Live from the headquarters of Ramsay Solutions. It's the Ramsey show. Where we help people build wealth, do work that they love, and create amazing relationships. I'm George Camel, Ramsey personality. Joined by best selling author and all around good person, Rachel Cruz. And we are here to take your calls. America at 888-25-5225 and George, I'm going.

To jump in as we start the show because it's a very special day. It is George's birthday. George.

Thank you. The crowd goes wild in the lobby.

Happy birthday, George.

Thank you. And thank you for this gift. Rachel. Just leave dollar 100 bills on the desk. That's so kind of you.

It's all prop money and everyone thinks it's real. It's all for you, George. I got that all for you.

The money may be fake, but the friendship is real. I appreciate that.

But seriously, happy birthday.

Thank you.

And on a Friday, that's a great birthday.

There's nowhere else I'd rather be other than at home on vacation. Okay. There's a lot of places I would rather be, but this is pretty good.

I know. Well, happy birthday.

Thank you. Well, I'm excited to take your calls. Make them good people. Jennifer kicks us off in Washington, DC. How's it going, Jennifer?

Great.

How are you doing?

Thank you so much for taking my call.

Sure. How can we help today?

So I have. I'm a single mom. I just got divorced, and I'm working two jobs. It's okay. It's actually a good thing. I'm working two jobs, trying to get out of debt. This debt was created during the marriage, and it's all credit card debt. And my children are really young, so I'm leaving them a lot, and that's hard. They're very responsible, though. So I'm trying to figure out the best solution. My wheels are constantly turning. I'm just trying to pay off debt as quick as I can. Interest rates are very high. I just feel like I'm making minimal payments. And it's becoming a lot. Like I don't know how else to stretch myself anymore. I'm really at a loss.

Are you able to pay all of your bills, like your four walls, food, shelter, utilities, transportation, cover everything and have some extra to throw at the credit cards?

Not really.

Okay.

I'm barely making it. Like, I juggle, so I juggle one month, I might not be able to pay the electric bill in full. So I take a hit there, and then next month I can.

So what do you do for work, Jennifer?

I'm a department supervisor for Lowe's got my first job after marriage. It was very abusive relationship.

So you're new to the workforce here.

Stepping out.

I'm proud of you. That's great. What are you making?

Thank you. I bring home, I just started bringing home around 3000 a month and then I work a second job as well. I make gelato on the side because it's very close to my home. So I can be quick to church, I can be quick to my children's school, I can be quick to home. So I keep myself like in a. Yeah.

How much more do you make with the side job?

I make between one to $300 a month.

A month? Okay. And how many hours is that?

That one? I work generally eight to eight to, I would say 20 hours a month. It depends on when they need me to come in and make Toronto.

Okay.

Jennifer, when you look at all of your expenses and you're looking at even just housing, are you in the same place you were where you guys were married? I'm just wondering if you're, from a percentage standpoint, if your mortgage or your rent is eating up a lot. I see you're in Washington, DC and I just know that's a very, you know, it's an expensive area. So I'm curious, that part of your budget.

Yes, absolutely. This area is extremely high. I can't move currently right now because that would take a lot of orchestrating on my part to leave. I would also create probably legal bills because my ex just, I've entertained the idea he will not have it no matter what.

You have to stay in the area due to the agreement.

Yes.

So how much is though your, do you own a home or are you renting?

Renting.

Okay, what's your rent every month?

28, 50. He currently pays that.

Okay. He pays, I was going to say, okay. I can see why things are tight here. All right, so he's, how long is he going to pay that rent for? For the foreseeable future.

He has been threatening to not pay it this coming year.

So does he have the legal right to do that?

Yes, because I was kind of afraid, so I didn't find him in court at all. I was moving with even putting chairs up against my doors just, I was really afraid of him.

Are you safe now?

Yeah, yeah. I think it was mental. More than anything I'm feeling now that I'm further away, I'm gaining strength, you know, and I'm not seeing him as such a threat, but we still keep.

Yeah. You know, so Jennifer, it's still them.

Yeah.

I feel what I would tell you after listening to your story and how fresh all this is, I would, yes. We want you to pay it on debt because how much credit card debt is it?

It's 38,000.

Okay.

And I pay it constantly.

Yes. So my, what I want you, I want you to have a level of security in where you're at. And doing that is making sure your four walls are covered. So when you said we don't pay the. I'm not able to pay the electric bill. Some of the months, those months visa doesn't get paid. Like, taking care of your necessities, food, shelter, utilities and transportation is vital, Jennifer, like making sure that those things are covered, that your lights aren't going to be shut off. I mean, these are, these are basic needs. And those things get paid before the credit card. And what I would do is I would call the credit card companies. Is it in one card or multiple?

It's multiple, yeah.

But it's the total of it. I would call each of them and I would just tell them your situation and say, here, here's what's happened in the last six months, three months, a year. I don't, I'm not gonna have the money to pay for this. And so what kind of plan can you put me on? I want to pay you back. That's my goal. But this is not going to get paid right now. And I would do as much communication on the front end because again, making sure that those necessities and are covered, those four walls, I think is crucial to your situation. And then, Jennifer, I do think it's so fresh, all of this. It's going to take you time. This isn't going to be something that's going to be, obviously, you may not.

Be able to be gazelle intense like you want to be.

That's right.

You might just be crawling for now. And that's okay.

And that's okay. And being with your kids, healing like all of that is okay, Jennifer, for a time, like, so give yourself the permission to breathe. Right? I mean, you've gone through a horrific, horrific situation. And so healing from that, don't feel like you have to take on the world and do everything. And so maybe the money plan is on pause, but I don't want you getting behind on your bills and bills, meaning the rents. It's not rent because he's paying for it.

Your actual life expenses.

That's right. That's right. Making sure that those are covered. And then if there is extra, sure, absolutely. We're going to be throwing it at the smallest debt. But I think giving yourself room to breathe and to say this has happened, it's going to take me a minute. Don't feel like you have to be the hero in the situation right now, because it may just be you healing.

Yeah. And you mentioned church. I would make sure that your church community knows what's going on and have them wrap their arms around you, see if family can help out. It's okay. You're strong, but it's okay to ask for help, too. So hang on the line. I'm gonna give to you financial peace, university, and every dollar so we can walk you through this mess.

Guys, it's no secret that the real estate market is weird right now. So go with a mortgage company you can trust to have your back. Churchill mortgage. Churchill is Ramsey trusted because they're stable, reliable, and focused on you. At a time when a lot of companies are being bought out or going out of business, count on Churchill mortgage to stick around. They've been doing things the right way for over 30 years, and they'll keep doing them the right way for 30 more. Get started@churchillmortgage.com.

This is a paid advertisement. NMLs id 1591 nmlsconsumeraccess.org comma equal housing lender 1749 Mallory Lane, suite 100, Brentwood, Tennessee 37027. Welcome back to the Ramsay show. I'm George Camel, joined by Rachel Cruz. Good news for those of you that like to have money. The Ramsey cash giveaway is here, and you could win one of our $500 weekly prizes or the grand prize of $3,000 that I'm holding. You get this exact. No, you actually get real money. This is ProB money.

Real money.

We'll give you real money.

Okay, so, George, question. $3,000.

Okay.

If you had to give a thousand, save a thousand, spend a thousand, where would it all go?

Oh, that's a great question.

There you go.

Okay.

To give a thousand. I think it would. If I really just generosity to, you know, a nonprofit.

A charity. Yeah, yeah.

What would be, you know, I'm a big fan of charity water and the way they do business and their mission. So I'd probably do a one time lump sum to charity water.

Okay. Where would you save it or invest it?

I would invest it into Mia's 529.

Oh, what a dad. Dad of the year.

You know, we got to set her up for success because we're doing fine now, and we want to make sure she's set up. Well, that's great. And then spending $1,000.

Yeah. Where'd you spend a $1,000?

Honestly, my dream would be just like a shopping spree at Costco. I would buy four things and $1,000 would be gone.

It'd be good.

No one can tell me what to buy.

No, that's right. And you get to go do whatever you want.

That's my dream.

Okay.

That's good.

It's a sad dream, but it's mine.

That is a dream.

How about you? Do you have that?

I wish your dreams were greater, George, but we're going to take them. We're going to take them a $1,000.

Not like it's not going to change your life to spend that much money.

Yeah.

You know, fair.

Yeah. I would give to. There's multiple organizations around foster care in Tennessee, so I would be giving to those to be helping families in foster care be able to, like, give, like, diapers, strollers, whatever any families need. Yep. That's where I would give Tennessee kids belong. It's a great organization. I would save it. I'd probably put in the high yield savings account because we're building a pool. I don't know if you heard.

Yes.

So I think that's technically saving.

Yeah.

Because it'll be down the road soon enough, but we're saving.

Still buy some of those, like, in the water chairs. Those are.

I don't know. Yeah, yeah, yeah. But that's. That'll be down the road. So that. And then spending. I would do half clothes, half, like, two great date nights out.

Oh, that's very. I think Winston would appreciate that.

Yeah. I'm so. I'm such a giver.

I should have said a thousand. I would give it all to Whitney to buy, I don't know, a purse or skims or whatever the kids are wearing these days.

$3,000 goes a long way. That goes a long way. So if you want $3,000, how do you get it, George?

Well, all you have to do is go to ramsaysolutions.com giveaway and you can enter every single day to increase your chances of winning. It takes about 15 seconds to do this. So this is a great hourly payout if it works out for you.

That's right.

And for a limited time when you're there, you're going to see a lot of best sellers that are 20% off. Like doctor John Deloney's building an on anxious life, which is on sale for the very first time. His questions for humans, conversations, cards, baby steps, millionaires and more so these make great gifts, especially for a grad in your life. And you can shop that sale@ramsaysolutions.com. Store all right, let's go to the phones. Caleb joins us in Indianapolis. What's going on, Caleb?

Hi, George, Rachel. I'm wondering if you guys think homesteading is at all financially viable, and if that's something my wife and I should.

Pursue, you call just the right people.

We just did an episode on this, Caleb.

I know more about homesteading than I legally should.

Smart money, happy hour, other podcasts we did, a whole topic on homesteading is it's become a thing. And so for those of you that don't know what homesteading is, because there's some people that don't know, it's, it's, I think the fullest degree of the definition is that you self sustain your life on your property.

So living self sufficiently.

Yep. So it's, it's. And then you're able to sell things on your property to others. So whether it's crops, cattle, cattle meats. Yep. All of that milk, it becomes part of the self sustaining model.

Beans, greens, potatoes, tomatoes, you name it.

What we've learned, Caleb, is that obviously it's a, it's a more expensive way at the beginning, right. Getting into it, to be able to get to this point of full homesteading. It, it can be expensive. Do you have the, do we have the numbers on it?

I do have the numbers. I pulled it up from our smart money happy hour outline here. Caleb, what is the nature of your question here? You're saying financially viable is, and can I afford to do this because the startup costs. Yeah.

Well, I would definitely be curious as to what the startup costs are, but even if you guys think it is, actually. Cause sometimes it's hard to cut through the, like, crap on the Internet of.

Like, rose colored glasses for everything.

And I don't know if this is.

One of them totally well.

And depending on what corner of the Internet, they'll either say homesteading is the only way to live or never homestead. And so I think it's a very personal choice. It's definitely a lifestyle that it's a hard one to commit to. I don't know that I've seen a lot of people go like, we've been homesteading for 40 years, but I think as people get tired of the chaos of this world in city limits, they go, what if we could do our own thing and have a more peaceful life? So I think it's beautiful. As I learned about it, I was like, this makes sense. It's a beautiful way of living if you can swing it. And then we found out about the startup costs and we're going, all right, you need to buy land. Do you have land?

We do not know right now. My wife and I are in an apartment, but we've both been saving prior to being married, and so we have money to. A little bit of money for a down payment on land. But I know that homeowners loans don't.

Necessarily apply to land. Right?

Yes. And so you're going to need not only the land, but then somewhere to live. And that might mean you build, you get an rv, a tiny home. For now, you need somewhere to live even after that land down payment. And so that's where it gets expensive. That's the biggest cost of homesteading, is land and somewhere to live. On top of that, you might need a vehicle that, you know, I don't. I don't know if, like, the Kia forte is going to work on the land. I don't know what your needs are if you're actually running this thing as a homestead, possibly a generator. If you're living off the grid, there's land development. If you need septic water, all of those things, and then tools and building materials and so that all can add up. And it's hard to put a number on it because we don't know your area and the timing of it and what the costs are and how big you're trying to go, how lean you're trying to be. So I think if you have a sizable down payment and you kind of count all the costs up and go, yeah, this is reasonable based on our income.

Do you guys have remote work? What would you be doing for work in the meantime?

Well, right now I am a full time student and I'm pursuing my master's in avenidated theology. And then my wife is a full time tattoo artist.

How much? Yeah, how much? How much does she make a year?

This is her first year doing it full time, and right now she's taken home about right around 5000 every month.

Awesome. And then with your divinity degree, are you wanting to be a pastor? Do you want to be a professor? What's the goal with that?

Yeah, either pastor.

My dream job is to be like.

A CS Lewis and be a professor.

That writes, welcome to the club, man.

Yeah, my dream job would be Cs Lewis Lewis.

I don't think being Cs Lewis is a job. But you want to be a theological writer.

The bar is high, Caleb. I think that's great.

You want to be a brilliant theological writer.

George just wants to go to Costco to go shopping. So, like, you're. You're in a better. You're in a better mind space, Caleb.

I didn't know being Cs Lewis was an option, Rachel. Okay. I love this, Caleb.

So what you could spend your thousand on is being Cs Lewis.

If only.

Yeah. So, Caleb, here's the deal. Here's my take. Can I just cut through it all?

Just cut through it, right?

Because I do think I see it on Instagram all the time and. And half the time I'm like, should we just sell everything and move? Like, I mean, right? Like, I think we all get to that place. Yeah, but what you're watching, if they're really doing it, is like really hard work. I mean, you're up at 04:00 a.m. I mean, you're a farmer is basically what it becomes. I mean, like, if you're doing it full time, like, it is. It is difficult. And you're usually, because you have land, you're far away from anything. It's going to be a 30 minutes drive to the closest grocery store. I'm like, you take out convenience of your life for the most part. Again, for this is for the person that can actually, like, do it, right?

Yeah.

The convenience isn't there. The startup costs are high, and it's like physically exhaust. I mean, it's hard work and you.

Got to know what you're doing. You're going to have a steep learning curve.

Oh, my gosh. I'm like, there's just a lot that goes into it. And like, anything on social media, including money stuff, including investing all that, it's just like, oh, yeah, it looks a.

Lot sexier and easier than it is.

Yeah, we just, we just do that. That where I'm like, go get some city chickens and like four box gardens and, like, start there. You know what I mean? And if you're enjoying that, then head.

To the amish part of town. Go on a camping trip, then make another step.

Make another step, but start small. And I think some people are like, we want to just go all in. And from a financial standpoint, it's just expensive to do that. So if you baby step your way in and you still enjoy it, then that could be a lifestyle. But then you could get four years into it and be like, oh, my gosh, we have kids. We have this. They want to do soccer practice. Like, we're not in a place situation.

Especially if your careers are tattoo artist and church pastor. That's a tough one to live out in the middle of nowhere and do so. Lot to think about. Don't want to dissuade you, but I would say it's a. Not now. Right now. Thanks for the call.

Listen, everyone needs id theft protection. It doesn't matter your age, how much money you have, or where you live. We all worked too hard to build our personal and financial reputations to have some thief rip them to shreds. Trust me, it's an absolute nightmare if you become a victim. But wasting money on overhyped, expensive plans doesn't make sense either. That's where Xander's id theft plan comes in. They've bundled together the services you need at pricing that can't be beat. Whether you're looking for monitoring, that includes your home title, VPN encryption, unlimited recovery services, or stolen funds protection, you'll get that and more at great value while dealing with people you can trust. I've seen these guys in action, which is why I have Zander's plan for my family and our entire team. Go to zander.com or call 803 564282 to get protected, save money, and stay ahead of the identity theft nightmare.

Welcome back to the ramsey show. I'm george Campbell, joined by rachel cruz. The number to call is triple 8825-5225 you call up, and we'll help you take the right next step for your life and your money. Clark is up next in salt Lake city. What's happening, clark?

Hey, George. Happy birthday.

Thank you so much, sir. How are you doing?

Doing well. Just figuring out how to get out of this mess that I made.

Tell us about it.

All right, so, in total, I have about 53,000 in debt, and about 38 of that is in a HELOC. I got ten or 9000 on a new roof, $4,000 on a credit card, and about $1,500 in medical debt. I just finished up baby step one, and I'm looking to tackle all of this. I guess my concern is that with my HELOC, it was a 100% loan to value, so the interest rate is a lot higher. It's actually sitting at about 14%. And, yeah, I'm feeling that every month.

Is that variable? Because generally these are variable.

Well, actually, I'm not sure. I actually think it might be a.

Variable because HeLOCs are generally variable. The home equity loan is generally going to have a fixed rate, and so that's something to watch out for as well. With these awful traps. Yeah, it can go up from here is what I'm saying.

Yeah. So I guess, like, does the baby steps still apply with how much I have in the HELOC? Does it make sense for me to attack that one first so that I can get rid of the most amount of interest payment per month? Or I guess, like, what would you do in this situation?

Well, when it comes to the debt snowball, it's never been about interest. It's about knocking out debts fast. Motivation, progress. Momentum, and actually getting to the finish line. So when it comes to helocs, our one parameter when it comes to the debt snowball is if the HeLOC is greater than half of your annual income, we can push it to baby step six when we're paying off the mortgage. And if it's less than half our annual income, it can fall into that debt snowball where. Wherever it would fall. So what is your income?

Um, I think after taxes, it's about 65,000 a year. Um, yeah, I'm an engineer.

Okay. And so before taxes, I assume it's like 80 something.

Um, it's actually about 70. I think it's 73.

Okay. Um, yeah, so you're right on the cusp there. I think this could go either way. Uh, because of its high interest, I think you can just put it in the debt snowball and attack it aggressively. But you're going to need to up the income. Does your, do you have a spouse that's working outside the home?

No, she stays at home with our four kids.

Okay.

Yeah. I mean, you could look Clark into refinancing. I mean, do you have a good rate on your mortgage? I'm assuming interest rate?

Yeah, I have a 3%.

Yeah, I was going to say, looking at that, of possibly refinancing and just rolling this into that. Yeah. Just for the interest.

Even a personal loan would probably have better rates than you've got on this HeLOC, but I don't know if you're going to be able to pull that off.

What about.

So I'm close to the 80% value loan to, sorry, balance to loan ratio. Would it be advisable to go in and say, hey, I want to switch out the type of line of credit to get a lower interest rate?

I'm not sure what they'll be able to do for you. I mean, if they can negotiate and go, hey, I need a lower rate. This thing's killing me. I want to pay it off, but this interest is making it really hard. I don't know what they're going to say. Depending on the company and, you know.

Yeah. Where you got it. Yeah, you could definitely ask Clark. Can't hurt those questions.

They're not going to raise it because you asked.

Right, right.

Okay.

But no, I would still stick though, with the methodology of just paying off. You'd pay off the medical debt, the 1500 first. And I would just, I mean, I would go down the line honestly still with that. Even though this is a huge loan with a really high interest rates, I think getting those other things out of the way is going to help free up some of the income of those minimum payments that you would have been paying once the smaller debts are paid off to keep aggressively tacking it. But, but again, I mean, I would run some numbers and just say, okay, for, you know, again, I don't want you to lose the great interest rate because. How much do you owe on your house?

Just about 300.

You owe 300? Okay. No, I wouldn't do that. Okay. So yeah, it would just be you guys just tackling it. I mean, slowly but surely you're gonna be paying it off. But I think upping your income, Clark, is gonna be really big for this season. And I would map out too, I think what's helpful during this process is to say, okay, what if I. What if I made an extra 1500 a month or 2000 a month or, you know, like some number that would require some sacrifice. You're gonna feel it. But how much faster am I cutting in? Half? Yeah. Would we get out of this? Right? So I think having a plan around some of this that can be so overwhelming when it's all in your head. But start mapping out some plans and with your wife and, you know, if there's anything she could even do, I don't know, to bring in anything extra. I mean, even some, you know, stay at home moms. Even like from the grocery standpoint, I'm like, some of them are like, hey, I can find an extra $300 a month if we go like really tight on the grocery budget.

Right?

I mean, like, there's just, there's different things that even she could be looking at to see, hey, what can we. What can we trim to be able to throw some extra cash?

Yeah, the magic word is margin here. So you can only define that two ways, is making more and spending less. And I would try to do both aggressively to see what kind of margin you can create.

Alrighty.

But man, this is a. What'd you use the heloc for? Curious.

So I got frustrated with all the student loan crap and I was like, I don't want to deal with that. And I was debating about buying an investment property. I was just trying to do all the things all at once, and then I was like, I'll just wrap it all up and pay it off in that way.

So you paid off your student loans by moving it to a higher interest debt?

Yeah. Probably one of the dumbest decisions I've made.

And so, hey, we've all done. Done with zeros on the end. It's only really stupid if you do it twice. And so you've learned your lesson here. It's a stupid task.

I'll do this again.

Yeah. And unfortunately, unfortunately, you realize that moving dead around doesn't actually solve it. And sometimes it makes it worse. Like, in this case, it's one of the reasons I hate helocs with a burning, undying passion. And they're marketed as these wonderful tools to set you up for freedom and help you do all these things, and it's just not true. It's just another rose with thorns by another name. So, Clark, I wish I could snap my fingers and give you a magic trick to get out of this, but this is just going to be a lot of hustle and grind and getting the income up and sacrifice for the whole family for the foreseeable future for probably next two, two and a half, three years. Okay.

All right, well, thank you. Thanks for the motivation and the help of.

Yeah. That's what we do around here, Rachel. We just. I feel like a doctor who just gave him the diagnosis.

I know. Bye, Clark.

You got gout. Have a good weekend. Best of luck with that, you know.

But it is hard. Well, in it sucks, too, because so much of personal finance, it's so personal, and so much of it, it's. For the most part, it's us choosing it. Right? Like, we're the. Like, when there are bad money decisions or choices, it's because we made them. And so I think part of it is swallowing that pill of, like, well, crap, I did this to myself. Like, I did this, you know, um, and kind of like that feeling of what probably Clark has a little bit, but, Clark, we're cheering you on. And here's the thing, too, Clark. We see people weekly on the debt free stage doing their debt free screams. And so much of them, during their debt payoff, they say, we started at 55,000, we started at 73,000. It went up to 110,000. Whether they got a raise at work, something happened in life. They took on extra work. But that income all, for the most part, always gets raised rarely been, like.

Well, I got $2,000 raise. And over those two years.

That's right.

Double.

Yeah. I mean, like, some people are. They find even in a whole other job, you know, for it. So, anyways, it's just. It's. It's still doable. So don't lose hope, Clark. I mean, we see it, but it's gonna. But it does. It takes. It takes some work, but map it out. I have a timeline. I always feel like that's helpful, because you're like, here's when we'll get out. Even if it's three years, at least we know here's a date we're shooting for. We have a goal, and we just gotta make it to that goal. And we know how fast time flies. You know, people. I mean, like, in a year. A year ago, you're like, wait, what? It's been a year.

So the year is gonna pass either way.

Yeah.

So where do you want to be a year from now?

That's right. Exactly.

But in that moment, you're like, oh, my gosh. A year of sacrifice. You know, it feels like yesterday. It was 2014.

I know. It's just like yesterday. You know, last year, you felt 20. You felt 34, George. And today, exhausted, 35.

You ever just wake up with, like, back. A back issue and a crick in your neck just from sleeping?

I know. I hear your forties. It gets worse. We don't know.

Neither of us know.

But we hear that looking out to.

A 40 year old right now. Well, that is.

Do you hope Randall calls this hour?

If Randall calls, I will lose my mind. If you all know about Randall calling the show last week.

Randall's a birthday appearance. I don't know. We'll see.

Only time will tell.

Promises Vivian may have. May have a. Inside. Inside. We'll see.

One of the reasons to stick around on the Ramsey show. We'll be right back.

You know, it doesn't take a degree in statistics to realize this one stinks. 93% of undergraduate private student loans are co signed. So when you're delinquent and drowned, mom or Papa or Uncle Joe is stuck in that financial stress along with you. But there is a way out. Why Refi? Why Refi offers a custom refinancing option with a fixed rate loan based on your ability to pay. And the average interest rate y Refi offers is 3.9%, which can significantly reduce your monthly payment and decrease your total cost. Contact Yrefi at 8442 Ramsey or go to yrefi.com ramsey. That's eight, four, four or the letter Y, then refy.com Ramsey why Refi is.

Not licensed by the California Department of Financial Protection and Innovation. Why ReFi is not authorized by the New York State Department of Financial Services to service any New York loans. Funding may not be available in all states. Welcome back to the Ramsey show. I'm George Campbell, joined by Rachel Cruz. Today's question comes from Greg in Alabama. What does Greg have to say? Rachel?

Yes, he asks. I am getting a 15 year mortgage and want to pay it off as quickly as possible. What's the best way to do that? Should I make an extra payment of as much as I can afford once a month, or is it better to pay a lump sum once a year? Great question.

First of all, Greg, I love that you went with a 15 year mortgage, a very difficult choice in today's mortgage environment. But it's the right choice because you're going to save so much on interest. You generally get a lower rate than a 30 year. You're paying it off in worst case, 15 years.

Yep.

Which is beautiful. And he wants to pay it off quickly, which we found, Rachel, in our millionaire study. The average millionaire paid off their home in 10.2 years. The average baby stepper following the Ramsey plan pays off their house in seven years.

Seven years. I know.

So it's incredible. And the way they do it. If you're asking here, should I make an extra payment, as much as I can afford once a year. There's all these TikTok strategies that are stupid out there. In the simplest way is when you have the money, pay it toward the principal. And for us, when we did this, it was every single month. We set a specific goal and we wanted to stay consistent. And if we could even up that goal every month, it was even better. So it might be right now, extra $500 is what we can do. It might go up to, we're going to double the mortgage payment every month for the year. You might even get to triple depending on what your mortgage is. And so set a goal. That's, you know, we talk about baby steps. When you get out of one through three, you go from intense to intentional.

Yes.

So it doesn't have to be gazelle intense, but I like having an actual payoff date goal. And if we do that, we need to pay this much off. Very similar to baby step two.

Yeah, well, it's almost like pay yourself a car payment, right? Like an dollar 800 car payment of what you would have paid if you were still living in debt and just you know, like, I think having even that picture. Yes. In it. But yeah, it going to the principal doing it. I wouldn't do it in a lump sum. We have found that it can be tempting if you have a lump sum of money.

If you're like, I'm sitting in the bank over the year, and then you.

Think, oh, well, the beach kind of sounds nice. What if we just took a little bit of that that we would have put toward the mortgage and used it, or we need to upgrade this, or we want to do that, you know, and there's a bunch of cash, there's a savings plan, a forced savings plan. It's a great way to put it.

So I like the strategy. And again, just like baby step two, you got to find ways to have more margins. So if you're only able to throw $100, we got to figure out how to make more by spending less or getting a side job, increasing our core income, all of that. But, man, it feels good once you see that principal go down. Look at everyone listening out there. Go look your amortization schedule. That's the nerdy word for the long list of if you make this payment, here's how much it'll be. And use our mortgage payoff calculator@ramsaysolutions.com and just see how much interest you'll save alone. And when we did that, it was encouraging because I found we're going to save $100,000.

Right.

In interest.

Yes.

Just by not giving it to the bank and paying this down sooner. And once you start to flip flop, the principal versus interest, you start to see it shift. Where you're now paying more in principle than interest. You, you feel like you can do anything. So good luck, Greg. Call us when you're debt free. We'll celebrate with you. Autumn is on the line in Charlotte, North Carolina. Up next, autumn, welcome to the Ramsey show.

Hey, guys. Thanks for taking my call.

Absolutely. How can we help?

So, yeah, my husband and I are starting a side hustle to pay off debt and grow wealth and stuff, and we kind of, we're not sure what to do with the suv we have. It's the last debt we've got besides our home, and right now we're paying $2,000 a month on it. And we have enough savings where we could pay it off, but we don't really want to dip into that. We want to kind of hold on to that because we're not really sure what the future holds and stuff.

What do you mean, the future?

Well, we make really good money right now, and we don't want to jeopardize that with the side hustle, but we also want to do the side hustles to make more money and, you know, and possibly, you know, going to real estate, you know, buying, selling properties and things like that.

So what are the kind of boundaries with the side hustle? What would cause you. What would cause it to affect your jobs?

I just don't think they would appreciate, you know, just, I feel like they might worry about it, taking away from, you know, our job and stuff like that, which we wouldn't do, you know?

Are you at work present for the amount of time required? Are you getting your work done? Is there a non compete that you signed?

Right. We would, yeah, there would be no issue with that, you know, or anything like that, so.

And have you spoken to your leaders at work about this and saying, hey, we're trying to get out of debt. Here's what we're doing?

No, no.

We thought it would be best to.

Keep it on the down low.

What are you doing? What are you doing? What do you do for work, autumn? And what's the side hustle?

It's food service administration. And the side hustle would be a real estate broker.

Those feel very drastically different.

Have you done. Have you done the side hustle? Have you guys been doing real estate?

Not yet. Oh, so it's just a general classes. Okay, well, we've done all the classes and everything like that.

Did you get your license?

Right?

Yeah.

Okay, you do have your license.

And do you have your. Is it. You have your broker's license, and what are you planning on doing with it?

Selling real estate.

Just as an independent agent within. Within your own brokerage with a firm.

Okay, well, number r1 estate is. It is hard to do part time as, like, a side hustle because of the amount of time it takes, the random schedule and hours. The good news is you can try to schedule around your, you know, is this like an eight to five type job you have right now?

Right?

Yeah.

Okay. I mean, I think as long as it's not affecting your actual work and productivity, there's nothing wrong with this.

You're saying you're making great money. You said that earlier. Is that through your main job? Obviously.

Right, right.

Yes. Okay. But you don't want to do that long term. You don't enjoy this work.

Partly. It would be great to be able to do both, you know, because we, you know, once upon a time, we talked about buying a second property where we like to vacation and, you know, financing it and whatnot, and decided not to do that, you know, after listening to you guys. But. So we'd like to pay off our mortgage and then, you know, purchase other real estate and whatnot, either to flip or.

Yeah.

You're excited about the idea of working in the real estate world at some point.

Yeah.

What's left on the suv?

38,000.

38,000?

Yeah.

How much do you have in savings?

About 29,000.

Oh, you said you had enough to pay off the car today.

Well, yeah, one account we have that, and then another one, we've got about 18,000. So, I mean, we could pull from a couple different accounts.

Well, I'm going to encourage you, regardless of the side hustles. I would pay off the car today. You guys don't have, you know, super unstable jobs where you're about to lose your jobs tomorrow. I would go ahead and pay off the car today, quit paying interest, free up the car payment. That's going to put you in a much better position and allow you to not have to work the side.

Yeah. How much do you guys make a year? Autumn?

It's about.

It's a potential.

About 295 gross.

Potential. Is that what you.

That's what potential bonus and whatnot. Net, we bring home about 100. 6165 ish.

Okay.

Without bonus.

Well, here's the key. Making 165 with no car payment, you're going to be able to save up that savings really quickly because that would put you in baby step three, where you save up three to six months of expenses. So I wouldn't go through all this hassle of trying to sell a house to pay down the car faster. You have the money, just be done with it and move on with your life. Save up money really quick. How much is your car payment?

2000.

It's like 700. But we're putting, you're putting 2000 on it.

So if you put 2000 instead, you know, you free up the car payment and put that money instead toward a savings account, you're going to be back there in no time.

Sure.

And you can probably do even better, I think, if you guys are really on a, on a tighter budget and I feel like there's probably some money leaks happening right now, you could get rid of it. You could get that savings really fast. So.

Yeah, and I. And I would suggest to. Yeah, pay it off so you don't feel like the side hustle has to be to pay off debt that kind of frees you up there. And then if you guys want to transition into a real estate career. Later on, you can can start taking those baby steps to do that. But I wouldn't let the motivation of the suv be the driver of getting into real estate either.

Pay it off. That puts this hour of the Ramsay show in the books, thanks to my co host, Rachel Cruz. All the folks in the booth keeping the show afloat. And you, America, thanks for listening in. We'll be back before you know it. Live from the headquarters of Ramsey Solutions, it's the Ramsey show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined by my co host, Rachel Cruz, who's also the co host of smart money happy hour. So be sure to check that show out. If you enjoy this one, you might even enjoy it more. Who knows?

Who knows?

We have a lot of fun on that show.

But it is fun.

And our recent episode was all about how birthdays and parties and gifts have gotten out of control in today's world.

That's right.

It's a fun one.

Are you setting me up for a birthday?

I'm not doing anything.

Happy birthday to George, though.

Thank you.

Because it is his birthday today. George, happy birthday.

I thought it was apropos.

Apropos money.

Happy hour release yesterday, the birthday. Today we're on the show.

There's so much.

So much stars have aligned.

So much is happening. So great.

Give us a call. AAA 825 225, and we will give you our best advice. And remember, it's free, so take it all with a grain of salt. Olivia kicks us off in LA. What is happening? Olivia, hi.

Thank you so much for taking my call or my question. And my question is to give a little backstory. My husband and I, we got married very young with little knowledge, or actually no knowledge of how to handle finances. And we've kind of stumbled through life, through marriage, through children, through buying our house. And although we've always wanted to tackle it, it's kind of complicated because when we do discuss it, we get into arguments of, well, you bought this and you did this. So I've kind of had a hard time communicating with him. And it's gotten to the point now that I think it's more peaceful if I just try to do things on my own the best that I can. And we both work. So I'm wondering if that's possible and what you would recommend to do.

Yeah, it's difficult. And a lot of couples find themselves, Olivia, in your exact situation, because it is a touchy subject. And especially, you know, you just said, like, we got married young, and we're just kind of getting through these big parts of life. And what we find, Olivia, very often, is that it's not usually a money problem. More than likely, there's a marriage issue going on. And I wonder how you guys communicate about money. Do you communicate about other things in life in the same kind of pattern or tone?

Right. I would agree with that. And I've also suggested that we seek marriage counseling. And he's kind of just like, well, he doesn't say, yeah, let's do it. He's just like, huh? And then changes the subject. So at this point, I'm like, well, you know, if marriage counseling is not important or you're not recognizing that we need it, how are we going to move forward?

Yeah. Yeah. And I think that's where a lot of people find the fork in the road of just this idea of, oh, my gosh, is this kind of the reality of where we're at in our relationship and in our marriage? And when one spouse is wanting to work on it and do it well and the other spouse seems to just be apathetic to it, it's very hurtful. Right? It's very hurtful. It feels like a level of rejection of, you know, you're probably asking yourself, am I not worth putting the work in and actually having effort towards this?

Have you shared that with him, like what Rachel just said, the kind of. The gravity and depth of this, of how you feel about it?

Not in those exact words, but I have had conversations where I feel that I could get more input, and I just don't see the effort. And it turns into, well, you're always unpleasable. You know, anything I do doesn't satisfy you. And I've come to think that maybe I have extremely high expectations.

No, it's his immaturity.

It's that.

But also, he doesn't want to change.

The way you're confronting him, though, olivia. It is pointing fingers. I want more input from you to him, and I want you to stop saying what you want from him. And I want to start talking out of olivia. What is olivia. What is Olivia feeling? And what does olivia want?

Hey.

I feel very hurt. I feel isolated. I don't feel like we have a partnership. I don't feel like we have a marriage. I feel like I'm doing this on my own. I don't feel like you care about me, and I'm in a place that I want this to be better. I want this to be better. And this is where I'm at. Would you consider, you know, x, y, and z going to marriage therapy? Would you consider sitting down and doing a budget? Because I think what ends up happening, not that you're meaning to, olivia, but I think it can be so easy, even in a nice tone, to point the finger of, this is what you're doing wrong. So he automatically is going to be defensive and say, well, this is what you're doing wrong. And it's this back and forth game that you guys have been playing versus just owning your own perspective and what you're thinking and feeling about you and less about him, if that makes sense. But that could be a starting place. But I think that's one of the best things that you can do with your spouse. And it's very vulnerable, and it's very scary.

But when you do just say, here's exactly. Here's where I'm fearful of. Here's what I'm feeling. Here's what's causing me to lose sleep at night. I mean, there's so much right when your marriage is in a level of, like, man, this is just not fun. This isn't good. This isn't what I thought marriage was going to be. And not even that, because sometimes we can have unrealistic expectations in general. And I think asking him very point blank, hey, I want to set up an appointment in two weeks with this marriage counselor. Will you meet me at the office at 02:00 you know what I mean? And, like, be pretty, pretty bold with it, because I think once you guys get on the same page, I think you're just missing each other. And I think that happens a lot.

George, with couples, especially when they've had a pattern of doing things a certain way, it becomes even harder to change. How long have you guys been married, Olivia?

It's gonna be 20 years in January.

Oh, my goodness.

You know what my therapist calls it? Because we go. I mean, Winston and I, we do marriage counseling, we do individual therapy. We do. I mean, like, I'm all into understanding yourself and work because I think it's so helpful to give the tools. But she always said it. She called it your dance. And Winston and I have our dance. Like, we have our thing that you kind of just end up going back into when you're not even aware. And you look up, you're like, oh, my gosh, we're back in that same dang pattern. And when you can get to the point, Olivia, where you can kind of laugh at it, that's where Winston and I are like, oh, my.

Well, you're so self aware, you can.

See it happening, and you can pause and use new tools that you've learned, because we're all trying to, you know, in some ways, manage our way through life. Right. And so there's things that you've learned to protect yourself. I mean. I mean, there's a lot there. There's a lot there, Olivia, the way.

You grew up, the way the mistakes you've made.

And then once you guys start those healthy patterns on your marriage, then suddenly when you're like, babe, the money is stressing me out, he's able to be like, okay, I hear you. Because you're using a different way of, you know, different language, different tone, different approaching all different ways of life. But again, Olivia, just like so many people, I really. I would encourage you guys, it's a marriage thing at this point. But to give you a quick, you know, you called into a money show, so. And I'm not a therapist. You're not a therapist? Definitely. We will not claim Rachel's way closer than I am. No, no, we won't claim that. But I would say to start off and just say, hey, don't point blame at him, but say, hey, can you help me with next month's budget? And, Olivia, we'll give you guys financial peace university and every dollar premium for a year and do a mock budget on every dollar, and then just say, hey, I would just love your input. I would love for you to look over this with me because I want to make sure that my brain's not the only one in this.

I want your input. I want to know your thoughts.

Here's your input matters. It's a different conversation.

That's right. Yep. Instead of. Instead of, you know, pushing the blame. And hopefully that's a good jumpstart on the money conversation. But again, I think the marriage piece, it's big.

Getting a spouse on board is one of the hardest things you'll do in a marriage, but it is worth the work. And that might mean, hey, we're going to listen to smart money happy hour. This is a fun podcast. Then, hey, what if we took financial peace university? That may then lead into counseling down the line as he sort of warms up to this idea and realizes he's not the villain here. We're trying to grow together in this marriage instead of apart. This isn't a, you know, conflict where we're at each other. We're aiming at the same thing together, and those are the kind of things that will help. So hang on the line. We'll gift you those gifts and I hope he uses them and I hope there's some amazing transformation on the other side. Welcome back to the Ramsey show. I'm George Campbell, joined by Rachel Cruz. Open phones at 888255 225. I'm buying my co host some time as he chows down on a cookie from the Baker street cafe.

Sorry, we have, we have, like, warm cookies and Melissa just gave me one at the break. That's so good.

That's the kind of service you get around here. And it's a friendly reminder to come visit us. We love. I'm looking at a lot of beautiful, friendly faces from around the country, sometimes around the world. And the show is free to come watch on the glass. If that's your, if that's what, you know, really gets you excited.

This is your Disneyland.

Come by. Nashville has, is a destination city anyways. It's such a fun city. If you visit Nashville and we have so many people that come for like, a long weekend and we're one of the stops.

Or you stop by because you're traveling through.

Yes.

South or north. And Nashville is a great pit stop. So come see us. You'll get free coffee and free cookies.

I'm indulging in right now.

She didn't pay for that. And you're not going to pay either. We won't allow it. So let's get to the phones. Adrian is up next in Asheville, North Carolina. What's going on, Adrian?

Hi. Thanks for taking my call.

Sure.

I heard you say in the last segment that if you do the stuff twice that you're really stupid and I am.

No.

What did you do twice?

Well, I was in debt. My husband and I claimed bankruptcy in the end of 2020, and now I'm back in debt. And I have a house in Florida. I live in North Carolina now and rent. And I want to know if I should sell the house there to pay off my debt.

Yeah, I'd probably sell your house regardless because being a long distance landlord is really difficult. But, Adrienne, tell me what caused you to go back into debt?

Well, we decided to move up here when I finished nursing school. My husband said, you know, we could.

Use a fresh start.

You can literally get a job anywhere once you're a nurse. Let's move. So we moved, and then within a couple months of living here, my mom got really sick and passed away.

I'm sorry.

And.

Not knowing anybody in the area, like, I just kind of coped by spending money on, like, everything.

Yeah.

And anything you know, $200 pair of shoes, $100 lunch out, like you name it. And then some other things happened over the past couple of years, and so I'm just ready to get out of debt now.

I know you said it's tough to.

Be a landlord long distance. I actually have a really great tenant in there, and it's been working out wonderfully.

But your life's not working out wonderfully.

No, you're right.

How much debt are you in?

So in total, including the mortgage down there, about 225 to 230,000.

What's not the mortgage? What's just your consumer debt?

So the mortgage is about 67. So about 160.

And is 160 mostly credit cards or what's in that?

No.

So about 97 of it is student loans.

Okay.

About 9000 is a car payment, and then the rest is like credit cards and personal loans.

Okay. Okay. And how much is the house in Florida? How much could you sell it for?

I think about 200 is what we could probably get for it.

Okay.

And walk away with a little over 100, which would knock down a good chunk of this consumer debt. It doesn't get you completely debt free, but, man, it would change your life.

Yeah.

Yeah. I mean, so, Adrienne, I mean, I, yeah, I would do that. Regardless of where you were financially, I think it's going to be really wise for you to do it because of where you are financially. But also recognizing that, you know, so much of personal binary, personal finance, it's behavior. Right. And it's us that is, you know, we talked about this in an early segment. It's, it's, we make the choices on what's going on with our money. And so understanding, Adrienne, that, that things within you, recognizing those things and healing and putting better money habits in place, better boundaries for yourself. I mean, all of these things are important because if you don't fix, Adrienne, in a sense, you're gonna be right back here five years from now. Right? So. So we wanna stop the pattern of why you're, what's causing you to do all of this. And, you know, maybe it was because of grief and where you were in loneliness in a new city, but I also would just be very aware that this, you know, this is going to be a gift to you, this margin, to be able to swipe out so much debt, but it also is not going to cause, could potentially not cause the habit transformation that needs to really happen.

So just being aware of that.

Is your spouse on board with this plan?

My spouse kind of leaves things up to me.

Oh, your spouse.

What?

Yeah.

Kind of leave things up to you. Like, if you said, hey, I'm gonna. I'm gonna sell the house, I'd be like, okay, whatever you want to do.

Yeah, basically. I know that's crazy.

How much do they have? Any debt?

I mean, that debt's like ours combined.

Okay. I want them to care more than just going, eh, whatever you want to do. I want some buy in here. And so I think you need to lay out everything together, all the debts, all of the income, create the budget, and go, hey, here's where we're at. Here's the state of the union for our house. And part of the plan is selling this house. And the byproduct of that is we're going to be able to clear all of the student loan debt in one fell swoop, maybe the car loan. And then we're going to start attacking these credit cards and personal loans. We make 150. We're going to attack the 60 within eight months. That's the level of detail you guys need to have together. What is your household income?

I would say about 160,000.

Okay. I was almost spot on. That's amazing. I just had a feeling. And both of you are working full time.

Yeah.

So think about that. You clear all of your student loan debt, sell this property, you're making 160. How quickly could you pay off another 60, freeing up all those payments? It's going to happen like that. We're talking less than a year. And so set an aggressive goal, and both of you are working toward it. You're both marking down the debt free chart. This needs to be a group effort. I don't want you taking this on your own just because they trust you.

Okay?

It's going to be easier and more fun and help you grow in your marriage and the communication and help you avoid ever getting into this again because both of you felt the sacrifice. Both of you saw the progress, and you can't unsee it. And that's going to help you transform so this never happens again.

Okay.

We also have.

Sorry, I can't hear you, Adrienne, speak directly on your phone.

Oh, I'm sorry. Can you hear me?

Yes.

Okay. We also have a daughter who is graduating in a couple of weeks and is wanting to go to college in the fall.

Okay. Have you talked to her about a plan to do that without debt?

Not really. Okay, well, I'm not sure how to approach a plan for that.

Well, step one, you can go watch borrowed future for free on our YouTube channel, and that will be a great conversation starter. We'll lay out all the facts. We'll lay out all the stories, the inspiring ones, the heartbreaking ones, and I guarantee she'll have questions at the end of that and say, oh, gosh, mom, I don't want that to be me. What. What can we do about this? Then? You guys can formulate a plan together.

And, Adrienne, I think, and I think it's a very honest conversation, too, of what debt has done in your life. It's created stress. It's created a wedge, possibly within your marriage. I mean, this is like, it's not produced good fruit in your life. Right. It has been harmful. It has not been helpful. And to guide your 18 year old and showing her and talking to her that it's just not an option. You are not going to sign and co sign a loan for student loans. You're not going to do that to your daughter. You're not going to put her and start her off on a foundation of what you're trying to get yourself out of. So, like, the intensity, too, of the situation needs to be very much communicated to her. And I know she wants to go to college. She may not have the money to go to college, and that's okay. Maybe she takes a gap year. Maybe she goes to community college. Maybe she applies for scholarships and grants. Maybe she looks for an in state school that's less expensive. Expensive than going to, you know, off to college in another state.

Like, you can start having these conversations with her, but you're in a real, you know, moment, though, Adrienne, of your own story, your own relationship to debt, and she needs to know about that. Like, that's a gift to her. And you're not going to stray her down that path as a mom. You love her too much to do that. That's the conversation I would have.

Welcome back to the Ramsey show. I'm George Campbell, joined by Rachel Cruz. Open phones at AAA 825. Two two five. Well, Rachel, we get a lot of questions about investing the social media world. Young people, all they want to hear is about how to build wealth. And it can be overwhelming.

It's great, great conversation to have, but.

There'S so much noise out there. It can be overwhelming. You can get sort of paralyzed, the paralysis analysis. And a lot of people end up doing nothing because they're scared of doing something but doing it incorrectly. And so I want to set them free today with, with some teaching on this, on kind of the primer for building wealth. And research has shown that a lack of confidence in making these decisions, it's a primary reason why people don't invest. So they, we just need to bring them some literacy and some hope that it's way easier than they think. So here's what we're going to call it. Keep it simple, stupid. You ever heard of that? The kiss method? That's what they call it back in my day. So investing is a long game. You're not trying to time the market and buy single stocks. You don't need to be a prodigy. And every time everyone is a first time investor, the first time they invest.

That's right.

So it's okay. But before there is a prerequisite, if you know the Ramsey plan, you've got to be in the right spot in the Ramsey. Baby steps. So we've got baby step one, starter emergency fund. Baby step two, paying off all the consumer debt. Baby step three, fully funded emergency fund. Then comes baby step four, investing.

Yep.

Make sure you knock those first three out, otherwise it's going to be much harder to invest. You're going to add a lot of risk and stress into your life.

But once you're there, well, and even those who are investing now and still have consumer debt when you're paying off debt, we would even say to pause, ooh, investing, too. So truly, those first three steps are just like one at a time. You're doing nothing else but those. But then you get to baby step four and you get to start, you get to start investing.

You start building for the future instead of paying for the past.

Yep.

This is where it gets exciting.

Yeah. So the first thing to really think through is, what are your goals? What are you wanting to invest for? Are you investing for retirement knowing I'm not going to see this until I'm 60 years old and I'm putting money away because I'm going to, you know, I want to retire at 60 and be able to cash everything out and be great or not cash everything out, but, you know, live off those investments. Is it that you want to maybe open up an index fund or a mutual fund and put some money in month to month because you're looking out in the future and you're like, yeah, we'll probably be putting a down payment on a house maybe in four to five years. I don't know. But I want to be able to get to that money without penalty. So, you know, I'm doing that. Is it kids college? Are you investing for kids college in a 529? So, again, mapping out why you're investing and kind of what those goals are, will help really take a really broad subject and narrow it down for you to know what lane you're wanting to invest in.

And that why will keep you focused, an eye on the prize instead of sort of getting a little starry eyed or pulling your money out when you go, oh, no, this is for this purpose.

Yeah. Because just so you'll know, we define investing as five years or later. Right. Or longer. That's. That's investing. For us, savings is more short term. You're saving for something in the next month, two, three, four years. But when you're talking five years or more, that's where you're like, okay, we can start thinking about this investing.

That's because there's less risk for you to lose money in the short term versus long term. We know you're going to make it if you do it the right way. So the next step, once you've decided on your investing goals, you got to figure out how much you're going to invest and your goals will determine this. But we recommend at baby step four, putting away 15% of your gross household income into tax advantaged retirement accounts. So, simply put, this would be, I've got a roth four hundred one k at work. I'm going to put 15% of my income. My spouse will put 15% of their income together. That's 15% of household income.

Yes.

That's a question. We get a lot. Wait, do I do seven and a half and she does.

Oh, yeah.

Nope. Because 15% of yours and 15% of hers becomes 15% of hours of the total. So that makes it real simple. I love that 15%. Don't overthink it. You don't need to do more at this point. You don't need to do any less. Keep it there and don't stop.

Yes. And then also understand your investing vehicles. So you were just saying that, George. So when you think about retirement, you guys do some research and figure out, okay, at my workplace, do they offer a 401K or a 403 b. These are great investing vehicles to be in. Or is there even a Roth option within it? Because Roth means that you. It's after tax dollars and the growth is tax free when you take it out, which is huge. So if you ever see Roth jump on that train, love that roll, that's a good one. Or maybe, you know, you're doing a Roth IRa, you know, which is another great place to put your money. A really simple investment, honestly.

And anyone can do that with earned income. So that's a good clarifying. Point. You're like, my employer doesn't have an IRA that's outside of your employer.

That's right.

Four hundred one k, four hundred three b. Those are employer retirement plans. The IRA, anyone can do if they.

Have to, I think $7,000 this year in 2024 that you can put in. So they limit it. But again, that's another one. And so you guys, you can sit down with somebody, a smartvestor pro or someone to open up, especially like something like a Roth or mutual funds or other things, but you can also go to vanguard and say, okay, looking into options. I mean, like, there's, there's ways to do this. But just know, when you, when you open up an account, which, again, if you sit down with a professional, which we recommend, they're going to help you with this, you actually have to invest the money because that's a mistake people make. They open up these accounts and they may put money in the account, but then they don't go and take that and actually invest in it.

You need to buy funds with it.

That's right. There's an extra step there.

So just remember that it's just like a shell. You've bought, you've per, you have a shell, but now you need to put some stuff in there to allow it to grow. So that's where it comes into choosing different types of investments. We've all heard of stocks and bonds. Our favorite of these is mutual funds or even index funds. The word fund is the key here. A fund is going to hold a giant basket of those stocks, which helps you diversify. And it doesn't put all of your eggs in one basket.

And we may be beating a dead horse, as they would say, george. But again, we're getting very simple here with this, just so we want you guys to know this. Yeah, George does. He loves horses. Don't ever sell the horse, alive or dead.

I wouldn't touch one.

Oh, my God. Is within these accounts. Your four hundred one k at work, a Roth Ira. You're investing in mutual funds within that account. So just to be clear on that, yes.

The next step would be picking an investment strategy. We've mentioned that good growth, stock mutual funds, that's the way to go to invest for the long term, consistent growth. You're spreading that out among a lot of different companies. And even then we recommend four different types of funds. We'll tell you more about that. I'll give you a great resource to check out. But the key here is diversification. That is why we do this.

That's right. And then next, that'll be opening the account, kind of what we were saying earlier. So you're gonna go and talk to your employer at work, you know, and then you're gonna do. Remember this formula? Roth. No, wait. Match. Hold on. Oh, no. I just messed it up. I messed it up. George Roth.

Nope. Match.

Start with.

Thank you. My gosh. Match beats Roth beats traditional.

We got there.

Oh, lord, have five words on my soul. Match beats Roth beats traditional. So remember that formula, because that's going to help guide you to say, okay, what should I do first? So, again, go up to your match and your 401k.

If there is one.

If there is one. And so say it's 4%. Well, you have 15% you got to invest in. So you can put that. So that means you have 9% of your income left to invest. That's when you're going to go over to a Roth IRA fund. Up to that 11%, you max that out. Yes. Good Lord.

It's okay. The cookie is messing with her.

It's. I mean, I get an Americano, I get a chocolate chip cookie, and I go downhill. That's right. 11% left. Go back. Go to your Roth. And if you max it out and you have more percentages left, go back to your 401K. But the beautiful thing would be a Roth 401K.

Love. That's what we have at Ramsey. And so, for a long time, that's what I was doing.

Yeah.

All 15%. We've got good mutual fund options. That's the key. Hey, what should I do? All 15% of the 401K. Yeah. If you've got good options and low fees, and it's Roth, go for it.

Yes.

So that it's simple. Match beats Roth, beats traditional. And again, this is regardless of the employer match, you were doing 15%. You don't do less because your employer has a match, or they give you free money. Even if they give you a free 4%, you still do 15%.

Yep. That's right.

So, the next step, the final step here is working with a pro to start investing, to keep learning. Rachel and I both have a smart vesture pro in our corner, as we call them. And the key here is you want someone in your corner who can educate you, who has the heart of a teacher, who can maybe help you avoid jumping off the ledge when the market's crazy, help you understand the trends that are happening, and give you a full plan, not just with choosing a fund, but what about estate planning and tax strategy and kids college and making sure you have a holistic plan.

Yeah. Because in our world today, I mean, there's some stuff, I mean, Vanguard's a great example that you can do on your own, right? I mean, very much so. But even if you do that, you guys having somebody in your corner, and this is what Winston, I do, we meet every January with ours to look at everything. They're looking at your entire financial life. And so I think that's so, so important that you're not doing this on your own, because if you're making big decisions to have somebody that's, yeah. From the tax standpoint, all of it just, they're seeing your entire financial picture, I think is really, really important.

Get that third party in there. So if you want to learn more, we've got a great article that will, that we'll put in the show notes in the description that explains it all. It's called how to start investing, and it's on the Ramsey solutions site. So go to the show notes, click the link in the description, and it's all free. We just want to help you guys build wealth with peace and confidence.

I'm going to go drink more coffee. George.

She needs it. This is the Ramsey show.

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 at ramsey solutions.com. Agent ramsaysolutions.com agent welcome back to the Ramsey show.

I'm George Campbell, joined by Rachel Cruz. This hour, open phones at 5225. In a previous segment, Rachel and I gave you a little deep dive on investing, but there's only so much we can cover in about seven minutes. And so lucky for you guys, we've got a brand new event coming up that's like 4 hours of just investing content. It's called Dave Ramsey's investing essentials. And at this event, Dave Ramsey and myself, we're going to deep dive into investing. For the first time ever, he's going to share his personal playbook on investing, including how he buys real estate, which is something Dave is known for. He's got an insane real estate portfolio, and there's a smart way to do it. He's going to lay it all out like never before. So this is a two night virtual event happening May 21 and 22nd. And because it's online, you can watch from the comfort of your home, wherever you are in the country. And investing is something that you guys ask us about all the time. You want us to dig deeper. You want us to nerd out a little bit. And that is where this is going to happen.

So we're going to cover the basics, of course, the normal baby step four stuff. But we're also going to talk about how to maximize your investments, your 401 ks, your mutual funds, investing outside of retirement, how to invest once you're in baby step seven and beyond Dave's personal strategy for real estate and which investing trends to follow and which ones you should avoid. Tickets start at, I think, $200 right now. So go to ramsaysolutions.com events, get your tickets today, and join us for this virtual event. I am so pumped for it. Let's get to the phones. Marie joins us in Ben, Oregon. Coming up. What's happening? Marie?

Hi. Thank you.

Sure. How can Rachel and I help?

So one thing I really love about your philosophy about money is just the openness, especially when it comes to it seems like your family just being able.

To have those open conversations and everyone.

Knows what's going on with everything. My main question is really just how to have those open conversations. I know that there are things in my name that I just have no idea what they are. And, I mean, that's not a terrible thing, but I also just feel kind of in the dark.

I think some of my family members.

Who set up things.

You don't just.

Kind of want to wait until a certain time period. But I also just, like, I don't know. I guess I just want to figure out how to navigate that and also just. Just being able to be open in general.

And are you talking more, like, with your nuclear family, like your husband and kids or like, your parents and siblings?

Mostly my parents and grandparents. But, yeah, it's definitely with everyone.

Yeah. So when you say your name is on things and that means more from, like, an inheritance standpoint that you'll be receiving, it's not like your name is on the deed of houses out there and you don't know it's not something like that.

I think it's mostly just trust some of that.

Okay. Yeah.

You'd be a beneficiary on there.

Are you guys, are you coming from wealth? Do you know, like, I mean, have you guys done really well, your family?

My grandfather did very well.

Yes.

Yes. Okay. And you just have no clue how much they have. You have no clue if there will be or if what amount of money would be passed down to you. I mean, like that. Those are the questions you're. You're asking?

Yeah.

And I think it's.

I think, you know, whenever we talk about money or family, it just is not as, like, it's just not well planned out, I guess. I mean, again, I'm grateful for, you know, what my grandfather did, but I also just, there's not as much of the, like, I just feel, like, left in the dark and where I can't do smart things. Like, I had my. My child, and I want to be able to set her up well and be open about things. And I guess I'm just looking forward to being able to set things differently up for her. And I'm just trying to figure out if I can maybe figure out some boundaries and. Or have discussions with my own family. I don't know.

How old are you?

I am 28.

Okay. And how old is your parents?

My dad is 60. My mom is almost 50.

And your grandparents are still. They're still living?

Yeah.

Yeah. And is that where most of the wealth came from, was your grandparents and your parents? And then. Okay. I'm just trying to get a family tree, a little bit of what you're thinking. Are you married, Marie?

Yeah.

I'm not.

You're not? Okay. And how old your daughter?

She is?

Four.

Okay, great. Yeah. I mean, I think at the end of the day, they're gonna have to be the ones, your grandparents, if they're the ones that, you know, hold most of this to that, it's their decision on how they choose to do it. I think you could, depending on the relationship, you know, have some level of a conversation of, like, hey, here's what I've seen. And I just want to be able to plan well and just to know how to prepare if you're. When something happens to you guys and kind of what the plan is. And it's not from a gold digger's perspective in a sense, or like, hey, I'm gonna just wait around till something's passed to me because I don't want that for you either, Marie. I mean, I want you to have the dignity to stand on your own 2ft, regardless of what you'll receive one day. But I do think, you know, it's like, I don't know. I mean, I think that that's a fair of, like, hey, I'm just. I'm kind of just curious and I would love to sit down. I don't know if there's a way to do this, you know, with all the cousins and the other siblings and everything, and let's just kind of have a family, a state meeting, and kind of just get a lay of the land of what's going on.

Cause it does feel in the dark, and, you know, and I think one of the worst things that families can do is that, you know, what, you know, the grandparents pass, and you guys, it's like in the movies, all end up in some, like, old english looking mansion and, like, a library. In a library, you know, and then the will is read out, and the first time you hear anything is in that moment, you know, which, I know kind of could happen, I guess, but it's a little traumatic, but. And I think just that. I think just your desire to just have the knowledge, you know, for yourself so that it's not at this point of, like, after they're gone, suddenly it's a surprise, you know? I think that's a fair thing to say, but I think it's up to them. Obviously, at the end of the day.

If they want to, it's still going to be slightly awkward. There's not a normal dinner time conversation, and so it's okay to lead with, hey, I know this might be awkward, and I'm just trying to open this conversation. If I. If you lead with some grace and humility instead of, like, entitlement and you're, you know, sort of aggressive about it, they may or may not tell you, and I'd also live my life knowing that it may or may not happen, because life, a lot of life will happen in between then. So, like Rachel said, I would prepare for a life where you get zero inheritance and prepare so that if you do get inheritance, you know how to manage it well, and regardless of it happens and how much it is, whether it's a dollar or $10 million, but it's fine to be curious about it. But again, there's no. What kind of sparked this for you, Marie? Was there a moment that was like, hey, I'm actually wondering about this.

I guess largely just inspired by setting things up for my own daughter and then also just seeing the way that other people are able to operate where it's more open. I just really like that. I just like.

I guess I'm wondering, how does it affect your financial life in the meantime?

I. I mean, I definitely. I mean, I'm fine where I am, so I'm not, like, trying to ask them for money.

Or anything.

It's just like, sort of, like scratching the itch in your brain if, like, I'm just curious what's go. What's gonna happen here?

Yeah, I've just kept on going. I think I'm just an overthinker. I've kept on going back and forth. I'm like, should I say anything? Does it really matter?

Or do you have good relationship with your parents? Do they have a good relationship with your grandparents? Like, how, how's the family dynamic?

It's definitely just, it's. There's just not really a whole lot of boundaries, it seems like. So it just feels harder for me.

To navigate boundaries of money.

Well, money and just other things in general.

Like, they overstep, they're too involved, or they like that kind of thing.

In some ways, yeah. And then in other ways, it's.

I don't know how to explain it, really.

No, no, you're fine. I just wondered, like, yeah. If you were just like, hey, mom and dad, I'm curious. How much are grandpa and grandma worth? Like, what's gonna happen, you know, when they pass away? I don't know.

It's a very awkward conversation.

It would be. And my question would be, I'm just curious, why would they be judging you? Would they not even know the numbers? Would they, like, what's, what causes that to be awkward?

It was just always such a secret. And it was like, it, yeah, we just always lived like we had nothing. But then there was actually, I think my parents actually had a lot. Then we just didn't, you know, as kids know about me, we were taught to stress about money.

Yeah.

And it's just strange. Okay.

Yeah. I mean, I don't. Yeah. Again, to George's point, I don't know, from the day to day aspect, I think it's something good for you to start saying, hey, I'm going to do something different with my daughter moving forward, and I'm going to have this to be a topic that's open, but we can't force people for it to be an open conversation and just start with.

I don't want to assume anything. I'm not here to be entitled. I just want to know, and that's it. It's just a place of curiosity, not expectation, that puts this hour of the show in the books. Thanks to my co host, Rachel Cruz, all the folks in the booth and you, America. We'll be back before you know it. Live from the headquarters of Ramsey Solutions, it's the Ramsey show, where we help people build wealth do work that they love and create amazing relationships. I'm Ramsay personality George Campbell, author of Breaking Free from Broke, joined by best selling author Rachel Cruz, latest author of I'm glad for where I am.

Yes. The new kids book. Thanks, George. You know what I'm glad for where I am? In the studio with the birthday guy. It's George Campbell's birthday. Happy birthday, George.

Thank you. I heard that you were gonna sing for me on air.

Oh, you know me. Not the voice of an angel.

Don't hide it under a bushel, Rachel. America needs to hear.

Let your light shine. I wish, I wish I could, but my birthday was just, yeah, two weeks ago, I guess. And I was asked on air, I think, by Ken Coleman if I'm the youngest Ramsay personality. And I was like, I think I am. And then I realized, no, no, no.

George is younger than me, and you'll never be younger than me. That's how time works. It marches on. It marches on.

We keep moving.

Well, you look younger. You're vibrant, energetic. You're doing fine.

So are you, George. The youth is there, but you're, I.

Could use a tan. But other than that.

You'Re doing good.

Thank you. That doesn't seem real, you know, genuine when you laugh through it. But I appreciate that. The number to call is aaa 85225. Call us and save the sinking ship. Leo is about to do that in Pittsburgh. Leo, welcome to the show. How can Rachel and I help?

Hi, Rachel and George. Thank you for very much for taking my call.

Sure. What's going on?

So little, little background for you guys. My wife and I are 27 years old. We don't have any debt outside of our mortgage, but we have a pretty large savings and a decent chunk of money that we add to it every month. And I've been wanting to get more aggressive with paying off our mortgage. And it's something that my wife is a little worried about doing. I think she likes the security of having the extra money in our savings account. So we've been kind of butting heads on what to do and how to approach that. And I was just hoping to maybe get some advice from you guys so that, you know, I could better communicate a plan to her.

Yeah. Does she know that we do? And what we would recommend to you is that you keep an emergency fund, even up to six months of expenses in the bank, so it's not draining it all the way down. And does that still make her feel uncomfortable?

Yeah. And I, I think, like, the big thing that she struggles with is her birth mother passed away when she's a big. When she was just a little baby. And she kind of lives in a way where she doesn't want to necessarily feel like she's constrained or living every single day to pay off our mortgage, because you just never know what could happen. And I can understand to that extent, but I'm still trying to help prepare our family for a great future and financial success. And we have a two year old daughter and a daughter on the way, so it's something that I know in the back of my head, like, what the best move is, but I'm just trying to help lead her to that.

Well, talk us through the actual numbers. What's your household income right now?

So we're right around about 190 a year.

Amazing. That's with both of you working outside the home?

Yes. My wife works part time, and I'm full time.

Wonderful.

How much you guys have in savings?

So we have 30,000 for our emergency fund, and then probably about another 110 sitting in a high yield savings account.

Wow. Way to go.

That's great. And how much is left on the mortgage?

350 on the mortgage.

Okay.

And is the 30,000, would that be considered three months or six months or somewhere in between? What's the number for how many months? I would float you guys for?

It would be six months for us.

Okay. And that's full expenses, all the little luxuries, or is that bare bones? If we had to go down to the skeleton here to cover.

Yeah.

That would be keeping up with our, like, current lifestyle. Like, nothing would change during that time.

Right. And she's comfortable with the 30, but she wants the extra 110 as a. Just in case life happens.

Yeah, pretty much. It's just, I don't know, think that she almost thinks that if I'm throwing something at the mortgage, that it's just, like, disappearing and going away and reality, it's really not. But I guess it's just a.

It's an emotional thing for her.

Sort of locked away.

Yeah. And leah, do you guys enjoy life? Do you guys go on trips and, you know, and go to concerts? I mean, like, are you able to. You're not the kind that's like, oh, my gosh, honey, we got to put everything towards the mortgage because there's that intensity that people feel. And if she's like, whoa, chill. Can we please just breathe and have fun with life? Like, I didn't know, like, what the balance was for you guys.

Yeah, there's definitely a balance involved. And, yeah, I think that I could be more intense than she can with a lot of things, but outside of that, I've been trying to reaffirm to her that our monthly budget would not change, and we would not necessarily start skipping out on doing things that we enjoy that we typically would want to do. I would just, you know, I was just kind of leading her in a way of anything extra that we had each month would go directly towards the mortgage instead of just getting thrown into a savings account where it's basically doing nothing for us.

Right. For sure, yeah. How much is your interest on your mortgage?

It is 5.5%.

Okay. Yeah. I mean, I could see. I don't know, George. I mean. Cause she's got a baby on the way. She went through something pretty traumatic in her life. Right. You know, has put a perspective in her mind that is different than those that probably haven't walked. Losing a parent that young. Right. So you can use that same logic.

To go, well, if anything could happen, and we want true security, that would mean owing nobody anything to where if I lost my job, we don't have to worry about a mortgage payment. So it would actually lower how much you would need in the emergency fund. It would limit how much risk you have in your life. So I think if that's her angle, that I think paying off the mortgage still would make sense. And I think showing her some of the math can help. She may not be math motivated to show her, you know, the interest and what you're paying in interest. And if we paid this down, here's what the balance would be. Here's how much would be going toward the house every month instead of lenders.

Yeah. And maybe you. You kind of baby step your way into this, Leo, and maybe you're like, hey, let's just take. Let's get our mortgage to 290 tonight. Like, what if we could just, like, throw 60 at it now, we keep 50 in the high yield, we keep 30 in our emergency funds, and let's just see how we feel, and then let's talk again in three months.

Start on the shallow end of the pool.

Yeah. I mean, seriously. Yeah. Because, I mean, it is kind of a whiplash to now if you're both on the same page and you're both like, hell, no. Heck, yeah. We're gonna, like, throw all this at the mortgage, and it's gonna be amazing. That's one thing. But if there is that one spouse that is holding back, then that's when I would say, why don't you just kind of baby step your way into it and just say, let's just have fun and go down to 290.

And in the future, as you guys set a goal for when you're going to pay off this mortgage, let's say it's five years from now, that will help to go, hey, we're already budgeting in our budget, that $2,000 extra is going to go toward the mortgage. And that way it's not this giant pile of money that's like a scary thing to let go of. Instead, it's just a normal part of your, you're just flexing that muscle. It's a rhythm of your budget, just like giving or anything else would be. So I think that will help for the future. Instead of just stacking it up and then going, what do we do with it instead? Make a plan pre decide to make a plan to pay it off early. So maybe the math will help. Maybe showing her that angle of, hey, I want us to have true security. I'm on your team. And the way I see that happening is us getting rid of this mortgage in our early thirties to have total freedom to where if you want to stay home, you stay home. If something happens, we have no bill. We're going to be okay.

We don't have bills. But in the meantime, when's the baby due?

October this year.

Okay. I would, you can have extra money. They're covered for October until October. And go, listen, we want to have the max out of pocket for insurance. We're going to have a sinking fund for home maintenance. But at the end of the day, there's really no emergency that's going to tank you guys. If you have the right insurance in place and you have your emergency fund.

And so just show enjoying life, too.

Walk her through the worst case scenarios and show her how you'd handle it. That'll give her some peace and confidence. Thanks for the call. This is the Ramsey show.

Here's the thing about investing advice. You can find it just about anywhere, but that doesn't mean it'll always help you with your personal goals. Here's another option. Check in with a smartvestor pro. These financial advisors can review your plan or help create one that's personalized to you. To find a smartvestor pro in your area, go to ramsaysolutions.com smartvestor. Go to ramsaysolutions.com smartvestor.

Ramsey Solutions is a paid non client promoter of participating pros. Learn more@ramsaysolutions.com smartvestor. This is the Ramsey show. I'm George Campbell, joined by Rachel Cruz. As you're listening or watching, do us a quick favor. The show is free, and it's also free to hit the share button, to hit the follow button, to subscribe, to leave a kind review, and maybe, you know, share this show or clip with a friend who may not know us or may benefit from hearing some of these money principles and some of these calls. You never know how it could affect them and how it could affect their future. And we want to spread hope. So thank you, all of you who have shared the show. You're our best marketing that we have. No billboard could do better. You guys, word of mouth. That's how we spread this message. Rachel, there was a recent article that gave me some hope, because there's a lot of news that doesn't give me hope, and this one is from Business Insider. Here's the headline. Let's get your take. Millennials are suddenly rich. Saw wealth double after the pandemic.

Wow. Is that.

I'm assuming housing, it's based on statistics, and I assume that they didn't go into it here, but here's what the article says. After years of killing off brands, languishing with student loans, and splurging on avocado toast instead of buying houses, millennials might finally be emerging on top.

Ah, look at us.

George. I send some sarcasm in there, but, okay. A new report from the center for American Progress, a left leaning think tank. Okay. Looked at how wealth changed for different age cohorts from 2019 to 2023. They analyzed data from the Fed, and they found good news that the wealth grew at historic clip from the end of 2019 to end of 2023. So a four year span, the average wealth of households under 40 grew by 49%.

Oh, my gosh.

That's pretty wild.

That is wild.

And wealth gains were higher for just millennials, who were 23 to 38 in 2019. Their wealth doubled from the end of 2019 to 2023. And so they go on to say, to be sure, a cohort entering their prime earning years is expected to see a big wealth gain as its members buy houses, begin to invest in earnest. Most surprising finding is that the gains came during and after the pandemic recession, a type of contraction that historically has meant far worse economic outcomes for youngers caught up in its wake.

Okay, well, it doesn't say it in here, but I would have to assume.

That those who are homeowners, that's what.

I mean, because what your home is worth today, we obviously all know, because the housing market's still crazy. But I mean, for some people, it doubled. Right. So saw wealth double. I mean, I would say. I would say that's a big part. And we see stats a lot with millennials, and Gen Z, for that matter, with lower credit card debt, even. Like, we see sometimes, you know, studies come out around that or avoiding personal loans. I mean, there's certain things that age groups maybe have seen from their parents and what they've done, and they're choosing something else. Maybe they're investing more because the market was good at certain points, right? We've had some good years.

So if you were in the market investing, if you were in the housing market with home ownership, you're going to see your wealth grow, your net worth is going to grow, which is probably the best scoreboard for finances versus a credit score or something else. So I like this, and I want to call out that this isn't just about millennials, because we know there's broke boomers, there's wealthy boomers, there's broke Gen Zers, there's Gen Zers doing better than us.

Yes.

And so there's nothing saying that there's a generational curse on any of these people, but it's all about the habits that you form. And the earlier you form them, the more wealth you're going to build.

That's how this works in the millennial age group. We were interesting, depending on, I mean, I know it's a span of years, but when we graduated college and we were entering the workforce during the recession of, you know, that 070809, I mean, that feel, you know, that was so bad, that's when we entered the workforce was at that point. And if you were in a position to say, you know, even though everything was so low, we're going to start investing. You buy low. I mean, you look back, you know, 1015 years, and it's amazing what can happen.

Yeah. Those that were in a financial position to do that, they didn't have all this debt holding them back.

That's right. That's right.

And I thought about it for a while. What caused that? Like, you're like, wait, during and after a pandemic, that's where all this wealth happened. Think about it. Everyone's stuck at home. So their spending went down, their savings went up. Everyone sort of did.

Yes.

They looked in the financial mirror, went, had an oh, crap moment. Maybe I should put this free money away. The government's giving stimulus checks, the student loans are on pause. You have a harder time spending money because you can't really go out to eat and go on vacations during the pandemic. I think all of that, on top of record low interest rates caused a lot of people to kind of expedite their. Their financial journey in a beautiful way. Now, there's a lot of people who didn't do anything smart during that time, and they're still where they were.

Yeah.

But there's a bunch of people that are in this group that did the right things. They actually knocked out their student loans while the payment was passed.

Yes, that's right. They weren't actually. They didn't have interest. They were putting all their money on principal, which was amazing.

They avoided going into debt. And so all of that, I think, has caused a lot of this, and I hope every generation benefited from some of those factors. And it's not too late, even in 2024.

Yes. And it's still huge, y'all. I feel like always the headlines, it's like it's a negative savings rate or the worst credit card debt we spent.

Or this generation is gonna be broke forever.

Yeah. I feel like we just. We hear the doom and gloom so much.

So, you guys, I'm done with it.

Some are doing well.

Done with doom. Done with gloom on your birthday. That's right.

That feels right to me.

Not on this show.

Not on this show.

All right, let's get to the phones. Jeff is in Spokane. What's happening, Jeff? Hi, guys.

How are you doing?

Hey, we're doing well. How can we help? Good, good. Thanks for having me on. So my question is about building credit for my son. He's 21 years old, and he graduates.

College tomorrow, actually, so that's.

Wow. So fun.

Yeah.

He's leaving college debt free, doesn't have any student loans.

Hey, Jeff, are you. Jeff, are you on speakerphone, by chance? You're echoing a little bit.

Just better.

Yes. Thank you so much. Yep.

Okay. Sure, sure. Okay. He's living college debt free, doesn't have.

Any credit cards, and has a reliable car that's fully paid for, and he won't be needing a car anytime soon, so.

Wonderful. He's good there. Yeah, yeah, yeah.

He's already accepted a job in Nashville at a hospital, and he'll be relocating in July.

Wonderful. Yeah, yeah. The.

The issue we're having is the apartment complexes that he's looked at.

He's all considering.

They want a positive credit history along.

With an offer letter showing that his.

Groupon salary, he doesn't have any credit history because he credit cards.

So I'm hoping you guys have some tips on building positive credit quickly or.

Any other suggestions on how to secure.

Housing without a credit history? Absolutely, we do.

Yeah. Yeah. We're not the place to talk about positive credit history, Jeff. But we can tell you.

I understand that. I understand that.

Yes. Can tell you that it is still possible to rent an apartment without a credit score. So it is. So the places that he may have looked may not. Right. So depending on the complex, they will have different rules and regulations. But actually, one of who used to be a Ramsey personality, Anthony O'Neill. Do you remember this? He called.

Oh, yeah.

How many did he call? He called like twelve apartment complexes.

And I've done this twice since then.

Okay. Okay.

Sorry, Anthony.

Dynamite.

I wanted to see for myself.

What'd you find, George?

And let me tell you, Jeff, a lot of good news. I did this on the fine print, my podcast. I did this on my YouTube channel recently. I put the transcript of these conversations in my book, breaking free from broke. And so here's the good news. The big takeaway is that you do need to be employed. So does he have the offer letter? Yes, he does. Great. He'll need to pass a background check. Is he a criminal?

Not even close, no.

Great. Does he have enough to potentially cover a slightly higher deposit that he would get back when he moves out? Yes.

He's already has a signing bonus.

Wonderful. Those are literally all the factors that matter. And I tell you this as a person who has rented multiple apartments without a credit score that they truly, they.

Call that said no. How many said yes?

Remember, I only think one. And that was in New York City. But it was more about them requiring like five or six times the income.

Because I think Anthony called Nashville once and now I will be honest, Jeff, I think this was a few years ago. Yeah, but I think he called twelve to 15 and I think locally. Yes. And I want to say it was like eight of them said sure. And he was sometimes, truthfully, the person.

On the phone, they don't even know. They don't have control. They don't know the backend software and system and all of that. But Jeff, what they're looking for is a bad credit score. So when they say, well, we have to run a credit check, what they're looking for is delinquencies. People who didn't pay their bills, who have a bad credit score, having no credit score, all they're going to say is, yeah, you might. Well, we might require the first month up front or instead of a $500 deposit, it's going to be a $1000 deposit.

Yeah. And I would talk to the manager of the apartment complex because if you just call the front desk, they're going to just probably just give you the script that they were told.

And I've also called just straight up landlords, so people that just, you know, they own a house, they're doing a rental. I called them and they say, well, are you employed? Will you pass a background check? Yep. And they went, oh, okay. Doesn't matter.

I think it's all in gloom, as you probably think.

Yeah. Don't go sign them up for a credit card because he needs to build credit. He's going to be just fine. In fact, he's doing so much better than his peers. And a lot of that is thanks to you. You raised a great kid.

Yes, sir. All right.

Congratulations. Appreciate y'all. Yeah. I'm going to send you a copy of my book, breaking free from broke. That'll outline a lot of this grad gift, a little grad gift for him. He's already done a great job. So this is just be a reminder that he's on the right path. So hang on the line and we'll send it to him. It's called breaking free from broke. And I know he'll enjoy it. It's fun, witty and very Gen Z.

Millennial and very George. I appreciate that about you.

For better and for worse, this is the Ramsey show. Hey, good folks, doctor John Deloney here. Listen, the Ramsey cash giveaway is back and you could win the $3,000 grand prize. Go to ramsaysolutions.com giveaway and enter every day. Plus, save 20% on bestsellers like my latest book, building a non anxious life. My questions for humans, conversation cards, and my friend Dave Ramsey's baby steps millionaires. Listen, don't miss these deals. Get 20% off@ramsaysolutions.com. Store welcome back to the Ramsey show. I'm George Campbell, joined by Rachel Cruz. As you've been listening to the show, you've probably heard us mention everydollar. That is our world class budgeting app. It's the best way to make the most of your money, creating and sticking to a monthly budget. Everydollar helps you do that. You can plan spending, track your expenses, use sinking funds, save for your goals, and it's an easy to use app that fits into your busy lifestyle. Both spouses can be logged into the same budget, and it really is just an intentional spending plan. You keep a pulse on what's actually happening with your money, and it helps people win regardless of where they're at in their financial journey.

So you can download every dollar for free in the App Store or on Google Play today. Be sure to check that out, especially as we begin a new month. My wife and I, we did our budget. It was May 1 and we were a little late because we already started the month. We say do it before the month begins.

Yes.

But, you know, we had a, we have a baby. A little crazy, a little grace, and it was wonderful. We both just talked through it. Hey, what's coming up this month? What do you have? How much? You know, blow money you're going to need this month. Oh, yeah, she needs to buy some new dresses. Yada, yada. And I know you posted that May is an expensive month, so a lot happening.

Expensive month.

Life blossoms in May.

I mean, I don't know what it is and I think it's, I don't know, age of kids, but I mean, it's everything. There's so many fees and gifts that you give in May, you know, into the school year. I mean, there's all of that. People are Venmo, can you Venmo this or Venmo that, you know, for this person or that person? And there's a lot, summer camps, you know, sometimes some of the deposits are due in May. Yeah, it's a very expensive month. And time wise, George, there's a lot money. There's a lot.

Two finite resources. So you better make the most of the money, at least with every dollar, and then lowers the stress because you're.

Like, here's what we planned, you know, teachers gifts. I have that in line item this month. And I went today, actually, and did some shopping online for them, which was so fun because I do love giving them gifts. And I'm like, great. We know. I know how much I have to spend and on each teacher and it makes the process more enjoyable.

I don't know.

I love it all.

Well, instead of being this last minute thing we didn't budget for, we don't have the money for it. When you budget for it, it just gives you the freedom and permission.

That's right.

I love that. And if you're not doing a budget, what are you doing? You're going to put it on a credit card because you didn't think about it. And one more reason to not have a card. And one more reason to do a budget. Love it. Brianna's in Chicago, up next. What's going on? Brianna?

Hi. Thanks for taking my call. George and Rachel. Happy birthday, George.

Oh, thank you.

Happy belated birthday, Rachel.

Oh, thanks.

She really.

Mine was back a few weeks ago. So my question. I've been using the baby stuff for a long time, and I have no real estate, and I just haven't been in a position to be able to buy anything. So I feel like I'm not really using the baby steps, but I'm trying to do everything else. So I guess my question is, what? What should I do? I'm happy to share.

Well, when you say you're not using the baby steps, you're doing all of the steps. You're just skipping three b, which is save for a home down payment.

Yeah. Yeah, well, I know, but I have a lot of cash, and I have. I have retirement funds, and I have a self managed brokerage account and emergency fund and no debt.

Wonderful.

And I'm 47, so I'm getting older and older and older, and then I, you know, I know. Like, you know, Dave Ramsey says that real estate's an inflation hedge. It's absolutely one right now. And you're in the Chicago area? Yeah.

Ish.

Yes. I'm not in a place where I can buy a place easily. I mean, the only thing I know to do is just try to stack up cash and watch everything get more expensive and watch my cash get less valuable.

We'll try to help you set it at a more concrete goal instead of just hope and pile up cash. So how much money do you have that is in non retirement? Like count up the brokerage and count up everything that's not your emergency fund? How much could you liquidate?

190.

Okay. And you're saying 190 is not enough to put down on a property for you to live in? Feels like enough for me. Even if it was a condo or townhome in your area?

Well, I'm in a weird position too, because I've worked very hard. I have a pension, and I'm starting another new career. And I have no kids, no spouse. I froze my eggs.

So.

So what does this have to do with your home, your home ownership journey?

I'm working very hard. I don't know, like, where I'm gonna be in the next couple of years. Like, I mean, I kind of know.

Has your career been in this area? Is it a, you know, in office job?

No, it's a very. I mean, didn't you write the book about doing what you love or something like Cancun?

That's Ken Coleman from paycheck to purpose.

Yes.

So I'm living purpose now, and so I've worked my butt off to be able to live.

Okay, but you're saying, hey, I don't know where I'll end up. I might move in the foreseeable future. Are we talking two years, three years, or is this like seven years?

It's very industry. Whatever the industry wants is where I'll go. So I'm saying probably, I'll probably be in this area for the next couple of years, but I don't know, about three to five to seven. I'm not really sure.

Okay, well, if it's at least three years, I think it's a wise thing to buy. And you don't have to go get a giant single family home just because you can get a condo or townhome and that'll still be a great hedge. It'll still appreciate in value. And I think it's a wise thing to do instead of having, you know, to have a fixed expense instead of, you know, paying rent every month, especially. You've done such a great job all across the board.

Yeah. And rent's going to continue to go up as well. So you can either choose to pay yourself, you know, in a way you're, you know, to build equity or you're paying someone else. And again, renting for a season is a really smart idea if you don't have the money, but you're in a great position to have the money and to build some equity and all of that. And I know, you know, even we have some friends, a couple of families that we know that have moved from Chicago, and it's. And almost they're saying it's not even as much as the house price anymore. It's the tax.

Taxes.

How expensive?

Property taxes there. It's wild. So, yeah, you do want to be wise with it and know, but yeah, I mean, I would be putting something into an asset like that, Brianna. I mean, I think it's a great place to put your money.

And so the parameters, Briana, to help you kind of just go, okay, I'm ready, or I'm not ready is, can I do this on a 15 year fixed rate mortgage where it's 25% of my take home pay, which means after taxes, but before other deductions, like 15% investing your healthcare premium. So if you do that math, you know, how much do you make a year? Gross.

Oh, well, it's weird to say gross because it's, I mean, I could just say I bring home eight a month.

But that's after you invest and pay healthcare.

Well, that's net with that before investing.

Before, because you're not. You don't have an employer investment plan?

Well, I already have about 700 in retirement.

Okay, let's go with the eight number and then go.

Okay.

We want 25% of that going toward mortgage. That means you want to spend about two grand, and that includes principal, interest, taxes, insurance. So now you have an actual ballpark of what kind of home you can afford. And that might be. Okay, I can afford a $400,000 townhome in this area based on putting 190 down and taking the rest out in a mortgage. And that's what this payment would end up being. And then you go, all right, let's shop. I'm going to get in touch with a Ramsey trusted real estate agent and start shopping the market and find something in my budget.

Okay.

But I don't want you to sit on the sidelines for years because you don't have enough to pay cash and the market's a moving target. Buy it when you're ready under those parameters.

Okay.

And if that means, you know, I'm going to move a little further out, I'm going to do a condo instead of single family. It's okay to adjust expectations and, you know, it's not settling. You're just going, here's the reality of what I can afford.

Right.

So I hope that helps with just putting some bones on it. It feels like it's been a lot of emotion. And here's what I think I should be doing, and I'm not.

The great housing crisis of 2008, and I was. I was a victim of that. You've seen some things, Ramsey. And so, I mean, it took me four years to sell a condo at half the price. So it. I went through that totally. I'm very, very traumatized about buying a place.

Yeah, totally. And right. And rightfully so. You've been burned by it. Right. But all the indicators that we can see is that it's just going to continue to slowly go up.

What's your rent right now?

Sorry?

What's your rent right now?

Oh, it's 28.

Okay. So you're already paying 2800. So it's not like, you know, switching over to a mortgage with your income and finding something even cheaper with a mortgage I think is very reasonable.

Okay.

It's also not going to go up next year. Stick to a 15 year fixed rate conventional. So I hope that helps and gives you some hope. I'm going to send you a copy of Dave's new quick read called real estate the Ramsey Way. I hope it gives you some confidence and peace as you enter this home ownership process. And I'll also gift you my new homebuyer's course. That's inside of Ramsey. Plus, I'll gift you a Ramsey membership to go watch that as well. So hang on the line. Kelly will pick up. We'll gift you both of those. Hope it helps you along the journey. This is the Ramsey show. Welcome back to the Ramsay show. Our scripture of the day, Luke. 1428. Suppose one of you wants to build a tower. Won't you first sit down and estimate the cost to see if you have enough money to complete it? Love that one. Look at that, Luke. Talking about budgeting.

Look at that. You have the money before you start.

Ahead of his time, that Luke, he was a doctor, right? Yeah, very process, numbers focused.

I like that.

Not a disciple.

It's.

Oh, is this your fun fact?

Right? Not a disciple. I'm just all the guy. Matthew, Mark. Luke. Yeah. John. Yeah.

All right.

There's a biblical.

Take me back to Awana. I got some learning to do. Rachel. All right. The net. The quote of the day comes from Graham Norton. A good rule to remember for life is that when it comes to plastic surgery and sushi, never be attracted by a bargain. That. I've always told Rachel that. And, you know, she's a big fan of both. And it's hard. You get tempted by the price. I'm kidding. She hates. She hates sushi. I'm having fun. It's my birthday. Am I allowed to make a joke?

Unbelievable.

My american right. It's my first amendment right.

Rachel give me a facelift and a spicy tuna. You know, call it a day.

Here's a $100. Go get you something now. All right, let's get to the phones. Todd is in Baltimore. God, how is it going?

Solve us from this crotchety old man, man.

Todd can't help.

Todd. Can you help us?

Can we help you at least?

Can you help us, Todd?

I hope you can. So my 20 year old son is under contract to purchase a house for $45,000. And the house is probably worth about twice that much, which is why I trying to buy it. But anyway, he's a part time student, part time working. He probably only brings in about a thousand a month. I'm thinking I'd have to cosign on the mortgage, but I'm wondering if I even need to do that, because. All right, my thought is, what if I take money out of my line of credit? We go to settlement with cash. We avoid the whole mortgage process and the costs with that. And then he gets his deed or whatever, and then he just turns around and gets his own line of credit and then pays me back.

This sounds like two broke people moving money around. If you both need a line of credit, this might not be a good move.

He may not be in a position to buy a house, even if it is a $45,000, which.

Yeah, I'm curious. Why are they selling at half price?

Oh, it's a. It's a friend of ours, and they're trying to help him get on his feet.

Yeah. He's a college student, part time student.

Right, right.

So they're willing to basically gift him $45,000.

Yeah. Juggling is this. Yeah, we'd be doing a juggling act for two years until he can get himself a job that is more steady income, so he can actually be paying things.

And he's gonna get into this house, and things are gonna start breaking. They have to replace. Yeah.

I'm guessing this house is not, like, a wonderful house in perfect condition. No, it's ready.

It's ready to go there he.

Where do you guys live? I'm just curious, for an $80,000 house. I mean, I've heard of, like, $180,000.

Is this a manufacturer?

No, this is a row home in southwest Baltimore.

Hmm. I'm just shocked that there is any quality real estate at that price in the northeast. It worries me that there could be something. Why are they selling this? That's kind of one of the questions I have.

Well, it's a friend of mine who. She's got several homes, a handful of homes. And so she was going to just put it on the market and sell it.

Yeah, I would.

My son.

So even though it's a deal, he can't afford it.

Yeah, he can't afford it. Now, Todd, if you had $45,000, and you were like, you know what? Yeah, I'm gonna. I'm gonna buy this, and I'm gonna let my son rent it from me, you know?

But then you're a lender and a landlord to your own son.

That's not a lender. I'm just saying, if Todd said, hey, there's the cash. Yeah. If he had the money and said, oh, yeah, $45,000, I'll buy the house, son, for two years. You can rent it. Maybe I'll turn around and sell it to you when you're in a position, or maybe not, you know, whatever. Like. But you both don't have $45,000, do you? In cash?

No.

Yeah. So you can't afford the house.

Do you have any debt, Todd? Personally?

No. The only debt I have is the line of credit on my house that, you know, I've got a little bit on down on it.

What's the balance on that?

So it's an 80,000? Yeah. Let me see. The available credit right now is 42,000.

And how much have you used of that? Is this like a home equity loan or are you saying a HELOC. A home equity line?

Yeah, it's a home equity line of credit. So the credit limit is 80,000. And my available credit is around 42 right now. So that's the only debt.

So how much do you owe? 42?

No, I owe about 37.

Okay. Yeah, I would pay this heloc off and then get rid of it. It is not a blessing to you. And, you know, going backwards further by taking out more of the available credit, it's just like a credit card attached to your house. It's putting your home at risk. It's going to put you in a bad financial spot. So I think we pass on this. We say thank you to the friends if they want to rent it to him. Let's do that for a while until he can. Yeah.

With a purchase. With a. With an option to buy. Yeah, with a purchase agreement. I mean, they could totally do that. And it's not like they don't need.

This money anyways, if they're willing to forfeit $45,000. So rent it to him for $500 a month until he gets on his feet. And then one day he'll be in.

Spot to buy it. And if he wants to buy it, or he lives in it for two years and he's like, this is a crappy house.

Honestly, Todd, at 20, I didn't know what the heck I wanted in life. So the chances of him wanting to be a long term homeowner in the spot, I don't think is going to be the case. He's figuring out his life. His brain is still developing.

Truly, I think your fully developed at 24.

It's a lot to take on at 20 years old as a part time student to take on the task of home ownership. And so for those reasons, I'm out on this.

You sound like shark tank.

That was my goal.

And for these reasons, it's called a.

Reference when you reference something else that exists.

Right.

But Todd, does that help you at all? Yeah. Yeah.

Well, well, okay.

He.

Now he signed a contract with the person already. I mean, it's a friend. Yeah, yeah, he.

Yeah. So let's see if the friend is kind enough, if they're real a friend, to just cut it up and go, listen, this was a mistake. You guys are so kind, but we need to back out of this. It's not going to be financially viable right now. It's an okay thing to say.

Yeah.

But I would not just go through this and put yourself in a financial hole where you become the lender and the landlord, because if something goes wrong, it's on you.

And then.

And at the end of the day.

You'Re gonna want him to buy it. And what if he doesn't want to? You're 22, and then you're stuck with it and still the debt and everything, and you're have to sell it, and.

It'S just my friends have feelings about you buying it instead of him. I don't know. This whole thing, basically, it just makes my stomach turn in a weird way. But that's our take.

Yep.

It's your life. You live it. Should we take one? Rachel, it's dicey.

Go real quick.

All right. John and Waco, can you get right to it? We're up against the clock. Hey, how's it going? Good. What's the question today?

Quick question. I have a pretty large car note, and I'm a traveling employee with a company based out of Wisconsin. Just kind of focused on setting my life up. Fresh out of college. Should I be throwing all my money at this. This car loan, or should I be putting more towards savings? You know, it's kind of special circumstances where I'm at.

Why is it special?

I move around every couple of years, and I'm still trying to, you know, have a home base in Wisconsin, but I still need to support myself on the road.

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

60,000.

Holy crap. What do you make?

170 a year?

That gives me a little bit more peace. Okay. Why did you have to buy a $60,000 car for work that you're going to just thrash?

Wanted something reliable to take across the country and tow stuff around.

I guarantee you my zero nine Honda Civic would have outrun that vehicle. That thing will last 30 years, and it cost me six grand, so I don't buy that. The problem with you using this for business, you're going to depreciate that vehicle so fast, you're literally throwing away hundreds of dollars out the window every day as you drive it. It.

Understood.

So I would either sell it and get something cheaper or pay this off as aggressively as possible. You have a $1,000 in the bank. What's that? I'm sorry, do you have a $1,000 in the bank? Oh, yeah. Okay. Outside of that, I'm attacking this vehicle. Is that all your debt?

Yeah, that's all I did. I have no student loans, no personal loans, no credit card.

Okay, that's great.

All right.

I would sell it. John, don't. You don't need a $60,000 car. You don't need a $60,000 car. I'd sell it.

You'll be lucky to sell it for 40 at this point, depending on how many miles you put on it. So that's the worst part about buying these brand new cars and then wearing them down instantly. So I hope that helps.

A lot of joy on your birthday, George.

That's how we do it right here.

Happy birthday.

Thank you, Rachel. Thanks to the booth. Thanks to all of you, America. It's been a great birthday, Rachel. This is the Ramsay show.

Hey, folks. Dave here. You want to hear even more life changing content from Ramsey? Download the Ramsey Network app so you can catch all your favorite shows all in one place. Like the Ramsey show, smart money, Happy Hour, and the doctor John Deloney show. You'll get real talk about life, relationships, money, and your career. Plus, the app lets you browse by topic, like debt, business, or selling your home. Get the content you want whenever and wherever you want to listen. Download the Ramsey Network app today.