If You Follow the Trends You’ll Fall for the Traps
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Live from the headquarters of Ramsey Solutions, this is The Ramsey Show. It's where we help you win in your life. Specifically, winning with your money.

winning in your work and winning in your relationships. 888-825-5225 is the phone number. 888-825-5225. I'm Ken Coleman. George Campbell joins me this hour. And we're here for you. And we want to help you. George is going to help you manage that money. We want to figure out, do we need to get out of debt? Are we investing? And I want to help you make more of it. How about that, George?

That's a great two-fold plan right there. That's my goal when I'm on the Ramsey Show. I needed to tell James. It's just help you make more money. That's my role as a Ramsey personality. When you need more money, I'm going to try to help you figure that out. So...

Obviously, that has a work context, but let's try to help you make more. And there's very few financial situations that wouldn't be helped by making more money. And in today's inflationary kind of environment, everybody's sitting there going, I need some more money. Even those that are debt-free are going, hey, I still have aggressive financial goals. How am I going to do this? There you go. Ken can help on the work and career and money side. The more money. The more money, baby. That's what we're about. Let's go to Sonia to get us started, or Sonia. I never know. Sonia, Sonia. We'll find out. I'm going to go Sonia.

Let's go to Syracuse, New York. Is it Sonia? Oh, I hit the wrong number. I apologize, guys. We're doing great so far. Hold on. There we go. Sonia or Sonia? Which is it? Sonia. Sonia. I was wrong. Dang it. If I had a nickel for every time Ken was wrong. Hey, Sonia, how can we help today? So long story short is I am a stay-at-home mom of two. And for the last eight years, my job has been my babies and taking care of them.

My husband is an amazing provider that we were able to live off of his income, but we are stuck in an apartment thanks to the economy and the housing market. And I am now able to enter the workplace again. I started this.

Being able to realize all the things I've been doing that I've been wanting to do for the past eight years, I've been able to do some of them. And one of those things has been to sew garments for myself. Everybody in my family who's ever tried something on their own, my mom tried a bakery, my dad is a carpenter, none of them have met success.

And if I'm going to be spending any more time and money not in corporate America, I need to know how to make this into a success so that I'm not wasting everything. And my idea was to start a YouTube where I just kind of make fun of myself and putz along so that people can figure out like, oh, that's what that word means. And this is how that works because I don't think there's an audience that knows that yet. Are you talking about sewing?

Sewing garments, yeah. Okay, so it's a YouTube channel focused around sewing and crafts, and you want to just have a fun, kind of entertaining way to educate people.

Yeah, and there's a whole vocabulary on sewing clothes and using the right tools and techniques and things that I don't think anyone's using for, you know, like, oh, this is what this word means. Oh, this is how that works. Yeah. And things of that nature. But I, again, I don't have a metric to use as someone to go, hey.

This is how that works. You're my success as your guide. I don't have that. I'm kind of just being so cool. Well, are there other YouTube channels that have massive followings and seem to be doing well in that world? Yes, but, again, they all use jargon and vocabulary that is assumed to be already known. Mm-hmm.

Well, so a couple things before we get into this. You're looking to make how much money? Because the way you presented this question is we want to get out of our apartment and in this economy right now, which we're seeing this every day, it's harder and harder to get a home. So how much money would be a number that you guys have discussed, you've got in your head to say, all right, this would help us move from apartment to house at some point in time? What's that number? Any.

Well, it's not any. There's a specific goal that you have to have to get out. Is it $20,000? Is it $25,000? Is it $30,000? In other words, if we were to add this much money to our combined income every month, it would allow us to get the down payment that we need to buy the house we want.

So what's that number? The thing is, we have a big down payment already. We have close to 20%, including closing costs, emergency funds, things of that nature. Okay, great. We have close to all of that already. We have, right now, our savings and all of those things, the giant pot is close to 80 plus thousand. Okay, so then what do we need the additional money for?

Because I want to give my children braces and I want to be able to have a little bit of money to buy fabric. I get it. So here's the deal. I don't want to belabor the point and get you stuck. I'm not trying to put you on the spot and make you lock into a number, but just give me a round number, then we'll move on because I want to cover two of the things I've heard here. So how much more additional money would we like to make? We've got to have a target.

20 to 30. 20 to 30,000. Great. Okay. Now we got a number and let's pick 30. Let's go on the high end just for the heck of it. It's 2,500 bucks. So what we've got to do when we, when we think about something like this, like how do I use this hobby or skillset to make more money? And I don't mind the YouTube idea. I think George asked the right question. Who's doing it well out there. The only challenge I have is, is what's more valuable, uh,

The jargon associated with sewing or the skill of sewing, which is a fast-fading skill that this younger generation, the do-it-yourselfers, cut corners, cut costs, I think there's an appealing idea there. I don't know if jargon is the hook for your YouTube channel. But I'm not in any way trying to rain on the parade there. The idea, I'd continue to look at what works, and I would tell you, start doing it. Do two to three videos a week.

and don't quit for a while, and let's just see if it picks up steam. But I want to address two other things very quickly, George, for Sonia. Number one, you led off with everybody in my family or a list of people in your family that tried an entrepreneurial thing didn't fail, and I think that's got a lot of doubt hanging all over you. And I want to address that because that's a mindset thing.

You can't assume that because other members of your family failed at entrepreneurial ventures that you're going to fail as well. And I want to make sure that I call that out. You got it? Yeah. All right. So let's shed that. We've got to shed that. That's a coat you're wearing. Now, real quick, here's what I'm going to suggest, George, and I want you to weigh in real quick. You've got about a minute. Sonia, I think you ought to actually start offering tailoring services for real money.

Like, I'm a guy, George and I both, we love getting our pants tailored. I went to the tailor last week. Our jackets. I think I would work Facebook and local and just your personal networks and connections. Hey, listen, I'm an expert sewer, and I've been doing it a long time, and I'm offering tailoring services. And I'll tell you what, if you give me a quote from your local tailor, I'll beat it by...

5%. You know, and start making money sewing while we're trying the YouTube. Because the truth is, YouTube, it might be three years before you see a dime from this thing. And so you have conflicting goals. One is I have a dream, and one is I need money to cover the braces. And one day they could coincide. I agree. So...

So, so, so. I see what you did there. Sonia, that's it. Start sewing. Everywhere you can. The guys in the booth didn't like that play on words. Ken, we've got to taper this segment off. We do. Let's just go ahead and hem it right here because we've got to go to commercial break. Let's put a safety pin in it. We'll come back. Sonia, you can do this. Let's start making money now, sewing everywhere we can. And maybe you're going to reap a lot more money. This is The Reign.

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Welcome back to the Ramsey Show. I'm Ken Coleman. George Campbell joins me. We're here for you this hour. Excited to have you with us. 888-825-5225. I'll tell you something else I'm excited about, George.

Can I guess? Yeah. Total Money Makeover Weekend. How did you know? I just felt it. We got that ET connection. We have that kind of chemistry. We've known each other a long time. You had that Total Money Makeover Weekend look in your eye. Okay. Wow. I tell you what. A glimmer of hope. I need to stay away from the poker table. I'm so easy to read. I caught your bluff. I'll tell you what. Well, listen, we're very excited about our brand new event, Total Money Makeover Weekend. It's happening May 10 and 11 right here in Nashville on our campus at

at our sparkling, beautiful Ramsey Event Center. Still got that new event center smell. It does. It does. Smells like a new car in there, and that's always exciting for George. And if you're wondering, what is this? This is a weekend where you're going to get a crash course on everything we teach about money, a lot of brand-new content. I'm doing brand-new stuff, and I'm going to talk about how to get rich.

Really? Is that true? It's absolutely true. I'm letting you know right here. Yeah, a little bit different than what people, but you know, it's obviously I'm the work personality, but I think people forget that like when Dave talks about the big shovel for decades. Your greatest wealth building tool, your income. And so we're going to talk about what does it take to make money in the short term?

Think baby step one through three, I got to be gazelle intense. And then how do we make money? How do we really start to multiply into baby steps four through seven? Not just a temporary side hustle for a season, but how do you actually amp up your career trajectory? So how about that for a little tease? I'm excited about that. Well, I'm planning something new. We just met to talk about it. Can you tell us? I can only tell you this. It may involve more than one microphone.

We're trying something really new and exciting, so you don't want to miss it. Our team's been working hard on this event. Every personality will be on stage, Dave Ramsey included. It's a Friday and Saturday. It's a Nashville experience, so start budgeting for travel and lodging, transportation, and of course, get your tickets, because right now they're about as cheap as they're going to get.

That's right. They're going to go fast. Early bird tickets start at just $99. So you'll want to jump in right now, ramsaysolutions.com slash events. Okay, let's go to Boston, Massachusetts, where Chris is awaiting. Chris, how can we help?

Hey, so I've been listening to the show and reading the books, and I realized kind of where my wife and I have messed up. We just kind of never accomplished baby steps one, two, or three, and we're just kind of spending money as we made it. Those are pretty important steps. Good ones to not gloss over. Yeah, yeah, yeah.

So in December, I got laid off and kind of everything started to catch up a little bit. So we never really got into trouble or behind on anything, but it brought to light kind of how the lack of preparation just didn't serve us well. So I am starting work back up on Monday and I was given the opportunity to cash out stock options from a startup I worked at previously and that hit my bank account this morning. So I...

What?

What a productive morning, man. I'm lucky to get my shoes on and get out of the house. This guy has been getting checks and cashing out debt. 5, 6, 30. Way to go. I'm proud of you. That's a lot of big steps to take after kind of fooling around for a while. Yeah, and it made me feel so good. So now the next thing is, it's like, what do I do next? So the situation we're in now, we have $165,000 left on the house.

But my wife's lease of her car is up, so we've been leasing as well. My wife's lease of her car is up in two months, and we have a... My youngest is 17, and she's going to be starting college next year. And she's been... And, like, these conversations have just given me so much anxiety around, like, student loans that she wants to take out and all of this. So it's like... So now we're wondering, after we've done steps one, two, and three, it's almost like we're going to get...

you know, when we have to get a new car, when we have to do something with the student loans, when we want to start investing, I'm not sure where to go next kind of thing. Yeah. You got a lot going on and you've done a great job up to this point. And so your next step, you are in baby steps four, five, six, and they're in order, but they are, you got to do them in priority here simultaneously. So baby step four, invest 15% of your income into retirement accounts. So how much do you guys make a year?

So I make $140,000. My wife makes $80,000. So, so far we've been, that's one thing we've been pretty consistent with in my 401k and it's split between like traditional and Roth. I have $145,000. My wife has $165,000 in hers so far. Great. So dial that to 15% for your wife, dial that to 15% for you. You've got baby step four locked and loaded. You move on to five and that is putting money away for college.

Obviously, this is a dire need right now. So this might look like, hey, we're going to shovel as much money as we can to cover this next semester or two. And then beyond that, we need to also upgrade this car. And so are you going to do an early... You're going to do the buyout of the lease when it's done? Are you going to hand it back in and get something...

He ended back in and get something. So that's what I was wondering. Like, do you use the six months of bills that like the finances basically to use that to pay off the car and build that back up? Or is it okay to go into debt if we know that we're done with debt? Okay. So yeah, the key here is whatever we can afford is what we buy. And that might be a real crappy car right now, but pretty soon you get those paychecks in and you don't have any debt payments except for the house.

So you're going to be able to stack up money real quick to get that used new-to-you car. Okay. So I would figure out what the buyout amount is for her car and see if that's something that's feasible or if you're going to have to just give it back and then buy something used for now that's in that maybe $5,000 to $10,000 range. How much money do you guys have outside of the emergency fund that you can use? About $5,000. We used a lot of it when I had gotten laid off. Okay. What do the taxes do for your stock option?

Cash out. It'll be next year. So I did it this morning, so it'll be due next year. Okay. Because what I'm wondering, if we use that money right now and then we save back up to cover the tax bill when that comes due. Okay. That's another thing I was wondering. Okay, cool. Taxes scare me. Oh, I agree. Yeah, I want you to be prepared, but I'd rather you cover the taxes later and save up than go into debt for a car right now.

Okay. And then having the hard conversation, and Ken, jump in here, with your daughter, you said, going to college? Yep. You got to say, hey, listen, mom and dad, we don't have the money to cover all four years, but we're going to come up with a plan so that you don't go into student loan debt. And that might mean she works part-time while in school. It might mean she treats scholarships and grants like a part-time job, applying for those like a crazy person. Yeah.

And so all of that combined, along with your savings that you're going to be able to put towards this, will help her get through at least that first or second year, and then we can develop a game plan for the rest. Is she a good student? She's got a lot of options via maybe her GPA and her SAT or ACT? Yeah, and it sucks. It doesn't suck. But my oldest daughter, we didn't worry because she got a full scholarship, and then all of a sudden –

everything happened at once. You never plan on losing your job and then it happens and it's like, oh my God, we, yeah, we're not ready for this. So she's got scholarships to some school, not full, but then she just got, I forget what the name of the booklet is, where she can start applying for scholarships and grants and all of that. See, she's got options. She's going to be aggressively doing

that. Yeah. She's got options. And so you've got to explain to her, it'd be one thing if she just had no options and the only place she could get in. And then it was way too much. Now you're going, man, my kid really wants to do this. And now you're trying to go their dreams and all the cultural pressure. If all their friends are, are getting into their favorite school and all that in your situation, she's got options. She's going to go in her self-esteem is feeling pretty good. I would help her see, Hey babe, uh, nobody really cares where you get your degree from.

And so let's go where financially you get to come out of this deal with your life in front of you, not your degree hanging on behind you because of all the debt. And I think that's just helping her see, hey, you've got so many options. Take the best option. And the best option is the one where you get what you need degree-wise, but you're not going into debt. And so...

Chris, I'll tell you, as a former Bostonian, I commuted to UMass Boston and lived at home in order to save money. Instead of going to Emerson, which I got into, it was going to be $200,000 for four years. And even then, not knowing Dave, I went, that feels like a stupid amount of money to pay for a film degree. Let me go ahead and go to this in-state school that's a fraction of the price while living at home. So she has to really think about how are we going to do this without debt? That will help make your decisions.

Yeah, really good stuff. Thanks for the call, Chris. You're on your way. Stay with the process. It works every time. You'll get that house paid off, but let's wait and figure out investing in the car and college. Then we can figure out paying down the house early. Yeah, you're in good shape. All right, don't move. A couple quick commercials, and we'll be right back. This is The Ramsey Show. ♪

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Welcome back to The Ramsey Show, where we help you win in your life. We want to help you make more money and then keep it. Today's question of the day is brought to you by Neighborly, your hub for home services. When you're looking to buy a home and need a professional inspection, trust the Neighborly brand house master.

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This is a juicy one. When will Dave Ramsey and Ramsey Solutions admit they were wrong on Bitcoin? Never. Jake. Never. Is this a real email, James, that came in?

Yeah, it's real. Wow. But the question is real, but the email address they gave was bogus, and they gave us a phone number to like a trash compacting company, so they didn't. Oh, so this is what we call trolls in the industry. Yeah, and Jake thinks he got us. Well, I doubt his real name is Jake. Yeah, it's Jake from State Farm. Jake is very excited right now that he's probably listening. He's like, oh, I got Ken and George to read my question. I got them.

And they can't track me because I gave them a fake phone number and a fake email. Ken, we're going to take the high road and give him a real answer despite his fake question. Well, his question was, will we admit that we were wrong? I don't think this is a right or wrong thing. And our stance on crypto and Bitcoin has not changed. And it's not out of sheer grit. It's that we were never angry at Bitcoin. The problem is people...

cashed out their retirement accounts betting on a coin. And if you ask anyone who actually knows about cryptocurrency, they'll tell you, "Oh, it's not an investment, it's speculation."

This is speculating. This is betting. It's not that dissimilar to gambling in Vegas. Do people make money gambling? Sure, some do. And they brag about it. And there's a lot of people who get hurt, who get burnt, and those are the people I'm most concerned about. And so I talk about this in my new book, Breaking Free from Broke, Under the Investment Traps. And I talk about cryptocurrency, which Bitcoin is sort of the 800-pound gorilla in the room of cryptocurrency.

And I compared it to Mary Kay for young men. That's what I called crypto. And I lay out the reasons. I talk about, you know, multi-level marketing. There's a lot of fangirls out there and there's crypto fanboys. And in their Twitter bios, Ken, they say hashtag Bitcoin. They have devoted their life. It's an obsession. They watch this 24-7 because that's how Bitcoin trades.

And right now, I just checked where things are at with Bitcoin. It's back at some near all-time high levels at about $61,000 a coin. So it's back up to its all-time when people were going crazy over it. And not long ago, Ken, it was... This was... Let's see. Let's go back to September of 2023. So this is...

five months ago, it was at 25,000. And so you can see the volatility of something like that worries me because most people doing this are young men who are not investing in retirement. They're not investing into things that have a proven track record. Instead, they're putting all of their eggs in one basket. And we've always railed against single stocks for the same reason. It's too risky to put all of your money into one thing. Yeah, highly risky. And that's the whole point. And it's not proven either.

This is a new situation that is not regulated. And I hate government regulation as a whole. And I think it will soon be regulated. Once it's regulated, this is something that probably needs some good old-fashioned fundamental regulation to protect consumers.

And so that's the reason why we're like, look, this is be careful. This is, as you like to call it, a trend with a trap. That's it. And so, again, if you want to invest in cryptocurrency, be my guest, but only do it after you're already investing 15 percent into tax advantage retirement accounts and you're doing this with fun money. Dave calls it the burn test. If you burn that amount of money on the kitchen table, would it change your life for the worse?

And if the answer is no, then go for it. If you're out of debt, you have an emergency fund, you're already investing 15%, if that's what you want to do with extra money, bless you. And if you do well with it, we'll cheer you on and be happy for you. But I can't in good faith go on air and tell people, hey guys, put your money into Bitcoin, and then it drops in value by half. If that happened with our 401ks, we would be rioting and losing our minds in the street. And this stuff happens all the time with crypto. And over time, I think it'll stick around. It's not a trend that's going to go away.

But we've seen a lot of fraud and scam coins and, you know, these Dogecoin and all of these kind of meme coins that have come and gone. And people have, I had a family member, not a direct family member, who put $400,000 into Dogecoin and it turned into $60,000.

And so that hurt my soul to think about putting your life savings into something like that, to see it burn away. Yeah. Wow. Might as well buy lottery tickets. I mean, there's not much different. And so I'm blessed to all of you who want to troll. And if you're going to do it, give us a real email. Don't be a coward. Yeah. Hiding behind the bushes. Very manly. All right. Let's go to Landon, who is joining us now in McAllen, Texas. Landon, how can we help? Hey, Ken. Hey, George. How y'all doing? Good. What's going on?

Hey, so my question is, how do I bring up pay raise structure with my boss when it was never brought up in the interview process? Is there a annual meeting that is part of the normal rhythm there at that company where they meet with you annually and kind of go over your growth and where you've been, where you are, any of that happening?

Uh, not that I'm aware of. Um, like we just, I mean, obviously the end of the year just happened and I was working here at the time I've been here about six months, but, um, no, not that I'm aware of. And that's kind of what I'm asking. Like what, how do I bring that up with my employer? Uh, I wouldn't, I wouldn't bring it up in the, uh, context of a raise. I would bring it up. Hey, I've been here six months and I know I've only been here six months. And I, and I realized that when, when I got hired, we didn't really talk about a performance plan, a growth plan, uh,

Do you do that?

you know, and are in, in, in, if you don't all the time, if it's not like a formal process here at the company, I'd love, you know, to, you know, do we do an annual meeting? I'd love to meet with you once a year, as far as my overall performance at a minimum and, and, and set some, some parameters, making sure that if my, if, if expectations have changed or if job description is slightly different, that we're on the same page about what you expect of me, how are we measuring those results? Um,

And then how are we rewarding those results? I think that's a mature, very thoughtful way without asking for a raise and without kind of saying, I deserve this and not feeling like,

You know, you're jumping the gun because, listen, you've been there six months. George, I don't know if it hits you this way. Six months feels a little soon to be having this conversation. But if you want to have it, that's the way to have it. I would certainly have it at 12 months and I would raise it the same way I just gave to you. Does that make sense? Any questions about that?

Right. Yeah. And that's kind of what I was aiming for. I wasn't going in to this thinking I want to ask for a raise. Like, I just want to know what the process is. What's your role? I'm a construction superintendent for a general contractor. Okay. So in your industry, in your field, what does it look like to kind of climb that ladder with growth? What would be the thing you're aiming for, you know, three years from now, five years from now?

So I could move into like a more, like more of a general superintendent role where, where the pay would be higher. But yeah,

I'm new to this type of role, so I'm not expecting that kind of growth in the next five years. I'd probably be in the same role for the next five years just with pay increases. Okay. So it's less of a growth plan as far as I want to be in a different role and more just like, hey, as I'm here over the long term, what does growth look like even in this role?

Right. Exactly. Yeah. Again, I love it. I would just wait until 12 months because even if you go in saying, look, I'm not asking for a raise, but I'm asking what raises are like, let me tell you what the leader's going to hear. And listen, most leaders, when there's not some type of structured conversation,

way of dealing with these type of issues, like an annual meeting where we talk about promotion and race, they can get defensive pretty quickly if you hit them this way. And that's the last thing you want to do. One can come across as entitlement even when that's not your tone or your heart. That's right. And so that's what we're more concerned about, especially a young guy coming in for six months, you know, the eager beaver who's like, hey, give me the raise. What can I do? Put me in, coach. I think the best thing you can do is crush it at your job and have everybody notice. That's right.

That's right. And here's a fun little exercise, I think, to play off of what George said. You know, what would you need to see? Put yourself in your boss's shoes and say, what would they need to see over the next six months where they just feel like, man, we got it. We got to give them a raise or we're going to lose them.

Just come up with that. You can't go wrong. But I would literally visualize that and say, okay, I need to make that happen. And get after that, and good things are going to happen, I promise. You won't have to worry about it. Thanks for the call, Landon. Good stuff. He's George Camel. I'm Ken Coleman. This is The Ramsey Show.

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Welcome back to the Ramsey Show. I'm Ken Coleman. George Campbell joins me. And we are here for you, America, to answer your questions about money and work and relationships.

And, you know, it's that time of the day for us. It's post-lunch, mid-afternoon hour approaches. Getting the sleepies. And on the commercial break, Georgie boy told me that he was fading a little bit. So he's got his cold brew in here, and this has become one of my favorites. You ready for the sound of nitrogen escaping this can? Yeah.

Wow. That was like a rocket ship taking off. That was fantastic. And that's what listening to the Ramsey Show is kind of like. You listen in, you watch on YouTube, you listen to the podcast, and it's like that. You know when you start listening that it's just that sound, and the goodness has been opened. It's in the form of hope and practical steps. I knew you'd find some way to make this inspirational. And you get a little jolt out of it.

That's good. It's real good. Just like George's Cold Brew. In fact, this segment is brought to you by George's Cold Brew. Man. It's not a thing, but it shouldn't be a thing. I think this shows that we're human. You know what I mean? We need caffeine just like the rest of America. Yeah. Yeah.

So cheers. And you, by the way, I need to get in that habit. I don't think you need it. You get too jittery. At your age, it's dangerous. You've got to watch your caffeine intake, Ken. Oh, I can't wait. I can't wait for the age jokes for you. Ken's going to beat me up in the parking lot. No, I love you, George. All right, let's go to Abby, who joins us now in Atlanta, Georgia. Abby, you are on The Ramsey Show. What can we help with today?

I want to figure out how the best approach would be to eliminate my debt and be able to save for a home. Love it. I think George has handled this question a few times before. I'm curious, Abby, how old are you?

I am 23. Okay. What is it with you on the age thing? It helps me to know. Are they 43? Can't you just help her? Why do you got to be so focused on the age? I could tell Abby she was a young buck ready to take on adulthood going like, all right, it's time to clean up my debt. I want to be a homeowner. And knowing that she's 23 just helps with the paradigm. Okay. You know? So Abby, how much debt do you have?

Most of my debt's medical debt. It's about $40,000 in medical debt and then about $3,000 to $4,000 in personal credit card debt. Okay. Wow, are you okay? That's a lot of medical debt. Yeah, tell me about it. That was with insurance. Wow. Well, medical debt I have the most empathy for because it's not something anyone wanted to take on. Yeah, she didn't go out and decide to go shopping. Yeah, it wasn't like you just bought a new car. You're like, I don't know what to do. So this is a tough thing. How old is the medical debt?

Most of that accrued around 2019 to 2020. Okay. I'm wondering if they would be willing to settle for a lower amount if you're unable to pay this in due time. I have tried, and they are just money hungry. Northeast Georgia does not like anything but money. Okay. So you've been making a minimum payment? What's been the payment plan for this?

Honestly, right now, currently, I'm in between jobs. Last year, I made about $30,000. And then I also have my boyfriend that we're both trying to save as well. Save for what? For a house and try and pay off all of it individually. You're going to buy a house with someone you're not married to?

Well, right now we just want to get our debts paid off and we each save up individually so we can purchase the home at that point. Okay. I would not do that until you're married. And it's not from like an old folk moral high ground. It's from a legal financial standpoint. It's very risky to do that. And we've taken that call. And so I'm warning you as someone who's seen it to go, don't go down that path. So let's talk about your debt. What are you making right now? You said you're in between jobs.

Well, currently I am just doing babysitting stuff and I'm only making about like $400 to $500 a week, but prior to that I made $30,000 last year. What were you doing? I was working as a VPA as a scale operator. Okay. And do you have a college degree or what was your level of education?

Just high school education. Okay. So I'm going to have Ken jump in and help with the career side. The key here is income. It's fine to dream about a home, but it's going to be hard to do that from babysitting money. And it's going to be hard to pay off $40,000 in debt when you make, you're at the poverty line, essentially, making $400 a week.

Oh, yeah. So we need to get income up before we talk about this other stuff. What can you do where you know, OK, listen, forget about confidence and connections and those things that kind of trip people up. But let's just say that I could put you in a position today where, you know, you could make more money. What are the things that I would be able to say to my all my friends out there going, hey, let me tell you why you need Abby. This is what she brings to the table. What could you do?

I've excelled in all the career paths I've ever took, whether it be manual labor, desk jobs, financial jobs, anything. I'm a jack-of-all-trades. Listen, that's great for making money. Listen, this is about transfer of skill.

So I get paid for the skill that I bring and the experience that I bring. And I love that you gave us three categories. So of those three categories that you mentioned, which one of those gives you the best opportunity? And I know where you live. My wife and I lived in Suwannee, Georgia for 11 years. So I know the Northeast area. That's a pretty good job economy there. What of those, just those buckets that you told us of past work, which one of those gives you the best chance to make the most amount of money, whether it be hourly or salary?

Anything in the business field I would think would be the best financially. Okay then. So here's what we're doing. We're getting out there and we're looking at what's available. We're going to go look at job sites and we start there and we go, okay, this is what I've done in the past. That's my experience. And here's the skill set that I brought to the table then and that I can still bring to the table now. And we start to match the skill and experience up.

on this metaphorical piece of paper, if you will, and I'm looking at the jobs and I'm going, okay, I can actually bring something to the table here. Then the second thing we do is we get out on social media, we talk to everybody we run into, if we're at a soccer game, if we're at church, if we're at the gym, if we're at the restaurant, the bar, and

We're telling everybody that'll listen, here's what I'm looking for. And you start to make this your number one priority, which is increasing your income. And here's the great news, Abby. Okay. If you can increase your income,

So $40,000 is actually extremely doable. You could pay that off pretty quick. We just do round numbers, okay? If you just did $1,000 a month, okay, then that would take a while. But if you can put $2,000 a month, now we're knocking this out in 20 months, just under two years, okay? And so I really think you ought to get to the point where you're able to get $2,000 at a minimum throwing at this medical debt.

And I would also go back to the hospitals when you start making better money and go, look, here's what I can do. It's going to take you this long to get it. Throw it at them. It's going to take you three and a half, four years to get this. Or I can give you half of it and you get it in the next six months or whatever. And let's just see what we have nothing to lose with that negotiation ploy. Because you offer them, this is the money you're going to get and you're going to get it quick.

I would revisit that once you increase your income. But right now, your number one goal is increasing income. So when you ask us the question, how can I get out of debt? You need to be working more or you need to be working better. And that means better pay. Yeah, because the job that I was working at, I was working six days a week, probably about 60 hours a week. Was that manual labor? It was a...

It was doing scales as a VPA. Yeah, I don't know what that means. You said that earlier, and I honestly have no clue what any of that means. What do you mean scales? 18-wheelers. They come across scales and get weighed. What does that pay hourly? I was getting paid $18.50 an hour. And so were you getting overtime with the 60, time and a half? Yes. Great. So what keeps us from going back to that?

It wasn't feasible with all the hours. All right. But here's the deal. With my health and stuff, it just wasn't feasible. Are you living at home right now? Me and my boyfriend live together at his parents' house to save money. Okay. Well, it's hard to save money when you don't make much, and so we need to get the income up if we're ever going to get out of this. I think you're too comfortable, Abby. I don't think you're urgent.

And I'm not criticizing. I've probably put in, just in the last month alone, I've probably put in close to 100 to 200 applications. I get it. I get it. But just putting out applications, it's like sitting on the shore and waiting for the fish to bite. No, no, no. We're going to go catch them. We're going to get in the water with a net. Good hour, George Campbell. Thank you, sir. I want to thank James Childs, our fearless leader, and you, America, for listening. This is The Ramsey Show.

Live from the headquarters of Ramsey Solutions, this is the Ramsey Show, where we help you win in your money, your work, and your relationships. Phone number is 888-825-5225, 888-825-5225. I'm Ken Coleman. George Campbell joins me, and we're excited to have you with us. One phone call away, we'd love to help you out today. Let's start it off this hour with Michelle in Cincinnati, Ohio. Michelle, how can we help?

Hi, I just have a question about career path for the most part. Okay. A little bit of background. I have a master's degree in aviation and transportation. Mm-hmm.

And I was actually originally going to college to become a pilot. I was almost to the end of my first certification to becoming a pilot, and both of my parents actually got cancer within two years of each other and then ultimately passed. But that was ultimately me dropping the flight program for my degree.

So I went ahead and finished the administration side of aviation and then continuing and getting my master's degree. Okay. Now I help manage flights during day-to-day operation with an airline. And my income and my career is not going where I want it to be. My concern is we have, for a breakdown, our mortgage is $280. It's down to $270 now.

And then our total debt other than the mortgage is about, I've got $70,000 in student loans still, a $40,000 personal loan that me and my husband took out. And then we also have the rest is credit card debt, which I've got my husband's credit cards halfway paid off because we're in baby step number two, we're snowballing. What's your income?

My husband just got his new management position this year. So going forward, our income is his 82 minus 60. And then with overtime, I bring home almost 86 last year. And then I also just got a second job as well so that we can try to pay off the debt faster. Okay. All right. So what's your...

I'm concerned with moving the kids around, but should I go and take additional loans and go back to school and finish my pilot certification and obviously go and be a pilot and make a lot more money, pay off the debt faster, or I would have to get into more debt to do that? No. No. I think because right now, think about what you're doing. I think you stay where you are as it relates to paying off the debt.

Stay where you are is only referring to let's not take out any additional loan for becoming a pilot. But I would love to work out a plan that says, okay, how much longer if we stay where we are financially and we get serious about paying the debt off, how long before we're in a position where we've paid the debt off, we have an emergency fund, three to six months, and we're beginning to invest 15% of our income. That's baby steps one, two, three, and four there.

And now we start to go, okay, how much time will it take me to save up money, become a pilot? Because right now there's a huge need in the industry. So while you're going to have to be patient, there's going to be a number of years attached to that. You can actually get there, but this time when you get there,

There's no debt. You just get to go fly the friendly skies and really realize all of that increased income. So what I'm describing isn't fun, and it certainly requires a lot of patience, but in the end, it's going to be so much better for you.

Got it. So how much is school going to cost? Sorry, George. One other thing. You've got to figure out how you can increase your income with that master's degree now. You know, you're making, let's call it $83,086, I thought you said. You know, what must be true for you to be making six figures with that education you have? And instead of working a second job, I'm wondering, and I love that you're working a second job, but I'm wondering what does it take to get you on a path to six figures pretty quickly and

um with that current education sorry george that was that was kind of my last thought on that so what is the schooling going to cost for the rest of the certification it would be 70 to 100 000 yeah it's insane it's insanely expensive yeah so i don't i want to paint the picture of what happens if you go down this path because you're like well make more money it'll be great well now you're 250 000 in debt with no savings for the foreseeable future

hoping that we can then clean up this mess. And so what we're saying to do is let's go slow so we can go fast later. Let's clean up the mess. Let's get some savings in place. Let's cash flow this schooling. And it might delay the dream, but it's also going to help your future and wealth move at a faster pace down the line. Yeah, that makes sense. And so I know that's not the exciting news you wanted to hear. And I believe you'll be a pilot. How old are you?

35. Okay. So we're talking about how long is the schooling going to take? From when you start to when you're actually flying, what does that look like? How many years? I already have all of the education basis. It would just be the flight time and certification. Okay. So we're talking a few years? So you're looking at probably about...

Michelle, I'm wondering, have you heard of any airline or maybe private aviation company essentially paying for someone like you because they need pilots? And so they're willing to, if you're going to sign on with them, they would either reimburse you or they would pay for your education. Does that happen in that industry? I just simply don't know.

Yes, they do that. The minimum qualification, you have to obtain your private pilot certification first. So what's that cost? That would cost anywhere from $4,000 to $10,000 for me to get that. So you're telling me you spend $10,000 and you will get the rest covered for free from a company? Correct. Let's pursue that path when the time comes. That's what I'd be doing.

George, let me ask this. I'm okay with her trying to cash flow that while paying off debt. I guess my point is I'd put that in the budget. I would still work the snowball, but I'd cut or I would cash flow that because that's about increasing the income and she could save the $4,000 relatively quickly. Yes, Michelle? Yes. Yeah, it would take a few months. My husband's looking for a second job as well. What's keeping you from pursuing that?

Right now, all of the debt that we have, every penny that we're making right now is just allotted into that. Okay. And again, that's the way we teach. But you made $26,000, you said, in overtime, right? Correct. And so I would make a plan to go, hey, we're going to attack our debt within this time period, and the extra money I'm going to put away into this separate fund to cover this certification. That's what I'd do.

George, are you okay with that? I like this plan. Taking maybe the second job? Are you going to be able to continue working while doing this pilot certification? Yes. Yes, I can. Okay. If it doesn't work,

If it doesn't give you a gap in income, I think this is the plan to help you get ahead faster while still paying off the debt. And I do believe your husband working extra as well for a season, you guys can be out of this debt within a few short years if you get focused. And it's going to go faster while we're paying off debt and we get a big, big shovel in the form of a massive promotion. She buried the lead there. We're getting this covered, Ken. I like this plan. That's right, Ken.

Leave us, dude, you and I are like little detectives. Tiny detectives. Tiny little detectives. I'm like Wishbone, man. With our little magnifying glasses, walking around, looking for clues. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Coleman. George Campbell joins me. The phone number is 888-825-5225. Thomas is going to start us off this segment in Cincinnati, Ohio. Thomas, how can we help? Ken and George, how you guys doing? Doing well. What's going on? Nothing.

Not a whole lot. My wife and I are currently on Baby Step 2 because turning through that debt. We last month just paid just about $15,000 off, and I still have about $7,000 in my stocks that I have from my stock purchase program at work. And we're just not sure what to do with the remaining seven grand. We have about $22,000 left in our debt snowball. Cool. Cool.

So this would definitely speed up the process to liquidate these stocks. What's holding you back from just selling the stocks and being debt-free faster? Yeah, so it took me about a year, maybe 18 months to get my wife on board with the debt snowball and just kind of following the baby steps each part of the way. But it's just that safety net of just having that extra money. We have the $1,000 emergency fund, of course, baby step one, but...

Um, just having that seven grand in case something were to happen unexpectedly. We do drive older cars to not have car payments. Um, we own our home, not outright, but we're not renting, I guess. And so just having that extra 7,000 just kind of gives her peace of mind and, um,

you know, happy wife, happy life kind of situation. Well, let's play this out. And I'll tell you this as a guy who did the exact thing you're doing. I had some employee stocks when I worked at the Apple store. And to finish off my debt payoff, I sold those stocks. And my nerd friends are like, I can't believe you know what those stocks would be today. And I go, you know,

It really doesn't matter because where I'm at now and the level of wealth I've built because I got debt-free faster and I got that pep in my step, I don't look back at the what-ifs. And so as far as safety, you're invested in a single stock, and this isn't even money sitting in savings, right? That's correct. So I wouldn't exactly call this a safety net. It's ironically the same stock that you were just mentioning. Oh, it was Apple. Okay, there you go, which historically –

So Apple's got enough cash. They're not going to go bankrupt anytime soon. But I don't think you're going to have the there's either two things happening here. Either you want to hang on to them because it's going to appreciate and you don't want to lose that. Or it truly is a safety net where you go, well, there's technically seven ish thousand here in case something happens. But you just told me you paid off 15 grand in a month, right?

Yeah, that was all from the same bucket. I had $22,000 and I sold 15 of it to really just speed this up. We paid all my wife's credit cards off and now we just have our student loans. And you freed up payments there. And so if you liquidate the stocks, you pay down your debt, you're down to $15,000 left, right? Yeah. Okay. How quickly will you pay off the remainder of the 15 at that point?

Um, well, my baby steps is on my phone, so I'm not going to go on speakerphone, but, um... But are we talking three months, six months? I would say that we probably have, I'd say it'd probably be more of like a, maybe a 12-month situation. What's your household income? We bring, or we make $115,000 combined. That's before tax. And you can only put $1,000 toward the debt, if that's your only debts left? Um...

I believe so. I think we can do better than that. Hold on. Let me rephrase. No, I'm so sorry. It would be, sorry, we could do $1,000 or more, actually. We could do about $1,200. Okay. And I think you can do even better than that once you free up some more of these payments and knock out some more of these individual student loans. Because if we're talking, you know, let's say seven months at $2,000 a month, this thing's about knocked out.

And so that becomes the goal. How do we find $2,000 in margin every single month? And that might mean cutting the subscriptions, making more side hustles over time, you name it. But I think that's the path for you guys to then get to long-term safety, real safety, which is building the emergency fund up to three to six months of expenses. Okay. Um,

I agree with you guys 100%. I think having this conversation and, you know, kind of hearing it from the horse's mouth, so to speak, would, you know, tear it a little more away. I'm the horse. Yes. Well, I don't know. She's not going to be convinced by a guy on the radio or on YouTube. Thank you. Out of the camel's mouth. Yes. But...

If I may, if I could ask you one additional question that I wanted to ask. We will allow it today. We will allow it because you're such a good guest. I really appreciate that, guys. So...

We iron all this debt out. We get our three to six months of emergency funds. I currently work full-time, staying with my wife. I'm in school right now, part-time, and was wondering, would you say it would be okay if I were to drop to part-time work and full-time school to expedite my career path?

Okay. How quickly would it make this expedition happen? And then what would be the financial benefit of this? Sure. So I'm currently doing three classes, going three semesters a year. It would take me about four years, four and a half years to get my associate's degree. And if I go full time, it would take me about...

18 to 24 months to get this done and I would be going for my mechanical engineering technology degree. So what do you estimate I know you can't give me an exact number but what do you estimate the bump in salary would be after the 24 months? If I assume I make about 50 right now well I do I can't assume I know I make 50 right now I would assume I would make at least 60

I would be surprised if I didn't, but... Yeah, I would be thinking 75 to 100 with that mechanical engineering degree. Well, it's an associate's degree, so I would still be working for that four-year. I see. Are you cash-flowing all the school? How are you paying for this?

So I have an Ohio 529 account that my family was nice enough to start for me. It's enough to get me started. And then my work pays me back about $52.50 a year. And so right now it's been covering it just fine. So if you drop down into part-time work, it's not going to really affect your budget that much?

If we're debt-free, I would assume it wouldn't at all because if we have so much margin to get ourselves... Then I would do that. So once you're debt-free with the emergency fund, then you can drop down to accelerate the schooling and cash flow the rest. That's the key. Yeah, that's when I would do it. If that's how you're going to do it, I'd say do that.

Because I think you've proven to us that it's a real fast forward button. And now selling the stocks becomes a part of that plan to accelerate the schooling. Because the faster we're debt free, the faster we can go to part time, the faster we get through school. There's the domino effect there. I like it. I think that's the story that you talked to your wife about. Not, hey, Ken and George said. It's, hey, think about it this way. I can get through school this much faster. So let's get out of debt as fast as we can, which means we're going to liquidate the stocks. Mm-hmm.

I have to take responsibility for all this? No, I'm kidding. Yes. But the good news is it's on YouTube. You can have her watch it back. That way she's not just hearing you say, well, I found out from the camel's mouth or whatever it is. Ken's face does all the selling. It's the moneymaker right there. Is that right? I hope that helps you, Thomas. Yeah. I think it's a good plan. And I think the key here, just a little marital or maybe some relationship communication advice is,

When doing something like this, if there's a little bit of pushback, then you always have to assume there's something fear-based there. So instead of just trying to convince and persuade, step back a little bit and go, what would be the concern or fear with this idea? Let me ask. And my wife tells me. And then I go, oh. So all of a sudden now I see her position and I can understand her position. And therefore now I have to address that concern myself.

with this plan and show her how this plan doesn't make that concern a reality or whatever. But you've got to really think through that piece. It's like the opposite of a politician. Instead of just dodging it, you're actually trying to get to the root of the problem there. Yeah, that's exactly right. And that'll help with this. And it's a little bit of vision casting to say, hey, this may feel risky, but let's look at all sides. Yeah, because when he asked us the question, should I do it? What is the first thing we do? We ask questions back.

Well, okay. What's that look like? And all we're doing is pulling out the information. You have to do the same thing. Present all the information. Let them ask questions. Address all the concerns. That's right. And then I think you're going to be much more effective. Good stuff. By the way, have you ever looked into a camel's mouth, George? I haven't too closely. You don't want to get too close. Because you rode a camel, didn't you? They're pretty gross. They don't brush their teeth. I floss twice a day. Do you really? Yeah.

Your neuroticism has no bounds. I got my dental cleaning tomorrow. Can't wait to tell them. It's going to be a good report. This is The Ramsey Show. This is The Ramsey Show, America, and we are thrilled that you have decided to join us. I'm Ken Coleman. George Campbell joins me. The phone number is 888-825-5225. 888-825-5225. Paul joins us now in Springfield, Missouri. Paul, how can we help?

Hey guys. Yeah, I'm calling in because I am currently trying to figure out a career path. Um, so I was in medical school and did not pass. So I now have a 50,000 currently in debt, but I have the option to go back to medical school in August. Um,

My problem here is I'm thinking if it's worth it financially to go back to medical school and try to complete it, or if I should try to go into a different career path, such as healthcare administration, because I could do my master's online in like two years as I continue to work full time. Well, I've got to dig. What was the cause of you failing out?

I mean, it was close. I just didn't quite pass. Well, hold on a second. Hold on. I'm not trying to be unkind, but there's not such a thing as I didn't quite pass. You failed. So I want to get to what you believe is the reason. Is it just it's really, really hard for you or something else happened? Because it leads to what my answer might be. I feel like it was more had to do with just not having the right study plan in effect.

Because I was doing really well in the beginning, but I think I did bad balancing, like studying and actual balance with making sure I'm still taking time with my wife and doing other things in life. I think I was just so focused on the school that I burnt out. Because I started off top 10% of my class. Oh, okay. That's what I'm getting at. Here's my point. I could never pass medical school.

And it would have nothing to do with burnout. I'm just, that part of my brain's dead. I just, I don't, can't do math and science. You, you're sitting here today with full confidence that you've got the intellect to be able to, to finish med school and crush it. Yeah. That's very different. So, but the challenge is, is the debt. It's just absurd to me. So you're already 50 grand in. If you were to go back in, I mean, you don't have the cash for this, correct?

Correct. So forgive my ignorance, but what is the process to retake the exam? Do you have to go all the way back through or what's the cost and time? I have the ability to come back. I don't have to retake any exams. So I was in medical school, didn't pass the first year, but you're able to go back to repeat as a quote unquote, like remediating student. So I can go back and start in August at half tuition for that year. But then every year after that will be the same price. So what's the bill? So the

For the four-year education, it's $50,000 tuition per year, so $200,000 plus the $50,000 I have, so it would be $250,000. Yeah, I just, ugh. Okay, let's look at the alternative path. So the health administration, what's required for that? So I could get a two-year online degree and then work full-time. So it would just be doing the online degree in two years because I have a bachelor's in biology. What does that cost? $250,000.

It would be $14,000 for the whole degree. Oh, that's fantastic. I like that plan. And then what would you be making in that field? Obviously less than if you were an MD. Right. I'd be making, once I'm out, estimated like $60,000 to $70,000 a year to start.

See, and I always answer this question, you know, I don't know if you're familiar with what I teach here at Ramsey Solutions, but I mean, I want you doing something that you were designed to do. You know, it's what you're wired for is a phrase that I like to use, right? You just, we all know you've got the talent. We know you love it. That's the passion. And there's a sense of mission behind it. You go, this work is meaningful to me. And I just wonder why.

Do you feel that sense towards being a doctor? Did you feel that? You go, man, I really, really want to be a doctor.

Yeah, I feel more that push towards being a doctor, but I definitely have an overall passion just for healthcare, which is why healthcare administration, I wouldn't rule out. I think I feel that passion though, more for just being a physician. I guess my question was, cause I mean, I'm married, so we're trying to make this decision together. I'm just trying to figure out if it's financially even smart because for the four years medical school, I mean, I come out with 250 to 300,000 debt and

Then you're three years in residency making $60,000 a year. Yeah. You're buried. I have to start paying back for that. And then after that three years of residency, now I'd be out making $300,000 a year. Yeah. So with that salary, I'm just trying to say is that salary, if I know I can go through and get it done, is it not worth it still? I don't think so. You're never going to hear us on the show say, yeah, go $200,000 into debt. It'll be fine. Well, it's going to be $250,000 first of all. And then several years later, you're finally making $300,000. You start running the numbers.

And how much of that income are you going to actually be able to keep? The answer is just bare bones. And so you've gone through all this work, all this time to be, you know, barely making it. Here's what I'd rather you do. I'd like to see you chart a path, whether it's healthcare administration or maybe it's a physician's assistant or a nurse or something else. Watch where you can get qualified cheaper and faster.

Without the debt, okay? Or if it's healthcare administration, I get in, can I work my way to a six-figure job? And with my wife working, maybe part-time, full-time, whatever. And then could we, over a five to seven-year period, save up the money for med school? Gotcha. Is your wife working full-time right now? Yeah, she's currently working full-time. How old are you?

24. Yeah. Oh, man. So I got to tell you, I was sitting there going, I don't know how he's feeling about that plan. But now at 24, it is. I want you to go with me here for a second, Paul. How if you do what we just said, how old do you think you are where you saved up the money to cash flow med school? How many years? I mean, it would take forever. Yeah.

Would it? I mean, George, help me out. And the thing is, like, it's competitive. Well, first off, it's competitive to get into it. But then all my, like, schooling and stuff, I would have to repeat a bunch of stuff to even reapply to get back in in the future. And I think that would be especially with wanting to have, like, kids. Well, you got in once. You got in once, Paul. Right. And, Paul, we're talking about doing the thing. But listen, there's no other way except for the debt. And I don't think that's worth it.

But I do think it's worth you saving up the money. George, based on his income, their income. Yeah, what's your household income? We're $66,000 together right now. And then we have no other debt other than the loans. We have a mortgage on our house that we have, and we own both our vehicles. Okay, so you have $50,000 in debt. You're making $66,000 household. But we need to get his income up. Yeah, is that with you just in school and not working? No.

No, that's with me working full-time now because I just went back into like, uh, basically an entry-level medical job. Yeah.

But again, entry level. So if we get that income up, combined income up to, let's say, $90,000 to $100,000, George, I just want to map it out for him. It changes the numbers to where you could put away $30,000 a year, and that's right now. Over the course of time, you're going to start making more, you and your wife combined. And so that allows you to put $40,000 the next year, maybe $50,000. And all of a sudden, you're like, five years, we can cash flow the rest of med school. That's not forever. The point is you're 29, 30 years of age going to med school.

And by the way, you got no debt. And so, and you taking a $60,000 job for three years, cause you have to. And, but then coming out of that, making 300,000, uh, my quick math has got you at 33, 34 years of age, making 300 grand being a doctor. And Oh, by the way, zero debt. I, if I were to talk to the average 34, a 24 year old on the street with a camera crew and George, and I said, are you willing to wait 10 years to do what it takes for 10 years from now to be making 300 grand? What do you think they'd say?

Absolutely. Well, what's your answer? Absolutely. I think it ought to say abso-freaking-lutely. I think I'd put a freak in it. And Paul, we talk to those people who come out of med school with $200,000. I've got family members who have $370,000 in medical school debt. It's not a fun life. Yeah. But 34, an MD, no debt? 34, MD debt-free. That's your new t-shirt. Ooh, I like that. I mean, 34. Now listen, I know that what we're saying takes incredible patience.

And I just want to point out to you, Paul, that it took me nine years to get to this role at Ramsey Solutions. And he's not even a doctor. I'm not a doctor. Right. It's going to take time, but it's going to be worth it. Nine years. And I did it because I stayed the course. And it was absolutely worth every second of the wait in the sense of I was doing something and waiting for the arrival. And I just really want you to take that path. I think you're going to be so happy, so fulfilled, and so wealthy.

Yikes. They're not telling you this anywhere else. This is The Ramsey Show. The Ramsey Show rolls on from our World Headquarters.

George always likes when I point out this is our worldwide headquarters. It is. We do have a lot of international fans, which is really fun. We have people travel in from all around the world to come see us in the lobby. And so here we are. I'm Ken Coleman. George Campbell joins me. 888-825-5225. Let's go to New Orleans, or as they like to say, Nolans. Thank you. Have you heard that before? I've heard it. Not quite like that. Not that badly. That's what we like to do. All right, Chris, how can we help?

Hey, guys. I appreciate you taking my call. I need some advice. All right. We have plenty of that. I don't know how good it is, but, boy, we have plenty of it. I'll give you a short back story. A couple of years ago, my wife and I started listening to you guys and

And getting angry at our debt and student loan payments were coming around. And we buckled down, paid off $119,000 of student loans, and super excited about that. Had our eyes on the truck and the boat, and there was an unexpected passing of a very close family member who –

we were lucky enough to, um, to be left, um, $150,000 in cash along with $250,000 of mortgage.

So that happened a few months ago and the dust is kind of settling there. And right now we have $250,000 in cash with the,

$240,000 mortgage and $19,000 in a truck and a boat, and then $130,000 mortgage on the house that we're currently in. Our vision is to definitely to be in the house that we inherited. The question is,

You know, everything inside of us wants to pay off the house, move in the house, but, you know, I don't know if that's the right way to do it. We still have the vehicles. We still have the other house we'd like to keep. I'd like to hear your opinion on that. So you want to keep both houses, move into the inherited one, and keep the one you're in right now as a rental? Correct. Okay. Well, there's a method to the madness here. So the person that passed away gifted you the house, and along with that, the mortgage. Correct.

Correct. Okay. And there was also $150,000 in cash. What happened to the $150,000 in cash? We still have it. You added to it to get to the $250,000? That's part of the $250,000. Correct. Okay. Got it. So what would be the problem with taking the $250,000 cash, paying off the truck and the boat today, and paying off your own personal mortgage today, and still having a pile of money left over to throw at the inherited mortgage and move into that one?

Well, the mortgage is $240,000. Okay, it wouldn't knock it out completely. Right. I'm all ears. So you're paying two mortgages right now anyways, right? That's right. So you're going to free up, if you do it my way, you're going to free up a truck payment, a boat payment, and your primary mortgage payment. Okay, so you're saying pay off the one that we would use as a rental? Yes. Okay.

and then apply whatever's left over towards the 240 in the house that we use as our primary residence. That's going to free up the most payments the fastest. That would leave you with one mortgage to pay, no debt, with an emergency fund. So now you have no payments in the world except for that inherited mortgage, and you're going to attack that one to pay it off early. That doesn't make a difference. The inherited mortgage is significantly higher than the

I mean, you could pay off the inherited mortgage, but you still have a truck payment, a boat payment. And right now, those truck and boat payments would fall into baby step two and the mortgages would fall into baby step six. And so the order would be pay off the truck and boat first and then have the emergency fund. Then whatever money is left over, you can attack the mortgages with.

Perfect. Okay. So you can do it either way. There's not a huge difference here, but I don't love the idea of having two mortgages. And so I want to knock one out as soon as possible, but I think you need to focus on consumer debt and have the emergency fund before you make any other moves. That's what I needed. We were kind of aiming towards one of the mortgages. Well, not only will you, you won't have your current mortgage payment on the primary, but you're also going to rent it out, right?

Correct. So you're going to go from losing $1,500 to hopefully making $2,000. So you're going to have a whole lot more money to throw at this mortgage. Your cash flow is so much better, and you've gotten rid of those payments on these depreciating assets.

The boat and the truck. There's a lot going on, and it's easy for us to lose that clarity, but that makes sense, and I appreciate it. We appreciate it a lot. Either way, you're going to be okay. The key is I want to get out of debt as fast as possible and stay out of debt. And if that payment on that inherited house is too much for you guys, you can knock that out first if that mortgage is too much of a burden. But it worries me that you're right now paying both anyways. You're somehow making that work.

Yeah, yeah. We're blessed with a good income. We're able to use for good so far. And, yeah, we're looking to get rid of both of them as fast as we possibly can. I think you guys will do that in no time. What a cool gift. Yeah, yeah. And then the paid-for boat, that boat probably is a little bit more enjoyable now. It just drives a little different, a little less shaky on the waters. A little less shaky. Is our boat shaky on the waters? I think so. What do you call it?

I don't know. That's why I asked you. I don't know. Let's go to John in Chicago. John, how can we help? Hey, I'm just going to get to the point. I'm able to fund either an HSA fully or a Roth IRA fully. I didn't know if it's best to do one or the other or which one to fund first. Well, both are great. Are you talking about your baby step four, 15%?

Yes. Okay. So when you're investing 15%, what is your current order? Do you have a 401k or is it just the Roth IRA? Well, my work is a pension, so they automatically take out like 4.5% and it's very minute. Is that out of your money? That's not money they're giving you? No, my money. Okay. So we would count that at half because of how poorly the pension performs. So let's call that 2%.

And so you still need to go invest 13% elsewhere. Right. And so I would fully fund a Roth IRA and then move on to any traditional accounts, and then the HSA would be outside of the 15%. Okay. That's kind of above and beyond. Yeah, I'm probably going a little overkill with my math figures here in front of me, but I just didn't know if it'd be best to do an HSA first or a Roth and...

Well, it's great to fund the HSA if you're going to use it, and it's a great investment tool later on down the road to max out. But right now, the Roth should be your focus because the Roth in retirement, you can use tax-free for anything. The HSA, you're only going to be able to use that tax-free if it's for medical expenses until you're 65 to when it kind of turns into a traditional 401k in a sense.

to where you'll be taxed on that income if you use it for other things. So I think the Roth IRA is a better bet, but I love the HSA, underutilized investment tool. And so outside of the 15%, I'm maxing that out. Okay.

I hope that helps. Yeah, thanks, John. Appreciate the call. You've got to love that. Straightforward. Yeah, we've got an HSA here at Ramsey. If you have a high deductible health plan, there's an HSA attached to that health savings account. Do you use yours now with baby? Oh, yeah. More than I ever thought. Yeah, so we're in a situation where it's not the best idea to invest in that. It is the best idea to use it.

Exactly. And what Dave does... Because we got, what, two surgeries last year of the boys? If you can... Oh, yeah, that's right. Football stuff. It's crazy. Yeah, it adds up, folks. Man, football. Who knew? I know, right? Because I think, well, these are young, healthy boys. And then I didn't think about, oh, that broken leg. I got to get you out to a game and let you just stand on the sidelines. I was part of the chain gang once. You know what that is? I have no idea what that is. Yeah, it's the guys who hold the first down markers...

You know? And they move up and down the sideline. The orange things that stick out. You might as well be speaking Yiddish to me right now. You really don't know. I've never been to a high school football game. So anyway, here's the point. The point is I'm standing on the sideline volunteering. They ask for the dads to volunteer. And you're standing there and you realize these are young men. You forget that, you know, they're big. And they're slamming their bodies into each other. It's violent, George. For our entertainment.

Yeah. Let me remind you. Oh, boy. It's like Spartacus. Don't go woke on me. It's like Gladiator. It's football. It's America. All right? Yes, it is a form of being a Gladiator. Is it safe? No, it's not. Do we watch it? Yes. Absolutely. Well, take me to a game. I'd love to see Friday Night Lights, Coleman edition. I'll tell you what. I'll get you a pretzel. I can't eat that one. This is the Randy Show.

Live from the headquarters of Ramsey Solutions, this is the Ramsey Show, where we help you win with your money, win in your work, and win in your relationships. 888-825-5225 is the phone number to jump in. I'm Ken Coleman. George Campbell joins me. Let's start this hour with Thomas in St. Petersburg, Florida. Thomas, you're on the Ramsey Show. How can we help? Hi, Ken and George. How are you all today? We're having a blast. What's up with you?

Oh, you know, just have a question about my budget, right? So I work about, on average, you know, 40 hours a week base pay. And next month is the, you know, the recalibration month for the income. It's, you know, potential raises, bonuses, promotions, et cetera. But my question is, well, it's actually two questions. But my first question, I guess, for George is,

So when you're budgeting your income for the month, you do it off your base pay, correct, after taxes? Yes. So you'd base it on take-home pay that you know is coming in. Oh, okay, good. And then that's really good because I tend to, you know, overestimate and then it justifies other things. Yeah, that's scary. You don't want to count your chickens before they hatch? Is that the old saying?

Yes, correct. Right now I'm in a position where I've got a lot of debt and I'm at the point where I'm 29 and I'm doing my best and I'm actually working. I signed up last night with a financial coach with

with Ramsey, you know, and I'm thankful to y'all for allowing that to happen. Awesome. And also, yeah, because, like, I'm, like, gazelle intense. My family thinks I'm crazy. They think, wait a minute, what, you're trying to get out of debt? You don't want a credit score? I'm like, yeah, I don't want any of that mess because...

I'm cash flowing my next license in my industry I work in. Good. Yeah. I've been listening to the show for many years and I've heard the horror stories of

The good news is my license I'm going for doesn't require a master's degree, only a bachelor's. And I'm very dedicated to what I do, and I'm able to achieve that license within three years. It takes time, but it would significantly make my income go up. What's your income today? Roughly about, after taxes, about $1,000.

Last year was a little bit lower. It was in the mid-30s. This year, it's expected to be closer to $45 to $50. That's your net income, or is that gross? Net income. Okay.

So as you create your every dollar budget, which I hope you're using every dollar. If not, we'll hook you up with that. You're going to list your lowest. Yes, I'm sorry. Okay. I'm sorry. So you're going to list your lowest estimate for monthly income and when it changes and if that's when you would update the budget. And so if you do get a bonus, like you said, you're on base. If you get a bonus that month or there's commissions, you would then update the budget and that allows you to then tackle more debt because you're in baby step two.

And so the key is, can you cover your expenses from your base salary? Yes, that's correct. I can cover my expenses and fund my emergency fund to where it needs to be at the $1,000 mark for Baby Step 2. By the end of this month, I'll be in Baby Step 2 again after I had a car repair. But I had the funds. I had the cash. I had the cash in the account. I didn't have to use a credit card to get the car repair. It was a minor repair. But

But they fixed it, and it was a reasonable price, and it was all cash. And you restocked the $1,000. You're back on the horse now attacking those debts. And so you're going to list those debts as minimum payments, and your debt snowball. Attack the smallest balance first with a vengeance with any extra money that comes in outside of your base pay. And the key is, how little can I live on so that I can throw any extra money at the debt to get rid of it faster? So how much debt do you have?

Oh, combined debt between credit cards and student loans, about $30K. Okay. But the good news is that I am picking up overtime hours, which allows me to make extra money when they release it. And I pick up as much overtime Monday through Friday as I can in the evening to work extra hours and make extra income. I love it.

Well, you're on the path, man. I think that coach is going to help you as well. And it's a great call out to anyone out there who has a regular income. The paychecks don't hit at the same times every month. The amounts are different. You are not excluded from making a budget. In fact, you have to make a budget more than anyone because life is so chaotic. And so the key here is to create a prioritized spending plan. That means food, utilities, shelter, transportation, that comes first. We got to cover that.

insurance, giving. Beyond that, if you have the money come in, great. We can use it towards those other goals. If not, at least you know you have the basics covered. Yeah, absolutely right. Great advice there. All right, let's go to Atlanta, Georgia now. Chad is on the line. Chad, how can we help?

Yeah, hey, I was calling. I wanted to see about my situation. I'm 23 years old, and I'm living at my parents' house. I'm in a really good spot financially. I have zero debt. I've been working for the past three years and built up a good 401K. One of my buddies is moving into Atlanta, and I'm wanting to potentially move out of the house, but I'm trying to decide now if I should...

stay at my parents' house because luckily I'm blessed I'm able to stay there with them. There's no rush to get out or go live in an apartment with him or potentially purchase a house and rent out the other room to my friends, essentially. Do you have the money to purchase a house? Yeah, so cash-wise, I'm sitting on about just over $20,000. Does that include your emergency fund?

That's everything? Yeah, so it's like $22,000, so that's everything. Okay, so we're going to call that your emergency fund. And beyond that, you can now start saving up for a down payment, which may take a few years.

Exactly. Especially in your area. Yeah, exactly. And I was looking at potentially maybe doing a lower down payment than the $20,000, but don't want to get with PMI or anything like that. I was talking to banks, just looking into it, looking at all my options and found out there is loans out there that you can go less than $20,000.

but also don't want to have too big of a monthly payment, especially since I'm younger. I don't want to be locked down to one spot. That's right. And Chad, you don't want to be in a desperate situation if a roommate bounces on you and you're like, oh, I've got to find somebody fast. The roommate needs to be like, oh, that's gravy.

And then the roommate busts the toilet, and then it's your problem because you're the landlord. Exactly. You're taking on a lot of responsibility, and we love homeownership. We love real estate. I think we need to pause on that. I would go rent with your buddy and take that next step into adulthood. I think it's going to be really good for your spirit. And as you're doing that, then sock money away for that down payment. What are you making a year at 23?

I'm about in the 60s, so I'm like 63 to 64. Good for you. Amazing. What do you do? I'm an air conditioning technician. Oh, man. And you've got a path. I mean, you're probably going to make more money in the next three to five years, would you say? Oh, yeah, for sure, because I'm starting to work on stuff. There you go. Come on.

I would set an aggressive gold chart and go, you want that house payment to be about 25% of your after-tax income before other deductions. And so that will help dictate the down payment. Don't listen to a bank as far as how much money they'll give you. They will give you an insane amount that is ungodly. Do it the peaceful way. Don't do it the bank's way. That's exactly right. And hey, the trades work, folks. There it is. Debt-free investing. Debt-free 23.

in the trades, going to be making really good money over the next three to five years. Oh, it's a story we need to tell more. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Cole and George Campbell is my pal and co-host this hour. 888-825-5225 is the number if you want to jump in. All right, George, have you done your taxes?

I have my appointment on March the 30th. I've got it set up. I'm working with a pro. You've got a Ramsey Tax Pro. Yeah. It just makes my life easier. I do the same. Stacey and I met with ours on Sunday. Oh, nice. How'd it go? Fantastic. David's amazing. Painless. We meet on Sunday afternoon. He's so kind to come in.

Stacey had all her questions, her notebooks, her folders. Oh, she's the nerdy one like me. Like I already have every document I need in a labeled folder. Yeah, I largely just sit there and listen. You're the eye candy.

Yeah, essentially, yeah. I mean, I have a couple comments here and there. Just color commentary. Yeah, yeah, yeah. I'm here so I don't get fined. There we go. The Marshawn Lynch press conference moment. But hey, a lot of you maybe are just now thinking about your taxes, maybe got all kinds of questions about your taxes, you're freaking out.

And we get that. We recently got a question from one of our listeners. Are there penalties for filing a tax extension, George? There's kind of a trick question in here. So here's the deal. There's no penalty for filing a tax extension. That gives you an extra six months to submit your return.

as long as you still file your extension by tax day. So you've got to ask for the extension by tax day to get that in. But here's the key: even if you file an extension and you owe taxes, you still have to pay your taxes by the deadline on tax day. So filing an extension doesn't excuse you from making the payment.

You still have to do that on time because if you don't, you will get hit with late fees and penalties. So here's how it works. When you request an extension, you have to estimate your total taxes owed and compare that to how much you paid in federal taxes during the year to see if you have a tax bill. But if you're going to go through that hassle, you might as well just file your tax return on time.

You know, you're already right there. You've already done the math. Yeah. Just go through the paperwork. So you can file your taxes or file an extension with the help of tax software or a tax pro. And we've got a great website. You can go to ramseysolutions.com slash tax, and we'll help you figure out whether you should go with the software or the pros to take care of this for you. Again, that's ramseysolutions.com slash tax. All right. Let's go to Kyle in Chicago, Illinois. Kyle, how can we help?

Hey, how are you guys doing today? Great. What's going on? Hey, so I have a question for you guys. Me and my wife have recently paid off 90% of our credit card debt. We are about debt free and within the next two weeks here, we'll be paying the rest of it off.

and be able to put some of our savings. I know. Thank you guys for that. I appreciate that. So my question is, if you guys were in our situation, we have enough for an emergency fund and a little after that in case something else goes funky. But what would you guys do? Would you try to find land to build a house or would you try to find something that would like fit our situation better?

better. What do you guys think? Well, the way you set that up, I'm going to go with a situation, I mean, that whatever fits our situation better. The way you said it was like either fine land to build or a situation that's better for us. And so the way you worded that, it feels like that's the way to go. Why are you considering something that's not the best situation? Well, we recently looked at some land the other day and we have three kids.

One is going to be nine here next month and the other two are one is just turned to and the other is going to turn one next month. So for us, like, I mean, we went with someone the other day, looked at some land and we got price range on it. And it's like, we could fit the monthly payment, but it's like, if you go on from there, like how much it's going to be to build, um,

And to go on after that, it's like, oh, I don't know. Yeah, it can get astronomical when you factor in the cost of buying the land and then the construction loan and getting the builder. It's going to be a longer process versus an existing home. The pros are, of course, you get a quick close. There's more room to negotiate. Location can be a big factor of proximity to things. You know, when you're buying land, generally it's going to be a little further out of the city. It's going to be on the outskirts. So you've got to think about all of that as well.

So there's a hassle factor with buying the land and building the house. A lot of people, though, that's a non-negotiable. They're like, I want land. This is my dream, and this is what I'm going to do, and I can't talk them off the ledge. So there's nothing wrong with going that route, but I think, is this your first home? The home we're in now, yes, it's our first home. We owe about $100,000 left on it. So why are you wanting to move? We're kind of cramped on bedroom space here. How many bedrooms is it, and how many people in the family?

Three bedrooms and there's five of us. Okay. So why not just move to a slightly bigger house that's in your same area? Yeah.

Trying to find it's the hard part. Yeah, there's not a lot of inventory because, I mean, it's pretty obvious. People don't want to let go of their precious low-interest mortgages while housing is very expensive. So not a lot of people want to take on a brand new 8% mortgage. And so there's not a ton of inventory, but there's still a lot of homes being sold out there. And so I would get in touch with a Ramsey Real Estate Pro on our website that's trusted to help you with this process. And I would probably just consider...

upgrading in-house slightly and staying in your area versus going the land route and building, which can be a long process and you're going to be paying rent while trying to build this home. And that could be a year plus at least. Yeah. Right. I would echo George, but I would say that I understand that, you know, the three kids, uh,

three bedrooms. It's not ideal, but I can tell you that that's all a you guys issue. It's not the kids. The one and the two-year-old aren't sitting together going, you know, we'd kind of like to have my own room, put my own decorations in there. They don't even know. I remember going back to my boyhood home, George, years and years, like two decades later. And I remember going, man, that house is teeny tiny. I thought it was massive.

And I just think that it's a very natural thing. I want to say that I empathize with you, Kyle, and your wife, I get it, but I wouldn't let that push you into a build that, let's be honest, you acknowledged without saying it, that it's not a good deal. Right. And you just don't want to put your family into that stress.

Right, exactly. I'd rather have the stress that comes with three kiddos and three bedrooms than land and something that I can't afford. Really, what you're asking for is you need four bedrooms instead of three. Yeah, pretty much. And so I wouldn't go like, well, we got to go get four acres in order to fit the other, you know. I'm just going to go, what's a reasonable home in our area, in our budget, with the equity we have we can put down, that will make this work. Yeah, be patient is the game here. How old are they?

All right. The kids? Yeah, how old are the kids? They've got a one, two, and nine, I think. Yeah? Yes, one, two, and nine. Wow, good man. Boy, just don't know what happened there. I'm thinking a one-year-old. Well, what's the sleeping arrangement for a one-year-old versus a two-year-old? Could the one and two-year-old not be in there? Aren't they both in cribs? I mean, the two-year-old likes to fight the one-year-old. Hey, there we go. But she's in our room. She's in our room with us. Okay. Who? The one-year-old or the two-year-old? Hey, one more question.

Well, I got you guys. I appreciate all this. He doesn't want to talk about that. Hey, Kyle's moved on. He wants another question. Go ahead, Kyle.

Can you guys send me one of them Yeti cups that Dave Ramsey wants? I'd appreciate that. Oh, that he wants the Yeti cup. We thought it was going to be a really good question. I thought, yeah. They're not for sale. I barely could get one, to be honest. I had to fight for one. This just says the Ken Coleman show on it. I don't even know who made that one. And nobody wants that. Yeah, that's probably right. But we should try selling those. That's probably right. Times get tough. The Ramsey cup, though, on the other hand. Yeah, you can always get a free mug. Has that ever happened to you before? Somebody asked for one of these things? No, I didn't know he knew about it. That's pretty amazing.

Respect to Kyle for the ask. Yeah, yeah. They're not for sale? Yeah, we know they're not for sale. Okay, they're free mugs. They're not the Yeti ones, but you can get a free mug if you visit us here at the headquarters. Oh, you can? I want to make that clear. Yeah. Yeah, this is a good time to point out that we have some great folks in the lobby today.

And every day usually we have somebody in the lobby, come watch the show. I'll give a shout out to Wesley who let me know. I signed a copy of my book for him and he let me know he won the Summer Reading Challenge in the entire state of Tennessee. Wesley did? Yeah. How old is Wesley? He got a thousand dollar scholarship. Did he really? For college because of that.

Way to go, Wesley. I don't know. Wesley's nine. I'm getting hand signals. That's great. Because I went, you're actually going to read this book? And he said, yeah, dude. I've read more than this. Heavier books than this. Boy, I'm going to have to connect with Wesley. I'm a big reader myself.

So there you go. I love that. Well, anyway, come see us sometime in the lobby, and I guess you get yourself a free coffee. Just south of Nashville, Tennessee. Pretty much everything's free. The show is free. The mug is free. Coffee and baked goods are free. The advice is free. The advice is free. If you want to buy a book or something, you can do that while you're here. But we appreciate your support. George and I have kids. That's true. They need to eat. I need Mia's scholarship fund. Yes, you do. ASAP. She's growing up on us. Sweet little Mia. All right, don't move. Quick break. We're coming right back. This is The Ramsey Show.

Welcome back to The Ramsey Show. I'm Ken Coleman. George Campbell joins me. Thrilled that you are with us as well. 888-825-5225. Let's go to Ethan in Atlanta, Georgia. Ethan, you're on The Ramsey Show. What's up? Hey, Ken and George. Good afternoon, guys. Good afternoon. So glad you're with us. What's going on?

Yeah, so on top of a couple of different things, but predominantly I'm in a unique working situation where my job gives me a monthly allowance for a vehicle. I have the ability to pay off the car if I wanted to, but I'm curious as to y'all's thoughts on keeping the car note, keeping the debt, if they're giving me money every month to pay for the car. All right, break it down for George. So what's the car payment?

Yeah, my car payment's right at about $400 a month. What's the allowance? $650 a month. Wow. And are you currently taking all $650 and putting it on the car? I have not. Nope, I just have auto-drive set up on the note. For the minimum, for the $400? Yes, that's correct. What do you do with the extra $250? Oh, it goes into my checking account. And then it disappears into spending? Yes.

See, that's the other side of the point I was going to get to with you guys. Oh, well, let's get to that.

With no further ado, please. I've been very fortunate in my working career. I'm 25 and out of college, got a good job then. And I had a very stringent budget and was good with my money, watched where everything went. And after a year of doing that, I got into what I do now, doubled my income and essentially thought, hey, I don't have to ever look at my money because I always have enough of it. And two

Two years of frivolous spending pursued. I reached another point in my career where my income's doubling again, and I need to get my house in order so I can set myself up with this money instead of spoil myself. Yeah, that's called lifestyle creep, and you can out-earn your stupidity for a good long while, but one day you wake up and you go, this is exhausting. What am I doing? I'm just going to make more to spend more.

It's not working for me. And that's kind of how I feel about your car right now. I'm like, this dude is too successful and works too hard to be trying to make a spread off of this payment. Just get rid of it. You have the cash to pay it off today? Yeah, that's correct. How much is left on the loan? About $20,000 on it. And you have how much in savings? I put $20,000 down when I purchased it. In liquid cash, probably right around $24,000-ish. Okay. So what's your income?

Well, the past two years, it's been averaged about $140,000 in that range. Amazing. This year, yeah, I'm very fortunate and work hard for it. But this year, I very well intend and project to do $250,000, $300,000 range. That's incredible. Do you have any other debt other than this car loan? No, I don't. Okay. And so that $24,000 is all the savings to your name?

Aside from investments and retirement, I have about $24,000 in retirement between 401Ks and Roth. Can I play some numbers out with you that might get you to pay this car off? Please. Because you're going to still get the $650,000 even if the car is paid off. That's correct. Okay, so let's pretend that you paid off the car today, you dwindle your savings down to $4,000, and then you rebuild your emergency fund real quick after that with the next few paychecks.

That's a very realistic scenario. Now we free up that $650,000 that was going to the car and to frivolous spending, and instead we invest that $650,000. All right? Correct. And let's say you start from zero in that investment account. If you contribute $650,000 a month from 25, you said you're 25 years old? That's correct. Let's say to 62. Is that fair?

Yeah, sure. I do not, but happy to. With the average return of what we've seen in the stock market, the S&P 500, let's say it's a 10% return. That's very reasonable. That's $3 million sitting there, just from that car allowance that you invested. Yes, that's a good point. Now your buddy, Jeff, he decided he's just going to keep rolling that into new cars and get a new car every time and just keep his 650 allowance going to a 650 payment. He has zero in that investment account.

Do you see the difference here? I do. I do very much see it. And that's what I see with a guy as successful as you making high six figures this young. It's so easy to wake up and go, well, I have all these nice luxury toys that I'm making payments on, but I can make the payments comfortably, so who cares? Instead, I'm going, dude, what if you could have an extra $3 million that you could just leave an inheritance with, leave a legacy with, buy a vacation home with, all with cash? You never have to touch debt again.

That's a very, very valid point. Do you have a home? I do not. I rent. Can you imagine making $200,000 with no payments how quickly you could save up money to buy a house? Yeah, especially if I didn't eat it nice and buy expensive things. Exactly. And so I'm going to ride, you know, drive this thing till the wheels fall off and have a separate sinking fund to go save up for another car in the future and always do it with cash and just pocket that allowance as long as you have that blessing.

Very good point. I like that idea, and I'll un-submit that. Can I have a caveat to it? What's the caveat? Uh-oh. Well, less of a caveat, more of a second question. So I now change from being a W-2 employee, like I have been in the past, to now moving over to 1099. Okay. And essentially I'm a contractor for my company now, and I opened an LLC that gets all my money. My checks are not regular. I don't get a regular amount of money. I'm in sales.

And I don't question the checks coming, but some months will be very, very large and some months there might not be a check. I opened a business and have plans to pay myself a fixed $4,000 a month income to live off to hopefully pay

Okay. I mean, there's not really a strategy. The IRS is going to see your income as your income. But if you're 1099, you're going to have to cover the taxes.

Yeah. And so that's the one thing I do that side of things. Yeah. I would keep taxes in a separate account and any paycheck you get, just go ahead and set aside 25 or 30% of that in a high yield savings account. So that, and, and probably do quarterly estimated payments if you're making that much money. And so that's what I would do strategically. But I, I haven't heard of, of the strategy of paying yourself out of the LLC for this business when you're commissioned sales, but I don't see anything wrong with it as long as you're following all of the legal, you know, tax codes.

Yeah, I've got that sort of thing worked out. I like the idea of sort of forcing yourself to control your spending by paying yourself. Instead of seeing $12,000 come through your bank, you see $4,000. You go, all right, I've got to live off $4,000. Exactly the thought. And I've just justified my sporadic income as a reason to not budget because the headache of it in the past, just knowing myself, has allowed me to think, I can't track my money. I don't know what's going to come in each month. I make enough. I can just spend. Yeah.

Yeah. Well, you're wise at 25 to realize that because I see that with human behavior, Ken. It's way easier to sort of force yourself to have guardrails versus hope that you're going to make the right decisions. Yeah, I agree. And I don't know what your take is on that, but I think –

getting the basics down, like going, all right, now look, here's what my basics are. Even 25, he doesn't have a lot of overhead is my guess, but still going, all right, this is what I got to cover. And I would include in those basics in his situation, he should have been including not just all of the, you know, the four walls as we talk about, but the investing, if he has no debt or the debt, you know, it's like, let's have a real plan. And then

And then when the money comes in, go, all right, I got to do something with this. This is all auto pay or however you want to set it up. And then the surplus, it doesn't take that long to go because then you get excited about the surplus. So instead of spending the surplus, which it's fun to do, but when you start to think about what I call the surplus, that's the word Stacey and I use, like what's the surplus? We always look at this is our budget on all the things. The gravy on top. Yeah. It's like what's the most –

What's the best thing we can do with that? And that's why I love when you make your budget in every dollar, what my wife and I do is we have our expenses. And once the expenses are covered, anything above that, we have pre-planned as to where that money is going to go, whether that's giving, a savings goal. And when you pre-plan, you're just far more likely to do it psychologically than you are mentally.

versus hoping when you see that money in the account, you make the right decision. I agree. So a budget is just pre-planning. That's it. Telling your money where to go instead of wondering where it went, as John Maxwell says. So check it out, everydollar.com. You can get started for free. And whether you're broke or rich, it's going to help you build wealth with confidence for the foreseeable future. Yeah. All right, don't move. More of the Ramsey Show and your questions coming right up.

Welcome back to The Ramsey Show. I'm Ken Coleman. George Campbell is with me. And we are here for you, 888-825-5225. It's time for our scripture of the day. It comes from Ecclesiastes 7.12. The protection of wisdom is like the protection of money, and the advantage of knowledge is that wisdom preserves the life of him who has it.

Our quote of the day from Margaret Thatcher. Do you know who Margaret Thatcher is, George? Just a little quick history checkup. Familiar, but I couldn't tell you much about her. I'm not much of a stenographer. I just wanted to see your reaction to that. That is great. Tell me about her. She's the former prime minister of...

I was going to say Great Britain. But to be fair, well, okay, sure, we'll give you that one. If this was Jeopardy, they would have given it to me. I don't think you were going to say that. I don't think you had any idea who she was at all, which is okay. You're younger. She sounds British. Let's be honest. Yeah. She was fantastic. She was prime minister during the Reagan administration. I feel like there's a lot of young people watching, James, and so this is why I'm saying this. So there you go. Her quote is, no one would remember the good Samaritan if he'd only had good intentions. He had money as well.

Little interesting take there. What do you think about that? Oh, I never thought about it that way. Good intention. You know what my version of that is? And I talk about this when I speak at churches. I'll go...

thoughts and prayers is great. But what if along with thoughts and prayers, you had an envelope of cash you could anonymously donate? And so I love that idea. Can we agree that we should retire that phrase? And I know people mean well. I mean, there's a lot of well-meaning people that put that out on social media, thoughts and prayers, and it's become such an overused. We don't know what to say in times of grief. So we just go thoughts and prayers. It's all we can do.

It's kind of like the combination of thinking of you. You'd write in a card maybe, thinking of you, and then praying for you. So we combine it. We go, well, I'm thinking of you, and I'm also praying for you. Well, just thinking of you is a little creepy. That's a fair point. You know, hey, Ken, I've been thinking about you. That's just weird. Well, when you look at me like that, it's even creepier. But if I said, Ken, you know, I've been praying for you. That means something. It does. I appreciate that. By the way, keep doing it.

Ronnie's up next in Denver, Colorado. Ronnie, you're on the Ramsey Show. Hey, how's it going, guys? We're having a good time. What are you doing? Nothing much. Just hanging out. Getting ready for my wife to get home from work and pick up my daughter. Nice. Enjoy the rest of the day. Thanks for making time for us. Ronnie's chilling right now. What's going on? How can we help?

Yeah. So I had to have a couple of questions. So, uh, my wife and I were currently, you know, in a, a position, um, where we're, um, in a little bit of debt, it's nothing crazy. We're about $10,000 in credit card debt. Um, then I think we owe like $7,200 on her car. My car's paid off, uh, which is a blessing. So I'm very thankful for that. And, uh, we have the money to, to easily pay it off. Um,

you know, that's not the hard part. Just, I guess, me wanting to put $17,000 away out of the, you know, $83,000 that we have in the bank. Aside for that. You have $83,000 saved? Yes, sir. Why are you hanging on to this debt? We're in the middle of, our lease is going to be ending here in a couple months.

and we're wanting to buy a house, but it's just expensive out here in Denver, and I just don't really know what to do. I want to make this money last, and I want to grow it. You know what's a good way to not make it last? Pay 22% APR to the credit card company, which is what you're doing right now. Yeah. What are we doing, man? Let's clean this up. There's a time and a place to be a homeowner, and you guys are so close, but we've got to do things in order so that this is a blessing and not a burden.

Yeah, we have a really good family friend that's a realtor, and I was actually talking to him last week, and I told him, I said, you know, I can easily pay off his debt, dude. I said, you know, what do you think I should do? I said, do you think that'll boost my credit score? And Tommy said, it might hurt it, actually. I don't know if that's true or not. Well, credit scores are...

one of the dumbest things on planet Earth. And it's true that sometimes if you pay off your debt, you'll have a temporary dip because they punish you for paying off debt because they want to keep you in debt. And so you have to play their game perfectly in order for your score to go up. Okay. It's as dumb as it sounds. So what is the best advice for that? Here's the advice. You have 83. You pay down. You take 17 out of that. Pay off all your debts. That leaves you with 66. Okay.

How much of that would you consider three to six months of expenses? 20 grand, 30 grand? Well, our rent is about $3,000 a month where we're currently at right now. Okay. That's about nine for rent. You know, we have a one-year-old daughter. I'm going to say 25. That's all in for all of your expenses for three to six months. All right.

Okay. So 66 minus 25 now leaves you, I'm going to separate this money. So anything beyond the 25 put in a separate high yield savings account. That's $41,000. That's now your down payment fund. You said put it in a what? In a high yield savings account. Okay.

And that's going to help this money at least grow for you a little bit at 4% or 5% with no risk, keeping it liquid. Don't invest this money. And then now you create a new down payment goal. You have no payments in the world. You have an emergency fund. Now's the time to be saving for the house. And so create that down payment goal. That might be $60,000, $80,000, $100,000. You said you're in the Denver area. It's crazy expensive out there.

Yeah, we're super close to our job. That's why my wife and I, we both live in the neighborhood we live at. We live in an extremely beautiful, one of the top neighborhoods out here in Denver, Colorado. But it's to the point where it definitely is pricey. So what's a house going to cost you? What's a reasonable house going to cost? To purchase? Yeah. In this area, I'd say anywhere from $700,000 to...

Four million. I said reasonable. That was a big jump. Yeah, well, I forgot. I didn't hear the reasonable part. So yeah, what would it look like for you guys to get a condo or a townhome that suits your needs for now? I don't know if we want a condo or a townhome. I don't care what you want, Ronnie. This is about reality. You can't afford a million-dollar home. And then also reality is wanting to...

possibly even look at we've talked about moving and getting away from Denver just because of how crazy it is you know I work in the education system and I see the schooling system and how rapidly downhill it's going and I don't know if I want to put our you know we don't know if we want to put our daughter in you know that situation feels like we've been talking about all the wrong things

It feels like this statement you just made is the one that we should be basing our decision on about housing, not how much in Denver we'd like or we want. It's do we even want to be there? And it doesn't sound like you do. Am I right?

Yeah, not really. You know, I do and I don't. You know, we have our family and stuff like that. And, you know, with our daughter being, you know, one, you know, we definitely talked about moving out of state. She's one. She doesn't care. She doesn't even know where she is. She literally has no idea where she is. What would it look like to move further outside of the city into an area with good schools that's still reasonably priced?

I can get down to Colorado Springs, probably, or somewhere up north, but then I have to change my whole profession and something like that. I'm extremely happy with what I do. I love what I do, and I

I started at my company two years ago at the base job, and now I'm the program supervisor. Well, if you love what you do, you love where you're at, then you have to look at other options for education. That might be homeschooling. It might be a private school. And so those are costs and factors we have to – but we can't have the cake and eat it too. We can't live in the Disneyland castle just because we want to. And we have to look at reality of what we can afford. And that might mean your down payment needs to be $300,000. Right.

If you want this $800,000 home. Either way, I think, Ronnie, the theme here that you're struggling with, and I'm not criticizing you, I'm just trying to help you see, you're struggling with patience. Yeah, definitely. Well, listen, welcome to the party, man. Welcome to the human race. Okay? There are things that I'm dreaming about right now. I was just talking about it on the break with George. Guess what? I got to wait. I got to wait.

I've got to wait. Life's got to cycle out. I've got expenses in certain areas. And you know what? It is what it is. It's worth waiting on. And I think you need a perspective change. We cannot. George nailed it. The K can eat it too. I don't know if young people recognize that phrase. Look it up. It's great. You can't have it all at the same time. You just can't.

And you're going to have to figure that out and be smart until we get there. Great advice, George. Thank you. I try. You're getting a little riled up there. I did get a little riled up. I apologize. The cold brew finally hit. That's what it is. Hey, great hour. Thanks, James Childs and the crew. Thank you, America. This is The Ramsey Show. Thank you.

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