Your Payments Are Keeping You From the Life You Want

22:20Erica is in Philadelphia, Pennsylvania. Erica, how can we help today? Hi, thanks for taking my call. So I am a single female living in Philadelphia. I'm a pharmacist and I graduated with a ton of student loan debt. So at this point, I am wondering how I can get this amount down or if I should invest instead to offset the compound interest on it. So I guess my question is, do I pay down the student loan debt or do I put more in investment? Okay. How much debt are we talking about? Not that it changes my answer. I just want to know. Yeah. Student loan debt is right around$192 ,000. $192 ,000. And what's your income now that you're a pharmacist?

23:13Currently, post-taxes, I make$57.82 per month. Okay. Do you happen to know what the interest rate is on those student loans, ballpark, if it's not the same for all of them? Yeah, it's 3.1%. Okay. Okay.

23:29George Kamel:So to your question, offsetting the compound interest, The best way to offset the interest is to pay more than the minimum payment, to throw as much as you can at it to knock down that principle because 3 % of$100 ,000 is a whole lot less than$192 ,000. So the faster you knock these debts out, the less interest you're going to pay. And that's a guaranteed rate of return, that 3.2 % versus investing it with market volatility. You could lose money one month, make a little one month, but you're much better off knocking out all these debts because your life is on hold until you repay these lenders.

24:06George Kamel:It's going to be really hard to do all the things you want to do in life, get married, get a house, have kids, whatever it is, go on vacations when you have all these payments stacked up every month. What are the minimum payments currently due for that$192 ,000? Currently, it's sitting at$1 ,300 per month. Okay. Yeah, I mean, that's a high payment. I tend to agree with George on this for similar reasons, but also I would just add on, you know, I think that there's, you're not the only one who feels that way, who thinks, hey, I could just pay the minimums and anything extra, I can invest that money and I'll feel great because I'll have$300 ,000 sitting in investments or I'll have half a million dollars.

24:47But you also have to consider that if you did that for a five or 10 year span, that student loan is still accruing. And even if you did invest and even if you did have$300 ,000 sitting there, that's your money. Now the student loan that started at$191 ,000 is now creeping up to, you know,$270 ,000,$275 ,000. And you have to ask yourself, oh my gosh, that's not going to feel like the freedom that I thought it would feel like. and I painted this picture before, but it helped me and my husband when we had 90 ,000 left and the payment wasn't very high. And we thought, you know what? We don't need to pay this off.

25:24We can just, we can live with this. But it feels like, it's like what I liken it to is being inside of a beautiful home. The home is beautiful. It's everything you wanted. As long as you're in there, everything is great. But the minute you open the door, you realize you are right at the edge of a cliff And it's like a California cliff at the end. You know, if the house falls off, you are just tumbling into the abyss. And that's the way it feels on the inside is I still have this debt attached to me. And you know what I'm talking about. I mean, you feel it every time when you lay in the bed at night.

25:58So that's kind of, you know, a more emotional take on it. And I think it's worth it because, you know, our body does keep the score in these in these situations. Yeah, absolutely. I think maybe the only issue that I find because I do have my own budget is what's left over after all of my expenses. And what makes it even tougher is being single and not living with somebody, being the only person contributing to rent in big city. And I did at one point make very large payments and it helped a lot. and then switching to different jobs, moving to a different city, being single again because I used to be married.

26:43It just makes it a lot harder. So this is the tough part. We're trying to look for that extra income to be able to put it there because all I'm doing right now is surviving.

26:55George Kamel:Well, what does the trajectory for you look like as a pharmacist? Because if you're bringing home, what is it,$69 ,000 a year, that's probably around$100 ,000 gross in a high cost of living area. So how do we get you to be making$150 ,000 as a pharmacist? Because that would really speed this up. Absolutely. So right now, that's kind of what I'm looking towards. The market within pharmacy is a little tough, but I do have some future plans on finding a job that probably the market in Philadelphia is right around, I would probably say about 140. But really, so that would be as a pharmacist, like a good salary that you can make.

27:42Now, I'm looking for other options too that can help me make more because right now what I'm making is not, just is not enough. Yeah, I agree. So I guess maybe that's the answer.

27:52George Kamel:Well, at this rate, you're just feeling hopeless because making these minimum payments, It's going to take you a lifetime to pay the student loans off. And until you can throw, you know, three grand a month at the debts, four grand a month, it's not going to feel like there's any hope in sight or light at the end of this tunnel. But I'm doing the math here going, all right, if you can throw$3 ,200 at these debts every month, you're done in five years. And that's if you don't get a raise. Now, that's tough. Obviously, you're in a high-cost living city. What is your rent every month? Currently, it's right around$1 ,500 or$1 ,600 a month.

28:23George Kamel:Okay. Could you get a two-bedroom and rent with a friend, get a roommate? So next year I'm planning on renting for my friend who owns a home in Philly, and it will be with a roommate. That's great. So that$15 ,000,$1 ,600 is one bedroom, one bath in Philly. So what would your rent go down to? I'm not sure. She would probably work with me. I would say she would probably help me get to like maybe$1 ,400. Oh, that's not much savings. It's not much different. I was hoping you were going to say like$1 ,000 or something. We're like, all right, we saved$500 a month. This is worth it. Well, when you pass it along through utilities and maybe food, I don't know how much you would share.

29:08There might be something there if you guys, you know.

29:11George Kamel:But if you could get a two-bedroom for$2 ,000 a month, well, now you're splitting at$1 ,000. I'm trying to go through. So there's two ways to get more margin to get rid of this debt faster, and that's to make more or spend less. And so those are the two areas, the two levers I want you to start looking at is do a detailed budget using every dollar, and I'll gift that to you to help you get through this. And go look at all of your expenses because right now you feel like you need to live like a pharmacist. You want people to know, look at me. I'm doing pretty good. And the problem is that's going to cause lifestyle creep.

29:43George Kamel:You're going to eat out more, go out more, have nicer things, dress nicer. And right now we need to live like a broke college student because we've got a mess to clean up. Absolutely. The good news is – Oh, I don't have any problem with eating ramen. The good news is your rent right now is really right at the 25 % mark. Between that and your minimum payments, you're at$2 ,800 a month. Where is the rest of that money going? What's your next biggest expense that you go, here's the problem, guys. It's my car payment. Is there anything else that we could try to help you find that margin? Do you have a car payment to speak of?

30:20I do have a car payment. It's not much, and I owe$1 ,898 less on it. Okay, that's nothing. About$3.85 per month. Okay, well, that's some margin freed up. Is there anything else? Because I still feel like there's a big chunk of money that's not accounted for by all the major players. You didn't mention kids or daycare or anything like that. um let me see i have a budget um there is i mean not really those are really it just goes to essentially rent car um i have a lot i put a lot of money away in retirement okay there's where it is i knew it was somewhere so again yeah i love this conversation because you're you're wanting to do the right things, you're just doing them in the wrong order.

31:11So I love a person who wants to build wealth. I love a person, you're very responsible because that's a responsible choice. But George and I would caution you that there's a better order to do this in because if you're investing, but you're still in debt, you know, obviously it's, it's taking away your peace. We talked about that. And obviously you probably don't have much liquid savings. And so therefore your retirement is at risk. The next time you're in a jam, you might liquidate that, which is terrible. So George and I would say you need to pause investments. It's only temporary. It's not a scary thing, but you need the full force of your income to do what George said, which is be putting hopefully around$3 ,000 a month on these student loans to get them paid off.

31:52Please, please, please cancel and pause those retirement contributions.

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33:29All right, George, let's hear from Tabitha, who's right here in our backyard, Nashville, Tennessee. Hi, Tabitha. What's up? Hey, so I recently paid off my student loans and I'm finally on the straight and narrow, right? Awesome. I called the credit union and I opened up a high yield. Well, it's a checking, but it has a higher yield than the high yield savings. So anyhow, and I asked them like, you know, because I want to plan to be able to put money down. And I was thinking about the manual underwriting because other than that, I have one credit card, but I don't use it. So I'm fixing to have it just cut off basically.

34:06and they they acted like that was crazy so I guess I got the weird thing um for the first time but I'm wondering like am I asking like is there questions I'm supposed to ask is there a different way to go about it because they were like no you need credit like you don't need to turn that off like even if you don't use it your credit score will still be there and we'll be able to use it and it should if everything's paid off and it should go up and I'm like um well just to for For the person listening, manual underwriting is the way that you get approved for a mortgage if you don't have a credit score.

34:39George Kamel:Not if you have a low score. People think, well, I can get around my low score. But no, if you have a score at all, you can't do manual underwriting. So that's the key, Tabitha, is once you're completely debt free, all the accounts are closed, it may take 6 to 12 months for your credit score to become indeterminable. And at that point, then you can do manual underwriting. So I don't know when you're going to be ready to actually go home shopping. Are we talking three years from now? Probably like a little over a year based on the amount that I'm going to have to save to get to the 25 % mark. Okay, cool.

35:12George Kamel:So do you have an emergency fund yet? I know you said your student loans are paid off. No, I'm finishing that up hopefully within the next six months, and then after that I'll start on the down payment savings fund. Okay, cool. So here's the deal. A lot of people don't know what manual underwriting is because they were so ingrained in the broken financial system we find ourselves in. But the truth is credit scores have not been around that long. We're talking like since the 90s. And before that, what lenders did was look at things like your income. So they'd verify your income, look at your rental payment history.

35:48George Kamel:They'd look at, you know, 12 month history of your bank statements. They would look at trade lines like utility bills or cell phone bills to determine whether or not they will grant this loan to you. So that's exactly what manual underwriting does. And you just looked in the wrong place. So I would reach out to Churchill Mortgage. You can go to churchhillmortgage.com and talk to them about it. They're the number one in the nation because we send all the Ramsey fans to them. So they won't look at you like you're crazy. They'll go, oh, absolutely. We can help with that. And they'll answer all of your questions and steer you in the right direction when it comes to what you need to do to get prepared for that.

36:20George Kamel:Because there are some steps. There's a few hoops to jump through, but I've done it. It's not as difficult as people make it out to be. No, it's not bad. So for a few more specifics, if you're thinking about that, you need to be able to show 12 months of documented rental history. So if you're listening out there and you're living with mom and dad and not paying rent, thinking you're going to buy a house and do manual underwriting, you need to pay rent. You need to have some sort of documented rental payment history. You need to have 12 months of other trade lines. These are things like George mentioned, cell phones, utilities.

36:48You could even use insurance payments for that. Also, actual money. Okay, so they're going to want to see that you have income for the last 12 months. If you're self-employed, they might look back two years. That's important. And then obviously, you want a nice down payment. The bigger, the better is going to set you up to win. And that's really all there is to it. It's really not that big of a deal. The only other part of this is just making sure you're in the right position. And Tabitha, it sounds like you're on the right track, finishing up that debt, saving up the three to six months and then getting on to that down payment.

37:21Very, very good call. That's awesome. Thank you for the call. All right, let's keep it rolling, George. We got Madison in Charlotte, North Carolina. Hey, Madison. Hi, thank you for taking my call. Yes, ma 'am. What's going on? So my husband and I just got married in January, and we started out at around close to$100 ,000 in debt. We're now at around$38 ,000. but we are expecting a baby in November. So my question, I know you guys say usually to pause if you're expecting, but how much do you think is a good amount to have to be prepared? I love that question. So yeah, you're exactly right. We call that a stork mode, which is kind of funny, but it's just the idea of the most important thing in your world right now is being prepared for this baby, not paying off debt.

38:08And so yeah, pausing is good. I'm thinking about two things. Number one, I'm going to save as much as I possibly can, whatever money I can. Cause the truth is if it weren't stork mode, you'd still be doing that. The money would just be going towards debt. So yeah, let's keep up that same intensity. Cause the fact of the matter is when the baby comes and you guys get home and everybody's healthy, you're going to take that money and you're going to throw it towards the debt. So the more the merrier, uh, but I would have a couple of thoughts in mind to go along with that. Number one, George, I'm always looking at the out-of-pocket max on my insurance.

38:40I want to know. That's the part you're on the hook for. Yep. I want to know that if things go south and, you know, we end up having more. Start racking up these bills. Yes. What is it? Is it 10 ,000? Is it 1250? Like whatever it is, I want that money, that amount saved that just gives you just that warm, fuzzy feeling.

38:57George Kamel:Some peace of mind that you're not going to be going into a bunch of medical debt if you were to have a longer hospital stay. And so once you and baby are home safe, you might have 30 grand ready to throw at the debt while you've been making these minimum payments. So how much could you save by the time baby's here? That's a good question. I feel like we kind of got a good head start because we were able to get rid of a car and then we had wedding money. But I would say we could probably save close to $10 ,000, maybe$15 ,000 before the baby gets here. Okay. So if you made minimum payments on the debts and then through the rest of its savings,$15 ,000 by November is what you're thinking.

39:33Sure. The only other thing is that I know we shouldn't have done this, but we borrowed some money from a family member. So we do want to pay that for sure before the baby gets here. But I think we could get through that pretty quickly. How much is it? $5 ,500. That's a significant chunk of$10 ,000 to$15 ,000. Yeah, I mean, we should be able to have that this month or next month. Oh, so that's aside from this? I think that we could still get to at least$10 ,000 before the baby gets here.

40:05George Kamel:Okay. What's your household income? 105. All right. And are you planning on going back to work after, or are you just going to stay home? I do plan to go back, yeah. Okay, cool. And what's left in 38K? What kind of debts are those? I have$13 ,000 on my car, $9 ,000 in student loans,$5 ,500 to my dad, and the rest is credit cards. Okay. Now, Now, the bigger question is, are you guys done with debt? Are you changing the behavior that got you here? Like, have you cut up the credit cards? Yeah, we're absolutely good. Good. Love to hear that. Well, you're on your way. I'd be focused on just making sure you and baby are healthy and the debt will get paid.

40:52George Kamel:And I hope it's done. I mean, it'd be pretty cool if you guys went real crazy and got it done early next year, before that baby's first birthday, for sure. That's the plan, as soon as possible. We've been doing pet sitting and staying at different houses, which we don't want to do that anymore because it's hard to be newlyweds and away from each other. But trying to do whatever we can to get through it. Yeah, absolutely. I mean, that's the mentality that you have to have when you're attacking debt, George. You're going to feel a level of discomfort. And if you're trying to do the things that we teach and trying to keep it, you know, life is the same.

41:28Nothing really changes. I don't really feel it. You're not doing it right.

41:31George Kamel:Yeah, you need to go hard enough that you never want to go back into debt because you sacrifice so deep. And for me, it was like lean cuisines. That was my debt-free journey food, and I would wait for them. I'm sorry. I'd go to Kroger. I'd wait for them to be on sale,$5 for$10 at the time. I remember that sale. $2. I was like, all right, if I can eat for$2 a meal. I mean, I looked, if you opened my fridge, there was nothing in it. You opened my freezer, just a stack of lean cuisines, 20 high. All I think about is the microplastics in today's world. they're gonna study my body for science one day your brain is like really made of plastic what happened to him and so now i can't even pass by the lean cuisines in the grocery store oh he's like like it just brings me back i feel a little vile oh no thank you not doing that again but that's caused me to not go into debt i know that's right whatever you have to do because i'm not going back to that lean cuisine lifestyle who cares who cares if you were in the best shape ever i'll keep my lean physique in other ways what a great name though lean cuisine you gotta admit yeah did you have a debt-free food now you're a foodie and you you eat super clean you wouldn't darken the door of a lean cuisine i wouldn't darken the door of a lean cuisine i i think for me the biggest thing is i don't don't ask me about a coupon don't ask me to do something to get money off right like i did enough couponing that i don't want anymore i a lot of times ptsd Yeah, even you'll say, oh, you should do that app.

42:54You can save money. I'm like, no, I don't want to save money.

42:57George Kamel:She doesn't want to hear about my promo code to get 30 % off pizza. I want none of it.

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44:21Welcome back to The Ramsey Show here in the Fairwinds Credit Union studio. I'm Jade. This is George next to me taking your calls. And we've got Jacob, who's on the line in Richmond, Virginia. Jacob, what's going on in your world? Hey, guys. Thanks for taking my call. I was calling about, I've been considering going to college to kind of get a job that I'm more wired for. I've taken the KIN assessment test. And the hard decision about it is just that I'm in a career now that pays pretty solid, considering I don't have a degree, but it's just not the most fulfilling. What kind of work is it that you're doing now, and what are you earning?

45:03Yeah, it's a lot of just kind of desk work at a computer desk for a labor company. I make about$55. Okay. And what is it that you want to do and what would be a fair salary that you think you'd make doing that? Yeah. I'm kind of more in line to like want to kind of counsel people or speak with them and like kind of leave an impact. From my research, what I can expect if I get like a degree with it would be about 60 to 65 is the average where I'm at. Okay.

45:37George Kamel:I'm confused. Are you talking about being like a therapist? so with the assessment test I did some of the options what I saw that I liked was like a school counselor was an option and have you looked into what it actually takes to become a school counselor yeah so on that assessment it shows that a master degree would be needed along with some licensing which the part that's hard for me is like I don't mind doing that but I feel like it's kind of maybe unwise to maybe do this to like change while I'm in the process of baby step number two. Oh, okay. So baby step two, for those listening, that's the step where you're paying off your consumer debt.

46:18How much consumer debt do you have? At this current moment, I have about$11 ,000. I started at$20 ,000 like last year. Okay, so you've been making headway on that. And is it just you, Jacob, or do you have a family, a wife? I actually just got married in March. I came down and visited you all on my honeymoon. Awesome. We probably told you to. go have fun and get out of here. George made a joke about it, yeah.

46:44George Kamel:That it's sad that you're like, what are you doing for your honeymoon? They're like, we're here. I'm like, okay, what else? No, that's great. So is your now wife working outside the home? Yeah, she's a nurse. She's a nurse tech at a hospital. Okay, and what does she make? I think right now she's like about 30 a year. She's like hourly, like 18 to 19. Okay. Nurse tech. Okay. Okay. And that should be closer to like 40 grand gross per year, which puts you guys close to a six-figure salary. Does she have any debt?

47:23No. Not all of her schools have been paid for so far, but we might have to pay for it in the future.

47:27George Kamel:Have you guys combined finances? Yes, completely. Okay. Because I'm wondering, how can we – here's my goal for you. How do we do this thing? Because I want you to pursue this dream of being a school counselor, but we want to do it smart and we want to do it debt free. And so what I would recommend is knocking out this debt really fast. And the why behind it is I got this dream on the other side that I want to get to, and that's going to put some fire under this to go, you know what? We make a hundred grand. We're bringing home, you know, seven grand a month, whatever it is. Can we throw three grand a month of this debt be done in three months or four grand a month and go hard at this thing?

48:06George Kamel:Because now, three months from now, now we can work on the emergency fund. Do you guys have savings right now? We have the thousand dollar savings outside of that. We're just in terms of paying off debt. Okay, good. So I would set an aggressive goal to pay off the debt, an aggressive goal to get through your baby step three, your full emergency fund of three to six months of expenses. And at that point, now you can begin investing and cash flowing this school dream. And so that's where you need to get clear on what is the most affordable school I can go to to get the degree required. Yeah. Not the fanciest school, just what is the most affordable school to check the box and say, yep, I have this degree.

48:43George Kamel:Because you need to go undergrad, into grad. Potentially for that. I'm not necessarily saying that's the exact career it has to be. I just know for a fact I'd probably be more fulfilled. But yeah, it's just been difficult because I'm not sure if it's unwise or kind of selfish to do a step like that. Well, you do have to consider the return on investment. You have to consider a couple of things. Number one, we're not going into debt for it. So just for the master side of it, I mean, a lot of people would borrow anywhere between 60 to 120 ,000 to be able to do what it is that you want to do. But then you're coming away with a degree making 55 to 75, right?

49:21So you have to think through that. The timeframe, I think, gives you some time that you could cash flow. And I mean, people do these programs in two to three years. So I think that that gives you some time that if you started with a chunk of money, right, as to start out with, it's like, okay, I work a semester. And during that semester, I'm saving up for the next semester. I think you could cash flow it in that way. And that's the only way that I would suggest it. Yeah, I would just do some really deep dives into how, I hate the word cheap, but how inexpensive you can get this degree? Is it an online option?

49:57Are there things that you can do to mitigate that cost at all? Yeah, that makes sense.

50:03George Kamel:And you'll have to think through, can you do this, go to school full time while your wife carries the load of income for the family? So that's another piece of the puzzle to figure out. Well, you need to work part time and this just takes longer and you're doing school at night, for example. So that would be a conversation I would start to have with your wife about what this actually looks like in reality, versus I just have this dream and I hate this job, so I'm just going to leave. And at all costs, I'm going to go do it. You want to be smart about it and move slowly with peace so that you don't have a pile of debt on the other side.

50:33And does your wife, does she plan on moving up to being a registered nurse? Or is she going to keep teching? Like, what's she going to do? Yeah, I think she wants to continue moving up in that kind of career tree. She has about two more years before she can be considered like an official nurse. Okay. And we can probably expect about another 10K for her schooling. And now that we're married, she probably won't get as much financial aid.

50:59George Kamel:Okay. Right. Okay. Because I wonder if her career trajectory has a higher ceiling right now, I might have her pursue school first. Like, hey, you go first. Yeah. You go make 80 grand a year as a nurse so that we have the freedom, flexibility for me to go pursue this over here. So there is kind of a give and take here. We can't all just go pursue our dreams all at the same time and nobody's working. Mm-hmm. Yeah, definitely. So it might take longer than you want it to, but I believe this is, it's not a selfish thing to go do work that you're wired to do that does give you fulfillment. Okay. I appreciate that.

51:35Yeah. Thanks for the call. Well, you know, a lot of times, George, we take these calls and we're talking about dollars and cents and income and all these things. But the truth is, this is the job that you're going to be going into day in, day out, spending the majority of your life there, eight, 10 hours a day. You're commuting there. You're giving up time from your children and your family there. It matters. Like you have to feel good about the work that you're doing. You have to feel like you're making a difference. It has to feel worth it to you. So conversations like this, I love them because I'm all about getting people to that.

52:09Everybody wants to feel good about the work that they're doing and the time that they're spending doing it.

52:13George Kamel:Well, Anna, I always recommend go meet with some school counselors. Get a feel for what they actually do day to day. True that. Do they enjoy it? What are the pitfalls? What are the things that they love about the job? What are things to look out for as you pursue this career field or what school you work at? All of that matters, and you don't want to show up and go, wow, this is not what I thought it would be. I sunk all this money Pivot Pivot Pivot

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54:28All right, back to the phone lines. Simon is in San Diego, California. What's up, Simon? Hey, how's it going? Good. How can we help?

54:39George Kamel:First of all, really awesome to be talking to Jayden George, longtime listener of the show. Second of all, I am debating on getting a HELOC to pay for one, clear up some Amex debt that my wife and I have to buy a new vehicle. Wait, is this a prank call, dude? No. You said longtime listener, and then you mentioned three things that we are vehemently against. Or did you just wait until Dave wasn't here? I totally get that. I was going to feel like I kind of sound a little bit silly, longtime listener. I know you guys don't like going into debt. So the goal of all this is to buy a new car? Well, Amex is a big one as well.

55:23George Kamel:But, yeah, we need a new vehicle. Our last one, the one that we currently have is on the fritz. And yeah, that's a primary concern right now with me and my life is getting a new car. Okay, so let's kind of pan back here because if you're doing all of this rigmarole to get a new car, this is a symptom of a much greater issue, which is you guys are out of control, right? There's something going on with debt. There's something going on with income that's causing you to spend on the credit card, not be able to pay the balance. And then instead of looking to something like savings or liquid cash, you're now looking to a line of credit that's attached to your home, which is what a HELOC is.

56:06And you're now thinking about draining the equity in one of your greatest assets to now fund what I think you said is, I don't know if it's a brand new car, but a new car. So I'm a little nervous about that. Very nervous about that. Tell us when you say your current car is on the fritz, what does that mean? Does that mean, hey, we just have to make some repairs and we just don't want to pay the$700? Or is it, you know, the engine exploded and it needs a new driveshaft? Like, what's going on? I'll never use that terminology again, by the way. That's the best I've got.

56:35George Kamel:That was impressive. It's going to be one of those scenarios where we either keep it for maybe a year, but it is a 2018. and it's gotten so many problems to where the next time we get any sort of, we have to pay more money for this car, we're just going to sell it at that point. Okay, so you said you could make this work for another year. So the question now is, can we clean up the financial mess in a year and save up for this car in cash and get a new-to-you car? Well, yeah, I have cash. That's the thing. How much cash do you have, Simon? About$15 ,000 right now in a savings. Good. But we have a lot of money actually in an inherited IRA.

57:26George Kamel:But we want to use that money technically as our income. So we use the stipends of that to add to our current income. What's your current income without the IRA? Without the IRA, the IRA right now is giving us an additional$30 ,000 a year. so then what do you guys make up that would be about 135 okay 135k is your household income and what's left on the amex what's the balance about 14k so why don't you use your savings and pay off the amex today well because we then we don't have any savings well we technically do but then we don't have any like liquid cash like i don't like taking money out of that ira i want to use that use those monthly stipends for you know as long as i possibly can but you like putting your house at risk with a heloc to pay off the mx to buy a brand new car that's going to go down in value i get that it's going to go down in value but i don't think the home is technically at risk because if i make a plan to pay this heloc off quickly and don't anything could happen if i had a nickel for every time someone had a plan on this show i wouldn't be in the job so yeah here's the cash savings to pay off the debt, cut up the freaking Amex, never use it again, never take out a HELOC, and then you save up for a car you can afford in cash.

58:46George Kamel:That's it. And make the repairs needed until you have the cash to buy the car you want and make sure that car and everything, other cars don't add up to more than half your annual income. So for you guys, that's, you know, 65K in cars. Yeah. That's plenty of car. Plenty of car. And I think the rule of thumb, there's a lesson to be learned here and I think it's worth highlighting. So you cannot solve a problem while simultaneously creating the problem. And in simplest terms, that is, if debt is your problem, you cannot solve the problem of debt while going into more debt. You cannot use debt to solve for debt.

59:22The only way you solve for debt is to pay it off. And the problem with it is a lot of times people use language like, I'm going to use a HELOC to pay off my credit card debt. Like, you're not paying it off. You're simply moving it. It is not a solution. It's just, I'm moving it from here to over here. And the saddest thing about it, George, is they're thinking that that's a better position for the debt.

59:47George Kamel:They're like, well, I'd rather, I need to pay off the mafia. So I'll go borrow from the cartel. I'd rather owe the cartel money than the mafia. You're like, dude, this is a terrible life you've created for yourself. Yeah. And, And it's not even, I don't even want to create any shame around it because I think what's speaking here is desperation. It's, I see a situation, it's not good. And I'm looking for a quick fix. Can I fix it quickly? Because you know you're not safe. Like, you know it's not a good thing. So the quickest possible thing I can do, I can go over here and get a HELOC. They're going to loan me up to 80 to 90 % of my home equity.

1:00:19I can do that. And it's like, hold up, pump the brakes. Let's just think for a second. This guy's got the money sitting there. And in many cases, that is. You've got the money liquid, but there's that false security of, I have this cash. I need this cash. But we're telling you, once you pay off the debt and you're free, now suddenly you've got more income. You can save up that cash again. If you saved it up once, you can save it up again.

1:00:42George Kamel:Well, if you're scared to part with the cash, you already did by going 15 grand to debt. That's right. Just you did it without realizing it was someone else's money that you got to pay back later. And later always comes, unfortunately. It does. And that's the part where, and this is, I'm not saying this to be snarky, although George, you could say it to be snarky. I appreciate that. Math, if you're deciding to do math, then you have to decide to do math on both sides. If you're deciding to say, I care about my 15 ,000, it took me X amount of months to save it up, it's precious to me, then you have to do the math on the other side that goes, well, you don't really have that because you owe 14 on a credit card.

1:01:17George Kamel:On the balance sheet, it's not mathin'. Yeah, and so that's just a little something to remember. It's important, guys. Okay, Brian in Sacramento, California. I'm sorry, Brian. How can we help you today? Is it another car question? Hi, James. Hi, George. Yes, it is. I want to buy sort of my midlife crisis car. How much is the Mazda Miata going to cost you? Close. It's$12 ,000. Okay. What car is it? I would rather not say because it's very rare, but it's as old as I am and it's a convertible. That's fun. All right. And it's only 12K. Do you have the cash to do it? I do. Are you in debt? What bothers me?

1:02:05No, I have no debt other than my mortgage. But I am 54. I have only about 100 grand in retirement savings at this point. And, you know, my mortgage I'd like to pay off by the time I'm in my mid 60s. I'm currently on track to pay it off by 66. Okay.

1:02:26George Kamel:So you're saying you feel bad blowing 12 grand on a toy when you're behind on retirement? I feel, yeah, yeah, I feel self indulgent and frivolous. It's, you know, it would be fun to have, but yeah, I just, I feel like I need to pay off my mortgage as fast as possible and I need to build up my retirement as quickly. I'm currently putting 15 % every year based on a$185 ,000 salary into my 401k. Would you be trading your existing car for this car or would this just be another car to add to the garage? This would be another car. Okay. Are you married? Single. Okay. Man, well, here's the thing. I don't think this is going to make or break your chances of retiring, but I do think if you buy this car, I would really hit the accelerator to get your retirement in order, get this house paid off faster, get your income up even further.

1:03:27George Kamel:You're doing really well right now. you just are in you know later on in the game so i'm not mad about it for you to get this 12k car you got to be ready for the insurance the maintenance the repairs as well there's going to be ongoing costs but again it's not a make or break i think it's not a make or break by the time you retire your house is going to be paid off and that money is going to a lump sum that's earning the right rate of return is going to double every seven years so i think that you can be okay just be okay working four months longer than you would have. There you go.

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1:05:50The truth is we wish we could get to every single call and question that pops up here on the show, but we can't. So if you have a money question and you want an answer for your specific situation, head over to our website and use the Ask Ramsey tool. Ask Ramsey is a free AI tool that's built and trained on proven Ramsey principles. you'll get an answer the same way we'd answer it right here on the show. Ask your question today at RamseySolutions.com or just click the link in the description if you're listening on podcast or YouTube. Jennifer is in Charleston, South Carolina. Jennifer, you are on the line.

1:06:25Hi, how are y 'all doing today? Doing great. What's up in your world? All right. So me and my husband got married just over a year ago and we were living in an apartment, paying rent. We have no debt. At all, other than just rent. Okay. So we got into some family issues. My husband's parents were supposed to be taking care of my husband's grandparents. If one of them passed away, they were pretty much going to be moving in with them. They got into an argument. They're no longer taking care of his grandpa. So we have now been blessed with the financial burden, I guess, of his grandfather and trying to help him financially because he's unable to on just one income.

1:07:13So we're having a hard time trying to navigate our life moving forward with taking on this big expense. Since we're both 27, we haven't started our family or anything like that, just kind of worried about long term. So let me get this straight. your in-laws got mad and decided we're not helping him anymore and they then pushed it over to you guys the 27 year olds pretty much so they don't think that he really looked at all of his options um he's living on his own right now he was going to be moving in with them um but now that they don't want him to move in they think that why don't they want him to it was some argument and some old bitterness from something that happened many years ago, that now they don't want him to move in now that he's needing to.

1:08:04Got it. And so now you guys are up to bat. And you can also say no. What happens if you say no? What do you think the repercussion is? Probably just a hardened relationship, I guess, with Grandpa. With Grandpa, okay. Right. He is alone now and he's sad. He just lost his wife back in December. Oh, no. So he just wants to be around family. Yeah. And of course, he could probably find a home to stay in or he probably would have to get a job again and work to make up. But how old is he? He's 73. He's in great health condition. He just is loving the retired life. He doesn't want to have to go back to work.

1:08:52George Kamel:Well, he doesn't get an option if he doesn't have money. I mean, true. So, I mean, that's a hard conversation to have with a grown adult and maybe the whole family and go, listen, nobody wants to take on the financial burden. We love grandpa. We need to figure out a plan for him. Let's say he lives another 25 years. Are you guys just going to live there and take care of his bills for 25 years and stunt your own growth? I don't want to. No, that's an insane thing to be asked of you, and you have every right to say, no, I'm not doing that. Right. And it doesn't mean you don't love grandpa. It just means you're not going to be a part of this dysfunction and get this slapped onto you to go, well, this is your burden to carry forever.

1:09:32George Kamel:That's what family does. Now, if you want to chip in to help grandpa, that's a discussion you can have and what limited contributions you're going to make per month for whatever amount of time. But for you to just fund his life forever because he enjoys being retired is insane. Where is he living now? Does he have a home that he owns? He does. He still has a mortgage on it. He could probably sell it, but would only make probably a little over$100 ,000 back in proceeds. Okay. So we have just moved in with him. We told him we can, of course, cover the home things. You moved in with him? Yeah, we already have.

1:10:08Oh, no. Jennifer, you just made this the plot twist. Now one of you has to get evicted. This is awkward. Our lease was ending, and so we didn't want to have to sign a six-month or another year if he was really struggling. And he's not struggling yet. Yeah, I thought you said he was healthy enough to go back to be working and stuff. Right. Without going back to work, he's in like a$2 ,000 deficit is what he says.

1:10:36George Kamel:Per month. Which really, yes. What are his expenses outside of the mortgage? Frivolous things. He spends too much money on groceries. So it's not really a deficit. It's a budgeting. He's living above his means for sure. So now we're funding misbehavior. We're not even just taking care of the elderly. We're just funding his lifestyle and whatever he wants to buy. It's going to be on you to fund the deficit. Yeah. Even more reason to not sign up for this. Yeah. I think those are two different things and it's worth noting the difference. If you're telling me that this guy just needs to reallocate funds and then he's got enough to live on his own, that is completely different than saying my grandfather, who is 90 years old, who is suffering from, you know, whatever, whatever health things he cannot work.

1:11:22He has, you know,$1 ,500 of social security and that's it. And no, right. Those are different situations. This is not that.

1:11:31George Kamel:How much does he actually bring in a month? A little over 2000. And what's his mortgage payment? His mortgage is like$7.92, I think. Okay. He escrows his taxes. He pays out of pocket for insurance. Okay. What about cars? Does he have a car payment? No, both of his cars are paid off, just the insurance. He has two vehicles. He doesn't want to get rid of one because it's his dream Mustang that he enjoys driving. This is getting worse for him. I know. Gas is expensive. I think he needs to feel the reality of a situation, which means nobody's going to be funding his misbehavior anymore. If he can't make the payments, if he goes deeply into credit card debt, that's on him.

1:12:15George Kamel:You don't need to try to, like, fund his life so that he doesn't go into debt. If he goes into debt, he's a grown man who can make those decisions. And that's, you know, Capital One's problem if they give a 73-year-old a$10 ,000 credit card limit. And, Jennifer, I want to turn this conversation to you just a little bit because I'm going to tell you, this is you and me just, we're hanging out right now, okay? Like you and me, we're best buddies. I'll probably pour you a glass of Chardonnay. Love it. Okay. And I'm going to slide it over to you and ask you, why would you move into grandpa's house?

1:12:49I wonder, do you also have an ulterior thing here where it's like we can save a little bit of money? We'll split the rent here. We'll split the mortgage. It works out for us. Tell me why you would do that. Because I'm looking at this dysfunction going, surely Jennifer wouldn't want to participate in that. Right, right. So he has he has offered us a deal ish. So an offer you can't refuse. Right, right. So we're already paying rent. So that money is already kind of going down the drain, you know, in a sec. So we're paying towards the house, which is about what we're paying in rent anyway. So we're not really shelling out more money than we already are.

1:13:28OK, he has stated that this house that he's in now just isn't going to be a good house long term. for all of us. Okay. So he said if we move in and we pretty much agree to take care of him, that when we find the next house, when he sells his house, we'll get whatever money we've put into his house now as we're living there, we'll get back and then he'll pay the down payment of a new house for us.

1:13:54George Kamel:This guy should become a politician. But he doesn't have any money. The amount of lies coming out of his mouth, he should be in Congress right now. Because guess what? Right. He's not going to have any money. Right. To give you. He's pretty much banking on that he's going to get a good chunk of proceeds from the house sales. How is he going to take care of himself, though? Because he would need to take those sales, and that would cover a nursing home or whatever living facility he'd go to, whatever care, heaven forbid, he doesn't need a nurse or someone to take care of him. This is all the money he has to his name.

1:14:22George Kamel:He can't give it to you. Right. And I would not expect that. He's told me in depth how much money he has. I thought you said he only had the$100 ,000 in the house. What else does he have? Oh, no. I mean, he has savings and stuff like that. I'm just talking about once he sells the house. So he has like$150 ,000 in a savings account. And I think he has$40 ,000 in another savings account. But he's trying to think how long that's going to last him. Well, and that's the biggest problem because he's 73 and healthy. This could go on for another 25 years. And you could look up and be like, we've paid the datgum house off.

1:14:58George Kamel:Yeah. And then he's like, oh, but I don't, you know, I think that. At a 25 grand deficit, all of his money is gone in like five years. So I'm not hitching my wagon to anything this guy's doing and I'm not trusting anything he says. And you don't need it. You don't need it, Jennifer. You guys can go out and make a life for yourself and buy the house that you want in time. Nothing's on fire. We don't need to make these crazy deals to be successful. I would move out tomorrow and say, love you, grandpa. We'll visit at Thanksgiving.

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1:16:56All right, all right. Laura is in Gray Falls, MT, Montana. Okay. Did I get it right, Laura? Is it Montana? Yes. All right. Got to remember those abbreviations from elementary school. Elementary school. I'm telling you. How can we help out today, Laura? Yeah. Thank you so much for taking my call. So our question is, should we pause Baby Step 2 to have the lead paint on the exterior of our house scraped and redone? Ooh. that's a health hazard, correct? Major? Yes. So our children, two of our children have tested with lead exposure in their blood. It's not like horrible. Yes. I'm saying yes. Yeah.

1:17:43How much is it going to cost to get rid of this poison that is on your home? About $10 ,000. Really? Just to get it out of there?

1:17:53George Kamel:Because you've got to repaint the whole thing? Yeah. So at The paint is in horrible condition, so the whole house has to be scraped to remove whatever's chipping, and then they have to repaint the whole thing to seal it. Okay. And you guys are in debt right now. How much debt do you have? We have$23 ,000 in student loans and$103 ,000 on our house. Okay. So just$23 ,000 is your consumer debt. yeah that's where it gets really hard for us because we had planned that we would be done with that student loan within the next year to year and a half and um so now we're just like do we wait the year and scrape and do the house later or do we address it i would just make minimum payments on those student loans and stack up as much cash as you can to cash flow this whole thing and be done with it.

1:18:48George Kamel:I mean, to me, this is an emergency. If it were my kids, and I'm weird about this kind of stuff too, I, yes, there's certain things in life that Trump getting out of debt for the moment, just for the moment. And this is one of them, like health is such a big part of our life. Otherwise, what are we doing it all for? And this, if you don't deal with this, it could cause more bills and health issues down the line. So absolutely, I would pause the debt snowball and just make minimum payments. How fast can you guys cash flow the scraping and repainting? It'll be like five, six months. Is there anything you can sell?

1:19:29George Kamel:Can either of you work extra, get side jobs?

1:19:35George Kamel:Because I wouldn't want to be in this house if I'm telling the truth. I'd be getting out of there until this thing is settled. Yeah. Can you live with family? Last summer, and we just came up with, like, that would be a horrible financial decision right now. Yeah. No, I would not sell over a$10 ,000 repair if you wanted to look at it like that. Yeah. Do you have family nearby? Yeah, yeah, we do. And then I'm also wondering, can you break it down? I mean, obviously you want to have the house repainted, but can you do the scraping first? And that's the first thing we do. And then for a while, your house looks, you know, ratchet.

1:20:14And then once you've saved up the other half and kind of break it up so it's not, it's a little bit more bite-sized. Does that make sense? Yeah, that's an interesting thought. We had thought about scraping it ourselves, but then we were concerned that, like, we're exposing ourselves to the wood also. No, I'm not saying scrape it yourself. I'm just simply saying, how much is it? Because my guess is it's probably, I don't know, but it might be more expensive to repaint than to just chip off or scrape off the bad paint. So I'd want separate estimates. Just how much is it to get rid of the paint that's on the house?

1:20:48You might find that that's$3 ,000 or$4 ,000.

1:20:50George Kamel:Have you got some bids on that? We just got a bid for the whole thing. So I would check and see if you can get different bids and maybe you can find someone to scrape for three and paint for four. Well, now you just save three grand on the project. Gotcha. So I would be doing some homework to get that price down as I stack up cash as fast as possible. I mean, I'd be flipping things on Facebook Marketplace to try to create some cash. Like, this is an emergency. Imagine your child needed an emergency procedure or medicine and you had to come up with 10 grand to get it. That's the level of urgency I would personally have for my family.

1:21:27Yeah, I agree. I would do the same thing. And there are certain things, guys, and we can do a better job of letting you know that because no one goes harder in the paint on debt than us. We want you to move hell and high water to get out of debt. We want you to sacrifice to win. All of that is so important. But we can't let that stop us from doing the things in the moment that really do require our attention. Obviously, anything regarding health, we're the first ones to tell you if there's a medical emergency, if somebody's having a baby, you need to pause. we're the first ones to tell you if somebody loses a job if somebody goes into the hospital you need to pause and there's other things that need to happen while you're paying off debt like you need to have the right insurance you need to have life insurance you need to be paying for a will like there are certain things that it's okay to do while you're doing baby step two paying off the debt and you should feel no shame about it you're not a failure because it took you six months

1:22:20George Kamel:longer to pay off the student loans no life we're still going to cheer you on life be lifing as they say. All right. Andy, Detroit, Michigan on the line. Andy, what's up? Hi. I'm calling on behalf of my son and daughter-in-law. They bought a money pit house and they thought elbow grease would be enough, but it's not. They would pay check a paycheck and can't fix things. And now they recently had an emergency flood that made the situation worse. they've been displaced into a hotel and now there's talk about it possibly being condemned oh gosh is insurance paying it was the flood something like where the water pipes burst or was it like it rained a lot and flood and water came in the house like what was the nature of the flood um the recent thing that happened was a pipe burst and it caused this whole thing to start but they've had floods from rain in the past that caused fire damage so when so insurance is possibly going to cover some of this, but they're finding a lot that was already wrong with it.

1:23:26So insurance is probably not going to cover a lot of things have been wrong for many years. They're finding asbestos in the ceiling, old wiring that has cloth coverings. Oh, did they not get an inspection? They didn't get an inspection when they purchased the house? They did. They did. Yes.

1:23:42George Kamel:And they found none of this. They thought this house is perfect. How long ago? How long have they had the house? It's been about a few years, I believe. Like a few years, like two or a few years, like eight? I think it's been, I want to say three years. Okay, three years. So what are you, tell us why you're calling. I'm calling because I want to advise them. They come to me for advice and I want to do it right. I'm wondering if a short sale is what's going to be needed because I don't see, if insurance will cover this, then everything will be fine. They can work their way out of this. But if insurance won't cover this and the house is not livable, I'm afraid for them.

1:24:23I mean, I'm really, my husband and I are willing to take him into our house and do whatever it takes. But I want, I just want to have the right advice for them financially. And I don't, I don't want to goof that up. Are they panicking? And I'm not saying your panic is misplaced, but are they panicking as much as you are? Or are they like, we're fine? They're panicking more so. And when I talk to them, I show a lot different side. Right. You're like cool and calm. I'm panicking behind the scenes and trying not to show. Yeah. Okay. Do you know the numbers around the house? Do you know what they paid for it?

1:24:59I believe it was like around$130 ,000. And it's just a little, you know, 800 to 900 square foot house. But the way the market was when they bought it, this was all they could get. And if they just put it for sale as is, hoping a flipper will take it, do you think that, what do you think reasonably, I mean, I don't know if you've done any research, reasonably, what do you think they could get as is? I don't know. I have not done that research, but I know they would lose because they haven't had a chance to pay off very much of this. Yeah, what's left on their mortgage? Pardon me?

1:25:33George Kamel:What's left on their mortgage? That I don't know. I don't know specific numbers here because I try not to get too much in their business. I'm the mother-in-law. So I'm trying to give advice while not being too much in their business. Listen, I'm kind of glad that you don't know the numbers. That makes me know that there's boundaries, which is great. Have they asked for help? They ask for advice. They don't usually ask for financial help. Okay. They ask for advice. That's fine. Well, on the advice front, what I would be doing is helping them navigate this insurance landscape because that's complicated and it's a headache and you think you got one denial so you give up, I would encourage them to appeal it, get a public adjuster, do all the research necessary because this insurance thing is the make or break if they're going to be able to get out of this unscathed or not.

1:26:20George Kamel:And worst case, there might be an as-is cash buyer situation and they might be on the hook for the difference. And that's a real problem for them. So I would do everything in my power to guide them through that insurance process and get this thing covered.

1:26:53welcome back to the ramsey show here in the fair ones credit union studio we're headed back to the phone lines where George and I find Mark in Albany, New York. Mark, how can we help out today? Hi, how are you? Doing great. What's up? So I was just wondering, is it ever okay to use or deplete your emergency fund to avoid taking a loan when you're making a big purchase? Is the big purchase an emergency? Something that is urgent? Something that is completely necessary and something that is like time factor? Yeah. Unexpected. No, it's something that's sort of been expected. It's for a car because my first,

1:27:42George Kamel:my current one is getting a little too expensive to maintain. Although safety isn't yet a concern, it's slowly getting to that point. So does the car need repairs? What do you mean expensive? so um i have to repair the not have to but the mileage is suffering from a damaged catalytic converter and a couple other things and it's also just losing value i know that shouldn't be my primary concern but i'm just is there a loan on it no there is no loan it's paid off okay and what kind of car are you looking to get how much is that going to cost you um it would be about 30 000 and would you be selling the current car yeah i'd be trading it in most likely so you'd trade it in and pay cash for this next car yes yes if i did not use the emergency fund then i would be taking out a loan for about half that amount uh what's what's the what's the trade-in amount that you think you're going to get for the existing vehicle if you don't put the repairs in?

1:28:49I might get$3 ,000 or$4 ,000.

1:28:52George Kamel:Oh, okay. Not much. All right. How much is in the emergency fund? Right now, I believe it's$11 ,000 or$12 ,000. Okay. So you don't even have the money to even buy this car. It's not like you have 30 grand sitting in the emergency fund ready to buy that car. Yeah. Where's the other money coming from? Well, I have$11 in the emergency fund, and I've been saving up in a new car fund. I have about$16 or$17 in the new car fund. Great. So why can't we just spend$16 or$17 since you have a new car fund that you've saved for? You can get a great car for$17 ,000. I suppose I could. It's just I found what I really liked.

1:29:36Ding, ding, ding. I admit I'm a bit. Pardon me?

1:29:38George Kamel:I was just saying ding, ding, ding. We have a winner. You got to the actual, the bottom of this, which is I saw it and I want it, and it looks fancier than the$17 ,000 version. What kind of car is this? It's used, so it's not a new car. Don't worry about that. It's a 2023 Q5. Oh. I thought we didn't want to get into expensive cars with expensive maintenance and expensive insurance and premium gas. That is true, yes. But we are. This is different. Okay. So I mean, my answer here is very cut and dry and we can get into the whys about it. But I think that you did something very intentional, which you said, I'm going to need a new car soon.

1:30:26Therefore, it's not really an emergency because you saw it was coming and you started saving money, which I applaud you. That's exactly what you should be doing. And you saved up a pretty penny. You saved up$17 ,000. Nothing stops you today from saying, I'm going to buy a$17 ,000 car today, and I'm going to continue to save towards that car fund so that maybe next year or at the appropriate time, I can add another$17 ,000 to it. And then I can come up and get my, what is it? IQ, what is it?

1:30:53George Kamel:IQ5, the Audi. So I'm curious, can you do these repairs now and ride this car for another six months to a year while you save up another 13 grand?

1:31:06For another six months, I'd probably be able to save about seven grand. Okay.

1:31:11George Kamel:So that puts us at about 24? Yeah, just about. All right. I mean, I'm looking at them online right now. I'm looking at some 2023 Q5 sitting at 23 grand. So I think it's possible to do some research and negotiate and find the right one for the price. And maybe it's eight months. Okay. And then we'll have 25 grand. And so it's up to you, the timeline, but the goal is don't use the emergency fund, except for emergencies and save up and pay cash for this car and don't let them talk. Cause here's what's going to happen. You're going to step onto that lot and they're going to say, well, do you want to just see the 2026 model?

1:31:45George Kamel:I mean, we can get you in for whatever payment you want. I mean, well, we can work with you. Sneaky, sneaky. So I already know the worst thing you can do is say I want my monthly payment to be this because they're going to sneak in all kinds of stuff. Well, we're not even talking about monthly payments. Even just they're going to try to get you into a fancier car that gives them a higher commission talking extended warranty. I mean, I just played this game. They put LoJack on a Tesla, which already can find itself, Jade. They put LoJack on there as a little extra. To try to add a little something.

1:32:16George Kamel:You can't take that off. I do feel like though, when you go to the car dealership and you've done your research online and you're just like, I'm here to pick up the car. Like, I'm here to get that car. I feel like there's less of that. You allow for less of that kind of inviting in of the sales guy. It's just, I did my research. Do you have the car ready? Here it is. Great. Okay, can you move on the price? Yes, no? Well, then you got to go to the finance office to talk to that guy, no matter how you're paying. And then he talks to you. He wants to get you the warranty and the paint protection package.

1:32:45George Kamel:That's true. It's exhausting. It's such a silly game. I'll be honest. So Sam and I just upgraded vehicles a couple of, I guess it's only been a couple of two weeks ago for him. And it really was, it was the best experience ever. I should give the guy a shout out. But yeah, looked online. This is the one we want. We called ahead of time. We said, hey, this is the car we're looking at. He goes, great, I'll have it ready by the time you pull up. This is the Toyota in Columbia. He goes, we'll have it ready when we pull up. We pulled up. It was right there. He goes, you guys just want to drive? He handed us the keys.

1:33:13He was like, I don't need to go with you. I trust you. Just like that.

1:33:16George Kamel:Wow. So we go test drive the car by ourselves, come back. He's like, so he's like, are you guys, how are you wanting to pay for this? And I said, let's, let's decide the price first. And then we'll decide me being sneaky. He goes, all right. And he goes, well, what are you hoping to pay? And I said, here's what we're hoping. And he goes, okay. I said, if you can do that deal, I said, we'll walk away, you know, we'll walk away with the car today. He comes back. He goes, I think I can get there. I said, all right, we're paying cash. That was that on that. And that's it. That, that was it. So simple.

1:33:45But you got to get to your point. Got to get to the heart of the matter.

1:33:47George Kamel:You got to have the walkaway power. You got to know exactly. You got to know more about the car than they do, first of all. Because otherwise they can talk around you in circles and get you in a car that you didn't actually want or you didn't ask enough questions about. I think the worst thing is when you're like, I think I want a new car. And you just go down to the lot and you're just browsing, hoping to be sold. And it's why like the CarMax and Carvanas of the world have done so well. because nobody wants to have to sit there and negotiate and haggle. They just go, I see that car for that price.

1:34:19George Kamel:Can I have that? And they go, sure. Yeah. Instead of the normal dealership experience. When I went to the place, that was their whole thing. We get you in and out in less than an hour. That's amazing. And it was less than an hour, can I just say. It's not an interrogation. It's like a timeshare presentation. You're there for three and a half hours to drink some Keurig coffee. And you don't even walk out with what you wanted. No. That's the worst part. All right, George. Well, I hope we help Mark. The key is it's not an emergency. And thank you for at least admitting it's just a shiny new thing and you want it.

1:34:50George Kamel:And so now you can look at your piece of crap car and go, well, the catalytic converter is out. It's going to be a safety issue. And you just say it. You want a nice new car, at least new to you. And it's OK. Just make sure everything, all the things with wheels and motors don't add up to more than half your annual income. That's right. And go, there's some opportunity costs here. And if you're willing to take on the cost of ownership and maintenance and premium gas, which right now, that hurts. Yes, it does. Go for it. Put it in the budget. Yeah, you got to know the difference between it and emergency, guys.

1:35:18We hit it earlier. It's got to be urgent, necessary, boy, and unexpected.

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1:36:43All right, today's question of the day is brought to you by Y-Refi. If you've been turned away by other lenders because your private student loans are out of control, Y-Refi may still be able to help. They specialize in refinancing options built specifically for borrowers in your situation. Go to YRefi.com slash Ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey. Remember, it may not be available in all states.

1:37:09George Kamel:Today's question comes from Carly in South Dakota. We're debt-free with our fully funded emergency fund, so I'm creating sinking funds for newer cars and house projects. I'm guessing that the sinking funds can't be cash and envelopes, so do I need to open separate savings accounts or separate checking accounts for each goal? What is the best way to create a sinking fund where I can put my money aside and not touch it for those expenses? These are great questions to be asking. I like it. Yeah, very good. Okay, so let's start with the first question. She's saying, okay, it's not going to be cash and envelopes do i need separate savings accounts you could i think it's helpful yeah and what's cool is that so we have our partner fairwinds we're in the fairwinds studio ah yes and what's really cool is they created this just for our fans you can have up to 10 different savings accounts that are earmarked for different things wow within their high yield savings so that's what i would do personally is have a car fund because these are big ticket items yeah if it's little stuff you don't need it all in separate savings that gets complicated but a big house project or a car I would label it car.

1:38:08George Kamel:Otherwise your emergency fund gets convoluted. They're actually different accounts or are they like bucketed? Yeah, they're bucketed in there. So you can actually move money around between them. Oh, wow. That's nice. It's very convenient. So that's one feature. And the sinking fund part, you can set that up in every dollar to actually market as a fund. And if it's, let's say$1 ,200 for the year is what you need, you can set a sinking fund for a hundred bucks a month in every dollar. Perfect. I love that. And that's just one of the ways that EveryDollar really helps you have a functioning budget, doing the things that you want to do.

1:38:41I always say a good budget is detailed, realistic, and flexible. And that's what you can do. The budget's very flexible. You can add the line items in there. You connect your bank. I'm a pro bank connect. You can track your transactions. You can set goals. All of those things you can do within EveryDollar. And you can manage your sinking funds. I love that. All right.

1:38:59George Kamel:So great. Mary's in Denver, Colorado. Mary, how can we help out today? My question is, I am married, and we're having kind of a dispute on retirement. I contribute a lot to my retirement account, and my husband contributes nothing, just Social Security. So I'm asking your advice on how to address this issue. So how old are you guys? um i'm 37 and my husband is 39 okay and when you say he his his goal is we'll just live off social security is that what i hear you saying correct um it's worked for his parents and he believes that that's all he needs okay are you guys out of debt we are we're on baby step four Okay.

1:39:57So just to frame up this conversation, and then we're going to go to town on this. So let's talk about Social Security for a brief moment, because he's not the only person in the world who has had that plan. But the truth is, Social Security is only going to replace about 40 % of your income. And that's if it's still existent.

1:40:16George Kamel:The trust fund is going to be depleted by, I think, 2032 or something, and that's going to lower the benefits by probably 23 % or so. Yeah. And the average payment right now for Social Security is like$2 ,000. Yeah,$18 ,000 to$2 ,000, which is really nothing. You guys factor in inflation. Imagine 30 years from now how much$2 ,000 is going to get you. Yeah. Not much. I think some of it is the actual facts, and it may need to come from someone else. You guys might need to sit down with a financial advisor, a SmartVestor Pro, and have them walk him through the reality of the situation and what could be.

1:40:54George Kamel:So sure, could you get by off of Social Security? Ask people who are doing it. It's a sad reality. That's usually the calls that we get when people call in and their parents or their grandparents, if, quote, all they have is Social Security, then the rest of the family, the younger members of the family are on the hook or feel like they're on the hook to help that person survive. And that is certainly not the position you want. I think social security is fine as supplement, you know, as a supplemental piece of your retirement, but it should not be the main piece. Okay. We've made that argument.

1:41:27So let's talk about the convincing part. So you're investing, how much are you doing the 15 % or? correct yeah i do 15 and i make significantly a lot more than my husband and um i also work full-time and he works kind of part-time um why is that so that's my issue is um well he works for his dad and um his dad owns a concrete company and his dad is getting to in my opinion needs to retire and um it's the business is just not it's just not gonna really go anywhere um what's he earned working part-time there what's he earned working part-time there um he makes about 40 ,000 a year and what do you earn i make about 55 ,000 or sorry 155 155 ,000 yeah do you and you if you don't want to answer this you don't have to but do you feel like because your income is so solid that he kind of feels like he can coast and doesn't really need to do much yeah I do he also has three kids I'm a stepmom to three kids and I have none of my own okay so my concern I guess long term is in my family we have a lot of um inheritance coming down the line here and I want to protect myself.

1:42:57And if I have a child of my own, you know, we're trying, but it's not working. And so I'm saying if, if I have a child of my own, I want to be able to pass down my family's inheritance to my child. And I also want to, you know, I just want to protect myself. I'm not saying like, we're headed for like a divorce, but I just in some way feel like I'm being taken advantage of. And I just don't know how to navigate it. Well, you're seeing some red flags and you don't want to ignore them. And I think that that's very smart and scary. It's scary to not put your, you know, bury your face in the ground.

1:43:34You're trying to be alert and see what's going on. And I applaud you for that. Have you actually shared your why behind all of this?

1:43:41George Kamel:Not asking him why is he not contributing, but saying, here's why I'm scared. Here's why I'm contributing. I have a fear of not being prepared. I want to leave an inheritance to our children and their children. I want freedom in retirement. I want to be able to travel. I don't want financial stress. Does he care about any of that if you shared it with him? yeah I've shared it with him and um um yeah I've shared it with him I I before we even got married I shared with him my retirement dreams I want to have multiple homes in different states I want to be able to travel I want to see my family I've shared all of that before we even got married because it was a concern of mine and um I've just worked very hard in my career I've earned you know, where, where I'm at.

1:44:26And, um, what's his response? He says that he, I think he honestly, he's just content being at home, being around his children. I think that over the years, his dreams have kind of changed compared to mine. Has he given up or is it that truly what he wants? He just wants to be a stay at home dad. Like, which do you think it is? honestly? I think it's a little bit of both. I think that he doesn't, I think honestly, he feels a little defeated. The fact that I make so much more money and that I'm already so far ahead of my retirement. And when I say I want to travel and I want to see my family, I have a large family.

1:45:08He has a very small family. I want to go golf and do all these things. He's very content being at home. It's just like very different changed. Yes. It sounds like you guys were never

1:45:18George Kamel:aligned on any of these like values and goals it was just sort of like well we're different it'll be fine but now i mean there's a chasm that's growing between you guys as you are very driven you're ambitious you have certain goals and dreams and he's gone that's not for me and he and the truth is he doesn't care about those for you how long have you been married we've been married five years and i think that the things have changed um we've been together almost nine and his children have grown up. They're now 20, 18, and we have an 11-year-old, and the 20-year-old has a baby, and I think things as the children have gotten older, his priorities have become more of, I want to be around my grandchildren, I want to be around my children, and less about traveling and doing all those things.

1:46:02But I feel free to do that because I don't have a child of myself. I'll be honest with you, Mary. This sounds like something that can only be solved in a counselor's office.

1:46:12George Kamel:This is a marriage problem far more than a financial problem, and I hope you guys can figure it out and align on some vision for your future.

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1:48:00I'm telling you guys, go to ramseysolutions.com slash store or click the link in the description if you're watching. Remember, the sale ends Monday, Monday, Monday. All right, we've got, not bad. We got Grace who's in Dayton, Ohio. Hey, Grace. How can George and I help today? Hi there. Good afternoon. So my question is regarding whether I should use my home equity to pay for college. I am a single mom to two teenagers, ages 14 and 16. Do you recommend a HELOC for this type of situation? I owe$96 ,000 on the home and I have roughly$200 ,000 in equity. Oh boy. Okay. So let me start with the empathy, which is, I love that you're thinking about ways to for your kids not to go into debt.

1:48:48I love that you're thinking about ways to pay for college that doesn't put the debt burden on them. However, putting it on you and your home and your place of safety and security is something that I would never, ever, ever recommend.

1:49:05George Kamel:And the reason is, yeah, HELOC is like a credit card attached to your house. So you're going backwards. Now you've got a variable interest rate while putting you at risk for foreclosure if you miss payments. So you're trading this unsecured education debt for secure debt attached to your house. And let's unpack that just a little bit more because I think it could be helpful for you and anybody listening. Guys, when you bought a house, you weren't thinking to yourself, oh, if I buy this house, it would make a very good credit card for me. You bought the house thinking, this is a way that I can build wealth.

1:49:41This is a way that I can have security. This is a place of, do you see what I'm saying? Financial security and emotional security.

1:49:50George Kamel:You're like resetting the clock on when you can retire now, which puts you at risk of you becoming a burden to your kids. So I want them to go to school debt-free, but let's make a plan to take debt off the table and go, okay, what are all the ways, all the levers we can pull that don't involve debt? And that might mean they're going to work part-time. It might mean they're going to go to a two-year community college to knock out their prereqs. How old are they? They can save in a 529 plan. How old are they? Are they ready to go right now? They're 14 and 16. Okay. So there's a little bit of time.

1:50:24George Kamel:Have there been conversations about college plans and what they might want to do? Because they're still young enough that they don't know. Yeah, they do know they would love to go to a four-year school. So I'm just trying to figure out how I can potentially make that work for them. And is that, do they want to stay in state? because I would start to set some boundaries on, hey, guess what? School costs this much money. It's going to be$200 ,000 for you to go out of state to this quote-unquote dream school or quote name brand school, or you can go to the school down the road for$5 ,000 a semester.

1:51:01George Kamel:So you can start to help them understand the math on this. Yes, I'm with you. And I think they're very willing to go to a reasonable in-state school. I'm just not even sure I can afford that lower cost route with, you know, what I'm looking at. But you're not factoring in if they get scholarships, grants, and that's where the pressure's on to do really well in school. Get really good, you know, grades on those SATs. And maybe there's even athletic scholarships. I don't know what they're into, but I would be looking at every scholarship and grant possible. you saving up as much as you can in a college savings account, like a 529 plan, and having them choose an affordable school and possibly working part-time, and even working now to start saving up for that.

1:51:46Doing community college on those first gen eds is going to save you a ton. A ton. I wish I had done it if I had been able to. So that plus what George is saying, I mean, that's exactly how people do it. People call in all the time who paid cash for college, and that's the way they do it. And I would say to George's point, don't be afraid to let them have some skin in the game. You know, this is the point, especially for the 16-year-old, applying for scholarships and creating an environment where they can be accepted for those scholarships, that ought to be their full-time job, you know, also while they're working at a supermarket or McDonald's or wherever else they're working.

1:52:25So them having skin in the game, I think, is actually really, really healthy for their college relationship because they'll value it more. Okay. I like that. Yeah.

1:52:36George Kamel:And if you want some help with the conversation, you can go watch Borrowed Future. It's a free documentary we created. It's on our YouTube channel. Just search Borrowed Future. And that will cause them to be asking questions. And it will likely scare them away from going into debt for college. And so that way we can do the work for you. I also talk about this in my book, Breaking Free from Broke. I have a whole chapter on student loans and at the end, how to go to college debt free. That's the goal. Because I don't want to set you back in retirement and you just take on the burden and go, well, at least the kids went to school debt-free.

1:53:06George Kamel:Now I'm shackled to debt for the next 20 years. Yeah. And I mean, we see that not just with HELOC's grace, but even with folks doing Parent PLUS loans. It's just, it really is, I think what it is is parent guilt. In this case, mom guilt, where it's like, I don't want to be the reason that they go into debt. Or I didn't do a good enough job. Or I didn't, yes. And it reflects on me as a parent. And the truth is, I've said this before and I'll say it again, the ability to pay for college is a privilege, both for the parent and for the child. There's plenty of people who meet us on down the line. Their kids have already gone to school and they didn't find Ramsey Solutions in time to kind of create that pathway.

1:53:47And that's okay. We're all learning. We're all making mistakes. But I will say the most important thing that you can do, even more so than paying for the college, is just starting to have the conversation very early and very often on what the expectations are. So if you're just saying, hey, this is what my parents did for me. They said there is no college fund. We don't have the 529. Jade, if you want to go to college, you either need to be very smart or very good at sports. And they said that straight up. And I was like, okay, got it. Let me work on this. Yes. and kids, I think, I hate to say the word kids, teenagers, I think they're responsive to that, especially if it's the household that you brought them up in, which is, hey, we're responsible for ourselves and we're self-starters and that sort of thing.

1:54:31George Kamel:I was just at a local high school in Columbia, Tennessee, and we just released this video on my YouTube channel. I asked high schoolers many questions they weren't ready for. And it was shocking to me, Jade, that I was the first person to be asking them questions like, hey, what do you want to do after high school? Okay, what's that going to cost you? Do you plan on taking student loans? How much debt would you be willing to go into to get this degree? And was it crazy what they were saying? Well, the funniest one was this girl wanted to be, she said, I want to stay at home. I went, that's sweet.

1:55:02George Kamel:You want to have kids? No, she said, no, I don't want kids. I said, you want to be a stay-at-home wife? I said, how will you spend your time? She said, shopping. And I said, I wish you the best of luck with this plan. and god bless the man who signs up for that oh but a lot of the kids were just sort of like well college is the next step because i was told it's the next step i don't really have a game plan i hope i have a job on the other side that pays me enough to knock out my student loans and whatever other debt i have and so it just was a good reminder that parents need to be having these conversations early and often it should not be a youtuber like me asking your kid for the first time at 16 or 17.

1:55:39George Kamel:Very good point. How they're going to pay for college. What's the game plan? Why are they going? Because you heard her say, well, they just want to go to a four-year school. Well, why? Because their friends are going? Yeah, exactly. Because the football team is great. Exactly. That's the real reason kids are going. The brochures, they don't talk about how great the library is and the quality of education. They're showing you the water slides, the cafeteria, the football team, how exciting it's going to be. That's how they market these things to get you to spend what you spend. I also think another driver is just like the freedom.

1:56:12The way I get freedom is I go to college. Like I have to go away. Then I can have a dorm room. And the further I go away,

1:56:19George Kamel:the better. And also the more expensive. Yeah. So true, George. Yeah. Having these conversations so, so important. And again, if you're able to do a 529 and fund your kids college, that's amazing. What a privilege. That's fabulous. Good for you. Good for them. But you're not if you're not able to. That's also OK. As long as you're having these conversations, as long as you take debt off the table, totally fine to tell your kid, hey, you're going to work for this. I'm going to work for this and you are, too. And you're going to work more. And they may they may not thank you now, but I promise you when they're in their 20s and they look at all their friends with student loan debt, they're going to go, mom, thank you.

1:56:54George Kamel:Dad, thank you for allowing me to avoid student loans.

1:57:00Thank you.

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1:57:52Well, we're coming to the end of the line, so that means one thing. Scripture and quote of the day, George. Can't miss it. Galatians chapter 6, verse 4 through 5 says, Each one should test their own actions. Then they can take pride in themselves alone without comparing themselves to someone else. for each one should carry their own load. It really said, check yourself before you wreck yourself. You best check yourself before you wreck yourself. All right, Mark Twain, not Dr. Dre, said, a man cannot be comfortable without his own approval.

1:58:24George Kamel:I'll chew on that. I'll chew on that a little bit. Come on, Mark Twain, we were just on Dr. Dre, and here you come. All right. The Dre of his time, some say. Some say. All right. Wow, that really makes me want to laugh. Alex from Los Angeles is on the line. What's going on, Alex? Hi, guys. Thank you for the Dr. J shout out. He's a real one. Yeah. So I had a question basically for how do the baby steps involve a newborn baby that we had with my partner? And with those baby steps, what are the deciding factors that decide who moves in with who? Is it who makes the most money? Is it who's closer to work?

1:59:06Is it who has the most family around? How does that all tie in together? Well, they're definitely all factors.

1:59:12George Kamel:A coin toss or a thumb war would be my favorite options. Oh, man. Are you guys getting married or tell us about the nature of the relationship? That is in the upcoming future, getting married together. Of course, having a strong family foundation to begin with. So again, yeah, that's in the line. And then just, I guess, just making sure that I do the best that I can for my family, whether it's saving the most money, whether it's, you know, moving into the cheapest city. I just want to see what guidelines are there for the baby steps and, you know, creating a family. Well, are you and your partner in different cities?

1:59:47You've mentioned that a couple of times. Where are you and where is she? It's about a 40-minute commute from both cities. Okay. We'll keep that confidential. potential um my i i want to get to your question and i don't want to sidetrack it but i'm kind of like why not just get married like solidify it the baby's here there's no question you're gonna be living together and starting a family together i think george that that would be top on my list first and then i'd be looking at spots we can have the party later but why not if i mean if we are

2:00:22George Kamel:we're doing this thing we're in this together for life with this new baby uh why not just go down in the courthouse, get the marriage certificate, and have some protections in place for both of you. Definitely. I feel like that would definitely make the household stronger, income as well. You know, we can, you know, get combined incomes and get our goals going, get the baby steps knocked out. Yeah. It's more secure for both of you. Yeah, definitely. She's not really into this, like, mindset, like saving money and, you know, building a good foundation. So I guess that's kind of what... What is she into?

2:00:58Coming with me? Like working, going home, buying stuff, jewelry, things like that. Got it. Okay.

2:01:06George Kamel:And are you the saver? How much money do you have? Yeah, I'd say so. About a couple, 15 or 20. And do you have any debt? Yes, I do. I'm working on paying that off, yes. How much? It's about 20 in total. So, yeah. What she have, do you know? I don't know. So that's kind of, you know, on her side of the court. We haven't been as vocal financially. But she does know that I have this mindset of getting towards that end of the baby steps. But again, I don't want to scare her away and be like, oh, man, if I move in with him. Can we be real, Alex? You guys made a baby together. I think it's time to get real with each other.

2:01:47Well, how new is the newborn? How young is this baby? One month. One month. I will say this. come at me in the comments but if you have this conversation with a one month old and she's still riding high on hormones and whatever it may not end well for you tonight so i might i might spend the next one to two months and gather my information and journal and think through what it is that i want to say and kind of you do some self-preparation give her some time to kind of adjust to life, then have the conversation, ease into it.

2:02:23George Kamel:Postpartum is real. It's a real thing. You're talking to somebody who was crazy. So was she working before? She was, but she's been off leave ever since. So about a month with no work. I went back to work two weeks after she was born. So how is she covering her bills and the baby right now? Through her savings that she has. She did tell me she has a little bit saved and she also has family leave. so I don't think she's lost too much of her income. Okay, what's the expectation of you chipping in and helping pay for things? Well, I mean, if she moves in with me, I'd be covering the rent for both of us together and my daughter, you know, just leading the household in a sense, putting food on the table.

2:03:04How long did, can I just ask, and no judgment, how long did you guys know each other before the baby? Before the pregnancy? A few years. Okay, so you know her. Okay. Yeah, definitely. We've been, yeah, she knows my family. I know her family. Okay, good, good, good. But, yeah.

2:03:19George Kamel:And you, do you live near where you work? You work in an office? I do, yes. I got promoted recently as well. I started a new position in two weeks. Congrats. What are you making? I like being closer to my 90. Awesome. And what was she doing and what is she making? The same thing, but she's making 70. Okay. And she does plan on going back to work at this point? Yeah. Yeah. Okay. Well, I mean, it's a discussion for you two to have as far as who's going to go where and what the commutes are like. There's some logistical pieces of this that I would factor into the equation. And, you know, what is she paying for rent?

2:03:55George Kamel:What are you paying for rent? How much can we afford together as a family, as we do a budget together? And again, I would not combine incomes until you're married. And I would get married very soon so that we can combine our lives fully. Because until then, this is just going to be messy and awkward and Venmoing each other. Definitely. The things I'd be thinking about as priorities and deciding, I'd be thinking about if we need family around for child care, then whoever's closest to the family who has been said that they would help. I'm thinking about that. I'm thinking about the place with the lower rent, because if something happens and she becomes more attached than she thought she was going to be and decides, you know what, I kind of do want to be home more.

2:04:34Having a lower cost of living is going to behoove you. So those are the two things that stick out to me right away as being like possible drivers on this. I don't think the size of the apartment would be as big of a driver because, you know, if you decide to have more children down the line, you can always move. That's fine. But I think those top two tend to be the ones that it's like, okay, daycare is always a big ticket thing. So having family is so important. And then, of course, yeah. And lease agreements as well.

2:05:05George Kamel:Like who signed up for what? How much time is left on the lease? can we get out early? Which one has the least amount of damage if we exit early? And so I would be looking into all those factors. And those are things you can do now kind of on your own. You know, you can ask her for some details without getting into the weeds, but there's going to be a lot of logistics here to figure out. And again, it's just going to simplify everything. If we can combine our life, be married, it's just one team, one dream. One team, one band, one sound. Remember Drumline? Nick Cannon? I missed that one. You've never seen Drumline?

2:05:37Have we had this discussion?

2:05:38George Kamel:I think we did and I think you judged me last time we had this discussion. I probably did. Listen, the movie's not all that good. Do I look like a guy who would enjoy Drumline? Yeah, it's HBCU centered. I get it. Well, it's more the, I don't do band stuff. You do indie bands. Yeah, I'm punk rock, all right? Bon Iver. There we go. Are you happy that I said it the right way? Thank you for not saying Bon Iver. You're welcome. Which is offensive to all people groups. Well, let it be known that I have said it that way as well. And I believe you were the one who corrected me, so. Oh, that's great. You live and you learn.

2:06:10All right. Do we want to take Jessica or can we get to it? Can we take a social question? We have some great ones here. All right. Jessica, call us back tomorrow. I promise we'll get to you. But let me just say this. People don't know this. The Ramsey Show is on the radio as much as it is on YouTube. And so we have a clock, guys, that we have to hit. We have to go to break at a certain time. We have to do all that. So don't be mad at us.

2:06:31George Kamel:The segments are like exactly eight minutes and 34 seconds. And it's our job to police that and try to get in and out. And that's why sometimes it's like we feel like we don't take as much time. Don't be mad at us. It's just the clock. We have to make the radio folks happy too. Well, anyway. All right, we got less than a minute. What do you got for me? All right. Should we include our child's 529 accounts as part of our net worth or not since they're going to be spent eventually? Oh, that's a fun one. I like that question. I mean, you can include it for now, but I wouldn't include it as far as your nest egg and retirement projections.

2:07:02George Kamel:But yes, it is an asset. And who knows if they'll actually use all of it. Yeah, and it's growing. On accounting terms, it all counts, but I would not count it as far as my future financial plans. Do you think about yours when you sit at night and you ponder your network? I do. You know, well, I check it to see where it's at because every month I contribute. So I like to see the number go up and to the right. That does make me feel good about my kids' futures. I agree. I see what you did there. Pardon the pun. Well, guys, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.

2:07:35Thank you.