Short-Term Sacrifice Leads to Long-Term Financial Freedom

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Your life from the Ramsey Network in the Fairwinds credit.

And I'm Rachel Cruz hosting this hour with my co host, the Smart Money Happy Hour and bestselling author, George.

We're actually filming Smart Money Happy Hour right after this.

That's right.

the best. Four hours with Rachel Cruise, that's a blessing.

What a gift.

Hey guys, thanks. Thanks for having me. I appreciate it.

What are you doing?

Hi, we're doing great. Thanks so much for calling in. How can we help?

Yeah, so um I guess my question I'm thirty

three.

Yeah.

I've been very diligent about savings since junior high. Um, I finally m crossed the millionaire, I guess, threshold.

Nice. Congratulations.

To buy a house cash, thank you.

Wow.

Wow.

Uh

Mainly because well, yeah, I just don't wanna don't wanna have a mortgage. Um, rates are a little bit higher and I I could probably make more money having a mortgage and leaving it invested but just to sleep a little better at night, so You want to do that?

Yeah.

Um I have quite a bit set aside. Roth traditional um Kind of quote unquote retire early.

Yeah.

um not to be done working but just with a traditional job. do things I'm a little bit more passionate about. I do some public speaking. I have a very unique situation. I'm quite disabled I guess. I s I'm still working full time, um, but I do some public speaking and Trying to figure out when I can kind of step away from a traditional job. on my investments and bit of income that comes in outside of that. I think that with what I'm doing, it's gonna grow and provide a higher income.

Later.

Um it's just not at the moment. So just trying to figure out that kind of freedom that

Thank you.

Cool. How much do you have right now in that brokerage account?

Uh, four hundred and thirty five thousand.

And you said you're thirty-three. So you've got a ways to go before accessing those retirement accounts. So that that brokerage account is that bridge to fund the gap. And so I would continue putting money into that. Now when can you officially use that to cover your life? Well, there's about a thousand variables that you know we don't have access to right now. We don't know the future. But, you know, you want enough in there that

Right. Do you know what your expenses are if you looked at per year, if you don't have a mortgage, but factoring in the fact you still own a home. So if something breaks, right, that you you have the ability to fix it, how much would you need to live off of, do you think, per year?

I think very conservatively I could do it off of thirty to forty thousand a year.

I

I would like much more than that.

Yeah, I was gonna say like like like an a like an actual'cause I would want this situation for you, James, to be realistic. Like I that is one thing kind of about not that you are quoting the fire movement by any means, but But that idea that like I'm gonna live on nothing I'm gonna save it where I can so I can just so I can retire and then your standard of living is just so low that there's almost like Yeah, no enjoyment. Right. So like what would be a realistic like

Bye.

This is the life I would want to live comfortably and good. Nothing crazy, extravagant, but definitely like I don't have to be thinking too much about money'cause I have enough. What would what would that number be then?

I know sixty to eighty would do that because on eighty thousand income now I'm saving close to forty five thousand a year.

Okay. Okay.

So I I know that I could do that. I would like to have nicer things and do

Sure.

Let's dream band.

And then you know.

Yeah.

Live on rice and beans, could or continue to, I can. Yep. Um so I would say sixty to eighty thousand would be a pretty comfortable amount.

Yeah.

Yeah. When I'm not saving an additional forty thousand in a year.

A year.

Yeah.

And you you said you had some income coming in. Was that from disability?

No, I'm employed.

Okay. And what do you make now?

Eighty thousand, probably ten bonus and maybe twenty thousand with what I do on the side.

Cool. And you're single?

Yeah.

Okay. All right. Do you have plans on the horizon to maybe get married one day?

Oh, that's not looking like that. If it happened, it happens.

Uh

It's nothing nothing in the pipeline.

Okay. I'm just trying to factor in your long term future and I have seen a lot of these the fire guys out there where they sort of go, Well, getting married and having kids is actually a deterrent to my financial plan. And I go, Well, your life sucks if family is a deterrent to your financial plan. So I just wanna make sure

Point six.

Look at that.

George.

Great minds think alike. That's just a gut. That's just a if you had to aim at something, I would aim at one and a half and with your income you'd probably get there and the next my guess is I don't know, ten years.

Yeah.

Does that sound accurate?

That's exactly what figure.

Uh

So I'm pretending like I have a fifteen year mortgage and I'm paying myself into the brokerage fifteen hundred a month.

Fantastic.

And so so I kinda figured yeah, I kinda f I kinda figured ten years, um, if I get real aggressive I'm I'm hoping to do it in five.

Mm-hmm.

Bye.

Yeah, and you might be able to. And honestly, James, your income might be going up more, right, throughout these years and everything. So you may hit it, you may hit it earlier. Um but I do I think that's a great next goal, especially for people. When my husband and I, we literally had this

The freedom number.

Freedom number, you call it the freedom number I don't know, kinda like crap hit the fan. I don't know. Everything just goes and you're like, What can I do that I could just walk away and I could still enjoy my life? Uh and yeah, and we ran that out and that's our goal. And so we yeah, so we're shooting for that. And so James, I think that's great. Especially you'll be on baby step seven. You won't have a mortgage, which is insane that you paid cash for your house. Um

Yeah.

Yeah.

Non retirement.

So I mean just so smart. And again, don't feel like you have to deprive yourself completely. Enjoy your life now for the in the next 10 years. Have some fun.

Go on a date, go on vacation.

Enjoy. But yeah, but that's kind of a neck that's a really great next step, especially for people out there who are in baby step seven, I think, is to have that number.

Well and I want to encourage James as well to not wait ten years to go pursue the thing he wants to do.

Yeah, that's true.

Do it now, unless you sign some sort of non compete that says you can't go public speak. I would just make that your side hustle and eventually what might happen is it overtakes your income. That's right. Over time and then you decide to leave three years from now and go do your thing full time.'Cause what breaks my heart is the fire people out there, they go, Well, I'm gonna go do something I'm passionate about one day.

Right.

Exhausted.

And especially if you know. You're miserable in it. Like I think there are some people that are wired more of like, hey, I have a great job. It's not like quote unquote my passion, but I'm really good at it. I get paid a lot. And so I get to like use that money to you know, have a great life. I think there's some of that people and then I think there are some that are like, no, I wanna do what I love, but then sometimes

And he might be able to do that in the next year.

Is that what the kids say?

I don't know if the kids say that, but

Is that right?

I like it.

You know, one of the first things I discovered working in the financial world is how absolutely devastating it is when the breadwinner of a family dies. And there's too little life insurance, or none at all. Grieving families are suddenly left behind scrambling to pay bills and trying to make ends meet.

Next we have John in Pennsylvania. Hi John, welcome to the show.

Hey you guys. Uh how are you?

Hi, we're doing great. How can we help?

Hey, um well this is crazy, sorry. Um so I have um a short question. Uh look

Very good

Short story behind it. Um so my wife and I um were I'm thirty one, she's almost thirty, um, but don't tell her I told you that. Um

And we would never, we would never.

The the only debt we have other than our house um is like ten grand left on the car loan. Um

And that's it.

That we realistically could pay off pretty shortly if we just uh rice and beans in it. Um but my question is, uh so I have a a guitar that I bought for a couple thousand dollars like ten years ago that is like pretty rare, one of one. And um someone recently offered me twelve thousand dollars for it, which is

Pretty nuts.

Um and I I'm just less sentimental uh than I used to be and I'm wondering if

I

should just get rid of this thing while I have like the highest bidder or or if I should keep it as like an asset. Um

Yeah.

my thoughts are right now, just trying to figure out the right next move.

Wow. Hm. So you bought it for a couple of grand, now it's worth twelve, you got ten K in debt. You're like, I could sell the guitar be completely debt free today with two grand left over.

Mm.

But you'll be guitarless and that will make you sad. You'll be like, did I make a dumb move? This could have been worth twenty if I waited. Because it sounds like you're looking at it as an investment slash asset and it's less so this was my grandpa's guitar.

Yeah, that's what I'm wondering. Is it is the sentimental value it's not really there as much as what is what you said? It is more you see it like what George just painted of like, Hey, I could get some money out of this.

Yeah, I I bought it from like a from like an artist, like a like a musician. So it's not really like dad or anything like that. Um

So Is that where where the value is because the artist owned it?

How is it?

It was owned by um I the the guitar is the it's a Gibson um signature model of a uh famous like punk rock guitar player.

Uh.

From the band Blink Wavy Two.

Oh my god.

Oh George.

I was like it can't be it can't be blink one at your two. I think there's a person in this building who might buy that. Maybe at this desk.

You might be getting an offer of

That is pretty perfect.

thousand one dollar after this show uh from someone.

Right.

I I was a little sad that John wasn't on, but also glad because he would immediately say, No, don't be a little more

Well, you you're talking to the guy who told someone to sell a horse. So I you know, I'm never uh above selling a guitar to get out of debt. But your numbers here, like you're gonna become debt free pretty fast. How many more months until you guys are completely debt free if you go hard at this?

If we really went hard at it, like maybe six months at the most, really.

Okay. So after six months you're debt free, let's say you have the emergency fund another three or four months after that. Would you still consider selling the guitar just to have the extra cash? Or would you say, No, I'm gonna hang on to it forever?

Yeah, if there was no debt, what would you do with it?

Yeah.

I feel like I would hold on to it'cause I could always make another twelve thousand dollars. But I could probably never get this again.

I think I would hold on to it

Yeah, I d I don't think it's on f nothing's on fire here. If you were like a hundred fifty grand in debt and you guys Or this was gonna clear some a lot of pain in your life. But it sounds like you guys are on track to do this without really, you know, affecting your life right now. So I would say hang on

Yeah. How much do you guys make a year?

Uh so I'm self employed. My wife works part time as a nurse. We have a couple of kids. Uh we're uh around a hundred to a hundred and twenty five which I know it's a big window. Probably probably like a hundred and ten thousand.

Okay. Okay. Well my question is why aren't we knocking this debt out sooner? Yeah. I would put some gas on this and

Yeah, yeah, we we definitely could. I I knew that question was was coming. We we just started uh every dollar so

We're

Okay.

All right.

So here's my caveat. If you pay off the car in ninety days you get to keep the guitar. How about that?

Paid off in three months.

I see I liked I don't know why. There's something about being human. I just need to d dangle the carrot and put some gas on my financial plan. And I think that helps me go, if I wanna keep this guitar, I've gotta w go a little harder at this.

And it's ten grand. If it was like a nice car that would bring like one twenty you know what I mean? Something's like crazy antique car. Like if it made a huge dent, I feel like I'd be more apt to be like get rid of it. Yes, and it was like you gotta clear everything. Nothing counts anymore in life. Yes. But

Yeah. Okay.

That's right.

Guys are much closer to okay.

So uh I think I'd keep it, John. Yeah.

Man.

So

That was a great concert. John and I went to that concert.

I know.

We had a great time. It healed my inner child just like Backstreet Boys did for you.

I don't know. Music is magical. All right. Let's go to Holly in Charleston, West Virginia. Hi, Holly. Welcome to the show.

Racially.

It's so good to talk to you.

Thanks, Holly. George is not here. Just me.

I'm just I'm just honored to speak to the both of you today. I've been so excited about trying to call all day and I'm I finally got through.

The Lord willed it.

Que

Guys in the situation, um I

I have

mental health concerns that um have Not force, but coerced me to stop working and do intensive intensive therapy and because of that I'm not working but I have a family member who sends thousand five hundred dollars a month and I was wondering Would that be wouldn't it be possible?

a fixed income?

Um with that small of an income in your situation, I'd probably say not right now. I think I would get into a place um mentally where you are you you are able to engage the world in a sense of like that you are healthy enough to start working. Have a job, right? And and all of that to in order to really probably go at this. Um, because how much how much consumer debt do you have?

Uh give or take a little bit, I think about five five K. So it's not bad actually

Okay.

from several years ago. But right now I only have probably not even five thousand. Um, but I do have some. Enough enough to make me a little bit concerned, but not terrible.

Yeah, it's five thousand. Is it credit card debt? What kind of debt is it?

No, ma'am. It is medical. And then a t a a tuition bill from the school, I stopped attending, and then um two Uh Ryzen and T Mobile.

Okay. Some phones.

I stopped my contract, they had a final bill. So um I just haven't been able to pay it yet. Yeah.

Um, how much is your expenses every month? Because how are I'm just wondering how you're gonna live on fifteen hundred.

Yeah. In West Virginia, as you can probably guess, living or cost of living is lower than most places. Um my my rent is seven hundred, my um Electric is about 120 a month and then my cell phone my Wi-Fi is fifty a month and then my cell phone is forty five a month. Um, I don't have to pay for water, sewer trash, none of that. But um that's basically where I'm at. I'm left with maybe five hundred dollars.

OK

the left over the month and I have to spend that on groceries. So I I really am in the pickle but I am very grateful. I'm really grateful to have a family member who

Yeah. It's very kind.

Like the intense extensive therapy that I need.

That's

Truly made.

Yeah.

Yeah.

Uh Medicaid.

Okay. And is there an end date, Holly, to that program that you know that you know, is it is it like a ninety day or a six month or a thirty day?

The one that I had a referral to, I just finished one that was ninety days. I finished it, got a certificate, made me very proud of myself, I stuck with it. And then they referred me to they referred me to another one that's twelve month long. So

Oh wow, okay.

Yeah, yeah. And it's it's not even for sure that I got into that app to have a bunch of consults and a bunch of tests and things like that before they even accept me. So I'm just kind of hoping they hope I get into it but no guarantee.

Yeah.

And waiting, okay. Yeah, so I think um yeah, from the I think from the financial perspective, I think my goal would be not getting into any more debt. Staying current on all your bills so you don't get behind. And then make maybe making some small goals towards paying some of this off.

You might be able to negotiate that medical debt even with the little bit you have in savings. So this is all I have, will you take it?

Yeah, because if you can get some traction a little bit, um, even if it's a couple of hundred bucks extra a month that you kind of work your way in that smallest debt, that actually may give you. some level of, you know, good energy, right? Of some confidence, yeah, of what you're doing. But um but yeah, I would I would take care of yourself, Holly. Get yourself in a good place and it sounds like you're doing that.

Hey George Campbell here. Let me pull back the curtain on something you may not know. If you're in debt and collectors are threatening lawsuits, the worst thing you can do is ignore it. That's exactly what they're counting on. Because when you do nothing, they can take you to court. And if you don't respond, they can win by default and even get access to your bank account. And that's why I tell people about Guardian Litigation Group.

Buying and selling your home, it's a big deal. And so you want to make sure you have someone in your corner that can trust to make sure that they will find the best deal for you. The Ramsey Trusted Program is the only way to find top agents that you can trust to make sure that your home is a blessing and not a burden. And it's easy. So you can just compare

Rachel, hi George. Thanks for taking my call.

Absolutely. How can we help?

Um I My wife and I we have a lot of concerns, but I'd uh I can narrow this down to uh one or two this point were fifty three and fifty four years old. Uh late bloomers as far as creating a a good income and we've developed uh we've collected a lot of debt.

Okay.

Uh my wife graduated from law school not too long ago after dropping out of high school she went back to school. Daughter Law degree. Um Pr uh we you know accumulated a lot of debt there, um about two hundred fifteen thousand, two hundred twenty thousand.

Ooh, okay.

Uh that's just the beginning. Um Uh we have a home that's we owe three sixty five on and it's worth somewhere in the mid fours. Uh maybe a little higher. Um we have a lot of other debt that we've accumulated over the years. Um so other than the school loans and the house Probably another hundred...

Fifty thousand.

No one looking at. Uh there's only one car um sitting there right now. It's about five grand left. And that's the thing that got me calling you guys'cause I had the urge when I That uh mount that was owed, I was like, Hey, it's worth more than that and I can go trade it in and get another car and then I was like, What are you stupid? Um, you wanna get another payment? And uh and so I decided not to do that and start looking back into the Ramsey uh program.

tutors.

Pay, which is less than what I make at uh as a manager at a warehouse club. Um

What's your household income today?

We make almost $10,000 a month.

That's right.

That is after

Mm-hmm.

That is our take home, but that is after all the insurance. I mean I max out everything on my on my paycheck really because

You're talking about investing?

Um insurance. I I've up till now, up till recently, I was investing twelve hundred a month into my four oh one K. Uh but I stopped that because I'm gonna start putting it toward debt.

Good.

Um I've already maxed out the for this year I've already maxed out my four hundred one K

That's a

company does a a gratuitous six percent on top of that. So um I'm letting them add to my four oh one K from here on until until get gets cleared up. So the question the the questions ha I have are are twofold really. Do I um Do we need to sell the home?

Продолжение следует...

Uh twenty six hundred. Yeah.

You'll have like seventy grand in equity, maybe, if you're lucky. Maybe fifty net after fees to throw at your three hundred seventy in consumer debt. So that's where I'm doing the math here going, you guys bring home one twenty. You have three hundred seventy in debt. How much can you realistic throw at all of your debt right now per month?

I'm still trying to collect all the data'cause we have not done a good job, obviously, of of controlling our spending. We we pull out a card and we spend and we don't pay attention. We go, Hey, we still got money in our account. Um, and that's how we live and we've been living, you know, according to payments and not according to debt. Um, you know, what what can we spend it each month?

Possibly not.

Suing a law firm? That feels fun.

Yeah, suing the county.

Okay.

Um because there are questions in there. Um ADA um you know disabilities act that that they're not uh they're not um following through with and also um questionable practice Bye. her law degree or her her bar.

My question about her, just real quickly, does she see another path of making a ton more money in the next five years with this degree that she paid two hundred and twenty thousand dollars for?

Quite possibly. But but right now she like I try to talk to her about this stuff and she says I am one hundred percent focused on I'm trying to figure this thing out at work. Um So the conversations just aren't happening. I am ready and rearing to go. I will go live in a trailer. Yeah. In a I'll go live in an R V if I

Yeah, you're done. Yeah, you're so done with all

That works.

wherever I need to. Yeah. My wife's not there yet. And that I knew that that was the biggest key. So you know, I called in I called ELPs um to talk to them and I was looking specifically for somebody who could be a financial advisor and a financial counselor.

Uh-huh.

Um and I'm I'm ready to pull the trigger on that, but my wife's not and I don't want to make decisions without her.

Sure. Do you guys work together, John, about money? Like in the past, like I'm not talking about the last six months.

For it.

Okay.

When one gets fired up, the other one's not.

Yeah, yeah.

And and so we flip flopped through that.

Yes. Your whole time. Okay, so that's been the pattern for I mean, how long have you guys been married?

Thirty one years.

Okay, so breaking a pattern of financial habits and marital habits with money. It's hard to do in a in a really quick way, right? You've hit your emotional breaking point, which was why this makes it easy. We call it the I've had it moment here at Ramsey. People

This drags out for two years as you guys get foreclosed on because you can't keep up with your It's gonna become her problem even if it's not right now. And the napkin math John to help you. Let me just show you this. If you pay two thousand a month toward your debts, it's gonna take you fifteen years. Yeah. That's two thousand a month. That's probably money you don't have right now to throw at all those debts. And so

We act I think we actually do.

How much can you throw at it?

Well,'cause you stopped the twelve hundred of your four oh one K. So you can add that. And then any level expenses that you can cut, you could probably cut another three, right?

I would make it a goal to be out of this thing in in less than four years and that's gonna take eight K a month getting thrown at this debt, which means upping the income. And maybe selling the house is just part of that game plan to clear some of it.

Working extra and all of it, yeah. Um yeah, you guys do have that long road ahead and getting her on the same page and you guys

Mm-hmm.

Talking about this is gonna is going to be a big part, right? You can't cut$3,000 out of a budget you used to spend. without your spouse really being on board. And so her sitting down and you guys creating a plan together is gonna be crucial and I think that she will have that ability to do it.

Let's talk about something nobody wants to think about until it wrecks their budget: medical debt. Medical debt is one of the biggest financial landmines in America today. And that's why Health Trust Financial is the only health insurance provider Ramsey recommends.

Next up we have Joe in Indianapolis. Hi Joe, welcome to the show.

Hey Ray.

Hey George, how you guys do?

Hi, we're doing great. How can we help?

Good. Yeah, it's a blessing to talk to you. Um I'll keep it brief here. So I actually get married in twelve days.

Oh congrats. Congratulations. Thank you.

Thank you so much. Yeah, it's been a long engagement, about two years, so we are more than than ready. Um but we're gonna be obviously uh combining finances and and kinda tackling debt. So I would just like some some wisdom and experience from you guys and how to just set ourselves up.

Uh

the the best we can financially heading into this new chapter.

And you both are on the same page that we're doing this.

Yeah.

Yep, yep.

It's about to be our debt, our income.

Absolutely. Yes, absolutely.

That's great.

you guys.

Uh, we're twenty five.

Okay, great. And how much debt will you guys have combined going in?

Um

So

And I I just bought a house last year, so um consumer debt I have about seventeen five. Um that

is

And then she uh is she's

I love you.

a chiropractor, so she has about a a hundred and ninety of student debt that she'll be bringing in, and that's all that we'll have.

Okay. And how much do you guys will you be making, do you think? Or is she uh is she just graduating school or is she working?

Thank you.

just graduating so she we think that she'll probably make about a hundred thousand um talking to the the chiropractors at the office that she's uh essentially doing her clinicals at right now where she will And then I'm self em I'm self employed, uh and I've only been working full time in the workforce for two years now. Um last year I made about a hundred and eighty one thousand and I'm I'm on track to do that this w uh year as well.

Good for you guys. Amazing.

That great income income's gonna help.'Cause you're never gonna be making two eighty one trying to pay down two oh seven. And so you got a big a big pile here, but you got a big shovel to clean it. And so the goal is combine the income into one bank account. What my wife and I did is I had a checking and I just made it a joint checking, added her and then we shut hers down.

Yeah.

A question a question I had is I have about a hundred and fifty thousand in my just a savings account, personal savings. Um and I I think I know the answer to this, but should I write a check for seventeen five today and just pay everything off?

Yes. Yes. And then write another huge check once you guys are back from the honeymoon and clear a bunch of these debts.

Okay.

What's the money for? The hundred fifty?

Uh that's um it's not for anything really. It's just what I've saved up working the last two years and yeah, it's just accumulating in my account.

Well so do you have are you gonna have a hard time letting go of all of that to pay down her debt?

Uh

I first

started making like I was a broke college student, first started making like quote unquote. right in in the adult life. I think at first, like probably four years ago, three years ago, I was a little bit hesitant, but I'm more than willing and wanting to just start, you know, from a clean slate. So

I am willing, yeah.

Yeah.

Love it. Well, if you use that, now you're down to seventy four thousand left to pay off, making two eighty one. And now we're done in a year.

Sound a lot better.

And so you see how that speeds us up? And guess what? You're gonna be able to build some serious wealth, making two eighty one with no payments for the rest of your life. Right? Yeah. Saving up$150,000. That's a lot of money, but you'll do it pretty quick with no debt payments.

I like that. It i it's much easier to hear that from you know, from somebody with your experience, so

It's what I would do if I was in your shoes. Yeah. So it's not just like well, it's what the Ramsey plan says. It's what I would do is clean up the dead as fast as possible.

That's what I said.

All the assets you guys have.

I mean that's what's crazy. If you have a hundred and fifty thousand dollars saved. That yeah, and two hundred thousand I mean, yeah, it's fifty grand. And if you guys made it an aggressive goal to say, Hey, let's pay this off in six months, right? What's wild to think about Joe is

That is so wild.

It's gonna be crazy like what you guys are gonna build. So have goals, have really big goals of saying, Hey, let's yeah, let's pay off the house. Let's um go on this trip and maybe it's a generosity play of like, yeah, maybe like we have parents that can never afford this type of trip. Let's make it a goal to be able to take them or, you know, whatever it looks like. But have always have something you're kind of shooting for and aiming for uh with your money because you guys make a lot of money.

Well, the the biggest temptation after you get married and you're making two eighty one at twenty five is to look like you make two eighty one.

Yes, that's right.

Let's get some fancy new cars. Even if you had the money to do it, it's

No, I know. That's right.

And your friends going, Dude, you you spent a hundred fifty grand on debt. You could've invested that, bro. That's gonna be your friends on the other side. And so you have to get blinders on going, No, these are the goals we set for our family and that is to be completely debt free to give us options and flexibility so that one day

That has margin. Love it. All right, let's head to Devon in Omaha. Hi, welcome to the show.

Hi.

Uh I'll try to keep it.

Claire.

Um currently on baby steps four, five, and six. I make about a hundred and thirteen thousand dollars a year, a wife makes between eighty and ninety. And then I run a small business on the side that brings it fluctuates quite a bit, maybe between twenty five and forty five thousand a year.

Oh nice. Okay.

Um Um, we're just wondering if we're to the point where she can stay home. Um, we had plans of paying off the mortgage within the next three or four years, but we have a two and a half year old and another baby and is it all right to delay that baby step six?

Yes.

For sure. For sure. I would still keep an a semi in aggressive goal, right? Because if you went all the way to what the average person, if they have a thirty year, like I'll pay it off in thirty, we still want you to pay it off in, you know, a reasonable time, um, to have that. But if it slows it down by a couple of years because

Have you done the budget and crunched the numbers just based on your income?

Yeah, um not factoring just my income. I don't I don't try to factor my side business in too much to our budget monthly just'cause that's kind of bonus on the top almost.

Just make that the extra mortgage payoff money. How about that? That's fun.

Yeah. A thousand to fifteen hundred left a month.

Still.

And that's after investing fifteen percent money in college.

Yeah.

Here's my next part on that. Um, I have a pension. You guys say to only count half of what you put into your pension?

Yes.

So if if it's you know Six percent, you can count three.

Yeah. So it's five, so it'd only be twelve and a half percent. So it'd be I could bump it two and a half percent. But yeah, we're still contributing to five twenty nines and then

That's the key. On your income, then it's green light.

Um, the other thing was is this would bump us above the twenty five percent rule for the mortgage just a little bit, but by the end of the year we'll have about a hundred thousand outside of our Emergency funds saved up. Would it be okay to recast the mortgage?

Yeah, throw that lump sum at it and recast, that'll bring your payment down. I mean either way, you're gonna knock the payment the mortgage out fast anyways. So you guys are in great shape. Yeah.

And congratulations, Devin. I mean, honestly, you guys doing this and paying off your consumer debt, having an emergency fund. That's why you do it. Yes. So you're not tied down to a job that you hate when you want to be home with your kids. And so yeah, you and your wife have done a fantastic job. So we're we're excited for her. That's so fun.

If you run a business you already know this. Bad information leads to bad decisions.

Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. I am Rachel Cruz, hosting today with George Campbell. Like I was gonna say co host, best selling officer. All the things. All the things. But we are here to answer your questions. So give us a call at triple eight eight two five five two two five. We have Lacey on the line in Phoenix, Arizona. Hi, Lacey. Welcome to the show.

Hey, thanks for having me.

Absolutely. How can we help?

my question is I'm a single mom of three and I'm trying to determine if I actually should drop my emergency savings down to a thousand dollars to put um that nine thousand towards my car loan.

Oh my goodness. Okay, how old how old are the kids?

Um seventeen, ten and eight.

Got your hands full. I applaud you, Lacey. Being a single parent. I can't I can't imagine. I mean, you're doing a fantastic job just calling and having a sentence that you're putting together'cause I know it's probably

I have ten.

Ten thousand dollars saved. And how much debt do you have?

And so I have my mortgage which is four hundred And then I have my car loan that's forty thousand.

Okay. How much do you make a year?

Um my my net take home monthly is seventy three hundred.

Okay. So that car so you're what is that probably about ninety thousand? Yes. A year. Um Yeah, you're right. That car is kinda right on the bubble of Too much car for what you make. We always say you don't want anything with motors and wheels being more than half of your annual income. And so you're not quite there, but you are kind of close. So I'm just curious, have you looked at If you sold the car, what could you sell it for?

I have and I've actually been going back and forth on this for a month or two. Um, so I'm in an equitable position in the vehicle, whether I were to trade it in or sell it private party. So I owe forty thousand. Um, if I were to cancel the warranties, um, I would get that prorated refund applied to the loan and I would be at thirty seven thousand um to to pay that loan off. If I sell it private party I

Okay, purchase.

because I basically have no maintenance, no, you know, um no issues for the next six years. So that's the hundred and fifty thousand mile powertrain warranty. And then um it includes oil changes, tire rotations, all of that stuff. So I felt like I was getting a really good deal. However, I still have a seven hundred and fifty dollar car payment. So I was looking at, okay, if I downgrade into something just a wee bit smaller.

Why not sell it, net your six, and then use, you know, five or nine to purchase something used for now and then upgrade later.

Yeah, and it it just makes me nervous too. not have that 10 K in my savings account because if there, you know, for example, I had a dog emergency a few months ago that cost me three thousand dollars. So if something like that were to come up, then I'm back to having to put something on a credit card, which I really don't want to do, right?

My question is say you did George's plan, okay? And that means you only have five thousand in the in the savings. If you didn't have a car payment, Could you could you find another I don't know, I'm making this up, six thousand dollars, do you think beyond Beyond the car payment.

Amen. Um

So

In the

position I'm in today, my my monthly margin is about eleven hundred. So getting rid of that car payment, I'm, you know,$1,800, almost$1,900 in monthly margin.

Okay.

Okay. Which means you could cash flow a three thousand dollar emergency between your thousand buck emergency fund and that's just One month.

And if you put that aside. Then you could have your emergency fund built back up in ther in three months.

So I hope you don't have any emergencies in the meantime.

But if you did, you could have, yeah, you you could cash flow up to eight thousand at that point if you kept five thousand in. use five thousand for the car plus the six, go get a eleven thousand dollar car. Um, yeah. I mean you could you could make this work. It's just it's it's transferring risk. Like see is kind of what we're looking at because

Yes. As you save up and then Get a better car. Yep. And then a better car. The problem is when we drive brand new cars, our body says, I need to have a brand new car forever now. And so you I kind of like stair stepping it up because you get used to that nice new leather smell and the fancy, you know, leather heated seats.

Mm. Yeah, so it's so I have no d I have no risk, no risk financially. Like I it is all you, all you. There's no bank tied.

Right, right.

And I promise you you can afford the oil change and the tire rotation should be free with wherever you got your tires. So I I think you know they'll sell you on those warranties all day and make you think this car is about to fall apart. And I go, Well maybe I shouldn't be buying this car if you're so worried that I need a warranty so bad.

Talk about this in your book, Breaking Free from Broke Joyce.

I mean most of the money they make is warranties and financing. It's not from the margin on the car. That's why they hate people like me who walk in with a check ready to pay cash. And so I would get out of that warranty, bringing it down to thirty seven, go get your forty three for it. Take that six and profit plus some from your emergency fund and find the best car you can. You know, do your research on make, model, and get a pre-purchase inspection for$100. A lemon?

That's right. And Lacy, if you have a few um friends That are good with cars, maybe some of your friends' husbands or something, I don't know. Have them look at it too, right? Because it is a big purchase, a car, and you want it to be reliable. You wanna you wanna make sure all of those things are in check. And they're they are though.

Okay guys, let me ask you something. What would it take for you to switch your bank? Because if you're still earning next to nothing on your savings, you need to check out Fairwinds Credit Union. And I know what you're thinking. It might sound like a hassle. Moving your direct deposit, updating bills, getting a new debit card feels like a lot.

Up next we have Valerie in Chicago. Hi Valerie, welcome to the show. Hello, uh thanks for calling in. How can we help? So

We are currently in a multi generational

How small.

old. We just moved in um not too long ago with my in laws. But there has been some costly updates that Probably should have been taken care of a while ago. But my in laws are expecting us to pay for it, but they haven't fully given us the home yet. Does that make sense?

Thank you.

Yeah. I mean when when are they planning on giving you the home?

When it's paid off.

Okay. That's still a bad idea for tax reasons, but we can couch that for a second and talk about this multi generational home. So is it just your in laws and you guys right now?

Yes, there are um ten of us living here in the home.

So it sounds like more than that. Is it kids? Who else is there?

We we have six kids.

Oh, okay. So how does this work? I'm curious, because I've heard about these. Uh who who pays who? So they own the house, they pay the mortgage, and then you pay them rent?

And then we're just paying the utility.

So you don't pay rent? Okay. So you're living pretty cheaply and they're going, Well, hey, listen, you guys are living here pretty cheap. The house is going to be yours. We think you should pay for these renovations.

Yeah.

How much is it?

Yes. Well, just for example, we had to order like a new um like a window and that was like nine hundred dollars. So But it had, you know, been needed to be taken care of before we moved in.

So they waited until you guys moved in and said, Hey, there's a lot a bunch of repairs to do. That's fun.

Kinda, but not really.

And

Go ahead. Well I was gonna ask how how did this all come about? Did they offer this as, you know, a great option in life? And you guys were like, let's do it. Uh. Okay.

M my husband got a job opportunity and so we moved back to his hometown.

Left to your own devices, would you guys want to have your own place?

We want the multi generational to to work. We want it to work.

Okay.

Well then I would do a reset. If you really want this to work, I would do a reset on all things finances. Because it sounds like you guys never actually came to any agreements as to how it would work other than you guys pay utilities. That was pretty much it.

Correct.

We need a whole lot more than that. And the thing about taxes I mentioned, if they give you the house while they're still alive, then you lose

You got it at $500.

You got it at five hundred, so there's no taxes. So if you went and sold it within a couple of months, you have no taxes to pay. And so that's one of the issues with giving a home to your kids. It sounds like a really sweet thing to do while you're alive, but it's actually one of the worst things you can do from a financial perspective. So I'd caution you again.

Well I didn't.

Which then complicates it, right? Well how do you get the house? Well you need to like buy it from them.

I mean from Yeah. But if that is that what you guys want though? You want a long term life like this?

Yes. Yeah, that's what we're planning on.

How old are the parents?

In their seventies.

Okay. So listen, uh people do life different. Um, and if this is how you choose and what you guys value and want to do, you you do what you guys want. I mean you're both you're all adults. Here's my fear, Valerie, is that Down the line and we've heard crazier than what I'm about to throw out. I'm just making this up.

But they run out of money and now they're doing a reverse mortgage and now you can't even inherit the home without paying them. Yes. And so there's a lot of issues that could arise in the meantime.

It sounds this is why doing deals with family can be a little sticky and and what I'm gonna propose is gonna sound probably a little heartless, but I would. I would almost write some type of legal contract that could hold up at court that literally plays out. It's what we would do if someone did a partnership in business. We don't recommend partnerships, but if we do, we're like, you gotta think about it all.

Yeah, and they are willing to write something you know, get something in in written.

form.

Um in case, you know, uh XYZ happens.

Okay. And then I would also come to an agreement on how repairs and renovations are gonna work.'Cause you're gonna have more of this as time goes on. And so are you guys gonna cover it forever? Are we gonna split it fifty fifty? Yeah. That's up to you guys to decide. And if you wanna foot the bill for this one, but I think if it's twenty thousand dollars in repairs and they just neglected to do them, I don't think that should fall on you. Mm-hmm.

And then Valerie you and your husband need to have some really healthy check-ins as well because sometimes you get locked in a situation where you start to be really unhappy. living with his parents. And again, maybe not next year, but five, six, seven years. resentment plays up and you know what I mean? Comes in and it starts to erode you guys, right? Like you just need to be thinking through all of this.

They extend regardless of the finances. Yes. Because they are in their seventies.

Yep. So I would just be I would be looking at every possible thing and saying it out loud and you and your husband be in agreement.

I would I would meet with an estate planning attorney just to help you navigate this. Not out of like we're not suing anybody. It's just more to hey, can you help us craft this in a way that makes sense for everybody?

Yeah, I think that would be great and I would feel comfortable. doing

Yeah. Yeah. And they can walk you through those financial aspects of well as well of what I mentioned of inheriting the house versus them giving it to you while they're alive. 'Cause that's also some pieces to think about. We get too many calls where someone calls in and they go, Yeah, they just gave it to me while they were alive and we go, Well, you have a a tax bill on that seven hundred thousand dollars in gains from when they bought it in nineteen eighty two.

Yes, yes, okay.

How many bedrooms is this? I'm just curious with ten people there.

three, four, five bedrooms.

Wow. So are the kids all bunking up?

Um, no, just some of just some of our boys. They're younger and so they um also have a a bedroom. But there's essentially two like primary suites.

Um

Six kids are splitting three rooms.

Okay. And then we have a baby with us, but also Um there's potential to like make other bedrooms if we need to along the way. But it's a pretty spacious house. It's 7,000 square feet.

Okay.

Oh wow.

That's great. That's great.

Okay, well I I wish you the best. I really do hope it works. Um

Yeah.

Thank you.

It sounds so good on paper. Like grandma and grandpa are there and and Dr. Arthur Brooks, he's mentioned this'cause he his kids live with him. Yes. Grown kids and it's a great situation, but it's because there's healthy boundaries in place.

Yeah.

Everyone has to be functional.

He studies this for a living too, which is

Need to have some financial footing, have good boundaries, be emotionally, mentally, financially healthy for this to work.

Yep, and a lot of things a lot of people go in blindly not thinking about what could be or don't address things and that's when the dysfunction starts to play out. So it can be a beautiful thing if it were. Um, but a lot of times people aren't, you know, aware of all the traps. So just going into it, you know. Eyes wide open's important.

Hey guys, George Campbell here. Listen, we need to talk about your phone plan. Because for a lot of you, it's like a bad roommate. You know the one. Unpredictable moods, always asking for money, hard to get rid of. And they never do the dishes. And that's what the so-called big wireless carriers are like. They're counting on you overpaying forever.

Based on average annual payment of ATT, Verizon, and T-Mobile customers compared to 12 months on the Boost Mobile Unlimited plan as of January 2026, see website for full details.

We wish we could get to every call here on the show, but if you do have a money question and you want an answer to your specific situation, make sure to head over to our website and use Ask Ramsey. So Ask Ramsey is our free AI tool that's built and trained on Ramsey. Principles. So we put in the past, you know, few years of shows into this, articles, books, everything coming out of Ramsey.

Bye.

Hi, Ray.

Rachel, hi George, how you doing?

Hi, we're doing great. How can we help today?

Well, I would like to know how one ages gracefully, financially speaking. I honestly thought the Lord would come back. While we wait the cost a long time.

Yeah. Word.

I feel like the country is not financially kind to the elderly, requiring

care.

And the life that we save for without debt, investing smartly, is just gone in a poof because

care.

So I'm fifty six.

My husband's sissy.

seven and after having witnessed what my parents who have since passed on when they needed care.

Yeah.

and my husband and even my in-laws. So how does one plan for that?

That's a great question. Um, so there's a couple of things you can do. There is long-term care insurance. Have you looked into that?

I

I've been thinking about it, I honestly have not and I'm not sure

How Investment.

Nah

We generally say once you turn sixty, on your sixtieth birthday as a gift to yourself, I would look into it and purchase a policy for you and for your husband.'Cause the earlier the better, the lower the premiums. Got it.'Cause that's the one thing that could tank you is that long term care. A nursing home stay, you know, can run over a hundred grand a year easily. And the average stay is two and a half years. So you're talking quarter of a million dollars.

Correct.

And so it's worth it, even though you're like, Oh man, it's an expensive insurance. Yes, but you're not gonna have it forever and hopefully quote you know, fingers crossed, we can get you self insured to where your nest egg can cover that easily without, you know, depleting your retirement.

Yep. So that was gonna be the next option. So you can do long term care insurance. And then the next option is is you, Wanda, you and your husband. So where are you guys at financially?

Oh, we've got um a couple of retirement accounts. We're still working, um just about to pay off our house at the end of the year.

Yeah.

So we're

We're doing okay and everything. Uh

How much are in those accounts?

Oh goodness. Let me think. Bye.

Right.

three hundred. I think I might have four hundred. I don't even know how they're split out. I kind of That's mentioned.

Yeah.

Bye-bye. Almost a hundred thousand in the bank.

Okay. So yeah, you guys are around eight hundred thousand and then your house is almost paid off, which is so exciting.

What's that worth?

Probably on the last time we checked, somewhere around two fifty. Three hundred.

Okay, great.

So you guys are net worth millionaires.

Uh okay

Thank you.

That's just the math. That's the math, Wanda.

Thank you. I think you are, which is very exciting.

would put you over the million dollar mark, which is awesome. That's a great milestone. It's not to say you can go retire tomorrow, but at least you're heading in the right direction compared to most of America. So I would continue to invest. Once the house is paid off, I'd start maxing out those retirement accounts.

Going to take us out. Yep. All right. Let's head to Catherine in Virginia. Hi, Catherine. Welcome to the show.

Hi, how are you?

Hi, we're doing great.

Okay, so I would like to know um should we increase our living expenses while we save up a down payment for our house? Bye.

Should you increase your living expenses? Yes. So spend more per month while you're saving up a down payment.

Yes, because we're welcoming our second baby in September and right now we're living in a studio apartment so that we could save up quickly for um the emergency fund.

Why?

I was pregnant and our leaf is about to be up.

Okay, yeah. Um, how much do you guys bring home a month? Okay, perfect. And are you home with the baby?

Yes, we have a toddler. Um she's one and a half.

Okay, so great. Um, so the where you guys are in Virginia, what would be an average rent for I don't know if you guys do like a two bedroom? Or a three bedroom or a small home, what what are you looking at rent wise?

Seems to be

idea that looks for something decent, um one thousand three hundred to one thousand five hundred.

Okay, yeah. Yeah, I would say that's pretty doable. I mean, we say twenty five percent of your income is sh what should be for living expenses, um or for I'm sorry, for rent or mortgage. So that's about right.

eighteen fifty or so would get you right there. And if it's, you know, twenty six percent, it's not like anything is on fire. It's just a parameter to make sure that you have money left over to do things like save a down payment and invest and save for the kids college and live your life and go on vacation because too many people have their house payment or rent at, you know, fifty percent of their take home pay.

Yeah, so if you guys upped it some, Catherine, for sure, I think that you can make that move because saving for the down payment, it may take you guys, what, two, three years possibly of you renting somewhere to save that up. And yeah, I probably would not want to do that in a studio apartment with two little kids. I would like walls and r and separate rooms. For the sanity of everyone.

Yeah,'cause my husband he actually works.

For a month.

Um he's um lost his job like

Right before

Um I got pregnant.

Bye, bye.

Oh wow.

big pay cut. And so um after we used that money from our house that we had bought um when we first got married to move down here and pay off all of our debts. Um 'Cause we just couldn't afford the mortgage, which was about two thousand dollars.

Mm-hmm.

Yeah, so we're just trying to figure out how we can save up as

quickly.

Possible.

Yeah, that's great.

Resetting with some peace this time.

For sure. Yeah, do you guys have any more consumer debt that you're working on? Okay, great. So yeah, so it really is that down payment. Do you guys have kind of a goal that you're you're shooting for?

Um, we're hoping about Forty. Um hopefully in like two and a half years. Um just based off of the numbers right now, my husband thinks he'll get a couple of raises but I just don't want to base it off the money.

we don't have yet

Sure.

Count the chickens before they hatch. But I'm hopeful if he's if he's got that mindset, I think he will increase his income because he's going for

Well, and the fact that he was being paid more in his last job than the job he took, so makes me think he's marketable, right, at some level to to be able to be making more too. So that's that's exciting.

That specific goal. 40 grand, two and a half years. That's a little over 1,300 a month. So we have to be putting that away.

Yeah.

Right now. And a high yield savings account. We'll let it grow. Uh and if you don't have a good one, Fairwinds is an awesome partner of ours. You can go to fairwinds.org slash Ramsey and get a great high yield savings account to help your down payment fund. Yeah. Awesome. We're so excited.

And pregnant with number two, you said, right? Yes. Okay. Congratulations. So exciting. Yeah, I think with uh this is this is the change in lifestyle, um, or in life. that happens, life scenarios that does make you say, okay, what what do we need to shift to create some peace that's doable? And the beautiful thing is that Catherine and her husband freaking work their butts off to get out of consumer debt. So that twelve hundred dollars, thirteen hundred, fourteen hundred in rent

are heartbreaking calls when we get those so it's nice to see someone doing it right.

I know, so that's the power you guys of getting out of debt and freeing up your income is that you can actually put money away and save for things that you want in the future uh for you and your family. So Catherine, well done. Uh yeah, and good luck to you guys with baby number two.

This show is sponsored by BetterHelp. All right, May is mental health awareness month. And according to the National Institute of Mental Health, more than one in five US adults experience mental illness every year. And nearly half of those folks never get any help. These people are not just statistics, they're you. They're me, they're our friends, they're our neighbors.

Today's question of the day is brought to you by Why Refi? If you've been turned away by other lenders because your private student loans are out of control, Y ReFi may still be able to help. They specialize in refinancing options built specifically for borrowers in that situation. So go to whyrefi.com/slash. Ramsey. That's the letter Y R E F Y dot com slash Ramsey may not be available in all states.

Today's question comes from Owen in New York. He says, I make$124,000 a year making two jobs more than my parents ever earned. I bought a used car and went to a cheap in-state college. My problem is that I can't afford a home. And my parents, who are retired, have a six hundred and fifty thousand dollar home. I live in upstate New York where property taxes are a thousand bucks a month, and houses that aren't falling down sell in three days.

ฮักฮักฮักฮักฮักฮัก

Well.

And he's mad at his parents?

He's met the en the entire boomer generation.

How dare you how dare you own a home.

Wow, and the generation's government

I get kind of being pissed about the housing situation. That's understandable. It is it is so crazy. It is. It's wild how expensive.

I can't wait for Owen to have kids for them to be they're gonna be so mad at Owen's generation. You ruined everything.

You ruined everything.

Listen.

Oh no Owen uh

W why were you a child in nineteen ninety two instead of buying up a home? What were you doing, man?

Oh you've two win at three.

Okay, but I do feel his anger. Yeah. And uh I actually

Not to that extreme.

Not to that, no. I understand going, I've done everything right. Sure. Even debt free, making six figures, it's still hard to afford a home where you want to live. No matter what your age is. And so I I get where he's coming from, but the real question how can I possibly afford a home?

I mean we just talked to A couple right and the at this right before the break. And they make they bring home five thousand and she said they still can probably put away thirteen hundred and that's with her and two kids and a husband. Yeah.

And he makes double that single, no kids.

I'm saying. So like you can make some serious sacrifices to put some serious cash away. Um, and that's the that's the reality of what has to happen. Now, did that have to be true for your parents for as long as what you're gonna have to do? Maybe not. Maybe not. Uh, but it is the reality. And I think that's what's hard, is like it sucks. And I think we can say that.

Yeah. Well, and there is some actual stats behind this anger. The median home price is now roughly six times the median household income. When you look back at the nineteen seventies, it was like two times. Yeah. So it is hard.

Three times as hard.

I don't want to minimize that. It is harder for a young person to save up for that home. Um and so that's not just the market being the market. Part of it is structural, part of it is supply and demand. Part of it is the interest rates during COVID were so low. Now everyone's hanging on to their House because of the mortgage.

Two percent rate or something.

So no one's letting go of their homes. And you've got the boomers who have had these homes for a long time. They've appreciated, and they're going to have a big tax bill if they sell. So they don't want to get out. But there is something, Rachel, I want to bring up that is actually happening right now in Congress. Oh yeah. That could actually help a little bit.

Okay.

It's not gonna be like a silver bullet, but it's a a move in the right direction. So you may have heard on the news these large institutional investors, firms that own hundreds of thousands of single family homes. You've heard private equity firms. Yeah. Well, they've been buying up these homes at scale in cash. outbidding regular families, which is really frustrating. People like Owen

Oh wow.

It's about as bipartisan as it gets.

Yeah.

Everybody is for these protections to keep large institutional investors from buying up more single family homes. So it's a it's a good bill and it actually could help some people buy a home. Could free up some of the supply.

So it would basically stop these private equities of buying up residential.

It would force them to sell off within seven years. And the ones that own three hundred fifty or more, they can't buy anymore. It just blocks them completely. And if you are renting one of those homes, you have the first right of refusal to buy that house.

So we don't want it.

We do not want this House bill to pass. And so listen, I'm not a person who thinks I can sway government, but th if this matters to you and I think it should, I would let my House representative know.

No.

Yeah, this is one of those times where you go find your rep sixty seconds, go to house.gov, we'll drop a link in the description to make it easy for you, and tell them to keep the protections. in place and to say no to this bill on Wednesday. And, you know, Congress hears from lobbyists every day. They almost never hear from regular people like you and I, and that's the gap you can fill.

That's right.

Solve our problems, but to be a part of that solution. So go to house.gov, find a rep. We'll drop a link in the description if you want to learn more about what's going on. We'll drop a link to an article.

Yeah, that's the main switch though. Good bill in Congress now bad bill that went to the house.

So can I mean as I was reading it, I was like, this is like a movie plot.

That's so crazy.

Bad guys are trying to swap it last minute to sneak it in. Yeah. And that th this is how it all happens. It's like late night, they kinda sneak it through the door, nobody knows about it, no one has time to read it, and then you're voting on it. This is insane. This is why I'm not in politics, Rachel. It's too much stress for me. I wanna actually we can help someone in seven minutes on this show.

But say no.

Say no to the house bill.

Right, but we are gonna say yes to Mike in what is this? Uh Westchester, New York. Hi, Mike. Welcome to the show.

How's it going?

How can we help?

So today I'm gonna be talking about

Uh

Wow, I graduated in December from college, um and then I came out with about twenty one grand in federal loans. I'm still in my grace until August, but I've already paid off about eleven grand.

Wow, good for you.

Yes, thank you. My question today is do I continue on this path for about another four

What four or five?

Or do I take out from my Roth and kinda just end all right now, um, as far as as as uh student loans?

Yeah, that's a great question. Um, I would just keep at it. I would just keep cash flowing, paying this off, because if you did take money out of your Roth IRA, that's a retirement account, and you will get penalized. uh by doing that and paying taxes too on it's uh because you're not fifty nine and a half. So that's gonna be

I'd say that I drive a used car and I kinda just stay

Fribel.

Thank you.

How much how much are you making?

I bring home about four grand a month.

Good for you, Mike. Well done.

Keep at it. If you had non-retirement investments like in a brokerage account, then we would say, yeah, let's sell those off and get rid of this debt even faster. But because it's in those retirement accounts, you can technically take out contributions, but then you're still unplugging all the growth. And at your age, If you actually map out what that cost is costing you over decades,

Way more than ten grades.

Slapping yourself going, what did I do? That could have been 150 grand or 500 grand. Way to go, man. Get debt free and stay debt free.

Normal is broke and common sense is weird. So we're here to help you transform your life from the Ramsey Network in the Fairwinds Credit Union studio. This is the Ramsey Show, and I'm Rachel Cruz. Hosting with George Camel and we are answering your questions at triple eight eight two five five two two five. All right, let's head to Sam in Roanoke, Virginia. Hi Sam. Welcome to the show.

Hey, how are you guys doing?

We're doing great. How can we help?

So I'm seventeen and I'm a business owner and I'm just wondering how I could build credit without using a credit card'cause I wanna buy my first home within the next few years and just don't know where to start on that.

Nice. Way to go, man. What are you making with this business?

Uh, right now I'm doing around two to three thousand a week.

Unfortunately, it's real.

Yeah.

Yes, sir.

What are you doing, Sam? That's amazing.

Uh I'm a mobile mechanic.

Wow. Did you go to trade school for that?

Uh I graduate in a month.

Way to go.

Sam, we applaud you.

How do we clone sound?

Unbelievable.

Okay. Great. I love this. Okay. So you're trying to build credit because you want to buy a house one day. Well here's the good news. You don't need credit to do that. I know that sounds crazy coming out of my mouth. Do you believe me, Sam, first of all? Do you trust me? I feel like Aladdin right now. Okay. Yes. So the way to do that is through something called manual underwriting.

Yeah.

Yeah.

'Cause it is. And so manual underwriting instead of automated underwriting, which is let the computer decide if you should get the mortgage and let the three digit number define your financial life. So instead the lender will look at your f your situation. Do you have on time rent payments, Sam?

I don't believe so.

I don't...

So do you rent right now or do you live with family?

Uh, I live with my parents so

Is the goal are you gonna live there for the next three years while you save up?

Uh, I'd like to rent eventually within the next year or two, but as of now, yes, I plan to stay there.

Okay. So you'll be required to show on time rent payments, whether it's to your family or to a landlord if you decide to go rent elsewhere, but you'll need a year of on time rent payments. You need some utility bills in your name. So, you know, think water, electric, cell phone, internet, things that show that you pay your bills on time.

I gotcha.

And if you have those things, you don't need to have the credit score in order to buy that home or get the mortgage.

Yeah. So Sam, if you were to live with your parents for the next three years, then I would be keeping track at least two years out um of rent. So document those um if you put deposits in for rent.

Oh, I gotcha. That makes sense.

But yeah, I mean, you're...

keep doing this, you're gonna pay cash for a home and ignore the entire system. That's pretty wild. What's your what's your savings goal right now?

Uh, right now I'd like to have by the end of this year around forty thousand saved. 'Cause I do want to possibly migrate into a shop space to rent at the end of this year.

Yeah. Cool.

In uh just grow my business that way.

It's amazing.

Yeah, right.

What are your what are your monthly expenses?

Uh, so I do have three vehicles. I do have a lot of tools I have to go through.

True.

Mm.

And besides that just insurance, gas, uh basic utility

Nice.

And you're doing this all on your own.

Currently.

The solo preneur.

That's amazing, Sam.

All the cars are paid off, those three cars?

Uh yes, sir.

Nice.

Okay, Sam, I wanna implore you because you're doing y above and beyond m I mean the you're a one percenter when it comes to the seventeen year olds in America. And if you stick to this principle with your business, Sam, it is going to help you not only grow but create such peace and wisdom is do not go into debt in your business, okay?

Mailers, Instagram ads, emails telling you, Hey, we'll give you a loan, Sam. Scale your business.

Yes, move at the speed of cash with your business, Sam. Stay debt free. And I promise you, it's the it's one of the number one things that take small businesses out. Is is debt and overhead expenses like that. I mean it's

Debt stays with you even if the business fails.

That's right.

They don't care if they still want their payment.

You are in the green and so stay there, Sam. Do not go into the red. Do not go into debt for your business. Uh but man, well done.

I mean, think about three years. If he lives off, say 30 or 40 living at home and socks away almost a hundred a year for three years, that's 300 grand.

Three hundred thousand.

Mind blowing.

Which would buy. Yeah, possibly a small home.

I'm sure you can find a home in Roanoke for three.

Yeah.

Yes. Especially as a young single man at twenty. That's pretty wild. So there you go, Sam. And I'm gonna send you a copy of my book, Breaking Free from Broke. I have a whole chapter on credit scores and how to live without it. And I walk painstakingly through everything of how do you rent an apartment, how do you get a car, how do you buy a home without a credit score, and I hope it's a a helpful gift to you'cause I we uh we wanna See you in. We believe in you.

Um all right, Sydney from Instagram.

Yeah.

If I only pay minimums on my higher debts and focus on the smallest debt payoff first, won't that put me further behind because those accounts will be occurring interest?

Sure. I mean they're gonna accrue interest no matter what, because that's how debt works, unless it's a zero percent. And in that case, the goal is to pay it off so aggressively that the interest doesn't matter all that much. Like yes, you might be paying fifty bucks or a hundred bucks or a couple of hundred bucks in interest, but if you're throwing a thousand or two thousand at it, you are faster than the interest.

That's right.

That's the goal.

And that's what I think people do the math. And they're like, well, shouldn't you pay off the highest interest rate first? What you don't understand, number one, is the behavior change, what actually ends up happening with the momentum. When you get a small win, our human spirit, it's it's how we're wired, is that you get excited.

Proven. I mean it's not just a Ramsey thing. Like Harvard Business Review, MIT, they all have come out and said Dave Ramsey was right. The debt snowball method is the best way to pay off your debt.

And to your point, George, when you're doing it this quickly, the average person is paying off all their debt in 18 to 24 months. The interest at the end of the day is just it ends up kind of just being a wash. And so, uh because you're outpacing it with the amount of money you're throwing at that debt.

You work your butt off for your money, but your money's never going to return the favor if all you do is hope for the best. If you're ready to learn how to make your money work for you, Check out the Smart Vestor program. Smart Vestor can help you find advisors who specialize in retirement planning, charitable giving, advanced investing strategies, and more. Whatever your goals, your pro will take the time to explain.

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Let's go to Ben in Cincinnati. Hi Ben.

Hi.

Thank you for having me.

Absolutely, how can we help?

We just paid off all of our

Um

Loans.

And we

We took the financial piece class and it was worth it.

Amazing. Congratulations.

Uh We paid off one other car. We have one more we we're paying off our minivan.

And we just

We bought a house last year, so we're working on those. We do have like about twenty five K saved up and savings.

Uh

uh a little bit for emergency and a little bit for the house emergency. But now uh as we're working through that, how would you say we should start saving up for her retirement since

Yeah.

Okay. Um, so we got a couple of things going on. You guys, how much is how much is left on the car?

Yeah.

Um

About 12 hours.

Twelve thousand dollars left on the car. Okay. And then you have twenty five thousand dollars in savings. And then you're asking about your wife's retirement. So before we get there, we do want this car. Cleaned up. The debt. Yep. Yep. So I would throw twelve thousand at it today out of your twenty five. Okay.

Which means you free up a payment. What's the payment on that?

Uh the payment on that is about three hundred.

Boom.

Yep. So then I would build that um emergency fund back up to what you guys need, three to six months of expenses, and you guys can pick in that range where you feel comfortable. And then you move on to maybe step four, which is retirement. So her company does not offer like a four oh one K, four oh three B, no pension plan, nothing.

No, it's just a small Christian school so they didn't have that in their

Uh

Rings.

Okay. As a benefit. Well, one thing she can do is open up a Roth IRA. And so she can do that and fund is it what, seven thousand?

Seventy five hundred.

Seventy five hundred.

Is the contribution limit. What's your household income? All together, gross income.

Where

All together before taxes were about ninety together. Okay.

Okay?

So if we so our plan, the Ramsey baby steps, baby step one, thousand dollar emergency fund, you have that. Baby step two, we'll knock out the consumer debt. You're about to do that today after you get off the call. Baby step three, let's fully fund that emergency fund at three to six months of expenses. Then baby step four is 15% of your household income going into retirement accounts. So for you guys, that's$13,500. That's what we want to see put away in a simple order.

I already do that And um

I think

all together with my employer putting in about

Uh

eight percent I put in about twelve percent.

So

Or putting

So you're putting in twelve percent of your income.

Yeah.

Yeah.

Yeah, that was way before we got married. I was already doing that.

So

Okay. And do you have a Roth four oh one K through your employer or just a traditional?

Uh four oh three B

Okay. Do you have a Roth version of the four three B you have access to?

I I

Thank you.

Think so.

Okay. Add that to your homework assignment to ask HR if there's a Roth version available and you might be able to sign in and see on on your four or three B Um login there. But if you do have that, I love that option because it's gonna be after tax money, but then it grows tax free forever. So imagine that's net income. If you have two million dollars sitting there and r in retirement, that's like two million dollars of take home pay that the government doesn't touch again.

Which is probably close to a little less than that seven thousand. She may not fully max it out with her income. Um, but yeah, I so I would put, yes, fifteen percent of hers into a Roth IRA. And then if your employer match goes up to eight percent, you may want to take it down a few percentages to max out a Roth IRA on your end, Ben.

If you don't have a Roth four or three B option.

Yeah.

The goal is get the match, move to all the Roth options that you can, fund those, then move back to traditional options if you run out of Roth options. But with your income, you guys won't you won't hit that. You'll be able to do all Roth there and uh and not run out of room.

Yes.

Get the emergency fund stock back up. In a couple of months, Max, you're investing fifteen percent with no problem of that household income.

Well done. All right, let's go to ooh New York City, one of my favorite places. And we have Sam on the line. Hi Sam.

Hi, how are you guys?

Hi, we're doing great. How can we help today?

Thank you.

Good.

Every job. Uh yeah. I've had a job for now I'd say three years. I hate it. Um but I make one hundred twenty thousand dollars and I have really

We know

I like

career path that would get me anywhere near that.

What do you do?

Thank you. So I'm basically like I do bookkeeping for a big trash company.

Okay. Do you hate trash or do you hate bookkeeping?

Okay.

No, I actually love trash because trash is feeding my family. 'Cause my my base value is really like eighty five thousand. But I get another twenty five thousand. Twenty five.

Family.

And

But I get another um through commissions. And they're not like, you know, one month, one month. These are in contract, you know, every month the same amount. And thank God it only goes up every month.

That's cool. I never heard of a bookkeeper making commissions. Is it off trash like accounts?

It's like

More accounts created, you get a piece of that.

Exactly. The the companies are in

Sam. What's going on that you're like, I hate my job?

So I'll tell you, coming to work. I love coming here. It's like

Awesome.

Um a great place to work. actual work. Like I feel like there's a lot more I have to add to this planet than doing bookkeeping, which I hate.

And what is that thing you have to add to this planet?

I don't know.

You just feel it. You just feel this like gnawing feeling that like this is not it.

Yes, John.

There's something more and I just need to know how do I A find out what that is and B how do I get there.

Hm.

Well that's where I was I was joking about the trash verse bookkeeping. But sometimes you're doing the right thing in the wrong place. Sometimes you're doing the wrong thing but in a great place and there might be a different seat on the bus, as we say. And so that's where I'm digging in.

Is there any other opportunity within the company?'Cause you said you love going to work there, which is a positive. Do you look around and see a position that you're like, oh man, that would be something I think I could really add value and be really good at?

No, the like the positions are really pretty booked up. Like I think if someone outsider came in to run the company, probably half the people here would

Do you want more of a challenge? Like are you kinda bored because you're like, All right, knock that out, what else?

Sure.

Okay. Yeah. Have you brought that up to your leadership?

Yes, I have. here runs very not to the word for it, like very mon pop. Like it's not Like there's no the company's very successful but it's not very efficient. I'm trying to think for the right the right word.

Yeah.

Well that's where I'm wondering. Are there opportunities where you go, Hey, I noticed this over here. I know in my bookkeeper seat it feels a little bit out of bounds but Could I try this little challenge over here and see if I can solve that and create some efficiencies in the business? If I'm the business owner, I'm so excited to have Sam on my team.

Right. But the thing is that when you have, you know, three kids, a wife, a mortgage, the whole thing Not that the wife is attacked, that helps, but when you have that many things going on, it's hard to just switch jobs.

Sure, yeah, you have a responsibility to put food on the table. So yeah, you don't want to neglect that.

We would never tell you to have a gap in income.

No, but I do wonder for you kind of searching Yeah, yourself and just to say, Hey, what else is out there? Um, if you hold on the line, we're gonna get you Ken Coleman's book, Find the Work You're Wired to Do. Uh there's a great assessment on the ba in the at the end of that book. And that may just be a good place

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

Are you sick and tired of working so hard but feeling like you have nothing to show for it? That it's so many people we talk to where they work and work, make a paycheck, but then they look up and they're like, I just still feel like I am broke.

It's gone.

Yeah, I feel like I'm broke. So if that is you, make sure to check out our Every Dollar app. So Every Dollar, the budgeting app, it helps you find extra money every single month and it builds you a personalized plan to help you beat debt and build wealth. And you can do all of this. In fifteen minutes you guys and find thousands of dollars that is hidden in margin that you don't even know you have.

Pizza's free.

There you go. So you guys don't be normal. Live like no one else and start every dollar for free in the App Store or Google Play. That is one app, George. Shameless plug. It's I I plug in I I tap on a couple of apps every single day.

Out of habit.

Weather channel app. I still love my weather channel app. Wow. I'm a I feel like a boomer, but I do. I love a weather channel app, uh, email, Instagram, and every dollar.

That's it.

I do, I look those are those are like a routine for me. I'll go through and look. Yeah.

A simple woman.

But every dollar it is. I'm like tracking those transactions. Feeling good about May. Put teachers gifts in there this weekend.

Nice, that's right.

So yeah, when you do it all you're like, Okay, this I feel organized, I feel in control.

You can't keep it all in your head. People go, Well don't I do a budget mentally? I'm like, mm, bet.

And can I say if you have kids, have a higher miscellaneous fund than ever before. Because who knew you had to sign up for the five years? May, and you're like, Oh my gosh, I'm signing up for soccer in May for fall. I didn't plan that. Put that in the miscellaneous category. So, but it helps.

It does. Even though it takes the stress out of the chaos of life.

Yes, it's wonderful. So again, there's a free version, you guys. Make sure to check it out. Build your budget. Actually be intentional with where your money is going. All right, let's head to Nick in Columbus, Ohio. Hi, Nick. Welcome to the show.

Hi, thanks for having me.

Yes, absolutely.

My wife and I are about to have our first child.

Congratulations.

Thank you so much. We uh so I have money and an investment account.

Yeah.

We're just about mil millionaires in total. Um, that's mostly tied up in retirements. Um I have been in school for ten years. Uh uh my wife has her masters. I have a bachelor's. It's a long story, but I had to restart because the school went under. Uh, luckily no debt from that. So we managed to pay off all of my school loans. Um we owe about a hundred and eighty thousand total. And that's her student loans, a house and um about fifteen K in credit card debt.

Okay.

It's about fifty thousand.

Fifty thousand. How much was the credit card debt you said?

About fifteen

fifteen. Okay. So that's the consumer debt.

Yeah.

Yes.

That's correct. And how much is in the stock?

Um, it's just under two hundred thousand. Um

Okay.

So my company pays me RSUs and I haven't touched it since I started business company.

Is all the is is all the two hundred thousand in the company stock?

Is that correct?

Okay. Single stop.

It's single stock and it's up a hundred and sixty eight percent.

Well that's some good return.

Good time to sell. That's exciting. Have you factored in what the taxes would be if you sold?

Um, I haven't factored that in. I just found your guys' show recently um and started listening.

Okay.

Yeah. Uh w with her pregnancy she had a health scare. Uh luckily everything is fine. But now I'm like, um

Oh gosh. Do you guys have liquid cash at all?

We have about eighteen K in liquid cash.

Okay, good. Okay, perfect, perfect.

Okay. So you could pay off the debt and still have the eighteen K left over as your emergency fund. Exactly. And have no mortgage payment or any other payment, which frees up how much if you added up those payments per month. Credit cards, still loans, mortgage.

So My wife and I do things a little differently. We have two accounts. Her income goes into an account that pays for our food, gas, m everything that we would need monthly. And my account just pays the bills. And and I say my account, we're attached to both accounts. We see what goes in, we see what comes out. It's just how we've divided it since

Why don't you just can I just ask Nick? Why don't you just put it all on one account and everything comes out of one account?

Um we had no money when we started dating in 2010. We were high school sweetheart. Um, and we decided that by doing it this way we worked while we were in college and we made sure that all of our bills were paid and we've always just done it that way.

Okay. Do you think things can change? Do you think a mindset of an eighteen year old Maybe could make some tweaks and some adjustments now that you're gonna be parents and you're grown ups and you're thirty years old and you both have careers.

Yep. Uh that's that's what I'm going through right now is like w

Yeah.

Mm-hmm.

We weren't

Planning to have kids necessarily. Not that it wasn't unplanned either, um, but it wasn't something that we were like, We're going to have kids, we were like we're going to live, we're going to travel, we're going

Totally, totally.

with my college happening we uh ended up not doing as much of that and focusing more on

That

Okay. Um so over the time I've only had like two full years out of college I graduated last year.

How much do you guys make a year, you and your wife?

Uh so not counting the RSE.

Use

We make two hundred and sixty thousand roughly with the RSUs it's about three hundred twenty.

Okay. Is she gonna be working still, Nick, do you think, after the baby's here?

That's her plan. She she's a social worker. She gives uh like she helps the community locally through

her job.

How much does she make? How much out of the two sixty is hers?

A hundred and ten.

One ten. Okay. Um okay, that's great. Yeah. So just said I mean, you called in. Can I just give you a couple of maybe random thoughts I have about your situation? Yep. Okay. So we talk about when you are pregnant, we have a thing called stork mode, meaning if you are trying to get out of debt.

I mean you're probably gonna get like a three or four thousand dollar raise if you paid off all of your debts, including the mortgage, right?

Yeah, I mean, this year has not been good for us financially. We had a lot of setbacks this year. We were basically debt free coming into the year. Um and then we had

House.

albums were basement flooded. We had uh had to rip dig a noose on pump line. Um our dog has been sick, he's sixteen and Kidney failure and stuff like that.

That's even more reason to be completely debt free, man. You have that money back in your life, you just sold yourself on becoming debt free and you're probably gonna have, you know, maybe fifteen percent capital gains on the money that's appreciated, not from what you bought it for, but the gap from what you bought it for to what it's worth today. That might be 20 grand. And look, lo and behold, that's 180 grand you can throw at your debt. Gosh, I would feel good. I like Rachel's.

Well.

Wade your toes in the water by paying off the consumer debt. Once the baby's here, I think you'll go, you know what? Let's liquidate the rest.

Yeah, and then relationally, Nick, you and you know, I I would love to see you guys see yourselves more as one financially. This is our household, this is our family. The money that comes into the household in one account, how do we run our household out of this account versus divvying it up, who pays what?

Hey guys, Rachel Cruz here, and I love summer. There is more fun on the calendar, more time with your people, and way more chances to make memories. But you know what else there's more of? Spending. Oh, between the extra groceries and gas and camp fees and family trips, it all starts to add up so fast. And before you know it, money stress starts to steal the fun out of everything.

Our scripture of the day comes from 1 Samuel 16, 7. The Lord does not look at the things people look at. People look at the outward appearance, but the Lord looks at the heart. Nathan Moore has said, I've found that the stuff, sorry, I have found that the less stuff I own, the less my stuff owns me.

Such a minimalist.

また

Before us time.

It's a little bit like a the Dave Ramsey quote of It's okay to have nice stuff, just don't let your nice stuff have you.

I wonder if that's where Dave got it from.

I don't know. How who's Nathan Morris? Google them real quick. Should we know him?

Evangelist?

He's not a president.

He's not I really hope it's the founding member of Boys to Men.

What is it?

I mean that is a Nathan Morris. I don't think it's the same one, but that would be

Credit.

Yes. Author of The Art of Getting Money, personal finance expert.

Uh Boys to Men lead singer would be so much more cool. Work on our quotes of the day. We need some boys to men. I'm sure they said something, you know, really profound about stuff and money and life. I'd like to say that. Boys to men said it. I found that the left stuff I own.

They probably

Stuff owns me. You should give a little tune, George. No. But that uh yeah, the the it's okay to have nice stuff, don't let your nice stuff have you. Is a great balance because your stuff having you is you go into debt for it, the borrower is slave to the lender, you don't own it, you owe on it, so it has you. And the identity contentment piece is really big.

Where your treasure is.

There your heart will be also.

There you go. It is what is the chokehold that material goods have on you? And you can't take it with you.

You can't. Nope. And so it's it's fun to have stuff, right?

They you can't even take your pants. Alright? They'll be folded neatly on the bed. Every time I still see f clothes folded on a bed I freak out a little bit.

That's that movie scarred.

Trauma. All three.

Yeah, there's three. They gave me the kids version.

Listen, you get left behind the first time by you get left behind three times, that's on you. That's on you.

Oh Lord. Okay. Uh Emily. God bless you, Emily. Sorry that you're not Round us out. But uh yeah, uh in Idaho Falls we have Emily. Hey Emily, what's up?

Hi. I am just calling in to ask my

My husband and I just have

We're almost done with baby step three. But we are growing out of our house.

Thank you.

Um we have an unfinished basement. We're just trying to figure out if it's financially wise to take out a loan to finish. We're feeling really on top of each other right now.

Seven people. That's a lot.

What's it gonna cost to do the basement?

So we asked to me if we About um forty thousand dollars to do a basement. For context, we are in a three bedroom as is. Um so I have two kids in each room and a baby Who's going to need a room soon? Um so we owe two hundred K on our mortgage and it's out of two point three. So moving just makes no sense, neither does refinancing. So we're trying to

figure out if

Alone to do the basement, would make it a little bit more than a little bit.

Makes sense.

It's um another piece of information, our current mortgage payment is below five percent of our take home.

Okay. How much do you guys bring home a month?

About ten.

Mortgage excluded, would you guys just go buy a different home right now if you could?

Absolutely not. We love our neighborhood. We love our home. We love the lot our home is on. It's our favorite.

Okay. So you want to make this homework no matter what. How much do you have in the emergency fund?

About thirty. Well, by the time I said we're almost done with baby step three, when we're done, it'll be at about thirty five.

Okay.'Cause I I think you can just cash flow this. I mean, that newborn baby's gonna sleep next to you for the first couple of months, right?

Yeah, it did take us I mean we have a lot of kids. It took us about Four years to get that fund put together.

But you bring home ten K a month, you said?

We do, yeah. Um our food bill is more than our mortgage.

Okay. Yeah,'cause you said the mortgage is five percent. So I went, Can you save up a couple

I was gonna say, yeah, could you s could you guys like really kinda go crazy and just say we're gonna save four grand a month and in ten months we'll have it all? And you can even start planning and like doing things Even before that.

Yes, yeah. So we do have we have

been doing that.

Um, we're just we're like I said, we're really on top of each other. I've got the baby. My husband also just started a new job where he'll be working from home sometimes and his current I mean, he doesn't have an office.

Well yeah, you got three bedrooms, yeah.

Yeah.

So what are you gonna do with the basement? Is it gonna be a bedroom, an office, and you're gonna parse it out?

Um, so it's got space for four bedrooms. We are hoping to get a quote to do just, you know, two bedrooms initially. Um, kinda leave the plumbing and stuff for later in the bathroom.

That feels reasonable.

Yeah, I mean I mean Emily, yeah, we're not gonna tell you to take it out alone, so you called the wrong show, I'm so sorry.

Okay.

Yeah, so what I would do though is Start meeting with some cause I think if you guys really could buckle down and save three to four grand a month, you could actually start to cash flow this and get it at least pr Starting. You don't have to have all 40 grand at the beginning. You know, you could you you could start some of this in six months. When when is the baby due?

Yeah.

Oh, he's here. Okay. I'm so sorry. Yeah. Yeah. So I mean, honestly, I yeah, that's what I would do. I would just make an aggressive goal, uh, to save, you know, fifteen thousand, start the process and you guys just be putting cash away every single month.

You work too hard to get debt free, so why go back in and restart the whole process and Uh it just it's it's not the move'cause you're gonna build this thing, you're gonna feel it, you're gonna be paying for it versus saving up and paying cash, you treat it differently. You're gonna get multiple bids, you're gonna be very strategic with every move and why you do it. When you take out a loan or even worse, a HELOC.

They're great sleepers, so thank goodness for that.

Well and what you could do too, which may scare some people, but you have thirty grand in the emergency fund. You know, you guys could say, Well, it only really takes us, you know, seven thousand to live off of. So technically twenty one thousand could be a three month. Yeah. It may feel a little risky'cause you got kids, one income, uh you know. But twenty one thousand, you know, could be okay for a bit if that if you want to take some of the

To get through the project. Refill it.

Yep, and then jumpstart it.

If you had an emergency, you pause pause the work until you're back to some stability. Yep. And I think you can cash flow this and you'll get to the end and be thankful that you don't have a loan to pay.

I mean, seriously. It yeah. And George, you you hit on it, but I just do want to reiterate when you do things with calf. There is something more subconscious that goes into the care at which the planning process is happening, the speed at which people do the ch the changes. If there's changes, um, you're thinking about those. so much more in a diligent way than when you borrow, it's a little bit like, oh, okay, if that's an extra five grand, tack it on, we'll figure it out later.

Add it to my tab.

Yeah, there can be a little bit of that feeling and so it really does force you to stay in a time frame and in a budget. I mean that's what Winston I found when we did our pool project and when we built our house in twenty nineteen, like It's it's a different game when you're cash flowing something like that, a big project. So it's um

It moves slower, but with that comes a whole lot of peace.

Absolutely. It takes more patience on the front end, right? To get to have the cash to do it. But in the process, you're just a yeah, I think you're just a little bit more paranoid about it because you're like, this cannot go over. This just can't go over. So what do we have to figure out? What I'm

I mean, if you were running a budget for a company, you're gonna go, I gotta stay within the budget and we can't take on any debt. So once you take the debt off the table, it just changes things. And that's really helped me go, Well, if I don't feel good about spending that much on it, maybe it's a sign.

That's right.

So if you're willing to finance it but not willing to pay depart with all that cash, that's your body saying, This is a big purchase, are you sure? Yes. And debt removes all of that. It makes it frictionless to get all of these things that you want now. And you signed a bunch of dotted lines that said, nope, you owe us with interest.

Yes.

With interest that adds into it. Yep. Absolutely. Well thank you, Emily. Uh and good luck to you guys. Uh George, great show. Always fun. Always fun hosting with you. Uh thanks to everyone in the booth. And remember, there's ultimately only one way to financial peace. And that is to walk daily with the Prince of Peace.