i gotta tell you after george ran those umbers out you've got a ways to go yeah based on this after you follow everything i've told you you still have to stack you still need to stack a hundred grand away in that account for a decade for this to even make sense so the reason i bring that up is not to discourage you, but to encourage you to have a more realistic goal.

1:35:41And a healthier one. And a healthier one so that we can actually reach it. Because I think you've created a mountain in your mind that's not climbable given your financial realities. But if you do what George said, you're going to be a very happy man and can, in fact, retire much earlier than most.

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1:37:18All right, folks, if you have kicked your debt to the curb, you deserve to celebrate. Where do they deserve to celebrate, George? Where would you recommend that somebody who beat all their debt, they got it out of their life, how would you think they might you know celebrate that i think somewhere warm somewhere tropical and somewhere with dave ramsey and the ramsey personalities how about the caribbean i'll go there with dave you me and all the other ramsey personalities take me there want to go there all right it's called the live like no one else cruise folks it's coming back uh after much popular demand and i'm not reading from any notes here this is a fact extemporaneous those folks loved it who went on it before and uh so my my my this is going to sell out way faster because now everybody knows how great it is and i gotta tell you um i'm not a cruise guy george traditionally well i don't like being on the boat i like the clothes that you would wear on the attire is what i like the boat attire and i like the caribbean well this clue this cruise was great and so here we do here we go we're gonna roll it back um i think they say run it back not roll it back run it it's your show ken march 14th through 21 march 14th through 21 2027 that's next year if you're looking at your calendars uh in the bahamas how about jamaica george do i want to take you was that my cue it was okay uh the grand cayman and uh cozumel uh cabins are limited save up to $300 when you book by February 7th.

1:38:52So, hey, those of you who haven't made any plans, are you kidding me? Next March, you got cash. You want to save$300? You got to do it before February 7th. Click the link in the show notes or go to RamseySolutions.com slash events to book your cabin. I am looking forward to this. I did not think it was going to be as amazing as it was. The ship was great. The people, our fans are just amazing. It was electric energy. The buffets were next level. And I will tell you, there was, in fact, a pickleball court on top of the ship. So if you're a pickleball enthusiast - And that is where you can find Ken.

1:39:26We had a lot of tournaments going on. They wore you out, man. You were up there for like seven hours. And people were like, no, no, no, you're not going anywhere, Ken. I want to play you. There's a shot right there with the headband - Oh, my gosh. And the lettuce, as the kids call my hair, flowing on top of the ship. It's on the top deck, George. That's a bold move to show off your legs, Ken. Yeah. With those chicken legs you got down there. Well, there's nothing to be ashamed of. They're just little. That's all it is. So we'd love to see you on the cruise. And I wear, by the way, on stage. Did you like my attire?

1:39:56I really went with a cruise ship theme last year. All of those white pants you own finally came in handy. Well, lots of linen. A lot of loafers. Yeah, a lot of loafers. All right. Carol knows what we're talking about somewhere in sunny Florida. Carol, how can we help you today? Thanks for taking my call. You bet. What's going on? my husband and I are both going to be turning 65 this year, and we want to retire at the end of the year. And we're trying to decide if we should pay off our house or not. And if so, where we should pull the money from. We don't have any other debt. And we do have some savings.

1:40:34We have about$1.1 million in an IRA. $90 ,000 of that is in a 401K. and we have about$145 ,000 in savings. Awesome. We owe$155 ,000 on the house and the interest rate is 2.75%. The problem is the maturity date on that loan is 2051, so we'll be about 90. Yeah, no, thank you. But I'm not sure, you know, if I pay it off, I'm not sure exactly where to pull the money from. So you've got$145K in liquid cash. What is that earmarked for right now? Initially to live off of when we retire, we'd like to delay drawing our social security, which would be about$4 ,400 a month. If we draw now, we'd like to wait at least a couple of years and let that grow.

1:41:33Our monthly expenses are about$5 ,000. Great. Right. So you almost have the cash to do it, but you're saying you need a big chunk of this to basically live because you want to retire by the end of the year. Yes. Retirement for me is a great goal. It's going to be a really big switch mindset for me because I'm a saver, not a spender. So depleting money out of that savings makes me incredibly uncomfortable. So that's just why I feel like I need a little bit of advice from someone who has a broader outlook. What's your household income? Our household income right now is about$160 ,000. Awesome. And we save about$2 ,500 a month, and we put about 15 % into our investments with employer match added.

1:42:21So outside of 15%, you're saying you have$2 ,500 extra you can throw at the mortgage? Yes, I could. All right. That'll get you far. That's$30 ,000 right there. and by that point the mortgage is down to 125 grand you'll have the money in cash but you're gonna need some of that to float you for a year or two it sounds like and do you have any other money outside of the 1.1 nest egg um i have about 40 well say 45 000 no 52 000 in a ross okay um but i didn't start it until 2022 so i don't think i can withdraw from that without penalty for five years. Is that correct? Yes. Do you have a financial advisory you use to crunch all these numbers?

1:43:09I have some of my investments in Schwab and I've talked to them, but the rest of it I've just done on my own. Okay. My only fear is that you're riding it pretty tight if you're wanting to spend five grand of net income a year for the rest of your life off of this million dollar nest And so that's the part where I can see it working, but a SmartVestor Pro can run the projections out and show you all of the scenarios and what medical costs might be and when Social Security would kick in and when you should take it. All of that will factor into when you should retire. Okay. So I think you're on the cusp here, and I think you can pull this plan off, but I would double check it with a SmartVestor Pro to make sure that the numbers make sense.

1:43:53but if I'm in your shoes, I like using cash first. We want to save the retirement. If you have any taxable investment accounts, use that next. Then we move on to traditional accounts. And then if you have any Roth accounts, I would wait as long as I could because those are growing tax-free for you right now. So that would be the bucket strategy and a SmartVestor Pro can walk you through that based on your numbers. And it might mean, hey, we got to work six months into 2027 to make this work, but I want to make sure that you're ironclad. Love it. Thanks for the call, Carol. Let's go to Michelle right here in our backyard of Nashville, Tennessee.

1:44:25Michelle, how can we help? Hi, how are you guys doing today? Good. What's going on? Good. Well, recently my husband and I both have had some raises. We're still in the middle of baby step two. And I'll be honest, we've been doing this for a couple of years now. And so just trudging along on this baby step two feels like it's just going on forever. But since we've got these raises, I'm wondering if I can quit my side hustle and just put this extra income towards Baby Stub 2. What was your side hustle paying you? It's about$20 ,000 a year. What's your raise paying you? What's the net on the raise?

1:45:06About$6 ,500 a year. So it's not apples to apples, correct? Well, it's not, but my husband also got a big increase in pay, and his was about$40 ,000. Oh, okay. All right. So, yeah, I mean, you certainly can. What's the timeline differences? Let's say you kept the side hustle and his raise and your raise. How fast would you get out versus if you quit the side hustle? Does it delay it by three months or a year? no it's not a year when i put it in um the app um every dollar it it says it's like three or four months difference although you know like i said i'm just tired of working you know the extra job but um i certainly want to get the debt paid off too and to be quite honest i don't like the extra three or four months either so well there's your answer it's really not our answer i mean we can give you our take, but there's no right or wrong answer is really my answer.

1:46:09But I would lean towards, I was going to turn the question on you and you got ahead of me and you asked your own question and answered it. You're choosing between two things that kind of suck. Continuing the side hustle or continuing to stay in debt even longer and sacrificing in other ways and making the payments and paying the interest. And so if you can find a second wind here and just power through and go, I hate this side hustle so much, I'm willing to work even harder. I think that will fuel this debt-free journey. I agree. I agree. You hate the side hustle. You hate the debt. But if you work three to four months more, you get rid of both of them at the same time.

1:46:45That's my answer. Bada bing, bada boom. And I'm sticking to it.

1:47:06Hey, 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.

1:47:57All right, it's always fun when we have friends of Dave stop by. And Dave's got lots of friends, George, as you know. And they're interesting people. And this is a special treat for us. We're really excited to be joined in studio by Andy Irwin and Bart Millard. And you're going, I think I may know those names. Well, you do. Andy Irwin, the award-winning filmmaker behind the very first film. I can only imagine. Bart Millard is now producing this as well. I Can Only Imagine 2 is the follow-up to I Can Only Imagine. And I got to say to you guys, when I saw that this was coming out, I thought, this is a good sign that the first movie, we know it was a big deal, but there had to be a lot of heat because I'm not a fan of sequels, George.

1:48:41They're hard to pull off. Unless it's Home Alone 2 and you're like, all right, good luck. That's one that I thought was good, but not great. And so I'm very excited about this sequel. Guys, first of all, welcome to the studio. Welcome to the Ramsey Show. And I think it begs the question, And I'm being serious. I mean, it seems scary to pull off a sequel because it's not done well. And you guys were telling us early that things look really good here. Why pull off the sequel? I was terrified. I said no over and over again. And so Bart and I have been really good friends since the first movie. And they kept bringing up this idea of there might be more story to tell.

1:49:17So Cindy Bond, who was the original producer, was like, I think there's more story. And I was like, absolutely not because I don't want to ruin it. It was just so magic. and there's sequels that are made that worship the original and then they just mess it all up. And then there's Top Gun Maverick. And so the idea of reintroducing you to the world you love and taking it somewhere new. And so Cindy started talking to Bart and then Brent McCorkle who did Jesus Revolution with my brother. They started talking about the story of Even If, the song that so many people love every bit as much as I can imagine.

1:49:49And when they started walking through that, they said, you've got to hear this. So they pulled me into the conversation. They walked me through the story. and it was just the second half of a whole, and it's the perfect end to a father-son story. And I was in tears by the end of it, and then Bart was like, I think this is kind of like the spiritual sequel to I Can Only Imagine. And I was like, no, this is the literal sequel. I can get that made tomorrow. And we pitched it to Lionsgate 30 seconds in. They're like, guys, we're obviously doing this movie. So for us to step into it was magic. To finish the movie and test it, we were just nervous, like, what's the audience going to think?

1:50:20The first I Can Only Imagine was our highest testing film we've ever had. It scored a 96 with the audience. This one scored a 97. So it's exciting. Well, hopefully. Hopefully. Yeah. And what you guys have done in the world of film and faith, it hasn't always been world class. And you guys have brought just such a level of quality from the stories to the acting, the craftsmanship. And so I can't wait to see, you know, this one out in theaters, February 20th, for everyone to see it for themselves, especially for our audience. Yeah. Yeah. Your audience is in for a treat. You know, Dave, Dave and Ramsey is a part of this.

1:50:54like uh the part of the movie was filmed on the campus i just found this out moments ago tell us what what's going on bart how did this happen because you and dave are big buddies yeah he's my stunt double pretty much no man uh yeah dave and i've been buddies for a long time i didn't even realize that he made the movie until i saw the so dave randy has a cameo if you listen closely he's got a voice over yeah he's one of the familiar voice yeah you will recognize it so you're filming on campus here and then then after i learned that i was also disappointed to find out that George and I did not make the final cut.

1:51:26You were too expensive. Did they even send you my audition tapes? That's the question. I don't think so. They named your price and it just priced you out. So we're going to have to work up to your level. Yeah, I'll get there. But we actually, we actually, we emailed Dave and said, everybody's like, no, Dave never says yes to filming stuff like that here. And so I emailed him and he was on y 'all's cruise. And I just said, hey, Dave, be careful when you're friends with a filmmaker because we ask for stuff. And I was like, how would you feel about us filming the movie at your place? And he's like, yeah, man, it'd be fine.

1:51:53talk to the guys and work it out. And I was like, and so you picked him on a good day. He was on the cruise. He was out in the sun. He had just finished the buffet. Uh, that's why he was excited. Okay, Bart, I want to pick up where Andy left off in, in describing how this came about as you were walking through more of the story, you know, as a guy who, of course you've been nominated, won so many awards as lead singer of mercy me, this is such a different space. You used to tell stories of songs. But as you were walking through this and the story that we heard, at what point do you go, I think this is a big screen story?

1:52:29I don't know if I was ever sure about that until I actually read the script. I mean, it's been almost 10 years since the last movie. I had an interview yesterday and they're like, so you're cashing in with a sequel. I was like, you don't normally cash in 10 years later. It's And so I really was excited that there was a story there. But, man, when Cindy Bond originally wanted to make a movie around Even If, she wanted to just find any story, like fan mail, something. And it was when I met with Brent McCorkle, who co-wrote Imagine, did Jesus Revolution. And he goes, well, where'd the song come from?

1:53:04And as I told him the story, that's when he had tears in his eyes. And he was like, this is it. And what if we literally got the band back together and put it kind of in this universe and made it a sequel? And so I was like, I was a little skeptical because, you know, you never think your life's that interesting. And it's not. He made it very interesting. But yeah, when I read the script, I was like, okay, yeah, let's do this. Well, so much of the story is about the true cost of success, the underbelly of, you know, you have this thing hit. And there's other pieces of your life that you get a flat tire in because you're so focused on your career.

1:53:35And a lot of our fans experience that. So where does this movie pick up? Is it a direct connection? You know, I think the thing that was beautiful that I was excited about is that, you know, there was a chance to kind of take it farther. And, you know, I love the stories in the building here, just how, you know, Dave has never shied away from that. A lot of this was born out of failure and out of, you know, learning at the lowest point. And so, you know, with Bart's story, I was really, really just excited that he was willing to look at on the other side of success of what happens if happily ever after breaks.

1:54:08what happens if you get everything you've ever dreamed of. The crowd stops cheering, they go home, and then life goes back to being hard. And where's God in the hardship there? And so this new character, Tim Timmons, kind of gets brought into the mix, played by Milo Ventimiglia. Incredible. That people know from This Is Us and Gilmore Girls and all that type stuff. Is that based on Tim? Yeah, Tim is the guy. I play pickleball with Tim Timmons. Tim Timmons? He didn't tell you? the movie's about Tim Timmons they were focused on pickleball he's been hurt he's been playing so he showed up recently and the weather's been rough but I gotta tell you I'm a little excited keep going I apologize I got goosebumps so Tim's one of Bart's best friends we co-wrote Even If and so the story is how we got to write that song we got to that point I love that dude I've known him a long long time but didn't know that you're about to get a lot of him I gotta text him on the way I'll be like dude you're holding out on us I'm gonna embarrass him next Wednesday night when we play I love it please do If you can embarrass Tim Timmons, then you're special because he's hard to embarrass.

1:55:10That's true. But he and Milo just hit it off, and Milo really wanted to make the faith authentic. And so Tim is this guy that gets thrown into Bart's world and is carrying this kind of secret about his own journey, but has this idea of gratitude, living with gratitude of, God, thank you that you woke me up today, and this kind of tension between grief and gratitude. and he begins to kind of, you know, encourage Bart in this journey and it leads to this amazing song and ultimately is the healing of this father-son story of Bart as a father towards his son. And we finished it at Red Rocks. We filmed the end of the movie at Red Rocks.

1:55:46Oh, that's epic. 8 ,500 people. They showed up and it's epic. I love it. We're talking about the new movie, I Can Only Imagine 2, in theaters, February 20th. Bart, I want to give you a final word to encourage our audience because these people, as you know well, or walking through some tough stuff. Our baby steps, while simple to explain, are very difficult to do. And I've just kind of moved, as Andy was talking about, the theme of this film. Encourage people who are in those dark days of just scrambling to maybe come up with$1 ,000 or they're in the middle of baby step two where they're paying off debt and it feels like an insurmountable climb.

1:56:23What would you say to them? Man, life is messy. Whether you're standing on stage or in the audience, it doesn't matter what's happening in your life. It's life happens and it's learning to live with grief or stress or worry and gratitude at the same time and realizing that it's, you know, the cliche of God is good all the time. It's that and not God is good if X, Y and Z happens or comes into place. And it's God's bigger than he's in all of it. If he's not, then we're hopeless. I love it. Well, folks, if you loved the first movie, and millions of you did, I can only imagine, well, I can only imagine, too, coming out in theaters February 20th.

1:56:59Also, a special fan event, a little kind of a sneak peek. Give us real quick, 10 seconds on this. Yeah, so February 14th, we've got a fan event where they'll have a one-night screening all across the country, February 14th. So you can get some early access stuff. They recorded Even If at Abbey Road in London. Where do they get details from? So they get details online, ICanOnlyImagineMovie.com. There it is. ICanOnlyImagineMovie.com. Did I get that right? I think I got it right. I probably got it wrong. Date night. Valentine's date night. You can't miss it. Valentine's Day. Hey, guys, thanks for being with us.

1:57:31Appreciate you guys. Andy, appreciate you guys.

1:57:47You work your butt off for your money, but your money's never going to return the favor if all you do is hope for the best. If you're ready to learn how to make your money work for you, check out the SmartVestor program. SmartVestor can help you find advisors who specialize in retirement planning, charitable giving, advanced investing strategies, and more. Whatever your goals, your pro will take the time to explain your options, so you never have to invest in anything you don't understand. Head to RamseySolutions.com slash SmartVestor to get connected. Ramsey Solutions is a paid, non-client promoter of participating pros.

1:58:23Learn more at ramsaysolutions.com slash smartvester.

1:58:42All right, our scripture of the day comes from Luke 16.10. Whoever can be trusted with very little can also be trusted with much, and whoever is dishonest with very little will also be dishonest with much. Our quote today from John Wooden, do not let what you cannot do interfere with what you can do. Trent is joining us now in Idaho. Trent, how can I help? Hey, George, I can. So I was calling. I had a question. So kind of got a late start on my retirement. and I'm currently in a good position building my retirement up, but I don't really have – I've got a wife and four kids, and we plan on adding two more kids.

1:59:29But the small town we live in doesn't really offer experience or opportunity for our kids to grow. And I got a potential job opportunity in my company in a larger city where there is more opportunity for my kids, but we would sacrifice our 401k growth that we're building right now. Kind of wanted some advice. What do you mean sacrificing growth there? Because you said it's with your company? Yes. So currently right now, my housing, we pay like$300 a month on rent. And so we have been able to put for the last two years, we've been putting 40 percent of each paycheck into retirement into my 401k Roth.

2:00:19And so we've been able to build a lot in the last two years. And then but in this small town, there's not a lot of opportunities for kids to grow and learn things. So you're saying you'll have less money to put into retirement due to a higher cost of living. Correct. What's your pay now and what would it be in the new city?

2:00:47So it would be, I'm currently getting paid around$74 ,000 a year. And it was put on the table so I don't have like a set amount that I would be getting paid in the new city. It would be either equal to or maybe a little bit more than what I'm currently making. So it would be a lateral move, but you'd have more opportunities for your family in general, a better quality of life, let's say. Yes. I'm taking that over more in the 401k. Yeah, I'm just sitting here listening and listening to the line of questioning and I'm going, this is a no-brainer to me. What would be the doubt that you have about this?

2:01:32uh because because how so like right now i have uh 165 000 in a my roth 401k and so we've been able that's where we're at right now and we're we're saving saving saving trying to build it up but why but i don't understand again what what is that the doubt you're going to be making more money?

2:02:01Well, it would be... Well, yes, because we wouldn't be putting as much into retirement, but we'd also... Yeah, but you also are going to have some type of a 401k or Roth program with that company. Can you still invest 15 % in this new area? Because that's the baby steps. Until you pay off the house, which you guys said you're renting right now? Well, currently right now, we're just in the... Yeah, we just... We rent. We don't have... No debt anywhere. The goal would be to own a home and then pay that house off one day while investing 15%. How old are you? Well, hold on. Hold on. I don't – let's get to that.

2:02:37But, Trent, I'm not sure that we've landed for yourself why you have doubt about taking this better job with better opportunities for your family.

2:02:51because of the the opportunity that i'm currently have to build my retirement that's not that's not the reason it's not for a 401k what makes you so freaked out about this retirement account that you're shoving 40 of your money into it uh i i'd like to retire early yeah okay let's say there. If you take this new job, will you be making more money? Yes or no? It will be equal to, or maybe a little bit more, but it's, it'll probably be just like a, even right across. Then why are you considering it a better opportunity? A better opportunity for my kids and my family. So like there's where I currently am.

2:03:42give me specifics specifics so um like activities as far as like sporting activities getting them involved in extracurriculars okay so better quality of life we can say that yes yes okay let me come back to it let's call this company xyz and i'm not i'm not totally cutting you off george but i feel like we're stuck here trent does company xyz have a retirement program so that the day you come in there, you start contributing through them, just like you are now? Well, it is through my company. So they match up to 3%. Okay, this is through your current company. Correct. And the company I'd be going to is the same company.

2:04:35It's just a different location. So he's just saying he's going to have less money because it's a higher cost of living, so he can't put as much into the 401k. That's the only thing here that you're worried about. I missed that part because I thought there was an opportunity for you to grow financially in this job. And I would make the case with your employer that, hey, if I'm going to make this move to a higher cost living area, move my family, I need more compensation for this to then cover the higher expenses. I think that's a fair thing to negotiate. It's fair, but at the same time, Trent, if this is better quality of life for your family and you're still in good shape, and George, you were going to go to the numbers here to show me.

2:05:13Well, the key is, can you live off of$80 ,000 in this new city? Can you cover all of your bills? Yes, we can. My wife and I, we're very smart with it. Do you have any debt? No, no debt at all. How much do you have in savings for an emergency fund? uh we have 8 000 in our emergency fund and i have around 42 000 in our savings so you have 50 000 in cash essentially yes okay and how old are you 38 okay you're 38 you wanted to retire early can we call that 55 is that fair yeah okay if you never get a raise you invest that thousand bucks a month that's the money you're putting in 15 plus some employer match, you'd have about$1.5 million at 55.

2:06:02From that one account, that's if you never get a raise from 38 to 55, which we can all agree is a ridiculous proposition. So what's likely to happen is you purchase a home, you pay that home off, you increase your investing, you get raises along the way. And all of a sudden, it looks more like$2 million at 55. And that's with you cutting back to 15%. So the question I would ask is, can I move to this new city while investing 15 % of my income and cover all the bills, cover this new rent, which is going to be higher than$300? And I think you're going to find the answer is yes. Is the answer yes, Trent?

2:06:39Yes. Yeah. He's got a good grasp. My wife and I are smart. Yeah. Trent, you're such a detail guy. You're on top of it. I know you've done all this research. So again, what's the big doubt? Do we still have the doubt?

2:06:55yes he's laughing there's some doubt you've got four opposing goals here i want the kids to have a better life but i also want to put 40 into my 401k and i also yeah and so you've got to just go what is the best thing for our family right now yeah and i think we it's very clear it's moving to this new city yeah okay and you'll be fine on retirement i'm really not worried about that you're in great shape if you keep staying out of debt you work your butt off you're going to keep getting raises. That's right. You're going to get a home. You're going to pay that home off in the next 15 years. And then you'll have a paid for home and 2 million bucks in the bank in your 50s.

2:07:29Where's your wife at on this decision?

2:07:33She is leaning more towards the

2:07:39retirement, putting more into the retirement, which is why I'm hesitant. Okay. See, this is information that I was trying to dig from you earlier. I think we need to get to the root of why she's so worried about that. Because you guys are on track to become multi-millionaires. And so I think there is an unhealthy fear that is not rooted in reality about this. That's right. And you're sacrificing, remember, the quality of life for your children for the foreseeable future by staying where you are. So you've got to choose which one is going to lead to a better life. George, what's your vote? I would vote for quality of life.

2:08:09I would move yesterday. I would too. Quality of life is just something you can't measure until it happens. All right. Appreciate the call. And hey, everybody, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.