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Jade Warshaw

Normal is broke and common sense is weird. So we're here to help you transform your life and your money. From the Ramsey Network in the Fair Winds Credit Union studio. This is the Ramsey Show. I'm Jade Warshaw. Next to me, George Camel. We will be taking your calls about your life and your money for the next couple hours. It's a live call. 888-5225 gets you on the line. Harold is on the line. He's in Colorado Springs, Colorado. Hey, Harold. How can Georgia.

Caller

Hey, what's going on, guys? Thanks for taking my call. I'll make it really brief. I'm 70, going to be 71, still working full time. Been there for 20 years. I've blown all my money all over the years by traveling, going different countries, continents. I started listening to you guys when I was 62, 63.

Jade Warshaw

Okay.

Caller

And I'm totally out of debt. I have no debt. My house paid off. I have credit cards. No, I don't owe anything. Personal debt. No, nothing on wheels. As Dave says. I have no debt on wheels at all. But I'm frustrated because I've lived a. Like Dave says, you spend like you're in Congress today. I just went out and had prime rib for lunch.

Jade Warshaw

I live in your best life.

Caller

I am. And I don't know when I'm gonna die. Right next week.

I hear that.

Five years.

Jade Warshaw

But you have nothing saved, Harold.

Caller

No, not really. No. Excuse me. Nothing to speak about. I make 30 500amonth and Social Security another 4,500amonth from Costco where I work.

George Camel

Are you full time? What's your hours like?

Caller

Yeah, I'm full time.

I had a chance. I went part time for a little while, but I'm working because of my benefits are so great there that.

George Camel

Yeah, Costco crushes the game on the benefit side.

Jade Warshaw

Are you investing? Are you investing? 50, 15% at the very least, herald of that 7,000 that you're bringing in.

Caller

You know what?

I'm not.

I, you know, I have, I have my 401 of my Roth at Costco for the last 20 years. And I know there's some money there,

George Camel

but how much is it?

Caller

I think it's 663.

George Camel

Okay.

Caller

As of yesterday. It's not nothing, but I mean, it's nothing that I like, pull out or

use because I, I'm at a point

in my life, you guys. Maybe it's psychological, but I feel like I'm going pain because it's like, what do I do with my life now? I. You know, I'm just working. I have my dogs.

Jade Warshaw

Are you healthy?

Caller

I don't know what to do, you know.

Jade Warshaw

Are you healthy?

Caller

Healthy? I'm a little chunky for meat and so darn good.

Jade Warshaw

But listen, that's all right. You have a family? Do you have grandkids, wife, significant other?

Caller

No, they're all. They're all gone. They're out of state. They're in Virginia. They're all successful. You know, they're all. My son's been in the air force for 20 some years and all my grandkids and.

Jade Warshaw

But you have good relationships. Do you have good relationships with them?

Caller

Okay, yeah. Yeah.

Jade Warshaw

So you're not alone. You're not alone. You're just. You're just chilling.

Caller

Yeah.

George Camel

You're in this weird sort of purgatory, Herald, where you're not, like, rich, but you're not broke. And so I think you just haven't really taken the time to create a vision for what you want. This sort of quarter to look like of your life to go. Okay, what does it look like? Is it me working full time? Do I want to travel more? Do I want to go see family? Do I want to pick up a hobby, start a business? It sounds like you're sort of itching for some. Some purpose, something you can sink your teeth into.

Caller

Yeah, otherwise I'm just, like, sitting around the house with my dogs. I'm fighting, you know, like, endlessly working on the yards because I have a huge yard and stuff, and I just. I'm always out there, like, you know, mowing, pulling weeds, cutting the bushes and. And I just. So I think what it is, I'm like, kid, and I. Yeah, I'm anxious and I. It's like I want to do stuff, you know, and if you could snap

Jade Warshaw

your finger, would you be doing. If we just said to you, hey, you have a genie in front of you. You know, do the little I dream of genie thing, and you can have what. What it is that you want. What would that look like? Would that be I no longer work at Costco? Would it be I live closer to family? Would it be I moved overseas? What would that be?

Caller

You know, definitely not living close to family, because I think that's when you start taking on all their responsibilities and their needs and stuff. You get it?

George Camel

Yeah, you got to watch the grandkids. That's a real drag, man.

Caller

But I myself would pro. Be on a beach down and play it El Carmen somewhere okay. With a drink in my head. I don't know. That's how immature I am.

Jade Warshaw

No, that's not immature. It's, it's not immature.

George Camel

It's. I hope to have your energy at 70, Harold. I don't have it now at 37. So I, I pray I get some later on.

Jade Warshaw

You need something to aim at. I, I think that's what George is getting at and that's what I'm getting at too. And, and we can do that if you say, you know what? I, I'd love to see what it would look like for me to move down by the beach to get myself a little condo. Maybe I moved down to Mexico. Let's, let's put that on the board and let's start working towards that. What must be true in order for that to be the case. What age do we want that to happen at? How much money in the bank would make you feel secure? Right. And even if you don't ever do it because you get down the line, you go, you know, I actually didn't want to do that. I just loved dreaming about, I love thinking about it. That's also fine.

George Camel

But at least it's now. Just, Well, I was just unwilling versus I regret never figuring it out.

Jade Warshaw

Exactly.

George Camel

So you might make a list of, here's the things I want to stop doing. Ideally, these are things that are draining me. Here's what I want to start doing, and for you, that might be, I delegate the lawn work for 300 bucks a month. Someone else can deal with it because it does not fill my tank, it does not reduce my anxiety. I'm going to throw in a spa day here or there, and then that's going to factor into a real budget. So now you need to figure out, can I sustain the life I want without needing to keep this full time job?

Jade Warshaw

Yeah. And the thing, the thing that must be true for you is starting today, you do need to start investing 15% because a day is going to come when you let that Costco job go and you're going to want, want to replace that 3, $500 a month. You're going to want to draw whatever that is, you know, $30,000 a year off of your nest egg, $35,000 a year off that nest egg to kind of take the place of that money. And so by you investing, that's going to make sure that money is there for you to do just that.

Caller

Yeah. Now was I, I listen to you guys every day and I don't see a lot of callers you know, that are in that position of man. I'm old and what. And I'm still working. What the heck do I do? You know what I'm saying? Because it gets scary. It. It becomes what are you scared of me?

You know, I don't know.

George Camel

That you can never stop.

Caller

Yeah.

George Camel

Yeah.

Caller

Because I'm 70 and I'm like. I love working with the people that I do and I enjoy the interaction with the employees and my members and.

Jade Warshaw

And I think you need that for your mental health. I think you need interaction, I think you need purpose. I think you need to be using skills and using your talents. I think that's has to be a part of life. If you're working a 9 to 5 or you're volunteering or you're mentoring someone, you just need to use your functions and your devices. And I think that's what you. I don't know. But based off of what you're saying, I think you're afraid that if you let this job go, that's like the beginning of the end and it's kind of a downward spiral from there on. And so just tonight, I think, Harold, I think two things are your homework and these are gonna be things that you, you look at for the rest of the week and into the weekend. Number one, start playing out that dream of moving to Playa del Carmen. And what does it look like? Would you be willing to sell your house? Start looking online at what little properties look like, get some numbers and put some real vision to what that is. And then you can actually decide do I really want this or do I not? That's thing one. And then thing two, I'm actually going to give you Ken Coleman's book. Find the work you're wired to do. Because I think that you deserve to know exactly how you're wired, what your skills are, what you enjoy to do and how you can kind of filter that into other activities. Maybe it's not just working at Costco. Maybe you get involved in a local ministry. Maybe you start volunteering at a school or at a hospital, whatever that is. You just need to get into the game and start using your personality. Cuz George, this guy's got a great personality. I can tell you that.

George Camel

I want to hang with Harold. I'm going to be honest.

Jade Warshaw

Yeah, you sound like a good time. You sound like, listen, at the family reunion, he's the one that everybody's flocking to.

George Camel

But the key here is I want you working cuz you want to, not cuz you have to that work optionality changes your life.

Jade Warshaw

Yeah. Agree.

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George Camel

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Jade Warshaw

Well, we're going back to the phone lines where we have Eduardo in San Antonio, Texas. Hi Eduardo. How can George and I help today?

Caller

Hello. I had a question. My question is, I have $200,000 in bad debt. When is it okay to give up on my credit?

Jade Warshaw

Give up on your credit or give up on the debt? On paying off the debt, I guess

Caller

it'd be both because you, I guess the credit would go bad after giving up. Or, you know, let's say I let my truck get repoed or the credit cards go into collections.

Jade Warshaw

I see. So I'll try to answer your question. When you make the choice to begin paying off debt and closing accounts, your credit does get bad before it completely goes away. And once it completely goes away, that's actually a really good thing because a zero credit score is the same as a very good credit score. The hard part is watching that number tick down because as you're paying them off and as you're closing those accounts, the factors that are used to measure your credit score, they start to disappear, right? And so that's kind of what's going to happen naturally. That's what happened to me, that's what happened to George. And that's not a bad thing. But what you're talking about I think is a bad thing because what you're saying is, hey, I'm kind of just giving up on this entire process. I want to do a voluntary repo. I don't want to even fool with this anymore. And I think that we can help you curtail that a little bit and do it the correct way.

George Camel

How old are you?

Caller

23.

George Camel

How did you get into 200 grand in debt by 23? What happened?

Caller

So

when I was 18, I got my first credit card secured. They, you know, gave me or put 200 down. And after that it became 3,000. And then after that I applied for another one, it became six. And I had a business at the time where I was just kind of use the credit and paid off. But after a while, it just kind of added up, and somehow I got to 25,000 in credit card debt. And then later on, I ended up buying myself a truck to do hotshots, because that's. That was like the only way at the time to kind of, you know, do anything for myself because I couldn't get a job.

George Camel

Why couldn't you get a job?

Caller

I guess I have a criminal past because I had a Mustang at the time when I was young, and I evaded arrest and I got a. Oh, arrested for that. And that basically shut down all my chances to go out there and do anything.

Jade Warshaw

So you're thinking I have to start a business. What type of business did you try to start?

Caller

I was trying to do vending machines because they say passive income is, you know, the best thing, but that was not even close to positive income. Sure, yeah, I was doing it, and I was an electrician for a good while, but I couldn't get into every single place. I was working in Tesla. But then I got a job in Google and they declined me.

Jade Warshaw

What are you doing today?

Caller

I'm a truck driver.

Jade Warshaw

Okay. Okay. And is it. Do you work for a company or do you own the truck? How does it. How is it set up for you?

Caller

So I get 25% of whatever comes in, and I work for a company.

Jade Warshaw

Okay. All right. And what do you earn? What do you take home every month doing that job? Your portion after expenses.

Caller

So Weekly I do 2,500. Monthly, I would say around 8,000 to 10,000.

Jade Warshaw

Okay, great. And is it just you or do you have a family, children?

Caller

I have a wife and a kid.

Jade Warshaw

Okay, and does she work?

Caller

And she did not.

Jade Warshaw

Okay. How old is the kid?

Caller

One year.

Jade Warshaw

Okay, so she's home with the one year old.

George Camel

All right. And if you broke down the debts, how much of this is credit card debt versus the truck loans? Break that down.

Caller

So $25,000 is credit card debt. $70,000 is my. My electric debt. And then 35,000 is my fiance's car debt, and then 60,000 is around my house debt.

George Camel

Okay, so we're not going to count the mortgage right now. You're talking about a mortgage.

Caller

Yeah, I have equity in it. It's worth around 180. Is thinking of selling it to get out of this, but no, I'd rather

George Camel

you sell the car and the truck.

Jade Warshaw

Yeah. Because the house, that's just the mortgage debt. It's not a HELOC or anything, right?

Caller

No, it's owner finance.

Jade Warshaw

Okay. So, yeah, I'm with George. The truck and the car look like the. The very first places I would start.

George Camel

Half your debt is gone immediately. And so let's move the mortgage out of this. That brings your debt down to 140. In consumer debt, we get rid of the cars, that gets rid of 105.

Caller

Right.

George Camel

This is a solvable problem. Now, we just went from I can't make my payments to, oh, my gosh, I'm almost debt free by the end of the year.

Jade Warshaw

Yeah. What's that $70,000 truck worth if you maybe sold it? Private sale on Kelley blue book.

Caller

Like 55.

Jade Warshaw

Okay. And what about the $35,000 car? Do you know what that might be worth?

Caller

Buy like 20.

Jade Warshaw

When was the last time you checked for the car?

Caller

I haven't checked on it. I just bought it this year. Reason being we got kicked out of our, you know, parents home pretty quickly. And she also, you know, was forced on, like, to get a car. I was kind of forced up on me that I need to. She needs to have a car in case of any emergencies, that she needs to be right.

George Camel

She was forced against the wall to buy a $40,000 vehicle.

Jade Warshaw

I'm cut through that because that's some B.S.

Caller

yeah.

Jade Warshaw

Everybody needs. Everybody needs a car, but you need to get a $35,000 car. Let's just be like, you could have gotten a 10,000, you could have gotten a 12,000. So, like, those are the things that I want you to internalize and go, I needed to solve a problem. I did not need to go to that extreme, because that's the only thing that's gonna save you going forward. You've gotta look at some of the choices you've made and go, why did I do that? And why did I go to that extreme? Because going forward, you and you and your wife both, you're going to have to stop and think in a different way going forward, otherwise you're going to start to repeat the same things for the same reasons. Well, we Needed a car. Well, we needed to do this and all those things are needs. You needed to get a job. You needed to probably come up with something smart to do that was different because of your record. She needed a vehicle. Like, I understand that, but we have to not go to the greatest extreme on it. Does that make sense?

Caller

Yeah.

Jade Warshaw

Yes. Okay, so to George's point, keep looking at these cars. So back to the $35,000 car. Let's check tonight and see what it's worth because, you know, obviously for the call today, I appreciate the guests, but let's get the real solid numbers really, on each of these vehicles because that's the ticket to you guys truly getting free on this and doing it quickly.

George Camel

Just see the private party value on Kelley Blue Book. Check Carvana and Carmax and all the others to see what they would offer you for these vehicles. Then at least you know the amount you need to cover that you're underwater on.

Caller

Right.

George Camel

That. Let's say it's 24,000.

Caller

I've checked. I've checked the truck yesterday and it was 50,000. What? They offered me a dealer trade in.

Jade Warshaw

Okay.

George Camel

So, yeah, dealer trade is going to be the worst offer ever. So I'm not. We're not looking for a dealer trade in at the local dealership that's selling brand new cars.

Jade Warshaw

Private. Private sale.

Caller

Yeah.

George Camel

So what could it sell for on Facebook or auto trader? And then what would Carmax or Carvana give you for it? Which is likely going to be higher than a normal dealer trade in.

Caller

Okay. And then whenever it's time to, you know, sell the. How does that work? Do you have to like, just pay it out of pocket?

George Camel

Whatever you need to come up with the difference. Some people go to the local credit union and get the difference as a personal loan, as just an unsecured loan. And some people will save up the difference. Now, with your income, if you really hunker down making 10 grand a month, you could save up 24 grand pretty quickly.

Jade Warshaw

Yeah. Or at the very least, save up the difference on one of the cars. You see what I'm saying?

Caller

That I could sell. Like I said, I was doing hot shots for a bit. And a trailer is worth around 10,000.

Jade Warshaw

Oh, perfect. Okay.

Caller

And it's paid out cost.

Jade Warshaw

Yeah. So let's do that. Let's sell the trailer. That gives you the 10k. That's probably gets you under your car. Yeah.

George Camel

Now, what's your wife's car payment?

Caller

750.

George Camel

Now imagine you got a $750 raise every month in your net take home pay that you can now apply to your other debts or use that to save up for the underwater difference on the truck. Now we're starting to get some momentum. So you went from your back against the wall to should I let this car get repoed? To oh, we can be done by Christmas.

Jade Warshaw

Yeah. The thing that's missing, and it's not just for Eduardo, it's the nuts and bolts of what it takes to get out of an underwater vehicle. And George was said it beautifully. If you can get a loan from a credit union, I love that. I don't care where you get the money. If you get the loan. The point is, we're going from $70,000 in debt to maybe 10,000 or even 15 or 20,000, but that's going backwards. We want the debt to go down. And as long as you're doing that, we're okay with you doing this. The point is, you're freeing up payments up to the tune of 750, 800amonth in car payments. That's big money.

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Caller

Foreign.

Jade Warshaw

I've said it before and I'll say it again. Buying or selling your home is a high stakes game because one bad deal could cost you tens of thousands of dollars. You don't want to overpay for your next house or sell your current home for less than it's worth. That's why Ramsey Trusted connects you with vetted Real estate agents who have the experience to guide you step by step to make smart decisions, not expensive mistakes. Connecting is easy. Just compare agent profile interview your top choices and pick the one that's right for you. Find a local Ramsey trusted agent who has your best interest at heart for free@ramseysolutions.com agent or you can click the link in the description if you're listening on YouTube or podcast. Caleb is in Little Rock, Arkansas. Hi Caleb. What's going on?

Caller

Hello there, ma'. Am. I'm on step two of the baby steps. You know, the debt snowball and I'm actually treating it more of an avalanche. I'm the. My smallest debt is also my highest interest rate. So. But anyways, all I have is $50,000 in student loan debt. Right.

Okay.

And the highest interest rate on it is 5%. It's several different loans, but the highest one is 5.02%. And I'm likely going to have some changes with my housing situation soon. I've been staying with my grandmother, taking care of her for the past three years and there's a good chance that she may have to move to a place with higher amounts of care or, you know, God forbid, should anything happen to her. I will need to find a new place to live. At the same time, my vehicle has also started trying to go out on me. My question is this. The thousand dollars that I saved up for the emergency fund, I do not think it will remotely cover a vehicle repair replacement or, you know, temporary housing while I find something long term.

Jade Warshaw

Right.

Caller

Should I postpone baby step two until I get, you know, maybe at least two or three months worth of income saved up. And that way I won't have, you know, I won't be up against the wall should one of those two eventualities take place.

Jade Warshaw

Yeah, I hear two things here. I do hear a bit of a storm mode, which is kind of what we would call a situation in life that, that things are changing. Whether it's a job loss, it's a move that's coming up a lot of times when people are pregnant and having babies or if there's a diagnosis. All of those things kind of cause us to put things on pause while we stack up the cash that we need to endure that next season. There's a couple of things I hear, though, when it comes to car repairs. And I want to say this to you, Kayla, but I want to say this to the broader audience that's listening. Emergencies are considered things that are, are unexpected, things that are completely necessary and things that are needed, like, within a specific time. When it comes to cars, regular maintenance, or when we know we drive an older vehicle, those are things that we want to be putting aside money monthly, like a sinking fund. We just know there's a maintenance line item on our budget, and that way when something happens, it's not like, oh, my gosh, it's an emergency. So that's just a little tidbit there. But let's talk about the temporary housing situation. How much time do you think you have left with your grandma in her residence?

Caller

Most likely probably six to eight months, I would say, at least. You know, granted, she's 93, so that could change anytime, but, you know, Lord, hopefully it'll be a good at least six months.

Jade Warshaw

And what happens to her residence if she were to, God forbid, if she were to pass away or if she were to go into, like, an assisted living. What's the plan for that home?

Caller

It will most likely be sold by my father and my aunts.

Jade Warshaw

Got it. Okay. Alrighty, then. And are you living in that area strictly for her, or is your job there? Tell us more about that.

Caller

No, ma'.

Am.

I work at a state park. I'm actually not in Little rock. I'm about 120 miles south of there. That's just the only place anyone would know. I'm in the middle of nowhere. My. My job with Arkansas state parks, I've worked with them for 12 years, and realistically, one step above my current position, it comes with housing, about a 20% pay boost. And, you know, how do we get that expected? Well, you have to be picked for, at the very least, one of the trainee programs, which is one of the reasons that I'm, you know, looking a little harder at the future now, because I was turned down for my sixth time yesterday.

Jade Warshaw

Oh, man. I'm sorry. Do you know why you were turned down? Did they tell you

Caller

so? For the first one, they said my qualifications, you know, they were excellent, but I lacked a more managerial experience. So I worked. My current job is, you know, I'm a facility manager, and I have employees underneath me. So I worked that for another year. The next time they said, yes, your management experience is good. Now you need more maintenance experience. And so then I got my supervisor to agree to let me work two days a week with maintenance.

Jade Warshaw

Okay.

Caller

Got all that. And the next time, they said, well, you need even more maintenance experience. So I did that for another six months. And then this time, they wouldn't even give me a reason.

Wow.

Jade Warshaw

I'm sorry.

George Camel

Well, what Would it cost to rent around you? Let's say that wasn't an option and you got to get out of grandma's. What would it cost to rent somewhere, whether it's on your own or with a roommate?

Caller

Realistically, the town that I'm in, there's only, the only place, and I know this sounds strange, the town of about 800 people, and that's including the dogs and cats, the only place to rent, there's low income housing, which for my $43,000 a year income would hit me about $800 a month. And, and that's just down the tubes, you know, it's no movement forward in life.

Jade Warshaw

No, that's not true. No, no, no. Let's, let's talk there because, and I'm glad that you said that because I, I want to challenge that belief. Renting is not down the tubes. Renting is a fabulous option that prepares you for being able to buy. It's, it's a preparation deal. It's not down the tubes because the truth is the opposite is, oh, I'll just buy a house and I won't have enough money for repairs and I won't have enough money if property taxes go up next year and I'll be

George Camel

house poor and most of my payments go interest.

Jade Warshaw

Yeah. So, yeah, trust me. And this is coming from Caleb, my husband and I rented for 10 years while we saved up and paid off debt and saved up a down payment. And I don't regret it one bit. I'm 42 years old now. I don't look back and go, oh my gosh, I can't believe I rented for 10 years. I go, thank God I rented for 10 years. So I just want to let that kind of put that in your back pocket and, and think about that later. But the $800 a month, I think that's a fantastic price, number one. And if that's the only option, I don't think it's a bad thing.

George Camel

And it's not forever. This might be for six months, 12 months, while we get some financial footing, get the emergency fund, you know, start saving up for a down payment. Because I imagine if it's a small town, housing isn't super expensive if you were to buy your own place.

Caller

It just depends. The big, the big problem is it's a farming community. And so a lot of migrant workers come in in the summer, which means that anything that's cheap and easy to put people in gets bought up by fairly large farmers. And then anything that's an entry level Home winds up being $100,000.

Jade Warshaw

Okay.

Caller

On a $42,000 a year income, that's kind of tough.

Jade Warshaw

So what you're talking about now is just. It's almost the logistics that anybody has to decide about in life. Right. So the career that you've chosen has put you in this location. The question I'd say to you is, okay, you're doing this in Little Rock, Arkansas. What does it look like for you to go to another place where there's national parks and do the same job

George Camel

there and you get a promotion and be able to afford your life? Because right now you're sort of stuck on your own volition, going, well, this is the only job I can find. It's the only place I can live.

Jade Warshaw

And that's not true.

Caller

Yeah, well, you see, and that's the reason that I did apply for all those promotions, because every single one of those would have had me traveling the entire state for about, you know, two years. Right. But we're saying, Caleb, once I finished it, they would move me to another place, likely better opportunity.

Jade Warshaw

We're saying, is there a way? Is. Is it just one tube of opportunity or is there a way that you're like, you know what, forget the state of Arkansas. I'm going to go to the state of Montana, or I'm going to go to Utah, or I'm going to go to Wyoming and see what it's like out there. I don't know your career field, but I'm just wondering, with your degree and what with, with your expertise, it seems like you could go to another state. Maybe there's some training involved, maybe there's, you know, some things, what have you. But I don't want you to think that you're up against and backed into a corner because George and I see options.

George Camel

Yeah. And I would definitely, if you want to save up to cover the repair, get some actual facts on what this repair is going to cost. Let's pause baby step two and save up for that. But let's not just save indefinitely three months of expenses just in case. Let's get some facts and figures first.

Jade Warshaw

Yeah.

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Jade Warshaw

All right, we've got Bill, who's on the line in Chicago, Illinois. Hi, Bill. How can George and I help today?

Caller

Hi, good afternoon. Thanks for taking my call.

Jade Warshaw

Yeah, you bet.

Caller

So I'm looking for your thoughts on the following situation. My wife and I are retired in our mid-70s, do well financially. We have two children who are married, each have two grandchildren. And we're wondering about, should we start giving him money now when the grandkids are small rather than waiting for inheritance someday?

George Camel

I love this idea, Bill, and I'm gonna speak on behalf of your kids and say they would love it too. Now, are they doing well financially on their own?

Caller

Yeah, they're all doing pretty well.

George Camel

Nice. What's your net worth?

Caller

About 5 million.

George Camel

Fantastic. You guys have done an awesome job.

Jade Warshaw

Way to go, Bill.

George Camel

And what is this like, break that down for us. How much of this is your primary residence? Do you have of properties? Is it all retirement accounts?

Caller

It's basically all retirement accounts.

George Camel

Fantastic. How much do you want to give? And do you want to give to something specific, like buy them a thing, or is it just here's money, do what you want with it.

Caller

You know, the last few years, we've been giving them 10, $15,000 at Christmas, something extra. And we're probably going to kick that up a little bit more, maybe 20, $30,000 a year.

George Camel

Wow, awesome. Well, you can give. I mean, without even having to file a form with the IRS for gift tax. You can give each kid 38 grand between you and your wife, right?

Caller

Yes.

George Camel

So you can at least give up to that amount if you want to do a straight cash gift. But I would, you know, talk to them about it and see, hey, what, what are the current needs? What could really help you guys out? Is it an experience? Do we just take them on a great cruise once a year internationally with the grandkids, or do you want to just give them cash to help bolster savings or car replacement funds?

Caller

Okay, great.

Yeah, we've been kind of talking about this and you know, we've been fortunate in our lives, and we just don't want to wait till we die and have them both good. Big pile of cash.

George Camel

Yeah, I love that. Well, there's an old saying, you know, better to give with a warm hand than a cold one. And it's a dark. It's a dark.

Jade Warshaw

Very dark. It's dark.

George Camel

But I like the idea, you know, you want to see your kids thrive and enjoy this money while you're alive versus, well, once they're in their 60s and I'm 90, 85, yeah, sure. They'll. They'll get some inheritance to do what they want with. The best time is when your kids could use a leg up. When they're raising young kids, things are expensive. Daycares, expensive. Everything's expensive, especially for those in their, you know, 30s and 40s. So I love this idea of Giving While youe Alive. There's a great book, too, Bill, that will go into this. It's not a Ramsey book, but it'll help you think about this in a different way. It's called Die With Zero again. Sounds very dramatic, but the idea is you don't need to go. Go into the afterlife with $28 million if you don't want to.

Jade Warshaw

Yeah.

George Camel

You can spend it while you're alive.

Jade Warshaw

I love that idea. A little bit of both is great. You know, there's an inheritance there when you pass away. But if you're able to give while everybody's alive and kicking and can enjoy it in.

George Camel

In their youth, I mean, that's my plan at least.

Jade Warshaw

Yeah.

George Camel

Set them up so well to where they don't even want the inheritance. Like, we're good, man.

Jade Warshaw

Yeah. Yeah. I think the line is you want them to still be productive human beings and feel like I don't. I'm not relying on this money to take the place of my own productivity.

George Camel

If you give it to someone who is not managing money well, they're just going to manage more money terribly.

Jade Warshaw

Yeah.

George Camel

So you want to make sure. That's why I always ask, are they. Are they doing well? Are they, you know, they're not in crippling debt and going further into it? Are they working full time? So there's some good pieces there to say, what's the work ethic like? What's the current family dynamic like before you just go hand a pile of money over?

Jade Warshaw

I agree with that. Great question. Thank you so much, Bill, and well done. Next week. Got Marcia, who's in Tallahassee, Florida. Hey, Marcia, you're on the line.

Caller

Hi, thanks for taking my call.

Jade Warshaw

Yes, ma'.

Caller

Am.

Jade Warshaw

How can we help?

Caller

Well, I have a couple of questions. I'm retired. I've been through some situations and now I'm disabled basically. And I'm dealing with a fixed income.

But I do have some debt and

I'm trying to figure out how to get out of it and following the plans that you guys up set and I've been trying to put money away and paying off the credit cards that I have, but I still have like personal loans and I have some money saved and I'm wondering if I should use that money to pay off some of these things and then just maybe start from scratch, even though my income is not going to change.

Jade Warshaw

What is your income, your fixed income?

Caller

About 74, 75,000 a year.

Year.

Jade Warshaw

Okay. What's that breakdown every month?

Caller

I have a mortgage, so take home spending. About six, six thousand something about six thousand.

Jade Warshaw

Okay. And you mentioned some credit card debt. How much is credit card debt and how much is personal loan debt?

Caller

I have a 30,000 personal loan debt. I've paid it down to that. Then I have about 8,000 plus credit

card, plus four cards.

Jade Warshaw

Okay.

Caller

That I'm trying to pay out and

Jade Warshaw

there's no more debt. That's. That's the only two?

Caller

Those are the only two? Yeah.

Jade Warshaw

Okay.

George Camel

What's left on the mortgage?

Caller

I have 255 left on the mortgage.

George Camel

255?

Caller

Yeah, I have some equity in there.

George Camel

Are you living alone or do you have family?

Caller

I'm living alone.

George Camel

Okay. And how old are you? I think. I don't know if I missed that. I know you said you're retired.

Caller

Oh, I'm 63.

George Camel

63. Okay. What's the nature of the disability?

Caller

Military.

George Camel

Okay. Because I'm wondering, you know, do you have a skill set and experience where you could actually go make more than the disability's offering you to if you wanted to get out of this thing faster?

Caller

I can't. No.

Mobility wise, I'm handicapped that way.

Jade Warshaw

Okay, understood.

Caller

Good.

Jade Warshaw

Now you did mention you had some money saved. How much non retirement money do you have saved?

Caller

Well, about. I have 20,000 in a, like a mutual fund plus an IRA and I

have, I say about 1800, just like in regular saving.

Jade Warshaw

Okay. So 1,800 in savings. Did you say the 20,000 was in the IRS?

Caller

It's in a mutual fund and IRA? I have about 5,000 in IRA.

Okay.

Jade Warshaw

Okay. And the other's just in a mutual fund, A brokerage account?

Caller

Yes.

Jade Warshaw

About 15,000?

Caller

Yes.

Jade Warshaw

Okay. Okay, so you're right. There is some money at your disposal to kind of start cleaning some of this up. I would keep the 1800 in savings. I'd probably drop it down to $1000 and just keep that as a starter emergency fund. It's just there in case something pops up that is unexpected and you need a little buffer there that'll keep you from running to a credit card. Right. But then that leaves you 15, almost $16,000 that we can start. We can fully knock out the credit cards. Right. We can knock out all 8,000 of those. And now you've got another 8,000 that you can throw towards these personal loans. And so you could begin to clear that out. Do you know off the top of your head what you were paying each month onto those credit cards? To pay the minimums.

Caller

To pay the minimum. Probably about a thousand something.

Jade Warshaw

Yeah. So if we, if we reach over and pay off those credit cards today, essentially now you've got $1,000 back in your month to month budget that you can put towards paying off the remainder of the private loans, loans or personal loans. Okay, now let's get back to what George was saying, because I do wonder. You did mention that your mobility was down, but everything else seems to be intact. I would be curious, and it might just be something that fills up your, you know, personal time too, just to see what other skills, what other things that might interest you that you can do with your time. Because it is important for all of us to do some sort of work that matters and have that sense of purpose every single morning. Um, and obviously the benefit to that is we can make some money in the process. And in your case, it would really, really help. Cause I'll tell you what I envision for you, Maris Marsha, is to look up and have this mortgage paid off one day when you're ready to fully retire. And when you've said, you know what, I'm, I'm just not working anymore, I'm hitting that age. I would love for that mortgage to be off of your plate. Have you thought about that?

Caller

Yes, I do. I do think about that.

George Camel

I like this plan. Do you have, is this VA disability? What kind is it?

Caller

Yeah.

George Camel

Okay. Because you should be able to, to work part time with no earnings limit if you can do something and that's not physical and that could help speed this up. If you're looking for ways otherwise you're going to go at the current pace you are. Try to bring your expenses as low as you can, but we can't Pull the other lever, which is income.

Jade Warshaw

Yeah, that's right.

George Camel

So this is just going to take a while. If we do, don't pull one of these other levers on the expense or income side. You just got to make the budget and go, all right, it's going to take a couple of years to get out of this thing.

Jade Warshaw

The good news is you have that disability locked in.

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Jade Warshaw

Well, welcome back to the Ramsey show here in the Fair Ones Credit Union studio. Continuing to take calls about your life and your money. Where we have Miles, who's in Biswan, Mark, North Dakota on the line. Hey, Miles, how can George and I help out?

Caller

Hey guys, how you doing? I got a question about my mortgage. First off, let me say I have five kids, married, I got a single income, wondering if I should refinance my house. I have about $100,000 left on it in order just to have some more cash flow during the month while my kids are still young. My oldest is 16, so I just want to enjoy time with them as much as I can.

Jade Warshaw

When you say refi, are you trying to get a lower interest rate or are you thinking about like recasting it so that you can get a lower payment on the same terms?

Caller

I would refinance to a 30 year. I'm on a 15 year right now. And then the interest rate would be a little higher, but my monthly payment would be cut at least in half.

Jade Warshaw

I don't love that idea. Are we thinking about cutting the payment in half because it's too much of your take home payment pay?

Caller

We have some Money left over at the end of the month, probably saving like maybe $1,000 a month. My thoughts are my kids are getting older. Just to have more wiggle room at the end of the month is basically my thought on it.

Jade Warshaw

Tell us what you're bringing home every month and then tell us how much the mortgage is.

Caller

All right. I bring home about $6,000 a month after taxes and everything's taken out out mortgages with taxes and all that and Insurance is about $1,400 a month.

George Camel

Okay, that's very reasonable.

Jade Warshaw

Uh huh. What else is going on? Your wife's at home, so I'm thinking there's no daycare costs or are there?

Caller

Nope, wife's at home, she homeschools her five children. Just maybe, I don't know, have a little money anxiety. We both do the finances together, but I would say I'm the main one that looks over the numbers on a regular basis and maybe too much.

George Camel

Are you investing right now? Do you guys have other debt?

Caller

We don't have any debt other than our mortgage. I am investing. I have some money in a money market account and then money in the index fund and then my 401k.

George Camel

How much are you investing as a percentage of your total income right now?

Caller

Now I do 4% in my 401k. I work for a major railway, so they take out X, they don't take out Social Security. They take out two different tiers of retirement and that second tier is about an extra 5% compared to normal American.

George Camel

Okay, so you're only investing 4% of your household income right now.

Caller

Yeah. Outside of that extra tier two that that railroad takes out.

George Camel

Okay. And that creates sort of a pension free you.

Caller

Correct. Yep.

Jade Warshaw

Okay, I'd love if you were investing, I mean truthfully assuming that you've got some money saved and I'll ask about that in a minute. Truthfully, I'd love for you to be closer to 15% that you're saving of your income. So that'd be around $900 a month, probably a little bit more if we took it off the gross. So I, I'm wondering what's creating this squeeze on your budget that's causing you to consider refinancing from a 15 year to a 30 year. Because that's pretty drastic and, and to be fair, it's going in the wrong direction. And so something is causing you to really consider like a drastic measure and almost doing something I'm going to call foolish. Not that you're a fool, but it's

George Camel

a Very drastic, backwards. Our whole goal in the show is to help you build wealth. And we found the best way to do that is to get debt free as soon as possible. House and everything, to have as much margin as possible. So if you called in saying, hey, I've got a car payment, it's 500 bucks a month, month over three years. If I refinance to a six year loan, I can get the payment down to 300 bucks. We'd all agree that's a bad solution. And so we're trying to find another solution, which is you got 4,600 bucks coming in outside of the mortgage payment. Where is all that money going? Can we squeeze some more money out of that? And then let's actually put down on paper what are the goals with this extra thousand dollars? Because if it's just I'll feel better emotionally. That may or may not be true. But if you go, I want a vacation with the kids once a year. It's going to be six grand.

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George Camel

Now we know. Let's set aside 500 bucks a month.

Jade Warshaw

Or is it kids college? Do you have some that are coming up that are getting to the age where they're starting to think about university or college?

Caller

My oldest is 16. She doesn't have an interest in college. I guess what we do is kind of just throw all the money into our money market account every month. We don't have a designated college fund, but we just stockpile that up.

George Camel

How much is in that there?

Caller

About 32,000 in a money market and another 14,000 in index fund.

George Camel

Is that outside of an emergency fund?

Caller

I. The money market would be my index or, excuse me, my emergency fund.

Jade Warshaw

Okay.

Caller

And I also have another 10,000 in a regular savings.

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Jade Warshaw

Okay, good. So you've got some good money saved. You are thinking about education and putting some money there. I was a little confused though, because it almost sounded like the college fund was the emergency fund fund.

Caller

Well, I would say so. The emergency fund is like the money market, the 32,000. Then that 14,000 in the index fund would be above and beyond my emergency fund.

Jade Warshaw

And is that year marked for college. I think we need to put some parameters around what this money is. So I would say and you, you jump in and tell me if I'm wrong. I agree. 32,000 emergency fund. Then you said you had an additional 10,000 saved. That was kind of on top of that. We need to earmark. What's that money for? And then you said you had 14,000 in an index fund. I'm Almost wondering if you should take. You've got five kids. I'm wondering if you should take that additional 10,000, add it to the 14,000, and call that kids college fund.

Caller

Okay. We are. Our vehicles are kind of getting older, too, so I have that on the horizon of saving up for a vehicle.

Jade Warshaw

Okay.

Caller

Kind of just. I really like a slush fund.

Jade Warshaw

Well, well, I don't mind. Listen, I don't mind if you said, hey, no, J. Keep the 10,000, and that's going to be our vehicle fund. I'm fine with that. I just think we have to put very clear markers on what this money is for. Number one, it's going to make you feel better. It's going to give you guys some organization, and it's going to make you feel like, okay, I'm being very intentional about this. To your point, what you said, when it feels like a slush fund is when it feels like anything goes. Nothing's really solid, sort of floating. Yeah, you don't want that feeling. You want to know? No, this is what that's for. So I. Let's. Yeah, let's say $10,000 vehicle fund, 14,000 index fund, and that's for kids college. And at this point, where you are in the baby steps, which is our overarching plan for your money, where you are right now, Miles, is let's bump up. And I know this is against your feelings right now because you're feeling like things are tight, but let's bump up the investing to 15%. Let's say, hey, on top of the 14,000 in the index fund, what would it look like if we continue to put another 150 or maybe $200 a month in there? And then instead of going backwards on the mortgage, what would it look like if we just continue to make the payment? And maybe we threw. Whether it's quarterly, whether it's once a year, maybe we aim for an extra payment every year. However we want to break that up, and that's you going in the right direction. But I think what would really help, and I don't know if you have one. Are you guys on a budget?

Caller

Yeah, I have a written budget on, just like on a notes app on my phone that we go over every month. But it's not hard and fast.

Jade Warshaw

Yeah, the hard thing about that, I love that you have that because it's a great place to start. But the tough thing about that is you're not able to track your transactions in real time, so you can't really see if you're off track. And if you are off track, then it's not till the end of the month where you go, oh, crap, we're $1,000 and over. Or, oh, you know, we should have

George Camel

had money left over. Where to go. Yeah, that's where the budget comes into play. So, Miles, hang on the line. We're going to gift you every dollar, the premium version for the next year so you can connect your accounts and get a real plan with your wife going, listen, we're going to have a thousand bucks left over because we are going to be in control of our money.

Jade Warshaw

Y.

Caller

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Jade Warshaw

All right, we have what may possibly be my favorite type of call on the line. Line for Jordan and Taylor in St. Louis, Missouri. All right, guys, set this up because this is my favorite.

Caller

Okay? Jordan and I own a home on 15 acres and it was kind of always our dream, but now I'm to the point where I want to sell and Jordan wants to stay.

George Camel

Okay, the dream changed.

Jade Warshaw

What caused it to change for you, Taylor?

Caller

I have lost my job a couple of times in the last few years. One was a wrongful termination and then one was my last place of employment. They filed bankruptcy and we closed unexpectedly. And I've always been the high earner. Jordan's always had the more blue collar job that allows more time to spend with our daughter and then he carries really good benefits for us.

Jade Warshaw

Okay?

Caller

So it's always really worked out. But I've always been the high earner. So when I've lost those jobs and with the amount of debt that we have, it's really impacted things. And I've always just. Yeah, I'm feeling it bad. And I've always just figured out a way to make it work, and now I. I'm. I'm tired.

Jade Warshaw

I can understand that.

Caller

So.

Jade Warshaw

And. And it's no shade on Jordan, but you're literally feeling the weight of the household on your shoulders.

Caller

Yes.

Jade Warshaw

And one thing changes, and it's like crushing.

Caller

Yep.

Jade Warshaw

Okay.

Caller

I feel like I'm failing.

What.

George Camel

What's the current incomes

Caller

I make about? So I just accepted a new job about four weeks ago because. So this is kind of fresh where I just lost my job again. I'm expected to earn about 137.

George Camel

Awesome.

Caller

And I used to. I used to earn 200, though. So that's part of the reason for this call.

Jade Warshaw

What type of work?

Caller

I work in automotive. Automotive management.

Jade Warshaw

Okay. And what is Jordan doing?

Caller

I work for the post office, and close to about 65. Okay.

Jade Warshaw

Okay, great.

George Camel

So still over 200,000 household income, which is fantastic. How much consumer debt do you guys have?

Caller

192, including vehicles.

Jade Warshaw

Okay, tell us about the vehicles.

Caller

So the vehicles. So I used to always have a demo a vehicle provided for me, and when I lost my job, I no longer had a vehicle. So I bought a Chevy track because they had zero percent interest, and it was a $500 payment, and it could get me. I'm driving an hour to work now.

Jade Warshaw

Would you pay for. For it?

Caller

I bought 28,000.

Jade Warshaw

Okay. 28K. And then what other. Any other vehicles?

Caller

And then Jordan has a vehicle that we owe 42,000 on. It's a F150.

Jade Warshaw

Okay. F150. Anything else?

Caller

We have a tractor.

Jade Warshaw

Okay, you need that?

Caller

That. Yeah. That's 20,000 that we have left on that.

Okay.

We have $3,000 left on a long more.

Jade Warshaw

Okay.

Caller

We have $7,500 left on vending machines that I'm currently trying to sell. So in my last dealership, we owned the vending machines in the company. So when it closed, obviously I've sold one of them. I have two more to sell, and I think that would pay off the remainder of the loan that's owed on them.

Jade Warshaw

How quickly can you sell those? I don't know much about that. Maybe you can educate me a bit on that.

Caller

I. So I just posted them, like, four weeks ago. I've sold one, and I'm trying as hard as I can to get the other two. Sol, I owe like 7,000 on the loan. I'm thinking, I mean, even if I can take six for it, I, you know, I'm willing to do that just to get them gone and get a payment gone.

Jade Warshaw

Okay. And you said the total was 7,000. Did I hear that right?

Caller

Yeah. 7,000 that we owe.

Jade Warshaw

Okay. 7,000 that you own.

George Camel

So we still got 92,000 to go. What else is there?

Caller

What's a camper?

Jade Warshaw

Camper.

Caller

Camper. Yeah. So we have $9,700 on a camper that we no longer own because I. We weren't using it. So I tried renting it out to make income to try and pay off debt, and someone total totaled it and they left it. Still left me with a payment on it.

Jade Warshaw

There was no insurance paid out.

Caller

The insurance didn't pay the full value of the camper.

Jade Warshaw

Okay. And I won't ask more questions on that. Okay. Anything else? Because I think we're still missing quite a bit here.

George Camel

We're about 80 grand.

Caller

IRS.

Okay.

IRS. $11,000.

Jade Warshaw

Okay.

Caller

We owe a little over 2,000 on student loans and tuition.

Jade Warshaw

Okay.

Caller

And then the rest is credit card debt.

Our.

Yeah, our total is like 197, actually. Wow.

Jade Warshaw

Okay.

Caller

And the rest is just credit card debt.

George Camel

And this is all while you guys have been making six figures or more?

Caller

Yeah. Yes. And I just. I can't. I can't catch up. It doesn't. No matter how much I make.

George Camel

Well, here's. Here's the good news, is you guys have a great income. You got a lot of land. You could get out of this fairly quickly. The bad news is selling this piece of land alone is not going to change any of the behavior that got us here.

Caller

Yeah. And behavior hasn't changed until probably recently. Very recently has the behavior changed.

George Camel

What do you owe on all this property and what's it worth?

Caller

Worth? We. So last year it appraised at 695. I think I could probably list it for 715 maybe. I am working on my real estate license. It's just always been something I've kind of wanted to do. So I was thinking if I had my license, then I wouldn't have to pay real estate fees if I sold it and I could keep more of

Jade Warshaw

the money maybe, But I don't know about that. I think I'd want somebody who's been doing this for a long time to make sure you're getting the best price and they're not missing anything.

George Camel

And you're pretty close to the transaction because it's your own property. So that could also muddy the waters and make things a little emotional, which could hurt you.

Jade Warshaw

What do you currently owe on it? We know what it's worth. 715. But what do you guys currently owe?

Caller

We owe 453 on the primary mortgage and we owe 120 on the HELOC. The contractor went over budget also.

Jade Warshaw

Okay, so we're 573.

George Camel

So you might net 1120 after all said done.

Caller

Yeah, I guess if I. If you count in realtor free fees, yes.

Jade Warshaw

Now let me ask this. Is there any separation that can take place between the home and just kind of like parcel out some of the land and say we want to get rid of a certain amount of land and make this more manageable for us, but keep the house? Is that possible?

Caller

No, not the way that it's parceled in the way that. And there's easement on the property and stuff for the farmers behind us. So it. It will help work.

Jade Warshaw

And you're positive? No. Has anybody else looked at it?

Caller

I'm like 90% positive. Okay. I'm 100%.

Jade Warshaw

I might add that to my due diligence list just to make sure. You know, it's easy sometimes to make assumptions and then you might find something that's like, oh, great, like, I didn't know. I trust what you're saying, but just because we're talking about big numbers and big decisions, I would do some due diligence on that. But I agree with George. I don't think selling this land at this point is necessarily the key to you guys getting out of debt. I think it is a behavioral thing. However, long term, you might find that there is a lot of just emotional maintenance that's attached to this. So you might sell it for those reasons, but that would not. I would not sell it to get out of debt, if that makes sense. I might sell it to simplify my life. But it's not the key to you getting out of debt. Is that fair?

Caller

Yeah, except I don't see the way out whenever, like after I accepted this job. Now we are $2500 upside down every month to make minimums. So the money that I have in our checking account is going to go quickly. Like, I'm not going to be able

Jade Warshaw

to make it understand I don't have

Caller

enough funds to cover the monthly payments.

Jade Warshaw

Okay, and what is the payment on the mortgage?

Caller

The mortgage is so the first. The. The first one is 2508. And then the HELOC payment is like 1200.

George Camel

Yes. We're about 3700 out of your take home pay.

Jade Warshaw

Okay, so I, I, yeah, I mean

George Camel

the, the mortgage and HELOC is still a small part of everything else. All these toys, all the payments. So the goal is we got to focus on the IRS debt. So that goes to the top of the debt snowball. But in the meantime, let's try to sell everything that can be sold. Every car, every vehicle, every camper, every lawnmower and just start from scratch. And if you guys do that, then I where we're at three months from now to see if it's still an unsolvable problem where we need to sell this land and start fresh and clean up the debt.

Jade Warshaw

And I will say, and you can stop me, I think I do hear that you do want to simplify your life. And I do think that the land and the mortgage is part of that. Is that fair to say?

Caller

I okay, I don't mind the land. Like I know that Jordan loves to hunt it, but I want a simpler

George Camel

we can go hunt on someone else's land land. Cuz right now the dream that you both guys, that you had is turned into a literal nightmare for you guys. Financially this is not a blessing in your life. And it's okay to call a spade a spade and say we tried, we messed up, we made some decisions, let's start over.

Jade Warshaw

Fresh, fresh start. Yep. Do all of it. Sell all of it.

George Camel

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Jade Warshaw

Well, George, you had a really interesting weekend.

George Camel

Yeah, you know, I'm a hustler, Jade. So I didn't get any breaks this weekend. Me and the whole YouTube team from my YouTube channel, we went to the World Cup. Not into the World cup, but outside the stadium.

Jade Warshaw

Oh, okay.

George Camel

Because inquiring minds want to know how much did people spend on this thing.

Jade Warshaw

I'm very curious.

George Camel

So we filmed it and God bless our team, they stayed up to like 3am to get this video out by yesterday morning. So I want you to watch a clip from this. We'll drop the link to the whole episode. It's about 16 minutes worth. The watch in the show notes and description of this episode. So click down there to watch the full thing. Here's a taste, Jade. Okay, so you think. How much did you guys spend on your World cup finals ticket find? We spent 30, bro. Okay, so is that 15 a piece? 15 piece.

Jade Warshaw

I'm going to file for bankruptcy after this. I'm calling my credit card.

George Camel

I'm saying this was never me. So you put it on a single credit card?

Sponsor/Ad Reader

Yeah.

George Camel

So who's paying who?

Sponsor/Ad Reader

I have to pay him?

Caller

Yeah.

George Camel

What's the interest rate on this credit card? I don't even want to think. What's your credit limit on this thing?

Caller

It's already maxed.

Jade Warshaw

After this, it's maxed.

George Camel

They call you and be like, hey, man, you know you can't do this.

Sponsor/Ad Reader

They let me through. They let me through.

George Camel

I got happy to collect 25% on 30 grand. Exactly.

Sponsor/Ad Reader

Wow.

George Camel

Okay. How much do you have in like checking right now?

Caller

Checking?

George Camel

I'm net negative, brother. Shut up.

Jade Warshaw

I've got no investments. I've got no savings.

George Camel

I've sacrificed everything for my life to be here today.

Caller

You know how much I sacrifice?

George Camel

There you go. Oh, that was just a scratching the surface of what I experienced.

Jade Warshaw

I'm shook upside down. I don't even have a. When he said 30, I was like, 30,000?

George Camel

Yeah. There's a couple of zeros after that.

Jade Warshaw

And then the fact that his. His dog owes him 15,000 on 29.9%. I'm just. This is going to go bad very quickly is all I'm saying.

George Camel

Like, I had secondhand stress just talking to these people. And here's the crazy part. There was only two camps, guys like that, who put it all on the credit card. Super broke. And then there was the families who, who. Let's just say that some. Some generosity, outrageous generosity.

Jade Warshaw

Okay.

George Camel

Either like a family member. Grandpa covered the whole trip for all five of us from Spain, $80,000. So, you know, a lot of these people are entrepreneurs. You know, their family has a company and they were able to afford this

Jade Warshaw

great, great, love that for them.

George Camel

All in cash. Absolutely. But those 2 of the spectrum. But it still shocks me, regardless of how you paid people paid anywhere. This is just from me talking to people anywhere from 4,000 to $15,000 per ticket. And that's without flights, lodging, all of that.

Jade Warshaw

Okay, but school me, because I. I don't follow. World cup was that just. Do you see one soccer match with that money or how many soccer matches do you get to see?

George Camel

That guy specifically was a single ticket. A lot of people did say, hey, I've been to five games so far. It was about 4,000 per ticket, so I'm 20 grand all in.

Jade Warshaw

Okay.

George Camel

Just on tickets.

Jade Warshaw

But that guy was 30,000 for one single game. Game.

George Camel

Him and his.

Jade Warshaw

Which means he was closer. Like closer down.

George Camel

Yeah. Well, he, he must have paid a lot of money in last minute kind of thing.

Jade Warshaw

Oh, my word. I hope his team won.

George Camel

They didn't.

Sponsor/Ad Reader

Oh, yeah.

George Camel

That was the funniest part. I met a lot of Argentina fans and the whole time I was like, all right, let's hope they win. Little did we know what would happen in this game.

Jade Warshaw

The next morning he probably woke up feeling like, qu y.

George Camel

Like, can you imagine spending 15 grand to see zero team score in the first 106 minutes?

Jade Warshaw

Minutes. I would never.

George Camel

I'm sure it was still a great. And here's the thing, they always said, well, I'm going to be telling my grandkids about this. I'm like, you're assuming your grandkids are going to care. You're going to do this all for the grandkids. Don't put that on them.

Jade Warshaw

So I do. It's. I got to know. Is there comments like, what are people saying? This is my.

George Camel

This is the top comment on the YouTube video. The winners of the World cup are Spain, Visa, MasterCard and American Express. And someone added an FIFA $9 billion this year. Yeah, they're the real winners here.

Caller

Wow.

George Camel

Just extorting money from people for this once in a lifetime experience.

Jade Warshaw

Love a lifetime. Once in a lifetime experience. I love if you can afford it. I love if you've saved up over time and budgeted for it, then I'm not mad. Then I think it's like, yeah, good for you.

George Camel

Yeah. But otherwise, just watch it at home, guys. Go to the. Watch Party and you'll have a good time, which a lot of people did. I met a lot of people who said, no, I'm not going into the game. It's not like that. I just wanted to be around it. And I was like, I understand that you want to be around the energy.

Jade Warshaw

I hope you gave them. I hope you gave those two guys every dollar so that they could at least. Maybe next time this comes around, do it with a little bit more wisdom.

George Camel

Well, the problem is we met a lot of International People and EveryDollar is a US budgeting app. So the ones that were us, I could hook them up. The other ones, I said, good luck, God bless, and watched more. Ramsey show. Okay, well, check out the whole episode. We'll drop a link in the show notes. That was just one of the many people I talked to, and they were very entertaining. As much as it was chaotic. There was a lot of really fun, interesting people that we got to talk to. So a very fruitful time in New York. We did some other ones. Ask people the cost of living in New York. How much are you paying for rent? That was a fun one.

Jade Warshaw

Oh, I would like that.

George Camel

International people, how much they have in debt? How do you view debt? How do you view America's debt?

Jade Warshaw

What do they. I'm like, what did they say? You'll have to wait. Tune in.

George Camel

Subscribe to the George Camel YouTube channel. And again, we'll drop a link to the World cup episode if you want to see how much people spent on tickets. But, goodness gracious, it made me even more fiscally responsible.

Jade Warshaw

Yeah, and you already are.

George Camel

Thank you.

Jade Warshaw

I almost want to know how much was your ticket? Ticket?

George Camel

Well, we didn't pay well for the flights.

Jade Warshaw

I guess you didn't. Wait a second.

George Camel

We didn't go into the game.

Jade Warshaw

You didn't go into a game?

George Camel

No, George. This is my life, Jade. I was just in the worst parts of it in the vuvuzela zone and people, you know, hawking flags.

Jade Warshaw

Yeah.

George Camel

All to then go home.

Jade Warshaw

Oh, wow.

George Camel

But it was fun. It was worth it for your entertainment, folks.

Caller

There you go.

Jade Warshaw

It was all a sacrifice.

George Camel

Yep.

Jade Warshaw

Well, I mentioned earlier, and now I'm gonna do my seamless transition into everydollar. It's very smooth. Yeah. I want you guys to have a good time. Do those once in a lifetime event. Listen, I went to see Beyonce, and I spent more than I've ever spent on a. On a concert ticket.

George Camel

Did you go, like, sinking fund, like, all right, I'm going to put away 500 bucks a month to have six grand in a year.

Jade Warshaw

Yeah, I knew it was coming, and so when it was time, I was ready.

George Camel

Well, this makes Beyonce look cheap. I mean, yes, it does. It makes Taylor Swift tickets look like a bargain.

Jade Warshaw

Yeah, you're going to be in a sinking fund for a really long time in order to do that. But I'm telling you, people love every dollar. It allows them to do the things that not just they need to do, but the things that they want to do. And they can have a plan for their money. You can find that on the Every Dollar budget app on the App Store for free. Or you can find it on Google Play. All right, we've got Sam, who's in Minneapolis, Minnesota, on the line. What's up, Sam?

Caller

Hey, guys. Fanboying so hard right now. I love the Ramsey show. I love you guys. Thank you for what you do.

George Camel

Thank you.

Jade Warshaw

We're glad you're here.

Caller

Okay, so I'm on Davies to step two. I am currently not investing in my kids college accounts. I opened them up nine years ago when my son was born. I have four children. Nine, ages nine, six, four, and one. And there's about 20,000 bucks spread out across the four of them. My mom is currently investing in it, like 25 bucks a month per kid and 100 bucks on their birthday.

Jade Warshaw

Good.

Caller

And my wife brought up rolling it over or moving it into like an IRA or like a Roth IRA account for my kids. And it was kind of like, I didn't know if that was a good idea or not. Neither my wife or I went to college. We're not really big believers in it, I guess, if that's blasphemous or not.

Jade Warshaw

But is she talking about now or later if they don't use the money? Do you.

Caller

She.

She was talking about it now.

George Camel

Okay, you can't. Now, there's a rule. The 529 has to be open for 15 years at least before you can even begin the rollover. And then it's 35 max per child. So up to the Roth IRA limit for that year. This year, it's 7,500 bucks until you hit 35 grand. And that's only if they don't end up using it for college.

Jade Warshaw

Right.

George Camel

Because I know, you know, we all think, well, who knows, 20 years from now, what will college be? Well, what if they go and it's three times as expensive as it is now?

Jade Warshaw

Right.

George Camel

And now they're in crippling student loan debt because mom and dad said you probably won't go. So I would rather be safe than sorry and have the money and then not need to use it or roll it to a different person. You can change the beneficiary anytime. Again, you can roll over up to 35 grand into retirement. There's so much you can do with these accounts and the tax advantages are so good that I would hate for you to miss out on that.

Jade Warshaw

What was her purpose in doing that? What was her purpose in making that move? Is she trying to solve a different problem?

Caller

I don't know. Honestly, my wife brought it up. I didn't really want to touch it. We're not investing in it right now, like I said anyway. And it was just kind of on my wife's behalf, I thought I would ask you guys.

Jade Warshaw

Yeah, my guess is maybe she was thinking since you guys aren't currently investing, if you rolled it over, it could be either, either for your retirement or for the kids college. But to George's point, it doesn't work that way. It's got to be one or the other. And you guys are in baby step 2. Keep chunking away at that. After that, you'll build up your three to six months of expenses and then before you know it, you'll be investing 15. And what I'd advise you to do is go over to ramseysolutions.com and use our investment calculator and start calculating. If you start investing, you know, from this age to that, that age, how much money that you're going to have and when you know those numbers, it gives you a lot of peace. Or if you don't like the numbers, you can start to plan for a scenario where you do like the numbers.

Sponsor/Ad Reader

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Jade Warshaw

Alrighty. Your Ramsey SHOW Question of the day is brought to you by Y Refi. When past due private student loans keep pulling you backward, it's hard to focus on what's ahead. Y Refi helps borrowers with a low fixed rate refining refinancing option that fits your budget so you can focus on the Future again. Visit yrefi.com Ramsey and remember, it may not be available in all states.

George Camel

Today's question comes from Victoria in Louisiana. Would you explain how compound interest works with regard to the stock market? I understand earning interest on bank deposits and how stocks can increase in the market. But how and when does compound interest happen?

Jade Warshaw

I love this question. This is super fun Mathematicas.

George Camel

Wish we could do like a whole like Bill Nye visual just to make it easier. But so there's a couple things going on here. Number one, compound interest interest is more like a bank deposit, like your high yield savings account. The bank says, hey, we'll pay you 3% on your balance. So every month the bank looks at your balance and you know, per day and they go, all right, here was, well, here's what paid out per day. We're going to pay it out at the end of the month. That's pretty easy to understand. Yep, 3% on $10,000. Divide that by 12 months. That's how much you'll make if you just left that amount in there. Now, compound growth is actually a little different. That's what's happening in the stock market market and it's not as straightforward because the stock market goes up and it goes down. So I buy a share of Jade Incorporated for $10. Right now Jade's crushing it. The revenue comes in. We're all excited for Jade's company. She's crushing it. The stock goes up to $15. Well, thank you. Now remember, I bought it at 10, so I just made $5 profit. So now as you start to go, okay, I have multiple of those shares now the profit increase. And so Now I got $15. Well, Jade's company is now they got they're going for 20 bucks a showing it. So now I just made money on top of the money I already made. And so over time that growth compounds to where you don't have to actually invest a million dollars. You invested 10,000 or 15,000. And over the course of decades. It grew as the sort of the piece that you had of ownership grew. So that's how the stock market works, is you have a share price price. That share price goes up and up and up and up. Bada bing, bada boom. You can retire one day and we've seen about 10 to 12% on average in the overall US stock market.

Jade Warshaw

I love that. You know, I'd pay good money to see you explain that Bill Nye style. But I think the closest I could get is Investing Essentials.

George Camel

There we go. That's true. We are going to walk through this in nerdy detail. How to choose mutual funds, how to, you know, sort of filter and balance where you invest, when you invest. Where do I put this money? What about the kids? What, what about estate planning and taxes and insurance? How do I keep the government's hands off of it? How do I hand it to my kids without destroying them? And at what point do I do that? What about trusts and wills? We're going to get into all of it at Investing Essentials. It's a virtual event that Dave Ramsey and I are doing September 1st and 2nd. So you can join us from anywhere, two nights, couple of hours a night. It is definitely worth the ticket price if you want to learn about this stuff. So.

Jade Warshaw

All right.

George Camel

Victoria ramseysolutions.com events there's your answer.

Jade Warshaw

If I had your information, I'd send you a free ticket, but I don't have it right. Right here. All right. Dawn is from Dallas, Texas on the line. Hi, Dawn. How can George and I help today?

Caller

Okay. Hi. So the good news is I got married three weeks ago.

Jade Warshaw

O congrats.

Caller

Thank you. We have a situation where my husband and I need some guidance on. So before this marriage, I was married before. I've been divorced for about eight years now. Now, in my first marriage, I took out a life insurance policy on me and one on my ex husband. There are $500,000 term life insurance is on each of us. After the divorce, I kept the life insurance policy on both me and him because he was paying child support and other expenses and if something were to happen to him, you know, it would be difficult. So anyways, with that, my new husband, he's like he says it feels weird to pay life insurance on my ex husband. He's not 100% against it, but he's not 100% for it and he doesn't know what to do. But then on the other hand, you know, I want to make sure my kids are taken care of because we Have a set of 14 year old twin boys who are about to go into high school. You know, we're staring down college. You know, there's just so much going on at this stage in life. And if I want to make sure something were to happen, that they're taken care of. But on the flip side of that, also want to respect my husband's decisions and follow his lead. But then he's like, he's like he doesn't know what to do. So go ahead.

Jade Warshaw

I can see two sides of it. I can see how, I'll tell you how my brain is seeing it. Obviously the purpose of insurance is to replace income. That's necessity, right? So before you were married, obviously, yeah, this guy was, you know, you were married to him, so he was part of the income situation. And then even as an ex, maybe he was paying child support or alimony, that sort of thing. At this point, now you're married to somebody else. There's kind of a new situation going on financially. The, the only piece of this that I could see a connection to is the case kids. If you're, if your ex husband was saying, hey, this is kind of an inheritance thing, when something happens to me, I want the kids to have this money. That piece I can totally understand. And them being the beneficiary of that makes sense to me if that's something that he wants to do from a legacy, legacy perspective. And as your current husband, I don't know that that should bother me to that extent because this, this is their dad. So how are you guys viewing it? Is he viewing it from more from a marital persp or more from a children's dad's legacy perspective?

Caller

Well, Mike's husband, his health, it was difficult to get the life insurance to begin with. And like he had gotten rejected multiple times over the course of the times we have tried. And so his health is not great as we speak. And then so I'm also got that in the back of my mind. And then. But my new husband, he's like, you know, he's a truck driver, so he makes pretty good. And you know, he's adamant that, you know, these are his kids, he will do whatever he can to take care of them. But the fact of the matter is, you know, he's a truck driver, I'm a teacher. There is only so much money that we make. And, and with being a teacher, education is important to me. So I want that option to be there for my kids to be able, if they want to, to go to college, to whatever College.

Jade Warshaw

So if you're having to worry about

Caller

how are we gonna.

Jade Warshaw

If your ex husband said, I want you guys to keep this policy and the purpose of it is for the children's college and if my life exceeds that, then it's there for them, you know, as they begin their life and start their life, then I, I think that's a wonderful thing. And I hope that he has a will and some documents that can really outline some of those things that he wants for his children. There's part of this policy.

Caller

I am the policy owner. I got it through. So I'm the one who's always paid.

Jade Warshaw

And you're listed as the beneficiary.

Caller

I guess I am the beneficiary of the policy. I always have been. So I don't even think even remembered he, we had the life insurance policy until the other day when I called and talked to him about it.

George Camel

Well, the main distinction is you are not hanging onto this policy to hang onto the past. You're hanging onto it to protect your kids futures. So until they are independent on their own, they're through college, they're working okay now they're fine. But right now the truth is, let's say you got rid of this policy. Well, you might not be able to afford college and support them. And so part of having kids is it's your obligation to support them. Now that might be through child support, that might be because you want to, but I would keep it for that reason. And it really has nothing to do with, you know, the new husband. The new husband. And so I, I totally understand his side of it. So I don't want to diminish that. It is uncomfortable, but that's the nature of a broken marriage and kids from a, from a different father. That's just part of what he signed up for. Yeah, there's a little bit of this discomfort and messiness.

Jade Warshaw

And if, I mean, I'm, I'm trying to put the shoe on the other foot. If for some reason my kids, I was separated from them through, you know, divorce, I would, I'd want them, I'd want them to still have life insurance on me so that they have access to whatever money I've accumulated or, you know, obviously get that death benefit if, if I were to leave this earth. So I can totally, totally understand it. And it's just a good lesson, guys. Life insurance is so important. I said it earlier, but I'll say it again. The purpose of life insurance is to take the place of income. That's people are dependent On. So you don't take out life insurance policies on children. Children. You take them out on working individuals. And we always suggest 10 to 12 times your yearly income is what you would need. And Xander is a great place to look that up if you haven't looked it up. Xander Insurance. That's where I get my life insurance. Term life is what you're looking for. That's where George gets his. And if you call them up, they are going to hook you up and take good care of you. Welcome back to the Ramsey show here in the Fair Ones Credit Union studio. Continuing on with the phone lines, we've got Amanda who's in Tampa. Just Tampa, Florida. I almost said Tampa Bay. Isn't it sometimes called that?

George Camel

You know what? I forgot there was multiple.

Jade Warshaw

Okay, well, we're just gonna go with Tampa, Florida. Hey, Amanda, what's on.

George Camel

Going.

Sponsor/Ad Reader

Going on.

Jade Warshaw

Is it sometimes Tampa Bay?

Caller

Yeah. Okay, that's fine.

Jade Warshaw

Just was checking my old check, checking out my own brain there. Okay, how can we help today?

Caller

Yes, ma'. Am. First of all, I am sorry for your loss. I saw your post this morning on Instagram. I left you a message. But. But, yeah, so sorry for your loss. I'm a big fan. I am almost done with your book and I am such a big fan. So I'll make you brief. I have a. A question about an Alabama state tax issue. I believe there has been an error tax return. I worked remotely for a company based in Alabama and I lived in Tampa, but the state says that I owe 1100. I've tried to resolve it because I don't think the amount is correct or I don't think that I owe them any tax because I never physically worked in the state of Alabama. Should I just pay the 1100 or just. They're trying to garnish my wages now, so should I just.

George Camel

They as in the irs?

Caller

Yeah.

George Camel

So have you verified this debt? Have you actually logged into IRS.gov and checked for all the letters there?

Caller

I have, yes. And I have called and talked to multiple people and they all say the same thing. I did file the return. And they say that it shows in their system that I do owe because the company is based out of Alabama. So we just finished. I worked so hard to finish step one. It's crazy. And so now I'm like, do I just go ahead and use that money to pay off that, you know, that tax that they keep saying I do owe?

Jade Warshaw

Did you. Or should you prepare your taxes or did somebody else.

Caller

I did. No, I did it myself on TurboTax.

Hmm.

Jade Warshaw

I mean you might have a tax professional take a look at it just to verify that there was an error or say, no, this is actually exactly right, there's no error. I mean that would be the best way to look at that because George and I wouldn't be able to tell you just from sitting here. I'd want somebody to look, look at it. And if it turns out you do owe the money, then we can talk about, let's talk about that scenario. Let's pretend you run it by a tax professional and they say, sorry Amanda, you owe this money. Let's talk about what a plan would look like for you to pay it.

Caller

Okay.

George Camel

Have you checked with your employer, checked with the accounting department there. What do they say?

Caller

So in 2024 it was reported that I had moved, which is, which is true because I did. I lived in Alabama for like two months out of the 20 lake, beginning of 2024. And then we moved to Florida. But, and that was recorded. But it's, it's, it's a mess because the old employer said that it has been reported. But when I tried to call out like the state of Alabama, they said, no, they didn't do that because it was reported that I'm reciting in Alabama. So yeah, I'll probably get a tax person to look through it. But.

George Camel

Well, I'm trying to figure out, I just think we need some facts here because I'm wondering if they say, hey, well those two months where you're going to owe taxes in Alabama, so you might owe taxes in two different states for that year because you did live there.

Caller

18. Right. I make 18,000 a year. I'm a part time employee. I have, I have kids. I home, I work from home. And there's no end. I owe 1100 and two months to the state of Alabama.

George Camel

I mean 500 bucks a month for two months is, that's not outrageous in taxes. Alabama has an individual income tax rate about 5%. So I'm just wondering, you know, I'm not here to defend the irs, but I just wonder if maybe there is a legitimate tax owed and we just didn't understand the tax law. And that's where I would reach out. Go to Ramsey Solutions.com and click on Tax Pro and we'll connect you with a Ramsey trusted tax pro to just look it all over and go, okay, here's the facts, here's what's not true, here's how to respond to the IRS before the deadline. That's what you want to do is stay in communication, meet all the deadlines, document everything, versus just going well, I don't feel like I should pay it. That's the last thing you want to do.

Jade Warshaw

And if you do find that you owe the money, let it. If. And you have other debts, let it jump to the top of the list. Like, IRS debt is something that we don't want to fool around with, and that's definitely one that we want to know. Knockout. Sooner than later and until again, until you find out. Otherwise, I'd start stacking up for this payment knowing that it could possibly be coming down the pipe. All right, thank you so much for the call, Amanda. Let's go to Mason in Dayton, Ohio. Hey, Mason, how can we help?

Caller

Hey, guys. Yeah, thanks for taking my call. So my wife and I were, with 26, just starting the process of realizing we're in a bad situation, trying to get out of it. So we have a lot of debt, but we have an investment home, and we're just curious if we should sell the rental property and get out of this hole or put our nose down and kind of stay in the hole longer while keeping the investment property.

Jade Warshaw

Interesting. So just tell us right off the bat, what do you owe on the rental and what's it worth?

Caller

Yeah, so we owe just right around 60,000, and it's worth around 160,000.

Jade Warshaw

Okay, that's great. And you have a. Are you and your wife also living in your own primary residence?

Caller

No, so we rent from actually a family member. My grandparents own the house that we are renting, so we're getting a pretty good deal on rent. It's more the location. We want to be opposed to where the rental property is.

Jade Warshaw

Got you. So you guys are renting. So how much other debt do you guys have?

Caller

We have between student loans, cars, and bad credit card debt, around 78.

Jade Warshaw

Okay, 78,000.

George Camel

And what's your income household?

Caller

Right around 95 to 100.

Jade Warshaw

Is that including the rental or not?

Caller

No, not including the rental.

George Camel

Okay, what is that cash flow? What's the actual net profit per month?

Caller

About $600 a month, roughly.

George Camel

Okay.

Jade Warshaw

Is there ever any. Is it in your plans to move into this house as your own at any point? Like, what was the plan with this rental?

Caller

Yeah, so the plan was for it always to be a rental. We actually lived in it for about a year, and it's just not in an area or neighborhood that we really wanted to live in and raise a. We have two little kids.

Okay.

So my parents helped me buy it when I Was in college, so help pay some bills and stuff while I was in college. I rented out while I was in college, got out of college and didn't have money to buy another house. So I moved into it for a year, actually about three years. But got it fully in our me and my wife's names a year ago. So that's kind of how we got there.

Jade Warshaw

Understood. And now you're renting it again. And I guess my big question is, was the plan to be landlords or did it just kind of happen by default?

Caller

By default. I guess I like the idea of the income coming in, but we realized what kind of hole we've been in so we finally put it all on paper. We're like, wow, that's a bigger number than we thought. You get those credit cards or a car that you can't afford. So now we're just like, how can we get out of this the quickest way possible.

George Camel

Yeah, the math just says, hey, we could get about $100,000 out right now or we could take home our seven grand a year.

Caller

Year.

George Camel

And it sounds like there's more urgency for you guys to get out of this situation that you're in versus man, we love the extra seven grand.

Jade Warshaw

Well, you never set out to even be in this situation, which is sort

George Camel

of landlord by default.

Jade Warshaw

Yeah, I think that is a pretty clear decision.

Caller

Yeah, that's kind of why I was hoping to get some reformation. A lot of my family stuff's in the real estate and I know you guys all Preach. You know, it's a good way to make it extra income when you have the money. So it is my thought was is it better to put our nose to the grindstone and keep the rental and then we have it at the end or. Or start over fresh again once we get out of this big hole.

George Camel

I don't think this rental is like the key to your whole wealth building scheme. I think the key is going to be getting out of debt, creating margin with your core income, that 100k. So I would sell it personally, I would get out of this, but I'd make sure to change the behavior along with it and not use it as a get out of jail free card.

Caller

Hey guys, Rachel Cruz here and I love summer. There is more fun on the calendar, more time with your people and way more chances to make memories. But you know what else? There's more of spending. Oh, between the extra groceries and gas and camp fees and family trips, it all starts to add up so fast. And before you know it, money Stress starts to steal the fun out of everything. And that is why I love the EveryDollar budget app because it helps you plan your money, track your spending and find more margin in your budget so that you can put extra cake cash towards the goals that matter most. Enjoy your summer without the money stress. Download the EveryDollar app in the App Store or Google Play and start for free today.

Jade Warshaw

All right, George, let's go back to the phone lines. We have Karen there who's in Dallas, Texas. Hi, Karen.

Caller

Hi, Jaden. George, thank you so much for taking our call.

Jade Warshaw

Yes, ma'.

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Am.

Jade Warshaw

How can we help?

Caller

So my husband and I both lost our jobs in May and we want to know if it's okay to take this time to build the potential businesses that we have our eyes set on or if we should go back and start looking for, you know, quote unquote, normal income.

Jade Warshaw

Well, gosh, I'm sorry that you both lost your jobs. Did you work in the same place or this was just a crazy coincidence.

Caller

Thank you. Yeah, we were working at the same place. I was laid off just after coming back from maternity leave and his contract ended.

Jade Warshaw

I'm so sorry. Do you have emergency funds? Do you have money set aside?

Caller

So we, we've been kind of working the baby steps, not as well as we should, but we do have our basic thousand dollar emergency fund. And then on top have, I would say our emergency fund plus the three to six months. It's not all in the right place, so. And I actually got a severance of $12,000. So we started with that and just said that we would try to live off of this for maybe three months or so.

Jade Warshaw

Do you guys have kids?

Caller

We do. We have to, you know, fresh baby, she's almost five months now. And then we have a five year old.

Jade Warshaw

Okay. So this is, I mean, this is a huge, huge life change. Obviously it's also a huge emergency. Hopefully it doesn't feel like a crisis though because you've got this money set aside. Twelve thousand severance, a thousand dollar baby. Step one. And how much would you say that the six month, three to six months fund is? How much money?

Caller

So our expenses on a monthly basis are about $3,000. And so we felt that six months was the safest this bet. So we have $20,000 in a high yield savings account and then we have another $20,000 in a separate high yield savings account for a little bit more cushion. The goal is to try to start generating income from the businesses so we don't have to touch any of our savings. But how long do we do that before it becomes, you know, the umb?

Jade Warshaw

Well, tell us a little bit. Well, first let me also ask, do you have any debt?

Caller

We do not have any debt, only the house.

Jade Warshaw

Oh, excellent, excellent.

George Camel

You're sitting on about 53,000 do in liquid cash.

Caller

Okay, that sounds, I haven't put it all together.

George Camel

Sounds like you've used some of it the last two months to live. So it might be down to like in the 40s somewhere. But I would sit down tonight and understand. Here's all the rations we have. And also we need some urgency to get income in right now versus well, let's just wait and pursue our passion project. Like I would be feeling the fire right now of going we got a baby, we got a five year old and we have nine. No income. You're going to burn through those savings way faster than you think.

Jade Warshaw

Did you already have a business that you'd started that you're just going to focus more on or is this starting something from scratch?

Caller

So we've been noodling on it before and it's kind of branches off of what we were doing prior. I luckily enough, well, we both actually have nailed down clients since losing our jobs. I got two clients and so I have been able to generate about $2,000 which paid, you know, the mortgage. And then my husband is generating a couple photography clients. So it's as much as we would like, but it's kind of working. The idea is that we, we don't want to go back to normal nine to five. We want to really, really make these work.

Jade Warshaw

I respect.

Caller

We're just hoping to keep money coming in.

Jade Warshaw

What are the two businesses? What is it he's doing? Photog. What are you doing?

Caller

Operations consulting. So before I was like an executive assistant operations manager. So now I am doing consultant for like you know, small business owners, fast founders consulting for their businesses, cleaning up their anything, you know, cleaning up their papers, inbox documentation.

Jade Warshaw

Okay.

Caller

So many different things.

Jade Warshaw

And what do you need to bring home every month to match what you guys were making before

Caller

we were bringing in together, he was bringing in $3,600 bimonthly. So twice a month. And I was bringing in about 24 in total. I believe we were. Yeah, right around like 10 maybe 12k.

George Camel

I'm seeing 12k is what you guys were bringing in.

Caller

Take home, which is more than we needed. Yeah, that's what we are bringing in. Take home after taxes, which is more than we needed. Our expenses prior to losing our jobs were about $3,600. But we've since been able to get that down to $2,700 to just sustain our home.

Jade Warshaw

Oh boy. Okay, well, we want to, we want to calculate beyond that because you got to live right? You have to have a lifestyle that you enjoy. So if you said, hey, for us to obviously not just pay our bills, but just to kind of have a life and be able to invest a little bit and save a little bit and not just be bare minimum, what do you think that number is?

Caller

I would say about $3,500.

Jade Warshaw

Okay.

Caller

Yeah, that, that would take care of the home and then we could invest a little bit as well. And we do have actually $10,000 invested into a betterment account. Sorry, I'm just pulling more out that' but we do have $10,000 in a betterment. I wanted to ask, is that what Dave considers like good growth stock mutual funds? Does that count?

George Camel

It depends on what it's invested in. My guess is it's in a taxable brokerage account that's non retirement and then you can buy anything within that. So you tell me what you invested in.

Caller

I actually don't know because I put it in the hands of the, the account because I didn't want to pick individually before.

George Camel

Like you didn't like a robo advisor advisor?

Caller

No, it, it wasn't.

George Camel

What do you mean in the hands

Caller

of the account Robo advisor? So betterment is the, the platform and essentially I understood that they were investing it into the s and P500, you know.

George Camel

Okay, so it's likely in some sort of index fund which is, it's fairly close to a mutual fund that we talk about on the show, which is you want to diversify across, you know, different types of companies. So large cap, mid cap, small cap companies and international. That's what we recommend. Your index var fund is likely not as diversified. It's probably mostly large cap companies, but that's not a crisis right now. But I would not be investing until I had consistent income because you guys are still, you're not as safe as it feels. You're in a great spot. You've done an awesome job. No debt except a mortgage. You've got 40 grand sitting there to protect you. But I don't want it to give you a false sense of security either and get too comfortable.

Jade Warshaw

Right. I, I want to say to you, I love businesses. I love small businesses. I love people who are like to break out of the nine to five. I, I, I love that. I just want to know how consistent we are. Because the best way to do that is having a consistent income while we build the business. And then once the business gets to a point to where it really is spitting off enough income for us to live our lives on, then we can transfer and do the business full time. So right now it does sound like you guys are in those that stage of, hey, we've got money coming in. It's still a little inconsistent. We're still trying to build the structure out especially I haven't heard much on the photography side side of things. For that reason, I think that you both probably should pick up two other jobs. Like you should pick up another job. He should pick up another job. And the point is, hey, this is not our long term play. This is just to get us some consistency while we build the thing that we really do want to do. And there's no shame in that game that that is the way that it's done. Otherwise you guys are going to be living hand to mouth like, yeah, especially

George Camel

if you're both reliant on clients, that's kind of a scary situation versus one of you having the stakes income and now you're out here trying to gather the clients and if you have a bad month, it's not going to sink you guys. Was he doing photography before full time? What was he working in?

Caller

Just kind of freelancing? He was doing photography and he was working as a similar consultant, office manager kind of deal. That said we did, you know, think a similar thought, but we were concerned that maybe getting sucked back into the nine to five, you know how it just gets tiring, you know, and then you feel like you don't have time for yourself at the end of the day or time for the kids. So we were afraid that that would take away all of the momentum from the businesses. And the next thing you know, we look up and it, you know, two years later we're still just comfy in these nine to five.

Jade Warshaw

Well, what you could do is you could split it and say something like, and this is just me looking at the numbers you've given me. It may be different, but I'd go, okay. So the person who has the biggest upside right now seems to be you. You can go out, you can get a couple clients and make two or $3,000, which is just shy of what it is that you need. So I'd say, okay, given that information, husband, why don't you go out and get the stable job, or I hate to say stable, you go out and get a job that's going to bring in some consistent income. I'll go out and I'll build my thing over here. And once that gets solid, that will allow you to then go out and build your thing, right? We don't have to both do it simultaneously. You guys are young, you've got two babies. You've got time to build this. And I want you to please hear me me say I want you to do this. I just want you to do it in a way that's going to cause as little rocking of the boat and as little financial ups and downs as possible.

George Camel

And entrepreneurship, self employment. The first couple of years, it ain't for the week. It's not 20 hours a week with a bunch of flexibility, it's 80 hours a week. And so I don't want you to get it twisted. This is going to be a walk in the park either going this way.

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Jade Warshaw

You know, we wish we could get to every single single call and question here on the Ramsey show, but that's just not possible. So if you have a money question and you want to answer for your question, go ahead and head over to our website ramseysolutions.com and use the Ask Ramsey tool. Ask Ramsey is our free AI tool. It's built and trained on proven Ramsey principles and you'll get an answer the same way that we'd answer it here on the show. Ask your question today@ramseysolutions.com or just click the link in the description if you're listening on podcast or YouTube. All right, Kris with a K is in Atlanta, Georgia. All right, Kris, how can we help today there?

Caller

I have a question about debt. I have a few different categories of debt and I am trying to determine which to pay off first.

Jade Warshaw

Okay, we can help.

Caller

Yes. So I have a mortgage payment. The mortgage I have left is about 190,000. My interest rate is 2.5 on that mortgage. For student loans I have about $23,000 with the highest interest rate is 4.6. And then my car, I owe $16,000 with a 5.5% interest rate.

Jade Warshaw

Okay. Anything else or those? Those three are it.

Caller

That is it. I luckily don't have any credit card debt.

Jade Warshaw

Way to go. Okay, well, first off, we tend to separate the debt by consumer debt versus mortgage debt. We don't touch the mortgage debt until a little bit further down in our steps of methodology. So how familiar are you with Ramsey? How long have you been listening?

Caller

I'm just an occasional listener, so not very much.

Jade Warshaw

Okay, so for your benefit and for anybody else listening, we have a seven step seven baby step program that we teach. And it helps people not only pay off debt, but you know, long term, they're building wealth as well and doing all of the things that are necessary to do with your money. So part of that baby step two is the pay off your debt section of this methodology. And like I said, we break it up. Mortgage debt is not until baby step six. So today we're just looking at the student loans and the car payments. So that's the first answer to your question. And then within baby step two, what we do is the debt snowball method. A debt snowball method is when you list your debts from smallest to largest by balance. And so in your case, I know that you read off the interest rates, but we do it smallest to largest by balance because we find that over time people are more willing to stick with the process and they're able to experience small winter. And so for people who actually want to finish paying off their debt, studies show that the debt snowball method works best in order to do that. So you mentioned that the student loans were broken up. How many individual ones are there?

Caller

A mix of subsidized and unsubsidized, and there are six. And they all vary between 3,000 to $5,000. And I've been on a forbearance for the last several years since COVID with the repayment plan and so need to change my payment plan or I just need to pay off the debt. So that's kind of what I'm curious about. Especially because the car is less money, right? I owe less on the car. So are you suggesting I should pay off the car first and then the student loans?

Jade Warshaw

No, I'm suggesting since the student loans, there's six of them, I would go through tonight and look at what the individual balances are. So you might have one for three, you might have one for eight, you might have one for one for seven, whatever those numbers are.

George Camel

Did you say there are three to five total? Like 3,000 3,000, 4,000. 5,000.

Caller

Yes, yes. 23,000.

George Camel

So if you use our every dollar budgeting app, it'll list out the debts from smallest to largest for you, and that will give you your next step. So you're going to make minimum payments on all of the debts, but that smallest balance, that $3,000 student loan, that's the one you're going to throw extra money at. And once that's knocked out, you free up that payment. Now you apply that newfound payment to the next smallest debt. And so that's how the snowball starts to gain traction. And that momentum, like Jay talked about, is what actually causes people to follow through with it versus interest rate. Focused.

Caller

Got it.

Jade Warshaw

Yeah. And then after that, I know it's probably tough for you because you're. You're used to these student loans being on default and so. Or being on, you know, Forbearance. Forbearance. Thank you. And so you're not paying. Paying the payment. And so you're probably thinking, oh, if I just pay off my car payment, that's a bigger. That's more money that's being freed up. I totally understand that line of thinking, but psychologically, what George said is absolutely true. I use the debt snowball method to pay off $230,000 of student loans, but in a total $460,000 of debt. And I can tell you it really does work. George used it as well, and so that's what I would suggest. How much money do you bring? Bring home every month?

Caller

About 7 to 8,000.

George Camel

Awesome.

Caller

I have a good chunk of savings, too, which is why I thought maybe I could go ahead and pay off. I have about $60,000.

George Camel

Wait, you're telling me you could pay off all of your consumer debt today and have money left over?

Caller

Yes.

George Camel

And we just spent seven minutes walking you through this like it was going to be a whole ordeal.

Jade Warshaw

Chris with a K. I'm mad that you told us this this late.

George Camel

Come on, you buried the lead and we thought you were broke.

Caller

Yes, no, I. I've done my savings and I, you know, because they've been on forbearance, I haven't really thought about paying towards it.

George Camel

The interest has been accruing this whole time.

Jade Warshaw

I know.

George Camel

That's the scary part. You're going to look up in that balance is ballooned.

Caller

Yeah, that's what it is. And then the income did, you know, start to increase a little bit in the last few years, which is why I'm in this position now to be able to pay some of that off.

Jade Warshaw

Well, I'm glad you are.

George Camel

So you're going to pay off all the debts today. Congratulations. You're still money left and you'll have 21 gr grand left. We're going to call that your emergency fund. You may want to add a little bit to it. We recommend three to six months of expenses.

Jade Warshaw

That's babysitter.

George Camel

So if you're a solo income earner, you may want to lead towards six. And so if your expenses are, let's say five grand a month, 30 grand is six months. So you got nine grand to go and you'll save up three grand a month for the next three months and boom, by Christmas you are completely debt free with an emergency fund of 30 grand and you're investing 15%, that's baby step four into retirement retirement accounts. And if you just do this, I know it sounds like, should I let go of the savings? Should I focus on the. If you just, just trust us on this one. This is a trust me bro situation. You will be in a very different place, mentally, emotionally, financially. When you don't owe anyone money. You got a pile of money in the bank and you're building toward the future.

Jade Warshaw

Yeah, I love a call like this where we find out that there's some cash that they're sitting on. But even if you're listening now and you're thinking, okay, I have debt debts, trust me, if you just start to think about this, think about, do you have money? Do you have stocks? Do you have money sitting in a brokerage account? Non retirement.

George Camel

Things you could sell.

Jade Warshaw

Are there things you could sell?

George Camel

Vehicles, Toys, Recreational vehicles.

Jade Warshaw

Yes, that's what George and I do. When you guys call in and tell us your list of debts, we're thinking, okay, what are the easiest ways that we can knock out money? And it's almost always it's sitting in stocks, it's sitting in a brokerage account, or it's sitting in your vehicles. If you're just willing to liquidate them and drive a hooptie for a while

George Camel

and even be surprised, even like pausing, investing. If you're investing, yeah, you know, 5, 10% and you pause that, that's money back in your paycheck.

Jade Warshaw

Yes.

George Camel

Or if you get a big refund, your withholding.

Jade Warshaw

Yeah. Yes, thank you, George. Changing your withholding. A lot of us got refund checks back from the IRS. If you take that amount and divide it by 12, you could essentially get that much money back in your paycheck. If you just change your W4 withholding, that $3,600 refund.

George Camel

That's 300 bucks a month you could have had in your paycheck.

Jade Warshaw

Yeah, that's big money. Big money. I love this. So just take a moment tonight, comb through your assets, comb through what you have, and you might find that getting debt free is quicker than you think. All right. I love a social question, George. How about we do it? This is Daryl from Facebook. He says, should gifted money received for a birthday be separate from household income and theirs to spend as they choose, or should all income, regardless of its source, be considered household income? Oh, brother. Come on. You better spend that birthday card.

George Camel

Say the quiet part out loud, Darrell. Like, I want to keep this money for me.

Jade Warshaw

Yeah, keep your wife's hands off of it.

George Camel

She's like, well, and the question is, like, where are we at financially? If we're in crippling debt and you got a hundred bucks, you may need to throw it at the debt. But if you're in a decent spot financially and you know, grandma gave you a birthday money, like, if. If my wife gets birthday money, I'm not like, hey, you know, I get a cut of that, right?

Jade Warshaw

No, that's not right.

George Camel

It should go towards the bills this month, however.

Jade Warshaw

Can I just tell you, this is like a. A real story. There were several years. My mother in law, Bubby, she would give us like, cards every year for our anniversary. She would give us Valentine's Day cards. I'd get a birthday card. I can tell you that money went to utilities many times when Sam and I were getting out of debt or it went towards getting, you know, paying off a credit card balance or getting back current on something.

George Camel

So I love it. The receiver gets to choose how the. How the blessing plays out.

Jade Warshaw

I know, but it is kind of sad when you don't get to spend your birthday money on.

George Camel

What'd you buy? Electricity. Does that count?

Caller

Water.

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Jade Warshaw

All right. Our Ramsey show show scripture and quote of the day, Ecclesiastes 10:10 says, if the ax is dull, and its edge needs unsharp. And its edge unsharpened. More strength is needed. But skill will bring success. John Wooten said, talent is God given. Be humble. Fame is man given. Be grateful. Conceit is self given. Be careful.

Caller

Wow.

George Camel

I like that.

Jade Warshaw

That's a foreboding. All right. Jenny is in Cincinnati, Ohio. Hey, Jenny, you're on the line.

Caller

Hi.

Jade Warshaw

Hi. How can we help?

Caller

So me and my fiance are getting married in October. We've been together since high school and he bought a house last June. And I'm not on it yet, obviously, because we're not married, but he got it through a VA loan and the VA inspector missed a bunch of stuff. So our $150,000 home, we had to put 50k in so far.

Wow.

On repairs and maintenance, unfortunately. And last month I got laid off from my job. And we're doing okay. Ish. It's just after I got laid off, we found out that all. All of our waste plumbing was still clay pipes and they collapsed.

Jade Warshaw

Oh.

George Camel

Oh boy.

Caller

So that was another 30,000 we had to take out in debt for that.

George Camel

How old is this house?

Caller

It was built in 1910.

George Camel

Goodness gracious. Okay.

Jade Warshaw

And this. This inspector really screwed you guys big time.

Caller

Yeah. Which is what we've been told. But since being laid off, our pipe payments don't start till next month. And I've been applying like crazy daily even to like entry level fast food jobs. And I keep getting rejected. And I just want to know how to deal with the gill and ways that I could help him out more because I've been feeling really guilty. He assures me it's fine. He's pretty traditional where he thinks that the man should take care of a majority of things anyway. But I come from a family that if you're a woman, you still have to make your own income and you should feel financially secure on your own in case anything happens. So I'm feeling a lot of emotions and I don't know exactly how to deal with that.

Jade Warshaw

Well, I'm hearing two things. I want to get to the emotional part, but I also am thinking about this homeless inspection. And you can. You can pursue a claim against a home inspection company. I don't know if you looked into that, but I mean, if it's.

Caller

Yeah. Sorry.

If.

Jade Warshaw

Yeah. Did you.

Caller

So unfortunately I can't do anything because I'm not on the house itself, the contract mortgage. But I keep telling him to pursue that because I can't do anything. If I could, I sure. I would be on the phone Daily.

Jade Warshaw

Why is it he is just,

Caller

I love him, very laid back person when it comes to stuff like that. He'd rather figure stuff out himself.

Jade Warshaw

And to the tune of $80,000.

Caller

Yes.

George Camel

That's not a fun way to be chill, to just go into crippling debt and do nothing about it. So he's right in that this is his problem. Not from a like traditional man standpoint because if that was the case, you guys wouldn't be living together before marriage if he was like super old school in that way. But this is his house. And so let's say you guys, God forbid, you broke up and you put $50,000 of your own money into this house. You have no claim on this house.

Caller

Yeah.

George Camel

And so that's the scary part. This is his problem to deal with legally, financially. And you have your own problem. If you guys broke up, you have nowhere to live and you have no income. And so you both have your own crises to deal with right now. And this is on him to figure out this financial aspect. Now once you're married, you combine your lives. Now it's going to be your jobs together to clean up the mess and to get to a better spot financially. But right now you both have your homework to do.

Jade Warshaw

Now what were you doing for work before you were fired or laid off?

Caller

I was an insurance agent. So I was the one that pushed him originally with the pipes happening and I pushed him to look because he didn't know if he had any, sorry, blanking on it. But like the extra stuff you add to your home inside insurance, he had no idea if he had any of that or not? Well, he did, but the clay pipes are considered wear and tear which is not covered under most home insurance policies.

Jade Warshaw

Sure.

George Camel

That that insurance company didn't exist when those pipes were put in. So that's the hard part here is I would be going through that thing, I would upload my insurance documentation to AI and help me figure all this out and do some dudes diligence here to figure out what we can go after, what we have to cover, what isn't covered.

Caller

Yes.

George Camel

So that's part of this whole thing. But what is he making right now?

Caller

I believe he makes around 3,000 to 4,000 a paycheck.

George Camel

And he gets paid twice a month or what?

Caller

Yes.

George Camel

Okay, so he's making a great income, six to seven grand. And have you tried to get back into the insurance world?

Caller

Yes, it's just, I'm having issues with. I just get rejection emails or I get ignored even if I Try to reach out again.

George Camel

Well, do you know people in the insurance world that you can contact personally versus just sort of a name and a digital stack?

Caller

Yes, I've tried to reach out, but most of the time they're just so. Unfortunately with my company, the reason I got laid off is they got acquired by a bigger company. So they weeded out the old employees and from what I found.

George Camel

What kind of insurance were you selling?

Caller

It was life insurance and car insurance.

George Camel

Okay. Because a lot of these jobs are commission so it's not like they need to go pay you a whole bunch of money, right?

Caller

Yeah.

George Camel

So I would be contacting every single person I know who's still in the insurance world who's not tied to that company and say, hey, are you guys hiring over there? What kind of positions? Can you give me a reference, a referral? That's how a lot of people get hired here at Rank Ramsey because we get thousands and thousands of applications and the ones that pop to the top is because, well, Jade said he's awesome, you should look into him.

Jade Warshaw

Yeah, that'd be my homework for you tonight is I'd be compiling a list and I wouldn't go to sleep tonight until I have at least 10 people on that list. Even if it's somebody that somebody else knows that can say, oh, my buddy has a friend. Right. It's okay if you're one to two people away. It's just something that someone can say, oh, I know somebody, or I know of somebody that's, that's going to be something that's really going to help you. That being said, don't stop applying. You know, you've got to get something. So keep applying, keep looking for that in between job to have something in the meantime. Because I agree with you, you want to contribute and I know that you're getting married, but today you want to contribute and you want to use your skills and I think that you should. So keep working towards that. And I, I mean my heart goes out to you because I know that that's, that's tough. It's not, it's not easy to lose a job and it's not always easy to find a new job. So you do have your work cut out for you, but don't give up on that. And I do think that this also opens up an opportunity in your marriage to have some deeper conversations about expectations and how we're going to handle money and how we're going to handle things that pop up. Right. Because this is an eighty thousand dollar deal here. We don't want to sleep on and we don't want to go easy on it because we're, quote, unquote, chill.

Sponsor/Ad Reader

Yeah.

George Camel

If this is what the next 40 years of marriage looks like, is he super passive and you're super frustrated, it's not going to bode well. And you guys have known each other a long time, so, you know, here's the parts he probably will change or is willing to change. And here's where this is just who this guy is. And I love that about him, that he's so chill. And also, there's a downside to that. So some new conversations to have. But I would also look into just side gigs right now. Jenny, I know it's. It's tough to kind of swallow the pride. I mean, you've done a great job just going, I'm gonna apply to entry level fast food. I'll do anything.

Jade Warshaw

Anything.

George Camel

I just want to have the, you know, that feeling of, I'm producing, I'm adding some value here, and that might be, you know, delivering pizzas. I'd be going everywhere going, hey, do you. Are you guys hiring right now? I'd be driving around town looking for any hiring signs, and I'd walk in there as the best employee they've ever had.

Jade Warshaw

Absolutely. George and I actually did a segment on side Hustles on Friday. Friday. That episode aired on Monday. You can find it on Our Ramsey Solutions YouTube. But people posted tons and tons of side hustles in the comments of what they're doing and what they're earning from it. One person said, and I'm not saying that you're going to go on to do this, but just for anybody who's looking. One person said that they do document review and they do it from home. They make 23 an hour.

Sponsor/Ad Reader

Wow.

Jade Warshaw

Photography. If you have a special skill, I'm not saying it has to be photography. Even if you can watch kids or babysit kids or be a nanny, those are services that people will pay money for based off of your skill set, based off of your background check that you can do.

George Camel

Yeah. And there's like a lot of apps and sites that make it easier. Like if you're going to watch kids or walk dogs. Care.com. yes, you can jump on there. Or if you're going to deliver Instacart, Ship, Door Dash, all of these apps can help. Even finding side gigs, like doing, you know, special events. They need people to help out and serve concessions, all kinds of things.

Jade Warshaw

Yeah, that's right.

George Camel

You just got to be looking for those opportunities.

Jade Warshaw

That's correct. Well, George, that puts this one in the books. Remember, guys, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of peace, Christ Jesus.