Live from the headquarters of Ramsay Solutions, this is the Ramsay show where we help you win in life, specifically with your money, in your work, and in your relationships. The phone number to jump in is triple 8825-5225 triple 825-5225. I'm Ken Coleman, joined by the incomparable, the illustrious.

Wow.

The esteemed number one bestselling author of breaking Free from Broke. I had to look over my shoulder. I got so into the compliments.

You know how to make a guy feel good.

I do. He is my good friend as well. We were just talking about having a fabulous dinner together with some other friends the other night. And George and I have a lot of fun together. He is George Campbell, of course. And he's going to be your money expert today. I'll weigh in, and then let's talk about your income. Let's talk about making money. This is a show about making money too, and I'm the work expert, they tell me. And Dave has said for decades, your income is your greatest wealth building tool. So you got any work questions that get you on the path to making more money? I'm your guy today. George will weigh in on those as well. You ready to go, partner?

I'm so ready.

All right, Vanessa is going to start us off in Dallas, Texas. Vanessa, how can we help?

Yes. My question is, what should I invest my $100 a month in to be a millionaire by 65.

How old are you?

Well, I am 27. I'll be 28 in September this year. So that was my other question. Should I backtrack? Because the post that Dave Ramsay had said was at 25. I know. I'm just a little bit behind on that.

Yeah, not far behind at all. What do you got for her, George? You love your investment calculator.

I got my calculator.

Just cracked your knuckles.

I'm pushing my glasses up. I'm ready to go, Vanessa.

Tell her, George.

Okay, so let's talk about your financial picture. You're saying $100 a month because that was the example Dave used.

At 25. Starting at 25.

Starting at 25. If you invest $100 a month, that post exists to tell people it's very much possible to become a millionaire. And it's simpler and easier than you think. It's just consistency plus time. It doesn't take a huge six figure income. And so that's the point of the post. I just want to make that clear. We're not telling people you should invest only $100 a month. So what's your financial status right now? Are you debt free? Do you have an emergency fund, so.

We are debt free. My husband and I, we are debt free. We also have savings, but we are both self employed, and so we don't have a retirement. And so that's kind of why I was like, well, even if we did more than $100 a month, but the minimum $100 a month, we would have something in place if we both weren't able to work at 65.

What's your household?

We've never really thought about a retirement. It's about 50 total household income. We don't make a whole. I'm primarily a stay at home wife, and I bake cakes on the side, so my husband primarily brings in the money, but we don't need a lot because our home is paid for and our vehicles are as well.

Great. Wow. What does he do?

Yeah, he builds metal buildings and shops and barns like that.

And he does it for himself, him and a buddy.

They do it together? Yes, sir.

How long they been doing it?

He's been doing it about a year and a half, two years now.

Do you ever hear him, do you guys talk about what he thinks the possibilities are going forward? Year two, year three, year four. The fact that it's just two of them building metal buildings.

Yeah. Not really financially. Like, how far they can go with it, because he kind of just does it for fun and to bring money in as well. But we don't live a luxurious life to where we need a whole lot of money. Sure. I'm just worried about, like, a retirement thing.

No, don't be worried.

Have a. Like a medical condition. So his thing is, like, last month he was out two weeks of work. So he does have to take off sometimes for procedures or things that come up. So that was my other doesn't. If he's not able to work at a certain age or something happens to me.

Do you have kids?

What should we be investing our money in? We have a five year old, and we might have another one.

Yeah, I get that. Well, George could speak to. He kind of already has. But the reason I'm asking that question is because. And now it's even more important knowing he's got this medical condition. And I love that you're able to be at home right now and bake cakes. In fact, if you want to send a cake to George and I, we'd be okay with that. I'd love to. Yeah, it'd be fantastic. George is gluten free. Do you make gluten free cakes?

I absolutely do.

Fantastic. Okay. Now George can part business. I am all for the gluten.

Can add extra gluten.

I am pro gluten, but the reason I'm bringing this up is because, Vanessa, if you feel like we want to catch up or we want to put more than $200 a month, meaning 100 from him, 100 from you. You do know that you've got the option to go work, and you'd have to change your lifestyle some. But it seems like you guys have really, a really frugal lifestyle, which gives you options. And so I just don't want you to have this fear hanging over your head, because you guys can catch up and catch up quickly, right, George? Yes.

And so the first place I would go for you is a Roth IRa. And that's going to use after tax money. It's not connected to an employer. Anybody with earned income can contribute to that. And the maximum for 2024 is $7,000. And you can open one as well. So your husband can open one. You can open one. So that's 7000 each. Now, when it comes to the amount you should invest, we recommend 15% when you're in baby step four. Now, because you guys have a paid for house, that puts you in baby step seven, which means you can invest even more than 15%. So I would not recommend investing $100 in your shoes. You should be investing at least $7,500 a year.

Okay.

And so when you open that Roth Ira and one of a smartvestor pro can help you with this, you can reach out to one@ramsaysolutions.com and get connected. These are financial advisors, investing pros, who can help set these up, help you understand what you're actually doing. And this is an individual retirement arrangement. And all it is, it's a shell within that. You then invest and buy mutual funds, which is just a basket of stocks, 90 to 200 companies that we're all rooting for to win and grow. And so that will help you create a ten to 12% return, is what we've been seeing in the market. And so I just did the calculation for you from 27 to 67. If you just put $100 in there, you could end up with 860 grand at 11% return.

How does that make you feel, Vanessa?

Good.

Yeah.

So you take 7500, for example, and the numbers change drastically when you start to get into those.

This is what I get excited.

So $7,500, that's 625 a month, right? If you invest 625 a month from 27 to 67, that would grow it to $5.3 million.

Wow.

With an 11% return, if you scale it down to 10%, 3.9, Vanessa, go more conservative. That's still 2.9, Vanessa. So the key, are you worried anymore? Get started. Do this every year and don't touch it.

She's not worried anymore, George.

And on top of that, Ken, I think Vanessa went.

I think Vanessa started going.

And Vanessa, guess how much of that was money you put in? Let's even say the 9% it grossed to 2.9 million. How much money do you think you put in out of that 2.9 million?

Oh, my gosh. I have no idea.

300,000. That's all you put in. 2.6 million was just growth, just compound interest. And so get started. Now, we have a lot of options for self employed people. So whoever's listening, they're going, I can't invest in retirement. Yes, you can. We have a whole blog called five Investing options for self employed people. Go check it out. The sep IRA, the simple IRA. Individual solo 401K. Tons of options out there for entrepreneurs.

Vanessa, go on YouTube later this afternoon. This evening, show this clip, this segment to your husband. And you guys have a fun dream session about what life is going to be like when you're in your 60s with all that money. Whoo.

Game on.

Oh, George, you're so good. This is the Ramsey show.

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Welcome back to the Ramsay show, America. Thrilled to have you. It is your show. It's about you and your life, and we're thrilled to be able to walk alongside of you. I'm Ken Coleman. George Campbell joins me. We're Ramsay personalities, and we are your host today. And let's get to it, shall we? Triple 8825-5225 Keith is going to join us now in Cedar Rapids, Iowa. Keith, how can we help?

Yes, me and my wife, we're having a lot of troubles just getting started on baby step one. We want to know the best advice.

Can you tell us what is, in your opinion, the problem or problems that are keeping you from getting started?

Well, her parents live with us. Her dad has dementia, alzheimer's and all that. So we care for them. It seems like every time we think we're getting ahead, something knocks us back down.

And this is attacking baby step one, just trying to get $1,000 in the bank. Yes, tell me. And again, this is a very tough situation that you're in, so our hearts go out to you. I've got some family. My brother in law is dealing with this, and it's devastating. So we want to tell you that we're sorry you're going through this, and this is a tough, tough journey. Let me give you a couple of options. Is this an income issue? Meaning we don't have enough and we're scraping by, so any kind of unexpected squall or a storm that pops up kind of kills the momentum or is it something more than income? Just no discipline. What do you think it is?

I think it's more discipline because me and my wife, we make decent money, and it's just what is decent between us, too? We make about 130 a year.

Oh, okay.

And then last year we started doing eBay and selling on eBay, and that brought us another 10,000, roughly.

Okay, so we can say you're in the 140 range.

Yes.

So, George, sounds like this is a budget issue.

Yes, so far. It's a lot of feelings, like, well, things are coming at us, and I just feel like we can't. And what happens when you don't do the budget is you lean on feelings instead of the facts and the budget tells all. And so when you list out the actual take home pay that ends up in your bank account, what does that amount to in a given month?

Let's see, I'm roughly 3200 and my.

Wife'S around the same 6400 comes in and you're saying we can't get 1000 together out of the 6400. So where is that 6400 going?

That's kind of what we're trying to figure out also like bills.

And there's a solution for all of this. We can solve this very easily with an every dollar budget. And I'm going to help you out with that. We're going to give you the premium version on us to get you started. And it's really simple. On that smartphone app, you list out your income and beneath that, all of your expenses, what you plan to spend in a given month. To make this easier, I would pull up your bank statement and go, what happened in the last month? Okay, here's the average for the utility bills. Oh, yeah. We have that subscription that comes out. We got to pay insurance. And so beyond the priorities, which is your four walls, food, utility, shelter, transportation, we'll add in insurance as a bonus. Everything beyond that we would call non necessities. Would you agree?

Yes.

Nonessentials. That's the parts you need to cut out. Because I'm guessing if you looked at your budget, you probably think you're spending 500 on food, you're probably spending 1200. Is that accurate? That's most people's problem. Is the food categories out of control?

Yeah, that would be a big one.

So I don't think there's much issue here. You make $6,400. We just got to pay attention to where every one of those dollars is going. And next paycheck you have $1,000 emergency fund. I don't believe that. There's these constant 1000 plus emergencies hitting you guys. It's ankle biters. And you're using the emergencies as an excuse as to why you're not going to follow through this plan and get on the budget.

Keith, what do you do for a living?

Deliver beer.

Oh, okay. When I say this phrase to you, I'm just curious what your action is. How do you feel about being reactive in life versus proactive? How's that hit you? Do you think you're a reactive guy? You think you're just by nature or are you a proactive guy?

I think more reactive.

Yeah. And I agree. And by the way, there's no wrong or right here and I'm not self aware. I'm trying to get you to a place of what's going on right now. If I was going to boil it down to one thing, is you and your wife are reacting to your paycheck. You aren't being proactive. You aren't saying, here's what we're going to do with this money. You're just kind of going wee and we're just one day at a time and one feeling at a time. And I think that if you could get that to go, wait a is. And George has given you every dollar, by the way, if you use every dollar, this is proactive. You are going to plug in numbers and you're going to begin to be intentional. That's what's so genius about every dollar, the budget tool. It creates a framework where I can be proactive.

You happen to your money life just happening to you and it's just, well, we'll hope we have money at the end of the month.

Yeah. And I'm going to submit to you that the rest of your life is going to improve, too. If you jump into this, I'm going to put a little extra, I think, motivation on this, not only to have money at the end of the month and not feel like you're always just reacting, but I think the rest of your life is going to improve as well. I think that's what I hope you get, Keith. No shame, but maybe a mindset switch. Let's be proactive. Intentional, not just let everything happen to us. Does that make sense?

Yes, it does.

How much debt do you guys have?

Probably roughly 50,000.

Okay, what kind of debt is that?

Car loan, my wife's car, personal loan, a couple of credit cards that we know we need to get rid of.

Okay, well, one thing you can do that's proactive is just cutting the cards up. Cut them up today. They haven't been serving you. They got you to this place of stress. You guys make amazing money. You're hardworking people. You're taking care of the parents. And I think you guys deserve a life with more margin and options than this.

Right.

And so it might be time to sell the car. If you can get some good money for it, and downgrade to something in cash, that will free you up even sooner.

What would you assume, Keith, your total debt payments are every month. If you take all that debt you just told George about, what would you say roughly the number is you're paying out? I need that jeopardy music right now. Just give me a rough name.

Yeah.

I'd guess probably 1500.

Okay.

Two things I want to point out. Number one, remember my little speech about intentionality. One of the other intentionality things you need to do is be able to answer that question instantly. You don't know what you don't know. You don't even know. And I'm not judging you, but you don't have a clue what you're paying out. So we got some homework let's get on that and let's go. Oh, my gosh. I could give myself $1,500 raise.

Yeah, you're telling us you're having a hard time saving up 1000. We just showed you where 1500 exists every single month and I got a.

Sneaky suspicion it's more than 1500. Given your jeopardy. Silence.

Now, is your wife bought in on this?

No, she has 100% yes.

Okay. I would sit down with her tonight and you're going to open that every dollar budget again. We're going to give it to you. And I want you to go through all of the numbers, lay it all out so you both have accountability and transparency into what's going on in our financial life. And at first it's going to be scary. You're going to probably throw up in your mouth a little bit, but the next day you're going to wake up going, I know exactly what we need to do.

That's disgusting. I know, Ken, take it there.

That's what happens the first time you do the budget. You go, oh, my gosh, I had no idea we had that much debt.

I don't know that you throw up in your mouth all the time.

Well, I don't want to assume anything.

Boy, I think you're really like, that was. It got dark quick.

I'm sorry, Keith.

I was over here going, oh, that's.

How debt makes me feel. Truly.

I appreciate that. I'm having a little bit of fun. I like that. I thought you went dark quick.

As a guy who consistently tells people that you need a tums, I thought you'd appreciate that.

I do appreciate the acid reflux. And I guess you're right. That's what it is. It makes it all the way up to the mouth.

That's even worse.

Oh, gosh, you took me there. But it was a vivid image, George, and powerful. So let's talk about every dollar really quick. Yes.

This is our free app.

This is huge for folks.

It's a totally free app. You can go download it, everydollar.com. You can get a deal on the premium version, everydollar.com slash George. And that allows you to connect to your bank, track the transactions, and both you and your spouse can log into the same app on different phones and have that transparency and accountability. If you see the debt free screams, they always say the budget is the key. It is freedom to spend.

And those people aren't verping. Do you know what a verp is?

I think, I assume right now it's.

A little bit of a burp, a little bit of vomit. You gotta get rid of the verp. Every dollar will do it. This is the Ramsey show.

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I'm Ken Coleman. George Campbell joins me. And boy, oh boy, it's that time of year. It's the spring starting to kind of say we may be around the corner.

I didn't see what all punksatani said.

Punksatani, Phil, I think it's going to be a short winter. Is that right, Joe? Joe pays attention to these things. Thank you.

He's got the farmer's almanac out at all times.

He has a pocket. You have that pocket version of the Constitution. I think you can get one of those of the farmer's almanac. I don't know, folks. I'm making all this up. We have new people joining the show. You need to understand, George and I like to have a little bit of fun while we help you. But speaking of helping you, you know where I was going with this, George?

Taxes.

Taxes are around the corner.

You're always trying to talk about taxes.

You know why? Because I hate taxes.

That's true.

I hate taxes.

I always joke that if you could go back in time, you'd go to the Boston tea party 100% just to throw some of that 100%.

I would have been, per capita, more boxes of tea thrown into the Boston harbor than anybody else. What a time I would have been that guy.

Epic.

No question about it. I'm for a flat tax. That's not why I'm talking about it. But if I was president for a day, that would be my deal.

Well, our goal is to help make taxes as painless as possible. And we've got a tax tip for you today. And here it is. You got two choices for claiming tax deductions, and you've got to understand the difference because this can save you big bucks. You can either take the standard deduction or itemize your deductions. So both options can lower your tax bill. But which one is best? Well, it depends. So let's take a closer look. Taking the standard deduction, that's the easiest option. It's the thing most people do. It's what makes the most sense for a lot of folks. It subtracts a set amount from your taxable income based on your filing status. So let's say you're single. You make 65 grand. Standard deduction knocks off close to 14 grand. So you just pay taxes on 51,000 of your income instead of the full 65. So that's like an automatic tax freebie. Itemizing takes more work because you need to subtract all of your deductible expenses from taxable income one by one. So medical expenses, charitable gifts, state sales taxes. If that adds up to more than the standard deduction, it's worth it to itemize.

And many find out it's not worth it. So if you want more help making sense of income taxes you want to file with confidence, be sure to go to ramsaysolutions.com slash tax. We've got tons of resources there for you. We'll help you figure out if you should work with a pro. If you want to self file using Ramsey smart tax. A lot of great options out there.

Yeah.

Get it done.

Good stuff, George. Great. Great.

Hope that was inspirational.

No.

Okay.

Nothing about paying taxes is inspiring. That has nothing to do with you. I thought you did a wonderful job, but thank you. It's taxes, for heaven's sakes.

Get it done.

All right, let's go to Keena now, who is joining us in the Tampa, Florida area. Keena, how can we help?

Hello. So I am here because I need a little help with introductory tools and resources. I'm at around 75,000, $80,000 in student loan debt, and I need some help with next steps on how to be able to afford a home within a year as a single woman, sustain my lifestyle and build my credit.

Wow. You've got a very aggressive agenda. We want to get it done fast.

Yeah. Why a year to be a homeowner?

I will honestly just say it's just the stage in age I am. This is just one of my goals. How old are you? 35.

35. By the way, I should point out that for men, the only place you can ask a woman's age is in a show like this.

This show, the context matters.

I have to kind of remind guys from time to time, and I'm sure if we have a special dispensation here on the show that I get to ask ladies how old they are.

It's on the phone. If we could see Keena, I would assume 25, Max.

Yeah, well, that's.

Appreciate that.

Boy, I'm a charmer. I got the Riz, as the kids say.

All right. The reason I asked that, Keena, is because I understand you're feeling that pressure. But can we, for the sake of this conversation that George is going to guide you through, can we take that year off the table? Let's get that twelve month pressure cooker of getting a house. Can we take that off the table, Keena, just for the next few minutes?

Sure thing.

Okay, good. All right, George.

All right, let's address the three. You said, I want to afford a house and you want to do that in a year.

We said, we're taking that off the table, George, were you looking?

But here's what I want to talk to you about. There's a rhythm and an order to this, and the problem is a lot of people, while drowning in debt with no emergency savings, go, I got to get a house. I got to get a house. Rent is expensive. Renting is a sin. I'm just going to jump into a house. And that causes them to be house poor where they barely can afford the mortgage. Now they got nothing down, no equity. And it creates a place where the house is a burden instead of a blessing. And that's the heart behind this. Okay, so once you're debt free with an emergency fund, then save up for the down payment and set that goal of home ownership. That's the time and place. Next on the list. You said, I want to sustain my lifestyle. Tell me about this lifestyle.

Okay. So just to be honest, I love to explore and travel, and I've given up some of those things as a sacrifice for me to meet some of my goals.

Good. Okay, so you're saying I want to mostly travel is what you mean by lifestyle?

Yes.

Okay. And again, there will be a time and place for that once we clean up the debt, because what do your payments add up to every month?

About $600 is going out altogether. I'm in a process where I'll be in the near future, trying to figure out if I want to consolidate my student loans.

What would be the purpose of consolidation?

I don't know. I'm just being honest, just throwing up.

Okay.

You heard. I love that.

Yeah. A lot of people think debt consolidation is somehow going to make the debt go away or go away faster. And the truth is, a lot of times it doesn't. So there can be a place in time where student loan consolidation makes sense, but for most people, it just makes them feel like they did something instead of doing the hard thing, which is getting rid of the student loans and actually paying the principal down. So let's put that on the table as well for now. Last thing you said, I want to build my credit. What was the purpose of building your credit?

Again, I am very new to all of this, so I'm just hearing that those are the steps that I need to take, because I can have a savings. However, if your credit and everything does not match, you won't get that far.

If your savings and credit don't match, what does that mean?

Okay, so for an example, I can save the money. However, when it's time. This is, again, what I've been informed of, when it's time to begin the home buying process. If I don't have a certain credit score or if it's not in a certain area, then I won't be considered. So I do need to build my credit because only thing I typically have right now is my student loans and one credit card.

Okay, so this is the same old message, George. We confront all the time. You can't get a house if you don't have a good credit score, right?

I've heard it. The problem is, it's a bold faced lie. And I know that because I bought a house without a credit score, Keen. I got a mortgage without a credit score. I didn't have debt. And six to twelve months later, my credit score disappeared into the abyss. I didn't have a credit history. And I worked with Churchill mortgage. A lot of companies out there do this. Churchill mortgage is the one that we've trusted for decades to help people buy a house without a credit score. And they can help you, too, once you get to that point.

I would also like to point something out, Keena, that George won't say because he's very humble. But George's life has gotten measurably better since that as well, in the form of great, awesome wife, now a beautiful little baby girl. Oh, and by the way, he's a number one bestselling author, and he's making more money than he ever made before all of that. So this idea of a credit score being the foundation of a better life is also garbage.

Okay?

And I'm going to send you a gift, Keena, to help explain this, because it's hard to do. In a quick radio call, I wrote a book called Breaking Free from broke, and there's a whole chapter on credit scores. There's a whole chapter on credit cards. And so my one ask is that you read it before you make any other financial decisions.

Okay, I will.

And I'm so glad you're new to our crew. And so I want to welcome you to this tribe of weirdos who goes like, hey, what if we didn't have debt? What if we stopped playing this weird rat maze game of trying to get the cheese of a high credit score to get more debt? To get a high credit score to get more debt.

Hey, Keenan, we've only got about a minute, so I wanted to ask really quick, for Georgia night, how much is your credit card debt?

As of right now, about 3500.

Right.

So that's the first one you attack. How quickly could you pay off that 3500 if you got real intentional?

Less than a month.

Boom.

What's your income?

I will say about $65,000, but that would mean I'm going in my savings.

And then how much do you have in savings?

Credit card? As of right now, I have about $14,500 in savings.

Oh, boy.

You know what's gone today? That credit card payment.

Okay.

Truly, that savings is a false security blanket because you owe $83,000 to lenders. And so I want you to have no payments. Then restock the emergency fund. So the seven baby steps are what we teach. Thousand bucks starter. Then attack all the consumer debt. My book, breaking free from broke, will walk you through it. Hang on the line. Skylar will make sure you get that book in the mail, the ebook, audiobook, whatever you want, we'll send it to you. Thanks for the call, Kena.

Man, Keena's going to be traveling in the life change. I love it. Great stuff. Thanks for the call, Keena. Welcome to the tribe. Hey, don't move. We got to take a couple commercials your way, and George and I are going to have fun in the break, and then we'll be back before you know it. This is the Ramsey show.

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Welcome back to the Ramsay show. I'm Ken Coleman. George Campbell joins me. And it's such a great crowd in the lobby today. Fine looking group of people, enthusiastic and from all over all. They're giving us the WHOOP. What do you.

I guess this is like a spring break week for a lot of folks.

Oh, is that right?

Okay. No, I'm getting a lot of head nods. Just people hanging out on a Friday.

And we want to. There they go. If you're watching on YouTube. Oh, look at you in the background on the jumbo track.

Oh, that's nice. I met a cameo there.

Yeah. And we love when folks come, so I just want to say it's always great to meet folks during commercial breaks.

We go out twice every hour.

Yeah. And so come see us. We'd love to see you. And honestly, we're all enneagram threes, and we need people looking at us.

We need the affirmation and validation.

Yeah. When we have some days where not a lot of people in the lobby.

It'S kind of like staring out into the abyss.

Yeah. So we're unhealthy and performers and throws.

Ken into an existential cris. Can't have that.

I don't know what to do. It's a total mess. But no, come see us ramseysolutions.com, and check out the schedule. And we'd love to host you. All right. Let's go to Albany, New York, where Sarah is. Sarah, how can we help?

Hi. Thanks for taking my call.

Yeah, you bet. What's up first?

I have just an active senior this year, and I'm trying to do the budgeting app, and I'm not being very successful with trying to plan accordingly for his unexpected fees that.

Are we talking sports band? What are we saying?

I know this feeling. I got three teens right now. So give us an example. Maybe over the last two months of stuff that's unexpected that popped up.

So we need track sneakers and track cleats, which, I don't know, spikes. I'm sorry. And we need baseball cleats and a new bat and probably apparel to go with both.

I'm very familiar. And when did we find out that he was going to do track and baseball?

Last night.

Oh, okay.

He just decided.

Tell me what that's like.

So he is very indecisive. So he always played baseball for years. And his coach no longer is at the school that he's at. So then he decided he wasn't going to do baseball. He was going to do track. So that's where my mindset was, okay, we're going to do track. Running shoes and these spikes.

And how long ago was this conversation that you just described? I'm not going to do baseball. I'm going to do track?

That was probably about, I would say, two or three weeks ago.

Okay, here's where I'm going with all this. Well, let me ask you another question. Did you talk to him several months ago, let's say before Christmas, when maybe football and basketball or whatever he was playing before ended, did you guys say, okay, what are you planning to do next semester as it relates to sports? Did that conversation happen?

No, because I just assumed it would be baseball.

Okay.

The coach actually just got dismissed, like, probably two weeks ago.

Okay.

Or three weeks ago. It all was about the same time when he told me that he was going to do track instead of baseball when that coach had left.

I get it. And life happens like that. But where I'm going with this, and George, I know I'm on this thing, but this is sort of a money issue, but it's sort of a, as a parent, and I understand this. So I'm not saying this from judgment. I'm saying I get it. And George knows all three of my kids. They're all very active in things. We would sit down with our kids ahead of time and go, hey, are you playing spring sports for this very reason? Because there are some significant amounts of money. For instance, our oldest son was talking about wrestling and he decided not to. And this is his senior year. And wrestling is a real big commitment because of the time traveling, the equipment is not expensive. This is not like, well, my son's activities are causing a budget issue. I think this is communication and expectations. And expectations. Yeah.

Does he know how much all this stuff costs?

Yeah, he just thinks that I have an never ending.

There's the new conversation.

Oh, hello.

Hey, son. I love you. Love that you want to do all this stuff. We don't have this endless pool of money sitting around. We have financial goals. We're trying to get out of debt. We're trying to do this. So we need to figure out a way to cover these expenses. That might mean he works part time to help cover it.

Hello.

Is that in the picture?

No. And I'll be honest, I'm going to use the word entitled because he gets a benefit from his dad that passed so he thinks that that money he is entitled to. So it doesn't matter what he asks for that that's what that money is for.

You know the quickest way to become not entitled? Do you know?

No.

Okay. This is great. I've been dying to say this. It's to take the entitlement away.

Okay. How do you do that?

Really simple conversation, hard conversation. This money that you got from your father, I'm in charge of this money. I get to decide where it's best spent. And I am not a sporting goods store. This money does not represent a sporting goods store. George, am I being too harsh?

No, but guess what? He's going to have some big feelings.

Well, that's fine, but that's, again, the way to break entitlement is to remove the entitlement. So there's an actual physical entitlement. Okay. So we talk about entitlements in government language, which, by the way, for all you conservatives out there, you're going to love the next 30 seconds. But the bottom line is that when we talk about an entitlement, it is a benefit. That's how it's used in that language. So it's a noun as that. Is everybody following with me in the lobby so that I know I'm making this? So entitlement in the form of a benefit is a noun, but then when it gets into an expectation of the noun, it becomes an attitude. Are you still following me out in the lobby? So I know I'm making this? So what's happened is it's become an attitude issue. So in order to get rid of the attitude of entitlement, what do we have to do? We have to remove the noun, the object. That's the lesson.

Okay, I get what you're saying completely. I guess I'm trying to think so. He is also a senior, so that's a hard thing to adjust now because I'm not going to take any of that away from him. So I'll figure that out, which is fine. But I'm thinking of long term for things that would be unexpected like that. So would you just do it as. Because it wouldn't fall into your emergency fund section?

No.

I guess that you either have to.

Move it from a different budget category or you create a miscellaneous line item for this kind of catch all junk drawer of we know something's going to come up, so let's put $100 away or $50 away every month to cover this stuff. And then I would also go, hey, buddy, you're now in charge of finding a used baseball bat from Facebook marketplace. And you're going to go meet up and I'll give you the $10. And so he needs to have some skin in the game instead of just deciding. Mom is an unlimited piggy bank and she's going to do all the work for me.

Or he chooses.

Hey, son, you get to do one sport, and here's the budget we have for this, and you need to make this work. That level of critical thinking will cause him to make different decisions.

Right.

He's got to go get a part.

Time job, and I think he needs a part time job.

Yeah.

Okay.

You want some nice track shoes?

That will get rid of the entitlement. When he starts to use his own money, it changes entitlement.

It really does. And it gives him freedom and independence.

I get it.

But listen, Sarah, we are not trying to pour guilt on you. We're just trying to be your friends and say, I have to say things to my kids that they don't like all the time. Feels like all the time these days. I got three teenagers. Feels like it's just I'm one constant irritant.

I felt that way about you.

For.

A lot of reasons.

For a lot of reasons. And I'm trying to encourage you. I don't want you to be discouraged. Was this a decent amount of money that he inherited?

Yeah.

I think it's for his future and.

He gets it when he becomes an adult or what's the plan?

Some of his money. I did invest it. I put it in his CD for him for later in life.

And he's going to be real thankful because right now he could blow that money as a senior on who knows what. And so I think you're doing the right thing before he's an adult. And the only thing he's truly entitled to as your son is food, shelter and transportation, utilities, the basics to survive, insurance. You're doing all of that for him. Put a bow on the kitchen sink and say, here you go, son. Here's the gift. And that will cause him to look differently at this versus. Well, I want to do the third sport. And, mom, I need another $100 for this. And so just tell him, hey, son, I'm okay covering it.

He's one of five from my ex husband, and we were together when we had the other, so there wasn't really a financial burden on myself. Decide, right. So now that he's the only one that went through high school without his do I feel like I gave him that reign to feel that entitlement, because.

I was okay, Sarah. Sarah, you're a good mom. You're a good mom. You're great. But go ahead and start making these changes on his entitlement, thinking around money. It's been a good hour. Thank you all for calling. Thank you, George, for hanging out with me. This is the Ramsey show, live from the headquarters of Ramsey solutions, this is the Ramsey show. It's where we help you win in your life, win with your money, win in your work, and win with your relationships. I'm Ken Coleman. George Campbell joins me. We're having a blast, and we want to help you, so let's go. Phone lines are open. Triple 8825-5225 Triple 8825-5225. Let's start this hour out in Huntsville, Alabama, not far from here. Chris is on the line. Chris, how can we help?

Hey.

Yeah, I have a question about some stock purchasing options I have through my work. Okay. We get offered the ability to put up to 10% of our paycheck into the program, and I work for a tech company. So what happens is, after six months, we get 15% off the lowest, either the entry or the exit of that six months, and my wife and I are going through FPU. We're currently on baby step three and just trying to figure out if that's something I'm able to do at this point, because we only have a certain window where we're able to opt into this, and then we can always decrease it at any point. But opting in is only a small window and just trying to get some more guidance to see what we can best do for us. And especially, we're going through FPU right now.

So what's your next financial goal?

So we have about 12,000 saved up. We have a son of the heart defect. So we're doing the six months emergency fund, which we think is about 19, 20,000, and we're going to buffer it possibly a little bit more with about 2000 specifically for medical expenses. So we're about 12,000. Our goal is to get about 22 for the emergency fund.

Cool. All right. And you're wondering, hey, should I opt in now? When is the next time you could opt in?

If it wasn't now, the next time would be six months from now.

Oh, okay. And you should have your emergency fund done when, based on your estimations.

I'm looking at my wife right now emergency fund. We can get done, and she says about three to four months.

Okay. I would just opt into the next six month mark because you still have retirement options. Even if you guys then fully funded the emergency fund, you then begin investing 15% of your income into retirement plans. And truthfully, the employee stock purchase program, which is what you're talking about, wouldn't be a part of your normal retirement investing. So this would be, if you want to use some fund money outside of the 15% to get some stocks, that's totally fine. But again, we don't recommend single stocks because of the volatility. And so I'm guessing you believe in this company. It's probably doing well, but it's still risky. And for those reasons, I wouldn't put too much stake in it. Okay.

Yeah. And it's the tech field. Yes. Over history, it's always going up. But, yeah, you see the ups and the downs. And I've worked for the company for five years, so I've used it in the past. It allowed us to buy a car and help put down payment on a house, things like that. But we've redirected our mindsets going through you all's programs and stuff.

I love it.

I appreciate trying to get that.

Yeah.

I wouldn't be investing while trying to save up the emergency fund, because what happens is the emergency hits and all of a sudden you go, oh, my gosh, we have to go back into debt. We weren't ready. So build this foundation, make savings a priority. Investing will come later. And I would still focus on retirement plans before touching single stocks.

Chris, you're doing the right thing. You're being a great husband and a great dad. Your brain's in the right place. You are not missing out. You're going to be fine. You're going to be fine. If you follow the baby steps, you're going to be plenty fine when it comes time to pull retirement money. So stay the course. Don't feel like you're missing out.

And we're wishing your kid out the best.

Yeah, absolutely, man, that's tough stuff. But that's where you get a lot of peace at night, is to have that cash there in case we need to have some extra for a very important procedure.

Yeah, that trumps any single stock out there.

I always slept with a little bit more peace when the kids were younger. And of course, now, good grief, it doesn't change. They're teenagers and going to be young adults before you know it. And you want to have that peace that I can handle an emergency. And that's why this just to the parents that are thinking about getting on the baby steps, can I just appeal to you, if nothing else works, the peace of being a parent with our baby steps is so much greater. Let's go to Bobby in Austin, Texas right now. Bobby, how can we help?

Hi, guys. Hope you all are doing good today.

We are having too much fun, I think. What's going on with you?

Well, I'm a military retiree, and I got a great job. Now. My wife and I have been married almost 28 years this year.

Congrats. What arm of the service were you in?

Air Force.

Air Force. Come on. All right. Well, you're a great American. Thank you for your service.

Thanks so much. I appreciate your support. Well, our kids are grown. We've got grandkids now, and we did a really good job paying off debt. We've just built our forever home. But I've not saved very much at all for retirement. And so I'm almost 50. I'd like to know just kind of where I should go from here. What's the best way to make sure that we're going to be okay? It's late to get started. I wish I would have did it 20 years ago.

Do you have a military retirement?

I do.

What will that add up to and when will it hit?

I'm already getting it. So I was active duty, so it's 33,000 a year.

Okay. So it's a good starter, but it's not going to be enough to retire on.

Right. That's the only passive income I have. That and my VA disability is about 40,000.

Okay. So we got 40 grand as kind of our base. And so what are your monthly expenses right now?

Well, I'm also full time employed. I'm not fully retired yet, so I'm a consultant. I make $149,000.

Wonderful.

Good for you.

Is that household income? Is there anyone else working?

No, that's just me. So the 149 and the 33 are taxed, and then, of course, the 40 is tax free.

And the 40 is every year. For how long?

That's forever.

Is the 40 on top of that?

I don't think you caught that. He's got a disability of 40 a year for his life. Three. So he's got a $73,000 base.

Wow.

In benefits.

That helps. And that's guaranteed for life. Okay.

Right.

So the good news is you don't need a massively large nest egg. No, but I would do my best to do as much as I can with that amazing income. How old are you?

47.

Okay. Do you have any retirement plans through your current employer?

I do have a 401 and I rolled over all the little ones I had in when I was trying to find a good transition job out of the military. I think I've got 43,000 in it, maybe, right? Not a lot. It's a 401K.

You're going to catch up.

11%. Right now it's mostly ETF.

And you got a mortgage?

I do. I have a massive mortgage.

Oh, boy. What's that add up to?

What's the. It was 615 and we're down to 513.

Okay. Do you have any debt?

Just a house. Just work really hard to pay it off. That's our only thing. And the payment is 3100, I think. And we're paying like 7000.

Good for you.

Well, outside of that, I would begin investing 15% of my income into a 401K. If you have a Roth 401K, that's great because that money is going to grow tax free with after tax money. So that's 1860 about. You should be putting in that retirement account, and that will help you create a nice little nest egg over the next 20 years. So that would be my focus, my friend. That'll add up.

Yeah. You're going to be fine. And again, you are a great American. You're off and running in this new direction. Love this story. Thank you for the call. All right, we'll be right back. This is the Ramsay show.

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People, welcome back to the Ramsay show. The phone number to jump in on the conversation about your life is triple 8825-5225 Triple 825-5225 I'm Ken Coleman. George Camel joins me. And today's question, George, comes from Matt in Ohio.

Here we go.

After getting a degree and wait a second. I think you're supposed to read that. It doesn't matter.

You're a great reader. Yeah, it's very comforting.

Yeah. I feel like I've already thrown the ball to you. Okay, here we go.

Matt in Ohio says after getting a degree in corporate accounting, I went to work for an accounting firm, but did not enjoy the work, so I quit. I then took a part time job as a baker at a local restaurant. And after talking to the owner about my work experience, she asked me to switch into a business development role. Now I'm doing more work than anticipated and getting paid the same. However, I love the role and realize that this is my first shot at getting a job in this area. I don't want to ask for more pay because I feel that this is my proving ground and that I should embrace it. On the other hand, I'm analyzing their books and creating a more organized system for them. As well as taking on business growth projects, we have a goal of increasing revenue by 20% this year. Should I continue as is or create my own company and charge them as a client?

Wow. Very interesting. Well, Matt, here's what I think. I think that you really enjoy this role and you see an opportunity for growth. I would just talk to them about workload. I would not talk about pay first. If we lead with pay, sometimes it creates an awkward environment, and it kind of puts the leader in a defensive posture. So I would go in, in this situation and go, I am thrilled about this role. I love it. I see a track for just exciting growth and what I can do for the company. However, my workload is starting to become an issue, and so we've led with, I love the job, I'm grateful, but I need your help, because the workload issue is, there's a lot more that I'm doing now. And I would love to talk about my growth opportunities as it relates to compensation along with responsibility. Can we talk about a growth plan that includes responsibility and compensation? And I think when you said it that way, two things happen. Number one, you posture it, George, in the best way possible so it doesn't look like a demand. And I deserve that. Always gives somebody a chance to kind of hit the ball back.

And we don't want that. We want to put the ball in their lap. Right. And let them take some ownership. So that's the first thing it does. The second thing it does is their response to this is going to reveal a lot, and it will reveal the answer to the last question. Should I just go do this? On my own and charge them as clients. So when you do it this way, let me tell you what a healthy leader does. A healthy leader goes, thanks for sharing this with me. We are loving what you're doing. You're going to find out how they value you. And so that's why you do it this way. So it could open up the door to growth in a healthy situation with a healthy leader, or it will reveal that it's going to be an exit strategy. If it's an unhealthy situation with an unhealthy leader, I like that.

And I'm going to add to this. He said, I took a part time job and now I'm in this role. So I'm wondering if he's even working full time at this juncture.

Yeah, it's hard to say. I wondered the same thing.

We don't have the details there.

So it's part time. And so are you still getting part time pay for full time hours, if that's the case?

That's what I'm wondering.

This is an easier discussion, but you still got to go into it with that.

The other part of this is wanting to start his own kind of consulting company.

Maybe it's too soon for that.

He could see, hey, can I get some clients outside of this one?

Sure.

First, and then you can jump ship.

I agree.

I got three clients. I'm going to leave and do this full time. But, hey, I'd love to keep you guys on as a client, because if he does this now and they say no and he gets fired, that leaves him in a real lurch.

Really good insight there. Good stuff. Thank you for the question, Matt. All right, let's go to Michael in Toledo, Ohio. Michael, how can we help?

Hello, sir. How are you?

Good. What are you doing currently?

I am drinking a cup of coffee right now, and I just got off of work.

Oh, it's exciting. I thought I'd mix it up every once in a while.

I like that. Like, what are you doing?

I like he had a good answer.

He really painted the picture for guys.

Enjoying a post work cup of.

Oh, always.

Now, I gotta ask for George really quick. Is it, you got any cream and sugar in it, like Ken would drink it, or are you a little snooty like George and it's just all black?

How is that snooty?

You're snooty about it somehow, mediva.

Because I put nothing in my coffee.

He's not snooty. But people that tend to drink their coffee black, they kind of judge the rest of us that like to doctor it up 100%. See, there's a guy in the lobby shaking his hand, shaking his head. He agrees.

That's fine.

What say you, Michael?

So, today, usually I just do straight black coffee. However, if I'm feeling a little frisky, I'll throw some cream and sugar in there.

Welcome to the frisky club. All right. Very good. All right, now we got that out of the way. Michael, how can we help?

I just want to say thank you for taking my phone call in the first place.

Sure.

So it involves around my home. So, currently, my wife and I. I'm 29 years old, been married for five. We completed the baby steps, one, two, and three. And we're on to the fourth. So my general question is, I have 110,000 investment accounts. Non Roth, non IRA, just straight individual tax.

Just a taxable brokerage account?

Yeah. Okay. And then our mortgage is only 110. So should I drain my investment and pay off my mortgage completely and be completely debt free or just continue investing 15% of the income? And his dad let the mortgage every month to pay it off.

What was the purpose of this taxable brokerage account?

So, my taxable brokerage account, my aim was for a dividend growth. So, like, right now, per year, it's about a 10% dividend growth rate with our capital gains.

Okay, so what will the tax burden be if you liquidate this entire account?

Tax burden will be.

Is it long term capital gain income?

Yeah.

Yes, sir.

Okay, so I would factor that into the equation.

So, what will it be, do we know?

Around 20%.

Okay. 20% of the 110 is what you'd end up paying in taxes. And how much do you guys have in savings?

We have a six month emergency fund totaling about 20 grand.

Wow. It's fantastic. Well, you know what? The emergency fund, if you needed to, it can now get a little lower once you don't have a mortgage payment to cover.

True.

What's your mortgage?

Mortgage is about 777 with a 2.2 interest rate.

Okay. And that includes property taxes, homeowners insurance, all that?

Yes. That's everything I lumped in.

Wow.

I got to ask another question. George, for you. I need to get you the judge gavel and robe, because I'm actually tiny gavel. You need a tiny gavel? I'm interested to see what you're going to say on this one, because I don't think this one is as clear cut as maybe some people think it is. That's all I'm going to say, but I am curious. When would you pay off the house?

I'm doing it today.

I know that. I'm saying it too excited about it. Do that.

Okay.

When would you pay off the house, Michael? If you didn't liquidate the joint brokerage.

If you just did 15% investing into retirement and anything extra you threw at the principal, when would you pay it off?

Actually, I did the math on that. Figured.

He did. He's a smart man.

We made the mistake, though, of doing a 30 year. This is before I took the baby steps.

Sure.

So we're doing about an extra $500 a month towards the payment, and then our payoff date would be 2041.

Okay.

So we're talking a good 17 years from now.

I didn't realize.

Yes, sir.

That's a long time to hang on to a it when you could be done with it today.

All right, I'm with you, George. I was just trying to play it a little bit.

I appreciate that, but it's too long.

I didn't realize it was going to take that long to pay it off. It's a really small amount.

I would liquidate it. I'd pay off the mortgage, and then I'd be ready come tax time and put that money aside in a separate account.

Gosh.

How much? What's your household income?

So currently, I make about 75 after tax. My wife take home after tax is about 44.

Amazing.

Wow.

So you guys are making close to 200 gross.

Oh, I'm sorry. I make 77. She makes 44,000.

You're saying after tax?

Yes.

Okay. That's a high. Yeah. 100 and 7180 gross around there.

Yeah.

That's awesome.

Well, here's the deal, George.

Even if you still had $250 in insurance and property taxes, $500 freed up from 29 to 67 invested is $2.5 million that you would create just by freeing up that mortgage payment and investing it. So just think about it that way. You're not really losing.

No.

It just hurts because you've worked hard to build this investment portfolio, and you're taking a temporary cut for long term gain, my friend.

Pay it off today.

If you regret it, you can always go get another mortgage. The banks are happy to give you that money.

It's a very good point, George. Although we would really recommend you.

Don't do it.

Please don't. All right, George. You're right. Yes. Good job.

Not every day you get to say that.

This is the Ramsey show. This is the Ramsey show. We're excited that you are with us. We're here to help you win in your money and win in your work, win in your relationships. All three of those areas are absolutely connected. To have a wholesome and healthy life. If you're failing or suffering, losing in any of those areas, I promise you it affects the others. And so we want to help you, and that's what we do here on the Ramsay show. I'm Ken Coleman. George Camel joins me. The phone number to jump in is triple 8825-5225 let's go to Las Vegas. And James is there. James, how can we help?

Hi there. Thanks for taking the call. Sure. We are on step four. We were marching towards step six when I was recently diagnosed with leukemia. Hey. We're blessed in so many ways, and it's the slow kind. So I'm going to be here for a while. But taking a shorter term view on our investment horizon or strategy, we have about $100,000 where we'd like to set up so my wife can support herself when my income goes away, I'm the primary on this. And so with that $100,000, our choices, the way we see it, is I could recast our current to try to drive that payment down or punch out, buy a cheaper house or something like that. And just love your take on the strategies for moving about 100 grand out, putting it to work for us on a shortened time frame.

All right, let's gather some facts here. So how much do you owe on your current home, and what is it worth?

It's worth about 470, and we owe just over four on it.

Okay, and what other investments do you have, or what kind of insurance? Give us a whole picture here of what we're dealing with.

So I have a term life insurance that, unfortunately, I responsibly bought it about 18 years ago. I got about two years left before it goes away, and so I'll probably be here for that to expire, thankfully. But then, obviously, challenge on getting another term. Okay. Have some investment accounts, but we're convinced we should probably let them sit tight for right now. And there's not very much in there, probably less.

And so the $100,000 is above and beyond your emergency fund.

It's commingled with that. Our emergency fund would be probably 40 of that.

Okay, so you got 60,000 to play with here.

Yeah.

And what would be the goal of this 60, if you could snap your fingers, boy.

Well, to invest it in such a way that when my income goes away, that my wife would be able to either have the most flexibility, I guess, either to stay in the current house, but not need where we're at right now. Her income would not. She'd have to move. She'd have to punch out, what is.

She making right now?

About 40.

And what are you making?

About 150.

Wow. Sizable difference there. So part of it is I would begin to make a budget just based off of her income and see what would be a sustainable life without your income being in the picture that she could afford. And that might mean we downgrade severely in house. Do you guys need to have this house right now, or could you downgrade to an apartment? Could you rent?

Yes, we could do all that.

Okay.

We don't need it.

I would be leaning that direction myself.

I don't know that a recast is going to change much. You could do it later on, but with not having much equity, it's not going to change the game. And you still would need to make a lump sum payment. So you might need to take that 60 lump sum.

It.

It'll still cost you a few hundred dollars to do a recast, and then it would bring your payment down. So it's something to consider. The other thing to consider is a guaranteed issue policy. Have you heard about these?

I have not.

Okay. This is something that won't give you a ton of coverage. It is expensive, but it is an option for folks that are in your shoes that can't get traditional life insurance. And so it has a maximum. You might get 25 grand of coverage and it might cost you $1,400 a year. But that's something you can do to at least cover final expenses and help cover a few other things while kind of adding one layer of protection. But the best thing you guys can do is take the majority of your income and throw it into savings and investments right now while you're still with us. And I hope you're with us for, goodness, a long, long time. And I hope you beat this thing.

Me too. And I should be for a while.

Good.

For sure. Good.

So if you continue making this money. Yeah. What's the mortgage payment right now?

$2,500.

I'm going to tell you right now, I would sell this house. You just don't have a ton of equity in it. And it's just something. Let me just say it this way. If I was in your shoes, I would be doing that because I would not want Stacy to have to deal with selling the house. I wouldn't want her to deal for 1 second with, how am I going to live on 40? I'm going to have to do this I'd want to take all of the decisions away from her and just allow her to grieve and move on with her life. And so I would sell the house. You guys downsize. You just got a $30,000 raise the minute you guys, and I understand. And if you can pay for something cash, that's where I'm assuming this is, that we get something smaller in cash and that just is no longer an issue. Your quality of life as a result of this decision, I would just have to believe is really good. How does that feel when you run that through your head?

It feels good to me.

All right.

Feels great.

And here's the other thing you could do. If you sell this place and you rent, maybe you sock enough money away that in five years you guys go buy a condo. That becomes the thing she's going to live in completely debt free.

That's a good idea too.

So I like the plan of going, hey, how can we limit her expenses long term to where she has a paid for condo? Very little. She'll pay an HOA fee, but she won't have to mess with things. Things will be covered. It's an easier life. And I think that's the thing you start aiming for is what does that next chapter for her look like, whether it's five years from now or 20 years from now?

Agree.

And maxing out your retirement plans is going to be a great thing for you guys to do. How old are you, James? 60. Okay. So you have the opportunity to do catch up contributions with retirement plans and making 190. You guys can put a whole lot of money away, especially if you got rid of the mortgage by renting for a season.

Yeah, if we meant that for sure.

I can't imagine being in your shoes, James. So we're, we're thinking of you and pulling for you and hope things go way better than even you plan.

Yeah. Thank you James for the call. Let's go to Cameron now in Tampa, Florida. Cameron, how can we help?

Hi. So I'm just wondering if I should be looking to buy a house soon. I'm pretty young, I got a pretty good job after graduating college here. I have a decent amount of money saved up. I do have some debt, but I'm just wondering if I should be looking to buy a house soon or if I should just keep renting and waiting.

What makes you think, hey, this is the time to buy a house?

Mostly because I feel like I'm throwing my money away and renting when I could be putting it towards a house.

Instead and who threw that myth at you?

Maybe just some friends, some family members, I guess. Mainly I'm just kind of tired of seeing my money go into the trash can when I'm paying rent. But I feel like it could be going towards.

I have a different viewpoint. I don't see renting as throwing away money because I know I've been a homeowner a long time, and I rented a long time. And renting buys you patience. There's so many benefits of renting options, flexibility, freedom, no maintenance and repairs to deal with. It's someone else's problem. And that's what you're paying for with rent.

That's right.

You're transferring the risk to someone else while you buy yourself patience and build a financial foundation. So how much debt do you have?

I have $31,000 in debt, and it's a car loan.

What's your income?

I make 115 base, but I get about 20 to 30 grand in bonuses, so about 140.

Amazing.

You went and got yourself a matchbox car. Nice car. What are you driving?

It's an Audi s five.

There it is.

I knew it.

How much do you have in savings?

So I have 60 grand in a high yield savings account that gets about 5% annual interest. And I have ten grand in my checking, and I have about 17 grand in my 401.

Bro, you got money? Why are you carrying a car payment?

Yeah.

Here's what I would do, Cameron.

Speaking of money and throwing money in the trash, that's what you're doing with the Audi?

Yeah. You're probably close to underwater on this thing. So here's what I would do. If you want to keep the car, pay it off today and use the other 29,000 remaining, that becomes your fully funded emergency fund. Then, and only then, do you begin saving up a down payment from scratch. And you'll be able to do that fast with no car payment making 140. And once you have a good down payment, five to 20%, 25%, your take home pay, a 15 year fixed. That's when you know you're ready, not when people tell you that it's time because you're throwing away money on rent. I rebuke that.

The Reverend George Camel has spoken. It's time to take an offering. We call it a commercial break. We'll be right back. This is the Ramsey show. Hey, guys.

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Welcome back to the Ramsay show. I'm Ken Coleman. George Campbell joins me, and we are so excited that you are with us. Triple 8825-5225 Triple 8825-5225 so from George next to me to George in Phoenix, Arizona, George, how can George and I help?

Thanks for taking my call. My call is regarding credit cards. I have just recently deleted all my credit cards from my life.

Are you saying you cut them up or did you close the accounts, closed them out?

Deleted them. Deleted them.

That's strong. I love it. George.

I called a while back, and George and Rachel was on with you that day, and you're both very helpful to me.

Good.

My question is, what do you do to pay for, for example, a plane reservation or a car rental or to buy something on Amazon? I've used my debit card a time or two, but it scares me to use a debit card because they have unlimited access to your account where the credit card, you can call and dispute it. And I'm real concerned about ID theft.

Absolutely. There's a bunch of things you can do, George, that'll help you sleep better at night. One, you can get in touch with our friends at Xander. They have a great ID theft protection program. Every single team member at Ramsey has it, and that really helps you stay protected. Number two, I want to encourage you that debit cards, does your card have a Visa or Mastercard logo on it, that debit card?

Yes.

They have a zero liability policy. You can look it up. That covers you as well. On top of that, there's something called the electronic fund Transfer act that covers debit cards from fraud as well. And so just that on the legal side, there's a lot of peace about that. Now I get it. It's your money on the hook versus the credit card companies. The bank commonly will issue a provisional credit while they investigate. So they'll put money back into your account. They'll look into it. A week or two later, the money's back, and all is well. And it's more rare than everyone has a fear that it's going to constantly happen to them. I can count on one hand with one finger how many times it's happened in my eleven years of just using debit cards. And I'll even give you an extra tool, George, that's so helpful. And this is not a company that we have a partnership with, but it's a great tool called privacy.com. And what it does, it creates virtual debit card numbers that's tied to your bank account. But if someone steals that number, it doesn't matter. It's a virtual card that you can just go delete on the website.

How is it that I know about this?

We don't hang out. So, George, when I'm booking a plane reservation or I'm using Amazon, number one, I don't tie my debit card to it. You know where it says save my card info for later? Don't do that. That's one way to avoid it. And number two, use a program like privacy.com to create a virtual debit card. Amazon, you can create another one for Southwest, create another one for this or that, and you can set spending limits, time limits. You can make it a one time use card so that once you make that transaction, it disappears forever. No one will ever have access.

Great. For teenagers.

It's fantastic.

What is your thought on a secured credit card? My credit union has offered that. And they've also offered, I think they called it a prepaid credit card.

I don't see the benefit of that. If you're going to use your own money anyways, other than the bank trying to get more data from you and selling you on more debt products and telling you, well, you might as well get this card with the rewards. George, you're doing such a great job. Might as well. And I find that it's a very trap, sneaky trap. And using a debit card has just changed the way I see money. I handle money. And I think if you use those steps I laid out for you, you're going to make purchases with a lot of confidence.

Well, that puts my mind much more to using my debit card. I appreciate your help today, guys.

If I can help one George out there, I've done the Lord's work, Ken.

I love a know who doesn't love a George. It started for me with the little curious George, the monkey.

That's the one you thought of?

It was the very first George in my life, is what I'm saying. Oh, okay.

I thought Washington.

You know, you don't learn about George Washington till, like, first grade.

Yeah, I thought you'd go foreman, Costanza, Lopez. I mean, there's a lot of good Georges out.

These guys are all Georges that hit me later in life. You're not listening to me. I feel like we don't talk anymore. I said the first, George, do you not listen to me? I apologize, all right? I don't feel. Don't. Thank you. Mr. The audience is totally trash about George.

And his credit card issues. Don't make this about.

Somehow I've made it about me. I don't know how the audience is.

Not surprised tell you that much.

But they're laughing.

It's an average Friday they're having.

Let's go to Lauren. Nicely done. You turned that completely on me.

That was what I do.

Beautiful Lauren is joining us in St. Louis. Lauren, how can we help?

Hi, Ken. Hi, George. First of all, I think I'm on team curious George. As my first George.

Hey. As are millions and millions of other people. Thank you, Lauren, for listening to me. Now we're listening to you, George. Are you listening to Lauren?

Yes.

Ken is the man in the yellow hat.

Sure.

Thank you.

Yeah.

Well, here's my situation. So I'm 23 years old. I have zero debt, zero student loans. I have $40,000 saved between cold hard cash and stocks, and $47,000 saved between my Roth Ira and my 401.

Wow. Way to go, Lauren.

Amazing.

Thank you. So my salary is base plus commission. I hit about 62,023. I'm expected to be around 70 to 70. 25. 70 to 75K. Just wonderful.

Wow.

This year.

Good for you.

And my question is, I'm expecting to be engaged at the end of this year. So little birdie, put that in my ear.

Okay.

Is this birdie credible?

This birdie is very credible, by the way.

Surprised.

I hope he's not listening right now.

So my question is, do I stay at home for another year, keep saving, or do I go ahead and purchase a home by myself now, because I don't want to move in with my boyfriend until we're engaged? I'm a little old fashioned, so I want to know if I should spend another year saving at home or if I can go ahead and purchase that home by myself.

I got feelings.

Ken has many. You want to be dad, Ken? For a moment?

Yeah. I'm old enough to be your dad. Unfortunately, I would tell you that you're not as old fashioned as you think you are, and I would not move in with him when you're engaged. I just am not a fan of that. There's so much that could go wrong. It's an unnecessary move. That's my little two cent on that, George.

Yes. I would move in once you guys are married, and then you combine finances, and it makes this whole process way smoother, relationally, emotionally, and financially.

And, oh, don't buy a house yet.

Yes.

You all buy the house together.

I think it's a special thing. And do that together. And even then, you may want to rent for a year.

I like that.

You got to figure out what it's like to live with someone.

Good heavens. The first year of marriage is dreadfully hard. I'm just going to tell you while I'm giving life advice. The lobby's loving.

This homeownership adds a level of stress to newlyweds. Unnecessary.

So you got two people, Lauren, that have grown up in two different ways, and you're trying to figure out how to mend that together and buying a house and all that. Just rent for a year, maybe two, figure out where we want to live, where we want to do life. Yeah.

And the more money you have saved up, the better position you'll be in when you do purchase a house. Now, is he as financially astute as you?

I hope?

Yes, very much so.

He has no debt. Money in the bank.

Yeah, he's doing very well, too. He has no debt. Student athlete, zero debt. He's got maybe 15 grand socked away right now.

Wonderful.

Yeah.

Well, if, you know, this engagement is on the horizon, followed by the wedding, I would just stay home. If you got a great situation, just stay home until you move into an apartment together that you guys rent. Once you're married, give that a six month lease to a year lease as you do the home shopping, and by then, you guys might have $200,000.

I see that.

And what if you could put 50% down or 70% down and pay off a mortgage early? Now, you guys are newlyweds with a six figure income with no payments in the world.

Double income, no kids.

Think about that.

I like that. We're talking about wealth building, George and Lauren.

That's something me and my wife did. We lived out exactly what I just told you. And it's one of the main factors that caused us to become net worth millionaires in our early 30s.

Stacy and I did the exact same thing. We were married three years before we bought a home.

And even then, buy a reasonable, modest home.

Yeah. Oh, it was modest. Of course. I thought we were going to die.

Really?

Oh, yeah. It was $195,000 house that I thought I had just. Of course, we were following Dave stuff, but I just remember going, people have.

That in student loan debt now, as they call the show.

That's normal, people. You look at me, I'm abnormal. I mean, we know this, but it was worth the wait. It really was. So thanks for that. Helps Lauren.

Appreciate it.

Absolutely. All right, George. Unbelievably, it feels another hour has passed.

Time flies by when you're having fun with Ken Coleman.

And it's the truth. He is George Campbell. I'm Ken Coleman. You're listening to the Ramsey show

live from the headquarters of Ramsay Solutions. This is the Ramsay show. It's where we help you win in your life with your money, with your work, and with your relationships. The phone number to jump in, because it is your show. Triple 8825-5225 Triple 825-5225 I'm Ken Coleman. George Camel joins me, and we are going to be here together with you this hour. Let's go to Boston, Massachusetts, George's old stomping ground. Let's see if a little bostonian accent makes its way to the advice. Chris, how can we help?

Great. How are you, Ken and George?

We're having a blast. I just heard it. I heard it in the way you said, george, that's beautiful. I love the Boston accent.

Maybe a little bit, I think.

So what's going on?

So I have a question. My wife and I are net worth millionaires. I'm 45. She is 32. I'm struggling a little bit on kind of what's underneath that and the approach that I should take. So we have a house, and we also have a second investment property. On top of that, some student loans and a car loan. Just kind of curious. Essentially, we're in baby step two, and we do have an emergency fund of a little bit more than $1,000. Struggling with the emergency fund of $1,000. If something major goes wrong and we need to repair the house, a furnace goes, or a roof needs to be replaced or something like that. Where we are network millionaires. I'm just kind of looking for advice on the next step to take and whether or not I should sell my investment property potentially and get rid of all of the other debt underneath and just have my mortgage left. So I'm just kind of looking for some advice.

Yeah. Well, I'm glad you're on the plan. And congratulations on being net worth millionaires at such a young age. That's an accomplishment. So tell me about these debts. How much do you have in student loans?

So, student loans. Between the two of us, we have about 37,000.

And the car loans, 35,000.

Just one car loan? My wife has a car but it's paid off.

Okay. And your primary mortgage?

Primary mortgage is 214,000. We do have a secondary of about 42,000 on the mortgage. The property is worth about 550 currently.

Okay. The secondary, is that like a HeLOC or a home equity loan?

It is, actually. That's one of the main reasons why I'm looking to sell the investment property, because the HeLOC rates are just not favorable at all right now.

And I'm guessing you're. And then your rental mortgage, what's left on that?

40,000. And that's worth about 230.

Okay, so let's play this out. You sell the rental, you would net how much? Like 160 or something.

After taxes? I would net approximately like 160 to 170 after I pay taxes and the realtor fees.

Okay. And then from smallest to largest debt, we would pay off the car loan and the student loans. Right.

I could pay off the car loan, student loans, the condo and the second mortgage. And have everything gone?

Yes. So that would leave you with, let's say 46 grand in savings and let's call that near emergency fund. And I would add up what all those payments add up to between the student loans, the car loans, the rental, the second mortgage, are we talking two grand, three grand a month that you'd have back in your life?

No, not quite. So between what I pay for payments now and what I would save, I'm looking at an extra like 500, $600 a month in payments.

What's your rental mortgage every year?

Yeah, I'm looking at it differently. So I'm looking at about two grand in payments. The difference between the two, it's about two grand in payments.

Okay. So you just got a sizable raise with 2000 extra dollars a month back in your life. And for that reason I'm doing this. And if you want to get back into real estate investing later on in life, it's totally fine. We love real estate, but I would do it with cash. And that's going to be a slower process, but it's also going to be a more peaceful process.

Yeah, I think I'm done with the real estate world. I think at my age I went through some health issues, was out of work for about four and a half years, and I'm back to work now. But I'm looking to eventually get into something that I love. I've actually been contemplating financial planning and being a financial coach. I've actually talked to Brad a few different times. And so I'm looking to even potentially downsize my job, so to speak. Do what you want. I love.

I'd love to help.

As opposed to.

Yeah, that's awesome. What's your current household income? I'm curious.

It's about two and a quarter.

Wow.

What do you make of that?

About 140.

Okay, so what do you think the options are beyond financial coaching? Because that's a start from scratch. That's a hang of shingle. That's like really gutting it out. That takes time to build. Are there other things in the finance world that you're intrigued by?

Yeah, there are a lot of companies that look for maybe like part time controller or even bookkeeping, something a little bit more simple.

Good.

If we downsize and all we have is this one mortgage left.

Love that.

The funds don't need to be as great. And we have about 650,000 in retirement savings as well.

Good.

Wonderful.

Well, I would look at.

We're on track there.

I'm going to give you a couple of things. I'm going to give you my get clear career assessment. It's a wonderful little tool. It's not a personality assessment. It's not at all. It has nothing to do with personality. It's really about how you're wired and want you to take that. It's my gift to you. And I think it's going to really help you with some more clarity and maybe just a whole lot of confirmation and confidence. So I'm going to give you that. And then I want to give you the book. The proximity principle. It's the number one bestseller, and it's all about the right people in the right places to help you make that transition when you're ready to make it. The proximity principle works on the front end in that before I confirm that, I want to pivot to something different. I want to hang out with people that are in that world. So maybe an accountant, maybe a CPA, maybe a bookkeeper, maybe a financial coach. Spending time over coffee or a meal with all those people allows you to kind of do a high school level term paper on the good, the bad and the ugly about these things.

And it allows your heart to go ding, ding, ding. Or the. And I want you to have those two gifts because I want you to have a smooth transition because financially, with George's advice, you guys are, boy, you're just going to have a lot of peace and a whole lot of opportunity to build.

I agree. I agree.

Awesome. Love it. Well, hang on the line.

Exciting.

And we'll get you both of those to get clear assessment. And the proximity principle.

I love the heart of this because we're now going, we're getting out of debt so that we have career options. We can do the thing we've always.

Dreamed, do the thing he wants to do.

And most people, they don't have the.

Margin to do that and point something else out. He has this insight because of a health issue that thankfully, he got through and four years of not working because of health. George, I just want to point out to our audience when you hear me talk, because I'm not the money personality. You're like, oh, why is that guy on the show?

Whatever.

Maybe you say that no one thinks that. Here's what I'm saying. Four years without doing work will get a person to a place of tremendous clarity on doing something that matters. You ever talked to somebody who hasn't worked? And I'm not talking in retirement. I'm saying there was a stoppage of work. There's something about the soul, George, that craves to make a contribution. And I love how it led him to this point. And because of this financial opportunity and financial peace and the baby steps, he's going to be able to pursue it. That's how it all ties together.

Full circle.

Yeah, really good stuff. Thank you for the call, Chris. All right, George, take us out in the bostonian accent, please.

Wicked. Sick show, dude. We'll be right back.

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Welcome back to the Ramsay show. I'm Ken Coleman. George Campbell joins me. The phone number for you to jump in is triple 825-5225 so George and I always enjoy being together. Love being together on the show. We really do. We have a lot of fun. Hope you can tell.

We call it camaraderie.

Is that what we call it?

You know how to spell camaraderie?

The question I've got is after the comra. Oh, you already lost me, Ken. C a m a. Camaraderie is with a c A, not a c o.

M a r a. Wow.

I got to tell you, it gets wild. I'm dealing with the reality that I'm not hooked on phonics. I thought I was. And this moment has revealed that I'm not. But anyway, one of the things we were talking about during the commercial break is how much we enjoy when we have the live studio audience. Great crowd today. They've been so great. And we love live events.

We were just talking about how we miss doing.

We miss all the doing, all the live events. And so we've got a big one coming. In fact, it's a brand new one. And you may have heard us talk about it. If you haven't, George, what are we calling it? Total money makeover weekend, May 10 and eleven. Right here on the Ramsay campus in our sparkling, spanking, brand new. What do we call it? The Ramsay Event center. Yeah.

And state of the art.

State of the art. And this is a one weekend crash course on everything we teach about money. Now, listen, we're all talking money. So if you come and go. All right. I'm waiting for Ken to give me a little career direction. Well, we're going to sort of. But it's money.

Money in a roundabout way.

I'm going to be talking about how to become rich.

Wow.

Yeah.

I might be in attendance.

Some of you are going, yeah, we know, Ken. It's the baby.

Not so fast, Padawan.

That's right. So that's all I'm going to reveal. It's actually a little bit more than that. And we're also going to be doing a live taping of your wildly successful runaway podcast with Rachel Cruz called Smart Money Happy Hour. And I'm going to see if my busy schedule will allow me to show up and sit in the crowd and have a sip.

To be fair, we can't.

I have a cocktail as well.

We can't stop you from storming the stage.

I'm not going to do that. It's not that.

If you rush the stage, you're on stage with us.

So anyway, it's going to be great. Lot of fun. All the Ramsey personalities, including Dave as well, don't wait to get your tickets. Our platinum plus tickets have already sold. Uh oh. Some of you waited too long for all that platinum plus.

There's a lot going on there.

I don't even know what that means. It's the whole Kate and caboodle.

They're going to be having a time at Dave's barn. There's a special private event there.

Oh. But here's some good news. You can still get. According to this lovely piece of paper in front of me, you can still get platinum or VIP tickets.

Yes.

So go to ramsaysolutions.com slash events. What are you doing? Can you tease your talk at all?

I can. It involves multiple microphones. That's about all I can tease legally right now.

So during your talk, that's all you'll tell me is that there's going to be multiple micro. I'm very excited.

It's a different.

Any chance you'll juggle those?

No, not physically.

Okay.

But mentally? Yes.

Did you just give us a clue? Unintentionally.

I won't be physically juggling if that's a clue.

I hope that not. I said, will you be juggling then? You said, not physically. So now you see what's happening at home, folks.

Ken's doing some mental juggling right now.

Boy, I tell you what, let's go to Vicki so that we're not juggling, we're helping. Vicki's joining us in Salt Lake city. Vicki, how can we help?

Hey, I just was wondering if you guys might have some ideas or solutions as to how we can get out of our debt pothole that we've got into.

I think we have a few.

How big of a pothole is this?

Well, from what I'm seeing with our credit cards and our Heloc loan is about now it's about 109,000.

What's on the credit cards? What's the balances total?

30,000.

And the Heloc is another 80.

Yeah, pretty close.

Wow. And that's all of the debt outside of your mortgage?

Yes. I think we owe like $340 on the house.

What's your household income?

I think it's $130.

Okay, so what caused you guys to go $110,000 into debt between the credit cards and HelOC?

Well, my husband bought the house before we were married and decided he was going to try to flip it.

I don't like the word try to flip it in there. That scares me.

Well, it's been two years now, and we're still living in an unfinished house.

It's like a TV show on one of those channels about fix my flip or something.

Flip or flop? One of those.

No, it's like, fix my flip.

Yeah, I think it's a flop right now.

Yeah.

All right, so what was the 110 spent on?

So obviously we both have kind of like a spending problem as well, aside from deciding to flip the house.

So tell me, what kind of things are out of control on the spending side?

Well.

I don't know where I would even begin to spend $100,000 on just stuff. Was it just stuff accumulated over furniture a couple of years, lifestyle, going out, massages? What was it? Because I want to get to the root of the spending addiction beneath it.

All, it's kind of a lifestyle thing. He's into hunting and all that kind of stuff. We all know that stuff isn't cheap. And I like the girly girl things. And I did figure out a way that I can still get my nails done and not have to actually pay cash for it.

How's that one?

I got to know more on that one because I'd like to tell my.

Wife trade work I do sewing off to the side, and so I make clothes and stuff like that for my nail artist and she does my nails.

In return to barter situation.

It's a haggle.

Yeah.

Okay, well, we're not going to be able to haggle our way out of $110,000 in debt. So here's the deal. Your lifestyle is about to be cut down to nothing.

Yeah, I see it going that way.

So no more gear. In fact, we're going to be selling everything in sight that's not tied down on Facebook marketplace. We're going to be doing our own Facebook marketplace.

I was going to say that she's got to paint her own nails now. All this knitting has got to go to selling stuff.

So making 130. How much margin do you guys have outside of all these payments? The minimum payments on your mortgage, the HeLOC, the credit cards. How much extra could you throw at these debts every month?

Well, some good things happened in the last week. We did get our tax return, which was 5000, and we put all of that into the credit cards and we did actually pay off, I think, two credit cards.

Good. Are you cutting them up, closing the accounts?

Yeah. Neither of us even carry the cards on us at all. We don't have access to them.

So here's the key. You're going to make a budget every month. You guys are going to sit down, you're going to agree to it, you're going to stick to it. You're going to track all the transactions and both of your goals to go. How much margin do we have at the end of each month to throw at the debt? And your goal is to increase that amount every single month. Make it a game and go. All right, we were able to throw 2000 extra on the credit cards this month. Let's try to aim for 2100 next month, and let's see what we need to move around in the budget to get there.

Okay?

And that means meal planning, hanging at home. We're not going to hunt. We're going to use anything we have at the house. We're not spending any extra money beyond food, utility, shelter, transportation, insurance bills. That's it. Basics.

Okay.

And making 130, you guys can get out of this in a few years. Think about it. If you're able to put, let's say, 35 grand a year at the debt, well, guess what? It's gone in about three years. So now you do the math on that and you go, all right, that's $2,900 a month. We got to throw at this debt. You guys get that amount in your paychecks every month, right?

Yeah, that sounds doable for sure.

And so I want you to set the goal that scares you just a little bit. If it feels like you're going to be able to hit it easily, you haven't set a big enough goal. You have to feel the sacrifice where.

You go, oh, we're really going to.

Have to cut back to get three grand to throw at the debt this month. But we're going to do it, and I promise you, it will actually create a better marriage. You guys are going to communicate like you never have before.

Yeah, I hope so.

So hang on the line. I'm going to gift you guys financial peace, university, watch all nine lessons together, and I'm going to gift you the every dollar premium budget. It'll connect to your bank account. You can track the transactions. You're about to experience some serious life change. And I can't wait for you to call back and let us know how it's. Yeah, especially this do it yourself nails.

Now, you did say no more hunting, but now that he's bought this stuff, he needs to bring home some meat.

Ammo is not cheap, but the savings.

On the venison and all those things, I mean, you fill up a freezer full of all that good.

Send Ken some deer jerky.

How is it that you aren't hunting now that you're debt free? This is you love to save money.

No desire. I'm an indoor cat, Ken. I'm all good.

We'll settle it on the break.

All right, let's cut to the chase. It's easy to get discouraged about crazy house prices and interest rates. But when you have the right real estate agent to help you buy and sell the right way, you'll have confidence to make smart decisions. Ramsey trusted agents aren't just experts who guide you through buying or selling. They're someone you can trust to have your back from the first call to closing day. Find a Ramsey trusted agent near you@ramseysolutions.com. Slash agent. Ramsaysolutions.com slash agent.

Welcome back to the Ramsey show. This is where you come for advice on your money, your work and your relationships. And we're so thrilled you're here. I'm Ken Coleman. George Campbell joins me. The phone number is triple 8825-5225 all right, let's go to Christy in Fargo, North Dakota. I don't know why I went Carolina, but it is North Dakota. Christy, how can we help?

Well, I have a question about paying for my son's college. Okay, so here's the. He's. My son is gifted. I never saved for his college because I always knew he'd probably get a full ride somewhere, which he has been offered multiple of those. However, he applied at MIT, where he wants to go for a math degree, and he actually got accepted.

Whoa. Congrats, mom.

It's awesome.

I know. So very proud. His father. Neither one of us are college graduates, so of course we want to give him every opportunity. But MIT, maybe you're aware they don't accept outside scholarships. They basically go by your income, and then they grant you the difference. Okay, so I'm looking at paying about 28,000 a year out of pocket for him to go. I don't want to do loans, like, I realize, but I guess my question is, do you think it's worth it for me to do that? I know Dave always said you don't need a pedigree, you just need a degree. But it's like a once in a lifetime kind of opportunity.

Let's flip the question. Can we flip it?

Yes.

Okay.

So instead of, should I do it? The question is, can you do it?

Well, I think so.

Well, no, not think so. Do we know that you can? So 28,000 a year, right?

Correct.

That's what you would be responsible for. So it's a little bit over two grand a month, right?

Correct.

Can you do that in your existing budget, with your existing income and everything? Else you got to take care of.

With a lot of cutbacks? Yes.

Okay, when we say a lot of cutbacks, are we barely making it by? Is it paycheck to paycheck?

No, we just spend a lot on probably foolish things that we just want and don't need.

How much could he earn during a summer job? Maybe a spring break here and there. So let's just take the number $28,000. How much do you think he could make that could contribute to that?

Well, actually, he's done that the past three years, and he's saved. So he makes about $12,000 a year at his job. Now, when he's in college, he won't be able to work. So he does have some savings. Well, so he would pay. Use that.

So how much? So, let's start playing this out. So, of the 28,000, by the time.

That bill is due, how much do we have?

How much can he contribute each year?

Well, I mean, this year he could cover almost all of it. He has 24,000.

Right.

So first year would be okay, but I'm just worried about the following years because he obviously won't be able to work as much while he's in school again.

I'm going to give it to the budget expert to my right.

So, by year two, when that bill comes due, can you guys cover the 28 grand that year?

I feel like we can, yes.

Okay. And then year three, can you save up another 28 in a year to cover year three?

I think so. Yes.

I know.

So this is where the budget comes into play, because it's very simple math. Christy, you take $28,000. We're going to divide it by twelve. That's 23, 33 every single month. We need to save. Now, with a high yield savings account, it's actually a little bit less. If we're on a short term, you may want to just do it in a high yield savings. And so now it becomes, all right, we got to save $2,300 a month. Can we find that room in the budget? If we cut back on XYZ, maybe he's going to work part time on the weekends. You guys are going to take on a side job for a little while until we know that the rest is covered.

Bingo.

Right? And he does plan to tutor at MIT. That's already been discussed. Great. If he goes, he can do that.

Christy, let me just talk to you parent to parent, because I got an 18 year old going off to school in the fall, and I'm doing the same deal. And let me just tell you this. If I was in your situation and I really wanted to do this, my first thought would be, all right, we need to do a budget and we've determined, you just told me and George that you could cover it. You could cover the 23 33 every month out of your monthly income. You'd have to cut back on some stuff. But you know what I'd do? I'd go, you know what? That's not good enough. I'm going to go make some side money or my husband's going to pick up a couple of jobs and we're going to make it to where we're not cutting back that much and we're able to bless our son. Where there is a will, there is a way. And I'm saying this is close enough to where you guys can go. There's no reason for us to cut back and suffer. Let's go hustle a little bit and let's make junior and you are pay a good chunk of it.

And so we've only got to come up with three years or two years or whatever it is. I think this is extremely doable and I'm going to go ahead and tell you it's doable. You just got to decide how you are going to do it.

We haven't even talked about him still applying for other scholarships and grants and awards.

Right. If he's that sharp.

And MIT only lets you use 5600 of outside scholarships. So he has gotten more than that. But that's all they will apply. That's the student portion.

Does that play into the 28?

No, because they will not apply that to the parent expected contribution.

What if it's an award directly to you rather than the school? Because that doesn't get subtracted from your aid.

I'm sorry, what was the question?

If it's an award that is paid directly to you rather than the school, that won't get.

Most of them are payable to the.

School but there are a lot out there that are just classified as awards that get paid directly to you. And so I would focus his efforts.

On that kid is so smart. So I got a quick question. Where's that 5600 that he's earned? Where's that going?

Well, so he'll pay that portion. The 5600 is what MIT expects the student to pay.

But I'm saying, is that coming off.

Of the 28 that'll come off of. No, it doesn't come off the 28. The 28 is on top of that.

Okay.

Family contribution is like 3300 whatever or 33,000 I got.

That's what I was trying to get at. So, I still hold my position that you guys can do this, but why have to scrimp? Just go make a little extra money. Do whatever it takes. Cut.

Yes.

He needs to.

Our income is a little variable. My husband works for the railroad. So when they call him for a train, then he goes. And when there's no trains, he doesn't go.

Guess what he's doing?

Side gig.

Well, hold on a second. I know what he's doing. When the train hadn't called, he's somewhere else. He needs to find himself some labor work where? When he's not on the train, he's working.

Yeah, but he has to be available on the phone to get on the train within 90 minutes.

So he goes and works for a guy that goes, here's the deal, man. I'm working for you, I'm busting it. If the Chuchu calls, I'm out.

Yeah, the other thing to realize, Christy, is that this is not fatal. If he doesn't go to MIT and he gets a full ride to another great school. The kid's brilliant. He's going to be okay.

He'll do great work.

And by the way, you save $120,000 that he can now use toward buying a house. And so, I don't think the MIT is truly. I'm from Boston. It's one of the greatest institutions out there, and it does hold some weight out there with employers. He might get an amazing job.

Why can't he work in the summer again?

Well, he will work in the summer when he's home, but I'm just saying, currently, when he was making 15,000 a year, he was working year round.

Yeah, but if he's as smart. First of all, I can't even compute what the brain must be like to get an MIT. Like, that whole part of my brain is dark. There's no brainwaves at all.

Yeah, they're going to study me.

When I die, they'll study me and go, this dude literally had no functional ability in science and math at all. It's really extraordinary. But my point is, if he's that smart, he could be tutoring, online tutoring there. He could be making more money. So it's, hey, Junior, you want to go to MIT? Awesome. You're that smart. Math is easy for you. Go make some more money.

Okay.

And you help out some, too. But I would say, yes, I would commit. But the husband. But again, I'm telling you what we always tell you. What we would do. If I were your husband in that train job, I would have something on the side where I could be making money. And if the train calls, fine. But let's take control of this and not feel like we're being controlled. That's what I'm getting.

Sure.

Okay. By the way, congratulations. You birthed an MIT level student. This deserves to be honored, doesn't it?

Very impressive.

Yeah. My husband and I always say, too stupid to make a smart, not true.

Negatives make a positive, not true, not true. Unfortunately, I did not pass along any math skills to my daughter either.

They'll be all right.

All right, George, we did this early in the hour. I feel MIT. Give me a bostonian MIT level out. Take us out to break.

George, bro, you got any algebra? Come on, dude. Give me a freaking equation real quick.

There it is, folks. George Campbell, Boston zone. Welcome back to the Ramsay show. I'm kid COVID. George Campbell joins me. It's time for our scripture of the day from proverbs 1425. A truthful witness saves lives, but one who breathes out lies is deceitful. Our quote of the day from Mark Twain, a lie can travel halfway around the world while the truth is putting on its shoes.

Love that.

Big theme.

And that was before social media.

Big theme on honesty today. I'm not sure what's going on with the team there, but we're driving some honesty.

Is that a dig, guys, what's going on in the booth?

Austin is feeling a little virtuous today.

Okay.

And a great shirt, I might add, by the Sir Hawaiian. Look at that guy's shirt, would you, please? Fantastic.

Don't look at it too closely. It's jarring. It's very bright.

All right. Denise is up in Carson City, Nevada. Denise, how can we?

Hello.

How are you?

Hey.

Good.

How are you guys?

Well, we're having a lot of fun. How can we help?

Well, I recently got married in September, and we've been doing the baby steps since January. And since January, we paid off the Home depot card, which was almost two grand. The tonal, which was $1,000. My car, which was $6,000. And we're almost complete with my credit card, which was $3,000. We owe $700.

Wow.

My question is, now I owe for a peloton rower, which is no interest, for three years, and the balance is 3200. And my house is $53,000. Since there's no interest on the peloton rower, should I just work on the house for the next three years and get that down and not pay the rower.

How long have you had the peloton rower?

I just got it in November.

All right. How often are you using it? I got to ask.

Every day, really?

You like the rowing?

Yeah, that's what I do, is I work out nice, obsessively, probably too much, but I have all the equipment, so my gym is pretty nice. So that's what I like to spend my money.

Right, right. All George, what say you, sir?

Well, Denise, here's the thing. When we look at debt and we look at payments, here at Ramsay, we don't look at interest rate. We look at solving for freedom, and we see payments and debt as a thief, regardless of the interest rate being 0% or 40%. And instead we focus on psychology because we know that personal finance is 80% behavior. It's only 20% head knowledge. And so the debt snowball is when you release the smallest debt. Next smallest debt. Next smallest debt. And that would mean your peloton is up next on the pecking order. And that's because you're going to pay that off pretty quickly. How much do you make?

Well, my husband makes about probably 40,000 tax free. He's a combat veteran, disabled, and I make probably about 70,000 a year.

Okay, so you guys are making six figures and you have no debt except the peloton. As far as consumer debt, well, a.

Credit card, that's $700, which we're going to pay off in probably a couple of days.

Do you have the money in the bank right now?

To pay the roller off?

No, to pay the credit card off.

Oh, yeah.

I'd pay it off today and never look back and just cut it up.

Okay.

Because part of the problem here is you're living a life where you're now okay with payments, whether it's the peloton at 0%, a credit card minimum. And I just want you to be comfortable where you go. We don't need payments. What if we just had our amazing six figure income at our disposal and gave none of it away to lenders, right. Instead built up. You're great at building muscle. Work on building a savings muscle. If we put $300 away for ten months, we could just pay for a peloton with cash.

Right?

Or even better, you go, I'm going to find one on Facebook marketplace that the last person thought they'd use, and I'm going to buy it at a deep discount. And so that mentality helps you make wiser spending decisions and helps you build wealth faster. So if I'm in your shoes. Credit card is gone today. The peloton is next. That gets rid of all of your consumer debt. Correct. And now we have every payment back in our life. What's the payment on the peloton?

$81 a month.

Okay. So that's $81 a month. You have now to throw extra at the mortgage with, which is $1,000 a year.

Right. That's a lot.

That's a lot.

Yeah.

You will row differently when it's debt free. I'm telling you.

You think so?

You will row like no one else.

Yeah. A little faster.

A little faster.

A little more.

Pepper.

Have you seen boys in the boat? Denise, the movie?

I have not.

Read the book, but, yes, you should see the movie, too. I just thought of it because you love rowing. It's fantastic.

And my next question, too, is my deferred comp. I work for the state, so I have a pension, which is 75% of my paycheck after 30 years. But I also have a deferred comp, and there's $74,000 in there right now. And I add $800 per month. Should I up that to more? We could definitely afford it. Just cutting back just a little bit?

Well, I just focus on the percentage. And right now, once you're debt free and you have an emergency fund, then I would begin investing 15% of your income into retirement plans. And do you have a 401K, as well?

Well, no, it's just a deferred comp.

Just deferred comp?

I don't know what the difference.

Well, whatever your employer retirement plan, I would focus on getting 15% in there. Whatever your income is, that's what you should be investing. And so that will help you dictate what your wealth building plan is. And once the house is paid off, you can increase investing even more.

Yeah. There you go.

Thanks for the question.

Yeah. Thank you, Denise. All right, let's go to Brooke in Dallas, Texas. Brooke, how can we help?

Hi. So, I recently got engaged, and I have absolutely no clue how much money I can put towards the wedding comfortably.

Wow. That's exciting.

Congratulations. When's the big day?

Thank you. We're thinking spring of next year, but no official date or venue or clue, really.

And tell George we only got about three minutes. I need to get him. He needs some information. When you say that you don't have any idea how much you can spend on the wedding, what does that mean?

So, I know how much I can contribute, but my fiance, he doesn't quite know with his finances. So I make about seventy k a year and I have about 40 grand to my name that I've saved and that I have from an inherited IrA. And so I know what contribute, but he makes about the same, but he has a lot of debt, whereas I have none. So we don't know what comfortably we can put towards that and then still try and save for a house.

Have you talked to family yet? Both sides of the parents and going, hey, are you guys able and willing and wanting to contribute to this wedding?

So his family, they are covering rehearsal dinner. Okay, but I only have my dad, my mom passed away, but my dad, he said that he could contribute maybe two grand. And so it's mainly funded by me and my fiance.

Okay. So what I would do is take in consideration what all the parents are doing, how much you have and will have, and then how much he's going to be able to do, even if it's not much, then create a budget based on that. So the budget is now based on reality and not aspirations. And instead of going, well, we need $100,000 wedding, we're going to go into debt for the rest. We go, no, we have $35,000 total. And I'm looking at my spreadsheet for my own wedding, and it is nerdy. And I've listed all the expenses, what's estimated, the actual total, who bought it.

Let me see that.

The due date is so nerdy.

How much did you.

And so it involves, hey, my in laws chipped in, my parents chipped in, an aunt chipped in. And so that will help you start to plan this out. And so let's round number. Let's say you have $50,000. Does that sound about right?

About.

I would go spend 50,000 and no more, and take into account taxes, deposits, the miscellaneous stuff that the ankle biters. There's going to be a lot of random stuff.

I don't like how you just threw go spend 50,000. I think that's crazy money, Ken.

You don't know.

You're old. No, you're antiquated. All right, here we go.

A venue alone is 15 grand these days.

Now, listen. No, I get that you set me up.

This is going to be great.

Boy, this is going to get the comments coming.

I'm not saying she has to spend 50.

All right, listen to me.

Do you have a reasonable amount in your mind, Brooke?

I was about ready to go on a rant. Brooke, what's your reasonable amount?

I think 20 grand is more.

Yes, I applaud Brooke. Brooke, can I speak to you? And all the Brooks out there?

I've been married Brooks only.

I've been married almost 26 years. And I will tell you that the only thing I would spend really legit money on is a photographer. And I think if you're creative, you can. Because a photographer is the most important part of the wedding. Because 26 years later, my wife and I will look at the photos and I'm glad for every nickel I spent on the photographer because that's what it's about. The cake. I don't remember the cake. Nobody cares about the freaking cake. You shove it in her face. Anyway, what are we doing here?

Wow, it's all bunch of pony show.

Don't act like you know what I'm talking about when she goes to eat it, you do that. It's all fun. Here's the point. Just make beautiful location. Find a way. Get good pictures of it. Don't feed the party. They can feed themselves.

Wow.

Photographer and a pastor in a good setting. This is the Ramsay show.

Hey, folks.

Dave here.

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