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Jade Warshaw

Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network in the Fair Ones Credit Union studio, this is the Ramsey Show. I'm Jade Warshaw. Next to me, GK George Camel. Taking your calls for the next couple hours on the phone lines, we've got Catherine, who's in Atlanta, Georgia. Katherine, you are on the line, my friend.

Caller

Hey, guys, can you hear me?

Jade Warshaw

Yes, ma'.

Caller

Am.

Hey, so my husband and I, we are 20 and 22. We've been married for a little over nine months now. And we're really starting to think about our future and being wise with our money early on. And our biggest goal is to buy our first house before we have kids, Lord willing, in the next two to four years. And we want to put 20% down so we can avoid Pima. We both work full time jobs, we have a budget, and we just want to make sure we're doing everything we can to reach that goal. So my question is, how aggressively do you think we should be saving for our house while still kind of enjoying this season of life? Should we cut back on fun things and kind of go in for the next couple of years to reach our goal faster or is there kind of like a healthy way to balance where we can still travel, do date nights and things here and there?

Jade Warshaw

I mean, I do think I love the goal of buying a house and I even love your timeframe. You said it in the next two to four years. And I think the balance that you need to strike is considering the following. If you don't have debt and you are in the phase where you could also be investing this money, there's a give and take, right? You, you want to save for that down payment, but you also don't want to lose out on unnecessary time Right. In the market.

Caller

Right.

Jade Warshaw

And so you want to balance that. If you can do both at the same time, I really love that and still hit your goal. But if it, if it means, hey, we're not going to be able to invest 15% because we need to put all of our extra margin towards this down payment, then yeah, you might want to go at a more intense pace so that we're not losing time. So that's one thing to think about and also a thing that I want you to think about is I love that you're trying to avoid private mortgage insurance, PMI. However, in today's market, 20% down is generally just the Starting point. Right. Because we want to make sure that payment is no more than 25% of your take home pay. And for that reason, many folks, depending on the amount of house that you're getting, many folks are needing to put upwards of 30 and 40, maybe even more down so that they can make sure that that ratio is okay in their monthly budget.

George Camel

Yeah, it's less about the down payment and it's more about how does this actually factor into your budget as a monthly payment. And so I would crunch the numbers. What's your income here? Your household income?

Caller

Yeah, our household income after tax is about 87,000.

George Camel

Awesome. And you guys are debt free with an emergency fund. Where are you at?

Caller

Yeah, we are debt free, which with an emergency fund we have also three months of our monthly income saved. So we're basically done all the baby steps up until a house and putting money aside for our kids college funds and things like that.

George Camel

Yeah. So you're at baby step 3B and that's saving up for a down payment. And it's a choose your own adventure. Like Jade mentioned, you can invest anywhere from 0 to 15%. And what I would do personally as a guy who went, we went a little too hard in the paint when we bought our house. We paid it off in 26 months. That was not the goal. We just ended up kind of sprinting and we couldn't stop.

Caller

Yeah.

George Camel

And so I would encourage you guys to live your life and prioritize like realistic enjoyment, like plan for a vacation, plan for regular date nights. You guys are newlyweds. This is a very exciting time. I don't want you to look back when you have kids in a house and go, man, we never got to enjoy anything. We just sort of sped walk through it like a mall walker, you know?

Caller

Yeah.

Jade Warshaw

So let's, let's run this out in real time. Let's try to help you with some of the numbers. What do you think? Just from you looking at the market, looking at your area, looking at your needs, what do you think that you might spend or would be looking to spend on a house?

Caller

Yeah. So in our area I would say anywhere from, for a good reasonable house, nothing too crazy is anywhere between 380,000 to about 400,000 in the area that we live.

Jade Warshaw

So I'll put 400,000 just to account for some time here. And if you're telling me, hey, we're going to put 20% down, that's $80,000. Right. And I'm doing this on a 15 year fixed rate mortgage because that's what we would recommend here. And by the way, I'm just using the mortgage calculator. You can find it on Ramsey Solutions.com and right now I'll plug in 5.8 for the rate. We don't know what it's going to be coming up but that's around what

George Camel

you might time you buy a house. Who knows where the rates will be? Who knows Exactly.

Jade Warshaw

But if we look at this and again this is round numbers, we're talking about principal and insurance on the payment, property taxes, home insurance, HOA. That's putting you at $3,258 a month. So that's the argument that I said before that a lot of people are going above the 20% because they really want that payment to feel cushy. And I don't believe that you'll still be making $87,000 a year four years from now. But do you see what I'm saying? Obviously that would be way too much house for $87,000 a year income. So just those are the things I want you to be thinking towards. It's not to scare you, it's not to steal your hope, it's just for you to prepare because I think you can get there. It's just being intentional about, about where you're actually going.

Caller

Yeah, that sounds great.

George Camel

So in your budget I would just put a line item for date nights, put a sinking fund in there for a reasonable vacation and then whatever margin you have left becomes your down payment savings. And then you make peace with that timeline for now, knowing that it will speed up as you guys make more money and get that budget dialed in. Yeah, that's, that's the reality. I wish we could wave our magic wand and say, oh, you can do it all, have the cake, eat it too. Yeah, but there's priorities here and there's the reality of the housing market.

Jade Warshaw

The housing market, it's expensive out there, we all know it. That's nothing new. But the good news is they're 20 and 22. If this takes them six years to accomplish, they are still, I mean, gosh, they have their whole lives ahead of them.

George Camel

And first time homebuyer median age is now 40. So if they do this by 30, they're still 10 years earlier than the average person. And there's no law that says you must own a home by 25 or else you're a loser and a failure.

Jade Warshaw

Absolutely.

George Camel

Don't let anyone, especially your parents, tell you that. Which is what you hear from your family. Oh, you got to stop throwing away money on rent. Jade, you guys got to get in house. What are you doing?

Jade Warshaw

And that's the other thing I'll say rent is. It's not a negative thing. Obviously, if you're doing it for the long term and it's your plan for life, it's not good. Because we know that homeownership is a key wealth building component. But if you're renting for a short period or, you know, an extended period to buy time until you can afford to buy, I think it's a really smart decision. Now in their case, 20 and 22 years old, George, I would say. And she said in their area, average right around 3, 3, 380 to 400,000 is what she said. I might suggest trying to find something less expensive that may not have everything you want. It's not the dream home. It may be something that's a fixer upper. It may be something that you know is never going to really hit the mark for you. But if you can get in earlier just to get into the real estate market and you're not having to spend as much time saving, I would probably suggest something like that because you want to get in where you fit in the longer you wait. It's kind of like a moving goalpost in that way.

George Camel

Yeah.

Jade Warshaw

And so that's just something to think about.

George Camel

Well, my first two homes were townhomes because that's what we could afford and we didn't need all the space. We were just a newlywed couple. We didn't have seven kids. And so that was awesome.

Jade Warshaw

Will you ever have seven kids?

George Camel

Not if I can help it. And I can help it. And so that's the good news. I always say we got two very needy French bulldogs, so they don't count as kids.

Jade Warshaw

But they don't have to.

George Camel

But the level of emotional energy that I have to expend is equivalent and the money, if not more. And the money, that's my hot take on that.

Jade Warshaw

But so the moral of the story is the best time to buy a house is when you can afford to buy a house. That's the teaching that we have around here. And we really want that house to be a blessing, not a burden. You might have heard us mention this 25% rule. You may have heard us mention a 15 year mortgage, which some people, they clutched their pearls when we said that. This is all for your benefit. All right. This is because we want homeownership to benefit you. Again, we don't want it to be a burden. And you can go out there and do what you want to do, but if you want it to be peaceful in a blessing, you'll do it the Ramsey way.

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Jade Warshaw

Right. Back to the phone lines we go. Where we have sky, who's in Tyler, Texas on line three. Hey, sky, how can we help today?

Caller

Hi there. So I have this debt that I just discovered. It is a medical debt, I believe, of 25, 22. And we can say just discovered was because I thought it was covered by my insurance and I was never billed for it. It looks like it used to be about 3,500. I'm wondering if I should try to settle that. Dispute it by some chance. I tried to dispute it once and nothing happened.

Jade Warshaw

You don't think it's yours?

Caller

I'm wondering. Oh, no, I know it's mine. I went to the hospital last year. I just before I disputed, I wasn't aware what disputed meant because I was new to finances and so I was like, okay, now I was at what's for? And so I was wondering if there was a possibility that I might be able to settle that or if that would hurt my credit more or if I just should just try to outright pay it.

George Camel

Is it in collections?

Caller

I believe so, yes. I just discovered it on my credit Karma. That's kind of trying to see where I was at. And I had no clue I would

George Camel

pull your actual credit reports to see which bureaus are even reporting it. You can do that@annualcreditreport.com it's totally free. Never pay for that. And that'll at Least give you a real picture of what's happening. And then I would request, request a written validation of the debt. That would be your next step because they'll have to validate that this is your debt, the numbers are actually right. And then you can contact the medical provider, the insurance company, ask for an itemized bill, explanation of benefits, all the nerdy stuff. Because I would, my go to is always, well, let me fight it if I can because the healthcare system is a scam to begin with. So let's not overpay if we don't have to. And then what you actually owe, do you have the money to pay that right now? If you, let's say you owe $2,000.

Caller

So right now I have my thousand dollar emergency fund and then I have about 500 extra in cash that I've added to that that I'm just kind of slowly building up. So I have about 500 on that right now.

Jade Warshaw

A lot of times you can settle these for a quarter on the dollar if you don't have the money but you have the lump sum of about a quarter of this. I would start, I would start there. At this point you're probably not going to do any further damage. Did you say this is from 2022? Is that what I heard? Oh, 2025. So it's not actually that old. So they may not settle it.

George Camel

Yeah, the older it is, the more they're like, well, we're not going to get anything, we'll take something. But if it's only eight months old, they might go, nope, we're not going to settle. You still owe this amount. In which case, after validating it all, after getting the itemized bill, after fighting it all to see if we can get that bill lower or even removed, then I would pay whatever's left over and I would try to do that in a lump sum on top of your thousand dollar emergency fund and get that out of your life.

Caller

Yeah.

Jade Warshaw

And if for some reason they don't settle, it's not un in the way that you had the service and this is the bill. Yeah. But never give them access to your checking account. That's the one thing. Make sure that you just do it as a, you know, online payment or something like that and you're not giving them.

George Camel

Yeah, what I, what I like to do is like I use a site called privacy.com. it's a virtual debit card so that my debit card number is not exposed. So it can be a one time use card. I can set spending limits, time Limits.

Jade Warshaw

So what's it called?

George Camel

Privacy.com. they actually now are a partner on my YouTube channel and I've been using them for years.

Jade Warshaw

I was going to say you've been

George Camel

talking about this all the time because I hate when people are like, well, George, credit, you know, debit cards are so dangerous. You're gonna get scammed online. I'm like, there's tools and ways out there.

Rachel Cruz

Yeah.

George Camel

To avoid this.

Jade Warshaw

Do you know, it's so, it's so funny you said that because just recently I was thinking about how checks are just crazy work because it's got your name, your address, it's got your routing number and your account number on the Datgum check. And we were just writing them willy nilly, just handing them out. Now I think about that and I go, why? What was wrong with us?

George Camel

Well, life hack. I found out you don't have to put your address on there. So now my checks don't have my address. But I mean think that's at least one step closer.

Jade Warshaw

But just it's got the routing number in the account number. George. Right there.

Announcer

Yeah.

George Camel

We're just I checks if I don't have to.

Jade Warshaw

Well, I thought about it recently because I almost, I a check was required and I was like, I'm not writing a check. All right, Mary.

Caller

I know.

Jade Warshaw

What is this? Mary's in Boston, Massachusetts. Mary, how can we help?

Caller

Hi, so I just have a question. I'm on baby step two, which is, you know, horrible being on the step with the debt that I have. But I, I, I finally have like a big chunk because I just had a recent pay raise. That's why I was able to pay off so much debt that I paid off in 10 months, about 17,000. And I'm currently, I'm doing a program for the field that I'm in through the state. So they paid off 30,000 of my student loans.

George Camel

W already like legitimately paid. It's not a promise to pay.

Caller

Oh yeah.

Jade Warshaw

So what is that? You're 47. You're 47 down.

Caller

Yeah.

Jade Warshaw

Wow. Well, how much to go?

Caller

So because I'm, I just became a nurse practitioner so I stupidly before I did the, before I went through financial peace, I was fell into that trap of taking out all the student loans. Oh, I'll just pay them back. And now my minus the 30 grand they just paid, I still owe 120. And then my car loan is 17,000, which is why I'm calling today to see what I can do with that. And then I have two credit cards that are 6,000. So I am. I am doing the app and every dollar. Yeah, I'm doing every dollar.

Jade Warshaw

That's the budget.

Caller

Yeah. Since there is a third paycheck this month, I have an extra 5,500 this month. So I was going to put towards one of the cards at 6,000 and then wipe off a card. But the. My question is, should I take that money and do something else with it? Because the car loans, like. Well, I was thinking, like, how can I get out of this car loan? Because I listened to you guys show pretty much like every day driving into work.

Jade Warshaw

Yeah, let's talk about that. So the 17th that you owe 17,000 on the car. What's the car worth? Have you checked in on Kelley Blue Book?

Caller

So it's like, it's saying like 10 to 12,000.

George Camel

Is that trade in value or private party?

Caller

Horrible. Well, it says 10,000. Trade in 12,000. Private. It did not hold its value at all. So I feel completely stuck.

Jade Warshaw

That's a $5,000 difference.

George Camel

Yeah. Five grand underwater. And you have the five grand. But then even if you got out of that car, you still need a different car. Right. Unless you're able to commute with public transportation.

Jade Warshaw

Are you.

Caller

Yeah. So I know I have five kids.

George Camel

Oh, goodness.

Jade Warshaw

Good to know. That is a. Yeah, we need that information.

George Camel

Okay, so gotta haul them around.

Jade Warshaw

How quickly could you stack up another $5,000 to buy yourself a used van or whatever it is that you need to use in the meantime?

Caller

So that's actually what I wanna do. Cause my car is like an SUV in the third row. Once it pops up, it just isn't conducive for the kids. So I want to get a van. So there's a third paycheck in October. So that's another like 3,500 extra. And then, I mean, I have. I know that I gotta have the emergency fund or I can pull from funds from like, other things. Like, I have a few. Not a lot, but like a couple hundred, 3, 400 in the sinking fund. Some in the. So, like, if I go rogue and take money out of like all the small.

Jade Warshaw

What are the sinking funds? What are they for?

Caller

I guess just because I get nervous if something happens.

Jade Warshaw

Listen, that's wise.

George Camel

It's good. You should have sinking funds even when you're on baby step two during the debt snowball. It's just. Is it for a vacation or is it for needed maintenance? That's coming up. That's the question.

Jade Warshaw

Are they. Are they necessary?

Caller

Like, needed maintenance? I Just get nervous. Like if something happens with the car.

Jade Warshaw

Well, let's leave those alone. Let's leave the sinking funds.

George Camel

I don't want you to go back into debt because you took out the money from your sinking fund once you need the car repair.

Caller

Right.

Jade Warshaw

I think what you can do is keep the 5,500 aside, knowing that you're going to need to replace this car and you're going to need to pay the difference and just keep going intensely like you have been. And then in October you can actually make that transaction once you have enough

George Camel

to get the other car and get out of your loan. That's when you know the time is right.

Jade Warshaw

So just keep those monies aside. Anything above and beyond that. Yes. Go as intensely as you can at the 6,000 in credit card debt and then, yeah, pull the trigger when it's time, knowing that you have the money. How much will you free up when you get rid of the seventeen thousand dollar car? What was the monthly payment?

Caller

560.

Jade Warshaw

Hey, okay, wait.

George Camel

What's your household income?

Caller

Yeah, so I'm separated from my husband right now. So me like we co parent and do 5050 with everything with the kids. My income is 145.

Jade Warshaw

Great, great.

George Camel

We can clean this up. It'll take a bit, but getting rid of that car I think will free you up emotionally, mentally and $560 raise on top of your other pay raise.

Jade Warshaw

That's what this is all about.

George Camel

Raises on raises.

Jade Warshaw

Raises on raises.

George Camel

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Jade Warshaw

All right, guys, buying or selling your home is high stakes because one bad deal could seriously cost you tens of thousands of dollars and you really don't want to overpay for your next house or sell your current home for less than it's worth. Ok? 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 profiles, interview your top choices and pick the one that's right for you. Find local Ramsey Trusted agents who have your best interest at heart for free@ramseysolutions.com agent or click the link in the description if you are listening on YouTube or podcast. Alrighty then. Mary is in Phoenix, Arizona. Mary, George and I are here to help.

Caller

Hi. Thank you so much for taking my call. I'm so excited. Just for a little bit of background, my husband and I are in baby step three and we are about two to three months out from finishing that and moving into baby steps four, five and six. Yeah, yeah, we did do. Yeah. So we did do a little bit of talking. And while we're doing that, we still want to be able to save up for things that come up such as vehicle replacement or repair or house repair or, you know, next house or vacations or things like that. So we were just wondering the best way to do that. Like, is that would that be best achieved through like high yield savings or investment type account?

George Camel

Love this question.

Announcer

Yeah.

George Camel

And sinking funds. For everyone listening out there, it, it's confusing. When you were sinking, you're like, that sounds bad. It's a good thing if you have a $1200 expense that happens every January, like insurance, sinking funds says, hey, let's put 100 bucks away in our budget so that we have that money ready when the time comes. So Mary, the way I do it, there's different ways to do this. Some people like to just keep that amount in checking, stacking up. But for some people that's tempting because you go, oh, we got extra money in checking, we can spend more.

Jade Warshaw

And some people just cash flow it.

George Camel

And some people cash flow. If it's a small enough thing like a hundred dollar subscription, you might be able to just finagle your budget that month. It's coming out to adjust for it. But an example, Mary, my insurance premiums are all coming out tomorrow. Every single one, the annual premium. This is thousands of dollars. So what I've done is in My every dollar budget, I have a line it insurance, and it's stacking, and I move that amount to savings every single month. And so I have a reminder, and when it's coming up, I move the money back from savings back to checking. So that's the simplest way to do it. If you have a little bit of discipline to keep up with it.

Jade Warshaw

Does that help?

Caller

So in terms of like, planning, though, for like, let's say if we wanted to take like a vacation, you know, next year, and we just need a time to plan and save for it, would you recommend just like, you know, just kind of the standard savings or is there.

George Camel

Yeah, I always go high yield savings. So I don't have a normal savings account because I want to make more than half a percent. And so, for example, our friends at Fairwinds, they have an awesome smart bundle that has a checking account, no fees, tied to a high yield savings account. So that's a great way to actually move the money really easily back and forth for things like sinking funds. So you can set up an auto transfer of 500 bucks a month to go to savings for your vacation so that 12 months from now you got six grand.

Jade Warshaw

I love the idea of fair ones. I'll tell you what Sam and I do. We have two high yield savings accounts. We have one that houses our emergency fund. And then another high yield savings account that's broken into buckets where we can save for, you know, car upgrades, vacations, you know, work on the house, whatever it may be. And then of course, our checking account.

George Camel

And I like to earmark it, like you're saying. And fair ones, actually, you can have up to 10 different savings accounts in there. So that's what I do, Mary. Cause you see emergency fund, and you're like, well, there's $100,000 in there, but that's earmarked for five different things, right. So I would separate it with different titles like vacation fund, car replacement, emergency fund. That helps keep it clean.

Jade Warshaw

Now for people, I will say this for people who. They're just a little trigger happy. It's easy for them to go over and get that money. You might put it in a separate institution. I've heard of people doing that. Yours truly, I can't look at it.

Caller

I can't see it.

George Camel

Save you from yourself.

Jade Warshaw

Yes. It's like how people used to put the credit card in the ice bl. I'd be in there, like, chiseling it out in the middle of the night. So I.

George Camel

It's a break in case of emergency.

Jade Warshaw

Yeah, keep it away from me. I don't want to see it.

George Camel

Are you self aware, Mary? Where do you fall on the spectrum?

Caller

Oh, we're very self aware. We use every dollar to track our expenses. And, you know, like I said, we're kind of future planning where we are like about two to three months out for that, for, you know, building up that emergency fund fully and then moving into the next baby step. So we are very much aware of it. We, you know, we have our monthly budget meetings where we go over the budget and make any changes to it.

George Camel

How do we clone you guys? You're amazing.

Jade Warshaw

I know. Well, Mary, I don't think we really have to worry about you much. I think that she's got it in the bag.

George Camel

She's figured out. But she's right in that there are a lot of ways to do it. It can be confusing, the mechanics of a sinking fund and where to move it from. But I do like the idea of automating your savings.

Jade Warshaw

Yes.

George Camel

Because leaving it up to me to remember or have the discipline. Not going to lead up the chance. So all of my stuff is automated and do it.

Jade Warshaw

Automate it for payday. By the way, if you're going to automate things, do it the day the money comes in. Don't let it be the last thing you do. Just let it happen automatically. Automate smart.

George Camel

It's similar like your 401k. I'm glad that it just is gone before it hits my bank account.

Jade Warshaw

I never even think I had the money to begin with.

George Camel

Because if you can learn to live on that smaller amount, you're going to be just fine in this life.

Jade Warshaw

I know that's right.

George Camel

So that's a great question, Mary. Thank you for that.

Jade Warshaw

Yeah. All right. Mike is in Charlotte, North Carolina. Hey, Mike. Mike.

Caller

Hey, how are y'? All? Thanks so much for taking my call.

Jade Warshaw

Absolutely.

Caller

What you do to help folks, including other members of my family and ourselves. So my question is, what kind. What amount of an emergency fund do you recommend for folks to have in retirement?

George Camel

Oh, are you in retirement now?

Caller

Yes. Six weeks into it.

George Camel

Congratulations. How old are you guys?

Caller

Oh, thank you. We just. We're both 60.

George Camel

Fantastic. All right, so how much do you have currently in the emergency fund?

Caller

So right now, currently it's about 96,000. The threshold had been 35,000, but when I lost my job and received a severance, we put that in the emergency fund as opposed to putting it in our investments. Because our plan is I have a pension from a previous career and that we plan to. Our plans for retirement, I think, are pretty reasonable. Just want to be able to live the way that we have. No big grandiose plans or anything.

Jade Warshaw

The 96,000, how many months of expenses is that for you guys? What does that equate to?

Caller

Our cash flow is roughly 90,000 a year.

George Camel

Sorry, you broke up on us, Mike. Speak directly in your phone.

Caller

I'm sorry. Sorry. Yeah, sorry. Our cash flow is about 90 grand a year, and my pension is 60 grand a year. So we'd probably take about 30 out of that a year. And my thought is I would to having to pull from our investments once I've used all of my severance. And if we could keep, you know, if that extends it, instead of having 35,000 in the emergency fund, if we draw that down to 20, you know, it probably would allow me to not have to pull anything out of investments for an additional six months.

George Camel

I love that. Yeah. And there's a couple schools of thought here. In the financial planning world, it's generally recommended to have one to two years of expenses if you can, to stomach a downturn in the market so that you're not pulling out $90,000 when stock market is down 20%. That kind of. That really hurts the nest egg more. And so if you can have one year, you're doing great. If you can have two years because you want to be super conservative, you're doing even better to have 200 grand there. And then some people say, hey, every January, take as much out of investments as you need for that year, and then don't touch the investments the rest of the year. You now have your expenses sitting there in a high yield savings account.

Caller

We've considered.

George Camel

Sorry, keep breaking up on us, Mike.

Caller

I'm so sorry. A lot of expenses are, what I would say, optional. So we're completely debt free. So, you know, when the market would be down, we would not take out as much out and just.

George Camel

You can shrink your spending down to half of that as an example.

Caller

Yeah, that's blessed to be able to do that.

George Camel

That's the key. That's the key to a great retirement, is having flexibility. I'm so proud of you guys. Can I ask what your net worth is?

Caller

Yeah, we're right at 2.2 million.

Jade Warshaw

Yay.

George Camel

Fantastic. How much of that is your nest egg?

Caller

Yeah, I think 1.5.

George Camel

And you have a $60,000 year pension.

Caller

I was. Yeah, it's, you know, I was a. Oh, man.

Jade Warshaw

He was. Well, either way, they've done a fantastic job And I, I love the questions around that. What would you say, George, to the person who's like, oh, man, what you're saying, George, that's new to me. I was just doing the typical baby steps and I had three to six months put aside.

George Camel

For most people, if you have a sizable nest egg to where you can stomach the market downturn, you're like, cool, I can do six months. You're going to be okay. But for someone who's going, I don't want to have to rob the portfolio at the worst moment or I can't shrink my spending. It is wise to have at least a year. So personally, when I retire, your boy's gonna have two years.

Jade Warshaw

Oh, you gonna have stacks on every side, George.

George Camel

I just believe it going, I'm ready for anything. B.

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Jade Warshaw

Alrighty. Today's question of the day is brought to you by Yrefi. One financial mistake doesn't have to decline or define the rest of your life. If you've fallen behind on your private student loans, Yrefi can help you explore low fixed rate refinancing options and affordable repayment plans. Go to yrefi.com Ramsey remember that's the letter yrefy.com Ramsey and it may not be available in all search states.

George Camel

Today's question comes from Diana in Maine. When my husband and I co signed our daughter student loans, this is a strong start. She promised us she would make the Payments. The loan is due now and she refuses to pay anything on it. We have worked hard our whole lives and are debt free.

Caller

Are you?

George Camel

That's my extra commentary I'm throwing.

Jade Warshaw

I like it.

George Camel

We recently started saving for retirement, which will be in 10 years. We've already paid 60 grand on her loans and the balance is 75 grand. We know that we should never have signed for her, but they would not allow her to sign because she had no payment history. She's 17. Of course. What can my husband and I do? We've always had a wonderful relationship, but this has caused a huge wedge between us.

Jade Warshaw

Why is the. I wonder why the wedge is between the.

George Camel

Well, they expected her to pay. They co signed going, fine, we'll sign it so that you can go to school, but you're gonna pay. Maybe that was a conversation.

Jade Warshaw

Oh, she's saying the wedge between them and the daughter, not the husband and wife. Duh.

George Camel

Maybe all of them at this point. Maybe because someone probably was like, we probably shouldn't do this. And one spouse is like, no, we should.

Jade Warshaw

It's her future.

George Camel

It's an investment. That's how it usually sounds. Oh, this is brutal. And it's the number one reason I hate Parent plus loans is because of the relationship killer. It's not even the financial aspect. It is, I love my daughter too much for this to cause a wedge. So the truth is, I'm gonna pay the stupid tax and pay the extra 15 grand. Oh, the balance is 75. They paid 60 on it already. Chances of her paying slim to none at this point. And if she does, she's gonna resent you forever. So this is sort of a $75,000 remaining stupid tax. It might mean you retire in 10.5 or 11 years instead of 10. And that's a hard pill to swallow, but that's what I would personally do as a parent if I was in this situation.

Jade Warshaw

I'd love to know. And it's not in here. I would love to know how successful the daughter is at this point. Was she able to get out of college and land a great job? Is she just choosing not to? Or is she really on a struggle? But there's so many ways this could land. But Georgia, we don't know her situation.

George Camel

Is she able to make the payments? That's one thing. Or is she trying to, like, buy a house? And she's doing great, but she's like, this is not a priority. This is mom and Dad's problem. Yes, but they started it with saying she promised us when a 17 year old promises you something, I'm gonna take that with a big old grain of salt.

Jade Warshaw

But here's the thing that again, and that's such a good point because most people are like, I'll pay off my student loans eventually in 30 to 40 years. And that may have been her thought. Like, yes, I said I would pay them back. I just didn't say was going to pay them back in the next two to three years. Y can I?

George Camel

You know, and what teenager understands the actual amount of 135 grand plus interest?

Jade Warshaw

You don't.

George Camel

Especially on a parent plus loan where the interest is even higher. So by the time she graduates and is actually paying this balance has ballooned. She's going, whoa, whoa, I didn't sign up for this.

Jade Warshaw

And that's why I'm going to take a hard stance. And this is a hot take, but this is the parent's fault. Even though she's not doing something. You have had. You were the deal with a 17 year old about thousands and thousands of dollars. And you were depending on a 17 year old to make good on a thousand dollar, you know, thousands of dollars of promises. I, I find that to be a parenting issue more so than it is the 17 year old's issue, who is now probably in her 20s.

George Camel

But it's up to them. Here's the two paths. They can pursue her and go, no, you said you would.

Jade Warshaw

It's only gonna hurt things.

George Camel

She's never showing up for Thanksgiving ever again. You won't have a relationship with your grandkids. Is that worth it? Is that worth 75,000 more dollars to you? That's really what's on the line here. And for me, in my house, I just, I can't. My daughter's three. I cannot imagine losing that relationship over a mistake that I made.

Jade Warshaw

Yeah, you gotta preserve the relationship.

George Camel

This is a suck it up buttercup situation, unfortunately, Diana. But you guys will be okay. You will live to tell the tale.

Jade Warshaw

I hope so.

George Camel

Hopefully it's a warning sign for any other parent who's in that situation.

Jade Warshaw

Oughta be. Be. All right. Elizabeth in Orlando, Florida is up next. Hi, Elizabeth.

Caller

Hi, Jane and George. Thanks for taking my call. Before my question, I wanted to clear up something from a recent caller. They said the Catholic church in the area required couples to have a baby before marriage prep. And as a practicing Catholic, as when? To reassure you this is not the case. They may postpone a wedding during an active pregnancy because they don't want people making a lifelong covenant under financial and emotional stress of an uncovered pregnancy, but it's that clarity.

George Camel

Thank you. I was on that call, and I literally said, this makes no sense. And you just cleared it up for me, so. I appreciate that, Elizabeth.

Jade Warshaw

I felt like I needed a backstory. I'm sorry, Elizabeth. Thank you for clearing that.

George Camel

This was like a week ago. I feel like. Okay, so, you know, Jade was neither here nor there, but that's okay.

Jade Warshaw

I believe you.

George Camel

But a lot of people heard that call and were also confused and sent me messages similar to Elizabeth saying, yeah, that's. That's not how it works.

Jade Warshaw

Got you. Got you. Okay, well, thank you for that, Elizabeth. How can we help you today?

Caller

Yeah, speaking of clarity, my actual question for you is about my own future. I'm heading to college this fall on a 100% full ride scholarship. Yay. And I earned my full AA through dual enrollment. I'm very excited. I'm majoring in the animal well being, conservation, and considering adding mathematics. I'm debt free and my expenses are covered, so I have the freedom to choose. I know it's early and I don't need to decide today, but I want to be intentional about choosing internships. My dilemma is between pursuing my passion for animals or leaning into the map side, which can lead to more lucrative careers.

Jade Warshaw

Do you like math?

Caller

How would you descend? Yeah.

Jade Warshaw

Okay, so they're both interests and loves of yours?

Caller

Yes.

George Camel

Okay, so fast forward five years from now. What are you doing? If I waved a magic wand? Wand. Regardless of the income, are you like a park ranger?

Caller

I'm not entirely sure yet, but, like, possibly canine trainer.

George Camel

Okay.

Jade Warshaw

Wow, that's cool.

Caller

So that interesting.

George Camel

That's more of an entrepreneurial endeavor where you could start your own canine training business. And you can make great money doing that. If you're like the Cesar Milan of, you know, canine training.

Caller

Yeah.

George Camel

You got customers for days. So now the question is, what is required for me to be a K9 trainer? Do you need a degree for that?

Caller

No, I'm just getting it because I like to learn.

George Camel

Great. So you're a lifelong learner. You're getting a full ride.

Jade Warshaw

It's free.

George Camel

So if it's free, enjoy it. Explore all your favorite classes, learn as much as you can, and know that regardless of what you choose, it may not even be relevant to the career you end up having. And that's okay.

Jade Warshaw

But for the mathematics side, I almost. If you have the free education and you know that's something you're also interested in, I feel like that's something you would Need a degree in order to pursue a career in.

George Camel

If someone was gonna hire you for a role that was tied to that field, they're gonna go, do you have a degree tied to it?

Caller

Yeah.

Jade Warshaw

So what would you do with mathematics?

Caller

I have heard mathematics. I just heard it's very flexible, like data or data scientist or aerospace engineer.

George Camel

I guess you're saying you could do a lot with that degree.

Caller

Yes.

Jade Warshaw

I got you.

Caller

Yeah.

George Camel

I mean, are you really good at math? Are you like a savant?

Caller

I think so. I need to practice it more. But I really liked my pre calculus course.

Wow.

George Camel

Listen, if you love pre calc, God bless you. We need people like that out there.

Jade Warshaw

So maybe we ought to set you up with Ken Coleman. His book find the work you're wired to do. Inside it. It. There's an assessment that you can do to assess your skills and what you're interested in, all these, all of these different factors. And then it helps you take the results and do something with them. So we'll make sure to set you up with that. And I, I think because at the end of the day, you're, you're, you are the captain of your course here. And George and I, in five minutes probably don't know which one you truly are better suited for. And it doesn't sound like there's a wrong answer here. I think you just need to decide. And as long as you're not going into debt over it. It's not a money question. Right. You're not going into debt over it. The money part of it is just how, how are you going to make the most money over the course of your career? And I would wager to say that you're the secret sauce in that. If you decide to start a canine training business and, and you're the one that's over that, and you have a lot of intensity in developing that and you're smart in your business plan, you're probably going to make tons of money. And same thing with mathematics. If you pursue a degree, you know, and, and go into a career path where there's a lot of upside, I think that you'll do fabulous.

George Camel

I always lean towards utility. So what I would probably do, and it's kind of what I did, is use the major that I think has the most roi, but then take classes or minor, do concentrations in the stuff that's more of the passion. That's what I did. I got a communication degree because I knew that's a broader field and I minored in like philosophy and worship leadership. Because I was into those things. But I knew I'm not going to teach philosophy, which is, you know, there's not a whole lot of people hiring philosophers these days.

Jade Warshaw

Yes, that's true. But you do quote philosophy in your book.

George Camel

I still love it. I love a good Aristotle quote. What can I say?

Jade Warshaw

Look at you, George.

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George Camel

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Jade Warshaw

Hey everybody. Welcome back to the Ramsey show in the Fair Ones Credit Union Studio. George and I are going to going to continue to take your calls. Remember, if you ever want to get in the numbers 888, 825, 5225. Andrew is in Fort Worth, Texas. Hi Andrew, how can we help?

Caller

Hi, how are you?

Jade Warshaw

Oh, man, I tell you what, these, these cell towers need to come along with it.

George Camel

Can we hear you loud and clear?

Caller

Hello? Yeah, I can hear you.

George Camel

There we go.

Caller

So this is my situation. My parents followed Dave Ramsey and became debt free and instilled that in me. And I graduated with a master's degree without taking any student loans.

Wow.

I recently just got my first job paying 100,000 a year roughly. And I have a, I have a wedding coming up that I'm trying to plan in about a year and a half where I need to save up for that and then moving out into an apartment.

Jade Warshaw

Apartment, yes.

Caller

I've been getting pressure from, you know, in laws and friends about why I

don't have a credit card.

And you know, they bring up, you

know, if you use it as a

debit card, you know, you can Only really get the benefits. So I was asking for some guidance about how, like if that's really true, can I use a credit card like a debit card and still get the benefits out of it without the risk?

George Camel

What are the benefits that you're looking for?

Caller

Well, I guess just better rates for mortgage since you know that's the one thing that I will have to do I can't really get out of. It's unlikely that I'm going to save enough money to buy a house cash, so I will need to take out a mortgage. So if credits, if the credit score

would help in making it easier or

getting a better interest rate on that.

George Camel

Okay, so now we've tied. I need the credit card to get the credit score to get the mortgage.

Jade Warshaw

Yes.

George Camel

Right.

Caller

Okay.

Jade Warshaw

Okay.

George Camel

What if we could skip the middleman and go straight to mortgage without a credit score? Would you, would you then need a credit card?

Caller

Well, no. See I've talked to my mom as well and you know, I know it's possible not to. I guess really my contention is the how do I weigh what's better or not?

Jade Warshaw

Tell us why it's better. Here's a question I have for you. I'm just going to repeat this back to you. Tell me why it's better to play the game to get the credit score mortgage versus why better to get the manual underwritten mortgage. You tell me why one's better than the other.

Caller

Well, I guess from what I hear it's better to use the credit card money since you know you can, you can get other benefits while you.

George Camel

Oh, see now it's about more than that, other benefits. Okay, that's what we're trying to get to points.

Jade Warshaw

So the, what you're really, you're not really talking about the mortgage mortgage. Because we've established you could do it either way and you can't really tell me and I don't think anybody could for that matter. Specifically speaking about a mortgage, why it's better to have a credit score mortgage or a zero score mortgage, There really is no advantage to a credit score mortgage because if you do a credit score mortgage, then you have to play the credit game. And once you introduce the credit game into your life, now you're introducing risk into your life. And so that's the disadvantage right there. If you do a manual underwritten score, a zero score low loan, that means you have no debt, therefore no risk associated with debt. So that's a no brainer. Now let's go back to what you're really talking about, which is, but Jade and George, if I open up a credit card then now I can have access to some points. And George is kind of an expert on how those points come about and how they're actually used and whatnot.

George Camel

Yeah. I'm going to send you a copy of my book, Breaking Free from Broke. Andrew, I wrote extensively about this in the credit cards chapter and the credit score chapter to kind of dispel a lot of these myths. Because everything you've said so far is, well, I heard and I'm getting pressure and they just want me to. And clearly these people care about you, but they've also never known a different way. This is all they know. And as someone who's lived without a credit card for 13 years now, purchased multiple homes without a credit score and I'm not special, they didn't give me it because I'm George Camel. They gave it to me because I had a Strong down payment, zero debt to income ratio, did a 15 year mortgage. And if you do it the Ramsey way, 15 year mortgage, at least 10% down, you're going to get just as good as a rate as the next guy who's got a great credit score. On the reward side, let's say you could have got 2%. Every study shows that if you use a credit card, you psychologically can't use it like a debit card. You're using someone else's money and paying it back later and that triggers something in your brain to go, I could spend a bit little more. And that turns into 12 to 20% or more that people spend, which negates any 2% cash back you could have gotten. So my theory, and no one's taken me up on this challenge, use a debit card the next 12 months and see if you spent less than you did on your credit card the 12 months previous. I think everyone who did that would save way more than anything they could have gotten in rewards.

Jade Warshaw

Yeah. Let me tell you the problem here. The problem that I hear is twofold, number one. And this is not me getting on you, Andrew. I'm gonna say this is the, the general problem, number one is you've got fomo. You're hearing people talk about this idea of what you can do with points and you feel like you're missing out. So you better explore it. Is what you're feeling, however?

Caller

Yeah, a little bit.

Jade Warshaw

Yeah. But the other problem is you're doing more due diligence, exploring one side of the equation and you're not doing the same due diligence exploring the side of equation, of the equation that George and I are talking about.

Announcer

About.

Jade Warshaw

So you're over here, you know, you're looking at American Express, you're looking at Capital One. You're thinking about what you could do with the money. You're talking to all friends, all these friends agree on one side of the equation. You need to do your due diligence on the side that George and I are talking about. And that's the only way you're going to be able to see this in a balanced way. And I promise you, just by facts, just by data, you're going to go, oh, wait, George was right, Jade was right. But that's the challenge that I have for you. This is. We're just two people you've talked to to keep going down this thread and see what else that you can find. Because I think you're going to find that we're right. The only thing you're missing out on, the only thing FOMO that's going on is debt and risk. That's the only thing you're missing out on.

Caller

Makes sense. I have a follow up question at this time.

Announcer

Sure.

Caller

I recently with my, I don't have a credit card yet. So this is all me doing research. But in doing that, a bank that I have offers a smart card, which is like a credit card, but the balance is whatever you have in your, your bank.

George Camel

Yeah, it's a secure credit card.

Caller

Or is that bad?

George Camel

I mean, you're one step better off than just a normal credit card, but at that point just use a debit card.

Jade Warshaw

Again, what's the point? And let's, okay, let's take it a step further because now we're having a broader conversation. So what we're teaching in a moment, obviously we're talking about a mortgage or we're talking about a credit score or no credit score. But let's talk about it over the course of your life. What we're talking about is deciding what your financial philosophy is for your life. So you can be a person who says, you know what? And this, a lot of people are like this. They go, you know what? I don't mind debt occasionally. I don't mind leveraging it for things like vehicles. I don't mind leveraging it and my credit score to buy a house. And if you choose to be that person, we love you. We will shake your hand and we'll just go, he's not a Ramsey guy. And that's fine. But then there's people who say, you know what? I think I just don't like owing people money. I think I just like being a person who is self sustainable. I like being able to use my money. The borrower is the slave to the lender. And so I don't like feeling like I'm a slave. I don't like that when I temporary,

George Camel

even if the balance off every month.

Jade Warshaw

Right. And so those are the people who go, you know, I'm just drawing a line in the sand. And I don't borrow money. And because of that, because I don't borrow money, I don't need a credit score. And because of that, I buy my cars overtime in cash. And because of that, I manual underwrite if I want to buy a home. And so that's kind of the, that's really the debate we're having is who do you want to be financially as a man in your marriage, in society? And that's something you're gonna have to take some time to think about.

Announcer

Yeah.

George Camel

And you know this idea that, well, just pay it off every month. I wish it was easy as that because half the people don't. And now we're $1.7 trillion in credit card debt. We're $0 in debit card debt last time I checked. So show your right. I wish I could, you know, give humanity the benefit of the doubt. They have proven me right every time.

Jade Warshaw

Yeah.

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Jade Warshaw

Kevin is in Houston, Texas. Kevin, you're up next. How can we help?

Caller

Hey there. Thanks for having me.

Rachel Cruz

Yeah.

Caller

My question is regarding buying a house that is far away from my work versus renting an apartment that is close to it for Some context. I am currently living with my parents. I have no car payment, it's fully paid off. I have no credit card debt or anything. I keep most of my savings in a high yield savings account and I'm currently maxing out my Roth IRA as well as my 401k the apartment. My commute to work is currently about 2 hours. It's about 45 minutes in the morning and then maybe like an hour to an hour 10 afternoon. Just depends on traffic. If I were to get an apartment, obviously it is kind of like throwing money down the drain, but it would shorten the commute to about like 10 to 15 minutes each way.

George Camel

I mean you're throwing your life down the drain by spending all that time in the car.

Jade Warshaw

But that's, that's you living at your parents house, right?

Caller

That is true, yes.

George Camel

Okay, what would rent cost near your work?

Caller

It's about 1.5.

George Camel

What do you mean, like 1500amonth?

Caller

Okay. Yes sir.

George Camel

I was like, man, where are you living, dude?

Caller

That's crazy.

George Camel

Okay, so 1500amonth and what do you take home every month? Kind of after taxes but before your other deductions and investing in all that after.

Caller

I'm a contractor, I make 85 an hour. I'm not sure how the.

George Camel

Wow, you're making like 170 grand a year gross.

Caller

Yeah.

Jade Warshaw

Good job.

George Camel

Go rent, dude. That's such a small part of your world. And I think being on your own, having the independence, getting your life back is only going to number one, increase your quality of life and number two, make you more focused at work, better at your job and move you forward. Forward.

Jade Warshaw

Now tell us about why you were thinking about buying far away. What was the mindset around that? I just want to understand.

Caller

So I'm currently living with my parents. We're kind of near the medical center in like, I guess central Houston. I work out in the refinery area and so buying a house closer to that is probably not very ideal is what I was getting word from. Just from like my coworkers as well as my parents in general. The house location that I was kind of searching around for was still kind of within the general Houston city area, just outside the inner loop, so that it's not as expensive.

Jade Warshaw

Have you ever lived alone? Have you. Will this be your first time living on your own?

Caller

Yes. After, after college? Yes. But I mean, yeah, I did live alone during college. Yeah.

Jade Warshaw

Okay. But on campus, yeah. Okay. So my advice to you would be I think eventually you do need to buy something. I think that that's great for, you know, wealth building. I think that that's great for stability, all of those things. But I do like the idea because the fact is you work where you work, right? So let's rent something in that area. In the time that you're renting, two things are going to occur. Number one, you're going to be able to save up more money for your down payment. That's thing number one. But thing number two is you're going to learn the area and you're going to be there for yourself. You won't have to take anybody else's word for, for what's a good area to buy. What neighborhood do you like, what neighborhood do you find yourself attracted to? Right. You're going to learn all of that. And that's really, really good research because obviously, you know, buying a house is a huge investment and you do want to buy in the right location. It's like they used to say, location, location, location. And one of those locations is what do you enjoy? It's got to be someplace that you like, not just what your friend said or what your brother said or what your grandma said. Right. So this is a win, win, win for you by renting close to work, no matter how you slice it.

Caller

Okay, how old are you? I'm currently 24.

George Camel

Okay. So there's also, you know, if you don't need a house, there's nothing wrong with just renting because it makes more sense for your life. Yeah, because as expensive, quote unquote as renting is, man, it's expensive to be a homeowner, to like maintain a three or four bedroom home that you're not even using and paying the extra property taxes, the utility bills, the maintenance, the repair, all of that's going to add up. And so I don't want you to think that renting is just a binary waste of money. You're just buying yourself time and you're really, it's a, it's a lifestyle choice in your early 20s. So maybe until you know, you meet someone and go, you know what, I think I'm going to get married. Because guess what, that person is probably not going to like the house you chose anyways. You chose wrong in 24.

Jade Warshaw

That's true. I mean, I'll piggyback on that. I'm not saying that I would directly wait until you meet someone because who knows, you might not meet somebody till

George Camel

you're 48, but got 24 more years.

Jade Warshaw

Kevin J. I'm not putting that evil on you. I'm Just simply saying you never know. However, I agree with George wholeheartedly. And there's also, what if your career shifts? Like if this is one of your first big jobs out of college, who's to say, you know, you could get

George Camel

an offer tomorrow and move now. You got a house, but you're tied down to that and it's going to be expensive to get out of it with all the fees. And. And so that is something to factor in as well of who knows how long. If this is your long term career and you know that you're not going anywhere, then settle down. But I wouldn't just rush into it because you feel like renting is a waste of money. That's not a good motive.

Jade Warshaw

Yes, there's no rush.

George Camel

I would not have a two hour commute. No, thank you.

Jade Warshaw

No, thank you. All right. Meg is in Minneapolis, Minnesota. What up, Meg?

Caller

Hi. Hi. Yeah, thank you so much for taking my call. My husband and I are looking for advice if we should fix our current car for about the same amount of money. Get a slightly newer car, tell us more. Okay, so we have. I love this car we got about two years ago. It is a Ford Expedition. It's a 2020. It's starting to have issues with its transmission. It's still drivable, but obviously we don't want the transmission to blow up. My husband's done some research and the repair on the transmission could be anywhere from five to eight grand. To totally replace the transmission, it would be nine to 11 grand. So when we start hitting those numbers, we're wondering, do we just get a new car? The other bit of information is that that same model of car. My husband did some research in the 2023 version and newer has supposedly fixed this issue. That is common mission is the expedition.

Jade Warshaw

The 2020 expedition. Is it Page paid off?

Caller

Yes.

Yep.

We bought with cash.

George Camel

Okay, awesome. What's it worth if you don't do this repair? Let's say you sold it as much as you could get for it to get this other car.

Caller

Yeah. I would guess between like 20 to 22 grand is what we could probably get.

Okay.

Jade Warshaw

Okay.

George Camel

And how much do you have saved for this other car?

Caller

We could probably put about comfortably ten grand towards it if we needed to do more. We could, but I. E. We wouldn't want to spend more than like 10 grand in cash towards either the repair or a new car.

Jade Warshaw

I mean, if you're either going to spend ten grand getting a new transmission in this car or spending 10 grand getting a revised newer Version of a vehicle. I feel like that's a no brainer. Yeah, I feel like it's a no brainer because if you're telling me it's like the Escalades, the version before this pass, they have so many issues and it's like it's one thing on top of another. And if you know that, you just know that this is just one thing and a long list of recalls that are going to happen. So if you know that I feel, I mean, George, what do you think?

George Camel

I think, yeah, I would get some real numbers on what you could actually get for this car and what that 2023 expedition is actually going to cost you all in, out the door. That way you have some real facts and figures to know if you can even do this right now or if we have to keep driving it for the time being and get an actual estimate for the transmission issue as well. And once you have a couple of bids on that, you actually know what your car is currently worth without the repairs, know what the new car is going to cost you, then I think you can move forward with a lot of confidence. But I'm with Jade. I'd probably just go to the upgrade car. You're doing it in cash.

Caller

Okay.

Jade Warshaw

Yeah. And if you have, if you have Christian Brothers near you, they're all over the country, I would recommend going in there. Here in Nashville, in the Franklin area, we have Christian Brothers Automotive. And by the way, if you're even looking to buy a used vehicle, you can bring it over there and have the mechanic look at it and make sure that it's in good shape so

George Camel

you feel good about the purchase inspection.

Jade Warshaw

Always recommend that, yes, please do it and they'll let you do it. So just bring it over there. And then they also have like fabulous warranties. So if you have that in your area, I would check it out. It's the only place that I use and it's the only place Sam and I take our vehicles. What about ugk?

George Camel

Yeah, I mean, I got a Tesla. So I'm in a different world. You're in a different world to go to. They. They really kept it in there. You got to go to Tesla. Oh, you know what I mean?

Jade Warshaw

Think about that.

George Camel

It's like you got an iPhone, you got to go to the Apple Store.

Jade Warshaw

That's right. That's right.

George Camel

It's. They're built into the ecosystem. That's how they get you. But luckily, very little things to repair.

Jade Warshaw

Yeah, it's just. But is it more expensive? Because everything's so electronic.

George Camel

It's not bad actually. Anytime there has been an electronic issue, it's like, you know, 2, 300 bucks. You're not going to have like a $5,000 issue issue.

Jade Warshaw

Can the computer just shut down while you're driving on the road?

George Camel

It could, but I think that's an overblown paranoia.

Jade Warshaw

Is it?

George Camel

Unless you're day.

Caller

Yeah.

George Camel

Dave would be riding with me and that's when it would happen. We get a good laugh.

Jade Warshaw

People want to know.

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Jade Warshaw

Alrighty George, a little discussion time here because we get calls and emails and DMS all the time about side hustles. People are trying to increase their income for many reasons. Number one, the price of living is just higher these days and so people are trying to close that gap. Maybe you're on the baby steps and you're trying to, you know, pay off some debt. Maybe you're trying to save up some cash for the first time and people immediately default to, well, can I do a side hustle? So let's talk about that because we have some ideas for you guys. But I also want to start out the conversation by saying if you do have an income issue, if your budget is not balancing and you're in the process, red, or if you do need to make more money in order to pay off debt or do some of the things that we talked about, there are two Methods that you can approach this from. Number one. And I want to talk about this first. For some of us, it's a core income issue, meaning the job that you work day to day, that you spend most of your time at, you're just not making enough money. And so you need to be able to identify is this a core income issue or is this a situation where my core income is good? I could just really use some supplemental income to go faster. And if that's the case, then yes, side hustling is free. You side hustling is what I would call a limited time only deal. Right. You're not doing this for life. It's not the key to unlock all of your money problems. It's a. It's a way to speed things up. So that being said, side hustling. George, I side hustle. You did it. What was your favorite?

George Camel

Oh, gosh, my favorite, I think was doing the thing that I was doing full time, but on the side, so consulting. So I was doing marketing consulting, helping people launch podcasts and books, building websites. So I took my sort of marketing creative tech brain and, and put it to good use. And that was the most money I made. Cause I could charge 25, 30 bucks an hour.

Jade Warshaw

It's an extension of a real job.

George Camel

Exactly. Versus doing Uber and Lyft, which I also did. You know, back in the day, they didn't have instacart and doordash. I feel like I'm. Back in my day, we didn't have these door. But that was the most lucrative, was kind of doing the consulting freelancing thing. If you have a skill that translates.

Jade Warshaw

Yeah, I love that. So for Sam and I, I fell into the first category Sam and I did where it was we had a core income issue. So we had to work really hard on our core income income. But in the meantime, we did side hustle, we walked dogs, and I did baking and sold baked goods.

George Camel

What was the weirdest one you did?

Jade Warshaw

The weirdest one I did was I worked at a vinyl tint and lettering installation place. So if you, if you go down the road and you see one of those big box trucks that has like all my sons moving on the side, I used to install the vinyl lettering.

George Camel

I still know how to do it.

Jade Warshaw

Yes, yes, yes. I probably could try my hand at it. And let me tell you, that's hard work. Like your finger, your knuckles get ashy.

George Camel

You like you're up there on ladders.

Jade Warshaw

Yeah.

Rachel Cruz

Wow.

Jade Warshaw

Did a lot.

George Camel

I did one that was the Nielsen people meter. So Nielsen ratings.

Caller

Yes.

George Camel

They use everyday people and they'll pay you as they listen to all the media you're listening to. They claim it only turns on when you have like radio, tv.

Jade Warshaw

That's so interesting.

George Camel

And so I'd get a check for like, you know, 10 or 20 bucks a month for just carrying a beeper around with me essentially. And I was like, all right, isn't

Jade Warshaw

that so crazy how they monitor that? But the truth is there's so many side hustles out there now. I will tell you, I believe the ones that are the most lucrative if it's not attached to your normal job, like what George was saying, the ones that are most lucrative are the ones that are service based. I believe if you get your butt

George Camel

off the couch and do something someone else doesn't want to do, you will make the most money.

Jade Warshaw

Yeah. If you mow someone's lawn, if you will plant their hedges, if you will babysit their children, if you will watch over their grandparents. Right. All of these kind of like care and service based. If you will cook their meals, like clean the house. Right. All of these very service based.

George Camel

Wash their car.

Jade Warshaw

Yes. That is where the Monty, that's where the moneyon is at, as the kids would say.

George Camel

Not, you know, I hear these like, well, you can do surveys from home and what are the things I can do from home? The problem is the ones from home are so saturated, there's too many people that want to do it and not enough work. So, you know, mystery shopping is another one I hear about. And that's not going to make you enough money to pay off some debt.

Jade Warshaw

So yeah, the key is you can, you can really mess yourself up and take a lower hourly rate by doing stuff that feels more comfortable or by doing things that you have an interest in. This is not about interest. This is about you making money. So there is a side hustle article that I wrote. It's on ramseysolutions.com we'll put it in the show notes. And it's got so many ideas in there for you guys.

George Camel

44 ideas. 44.

Jade Warshaw

That's a lot. That's a lot of ideas.

George Camel

That's legit.

Jade Warshaw

But this is what you need, guys. This is how you need to get the old train running and get this money going.

George Camel

That's right. Drop a comment on this episode wherever you're watching, listening, Spotify, YouTube, if you're doing side hustles or you have, let us know what you do, what you did and how much you made either per month or Per hour.

Jade Warshaw

Yes.

George Camel

Because I don't want to gatekeep, give everybody the idea. Some of them may not apply to you, but the key is be resourceful, get creative. What's something people aren't doing that people would pay you for?

Jade Warshaw

Love that. And other side note, guys, now's not the time to be thinking, oh, this is how I'm going to start my next business. Yeah, we need to make money fast.

George Camel

And a good call out. This is not no shade on multilevel marketing. This is not the time to sell essential oils.

Jade Warshaw

No.

George Camel

That is not a money making scheme. It costs you money to get into it. And if you look at the disclosures, most people don't make a dime from it and so not shade to anyone who does this. But this is not a side hustle that I recommend for people to get get started.

Jade Warshaw

We want you to make money fast. Mo money. All right, that ends that topic. Let's go to Josh, who's in Dallas, Texas. Hey, Josh, how can we help?

Caller

Hey guys, how's it going? My wife and I, we make about $400,000 together.

Jade Warshaw

Excellent.

Caller

We've been paying off our. We had a lot of student loans together. We had a lot of credit card debts and vehicle debt, but we've paid all the vehicle debt off, paid all the student loans off, so. And we thought we paid all the credit card debt off, but we just found out we are pregnant and we'll be having a baby in November.

Wow.

First one and so second one. So it's actually a seven year split between us.

Jade Warshaw

Wow.

Caller

Okay. Yeah. So nice gap. But yeah, we have been trying to do a high yield savings because after she has the baby she wants to take a year off and we just found out that she has about $40,000 in credit card debt and. Whoa.

George Camel

Did we find that you found out. Did she not know?

Caller

Yes, she knew. I guess she didn't realize how bad it had gotten. It had been kind of snowballing. I, I had been paying the, the bills out of my account and so it, I guess I just really wasn't paying attention to it because she the spending money and stuff.

George Camel

Do you guys have separate accounts?

Caller

We have one main bill account and then separate checking accounts.

Jade Warshaw

Did you know she had the credit card?

Caller

Yes. Okay. Kind of the way I do is I put money on the credit card and I pay off each month and I don't think she's. Obviously she hasn't been doing that.

Jade Warshaw

So when you said earlier we paid off the student loans, we paid off the car, we Paid off the. Was that a joint effort or was this something that was in your name or how did that come.

Caller

Come about as a joint effort? Yeah, so we, we definitely, you know, got together on that. We were paying off student loans. She was paying the med and paying on the student loan. And then I was paying extra to try to knock it out.

Jade Warshaw

Are you feeling blindsided by this or how. What is your emotion here? I'm having a hard time telling.

Caller

I was blindsided about it about a month ago. And then we just. And we're, you know, working on it now. You know, definitely just have a team mentality. They kind of get knocked out.

Jade Warshaw

Okay.

Caller

We got half of the 40,000 set aside on a 0% interest balance transfer. And then the other 20,000 still on the 29% interest.

Jade Warshaw

Okay.

Caller

But I have 20,000 in the high yield savings because I kind of feel worried about that time after, after she takes off for Baby.

Jade Warshaw

Is there any money that. Is there any other money saved that's non retirement besides the 20,000?

Caller

I have $10,000 in just our bill account. But our bills are around $8,500 a month.

Jade Warshaw

Right. So that would not be extra money. Here's what I think needs to happen. I think that you guys have an incredible income and you have the means to get this paid off off before November. Now, that might mean that how much of the 400,000 is her income? Let me ask that question.

Caller

90,000.

Jade Warshaw

90. Okay.

George Camel

So you guys can live off of your income for a year without needing to have it all in savings?

Caller

Yes.

George Camel

Okay. If I'm in your shoes, I'm knocking out the credit cards with all the muster I can muster up and then save up as much as you can. And with your income, you're going to be okay to cash flow any kind of medical expenses that come out of this. But I would work to get this thing cleaned up fast, sock up an emergency fund of another 10 to 20 grand before baby comes in November.

Jade Warshaw

Right. And the core of this is you now need to combine incomes. She wanted that money saved because that was her portion of the income. But if you guys use your money as yours, ours and us, then it doesn't matter anymore.

Caller

It.

Jade Warshaw

You know, George, people always want to know working here at Ramsey, how did Dave build this place? Like, how did he build up hundreds of millions of dollars in real estate? How did he create this, this Scrooge McDuck fortune? So he's going to actually be walking through it at an event we have here called Investing essentials. It's a two night virtual event September 1st and 2nd. You're part of it.

George Camel

That's right. Dave and I are going to walk through the playbook for investing wealth planning, including how he think real estate, when he buys, when he walks away. He's going to cover the basics of investing if you're new. And then we've got all new content on night two about wealth planning. So think inheritance taxes, how to keep the government's grubby hands off your money as you built the wealth, how to not destroy your kids, how to leave a legacy, how to think about all of this. And so we're going to walk through it in layman's terms because it is some heady stuff. And so the meetings have been fun. It's deeper than we've ever gone on this stuff.

Jade Warshaw

Is it for everyone though. Do you feel like people at all walks of investing life?

George Camel

Yeah, I mean it's definitely targeting targeted to the baby step four plus crowd. So if you're out of debt with the emergency fund and you want to dig into this stuff and get it right, especially over the long haul, wealth planning, wealth building, that's you know, 20, 30, 40 year journey for a lot of people. So that's who it's for. Now we get people who are in the earlier baby steps because they want to know about it and be prepared. But that's kind of who is aimed at. You're going to get the most out of it if you're there. So tickets start at 199 bucks. Two nights. We're talking four hours of deep dive content. It is live. Get yours today ramseysolutions.com events or click the link in the show notes if you're listening on podcast or YouTube.

Jade Warshaw

Yeah, that's the biggest point. It's live.

George Camel

I love that it's virtual. So it doesn't matter where you are. You can tune in and you can catch the replay if you can't make it during that exact segment from, you know, 7 to 9pm or whatever. So it'll be fun.

Jade Warshaw

Excellent. All right. Sarah is in Washington D.C. hey Sarah.

Caller

Hi, Jaden, George. My husband and I are in dan Baby Step two. We make a household income of 210,000. I have 240,000 in student loans. We're projected to pay it off in about two to three years if things go well. However, I have a scalable education business that I would like to invest in so that I can help accelerate the debt payoff. So how do I do that? Is it okay to I just Heard Jade saying that, you know, the time.

Jade Warshaw

Well, it depends. It depends on how we're looking at this.

George Camel

Can you scale it without spending $70,000?

Jade Warshaw

Right. And that's the biggest thing. So what does it take to scale it?

Caller

Yeah, I thought of hiring a recruiter because it's like an education business. So we need more clients and students, and per client and student we can get after taxes and all that. It could be 15 per student.

Jade Warshaw

What does it make now? What do you, what, what's the profit that you take home from the business as it stands?

Caller

Yeah, it's 1500 per student.

Jade Warshaw

And how many students, like, per year?

George Camel

What are you actually making from this business at the end of the day?

Caller

So.

So that's the thing. It's based on how much work I put into it, how much advertising I do, how much.

Jade Warshaw

Right. But today, today we've had.

Caller

We've had just 12 students and we've made 25,000. I love that.

Jade Warshaw

For the year or for just over

Caller

since we've been in business since we opened in two years ago.

Jade Warshaw

Okay, so tell me, give me an average on a month. How much money do you take from this as profit on a month to month basis?

Caller

So that's the thing. It's hard to say, you know, per month, because it's only whenever, you know, people hear about us and they want to take our. They want to go through our program and then they pay for it. So it's hard to say per month. But that's why I hope to have a recruiter pay them so that they can, you know, so I can tell them, hey, the expectation is two students per month and you would have to

Jade Warshaw

pay a recruiter how much per year or how much?

Caller

Yeah, sure. I saw on like a, you know, one of those freelancing companies, I found somebody. She would be about $500 per month.

Jade Warshaw

Here's what, here's what I'm going to say to this. I think that you do have an idea here, but my problem is you haven't proven it out enough on your own. And I actually do think that if you invested the right amount of time and effort, you probably could recruit students on your own. I don't know that you do need to pay a recruiter. That's my first thought. My second thought is to go back to what you said earlier, which is if you had a business that was already generating a regular amount of income, I would. And it didn't cost much to kind of ramp it up to the next level. I might say, yeah, go ahead and do it. But similar to what George and I were saying earlier, when you're paying off debt, you just need money and you need it fast and you need to guaranteed. Right? And so that's the phase that I think you guys are at right now. I don't think you can make the gamble of paying someone 500 really, really important dollars that you need to pay off debt for speculation. Because truly that's what it is. There's no guarantee that that recruiter is going to turn up exactly what you want and exactly what you need because you've never tried it. So I'm a.

George Camel

If you're going to do it, I would put them on commission and say, hey, for every student you recruit, I'll give you 200 bucks. And that way you're not out this money. They can still go in. They have a lot of incentive. But I feel like your core income is the money maker here. Can you work overtime and make. Because you said you're basically made 12 a year doing this if you split your 25 over two years. So the question is, can you make 12 grand just in working harder at your jobs, working more at your jobs?

Caller

Yeah, yeah, I definitely could. It's just, you know, I work so hard to build the business. So to have it like sitting there for two to three years and just not do anything. And it's a lot of licensure, accreditation.

Jade Warshaw

But Sarah, even If you had one student and that was making you $1,500 a month and you just kept recycling to make sure you always had one, one student, that's better than a lot of side hustles. So if you said, hey, I'm gonna get two, like, my goal is two students that I always, no matter what month of the year, I always have two students in the hopper. I feel like you could do that on your own. And I mean, that's word of mouth right there. And that's enough to really move the needle because you're bringing in 3,000 extra dollars a month. Unless I have my numbers wrong.

Caller

Yeah, no, you're right. It's just I'm at this phase of like just being tired. Tired of, you know, advertising on my own. So I kind of wanted to just bring somebody in to do that while I work my full time job and, you know, hopefully have that income coming in. But I think, I think that you

George Camel

could try it for one month and go, hey, I'm okay risking 500 bucks right now.

Jade Warshaw

Sure.

George Camel

To see if there's actual ROI there. Because my fear is they go, I couldn't get anybody and you still owe me the money.

Jade Warshaw

I loved your idea, George, of putting those people on commission. I can you tell, tell you with, with Sam and I, the reason that we were able to scale a business while we were doing debt is because of the payment structure. Everything was commission so we didn't have to shell out a lot of our own money. Everything was agent based, commission based work. And we did, here's the thing, we did a lot of the work by ourselves. We, we weren't at the stage where we could pay things, people to do things. We can do that now, but we couldn't then.

George Camel

Your hr, accounting, marketing, sales, you have

Jade Warshaw

to everybody wear every single hat. And, and so that's why I'm challenging you because I do think that you probably, if you keep it, if you keep the bar reasonable and say, okay, my goal is one or two and start there, I don't think it'll feel as unmanageable. I think right now you're thinking about a grand scheme. I want as many students as I can get and there's nothing wrong with that. But today you just need a one or two. And then once you get one or two, you're going to feel the confidence to go, well, I could get one, one more. And it's going to build organically in that way.

George Camel

I would also deputize the students that have gone through that's your best marketing right there. Are they leaving testimonials, reviews? If they refer someone to you, you can write them a check as a bonus. And so there's a lot of things you can do with the customers you already have to scale.

Jade Warshaw

Yeah, I love that. And if you haven't already, maybe you have. I would utilize AI, jump on and figure out what is it that you need to be doing because a lot of the jobs are out there. The blueprint is right there on the Internet for us all to learn. So I think there's probably a lot more that you can do if you just do some research around what it takes to find your customer.

George Camel

And I would treat it like a job set aside. Hey, every Saturday from 12 to 2, I'm working on the business. I got to go to my part time job doing this, creating the social media post, doing the marketing, reaching out, whatever it is. And if you just set aside that time, kind of like you're budgeting your time, say I'm not going to work on this more than five hours a week because I don't want to burn out as much As I get from that is what I'm putting into it.

Jade Warshaw

Yeah, I love that.

George Camel

And that hourly rate is probably pretty good.

Jade Warshaw

Exactly.

George Camel

You're getting a couple students out of it.

Jade Warshaw

And that's the thing. That's why I think it is worth continuing to go down that wall. Cuz just like George and I were talking about, your time is the most valuable thing that you have in this now is not the time to be wasting, you know, your time on an $8 an hour, $12 hour, an dollar an hour deal when you can be really making some real money like she can. So that's what we're headed for. Find the side hustles that really are going to give you the biggest ROI and really help you pay down that debt. And in your case, your income is already pretty sweet. Alrighty. Welcome back to the Ramsey Show. We're here the Fair Ones Credit union studio continuing to take calls about your life and your money. And we have Ashlin who's on the line in Lincoln, Nebraska. What's up, Ashlin? How can George and I help?

Caller

Hey, George. Hey Jade. How are you guys doing?

Jade Warshaw

Excellent. How are you?

Caller

Good. I'm doing great. So my question is, is it ever okay to drain my emergency fund to buy a house? House?

Jade Warshaw

Why is it so urgent that you must drain your emergency desperation here and not use a down payment like we would teach you to do?

Caller

Okay, so I just, I'm. I listen to you guys every day and I know it sounds silly asking this question, but I just hear about how real estate's only going to go up and I just feel as everybody does around my age, feel behind comparing to everybody else. And I just want to get, get in it as soon as possible.

Jade Warshaw

How old are you?

Caller

20.

Jade Warshaw

20.

George Camel

I was hoping for a number. After the two, I thought for sure

Jade Warshaw

you were going to be 48. Talking about I'm behind.

George Camel

Behind who?

Jade Warshaw

The 18 year olds.

George Camel

Who are you following on on Instagram?

Caller

Well, my, my friends back home, they're very entrepreneurial oriented and I am not. So they have their own little businesses and I just feel kind of left behind there.

George Camel

Okay, what do you do for work?

Caller

So I work full time at an investments firm and then I also have a side hustle, but I work probably 10 to 15 hours every other week.

Wow.

George Camel

What do you make doing all that?

Caller

So full time? At my office job, I make 24 an hour and then my side hustle pays 25 plus commission.

George Camel

Wow, 25 an hour plus commission.

Caller

Yeah.

Wow.

Jade Warshaw

How many hours a week do you do that? Side hustle,

Caller

10 to 15, like every other week. It's kind of however many events I want to pick up. But I've been kind of facing burnout recently.

Jade Warshaw

Okay.

Caller

So I've kind of laid back a little bit.

George Camel

So maybe like five, six hundred bucks a month. Is that what it's bringing in?

Caller

I calculated it before I called, and it. I. I thought it was about 15,000 last year.

George Camel

Oh, awesome. So over a grand a month on average? On top of your. Your 50 grand that you're making?

Caller

Yes.

Jade Warshaw

So what, like 6,000 bucks a month? Is that where. Or is that what you're bringing home? Where are you at every month?

Caller

I would say average. I would put it around 3,500amonth.

Jade Warshaw

Okay, so let's go back to this house conversation for a second. Are you telling us that. I mean, and you can shoot a straight. Are you telling us that really the only reason you're thinking about buying a house and doing it at the detriment of draining your emergency fund is because your friends are. Are doing it?

Caller

No, my friends aren't doing it. I just. I have. I have four older sisters, and I see them, you know, going and living their life, and I feel behind compared to them as well.

Jade Warshaw

Okay, okay, so let's talk about that

Caller

in the right direction.

Jade Warshaw

Let's talk about that, because this is. You're talking about money, but this doesn't feel like a money call to me. And I. You've got older sisters, so I'll be your older. I'll be your older sister from another mother.

George Camel

Can I be unk.

Jade Warshaw

Yeah, you can be unknown, and I'll be auntie. And let me just. I'm 42 years old, George. How old are you?

George Camel

I'm 37.

Jade Warshaw

Okay, I want you to know because. Because let me just say it like this. I get comparison. Comparison. It just feels. It's just part of the human experience. But as much as we can do to mitigate it, it's really going to be helpful for us. Okay? And what I really want you to take away from this is the following. Life is a race, but it's not a competitive race, okay? And the problem right now is you're viewing it as a competitive race. You're looking at the runner next to you, which is your sisters, your friends, and you're going, oh, my gosh, they're further down the track than they. Than I am. And you're trying to run and catch up with them, but that's not the way the course is designed. It is really you doing Your personal best on your race. That's all it is. Because the courses are not the same. My course is not the same as George's course. We.

George Camel

There's different obstacles. One's a 5K, one's a marathon man.

Jade Warshaw

Yes. And. And his is in the mud, but mine was on it. A straight shot. You know, his is by the beach, but mine is in the snow. Right. There's. It's very different. And so if you start comparing, you are going to be bamboozled every single time. And so what you've really got to do is lock in and go, what do I have in front of me? And what is my course? Where am I trying to get? And can I do it as efficiently and with as good attitude as I possibly can? That is your goal. But as long as you start looking at you see what I'm saying? And so you're 20, your sisters are older, so you can't even compare it by age. Right. So let's lock in and go. Okay. What's true is you've got a nice job. Making 50k at 20 years old is great. You've got a great side hustle. It doesn't sound like you have debt, do you?

Caller

No debt.

Jade Warshaw

No fabulous. All.

George Camel

You're way ahead of most of the country, regardless of age.

Jade Warshaw

If we were comparing. If we really were comparing, I'd be like, well, dang. Ashlyn's got her life way more together than I had when I was at 20. I had $460,000 of debt when I was 20, so I think gracious.

George Camel

The goal here is to move from impulsive to intentional. From this like FOMO to Jomo is what I call it the joy of missing out now. And listen, I'm doing my own thing. I don't need to worry about being behind or missing out. And the median age of home buyers these days is 40. So if you do it before 40, you are above average, Ashlyn.

Announcer

Wow.

George Camel

How does that hit you?

Caller

That is really crazy. That is.

George Camel

And you're going to get.

Caller

I like to stay ahead of the curve.

Jade Warshaw

You are ahead of the curve.

George Camel

So let's set a realistic goal that doesn't involve robbing your emergency fund to go. Okay. My next step is a down payment. What is it going to cost to get a place that I like in Lincoln, Nebraska, by 25? Now, we can actually put some numbers on this. Go. Okay. It's going to be 350 grand. I need 50 grand down. I can save two grand a month. It's going to take me 25 months to have a down payment.

Jade Warshaw

Booyah.

George Camel

So that's the kind of stuff that will move you away from just emotions to actual facts, to how habits. And then you're actually going to get to where you want to go, because you could get to 25 and go, well, now I'm behind in a different way. Now I want a bigger house. Now I want to get married. Now I want kids. Whatever. The thing is, you're always going to feel behind if you're looking at the person in front of you.

Jade Warshaw

Yeah. How many sisters do you have?

Caller

I have four.

Jade Warshaw

Four. And you're the youngest?

Caller

Yes.

Jade Warshaw

Listen, you just love your sisters. You're looking up to them. They're doing all these wonderful things, and that's great. They're kind of setting the path and they're, you know, setting the course of what quote, unquote, normal looks like. And I totally understand that. I was the youngest for a really long time until my younger brother came along. And so I totally get it. But I cannot stress to you enough that you're doing such a fabulous job to have to be 20 years old. No debt, no student loans. You are killing it. The fact that you're even thinking about real estate, you're so far ahead of the game, that fact that you even have an opportunity. Emergency fund saved again, so far ahead of the game, you're really doing well. How much do you have saved, by the way?

Caller

I only have 10,000 saved right now.

Jade Warshaw

Don't say, only say I. Girl. I got 10,000 saved.

George Camel

I'm 20 years old. I'm debt free with 10,000 in my name. I have a positive net worth.

Jade Warshaw

Yes. Put some respect on your own name. Way to go. Way to go.

George Camel

And your career is going to grow. Your income is going to grow. So it's easy to think, well, this pace, it's going to turn, take forever. You don't know. Five years from now, you're going to be in a different place. When I started this plan, jade, I was 40 grand in debt back in 2013. And within 10 years, I went from negative net worth to millionaire as a W2 employee. And I never thought I'd get there. People overestimate what they can accomplish in a year. They underestimate what they can accomplish in a decade. And that's going to be Ashlyn's story.

Jade Warshaw

Oh, listen, and we didn't plug your numbers into an investment calculator, but you should, Ashlyn, you should go to ramseysolutions.com and you, the investment calculator cuz if you start investing 15% of your money, which you could start doing, by the way, by the time you're George and I's age, old age, you're going to have so many millions of dollars, it's going to make your head spin.

George Camel

She's going to be a rich auntie.

Jade Warshaw

Successful. A rich auntie.

Caller

Foreign.

Announcer

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

Jade Warshaw

You know, George, on here, we talk a lot about budget budgeting. It's a core practice in order to do the things that we teach and understood.

George Camel

The entire Ramsey plan.

Jade Warshaw

That's right. If you don't budget, we can't help you.

George Camel

What are you doing?

Jade Warshaw

What are you even doing? And the best budgeting tool out there is everydollar. And the truth is, it's more than just a budgeting tool. It started out as just a budget, but now in there, there is the full Ramsey plan. It teaches you, it helps you, it guides you, it mentors you. It really is a really, really amazing app and it really is helping folks. Matter of fact, we got a fan quote. Somebody sent in this message. They, they said, you know what? Every dollar is excellent. It really helped me get my personal finances in order. And now that I'm married, my wife and I use it together out of our joint account. It really helps us maintain a common vision and set of goals. So honestly, that's really great for us to hear. We know that it works because we all use it. I've been using it since inception.

George Camel

It's a marriage improvement tool. Look at that. Honestly, I mean, common vision and set of goals.

Jade Warshaw

That's he maybe, maybe use chat GBT to write that.

George Camel

It sounds very well worded. I'm impressed.

Jade Warshaw

But it's true, nevertheless. All right, let's go to Tyler in Lubbock, Texas. Hi, Tyler, you're on the line.

Caller

Hey, how are y' all doing?

Jade Warshaw

Good. How can we help?

Caller

So I own a street service business here. It's going great, doing well. Got several employees that's growing. Already done as much this year up to this point as we did all of last year.

Jade Warshaw

Wow, Congrats.

Caller

So I had a gentleman approach me this week about purchasing his lawn care and Christmas light business. And I'm contemplating whether that should be something I should add to my business.

George Camel

Who is this person that's selling it?

Caller

It's someone from my hometown. We don't know each other super well, but we're from the same place and. And anyway, we've met to go over all the financials and everything.

Jade Warshaw

So why is he selling it?

Caller

He's moved. He's older, an older gentleman and he's actually moved to be closer to family. Okay, so he's not. He's able to manage it from afar, but he just doesn't necessarily want to.

George Camel

So why you? Why'd he single you out and go, this guy might want to buy more my business?

Caller

Well, I'm pretty well known in the area or my tree service business. I'm certainly well known in my community and I think I was just top of mind to reach out to and you know, he wants to sell it to somebody that, you know, he does want to sell or finance it. So he wants it to be the right fit, you know.

George Camel

Do you. How much is the business going to cost?

Caller

About 200,000. I'm not 100% sure if that's gonna include all the equipment just yet. So I think probably a safer bet would be like 250 for all the equipment.

George Camel

What's the net profit every year?

Caller

About 40%.

George Camel

40% of that.

Jade Warshaw

Okay, so is the plan that you would take the business and what. Whatever profits you would make, you know, take a salary and whatever's above that you would pay him until you've paid back the 250,000. Is that the deal?

Caller

That's kind of how I presented it to him. He says he takes out 60,000 per year to pay himself. So. Yeah. So mine is that paying him back as quickly as possible? Yes.

Jade Warshaw

How many employees does it take to run the. This, the. Just the lawn care and Christmas lights?

Caller

Currently he has three full time and then he has not been. He's been in the business working himself maybe like 20, 30% of the time. But as of the last year he hasn't been working in the business at all.

Jade Warshaw

Are they separate? Are they separate PNLs or has he. Does he run them out together?

Caller

All together, yeah.

George Camel

What does your tree service business make net profit? Profit every year?

Caller

Net 175 for this year.

George Camel

Because I'm just wondering if you're going to put your time into something, it may be worth just scaling the tree Service business versus getting into this deal.

Jade Warshaw

I'd also want to know separately what the lawn care does versus the Christmas lights because that to me, they're two very different. I can understand. Well, if you're getting this service from me, I can do this for you too. I understand how it happened that way, but I'd really want to know how much are you making on the Christmas lights versus what you're making on the lawn care to decide which is the better business and if they really need to be paired together or if you can.

George Camel

There could be a weak link here.

Caller

Right. So in my business, I've successfully fully delegated it. I'm only managing and leading. I have a salesperson, have the delivery team completely built out. I have an administration person. So I'm working in my business 15 to 20 hours per week. And it's. And I found that that is the correct move right now.

George Camel

And how much are you taking home from that?

Caller

I pay myself 60,000.

George Camel

Okay, so you're making 60 working 15 to 20 hours a week. And you're saying I could go work 15 to 20 hours a week on this other business and double and make some money? Obviously you got to pay him back and agree on a percentage there. It doesn't sound like a terrible move. I would do a lot of due diligence and I would also never go into debt, quote unquote, for this. So if you want to do a sweat equity deal like we talked about, where he gets, let's say, 20% of the profits until the 200k is paid

Jade Warshaw

back, and I'd want to know what the time frame is because there's part of this where you can't necessarily assume everything's going to go right back to the way it was. There might be people who are like, well, I did the service because I just like Bob or whatever the guy's name was, and so might be some drop off simply because Bob no longer owns the business. So I'd really be thoughtful to George's point on what. What are their terms? How quickly does this need to be paid back and at what percentage? And that's under the assumption that you're making a certain amount of profit. Right. So there's all. And I. You already know all this. I can tell. We're just reiterating it more so for the people listening, because I think you know this. And again, I'd really want to know. Tell me separately how the Christmas lights are doing versus the lawn care because. And can I trim one off if one of them I find is really siphoning my.

George Camel

From the other or one is a real headache and the other one's super easy and higher margin. And the other thing is just making sure you have a good transition plan of how are we going to roll this out to customers so we don't lose them. How length of time is this going to take? Is a six month process to fully turn over the business and he kind of stays in it to guide you through the process. Because there's going to be some learning curve with a, with a new business. It's run, it's been run a very different way than you run your tree service business. And then are we gonna move this into our tree service business to be one bigger business or is it gonna be two separate ones?

Jade Warshaw

And a final thing, here's another factor to write on your list is how does this affect your ability to scale your original tree service business at the rate that you really were intending to? Is this taking the place of that? How are they running alongside each other?

George Camel

Could it hurt the business by taking your attention away from it?

Caller

Well, to answer y' all's first question was the Christmas lights have just been done for 2025 and that 10,000 of that amount. So that's pretty new, Right. This would be a very symbiotic business to what I'm doing.

Right.

Jade Warshaw

Already the lawn service part. Yeah.

Caller

You know, I could present this lawn care slash landscaping, clearsmith life offer to all my existing customers and you know, probably instantly increase conservatively that customer base by 30%. And what I, what intrigues me about is like tree work is generally one off, pretty high profit. But I'm also missing a lot of potential customers that don't beat my minimum. Right, right. So the addition of this lawn care would add contract reoccurring revenue. Right?

Jade Warshaw

Yeah, I can see that.

George Camel

It'll stabilize the business in of a lot, lot of ways.

Caller

Yeah. It'll give me the ability to do these lower margin, higher volume type tree jobs.

Jade Warshaw

I don't think it's a bad. I mean, let me just go out on a limb here and say I don't think. George, you're supposed to laugh at my pun. Thank you.

George Camel

Sorry, I took me a second.

Jade Warshaw

Thank you. I don't think this is a bad deal in theory. I just think you need to really dot your eyes and cross your T's and really ask a lot of good questions. Don't rush it. I think it has the potential to be exactly what you saying, which is a nice boost to your business and really help you grow over time. I think you've just got to play it out and make sure, to George's point, no debt.

George Camel

That's the key. I'm going to send you a copy of Dave's book, build a business you love, Tyler. I think it's going to give you a lot of confidence and clarity about how to do this the right way and how to scale it properly.

Rachel Cruz

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Jade Warshaw

Oh.

Rachel Cruz

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Jade Warshaw

Guys, you probably heard us talk about our free AI tool that's built and trained on Ramsey principles. It's called Ask Ramsey. And today we're going to break down one of the questions that we received this week. So every week we kind of get questions that begin to trend. And the question this week is, I have. I have cut back on retirement savings and spending to pay towards credit card debt. What else can I do to pay off $20,000 in credit card. Credit card debt. So this person is clearly not really doing things in Ramsey order because we would tell you that if you have debt, you do need to pause retirement and. And pause everything else to get paying things off.

Caller

Yeah.

George Camel

Cut back tells me there's still something going toward it. We need a full stop. So pausing all retirement contributions, even the match. I know it sounds crazy because we're not talking about math here. We're talking about behavior, momentum. And that's what happens when you pause that match. You're a little bit angry and you freed up some margin. Now you're a dangerous man with some money in your pocket.

Jade Warshaw

Yeah. And number one, if anybody with credit card debt. Yeah. You have to cut up the credit card. You can't simultaneously solve a problem while simultaneously creating the problem.

George Camel

You gotta cut it out.

Jade Warshaw

Yes. Don't add to the balance. And like, like George said. Yeah. Pause retirement contributions. And then there's just month to month things you can do. Like Stop going out to eat, cut back on some subscriptions.

George Camel

You know, that's all entertainment, luxury.

Jade Warshaw

Yes. And then what we've been talking about. I feel like we've talked about this all hour long. Is side hustling guys, finding extra income, whether that's a side hustle, taking on extra overtime at your current job, even $300 a month, guys could really shorten your timeline. So pick an amount and focus on it and say, I want to make X amount extra dollars every month.

George Camel

And then start selling stuff. I mean, Facebook Marketplace. I list a lot of stuff on there. Stuff that I pay too much money for that hurts my soul to sell at a deep discount. But then I realized, oh, I can go buy it at a deep discount from Facebook Marketplace later when I'm not broke.

Jade Warshaw

In today's society, maximalism, like, everybody's just got the most of everything. You're telling me there's not something.

George Camel

And you, you would think something won't sell. I dare you. Put it on Facebook. Somebody will take it.

Jade Warshaw

I once sold a pair of used bath mats. I will tell that story all day long on Facebook Marketplace. They were. They weren't even very big. They were turquoise squared used bath mats. And those jokers sold. So don't tell me somebody needed it

George Camel

more than you, Jade.

Jade Warshaw

Wow.

George Camel

Well, hey, check out Ask Ramsey. It's going to walk you through more examples of how to get rid of this debt and calculate a payoff timeline for you. It's basically like us, but way smarter. So check it out. Ask your specific questions today. Go to ramseysolutions.com or click the link in the description if you're on podcast or YouTube.

Jade Warshaw

Right on. All right. Alex is in Tampa, Florida. Hey, Alex, how can you. Can we help today?

Caller

Hi, Jade. Hi, George. How are you guys doing today?

Jade Warshaw

Excellent. What's up?

Caller

Awesome. Awesome. I want to ask. I'm 23 years old. I've just completed baby step 3, and I'm currently working on baby steps 4 and 3B. My question is, how should I be allocating my Roth ira? What types of mutual funds would you guys recommend? And how do I balance investing 15% for my retirement while also saving for a down payment on my first home?

Jade Warshaw

Love it. And, George, this is your love language right here.

George Camel

Talking about, especially at this age. I'm just impressed by the way Alex is talking. I'm like, this guy's gonna be okay. So in 3B, you can invest anywhere from 0 to 15%. You sound like a guy who really wants to invest. So maybe some people Go. You're already at 15%. You want to keep it there and then you want to save up a down payment on top of that.

Caller

Is that what I'm hearing correct, sir?

George Camel

How long will it take to save up a down payment at your current income and margin?

Caller

I guess the question is, what should my down payment be? I kind of heard that Dave says If you have 20%, you can get rid of that mortgage, insurance. So the minimum houses.

George Camel

Yeah. I mean, even just based on house prices, putting 20% down could still leave you with too much of a mortgage. And so that's. That's like a good starting point, depending on, I don't know what homes are in the Tampa area. I imagine they're not cheap.

Jade Warshaw

What are you thinking that it would cost you to buy a home?

Caller

Right now, the way we're looking, like for a starter house, somewhere between 400 or 500,000.

Jade Warshaw

Okay.

George Camel

What's your income?

Caller

I'm making around 60 $500 a month net. And that's going up as I grow my book of business.

George Camel

Fant. Fantastic. Are you solo single?

Caller

I have a girlfriend who I live with, hopefully getting married soon. That's the point.

Jade Warshaw

So if you put down 20%, if you go out the rate that you're going and you save up 80 grand and put down 20%, your payment is still going to be upwards with everything included. HOA, home insurance, property tax principles and interest, somewhere around 3, 200, which is really half of your income. So you're probably going to have to put down more like 40 or even 40, 25%, depending on how long this takes you.

George Camel

Could you save up? Could you set aside, you know, three or four grand a month with your current margin and income?

Caller

I definitely could. I guess the question would be, should I take away some of that 15% for retirement or should I take, you know, live on rice and beans so that I can, I can save up that money or.

George Camel

I mean, I don't think anything's on fire. I think if you, let's say you guys got engaged and then you were married and you rented for a while, while. For a year, while continuing to save, I think that would put some urgency on it once you're at that phase. But for right now, if you can throw three grand a month, that's 36 grand a year, 72 grand after two years, over 100 grand after three years. So that puts you at like 26 with six figures for down payment.

Caller

Correct. And my grandfather about the same amount, amount of money net as I am.

George Camel

Oh, boom. So once you're married and combined incomes now that 3200 becomes a reasonable mortgage. As long as you guys are both going to keep those jobs.

Jade Warshaw

Yeah, and just keep it in a high yield savings account. But I also heard you mention earlier you were wondering how to allocate the money in your Roth IRA funds. Did I hear that?

Caller

Yeah, that's, that's correct. I currently have $3,000 in there. It's just sitting in the money market fund. I guess I'm just figuring out how I want to allocate it. I know the best thing to do is to do something, but I'm really just, you know, want to make the right decision. And then as that 15% comes in, how, how am I going to keep dollar cost averaging across that portfolio? You guys have me.

George Camel

I love it. Well, one way to do it is just automate the investment. So automate whatever the amount is beyond your 401k. If you have a Roth or a match, I would do that first with your employer. But if you have the leftover money in that 15%, go to the Roth IRA, automate it. We recommend four types of mutual funds split across basically large cap, mid cap, small cap, and international. And that'll help diversify. Some people go all in on the small cap. They want the aggressive growth. Well, that's a roller coaster.

Jade Warshaw

It is. That's a roller coaster.

George Camel

Some people go all in on the large cap. And so if you look at like an S&P 500 index fund, it's mostly large cap companies with some mid cap. So that's a great start. If you do nothing else, you know, broad based index fund will do the trick. But splitting across those four mutual fund types will definitely add to the diversity because we saw this when the market, US market went down, the international market went up.

Jade Warshaw

Went up.

Caller

Yep.

George Camel

And so it helps just balance the portfolio over the the long term. So if you're doing it that way, I mean you can't go wrong with an index fund. But if you split it across those four mutual funds, you might find yourself sometimes beating the market or at least being a little more balanced over the long haul. What you don't want to do is single stocks, target date funds or bonds. Those are the ones to avoid.

Jade Warshaw

Yes, I love that. I think we covered it.

George Camel

That was great. You know what? I'm going to send him a free ticket to Investing Essentials.

Jade Warshaw

There you go, George.

George Camel

Okay, Alex, hang on the line. We're going to get you a virtual ticket to that event. September 1st and 2nd Dave Ramsey and I are going to walk through his wealth building playbook, talking about investing in real estate as well, wealth planning for the long haul. I think that's going to give you a lot of confidence as you move forward.

Jade Warshaw

I love it. I love it, I love it. All right. All this talk about money. George, let's go to a question that we have from our Ramsey baby steps community over there on Facebook. If you haven't checked it out and you want some extra support, we have a really great active group of folks.

George Camel

I go in there for fun. That's my entertainment on the weekends. Just reading up on the posts in there. The drama, the joy, the celebration, the wins.

Jade Warshaw

It's better than Netflix 100%.

Caller

Wow.

Jade Warshaw

So we have Jackson who is from the Ramsey baby steps community and he says, okay, George, if banks are FDIC insured up to $250,000, where do you put the rest of your money? Should you split it into multiple bank accounts with no more than 250,000 in each? Very good question.

George Camel

This is a fun question. Yeah, it's a good note that if you have your money with an FDIC insurance insured bank or if it's credit union, that's the NCUA, that's that equivalent of that, you're insured up to 250, 000. If the bank goes under, the government says we can't help you. So the good news is, the good news is if you're married and you got a joint account that doubles. So now you're at 500,000, which is a good problem to have if you're sitting there with 500,000 in cash and savings. So yes, you can open a different high yield savings account with a different bank. Fairway one's, you know, is a great one if you want to add one to the mix to get more. But the key is you want to make sure that it's per. Let me see here, it's per 250,000 per account. So that's a good.

Jade Warshaw

You can have multiple accounts under the same bank umbrella.

George Camel

Yes. So categories would be single accounts versus joint accounts, business accounts. So you want to have that different account type. And splitting across different banks if you get to that point, is a great option. Option if you're not married.

Jade Warshaw

The real question is why you got so much money tied up in a bank.

George Camel

I wouldn't hang on to it for too long. Invest that money.

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Jade Warshaw

Our Ramsey show scripture and quote of the day, Hebrews 6:11. And we desire that each one of you show the same diligence to the full assurance of hope until the the very end. Lily Tomlin said the road to success is always under construction. Sounds like 65. All right. I know it. That's.

George Camel

That's an interstate for everyone wondering what does that mean? The age of 65?

Jade Warshaw

No, 65. Highway 65. I feel like it's always something going on and they need to widen it by where I live. All right. Chris is in Eugene, Oregon. Chris, how can we help?

Caller

Yes, I was worrying about baby step

two and if I should go ahead. I owe twelve hundred dollars on a credit card. Did I go ahead and pay that off with baby step one?

George Camel

How much do you currently have in cash?

Caller

I have about a thousand dollars in extra saved up over the 1,000. I want to be my.

Jade Warshaw

No, you have $1,000 total.

Caller

Yes.

Jade Warshaw

Okay, so we'll call that baby step one. Let's call that baby step one. And you need to keep that money. That's the first foundational step that we teach. You need to have that money. That is your emergency fund for things that come up that are completely unexpected, completely necessary and really have a time factor on it that need to be very urgent. The credit cards, although they're urgent and they're important, it's not an emergency. I'd rather you use your month to month cash to pay those off. How much money do you bring in every month?

Caller

I am on disability and I get about 4,000amonth.

Jade Warshaw

Okay, and how much. What is it when you look at your budget, if you have an every dollar budget, how much margin do you have after you've put paid for all the things that that fall into your cost of living?

Caller

I haven't done that yet. I'm doing this without. I'm on your website looking at the books now, but I've already established a, you know, emergency fund.

George Camel

Fantastic. Well, we'll spare you the research. We're going to hook you up with our everydollar budgeting app, the premium version. You can connect your bank to it. It's got all the paycheck Planning features. And once you do that and see that margin, that'll give you the real math of how long, long it's going to take to pay off your 1200 bucks in credit card debt. Do you just have one credit card or there multiple debts?

Caller

No, I have one other credit card that's at almost 9,000 and I have a car payment.

George Camel

Okay, what's, what's left on the car?

Caller

About three years.

George Camel

What's the balance?

Caller

I'm not sure. My wife is taking care of that, but both of her names are on the car.

Jade Warshaw

Does your wife bring in income, Chris?

Caller

Yes.

George Camel

How much is that?

Caller

I'm not sure.

George Camel

Do you guys have separate finances?

Caller

Yes, we do.

George Camel

Is that for a intended reason? The reason I ask is because this plan is a whole lot easier and a whole lot more fun when you have combined shared income, shared, shared goals. You're going to knock this debt out so much faster if you bring in her income into the mix.

Caller

So she just paid off one of our big personal loans, but she did want to start doing. She asked me about a, an app to use and that's was looking at the planner. Yeah.

Jade Warshaw

Okay.

George Camel

Okay.

Jade Warshaw

Yeah. I want to reiterate what George said. We can help you today, but when we try to solve problems around here, we try to solve them at the root. Whenever we do service level stuff, they kind of pop up in new ways over and over again. So solving this problem of debt at the root would cause you to also have to look at how you handle money in your marriage at the root. And so that's why Georgia went to that. In the meantime, I would love just for your own awareness, at the very least, I would love to, for you to at least find out what does your wife earn? Like what's her month to month income, what's her financial life look like? And I think that that would probably be the first step in that discovery in your marriage is you should, at the very least, you should both know what each other earns. So I would start there.

George Camel

And if she has debts, do you know her whole financial picture? Picture on that side?

Caller

Not everything, but I do have some idea. He's more likely to go to a cash checking place when she runs into trouble.

Okay.

George Camel

That, that's a scary habit for sure.

Jade Warshaw

How long have you, how long have you guys been married?

Caller

Oh, how much? How many years?

Jade Warshaw

10 years.

Caller

Like 20.

Wow.

Jade Warshaw

Okay.

George Camel

Well, I say that because on a call today, a guy called in and said, hey, we found out my wife has 40 grand in credit card debt that I didn't know about. And so that's where things like this can pop up. So as you're trying to clean up a mess, you realize, oh, we got a whole nother mess over here. So if you guys can combine your lives, look at all the debts, do the debt snowball together? Combining incomes, combining everything, this whole process is going to be so much easier and it's going to strengthen your marriage.

Caller

Yeah.

Jade Warshaw

And I want to say this, I don't want it to sound like a lecture by any means. I just want the best for you and part of marriage. And I think you know this, Chris, part of the reason that we say yes to another individual is because we want to build something together. That's one of the joys of marriage, is you kind of get to lock arms and plan a vision for your future. And that's really exciting. And then as you take steps towards what that vision is, it becomes more and more exciting. And to George's point, you gain more in intimacy and in trust and all of these wonderful kind of things. These deposits get made into your marriage as you go down that line. And I would really love for you to experience that side of marriage with your spouse. So that's kind of why we're really, really pushing on that. On your question today, which is here's my list of debts. What can I do? I think the best place for you to start today is with the baby steps. And the truth is your wife may never want to combine money and I would hate for that to stop you from doing the baby steps. Because the truth is, you to do it today, it's just going to take longer and you've got baby step one locked in. But baby step two, we want you to do that, obviously paying off all of your consumer debt, everything but the mortgage. And you're going to list them smallest to largest. We call that the debt snowball. And that's what you're going to do. Smallest to largest, by balance. And you're going to take any extra money that you have after your minimum expenses are paid, after all of your minimums are paid, and you're going to put that margin on the smallest debt until you can pay it off. Now, you mentioned being on disability. Does that preclude you from really doing any work of any sort? Or do you think that there's things that you could do to pick up some extra income?

Caller

I could probably help out some friends or something like that, but if it has to do with a W2, I could lose my disability. It's military related.

Jade Warshaw

Okay. And do you feel really confident? Because here's the thing that you have to balance with this and, and I bring this up to everybody who's on disability. If you feel completely confident that there's no way in this world that you could earn more than $4,000 a month in your current state of health, then I will support you. But if you think I would hate for you to not go and be your fullest self because you're afraid to lose, because if you go and be your fullest self and you lose it, it's because you're out earning it. And that's actually a positive.

George Camel

Yeah, it's a good problem to have. Now we're bringing in six grand a month instead of four. So that's why we ask. But I do think for an example, if you bring in four grand and your expenses are say $2800 covers everything, that means you should have twelve hundred dollars in margin and boom, you just knocked out that first credit card. Now you free up that payment. Now we can apply all the margin plus that new payment that you freed up to the next smallest debt. So that's how the debt snowball works. It builds on itself. You get the momentum and that is the key. That's how millions have actually got gotten out of debt. And it's as simple as that, and it's as hard as that. Cuz you got to create the margin. That's no easy task.

Jade Warshaw

And, and that's where all the side hustles and the things that we've been talking about for the last couple hours fall into play. But then as most of you know, and I'll go ahead and go through it because we haven't done it this show after you've paid off all of your debt in baby step two, now we're going on to baby step three. We're building up three to six months of expenses still at intensity. Right. We're still going fast through here from there. Once that's completed, we do the next three steps together simultaneously. Four, five and six happen together. Number four is you're investing 15% of your gross income every single month into good growth stock mutual funds. George talked about it in the previous call. At the same time, if you have children, you're going to put extra money at your discretion towards 529s to help pay for their kids, you know, college fund and then any extra money above that. Yeah, we want to start putting extra payments, extra monetary amount on the mortgage. And once that's done, we're in baby step seven. The house is paid off, kids. College is funded. Now we're just living and giving, guys. We can invest more than 15%. We can really build wealth. We can really enjoy life. Take that vacation. Have a good time. All right, guys. All right, George. That puts this hour in the books. Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of peace, Christ Jesus there.