Stop Watching the Market—Start Building Wealth
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This is the Ramsey Show, where America hangs out to have a conversation about life, specifically money, your professional career, and your relationships. 888-825-5225 is the phone number. 888-825-5225. Currently holding his stock position at...

And sitting alongside me is George Campbell. Welcome, pal. Can I be honest, Ken? I haven't even looked at my 401k. I have no desire. It's a good decision. Good decision. I'm riding it out. I'm Ken Coleman. We'll be with you together. We always have a lot of fun together. George will take the lead on your money questions. I'll take the lead on your income questions. That's what we want you to do. And for heaven's sakes, let's address the elephant on the map. Not in the room, George. We just got to say, hold, hold.

Hold, hold. Don't freak out. Chill out. Don't look at your 401k. Don't look at the headlines today. Yeah. Today's probably a good day to just play board games. You know who's having a good day? All of the news outlets who are getting a lot of views from you guys. Very excited. Very excited. All of your clicks and eyeballs going, oh my gosh, it's all coming down. Yeah. Calm down. It's going to be okay. Calm down. You're not cashing out your retirement today. That's right. Leave it alone. Just breathe. Go find a hobby. Yeah.

Keep investing. It's going to be okay. It's on sale. Look at it that way. It's been a while since it's been on sale, and it's on sale now. It's on sale. It's a good way of saying it. Next time you invest, those stocks are a lot cheaper. And I'm going to bite my fingers until they're completely gone to not go on a rant today about what I think about these tariffs. Oh, boy. But I will let that alone for today, I think. Let's go to Michael in Charleston, West Virginia. Michael, how can we help?

I'm having a little issue. I lost my husband in 2008 and got a settlement.

because he died in a work accident, and had a family friend who was a trust officer at a regional bank and offered to help me walk through the whole process and drew up some trust for me and my kids. And two years ago, I found out that he stole all the money. Oh, my goodness. Two years ago?

Yeah, it should have been about $8 million in the accounts and there was nothing. So, um, I just recently received a malpractice settlement for $531, $531,000. And, um, took me two weeks to even put it in the bank because I was scared to let go of the check. Sure. Um, so I've just got it in a money market account right now. It,

3.75 interest because i just needed it somewhere safe but i need it to grow and i'm just scared to do anything with it now sure can we just ask what happened did you report this to the law is there any anything working on this we have i have some attorneys that are working on it but it looks like he has spent all of the money i might possibly recover a couple hundred thousand dollars maybe

be. Is he in prison now? Where is this guy? He's in Florida right now, and we found out there's other widows he's done it to. Oh, sure. Well, I'm hoping that he's going to be arrested soon. Well, that's the hope. Okay. In the meantime, we've got to help you with this $530-some thousand. Do you have any debt right now?

I moved into a trailer when I found out or into a camper when I found out the money was gone because I panicked and didn't want to be spending any more money. So I owe about 12 on the camper and I have a little bit on a credit card because that had kind of been my backup while I was figuring things out. Do you have a job?

No, I still medically am not in a place that I can really get a job, but I do get workers comp for my husband's accident. Okay, so what are your monthly expenses and then are you able to cover those with your medical expenses?

Well, I just recently, the guy who took the money was giving me a paycheck. So I had Obamacare and when he took the paycheck, now I'm on Medicaid. And then I just found out that because of this settlement, I'll probably lose Medicaid. So just little things that are up in the air that I'm not sure what to do, but I don't have a lot of expenses. I get about 2783 a month from workers comp and,

And I have about $1,500, give or take. I pay extra on the camper and medical bills and things like that. Do you have any family? Do you have kids? I have two grown children, and actually my camper is on my mother's property. Okay. And where were you living before?

I had an apartment. I went straight from my mom and dad's house to my husband's house. I got an apartment and decided I would live in town and do that for a few. So what would it cost you to rent somewhere? Let's say you got rid of the camper. Everything I've looked at.

the camper's better than what I would spend to rent. Well, better is, I want to argue with that word. I don't know that your quality of life is amazing right now, living in this camper on your mom's property. I think you need to stand on your own two feet and do some sort of work that you can do, because I don't know that this is going to provide enough income for you to cover for the rest of your life. When does this workers' comp end? I get it until I'm 70. And how old are you now?

53. Okay. So you got another 17 years of this $27.83, but that's not enough to cover your bills and have a life. No, that's why I need to know what to do with the money. Well, you're going to need to invest the money. You don't need a big portion of it right now other than paying off this debt, which I would just suggest selling this camper and getting rid of it. Are you underwater on the camper?

No, I went very minimal on one. So you owe $12,000. What is the camper worth? It's probably worth $20,000. Okay. So you could profit off of that. And then what's the credit card balance? It's like $5,500 right now. Okay. It's got medical stuff on it. So you could sell the camper, use the profits to pay off the credit cards, never touch debt again, build up an emergency fund with some of the settlement money, and invest the rest. Okay.

Yes. That's what I would do. My husband and I did financial peace before he passed away. So I've just been in this situation now that I have a little bit of credit card debt in the camper because of what happened. Well, you're going to start a new chapter now. It's been a long time, and I think you've been stuck in this sort of fight or flight, and then all the grief of learning that this money's gone. Mm-hmm.

And the frustration, the resentment, the anger that you must be feeling. There's a lot going on here. And I think we just need to move forward. And I hope that you can get some resolution. I don't think you're going to get all your money back. I do hope this guy gets what he deserves. But for now, you got to go find something you can do and create a life for yourself. You're in survival mode. I am very much so. So what would it take for you to be able to do some sort of work?

Is it physical therapy, rehab, therapy? What would it take? No, it's all surgical. I just have a lot of internal issues now from all the surgeries. Could you do something from home, customer service? You're talking to us, and so I feel like there's got to be something out there you can do to create some income.

Um, plausibly I could do something from home. I guess it's probably a little lack of, um, confidence too. I've been a stay-at-home mom since I was 24, so. Well, you've got a good personality. Uh, you've got good common sense. Uh, your, your brain's working fine and you need to be working for momentum sake. It's not about a ton of money that you need, but it's about momentum across the board.

your shoulders will go back a little bit more. Your head gets a little higher as you begin to see that I can take care of myself. And the good news is if you do what George told you to do, we also want you to go see a smart investor pro in your area or two or three and have them explain how they're going to help you invest that money. And then your confidence begins to grow and you can still climb back here. Thank you for calling. This is the Ramsey show. Hey, listen up.

We'll be right back.

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You can take a quick quiz to check your progress and receive a personalized plan just for you. Simply head to the show notes, click on the link titled, Are You On Track With The Baby Steps? and complete the quiz. You'll get a result, and that'll help you get caught up with all of our content because we want you to hit the ground running no matter how fast that is. Sometimes you just got to crawl before you walk. Remember that. And we're here along the way. Let's go to Detroit, Michigan next where Jill joins us. Jill, how can we help today?

Hi. Oh my gosh, I'm so nervous. Well, it's because George is on. He's very intimidating, but I'm going to be here for you. So I am currently in Baby Step 2. I have only 9,000 left to go. I've been working like crazy seven days a week and evenings, and I'm exhausted.

But I'm trying to figure out once I'm in baby step four, how to invest 15% because I don't see the numbers working out. And I'm wondering if I should pay off my mortgage like it's baby step two, or if I need to just do side gigs for...

The next decade or so. Side gigs for a decade? I'd rather see you get your full-time income up. But let's dig into the numbers here to see what's actually going on. Let's try for a budget ectomy. Yeah. Okay, what is your income? Yeah. Your gross income? I make $57,800. I'm a teacher, so I also make about $3,000 or $3,500 gross in the summer. Great. So about $60,000.

Okay. And you're saying you can't invest 15% once you're debt-free? You're not going to have the margin to do it? I mean, according to the numbers that I, according to the math that I did, my household expenses are around $3,000. Okay. And I think my net income, according to my paychecks, is about $3,225.

And then the summer, I mean, divide that by 12 and add that to the income. So you're talking about investing $750 a month. That's what 15% is of your gross income. And so when you do your every dollar budget and you list out your take-home pay, now it's coming out before it hits your bank account. You have a 403B through your employer? Yeah.

I do. I'm not investing right now, but I get a 4% match. Okay. So once you're there, you invest 15%. Whatever's left becomes your take-home pay that you're going to pay all of your bills out of. Okay. So it may not be as much of an issue as you think, as long as you can live off the rest of that take-home pay.

I'm just, like, when I look at my margin, it's like $475. So, man, unless I'm missing something, I don't know. Well, that's on the net side. You're looking at your budget with your take-home pay. So, it would reduce your gross income by $750. So, if you were making $5,000, what's going to actually end up in your bank account is $4,250. You tracking? Okay, so...

I think so. Right now, I have 6% being taken out for my pension automatically. Okay. So that's already, and I think you guys say to cut that in half. Yes, we would count that as half of your 15%. So we would count it as three. You would still need to invest another 12%. Okay. And then I wanted to do the 4% for the match and then do the rest in a Roth IRA. And so that's why I was doing net income. Does that make sense? Yes. Okay.

But I'm thinking here, what were your debt payments when you started this process? What were your total debt payments per month? Not much. So I think only like $100 per month because most of it's due to loans, and I have a $0 payment right now. Okay. So what I would do is once you're debt-free, you're going to start doing your budget. I would ratchet it up to 15% and then see what the deficit is if there is one.

I think the numbers are going to work here. I don't know what all the rest of your expenses are and what you can trim out of the budget, but there's two ways to find this margin, either spend less or make more. So before you go sign up for a side gig for the next decade, I'd rather see us work on spending less and reducing our bills so that you have the margin to do this. And by the way, there's still other baby steps. You know, like you said, you want to pay off the mortgage early. Do you have children?

No. Okay. So we can skip baby step five and we're going to move on to six, which is any extra income beyond the 15%, we can start throwing at the mortgage. But no, you don't have to treat that like a baby step two item. We move from intensity to intentionality when we move out of baby step three into four. So that could be a seven to 10 year journey. You don't need to do this in three years. I think you need to enjoy life a little. Wouldn't it be cool to take summers off? I'll be able to afford to. As a teacher, would you want to take a summer off?

Or do you enjoy doing it? Well, I do get bored if I have taken a summer off before, and it does get boring. But I don't know. I just didn't see the numbers working out like I thought. Well, the every dollar budget will tell you, but I want you to just make sure you're looking at the right numbers, gross versus net. Right. Because that will be deducted from each paycheck. So I don't want you to get spooked by saying, well, I don't have the money in the every dollar budget because that's just your take-home pay.

I doesn't the Roth IRA though doesn't the net it doesn't come out of your net though. Roth IRA you would invest on your own so that wouldn't come directly out of your paycheck that's not through your employer. Do you have a Roth 403b through your employer?

No, I don't. They don't offer a Roth option. Okay. So yeah, you do match beats Roth beats traditional. So invest up to the match. That's 4%. Move on to your Roth options, which would be an IRA outside of your employer. And then if you still haven't hit 15%, you would move back. But it sounds like you will hit that with your employer, so you won't need to move back to it. Okay. You got this. Now do you believe, Jill?

I don't know. I guess. I mean, maybe when I get there, it'll be different, but... I think so. And you'll make more money over time, right?

Yeah, that's true. I mean, I'll move up to $61,000 next fall or this fall. I want to see you actually, I want you to look outside the teaching world. I really would like to see you try it. Just look at it. Just see where you could take your experience and skill set and make a sizable chunk more. And then I also think while you're looking at that, you ought to be looking at some good money-earning opportunities in the summer. Let's see if we could keep that income going doing something else during the summer.

You've got to look. And Jill, I can hear it in your voice. You're one of those, you're the true doubting Thomas from the Bible. You know, you've got to see the scars. And George laid it out for you, so you're going to have to try this stuff so you can see what he's saying. Because even as he lays it out, you're having a hard time believing it's possible. But I've sat with him long enough to know he's right. But you're going to have to try some of this stuff. So I'm really going to push you in two other areas here.

I really do want you to see what you can make in the summer. Let's see if we can max out the summer. Can we make $9,000 in the summer? Let's set a goal. Let's look. Could I transition from the traditional teaching world into a different role? Because I've counseled so many teachers, George, you know this, on my old show, The Ken Coleman Show, where they didn't think they could do anything but teach. But you can. Those skill sets. You are an instructor at heart.

And you are an instructor by trade. That's really, really valuable. So if I were to just tell you to kick the tires on looking at corporate training, for instance, you know, I think you should be making somewhere between $75,000 to $100,000. Wow. But you won't see it if you don't look for it. Well, I will say I don't – I do live in a smaller town. I'm not in Detroit, but I have – I just do, like –

Department of Natural Resources, summer gigs like that. That's what I've been doing. I know, but that's bottom of the barrel. You're worth more than that. I'm trying to get you fired up a little bit. I'm trying to be your cheerleader in the locker room because if you head out on the field acting like you are right now, you're going to get beat by 100.

You've got to come out of that locker room like you're going to destroy the other team. And you need to come out of this thing going, I'm going to actually do what George told me to do, and that's just the beginning. And I'm going to absolutely win. And if I've got to move, I'm going to move. But you need to happen to life, Jill. I think too much of life is happening to you. I guess I just don't know what to do in the summer then because that's kind of crazy to me that much. I know you don't because you haven't looked for it. You haven't looked for it.

You've got to get your head up. You've got to start looking. You've got to start talking to everybody. Hey, I'm a teacher. This is the skill set I've got, George. I've done this for this many years. I'm looking for this kind of work here. And you've got to look for it. You cannot find it if you don't look for it. And looking for it means I believe if I look for it that I'll see it. Come on, Jill. Let's go. Happened to life a little bit here. Coach Ken. Man, I need to bang the locker room, blow a whistle or something.

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If there's anybody who knows student loan debt is a problem, it's me. My husband and I had $280,000 of it, but we were able to dig ourselves out and you can too. If your student loan payment and interest rate are burying you, refinancing could be the solution. Now, I recommend contacting my friends at Laurel Road today. Through their online application, you can get an initial rate quote in less than five minutes. And if you have a more complex

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We'll be right back.

nobody's coming to save you from student loan debt. If you want them gone, you can't mess around. Go to laurelroad.com slash Ramsey to find out more about student loan refinancing. Again, that's laurelroad.com slash Ramsey. Laurel Road is a brand of Key Bank National Association. All credit products are subject to credit approval. Lisa from Milwaukee is up next. Lisa, how can we help? Hi, George and Ken. Thank you so much for taking my call. My

My question, a little bit of a background. I started a business in 2023 and it took a little time to get it ramped up. So I didn't make that much in 2023. So the taxes that I paid were relatively low. But in 2024, I did much better.

And as I was giving all my documents to my tax preparer, I said, oh my gosh, I'm sick. I can just imagine how much I'm going to have to pay in taxes. Is there anything I can do to reduce my tax bill? I'm in real estate. And I said, aside from purchasing properties, I'm not in that mode yet. And he said that I could, I have a Roth, a self-directed Roth IRA, but that won't reduce my tax bill. Okay.

He said I could open a traditional IRA, a simple IRA, or a self-directed 401k, but at this point, my only option is a traditional IRA for 2024 tax benefits. Is it beneficial for somebody self-employed to open a traditional IRA for tax benefits?

Well, I mean, you're just switching it up. So with the Roth side, you're paying taxes now and then never again. And so what you're saying is, well, I'd rather not pay the taxes now, but one day when you go to withdraw that money, you're going to pay taxes on it. So there's no way to really avoid the tax man. You're going to do it on either side. And if I'm in your shoes, I would just stick with the Roth.

I don't like doing anything for the tax benefit. I know it stinks to pay taxes, but it's just part of making an income in America today. And so I would do any other thing you can do to reduce your taxable income through deductions and credits, but I don't think it's worth switching to the traditional side just to save a little bit on taxes.

Should I have an additional retirement account besides the self-directed Roth IRA for any? Because my expenses for my business, my startup expenses, I had some more, but now my expenses are very minimal. So the amount of deductions that I have are very small. So the only thing that he said that could reduce is either purchasing real estate, which again, isn't my mode of operation. You're out of options as far as tax advantage retirement accounts.

Okay. Do you have a health insurance plan? I'm through Marketplace. I was diagnosed with cancer four years ago, so my health insurance is astronomical. Is it a high deductible plan or is it PPO? Do you know what it is?

I believe it's HMO, but based on my income, it's $600 a month, essentially. I was asking because if you have a high deductible health care plan, you can do an HSA, which is a health savings account, and you can actually invest through there with tax advantages. So it kind of becomes a bonus retirement account in that way, you know, outside of your Roth IRA. Beyond that, beyond the HSA, a Roth IRA, if you have no other options that you can do, you could always go to a taxable brokerage account.

non-retirement and just dump money in there into some S&P index funds. Okay. And that would give me a tax advantage then? It wouldn't give you a tax advantage, but it's another way to invest if you're not hitting that 15%. Are you debt-free with an emergency fund currently?

Oh, so, um, for two years when I was healing cancer, I didn't work at all. So I was living off of credit cards. So, um, in 2023, I paid off about 10,000. And this past year I paid off the remaining 50,000 in credit cards. And I, well, I should feel great, right? But because my income is still unpredictable, it really took everything. Besides I had enough money. I didn't know how much I was going to pay in taxes, but, um, so where are you at now? It's

In terms of? Your debt. Debt. So no credit card. I do have about $17,000 remaining on a student loan, which I was hoping to tackle this year. Okay. If I was in your shoes, and again, you called our show, this is the way we do it. I would pause all investing, you know this, and knock out the student loans, get an emergency fund, because right now you are skating on some thin ice. All it takes is one more emergency and you're back to using the credit cards.

Yeah, it's going to move you backwards and you're not going to be able to build wealth because you're going to be dealing with all these ankle biter things. And so getting rid of that debt, getting the emergency fund in place should be your A1 before you get to investing.

Okay. I thought you would say that, but I wanted confirmation. There you go. You got it. We are here for you, Lisa. He's consistent. I'm telling you, the clock and George Campbell got the same consistency. I'm ticking. Going to hit the mark. Speaking of taxes, we are up against that favorite time of year for most Americans. Got to get those taxes in. And...

Oh, I know what that means. That sound right there in my hands, I've got some myths about taxes I want to run by you, George. Okay. You ready? Hit me. Myth number one, a tax refund is free money. What say you, George? That's a real gear grinder for me, Ken. Oh, okay. You need a little grease. I don't understand. People think, wow, the government blessed me with free money. That's not how it works. You just overpaid your taxes throughout the year, and the government says, hey, you overpaid. Here's a little bit of money back. So here's what you should do instead. Adjust your withholdings to keep more of your earnings during the year.

Get to as close to zero as possible. You don't want to owe too much. You don't want to get refunded too much. All right. Myth number two, higher tax brackets are bad. Oh, boy. This one's hilarious. People go, well, Ken, I don't want to make, I don't want to get a raise. I'm going to owe more in taxes. I'm going to get kicked into another bracket. Dumbest thing I've ever heard. That's not how it actually works. Only the income within each bracket is taxed at that rate.

at that bracket's rate. So it's this much up to 10%, then the next batch is up to 12%. So you're not actually paying 22% on all of your money. That's right. There's marginal and effective. So you've got to look at that. Earning more increases your income, not the overall tax rate. All right.

Myth number three, keeping debt for tax deductions is beneficial. Oh, boy. You're just trying to rile me up, aren't you? It burns your biscuits, doesn't it? Gosh, yeah. Paying interest in order to gain a tax deduction is very counterproductive. If your tax advisor is suggesting you do this, you should fire them. It is way better to pay off your debt, save on the interest payments, and free up that income. Never do anything just for the tax deduction. All right.

Myth number four, the team hates the paper crinkle. They hate it so much. But I think the audience loves it. America said yes. They do.

pay by tax day or don't pay at all. That's a funny one. They go, well, I can't pay what I owe, so might as well just not file at all. Yeah. That's how you go to jail. That's not a good plan. So the penalty for not filing a return or filing late can be up to 10 times as much for the penalty for not paying on time. So you still have to file the return by the regular deadline, pay as much as you can by the deadline, and then set up a payment plan with the IRS for the rest of the year.

that you owe, but you got to file by the deadline. That's right. Unless you look good in stripes or orange. Hey, that's not me. Okay. Neither one of us. Not flattering. Neither one of us. And finally, myth number five, you're not smart enough to do your own taxes.

Now that one, the jury's out on that one. Well, now I'm not. So in this situation, that would be reality, James. I would go to jail accidentally because I'm just bad with details. That's fair. Well, here's the good news. You're probably better off filing your own taxes if you have a simple tax situation.

So if you're a normal W-2 employee and have a lot of life changes this year, then it's fine. You can use Ramsey Smart Tax and file on your own. But if you have a more complicated tax situation, you own a business, you bought a home, you had a baby, you're Ken Coleman, you want to consider connecting with a tax professional. Yeah.

So regardless of all this, you got to file by April 15th. The deadline is upon us. And if you're ready to file online, be sure to check out Ramsey Smart Tax. It's tax software that's easy to navigate. It is foolproof. Even Ken Coleman could do it. That is true. Go to ramseysolutions.com slash smart tax or click the link in the description if you're on YouTube or podcast. All right. So I'm glad we went through that. It's painless. It is. And so many people make bad decisions around taxes. The one that kills me.

is the idea that I'm going to go spend money

In order to get a little tax relief. Oh. You know, we hear that one a lot. That didn't make the myths. But you know the idea is, well, I've got a business. We use a lot of business owners. So I'm going to go out and spend a bunch of money in order to- So I can deduct it as an expense. Yeah. As opposed to saving it or investing it. It's not a dollar for dollar deduction. Doesn't that drive you crazy? Yeah. Well, because this stuff is all over TikTok and social media. That's why I bring it up to let you just swat it. They're going, hey, let me go buy a G-Wagon so that I can write it off. Right. Right.

As if the write-off is better than saving the money. Where does that come from? Where does this notion come from? Well, it gets a lot of clicks on social media, and then people go, well, it makes sense, and then your tax pro is telling you the same thing because that's what you want to hear. You want to go spend money? Great. Just write it off. It's not a dollar-for-dollar deduction, and it's unwise to spend money that you don't need to be spending. That's not how a successful business is run. Amazing how that works. More money. Who knew you'd rile me up about tax myths?

On a Friday. Well, it's hard to... It's the last thing America needs right now. Well, to be fair, George, you're so even keel that most of Americans can't tell when you're raging versus when you're relaxing. And I envy that, my friend. You're as steady as they come. Thank you. Steady Eddie, they would have called you back in the day. I'll take that. You ever heard that before? No. Yeah. It sounds like it's from the 1950s. I like to dive back into the way back back every once in a while. Yeah. I'm still in touch with the 50s. It's back when you can hit a vending machine and make some pop just roll out. Pop? Yeah. That's what they call it.

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A well-organized legacy is a gift to your family. That's NOKBox.com slash Ramsey. Uche joins us next in Alexandria, Washington, it says here. All right, I'm familiar with the Virginia. I didn't know. All right, Uche, how can we help?

Hi. So I was calling mostly because I needed some kind of coaching and advice. I've just been in this country since 2022, so I don't know much about the credit. That being said, I do have a credit card debt of $1,000, and I have my car loan that I'm still paying, and I'm currently in school.

So I have about, I think not, I think it's 8,000 on student loan. And right now I was working to see how I can manage it. So it doesn't go out of hand because already it's quite a lot. Um, I can make payments on my credit card. However, I came across national debt relief and after I heard, you know, spoke with one of their consultants, they said they can negotiate that. And, um,

Bring it down to 50%. And obviously, I'm going to have to pay their fees. In total, instead of paying $1,000, I'm going to pay $8,400. Now, it all sounds good, but I have no idea for anyone to tell me how that affects me. If I should just go ahead and pay off the card myself or if I can work with them on that. You've got George. I'm so glad you called. You did not sign anything with these people, did you? Not yet. Please don't. Please run so far away.

that they can't see you anymore, they can't contact you, block their numbers. These people are not here to help you. Do you understand how these work? So they tell you, hey, we'll reduce your debt one easy monthly payment. Your life's going to be so much better. Here's what actually happens behind the scenes. They tell you to stop paying on all your debts, stop paying your creditors, let your accounts go to collections,

which tanks your financial world, then instead of sending your payments to the debtors, you send it to them, right? They put it in an account and they hold it for you and they wait months, sometimes years to negotiate a lower lump sum and they charge you for it. That's the fees you're talking about. So you pay thousands of dollars for someone else to attempt to fix your financial mess while tanking your financial world, right? Now the creditors, they don't have to do any of this. They can still sue you. They could take you to court.

And even if they do settle a debt for less than you owe, the IRS considers the forgiven amount as taxable income. So you still have to pay taxes on that difference. And so instead of doing the shortcut, I believe in Uche and your ability to pay off this debt on your own without this shortcut that's going to really harm you in the long run. So here's what you do instead. Pause everything you're doing in your financial world and cover your four walls. Can you cover your food, utilities, transportation? No.

housing with your current income? Well, yes. Yes, I can. I definitely can because I already use their every dollar to comp. The only part is I always feel like I'm on the edge of

not being able to get other personal items or let's say I run out of something during the week. I'm like, I don't know if I have enough for next. So I was trying to see how I can not live on that edge. That's your four walls. So you need enough to cover the basics, nothing more. And then beyond that, we need to make the minimum payments on our debts. Can you do all of that right now? I can definitely work towards the minimum payments. Okay. And then do you have anything left over to throw at your smallest debt? No. Beyond your basic bill. So what is your income right now?

I currently have $3,697 after taxes every month. Okay. Are you doing any investing right now? I have not started it, but I started putting out about $21 to see if I can save with those. I just have it in a savings account for now just because, like I said, I'm always living on the edge. So it's like maybe I can just put whatever small I can find. So how much do you have in savings? Do you have $1,000 saved yet?

No, I don't have a calendar. Okay. So that is your A1. You're going to cover your four walls, nothing more, cover all of your minimum payments, any extra dollars need to go to a savings account until you have $1,000. That's going to help you cover those ankle biters like you're mentioning. Okay. Then once you have $1,000, you're going to move on to the debt snowball. That's baby step two. List out your smallest debt all the way to the largest debt and just attack the little one with a vengeance while you make minimum payments on the rest. So what is the smallest debt if you listed them all out?

The smallest one would definitely be the credit card. It's supposed to be school loans, but they're not due yet. And I'm still in school. I have $8,000. So I have not contacted them on how to pay it back. Okay. So whatever I have to pay right now is just my credit card. And it's one credit card that I... Are you still using that credit card? No, I have not used it in the last two months. Good. I've been working with my own because I'm trying to see what is possible. That's where...

I'm at right now. What is your relationship from the amount of hours you're working to schooling? Well, it's quite tight. I work full-time and I go to school full-time. I go to school online and then I'm working full-time because I do not want to have to do everything on credit. Sure. What are you going to school for? Well, bachelor's, master's in psychology. I'm trying to be a behavior analyst.

Okay. How much more do you have schooling-wise? One and a half to two years, depending if I don't have any gaps.

I'm going to throw this out here because I want to hear what George's take is, and I'm not actually recommending this. I'm just wondering if we don't think about pausing school for a season to get through this. You're so tight right now, and the degree will still be there. And I just wonder if it's not a good idea for you to spend, let's say you spent half the amount of time that you're in school working an extra job.

just for a short season, to knock this debt out, get an emergency fund in place, and then finish. It just feels like you're trying to do a lot right now, and you don't have to do the school work

I know you want to, and I'm not in any way trying to discourage that goal, but I think that there's a season for everything, and it feels like trying to get out of debt and get your life set up financially and be in school full-time is not the best play. George, do you disagree with me on that? Yeah, well, you're making decent money right now. What are you doing full-time? Well, I am a behavior therapist.

So you're doing all of this for like a 10 grand raise? What's the upside at the end of this? It will be about 20 grand raise. Well, that's the minimum, 20 grand raise from what I already am. I would pause right now. I'm even more bullish on this idea. Yeah, would they help you cash flow this, your employer? Will they help?

Well, no, the most they did was put me on salary because typically you get it hourly pay. So when I had reached out to them and I said, hey, this is what I'm doing, because it was my supervisor that I spoke to. Like I said, I came here very without information. So when I had thought about going to school, they were like, oh, you can go to school. I was like, I don't have the money. And they're like, oh, you don't have to pay right now. Usually you sign up first and then you do this. So I was already in this and I started understanding the system a little better.

And I'm like, okay, now I need help with this. Because they hear it out there, like, that's just how, you know, it's that easy to do it. Of course. I was like, if it's that easy, everybody would do it. Nothing about your life is easy right now. Nothing. I know. I know. I've thought about pausing school, but I keep feeling that pressure in me. Like, what are you going to do? You're not going to lose the credits, right? Why do you want to delay it? Can you pick up where you left off six months, a year from now? Yeah.

Okay. Yes, you can. I know. I feel what it is because where I'm from, my culture, going to school and becoming something. There's the real reason. But Uche. I cannot. Uche, you are. I'm not saying drop out. I'm saying pause. The pressure you're feeling from the finances is way more than the pressure you're going to feel from back home or anything else. And you're not quitting. I'm not suggesting you quit. I'm saying pause. Do they pay your bills?

No. Your family that's putting all the pressure on you? No. I don't think they get a vote at this point. They're not experiencing the stress that you are trying to balance all of this at once. Imagine, Uche, if I can cast vision. Imagine getting this debt paid off the way George instructed you, and you do this, you press pause, and then you get set up, and you have a strong financial base, you're debt-free, you got an emergency fund, and now we start cash flowing our way through school. Think about how much less stress you'll have in your life as you finish.

That's the vision. You're actually going to feel like you got a raise. Because if you do it this way, on the track you're on, you're going to be throwing your entire raise at more debt. Yeah. Because you're going to keep racking it up. Yeah. George, I'm bullish on this idea. I'm for pausing. Yeah. I like that plan. And maybe if the car, I don't know how much the car is worth, but you may want to sell that to get out of it and downsize for now. If you've got public transportation, you're in the D.C. area. So it may be possible. Yeah. Good hour here on The Ramsey Show. More coming up.

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This is The Ramsey Show, where America congregates to have a conversation about money, your work, and your relationships. 888-825-5225 is the phone number. 888-825-5225. I'm Ken Coleman. I'm joined by the Natalie-attired shacket man, George Camel, ladies and gentlemen. Natalie. That's a word you don't hear a lot. I'm not sure it's a word. I'm going to have to check that out. I said check that up.

Is Natalie, it's Natty Attire? Yeah. It means stylish or tidy. You like that. Nothing describes you better than stylish and tidy. They made that word for me. You are so happy right now. Look at the smile on your face. Ken always teaches me a new word on this show. I try. I hope you guys are learning along with me. I try. George is going to lead out on coaching you on what to do with your money. I'm going to help coach you on how to make more of your, make more money rather, so that you can win and win big. Let's go to Emily in Philadelphia. Emily, how can we help today?

Hey, guys. How's it going? Well, we're having a blast. What's going on with you? Well, I called in a few years ago, and at that time, I was making about $30,000 a year, and it took me a little bit. But since then, I have taken Dave's advice and

and got a more advanced license in my field. So these days, I basically quadrupled my income. Come on, Emily. Way to go. Emily, the studio audience is clapping for you right now. You can't see this, but they're so excited for you.

That's awesome. Well, I really appreciate it. It's been quite the journey, but I'm glad I'm here now. In addition to that, since then, I've gotten married and my husband is a veteran. He's currently in school for his undergraduate degree. So, of course, we get benefits that basically just cover our housing. We live in a pretty expensive area. So,

All of his income basically goes to helping pay for the mortgage, which makes me the sole earner for all of the other things, especially since he's planning to go to law school once he finishes his undergrad. So we're in a place now where we're really eager to have our first child within the next year or two, which brings me to the issue.

So the issue is that we currently have about $120,000 in non-mortgage debt. And I'm really torn between two things here. I don't know whether to just keep plugging away at the baby steps and pay down my mortgage

our debt. That's debt that I brought into the relationship, but pay down our debt really aggressively or to start saving up for parental leave since I'm partly self-employed and partly employed by a company that doesn't have a parental leave.

policy in place. So I just want to make sure that I can take time off without worrying too much about our finances, but I also want to be smart about the debt. So we've just been talking about this a lot lately and I'm hoping you guys can help steer the direction here. Yeah. What do you make? I make about $120 a year. Awesome. And what is the total take-home pay you guys are bringing in every month?

It's right around $10,000. Okay. And what are your bills every month?

So I have about $1,000 in personal loans, about $5,700 in credit card debt, $14,000 left on the car, and then just under $100,000 in student loans. And then our mortgage is about $2,400 a month. So those are the big things. How much money would you need to have set aside or want to have set aside to offset your

the parental leave expenses? I think I would feel super comfortable if we had $20,000 set aside. Okay. Um...

That's what would make me feel really good to know that every bill that needs to be paid is getting paid. We've got a little bit extra for things that might pop up, any unexpected medical bills. I do thankfully have health insurance, but babies are expensive. How much is left over right now? Once you cover all of your basic bills, minimum payments on the debts, how much extra is there?

Uh, it winds up not feeling like a ton. I want to say like a ballpark of maybe a thousand a month. You're telling me you guys are spending $9,000 a month? I think so. And I think part of the...

well, maybe not problem, but part of what we've been doing is paying down on previous personal loans that were really high. So we've been paying on those really aggressively. If we were to just stop paying...

paying all the extra on the debt, that would be significantly less going out every month. I mean, I think we'd probably have $4,000 or $5,000 left over. Okay. That's good news. So if I'm in your shoes, here's what I would do. Once you're actually pregnant, it's fine to go into stork mode and just stack up cash. And $2,000 a month for the nine months of pregnancy, you'll have $18,000 sitting in that one account.

Okay. And so that'll get you by for those months. It's so easy when you say it. Yeah, that's just the basic math. What I wouldn't do is go, well, we don't know, so let's just start saving now and not pay on our debts and just make minimum payments. I would continue the debt snowball until we go, all right, game on, nine months until baby. Then I would pause and stack up cash. Once you and baby are home safe, you're done with leave, you've got the money left over, start chunking it at the debt and push play on the debt snowball.

Okay. Yeah, you can do that. Yeah, and real quick question. What is your hubs getting his degree in? He's studying sociology right now, although the plan, again, is for him to go to law school and then probably commission as an officer back into the military. Yeah, as a part of this plan, I always like to throw something out for people to think about. I'm not suggesting that he do this or that you all do this, but I would sit down and talk about it.

I would entertain what a gap could look like between his undergrad and law school. There is this drive in America. I don't see it anywhere else. It is such an American cultural pressure to, I got to knock it all out as fast as I can. I'm going to slog through it. I'm going to come out on the other side with all these degrees. And then you're saying he may actually go into the military. It didn't sound like he needs a law degree to do that. It doesn't. And so especially with that little wrinkle you threw at me,

Why not go work for a year or two and, again, kind of bring in some more income? And let's fast forward our financial progress here.

And law school is always going to be there. The other thing that I would recommend is that he work really hard on getting a strong LSAT score because we know for a fact, I've proven this over and over again, you can do some research to check me on this because I'm right, but there are a lot of smaller, lesser-known law schools that will give your husband a full ride if he gets a very high LSAT score. So these are things to be thinking about as opposed to just going through the motions of,

of, well, we're going to grit our teeth and stay on one income, and especially if baby's there now, I would just have a conversation about that. That's all I'm suggesting.

Yeah, yeah. I think that's really fair. And I appreciate all of the advice and your time. Thank you so much. Yeah, you bet. Appreciate the call.

And so that's my goal for you guys is two years. Now, this is aside from if you get pregnant. Even easier, by the way, George, if his income goes up. Boom. Now it's like 18 months. And that's why I'm presenting the idea of a pause between graduate school, especially when you're in debt. Get out of debt, George, is my play. Sometimes you got to hit pause to move forward. Yeah. Yeah. I like that. Very good.

Well, George and I will continue to talk that philosophy. And, you know, very Socratic. So I like that. It's very good. All right, Dave, you have some strong opinions. Possibly, yeah. Yeah, I think so. Okay, because you really prefer credit unions over big banks. So why is that? Well, credit unions, for one thing, are nonprofit, which means that the members, the customers, own the creditors.

the credit union. So any profits that the credit union makes goes back into customer pricing. So you get better interest rate on savings, cheaper checking, and so on, that kind of thing. But what's more important than that, though, is the fact that the customer is the owner

changes the spirit on the credit union. So I find very few credit unions that aren't very customer-centric. Yes. Well, and I think we have found one that is incredible, and that's Fairwinds. They are an incredible credit union that is really out with the heart to help the customer. You know, that's why we're partnering with them.

because they've got a scope to be able to handle the Ramsey audience, and they're the right kind of people with the right kind of values. And they've done a really, really good job with customer service, and the deals that they're offering, the Ramsey tribe is incredible. Yeah, absolutely. And you're right, their customer service is unbelievable. Winston and I just signed up, and we got an account. And I'm not kidding, it took less than five minutes to

It was so user-friendly. The step-by-step approach was unbelievable. And then the next day, my phone rings and it says Fairwinds on my phone. So I answered it and talked to someone there and they said, yeah, they give calls to every new customer. And so again, they just really care about your experience. And I so, so appreciate that. So again, you guys, I know it can be a pain to switch banks or to open up new accounts, but Fairwinds,

Again, they make it so easy. Plus, anything that you can do at a traditional branch, you can do with them at fairwinds.org or on their app. And you'll have free access to over 33,000 ATMs. Hey, you guys know how much I hate banks in general. And so for me to do this is a big deal. Talk to our friends at Fairwinds and check out the combined checking and savings bundle that they created just for the Ramsey tribe.

You guys, it's incredible. Yeah, you guys, it's so easy to join Fairwinds no matter where you live. So go to fairwinds.org slash Ramsey to learn more. That's F-A-I-R-W-I-N-D-S dot org slash Ramsey. Hey, guys, good news. Presale is on now for my new book,

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All right, time for our question of the day, brought to you by our friends at Why Re-Fry. A little tongue twister. Why Re-Fry. Wow.

Freudian slip there, I think. If you've got defaulted private student loans keeping you up at night, YRefi can help you lower your payments and your interest rate. Visit YRefi.com slash Ramsey and start resting easier. That's the letter Y-R-E-F-Y dot com slash Ramsey. It may not be available in all states. Today's question comes from Marissa in Oregon. My husband and I are working hard to pay off our debt. We set our budget each month and try to stay with it.

Our problem is that we have way too many auto withdrawals coming out of our accounts. I started a calendar to track our finances, but that doesn't seem to help. What advice do you have regarding budgeting for scheduled withdrawals? Oh, my goodness. I don't know that I've ever seen a question more teed up for you. I think Ken fell asleep while I was – my second reference of withdrawals, he was like, I'm losing it. Okay, this is actually a good question. It's a really good question. It's very tactical, but I think this will help a lot of people out there who are also struggling with this.

So when you have auto withdrawals, they're on auto pay. The electric bill is going to come out on the 17th every single month. So you say that you're setting your budget. I don't know what budgeting method you're using. You didn't mention that. I personally use the EveryDollar budgeting app. You can jump on there and use that for free, get it in the app store. And what I love about this is that you can set the due dates with each item in the budget, each transaction, and you can have reminders in there. And so one thing you can do is with the

premium version, there's a paycheck planning tool where you can see exactly when you're going to run out of money based on when those bills are coming out. And then the process would be call the utility company, get online, and you can change the payment date within a certain window and to say, hey, I need this to come out on the 16th instead of the 14th so that it can come after the next paycheck and not before.

And that will help you over time. And it sounds like you guys are also, you're running it real tight right now. I would keep a buffer of $100, $200, $300 in your checking account so that you're not running up to zero and overdrafting. That's what you want to avoid here. So doing all of that will help. And over time, it's going to get easier

easier as you understand when these bills are coming out. But doing that every dollar budget is really going to help you understand paycheck one hits here. Here's all the bills that come after it. Paycheck two hits here. Here's all the bills that come after it. And over time, you'll get it dialed in and you'll start making that progress.

But speaking of every dollar, we have multiple free trainings. These are webinars that are absolutely free for you this month. You can join in on a live webinar, and we walk you through how to break that paycheck-to-paycheck cycle in 90 days, step-by-step, like George was talking, through the EveryDollarBudget app.

Over 160,000 people have signed up already. Join it. It's free. Go to everydollar.com slash webinar, everydollar.com slash webinar. Macon, Georgia is where Alan is waiting for us. Alan, how can we help today?

Hi, I just had a question for you guys. Needed to know if my plan, I know nothing about really you guys, is just I'm an idiot or how much of it is I'm an idiot to try to get everything straightened out financially? Well, don't beat yourself up too much. You don't know us and yet you decided to call us. So somebody close to you said, Alan, call these guys. Am I getting this right?

Yes, you guys have been referenced to me before by a co-worker over a year ago. I wrote it off as nothing and then was like, oh boy, maybe there's something to it. That tells us actually how desperate you are. You're like, fine, a year later. A year later, I'm desperate. I'm going to call these clowns and see if they're going to help me. We'll do our best. We will do our best. Give us a little bit more detail here on the real problem.

All right. So me and my wife are pregnant. Well, I'm not. She is. Thanks for clarifying that. Pretty soon. I talked to try to file bankruptcy. That cost over two grand, so I didn't do it. They estimated me at about $12,000 in debt, and that's including her car. I don't have one. You tried to file bankruptcy over $12,000? Yeah. Yeah.

Now, I told you I don't know what I'm doing, how much of an idiot I am. I don't know. No, let's stop. Well, I'll tell you this. Bankruptcy is not your answer. You guys are the solution to this problem. And so we're going to get you out of it. You're working full time? Yes. My hours vary and so does my paycheck. It's highly inconsistent. What kind of work are you doing? Geotechnical field technician. That sounds really fancy. What does that mean?

um summed up construction needs testing done before they can build or any of that i run a bunch of tests okay um but that's not a consistent 40 hour a week gig um sometimes it can be just below 40 hours i'll make less than 400 or 500 bucks sometimes i'm working almost 60 hours still make less than 800 i'm so i never know what my check's gonna be what is your is it an hourly rate who's setting this

It's $15 an hour. Okay, I think you need to be making more money doing something this technical. Better job, better job. So let's just check that off the list. My boss told me today, sorry, that he was looking to give me a raise soon but has no idea how much or how little it'll be.

Does that not like, that just makes my head hurt listening to that entire sentence. Right, but I'd come back to them because we had moved back up to Georgia from Florida because that was a bust at every avenue and they were the only place I could find to go back to work for. I did get my real estate license in Florida and I got the paperwork printed out to transfer it up here. So my plan is to try to get

What time I have not working, because I could work through the weekend at a moment's notice. You get told at the end of the day whether you've got to be at work at regular time. Hey, Alan, Alan, Alan, Alan, Alan, you're making too many excuses as to why you're stuck.

This whole- That's where my plan comes in is I want to get into the real estate and find a secondary gig, put all my time into it. Dude, that is a luxury. You need money now. Yeah. Not I hope to make a commission seven months from now to sell my first house. Yeah.

I'd be working 60 hours a week doing retail and you'll make more. Yeah, that's absolutely right. You can get, you can be making $20 an hour stock and shell somewhere at this point. You've got to get really intentional. This whole, I'm an idiot act. It's, it's a function of, if I can be very straight with you,

you're making a lot of excuses. And George is right. You presented us with $12,000, which in the grand scheme of things, my friend, is not a lot of money to pay off if you have intentionality. In other words, a much better paying job, and then you do what George tells you to do to pay it off. The debt mathematically is not your issue here.

Absolutely. I understand. I just started getting real with these things like a wake up this week. So I knew I had nothing together. All right. Well, listen to George here. I think here's how we pay. Here's what happened. You got a baby on the way and it was a reality check. That's right. And you went, oh, my goodness. I got to be like an adult all of a sudden. Mm hmm. Right. Yes. And your wife is feeling the stress, too. She currently doesn't care about money. She does when she doesn't have it and she can't feed her baby. Yeah.

All right. She's got to start caring. Walking through how he gets out of this. Okay. Listen, Alan paid attention like you've never paid attention to anything else in your life. You need income ASAP. The debt, I'm guessing the minimum payment is a few hundred bucks? Yes, sir. Okay. And you owe 12 grand and it's a car? It's a couple of things. A credit card, her car, a lawyer from a previous divorce that's only two grand, didn't even use them. Okay.

What's the car worth and what do you owe on it? I believe she said the car's worth like 20-something, 30. And it should be paid off next year. No, what do you owe on the car? I think like seven. You need to sell that car today. It's worth 30 grand and you owe seven? Yeah.

I think that's what she said last time I asked her about it. So you could make $23,000 from this sale, use that to pay off the rest of your debts, and still have money left over to buy another car used in cash.

You hear that? You just solved the problem right there, Alan. And then the next step is let's get our income up and start stacking up cash so that we have some when the baby's here. You guys are going to be debt-free with an emergency fund by the time this baby arrives into this world. Mark my words. And we're going to send you Financial Peace University. You and your wife sit down, watch all nine lessons, and then you will be on the Ramsey train on the path to building wealth.

And Alan, let's change the label. You're not an idiot. You're a good man. You're a husband. You're a father. You're a hustler. Pick a label, own it, and go happen to this situation. George just gave you the game plan. I'd be listening to that car in the next five minutes.

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That's ramseysolutions.com/smarttax. In the lobby of our Ramsey Solutions headquarters here, just across the studio here, through the glass on the debt-free stage is Rachel. Welcome, Rachel. Hi, thanks for having me. You bet. Where are you from? I'm from Dallas, Texas. All right, and you're here to do your debt-free scream, I'm told. I am, yes. So exciting. Okay, give us the data here. How much debt did you pay off? I paid off $65,000.

Okay, and how long? It took 14 months. All right, way to go. And what was your range of income during that time? It started at about $105,000 up to $115,000. What do you do for a living? I'm a director of revenue for a hospitality management company.

Oh, nice. And was the bump due to side work or just a raise at your job? It was mostly from starting a side hustle at a gym. No, you started a gym? Oh, no, no. Oh, okay. I'm sorry. I work at a gym. Okay, I was going to say, that's quite the side hustle. I was about ready to be blown away. On a whim, started a gym. Yeah, fun stuff. All right, so take us back to 14 months ago when you started this journey. What led to this?

I had been with my boyfriend for a while, seriously dating, and we started to have deeper conversations about what we wanted our future to look like, and I just started to realize that the path I was going down was going one way, and the path I said I wanted to go down was another way, and something needed to bridge that together, so I decided to

get serious about paying off debt. It was a good time. No spouse, no kids, just a good time to hustle and lay a good financial foundation. Now, how'd you hear about what we're doing here?

Started with my parents giving me FPU. Okay. Right after I left college with six figures of debt. Oh, boy. Wow. Good luck to you, sweetie. I got to ask. I don't want to belabor it or stay here too long, but when you had this conversation with the boyfriend and you said, I realized I was going down one path. I wanted to go another path. Did he come along for the journey or was he out? Oh, yeah. No, he was so excited and definitely on board. Obviously, I'm not a fan of the boy.

Our finances are not combined, but we hustled together. So he's still around? Oh, yes, very much. You left us on a cliffhanger there. I know. Okay, so he was supportive. Yes, he is. Okay, good. Shout out to Ryan. Shout out to Ryan. Your good boyfriend, sounds like to me. Yeah. So was he on the debt-free journey too, or did he not have debt? He is, yeah. He's still on the ride. Good. You beat him to it, so that's good. Yeah, yeah. So what kind of debt was the 65%?

Oh, it was the All-American Variety Pack. I had student loans, multiple credit cards, auto loan, personal loan, and medical debt. Wow. Good for you. A little potpourri of debt there. So what did it look like intensity-wise for you when you jumped all in to knock this debt out? What were you doing? What cuts did you make? Give us a sense of what the journey was like.

I think the biggest piece was writing a budget for the first time in my adult life. So that was a huge game changer. And then really learned to track where my spending was going and cut out all of the non-essentials. And I think another big piece for me was initially building

doing the numbers and finding an end date that I could focus on you know like if I can just stay in tents for 14 months and that really kind of helped just to see where the finish line was I love that so it wasn't just a never-ending journey there was a destination and you know where it was and so it's like you're going on a road trip you know the ETA yeah and that's what that did for you having that goal set and going for it and did you stay on track the whole time did you exceed your goal

I met my goal. It was to pay it off by December 31st of 2024 and I hit it. Boom. I got a feeling that that's not abnormal for you. Are you one of those people that sets a goal and goes and gets it? You're like a super achiever? 100%. I love that. Where does that come from do you think?

Oh, I'd say both my parents, I would say. My mom's the analytical one and my dad was the creative mind, but both of them goal-driven. Yeah. And I've got to point out for our audience, the viewing audience can see this on YouTube if we can lock in, but Rachel, you've got some customized genes, which I'll be honest, normally I'm a little bit worried about, but

But I think you nailed those. Walk us through what's happening there. Thank you. These are, in case I forget why I'm here. Yeah. It says debt-free pants. Uh-huh. And how did you go about doing that? Is that hand-stitched? Is it embroidered? Yeah. I just went to Goodwill, bought some jeans, and then I cut up and sewed another pair on top of these. No way. Wow. Did it yourself? Yeah.

Did you self-teach or were you already taught in the art of sewing? I was taught by my mother when I was growing up. Way to go, mom. I think this could be your next side hustle. Maybe. Making personal finance themed clothing. How much did the jeans cost at Goodwill? Eight bucks. Eight dollars, Jordan. That's your kind of jeans right there. That is thrifty. Wow. I love this so much. So what's next for you now?

You're debt free. You're still young. You got time on your side. Yeah. I'm just enjoying life. Obviously coming here was a exciting opportunity and have a few trips planned later this year and really just continue to save for the future. And we think Ryan's going to finish his race soon. Yes. When is he expected to be debt free? Do we know? Sometime this year. Oh boy. Yeah. Do you think he's going to pop the question? What are we talking about? We'll see. You don't know? It's not that serious yet? I

I like putting pressure on the young man, George, because he's not here. What if he popped up behind the wall? No. That would be epic. That would be good television. Look at her. She's already hyperventilating. He's not here. He's not here. He's actually not there. Sorry, Ray. George, look what you did to her. I'm sorry. All right. So one of the questions we'd love to ask those who step on that stage, who have finished this journey, is what was the key for your particular journey to get debt-free? What would you say that is?

I think the budget just played such a big role assigning every dollar a place so that it didn't just disappear. And then for me, a little bit more personally, I would say just not feeling

feeling the need i'm a people pleaser and so it was very difficult to feel like i was letting people down by saying i couldn't do certain things or attend certain you know important moments in other people's lives and that was that was tough but the weddings the birthday parties the girls trips it had to be hey i'm on a journey you guys know i'm gonna become debt free yeah and now they're gonna be asking you questions going hey tell me more about that plan you did because i

We make like the same money and I got all this debt. And if it worked for you, could it work for me? Have you been encouraging friends now? Yeah, that's been a really cool piece to this as well as seeing others that I've inspired to start this journey as well. And yeah, now I get to cheer them on. Speaking of being cheered on, we see mom over there. Besides mom, who else were some big cheerleaders for you on this journey?

Oh, my family. I have some siblings back home in San Antonio and people from work. Obviously, my boyfriend, Ryan. That's awesome. So fun. We got a little gift for you, a parting gift. Two every dollar premium subscriptions. Good for a year. You can use those. You can pass them along to one of the friends you're encouraging. And that's our parting gift for you joining us here in Nashville. Amazing. Thank you. And I think you've modeled this. I want to remind people as they're listening to your story.

It's so much easier to say no on the debt-free journey, no to all the friends, no to all the invitations when you've already said yes to getting out of debt and yes to this process. You make that decision first, the no's become a lot easier. I'm just saying that for all recovering people pleasers like myself. I mean, that's so key. Love your story, Rachel. And it can be done. What would you say to young people who think maybe it's not possible to pay off $65,000 in 14 months?

It absolutely can't be done if you stay intentional and really just fight for the life you deserve. And it can be easy to see social media or society trying to serve you up what you think is a good life, but just know

knowing what you want and staying true to that. Well, you did. You knew what you wanted and you stayed true to it. We're so proud of you. Thanks for sharing your story. All right. The moment has come, Rachel. You've worked so hard for this. Rachel from the Dallas, Texas area. She paid off $65,000 in 14 months, making $105,000 all the way up to $115,000. Rachel, you know what to do. Take it away. It's time for your debt-free scream. Three, two, one. I'm debt-free.

She is. She did it, folks. I love it. She is debt-free. And normally we have Mel Gibson screaming from So We Need You To Do Your Best. FREEDOM!

Very good, George. That's as good as it gets. All you need is some blue face paint. There it is. There we go. Who did it better? Who did it better? I don't know. I think you did it better, George. I might trade in my skinny jeans for some of those right there. I want to see you go to Goodwill and get yourself a pair of jeans for less than $10. How about that? That's what I want. That's your homework assignment this weekend, George. I'll leave the embroidery to Rachel. Good choice. Good choice.

Are you sick and tired of being sick and tired? You can take control of your money and your relationships. And it starts with just one night. Join me and Dr. John Deloney live in a city near you on the Money and Relationships Tour. We're covering the real life stuff that matters so you can break the cycles that have left you stuck.

It's coming up fast, so get your tickets for Louisville, Durham, Atlanta, Phoenix, Fort Worth, or Kansas City at ramseysolutions.com slash tour today. All right, let's get to Doug, who is joining us here in Nashville. Doug, how can we help?

Hey, guys. Thanks for taking my call. I've got a question. I'm 100% stumped on what to do. I'm currently in about $7,500 a month worth of mortgage debt. It's two mortgages. The first one's about $3,000. The second one's $4,500. I live in...

The one is my primary residence. The other one I'm holding on to, it's renting out, but it's losing money every month. So I don't know whether I hold the property and wait for it to appreciate and just weather the loss or, um, and take the tax deduction from it every year from the interest. Or do I look to sell the property to,

And I won't recover what I put into it. So I'm not going to be recovering my closing costs or any of my down payment. I'll basically break even if I sell it. I bought it at the height of the market. Doug, you are the violinist on the Titanic, man. You're going, hey, we're going to play until the ship goes down. Get off the ship, man. Get off your bleeding money. You're giving George blood pressure issues, Doug. Just setting that up, George is having a reaction over here.

I know, I know. But I look at it and I say, hey, you know, I'm saving a little bit maybe from the taxes. You're not. You're drowning. It's called a sunk cost fallacy. I put money into this. I was hoping it was going to work. Take what you can get out of it and call it a stupid tax and move on with your life. You took on a lot of risk and it didn't pan out. And that's okay. We've all done stupid stuff. I'm not here to beat you up. But I'm telling you, man, now is the time to get out.

So do my calculations matter on this? Because I've, I've basically looked at if I hold onto this property at a three or three and a half percent appreciation over the next three years, I

I can pull my money out. I can get what I put back into it. You're going to be calling us back saying, I'm doing even worse now. I thought it was going to work out. None of the calculations make sense. This is a third-grade math problem. You are bleeding money every single month. Get out while you can. It's only going to get worse. I don't do anything to hang on to a stupid interest rate, and it's only going to harm you in the long run to stay in this thing. Okay. I know you'll be sad to lose your interest rate, but at least you won't be bleeding money

money out because you're losing money. Even if it was breaking even, it would still be a bad idea, but you're losing money on this thing every single month. What's your income right now? Income right now, I make a decent income. I bring home about 220 net. Amazing. And so this is not money you even need, even if it was working out.

It's still not worth this much.

to you guys, which is why I needed a little bit of clarity on it because I really feel like I want to hold on to it. Well, as Dave Ramsey would say, you can out-earn your stupidity for a long time. And so I get that you don't feel it as much in your budget because you're going, well, I got margin, but you're not running a charity here. If you want to run a charity, go start a charity. But you got into the real estate business to make money.

And it's not worth hanging on to the appreciation. It's not worth hanging on to it for the interest rate. I would just get out and next time you buy real estate, do it in cash and do some due diligence to make sure that it will ROI for you.

Okay. And you'll be able to do that fast. Okay. I mean, are you debt-free outside of these mortgages? Well, I have, so I have the mortgage, of course. I have a vehicle, and other than that, no, I actually used the debt snowball, paid off all my credit cards, paid off all my medical debt, paid off all my student loans, probably paid off about $80,000 worth of debt. Right. What's left on the car? The truck has $35,000 left on it. Okay. How quickly can you pay that off once you get rid of this house?

Well, if I look at it, you know, I'm currently contributing, and this goes into another question, I'm contributing to my savings plan through work. You know, they match up to a certain percentage. I'm putting away into a high-interest, high-yield savings account every month. I could take that money, stop it, I could have it paid off in a year. Because as it currently sits, I'm about $3,000 a month cash positive. Can I be honest, Doug? For a guy who makes $220,000, your plan sucks. Yeah.

It's going to take you a year to pay off $35,000 making $220,000? Yeah. I mean, my monthly mandatory right now is about $10,000. What's that? Are you making like $15,000 a month take home? Yeah, about $16,000, $16,500 a month roughly. I mean, basic math says you can get rid of this thing in a few months. $35,000, throw $7,000, $8,000 at this thing, get your expenses low. I think you've been living high on the hog for a long time now.

Yeah, I mean, the income is, I have been, but the income hasn't always been there. So I'm making up for all the pain and suffering that I had to put on myself earlier on. I finally, yeah, exactly. I finally kind of realized it. You could be making $300,000.

A year from now. And you'd still have debt hanging around. There's no reason a guy as successful as you are is hanging on to any level of debt. And you can get rid of this car debt fast. I would pause investing and saving. You're going to do that for like three months. I'm telling you, three or four months, you can get rid of this truck debt, be completely debt-free, free up the payment, get back to... You have an emergency fund in place? I do. I have my retirement investments, of course. I've got about $25,000 in cash. Amazing. So you could be debt-free even faster. Yeah, I take that...

Okay. You could liquidate most of that savings, throw it at the car, at the truck, and be done in, let's say, two months. 60 days, this truck is gone between your savings and your cash flow and selling this other property. You're going to be in a really good place four or five months from now if you follow this plan.

Okay. And then you can save up and buy real estate real quick, making $220,000 with no payments in the world other than your mortgage, which is reasonable considering your income. Is it a $3,000 mortgage on your primary? No, the primary is the $4,500. Okay. So, you know, yeah, and just, of course, given the market, I mean, you know how it is here, so it's difficult. That's a hefty mortgage for sure, but it's doable if you continue this trajectory. It is, and it was all part of the school system. So, okay. Okay.

You got this, Doug. Well, I appreciate that. There you go. I hope he follows your advice. I think Doug's on the fence. I really do. I think he's trying to make it all work. And I got riled up because he's too successful to stay in this mess and quagmire doing 17 things at once. No question. It makes really good money. Yeah. No need to play this out the way it played out. But again, this is what happens when we do calculator psychology.

Do you know what I mean? We start going, well, if I wait three years, if I hold on to it, then I get, you know, and you start trying to calculate. And justify. A thought. Yeah. To try to bail yourself out as opposed to actually bailing yourself out. Yeah. Like you can't, you know this, George, you write about this in your book, Breaking Free from Broke, but people get into messes because they're trying to shortcut wealth.

And then they stay in messes longer because they're trying to shortcut their way out of it. It feels like we got too many shortcuts. And this was, as I was just sitting here listening, he's trying to shortcut everything. Am I right? Yeah. I was getting riled up. And Ken, thank you for just peeling back some layers. Somebody had to be the voice of reason over here. Speaking of, I got a clip I want you to react to real quick before this hour is up. I think you're going to have a really good take on this. Can we play it, James? Okay. Here we go. Let's go. Bust.

Oh, no. This is me and Jade at 80s night on the Ramsey Cruise. This is a core memory for me now. I did not know this was... So, now, Jade and I are both attempting to warm up. You'll notice she's warmer than I am. I look very stiff and uncomfortable, honestly. It's kind of a weekend at Bernie's vibe you get going on. It almost looks like a cadaver that's being moved. I want you all to listen in. Do you hear that cackling, woman?

That's my wife. She thinks this is funny. Audience of one. Now, this is all ad lib. Watch this move. There goes the fish hook. There I am. Oh, my goodness. Jade has caught the tuna. Watch the slap. Oh, man. If you weren't watching that on YouTube or wherever, you got to get that on video. You can't just listen. So I hope that convinces people to tune in. And I got to say, Ken, you have some moves. Yeah.

And that's generous. I was going to say, that's one way to describe him. There's no moves at all. I didn't want to encourage it, but I just thought this is too good. Well, I feel like I should give some context to this. I did not set out, James, for that to happen. To win a dance battle? No, no. I was tagging along with Jade Warshaw and my wife, Stacey. They were Thelma and Louise, and I'm just, you know...

hanging around. And all of a sudden, Michael Reddish, our dear friend, he's on the mic. He goes, all right, we've got two Ramsey personalities here. Let's get Ken Coleman, Jade Warchild on the dance floor for a dance off. At which point I was already defeated. Jade's got more soul in her pinky finger than I do in my entire body. Amen. I'm just glad that we were under maritime law because you could have gone to jail for what you did on that dance floor. By the way, that's a shortened version of the video, the full video. I won it because James, I dropped down and did three pushups with a clap.

So when I came up, I was able to clap. And that won the crowd over with my physical fitness. That's too hot for TV. We can't even air that. You're doing a push-up. It's too much for young men to see. Put the women and children to bed.