Transcript

Financial Shortcuts Won't Build Longterm Wealth | January 21, 2026

From The Ramsey Show · Episode page · Watch on YouTube

· 2 h 7 min · 24,175 words · 522 timestamped sections

This is the full, timestamped transcript of "Financial Shortcuts Won't Build Longterm Wealth | January 21, 2026", an episode of The Ramsey Show published January 21, 2026 (2 h 7 min, about 24,175 words). It mentions 5 people, works and ideas, including Better Help, PERS, IRS, Trina, Lonnie.

What this episode is about

The discussion centers around the pitfalls of seeking financial shortcuts and the importance of building long-term wealth. Through a conversation with a caller named Daisy, the hosts emphasize the need for careful financial planning and the potential for transition into more sustainable income sources, especially in the context of personal life changes like starting a family.

Key takeaways

  • Daisy's $1,000 monthly income shows that success doesn't always require a six-figure salary; sometimes, it's about mindset.
  • A $10,000 raise for Daisy’s boyfriend could cover her OnlyFans income—a stark reminder of shared financial strength in relationships.
  • Marriage before baby? Legal benefits aside, tying the knot can simplify financial planning and create stronger family bonds.
  • Daisy’s emotional breakdown over OnlyFans highlights that money shouldn't eclipse mental health—find fulfillment, not just funds.
  • Budgeting for unexpected life changes is crucial; even in love, knowledge is power—especially in financial matters.

Who speaks in this episode?

What is discussed, and when

  1. – 30:00: Trina
  2. – 45:00: Better Help
  3. – 2:00:00: Lonnie, PERS
  4. – 2:06:35: Lonnie

Notable quotes from "Financial Shortcuts Won't Build Longterm Wealth | January 21, 2026"

  • I always said I wanted to retire by the time I was 40. I am almost 40.
    about Trina · at
  • Therapy can help you identify the heavy stuff, set it down, and move forward with clarity so you can focus on living the life you want to live in the new year. If you're thinking about therapy,.
    about Better Help · at
  • All right, we've got Lonnie up next in Dayton, Ohio. Lonnie, you with us?
    about Lonnie · at
  • Cool. What else? And I have 400,000 in my pension which is a PERS and that's the account value. If I were to quit they would give me that amount or if I stick it through a couple more years I.
    about PERS · at

Who and what is mentioned in this episode?

People

  • Trina — Person · Caller (Florida) seeking guidance · 1 mention · first at
    Caller focused on retiring by 40 while carrying post-bankruptcy debt; hosts reframe goals toward debt-free living and avoiding 'creative financing' schemes.
  • Lonnie — Person · Referenced person (unclear/insufficient context) · 7 mentions · first at
    Name appears in the extracted entity list, but the provided transcript context does not include a mention of 'Lonnie', so role and details cannot be grounded in this episode excerpt.

Companies & orgs

Full transcript with timestamps

Brought to you by the Every Dollar app. Start budgeting for free today. 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 Ramsay Show. I'm George Camel joined by my co-host Rachel Cruz, also my co-host on Smart Money Happy Hour, which you can get on YouTube or podcast. You call us 88825-5225 and we'll help you take the right next step for your money and your life. Daisy kicks us off in Phoenix. Daisy, welcome to the show.

Hey there, it's Daisy and I've just been um I'm just in a little bit of a knot with Only Fans.

Oh. So I Yeah. Um I've been doing it for about three years now and as of recently I've fallen pregnant and would like to, you know, become a stay-at-home mom from that.

Okay. So there's a multiple pieces here. You've been doing this for three years and you want out only now because you're trying to start a family.

No, I have been wanting an out for a while now, but as of recently, I found out I'm pregnant. So, it's like

this just gave you the kickstart to go motivation. Okay, Daisy, how old are you?

I'm 21. You're 21. Okay. And who is the father of the baby? Is it a someone you're dating? Is it Are you married? What's

it's my boyfriend? We've been together for about 2 and a half years now. Okay. Wonderful.

Okay. And what is your current income? Just you. Um, my current income is honestly about $1,000 a month right now because my boyfriend, he's the one that takes care of everything.

Okay. How much does he make? He makes about 4,000. All right. And you guys have you've combined finances already?

Yes. Okay. And Daisy, is that I mean, is the $1,000 coming from Only Fans? That's your income?

Yes, it is. Okay. Okay. Well, the positive thing is you could replace that in a heartbeat doing anything else, right? I mean, it's So so

if he gets a $10,000 raise, he effectively replaced her income. Mhm. Would he What does he do for work?

Him or you, Daisy? I mean, just for the for the time being, though. Do you know what I'm saying? Like,

how how far along are you? Yes. Um, I just uh found out last week, so I'm about five weeks.

Oh, congrats. Okay, so early on. Thank you. That's good. How you feeling? This is

Oh, I'm feeling great. I've been trying for months now. So, Rachel meant like morning sickness.

I meant like Yeah. The the first trimester is always tough. So, actually none of that luckily thankfully.

Good. Okay. So, Daisy, yeah. I mean, so to be able to replace this, I mean, you could do this, you know, doing Uber Eats, you know what I mean? thousand bucks a month,

250 a week could be found Yeah. Yeah. It could be found super easy, which I'm I'm thankful for because sometimes when people are looking to replace their income and especially when you're in this like moral dilemma of how you're making your money,

sometimes you're trying to replace like 10,000 a month. Yeah. Yeah. Like like a crazy amount that would be hard to replace. This is easy. So yeah. So I

And luckily we're not in debt either at all. So Okay. So no debt. You guys have anything in savings? Um, we did have savings, but unfortunately that was taken from taxes and just um just a bunch of life things. So, no, we don't have any emergency savings right now, but however, we do have uh 20,000 in savings for my mother.

From your mother? Yes, my mom, she's uh kept a a savings for me. Okay. And do you have access to it now? Is this a like a gift that she's given you? Um, it's whenever like we're ready for a house, ready for marriage, any big things like that.

Okay. Well, speaking of marriage, when is that going to come into the picture? Hopefully soon. Hopefully soon.

Like before the baby's here. Oh, yes. Um, ring possibly, yes. Marriage, possibly no, because I'm under my mom's insurance right now.

Okay. And you would lose that when you get married? I don't exactly know, but I'd have to recheck.

I know. I think you can still I mean, yeah, because your husband, if he if he has a benefit of insurance, I think he can opt in as an individual. And if you're under 25, I think you can still, right?

I would I would not get married because you think you may not have mom's insurance.

So, if I'm in your shoes, I'm going, "Hey, courthouse wedding, the time to do all this in order is long gone. Let's at least speed things up here." And so if he's the one, he's going to be the father. He's going to be in this baby's life. You're committed to each other. Let's go ahead and get married. We can have a party later on down the road.

Yeah. And I agree with that completely. Yeah. And that way, Daisy, you guys can start to combine your lives even more, right? I mean, it's not only from a legal standpoint when you get married, but also from a financial because I would not be combining money with him until you guys are married. And so there does have to be because you are living together, you're going to have to figure out like a pay schedule, right, of okay, he's going to be in charge of these things, I'm in charge of this, you know, whatever it looks like to run the household of how you guys are. But um but yeah, there there's something about that marriage. And again, it's is it is if he's the one and I mean, he's going to be in your life. I mean, I assume regardless because you guys have a kid together, you know. Um but yeah, I think um yeah, I think stopping the income source right now from the only fans cuz

Are you done done like account shut down? No, I don't have the account shut down. I've just been running it, but every time I go do it, I just have a complete breakdown and just cry cry about how much I don't want to do it.

Wow. Yeah, Daisy, for your I mean, for your sake, girl. like it's it's not worth the money and your your mental health, your emotional health, your relationship.

There's a there's there's something trapped in there for you that would be freed up from you. I mean, seriously, when that gets closed down, there is something a dignity that gets placed back into you and who you are. And so,

this is not your identity. It never was. And I know it's it's hard to separate that because this is what you've been doing

and you've been getting attention and affirmation and money from this, but this is not healthy in any way, shape, or form.

Correct. Yes. And so I would shut it down today as a line in the sand to yourself.

Does your boyfriend know about it? Yes, he's known about it. And we've just kind of made a goal to kind of push through it because we actually both do it.

He's okay with it. He's involved. Um, we both do it. Oh boy. Is that where he's Is that where he's making his money?

No, no, no. He's an electrical apprentice and that's where he he makes his most money.

That's an honorable position. Can he make more doing that? When is he done with the apprenticeship?

Um I He's about to come up on his two years this year. Okay. Like before the baby's here, he'll be done and and have an upgrade in income.

Um possibly not. I don't think so. But we have been looking for uh possibly finding him a new electrical job. Yes.

Okay. And what are your household expenses right now? Have you guys actually sat down, done the math, you know, kind of what it's going to take to run your house?

Yes, correct. We kind of live in an apartment right now and we're hoping to actually move into a house though before

rent a house or buy a house. Um depending on what the cards play out. Well, I can tell you the cards right now. You guys don't have the money to buy a house. That 20 grand is not down payment money. That is emergency fund money, especially with a baby on the way. We are not going to touch that.

Okay. So, Daisy, you've got some hard choices to make, some hard conversations, but you can do this. If you want to be a stay-at-home mom, you can do this. We got to figure out how to live on his income alone. And the hardest part is just detaching from this life that you guys have been living.

Correct. Yes. And I'd really love to cuz I mean like you know especially becoming parents you know you don't want that difference.

And Daisy listen to your gut. Something's telling you to get out. And I and I would I would do some deep marriage uh premarital counseling work cuz I don't like the guy you're marrying is okay with all of this either. That I don't like that.

That gives me serious pause. I'd find a good community, a good church home, and hopefully a good therapist you can detach from this life you've been living. Best of luck. You know, every year I hear the same excuses for why people don't get the life insurance they need to protect their families. So this year, let's clear the air and look at the facts. Having 10 to 12 times your income on a 15 or 20-year plan is in many cases just plain cheap. That amount of coverage lets your family keep the lights on and keep food on the table while they're grieving. Second, life insurance through your work is not enough, especially since these plans go away if you change jobs. You need to have your own policy so you're not without protection when your family really needs it. Third, stay-at-home parents need life insurance, especially those with young kids. People don't realize how quickly the costs add up without someone at home

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Shane is in Vegas up next. What's going on Shane? Hey y'all. Thanks for having me on. It's an honor to be speaking to you today.

Thank you. How can we help today? Um yeah, so uh favorite topic for you guys, money and family.

Uh long time ago when I was 18, took out uh student loans. uh with the agreement with my father that they would pay uh until the balance is zero. Um 35 now balance is still in the mid70s to uh mid700.

Oh my gosh. What was it originally? Yeah. Uh it was over 120. So uh they've been paying it down. They've been making minimum payments.

That's a problem. I I agree with you. Uh the issue I'm really having is that my dad is he's totally fine paying it. He still makes the payments, but my mother constantly brings up the fact that they are paying for my student loans. Um, feels like there's strings attached when at the very beginning there were never uh those agreements put

and there was a clear agreement. Hey, we're we're going to pay these off. We can't we don't have the money to cover it, but take out the loan and we'll cover it. Is it in your name or their name or both?

They're they're in my name. Uh they have the money. Uh, I mean, right now they could snap their fingers and pay it off, but the the way my father sees it is he can make more money in the stock market, so he just chooses to. Uh,

are your parents still together? Yeah, they're still together. Um, are you married still financially? I am married. Yes.

Okay. So, when you guys are around your parents, how often is that? How often do y'all see them?

Uh, we I mean we live on separate sides of the country, so once twice a year, but uh even in some phone calls, the still come.

And what does she say? like what are her comments? Um, a lot of the times it's like revolved around like, "Oh, you just bought a truck. Like that could have gone to

the student loans or oh, you took a nice vacation. Like why is that money?" But but you know, going back to where I said it's that was never part of the agreement, so I'd never feel

uh obligated. Um, but then, you know, my father, he's like, "Yeah, I I don't care. I'm still paying them. It's whatever." So,

have you rather frustrating. Yeah. Do you push back on her at all? I do. I try to keep it, you know, calm and and light, but uh my wife is really the one that gets frustrated about it.

That's why I was asked if you were married cuz I feel like I would be like, "Oh my gosh."

See, this is the issue with the student loan stuff is these parents are like, "Sure, go take out whatever you want to go take out." And you're 18, Shane, right? And

sure, you sign it. I mean, yeah, you're 18. You're an adult. So yes, you have some responsibility in the sense of like you chose to make that decision, but you also had fully functioning adults in your life that said yes, we and we would pay for this. So I almost would have a very kind but a very clear conversation with her um around the boundaries of these comments because it starts to erode the relationship.

I'm guessing it already has. Yeah. Doesn't sound like I mean that's why you're calling, right? This is your this is

Yeah. A lot of tension. Yes. Okay. Okay. Um, so yeah, I mean I would I would tell her and I and I would be very kind, but I would be very very clear and

and just and to be honest with her and say, you know, mom, there have been multiple comments made. I mean, you could give her some examples. And the truth is, when I was 18, you all told me that you would take them out and you would pay for this.

And I'm I'm holding y'all to that word. I mean, that that's what was said. If something has changed and you and dad agree on a different plan, you're I'm happy to have a discussion with you if that's the case. But that's not been the discussion. And so I need you to stop stop making these comments. They're passive aggressive and and it's eroding our relationship. Can you do that, mom? And at that point, that's up to her. She's the adult that gets to make the decision if she wants to continue a healthy relationship.

Listen, I don't control y'all's money. That's your decision. So this is now a marital problem they have of mom disagrees with how dad is handling a debt they agreed to pay.

That's a good point, too. Yeah. So legally, yes, it's yours. They could stop paying today and it's going to come to you. Now, they haven't done that yet, and I'm glad that they're not intentionally trying to tank your life, but this might be another conversation with dad of saying, "Hey, listen. You have the money. I don't care how much you can make in the freaking stock market. This is eroding our relationship, which is way more important than some spread you could make." And so, you can try to also influence him to, you know, sort of This would solve everything, wouldn't it? If dad just wrote the check, paid him off, and went, "Dude, it's been 17 years."

Be pissed. I don't know. Would your mom be mad at that? Yeah. H knows. So, she just doesn't want to even use any of their money anymore to pay for these loans.

I'm sorry. Can you say it again? She doesn't want any of their money to be used to pay for any more of your student loans. She's just done with this whole thing.

I It's hard to say. Um I know they're financially well off. Like they're My mom is retired. My dad, he makes fairly decent living. And I know what their nest egg is and and uh in liquid and retirement. So, I know like

this is not a big part of their world. It's not a big part of our their world and uh you know my wife and I we make decent money. Uh so like the payment could it would be totally fine for us to take on. It's just like

I need to know if I need to start paying my $80,000. Do you guys have the money to write a check and pay this off today?

Um not in like liquid assets. I mean uh I could save a couple more months and it would be fine. Uh but then it would just wipe out all of our uh liquid investments. So, not

my wife doesn't really want to do that one. So, it would probably just be what I'm hearing is either way someone's going to be angry. And so, that's the thing we have to make peace with is who do we want to upset? And the truth is you can't control how they react or respond. All you can do is be a person of integrity and have the conversation.

That's fair. So, I don't I was just saying if you wanted to, this is the other option is you write a check and say, "Mom, I don't want this to come between us and destroy our relationship. Here's the freaking check to pay off the loans. Yep. That's the other pisses me off those because Yeah, because they've been they freaking have had this for almost 20 years.

Yes. The immaturity is on mom's side at this point and dad's for and I'm sure they are exhausted. But yes it's

been two decades, man. When your when your 18-year-old wants to go and take out $120,000, you say no. But no, they didn't. They said yes, we will we will do this and take this on. And so they're the ones that have been dragging their feet. It's not his it's not your fault. Sh. I mean, you know what I mean? To that degree, cuz there was a deal. There was a deal that was made.

Um, yeah. So, I'm sorry. That's so frustrating. But I would I I mean, for the for your your wife's sake, for your sake to like be in her presence and have passive aggressive comments constantly. Um,

yeah, I would Yeah, I would be clear and and draw a boundary there. But again, kind but clear.

And there might be help, guys. Yeah, there might be a compromise where you go, "Hey, listen. here's how much I'm willing to chip in to just

Man, you're really trying to bail the parents out, but they're fine. If they were on food stamps, like I get that.

No, they have the ability to. And so that's where I go. This is really between mom and dad because they have a disagreement. Mom should be mad at dad, not the son.

Cuz dad's been dragging his feet for 17 years. Can I remind you? No, they both have.

Goodness gracious. That's And clearly mom doesn't have a vote when it comes to finances.

I feel like we're getting more and more of these. I don't know why. I feel like I we hear more and more parent resentment guilt to adult children with the student loan debacle in the mix of someone said they were going to pay, they're not paying or they're paying and they're mad but this was

asking me for money again. Yeah. I mean it's just it's so much. Um so so can we talk about our parameters around family and money? I think it's a good reminder for everyone listening here which is this. Never loan money to family or friends. If you want to give money, make it a gift. And please don't go into debt for said gift. That's not really a gift. We've heard that with like, well, mom got me a car. It has a loan on it and so I, you know, I got to pay it, but she got me the car,

right? Yes. And so it's fine if you want to give. And if the giving ends up becoming a pattern of enabling bad behavior or irresponsibility, that's another stop, right? We're not doing that.

Um, but the the gets because I mean part of the show is about changing your family tree, right? getting yourself in a position where you can change your life, you change your family's life, you change others lives. Like the ripple effect is beautiful and wonderful and we want that to be, but we also want the people on the other side that are receiving it to be in a healthy good spot themselves to have their own dignity um as adults. So that and then the other thing, George, no co-signing

ever. Please, please, no cosign. We had a grandma who co-signed. That was last week on the show, I think. I know. But she was like 92. And this guy's like, "Yeah, my grandma cosigned." I was like, "You poor grandmother. You're he's broke. He's probably not going to be able to make the payment."

Yeah. They require a co-signer cuz nobody trusts you to pay it off. Yes. And so what happens is you end up not paying it off and they go after poor grandma

who thought you were going to make the payments perfectly. And she was just more of a, you know,

more of a just like a nice thing. I'll sign it, but I won't ever have to deal with it.

Right. Right. Never think that. It will destroy a relationship and cause resentment. And so it's so much easier to just either put the boundary up and to say no or give a one-time gift if it's going to be a blessing and you're not enabling terrible

time though. You think just once for the rest of their life? Well, not like an ongoing, hey, I'm going to give you a,000 bucks every month forever.

The pattern. Yes. You know what I mean? If you reward bad behavior, that's when it turns into entitlement.

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find peace with your digital life. Start protecting your privacy and your peace today. Go to joindeme.comsey for 20% off an annual plan. That's joined me.com. Trina is in Florida up next. Trina, welcome to the Ramsay Show. How can we help today?

Hi. Hi. Hey, I'm so excited, you guys. We're excited as well. We're glad you called, Trina. We're excited to talk to you.

Okay, guys. I'm having this like issue. I always said I wanted to retire by the time I was 40. I am almost 40.

Wow. It's an aggressive plan. My dad did it twice before he turned 40. And I'm just like,

wait, wait. Hold on. He retired twice. What do you mean? So he retired from the city and then he retired from boxing. So he like got to retire twice before he was authority.

Was he said boxing retirement? Yeah. Like he was a professional boxer. Yeah. He was like semi-pro. Did he have to do it to earn money?

Yes. Okay. So he didn't really like get to retire. He was semi-retired while semi and then fully retired.

Yeah. Okay. And he I was trying to relieve some pressure for you of like is that where this idea came from then? You're like I want to be like dad. I want to retire by 40.

Well I it inspired me. Yes. I like that. I've always been like a overachiever and work hard like yeah. An aggressive goal you know of something big that you're like I want to work for that. I get that. Okay. Okay. Perfect. So keep going.

So yeah, how can we help? So I ran into a financial situation. It's not a lot of debt. It's like $44,000 worth of debt and I make about 60. So, I want to pay this debt off. And I kind of debt about

um it's like 20,000 in a car. um like 4,000 about in um personal loans and like 2,000 in my son's private school that I still owe and oh credit cards like 16,000 in credit cards.

Woo. Doesn't feel like a recipe to early retirement. Like if I was trying to retire early, I'd probably go, "Hey, I'm going to make sure I don't owe people money and have money saved on top of that."

And um so how long how long has this been floating around? How long have you had this debt for?

Um so I filed a bankruptcy about two years ago. Um this is when all of this started.

So all of this debt was post bankruptcy or did it get were you on a payment plan? What happened? Um, so actually the only debt that I don't technic like I don't have to pay back um one of the personal loans, one of the credit cards and yeah

because of because of the bankruptcy. Because of the bankruptcy. issue is that I want to keep the relationship with that bank and I want to pay them their money back cuz I never wanted to put the items in bankruptcy. I was still paying it but they said that because I filed a chapter 7 that they had to put it in the

What caused you to file bankruptcy two years ago? What was the what were your numbers then?

So then I was making about um it kind of flip-flopped. I was making about 40 then I went back to 60. Um then I think before that I made 80. Um so what happened was I was working for this company. I had moved. I was working for this company. Um basically I decided I wanted to open up my own company because we're under government contracts. We have a certain criteria that we have to meet. When I said that I wanted to open up my company, the government's agency said that they had to take away all my clients. So, basically, I went from having, you know, a a decent income to like having nothing the next day.

Okay. And it was all because of this new business. Yes. So, the new business never never took off, but you took out loans to float the business for a bit and that's what caused the bankruptcy.

No. So, when they took my clients, um, it took a while. It took about a year and a half for me to open up and to get clients. So, I started having clients in September. I had like maybe 15. Um, now I have like 25. So, and that's all I need.

Yes. But Trina, I'm What caused the bankruptcy two years ago, though? Was it consumer debt? Was it business loans? What was it? So, I had these um student loans and I put them in an adversary proceeding where I filed bankruptcy to get rid of the student loans while I was waiting for my agency to open. When the agency um when the agency didn't take off right away, I started using my kids college funds, my retirement boy,

I started pulling everything out. Okay. And so I started listing um and I started working as with another company but that company just didn't pay that much. I

gota Okay. So Trina I have a new goal for you. I think instead of retiring at 40 we are going to learn to live debtree

which I usually do. But this is like Trina. So far it's been everyone else's fault and the government took your clients away.

Oh no. Well, I'm not saying she's pushing on everyone's paw, but like nutrina, you got to be able to say like I I Yes. I I'm used to living with debt, though. From student loans to where you are now, there's a pattern of you using debt. Can we say yes to that?

Oh, that makes sense. Yeah. I wasn't looking at it. Sorry. No, you're great. No, I just want to make sure we're tracking. So, I think in order to have a completely new mindset with money from where you've been of saying, I'm living completely debtree. Debt's not an option. debt is not an option. I'm going to save up and pay for things. I'm not going to be making unwise decisions about purchases and pulling money out of retirement or kids college or investments because that's not wise, right? Where um that stuff is all for the future and I'm going to learn to live within my income and my means and that means making hard decisions about lifestyle and about, you know, yeah, I mean, life choices and everything. And so, I mean, genuinely, I would make that the goal. I would make it a aggressive goal to get out of debt in I don't know what two years like make make a make a goal to aggressive goal to

get out of debt to save up a fully funded emergency fund um and freeze your credit that way it stops your debtree plan

two and a half years is okay okay that's so great we never even got to your question I'm sorry there's so much details to jump into what is your actual question we can help you with

well I wanted to basically um flip this piece of property. They have a piece of land that's for sale. It hasn't been impacted yet. I wanted to do like a creative finance to see if I can

No, we're off. Remember 10 seconds ago we talked about the new goal. Remember creative financing just means, hey, I'm going to do stupid on steroids.

That's fair. That was her original question. That's fair. We made a new goal 10 seconds ago. Yeah. Okay. So So how would you answer how would you answer this now? Trina, answer your own question with your new goals in mind. So, I am going to stick to my two and a half year budget that literally just looks like this month.

And that's what we're talking about, Trina. See, be debtree after that and then maybe save the money instead of

Look at you. And how old how old are you Trina? I'm 38. 38. Okay. Can I tell you if you don't retire by 40, you're not a failure?

I promise. Can I just promise you that if you don't retire by 60, you're not a failure.

How about this? You're not a failure. Period. Oh, there you go. That's the most encouraging thing I've said today.

Rachel can attest to that. But the truth is I we have these aggressive goals and we need to create actions to get there. And we can't hold ourselves to these goals because life is going to happen. And so it's okay to pivot the dream. But one thing we can't do is pivot in going backwards and rob our future. Rob our children's future. You are worth more than that. And so from today forward, you're a person who doesn't go into debt, who doesn't owe people money.

And all your decisions can be based off of that value system because that brings you freedom, Trina. There's no shortcut. There's no like, okay, I can do this creative financing here and do this and I'll make 20 grand just like that and look at that. Like that's that doesn't work. That's not the real world. It is it is hard work. It is the long game. It is a marathon. It's not a sprint. And it's just a different mindset you have to be in to get true financial freedom and true control over your money. And so you do have to shift the way you've been doing it. Trina, if you keep doing what you've been doing, you're going to keep getting what you've been getting. And so, um, yeah, I'm glad that Trina, uh, answered her own question.

We got there. We're not going to finance a piece of land to build a home to flip it. Uh, we are going to work on getting out of debt. derisk your life. Debt equals risk. More debt equals more risk. And so this creative financing is just adding more risk to the puzzle. And so be free. That's your best path to an early retirement.

You're awesome, Trina. Thanks for thanks for calling. This is Dave Ramsey. We all want to know that the money we give to charity is doing something that matters, that it's making a real change, giving someone lasting hope. And here's one way to make sure of that. Give to Pre-born. They're the real deal. Proven, transparent, and changing lives every day. I trust Pre-born, and you can, too. They're on the front lines of the battle for life, partnering with clinics to offer free ultrasounds to mothers in crisis. Because when a mom sees her baby on that screen, something changes. It's not just a decision anymore. It's a person. And 80% of the time when a mom sees that ultrasound, she chooses life. Your $28 gift provides one of those ultrasounds.

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If you're working the baby steps, the best and fastest way to do it is by using Every Dollar. It's more than just our budgeting app. Now, the plan is built right in. You can track your progress, plus get personalized recommendations and coaching for your situation that will help you free up more money and work to plan even faster. It's like having one of us walking with you every day, 24/7, showing you the next right step and holding you accountable. So, start every dollar for free. You can download it in the App Store or Google Play. Miriam is in New York City up next. Miriam, how can we help?

Hi, it's a pleasure to speak to both of you. Thank you for taking my call. Sure. Uh my question is about life insurance. Um we pushed off getting life life insurance way too long and I thought it would pretty straightforward. Um the I wanted to call down insurance and my husband knew two people who kept bugging him that they wanted to sell him life insurance. So I said, "Okay, we need a 20-year term." And I think we got a little screwed by them because we ended up getting a policy which they said it was 20 year but it's extendable 20 year.

Oh, so after the 20 years you can reup at the current premiums for your age which is going to be two to five times higher

something like that. But I think when we got the package which was after you know we have 30 days to cancel or whatever but it's past the 30 days. Either way either way I'm going to replace it. But it goes up even before the 20 years I think. Like there's a whole chart. It's hard to understand. I

Yeah, I'm not really sure. Who'd you get it through? What company? I've Northwestern.

Oh boy. Okay, you've said enough. I would cancel yesterday. It's not a scam. And they're they're a company who does all kinds of financial products, but likely what happens. Here's what I've seen. It's mostly young guys right out of college who want some sales experience and they sell the scummiest life insurance products to unsuspecting victims like their family and friends.

Right. Yeah, that's what I've seen. That's accurate. So, I'm not dogging the whole company.

Yep. That's exactly what that's my brother. Same thing happened to my own brother, right? Some guy from college reaches out. Hey, man. How you doing?

And so, I would get out of this and I would contact our friends at Xander because they're not going to sell you extendable term life insurance. Term life insurance by definition.

Already reach out to Xander. Okay. I So, I just wanted to know like based on should I take 20 year, should I take 30 year? They said that Dave recommends a child rider, which I never heard on the show.

Hold on, hold on. Northwestern said Dave recommends a child writer. No, no, no. Vander,

for what reason? Oh, I don't know. I have four kids. That's why I I I never heard it from him. That's why I I called because I I want to understand. And then somebody else I'm getting very overwhelmed, but somebody else told me that we should really do a disability rider. I don't

No, there's there's a lot of riders. And when you hear the word rider, just think gimmick. And so all you need is term life insurance. 20 years should be enough. And here's how to think about it. In 20 years time, you should be self-insured. If you follow the Ramsey plan, you become debtree, stay debtree, you have the emergency fund, you invest in retirement for 20 years, you pay the house off in 15 years if you follow our parameters of a 15-year mortgage, and all of a sudden, you don't need the life insurance anymore once the term expires.

So that's the goal. And if it needs if you need 25 years to get there, then you get 25.

Well, and that that's what I'm asking. How do I We're in baby step 3B. We're going to New York, so that's taking a while. Um I have four kids, one on the way, and I'm not done. My husband and I are both from very large families. So, I'm thinking my kids are not going to be out of the house in 20 years. Should I go longer? Should I look for something in between to add?

Yeah. I mean, you could see how much it is because Are you guys in good health, would you say? Yes.

Okay. Because that's the great thing about term life is it is so inexpensive and then when it comes up for time for renewal, you can always, you know, go back through and recheck things and make different decisions, right?

You can always get additional policies, you know, in a few years. Now, it's going to be more expensive as you age. So, your best bet likely, and they can help you run the math, is going, "Hey, let's do a 25 year cuz it's going to end up being cheaper than doing a 20 now and a five later." And so, I would uh confer with them. get the math on it and always stick to term no matter what. Just term and if it's 15, 20, 25, that's fine. And always get 10 to 12 times your annual income or your husband's annual income. And both of you should have your own individual policies.

Yeah. And and you're saying not 30, 25 should I shouldn't go more than that. 30 feels aggressive. If the kids are still in the house at that point, that's on them. And you guys will be multi-millionaires by

I was going to say cuz I mean in Yes. You'll be selfinsured in 25 years. Yes. Miriam, if you guys are investing 15% of your income, if you guys are working to pay everything off, I'm like, it's just that continues to build. That's where you build wealth. And in 25 years, what that's going to end up being is a lot of money. And so for the kids that are in the home, maybe it's one or two of them. They're going to have plenty of money. The others should be out living their own lives. Um, you know, and not needing your financial.

You'll have a village at that point to take care of each other. So, I'm less worried 25 years from now about what life looks like if you follow the plan.

Exactly. Okay. I I can I ask one more quick question. Sure. About if when your income goes up, you're supposed 10 to 12 times your income. So then do you buy another plan in term with for the difference?

You can you can get a small policy for the difference? I wouldn't cancel the one you currently have and get a new one. You can always add you look at that like in a year if it goes up every few years.

It's a parameter. So if you get a $5,000 raise, you don't need to go out and get an extra policy,

right? But if you get a substantial raise and your lifestyles change and your expenses have changed dramatically, that's when you go, "All right, we need to reook at this."

Yeah, it's about every four to five years, I would reook. And in the, you know, the kids situation, too, changes it. I mean, for me,

um, so yeah, but I'd say, yeah, every every four to five years. I'm trying to think of Winston and I because we just reuped our life insurance

maybe like two years ago or something. Um, cuz we still get it. I don't know. I I like having it, you know, even if we're debtree and every day there's a part of me that I'm like, nah, we're young and healthy and it's cheap and that's the great thing about

for what it costs, I mean, it's a great policy to have a long time ago. Yeah. Yeah. So, um Yeah. So, anything fancy around it, any words you don't understand, Miriam, usually is like a that's a red flag to me. They're adding things on. Uh if it's a young guy that's in the situation and there and it's all these weird terms again that they're selling you this package, probably not a great deal. Like the simpler the better. Just a 20 year 25 years

and they always want to pray on your emotions and the whatifs and well a good parent would do this if you really want to take care of your kids.

And kids don't need life insurance only you you know I mean all of it. So it's meant to do one thing which is replace income. That's it.

Yeah. your two-year-old is not bringing, you know, money into the house here, unless he's like a Gerber baby making bank. So, uh, you're asking really good questions, Miriam, and I love that you're taking care of your family in this way. Most people are going, "What the heck are they talking about? I don't have any insurance." And so, for everyone out there listening, you need term life insurance if anybody depends on you, a spouse or children. And it's very affordable. And you can call our friends at Xander and get this done today. 800356-4282 or go to xander.com. They'll take care of you. Rachel and I both have our policies through Xander for our families and it's well worth the money.

Yeah, and Xander's great because they go and shop. Yeah. All different companies versus again like a Northwestern, right? To pick on them a little bit, but it's like, okay, it's just one or Affleck, it's just one, you know what I mean? I guess their car. I don't know if they do live.

They probably do it all these days. Probably. But yeah, it's not just the one company that you're getting the price from. What Xander does, they shop all the companies to get you the best price of what you're looking. And a lot of these now have uh no medical exams. Like if you're under, I don't know, a million dollar policy. Oh, really?

You don't have to go get the medical exam or, you know, so that's that's always nice. Not have to get

convenience. Have someone come to the house and get pricricked and get your blood done or go somewhere and get the blood work done. I love it.

Uh and it's a good idea to get healthy before you shop for life insurance. Cut the bad habits.

Be thinking about your diet the night before your blood gets drawn. It's like cramming for a test. You're like, "Well, if I don't eat bad today,

fast and drink a lot of water because you're like googling how fast will my blood work be good if I cut sweets."

I know. Yep. That's a good reminder. Yeah. And I think those are some of the saddest calls, George, of um, you know, um, we'll get, you know, a widowerower widowerower or a widow calling that their spouse passed away and they have kids and they're trying to pick up the pieces, you know, whether they're trying to find a new job or starting to work because they were a stay at home parent or trying to figure out child care for the kids. So they can go to work. I mean, it's just

it and and if there is no life insurance, Yeah. then they are they have nothing, you know, they're just like with what it is. And so it is.

And the sad part is a lot of people think they're covered cuz they're like, "Well, uh, he has one through work." And they go, "Well, how much is that policy?" They go, "It's $50,000." I was like, "Well, great. We can get by for maybe 6 to 12 months, but what about after that?" And so the goal here is if you make $50,000 and you get a $500,000 policy, you could invest that money and it would be able to spit off $50,000 with the average return in the market. And so that's the goal of getting 10 to 12 times your income is because the stock market historically has done about 10 to 12%. And so that's the reason for life insurance. That's the mechanics of it. And it doesn't take long. I know it feels like, well, I'm going to die sooner if I get life insurance. No, you're going to die regardless. Maybe tomorrow, maybe in 50 years, but either way, you need to sleep better knowing that your family's protected. And our

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Welcome back to the Ramsey Show in the Fair Winds Credit Union studio. I'm George Camel joined by best-selling author Rachel Cruz. You can call us at8825-55225. That is the only way to get through and get your question answered. Joe is up next in Huntsville, Alabama. What's going on, Joe?

Hi, guys. Um, I just want to thank y'all for taking my call and before I get into it, I want to thank all of you for all the work that you do at Church of the Highlands in Alabama.

A thank you. Thank you. Good people over there. Yeah. Thank y'all. Well, I'm just calling because um I've got I came into marriage with about uh 30,000 in student loans. Um and we now owe about 23 on it. We are not homeowners yet, but we have been blessed by just gifts um and what we both brought into the marriage of saving and we have about 122,000 in savings.

Good for y'all. And thank you. Um but it it was not mostly us. We eloped and so we got a great gift for but

nice. Yes. So um I would love to be able to write a check and get those that's the only debt we have. Um like I said, not homeowners yet. We rent, but I would love to write a check and get that debt out of our life. But we're not quite on the same page. Um my husband's not comfortable with that yet because we're not homeowners and it's just feels like a scary thing to do to just send that much money off. Um not knowing what the future might bring because I am a stay-at-home mom. Um so just you know want some advice.

Okay. So his big hangup is he wants to keep a ton of savings and not pay off anything because of something possibly happening to something where income's not coming in and he would rather have $122,000 saved than a h 100,000 in no debt.

Uh when you put it like that essentially. Yeah. Okay. Because that's Yeah. I mean, that's that's what it is when you break down. Um,

and he he wants to be a homeowner first before he pays off the debt. Um, I think he's mostly concerned about like having once we pay off that debt and then once we do, we're looking to buy a house, you know, in the next end of this year when our lease ends. Um, so when we do end up putting that down payment on a home, where does that leave us? I think that's his concern. Like

that you won't be able to afford the mortgage. Well, no. Where does that leave our emergency fund and where does that leave if he loses his job or like 3 to six months of expenses?

Yeah. So, it's kind of in my opinion the dog's wagging the wait, what is it? The tail wagging the tail.

Tail wagging the dog. Yeah. The dog is always going to be wagging the tail. The tail wagging the dog because he's going backwards. He's wanting to be a homeowner, which is one of the largest financial purchases you ever make. One of the most expensive things you ever do is to own a home. It's a good thing and it it needs to be part of your financial plan, but he wants to do that big thing first before paying off debt and almost regardless of what's in the emergency fund and that's what's scaring him, right? So, if you flipped it and said, "Okay, we need to get rid of the risk of the debt, then have the emergency fund and then what's left is what we have for a down payment." So that means if we don't have enough by the end of the year, we may have to lease somewhere for six months and then we buy a home in this next summer versus at the end of this year when our lease is up, right?

Essentially, I would say so. Um I think because say we put 50,000 down on a home, we pay the 22 or 23 off in loans. That still leaves us, you know, pretty comfortable, I would say, with at least four to six months of expenses. And

100%. Yeah. Well, and that's if you guys do nothing for a year, right? You I mean, he's working, right?

And you guys are putting more money on save, right? Like I mean, what how much margin do you guys have a month?

So, we live pretty comfortably on what he makes now. Um, like I said, I'm a stay at home mom, so we're not saving as much as we'd like. We don't invest because we we're just kind of unfamiliar with all of it, you know, we're so new to all of this and like but we have a money market account that we save about 200 a month and then we have a money market that brings in about 150 a month 350 a month right now 1250.

Okay. So the question mark is how much house can we actually afford and is this timeline even reasonable? Because I think what he's really saying is things are already tight and it's only going to get tighter if we pay off your debt. But really what it's doing is you're freeing up a payment and getting a better financial foundation. And if you can't buy a home when the lease is up, that's okay. This is a fake timeline we've made up that we have to be homeowners when the lease is up.

And so you guys need to sit down and get some real numbers on this and not just well I think and I'm not sure what's going to happen. We need to go here's what is true today. Here's what will be true 12 months from now.

Okay. So my proposal is that we um and this is like you know understandable. my proposal, we pay about 320 on the loan a month right now and we also tithe 10%. So my prop so and that still puts us comfortable. So we're like we're pretty frugal. Um so if we were to free up that 320 that would put us saving more like 600 a month. That would like pretty much double the amount we save.

So his fear is that we wouldn't actually save it, you know? So which is understandable, but it would just take the discipline.

So his fear Yeah. is that you guys aren't disciplining on the loan. Yeah, I think it'd be good.

Well, I believe we are. I think you guys are too. I think he's he's using a lot of these, well, I'm scared. I'm fear. Well, you have fears, too.

Scarcity mentality. How did he grow up with money? What was his childhood like?

Um, I mean, pretty just middle like, you know, general middle class. Um, and I don't believe that his family of origin spoke about money very often. Um unless it was a tight season.

Yes. Okay. Whereas, you know, this is the most money I've ever had in my entire life.

Sure. No. Totally. Because I grew up my mom was a single mom and so just different families of origin.

For sure. Yeah. Do you guys sit down and do a budget every month together? We we do. Um, I track every dollar we spend. Um, and that's like

and then we sit down and we close the month and I kind of I keep the spreadsheet because that's just kind of my thing. I'm good at that. And so we but we sit down and look at it together and I say like, "Okay, this is where we spent

and groceries and this is what we saved and I know where every dollar goes." Yeah. Y'all are y'all are amazing. I mean, well done. Okay. So, what I would what I might suggest is I don't know. There's something about hitting goals together as a couple that is so unifying. And I'm trying to figure out and think through, you know, what could be something that you guys do together that's going to make you both a little uncomfortable, but it's at least getting you towards what you're both wanting. So, I'm throwing this out here. I don't even know if this would work. I wonder if you guys sat down and just said, "Hey, what if we paid off half the money right now

and we just wrote Yeah. We wrote a check 12 grand and we just paid half of it off. Can we just see how we feel now?" because a lot of this is like the emotions are driving his fear is driving a lot of this um of not to George's point to a fake timeline of buying a house that you know

you're just moving a digital balance and the truth is you owe people money and so the balance isn't really 122 it's 99 and so if you did it this way he also sounds like he's not familiar with the plan I would go watch Financial Peace University with him and go hey this is what I'm after that's the financial piece I'm after and as long as we have debt I don't want to move forward I don't want to become a homeowner life is only going to get more expensive. Therefore, let's create more margin in our life. So, I would pay it all off.

You have 99 left. Earmark 30 for an emergency fund. That's 70 you have left for the down payment. And if you save over 600 bucks a month, you'll have another 8 grand. So, a year from now, you have 78,000 to put down on a house. How much house can we afford with that number? That's the kind of tactical homework you guys have to do tonight instead of just a lot of feelings.

Look at you. I know. And I went right into the feelings. I just pay half off and just see how we all feel.

I'm just a nerd. I'm like enough. Let's use logic people. But money is always emotional.

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Attorney advertising. Results may vary and no specific outcome is guaranteed. Julia is in Denver. Up next, Julia, welcome to the Ramsay Show. Hi. Uh, it's so great to talk to Hello. Can you hear me?

Yes. You sound great. We're happy to talk to you. Wonderful. I'm actually a huge fan of your guys' show. I actually try your mocktails on the regular.

Oh, fun. Smart money happy hour fan. We love to see it. Yes, you guys do talk what everyone else is talking about.

Yeah, that's our tagline. That's it. That's our tagline. Rachel's is very relatable that way. Well, George, I've actually talked to you before when you and Dave were on the show. Um, and I was the one who uh was asking about my mom's student loan debt and stuff like that. Um, I will say updates from them. I got a job, a full-time job that isn't just VA work,

which I'm not an Instagram influencer, just to clarify. Um, and uh, my husband actually was able to get a part-time job. Uh, the reason he was able to get that job was because it was a seasonal job, but now we're coming out of season. They're keeping him. Praise the Lord. But it's not enough. And we're still struggling to get any other work um, from, you know, just applying. And so we're trying to use uh, what's his name? Ken Helman's strategy, the principle.

Yeah. Okay. um by using my company because they have a position open and my boss said that if we have him apply he'll have a really high chance of getting that position. The problem is he would need a car and we're down to one car right now.

Okay. So being in step two, I'm wondering is it better to move on or hold off paying off debt and get a like a beater that'll just work for this job

because we'll be making more money? Yeah, because how much of a raise would he get?

Go ahead. Sorry. How much of a raise will he get with the job versus what he's So, right now he's only making like it's really low hours. He was getting at most he got 30 hours during seasonal but now he's getting like 15 hours and he paid very little which is really hard for him

cuz he was a manager and he lost his job because of some other stuff. But, um, so he's having a hard time wanting to ask for more hours knowing how little he is. I mean, he still is asking for more hours, but they can't really give him much. So, it would raise him by about $2,000 more a month.

Okay. So, he's getting a 24 grand raise. Yeah. Amazing. Okay. So, yeah. So, if you guys stopped um the debt snowball, saved up some cash for him to get a car, and say you p you paused for 90 days and, you know, worked like crazy, did, you know, did whatever you could.

Yeah. Could you save two grand a month if you really went for it? Yes, we can. Um, we just moved into a new apartment. So, last month we had to move into just a better situation for our living. So, we weren't able to get ahead with like debt or anything like that. But that those expenses are no longer worried about. It's just like I I don't have a good vision on how much we have. I mean, I have a budget and everything and ideally what we should be um making. We're still kind of figuring that out. So, I can't say for sure that we can save about two grand a month. Um but I think it's very doable if we do a little extra Instacart.

Okay. I have an ignorant question. If you guys work at the same company, why can't you carpool?

Um so, because it's not So, I'm a merchandiser and I go I have 10 different store locations. So, I'm traveling. It's not like an 8 to5 in the same building. You're moving all over the place and he's he would be more of an 8 to5 in the building.

No, he would be doing something similar to what I'm doing. Oh, so he'd be traveling to different stores as well on his own.

Right. Exactly. Okay. Well, uh this is a solvable problem. I would pause pause right now and just stack up cash real fast. Now, this is not we're going to take a break for a year from paying off debt. Like Rachel said, this is like 3 months max. We're going to go really hard. And worst case, if you're not there yet, you need to rent a car for a month, do that. Borrow a car. Whatever you need to do to get by as he takes on this new job, that's okay. But just please don't take out a car loan cuz you quote had to. I know you're better than that, Julia. I know, but that's the calls we get.

He needed a $4,000 truck because he got a new job. Yeah. Okay. So, that's the game plan. I How How is it that he's going to get this job? Um they said that they don't have anyone applying for this position right now. So as soon as we apply they'll get him.

Yeah. What would your total household income be at that point? Um so it increase by 2,000 we'd be at 7K a month.

The 7K total is what you'd be bringing home a month. Mhm. Awesome. And then how much debt do you have left?

Uh so I did the math and it's actually more than we were expecting. We're in 60K right now.

Okay. And what makes up the 60K? Okay, so 16 of it, 16,000 of it is his credit card, which I'm getting really nervous about cuz we haven't made any payments on it in a while.

Yikes. Um, and then we have my student loans, uh, which is about 12K. Um, and those are under my name. That's not the parent plus loan with my mom.

Okay. Um, and then which you guys advised for me to wait to worry about that. So, I'm not even including that in the

the parent plus loan. Yeah. Yeah. Yeah, I wouldn't worry about that right now. Um, and then there is just like a bunch of odd end things. Like our last apartment we ran into just some issues with the landlord. They didn't take our rent when we wanted to pay because we were behind a month and it was a whole thing. And so now we have $8,000 of dollars to go towards an apartment complex.

You owe them which we in like back back. Okay. Mhm. Are you guys done taking on debt?

Because we tried. So Huh. Are you guys done taking on debt? Are you still using credit cards or anything like that?

No, we haven't used a credit card ever since we got married. This was before I married my husband.

Julia, are you guys done if he gets this job? What time are you guys home at night?

Like hour hour wise. That's a great question because he could the position that we're looking for he could do later in the day whereas I can work early in the morning and that would help with the baby because we do have a eight-month at a home.

Okay. Yeah. Um so it' probably be like we I'd be working in the morning and he'd be working at night.

Okay. Yeah. Yeah. So you guys would but not hopefully not too long term because hopefully once you're out of this debt you guys can you know factor in maybe daycare or something. I don't know. So you can at least get on the same schedule so you're not missing each other for years, you know, uh, in life. You don't want that's not sustainable for your marriage, for sure.

But here's the math on this. Can you guys put three grand a month with this new income toward your debt?

Minimum payments plus extra. Can you do three grand a month? Like after we get the car and get this position

once you guys are settled and stable in this new life. Yeah, we should be able to.

Okay. Because that means 60K, three grand a month, you're done in 20 months. And that's if you don't do more than that,

less than two years. Yeah. If you guys go more aggressive, you can get it done in 18 months, 12 months. And so

that's why I was asking about the hours because if you guys could keep up the Instacarting or something on the side and bring in

Yeah. Don't stop. You know what I mean? Like that's that that's the gazelle intensity that we talk about maybe step two of you're you guys are just crazy people, right? You're just doing anything and everything to earn income, cut lifestyle. I mean it is like we are putting everything because every if you think about it every $2 $300 that you can put that's not going out in lifestyle towards this debt that's a you know a couple hours that you're not working you know like I mean it's just that give and take. So it's like just deep deep sacrifice. And again if you do that like George said in less than two years you guys could be out which is just huge.

Which how long how long have you been in debt? Uh, my whole adult life. Don't you think you deserve better, Julia?

I do. I think you do, too. So, I think we make a plan tonight. We spit shake and say, "Hey, hubby, we're going to go hard in the paint until this thing is gone."

We're both working like crazy. It's a a competition of who can work more hours. At this point,

we're very competitive, so that works out. And we're very ambitious. I mean, he has his own uh business and it's like hard for him to invest in that with all the debt and everything. And so, and then I have like a ministry and there's all this other stuff going on in our life that we want to do, but

you have you have a great why. He wants to run this business. You want to be generous and run this ministry. So, all of these things will fuel the journey. When it gets really hard, when you guys are both exhausted and instead of fighting each other, you go,

"Good job today. Way to go. Thank you for providing for our family. Thank you for knocking out this debt. We are worth being debtree and you guys will get there in no time. Are you guys using every dollar right now?

We are. I just got the subscription in December. Good. You are on the way. Julia, call us back and we will celebrate with you maybe 20 months from now. Worst case. You got this. Tax season is coming up fast, which means a lot of you are paying more attention to your money and maybe realizing the holiday damage. So, if you're trying to clean up the budget and start the year strong, cutting your phone bill is an easy win. With Boost Mobile, keep the phone you love and pay just 25 bucks a month for unlimited data, talk, and text forever. No contracts, no traps, just predictable savings that help you stay in control.

Switch now at boostmobile.com/ramsey. Restrictions apply. See website for details. Robert is in Columbia, South Carolina up next. Robert, what's going on?

Hey, how are you today? We're doing great. How can Rachel and I help? Yeah, so uh I have a lot going on. Um, first question that I have is where to start with um, everything that I have going on. Um, I've recently in the last month I own a business. I've had a business now for going on three years. This will be my third year. Um, first year I did great. Second year I cut back and um, I had too many eggs in a basket and they went with a different contractor and so to speak I'm losing about 80% of my income. Oh gosh.

So, what was it and what is it now? So, um my income was uh 6,000 um or really 4,000 um and uh it's it's dropping down to about uh 2,000.

Okay. So, you went from four to two. Yeah. Well, really six to two. Um, but I was I was putting money back in savings and and using that for the business.

Got it. But you were kind of taking from the business. You were taking six for your own personal goals.

Uh, yes, sir. Okay. Are you actively trying to replace that since you know that it's going to be cut? I mean, are you

Yeah. What's What's the plan for that? So, um I've been going and meeting with different owners and I actually am looking at taking on uh more contracts than what I had before. I just don't have the contract signed right now.

Oh, good. Okay. So, in the pipeline, you got some leads here. Yes, sir. Good, good, good, good.

But in the meantime, it it sounds like there's other pieces here. Do you have debt?

Yes, I do. Um, uh, to be completely honest, um, I I'm behind on my taxes. Um, in my personal life, I'm looking at doing a bankruptcy. I have enough money saved up right now to float me by for two months if something does not come through. And then after that, I will basically lose everything that I have built. I have four children and I have a fiance.

Wow. Okay. Um, how much debt do you have? Um, so after the bankruptcy it will basically uh

Wait, are you f Wait, have you filed? Give me Where are we at? When when you say after the bankruptcy, is is that in process?

I have uh Yeah, it is in process. So, I have one more final payment before I'll have my court date.

Okay. And can I ask why you filed? So, um I had a few judgments put on on me um from a past marriage that I had.

Okay. Um I took all the debt from that and they reached out to me uh and uh put some judgments on me for some vehicles that we had.

Okay. So, you have you're coming out of that. Um, and do you have you don't you have no money personally saved for these upcoming months

other than 2 months worth? That's correct. Two months. Okay. How much do you owe the IRS?

Um, I would say about 26,000. And that is that back taxes or is that hey, I I should have been making these estimated payments. It'll be due in April and I don't have it.

Yeah. So that's back taxes and then come April will be for another tax year and you don't have that'll be another 26 or so that you'll owe.

Yes. Yes. Okay. So we basically owe you know 50 grand to the IRS. What other debts do you currently have?

I have a truck that I'm uh been working diligently to get paid off. I'm about $900 away from having that paid off.

Oh, good. I also have a family vehicle that I've been working diligently. I'm about $600 from having that paid off.

So, $1,500 and you free up both car payments. Yes, sir. I would dip into that savings you have and pay those off today.

Okay. That lowers your expenses measurably. Yeah. How much are each how much is each car payment?

Um, so combined they're about 900 bucks. Okay. Yeah. that and then Robert I'm like I don't know I'm just thinking out loud here but if you know you're going to be going down to $2,000 and you know there's contracts in the pipeline but they're not signed and there are no guarantee go get another job can you go work?

Yeah. So I'm actually I'm looking at going into drill and making about 10k a month. Um, and the only thing that's holding me up from that is one of the this is another issue I have. Me and my fiance um disagree on finances quite a bit. Um, and so this last past Sunday, I started up a FPU um 9week course. Um, so I'm I'm currently trying to have that conversation with her on cutting back and um canceling out debt to improve our financial life.

So when you say you're not aligned, where is she at on all this this financial situation? Does she even know what's going on?

Yes. So So she does know what's going on and um she trusts me to provide. I've always provided. Um, however, you know, we don't see eye to eye on things such as cutting out Spotify, cutting out all the things that are not necessities to be able to cancel out debt and basically restart. Um, and we we don't see eye to eye on that.

Does she work outside the home? No. Um, she currently uh she's a stay-at-home mother with our four children.

Okay. So, does she understand the reality that, hey, we have $2,000 to cover all of our bills and we can't afford that.

So, therefore, we don't have an option but to cut. This isn't like a, hey, let's just really hunker down and get rid of the debt. You guys are in storm mode right now.

Yeah. How old are the kids? Um, so I have a 9-year-old, um, a six-year-old, a fouryear-old, and then a three-year-old.

Okay. Yeah. I mean, I I don't know. In my head, this is like a little bit on fire, right? I mean, you're coming out of a bankruptcy.

Yeah. You guys have $2,000 with tax that, you know, you have the IRS that's going to be freaking

You got to focus on that before anything else. Yeah. Um, and so for me, it's all it's all hands on deck. So, I need to be looking at what she can do to bring home money from being a stay-at-home mom. Um, I if I'm you, I'm looking at three different jobs or the 10 or the drill, you know.

Yeah. How how sure is the drilling gig and what do you need to do to actually get the job?

It's for sure. I just have to go and do the paperwork in a different state and go for the training classes.

How long does that take? Um, well, they paid me during training. Um, I could probably have that secured within three weeks.

Go $10,000 a month. Is is she on board with this? I don't care. She has to because you're ditching the family for two weeks. Is this going to be a problem? And your business as well.

They don't have money. Yeah. No, I'm just making sure this is a reality. He can just go do this right now.

I know. So, the current situation with it is is I'll have to be gone for 3 weeks, come back home for two weeks. So, there's that. And then

um like ongoing. There's also Yeah, it's ongoing. Every month it would be that way. Um, and then there's also the current talk of should I give up on a business that in our first year we made almost 200,000 um and and did fantastic. Um, however, we did not financially um save back from this. You know, it was kind of money that never seen. Listen, if I'm you guys, I'm like, we have to have we have to have some major changes in our lives because we have $50,000 that we're going to owe to the IRS with both, you know, both years. Um, you know, we we're I don't know. All to me, I'm like, do what you have to do for six months and let's reevaluate in August.

Like, go do the drilling thing and put every month. I mean, that that'll clear out the debt.

Um, you know, maybe you do it for a year and that's it. I mean, talk to people that are deployed, right? I mean, they're gone from their families for 6 months at a time. Um, so it it is possible. I'm not saying it's the only option, but it's a very very great option that's right in front of you

for a short season for just a season. It doesn't be forever. And then when you guys actually have your head above water and you actually have somewhat of stability, then we can look to see, okay, what do we want to do with this business? And should we, you know, get it back going? But if I'm y'all and I'm coming out of bankruptcy and my income's being shot, I'm I'm just looking anywhere to make money at this point to feed four kids. And yes, your fiance, I'm sorry, she needs to grow up and understand how math works.

That you don't get to live in my lifestyle. You don't make $200,000 anymore. That's what she has to realize. You don't. So, what are you going to do? If you're waking up tired every morning, you don't need more caffeine. You need better rest. And that's why Casper mattresses are engineered to help you sleep deeper and wake up refreshed. And this isn't just one George's opinion. Thousands of five-star reviews prove it. Plus, Casper mattresses ship free and come with a 100 night trial, so you've got nothing to lose. Sleep is a must, and you deserve the best. So, go to casper.com/ramsey and use promo code ramsey for 25% off mattresses and 10% off everything else.

That gives you up to,200 bucks off the Snowmax mattress, which is the exact one I sleep on every night. That's casper.com/ramsey. Code Ramsey. Exclusions apply. If you have a simple tax situation, like you haven't had any major life changes or big investments, check out Ramsey Smart Tax. At Ramsey Smart Tax is affordable. It keeps filing simple. Plus, it has built-in support in case you need a little help. Filing early means getting the best deals and you get that tax stress off your shoulders. So, as soon as you get all your tax documents, head to ramseyolutions.com/smartax and start filing. Matt is in Colorado Springs. What's going on, Matt?

Hey. So, uh first first thing I just want to say is y'all are such a blessing to so many people.

Thank you. I I I have listened for quite some time and I'm just thankful for what y'all do. Uh and and now I find myself in a situation where I could use some advice.

Thank you, Matt. Yeah. Uh so I guess the brass tax of the situation is I've got a pretty considerable amount of IRS debt. I own two businesses and I've just kind of got myself in a little bit of a hole. Um, and so the question is if there's any credibility to uh tax relief programs and and things of that nature.

Well, they're often marketed to people who are desperate and vulnerable, which is never a good sign,

you know, when they're that usually means they're predatory and they're promising way overpromising and underdeling. So, what they tell you to do is basically, hey, don't pay a dime. you pay us instead and what's going to happen is tanks your credit which with the IRS not the people you want to not pay and so they then try to settle for you and save you money which by the way you can do all of this yourself and with the IRS they can already set up a payment plan

so there's really no use for a tax relief program in this situation okay they're just paid middlemen between you and the IRS

right and and the other uh your office that I contacted was more of like a tax attorney that talks more about the the future plan for the taxes for the business to to avoid this issue in the future, which legit may be beneficial. Yeah.

Um but but then his office was saying, you know, we don't recommend these tax relief programs because they're they're overpromising, underdelivering. So,

perfect. I'm in line with an attorney. That's a good day for me. Okay. So, uh, I guess I guess the question is in your if you were in this situation, what what steps you might take. Um,

yeah. How much do you make a year, Matt? Um, it's kind of relative. Uh, probably somewhere around 100 or so.

Okay. And do you have anything in savings? Yeah. Uh, I typically try not to dip below 15 or 20 in savings. Uh,

so you have 20? Yeah, about about right there right now. Yeah. The but the the issue with my particular business is it's extremely seasonal with construction. So, you know, I kind of hunker down in the winter time and, you know, rice and beans and do just about nothing. So, um but then in the the busier season, it's easier to tackle some of these things. So,

what kind of construction? uh outdoor, you know, fence and deck and uh a lot of carpentry kind of stuff. So

cool. Well, the good news is you can still work during that time and make money and you can definitely pay this money back in a reasonable amount of time. Do you have any other debts that are are holding you back from creating the margin to knock this out quick?

Yeah, there's still about 20,000 remaining on a heliloc. Okay. Uh, and I already know that's a teeth grinding word for you probably, but um that you it's it's one of those situations where sure I could pay that off, but then you know, you have to worry about the the bills right now. So, if I were to pay it off, I would wait until the money's coming in more fluently and Okay. in the busier.

So, you got 40 to the IRS, 20 on the HELOC. Anything else? Uh, that's about it. I've paid off, I don't know, 20,000 something in credit cards. Great. No car loan.

Yeah. Well, I would, this changes the debt snowball a little bit because IRS debt gets moved to the front. So, even before the heliloc, I would be tackling this 40. And I would just make it an aggressive goal. And again, I don't know if it's a payment plan that you contact the IRS with, but I mean, I would try to have this all paid off in less than a year.

Yeah. Um, so, so I guess other pieces of the equation are I've got to file the last two years of taxes. is I'm behind on that. Uh so there'll be probably another 10 to 15 after all the expenses and whatnot.

So let's call it 60. Is that fair? Sure. So if we call it 60, you know, you owe 60, set up a payment plan with them and maybe it's, hey, you're going to pay a,000 a month or 2,000 a month and then once you get down to that, you know, you got 15 grand left, I would use your savings to just knock it out

and then you can replenish the savings. Really, what you do is then attack the HELOC, then replenish the savings. So I guess the questions then become, you know, I pay a considerable amount of additional principal on my home. Does it make more sense to factor that into this equation? I'll make the minimum mortgage payment. Why are you paying extra on the principal of your home right now?

Yeah, generally just, you know, you look at the amateurization schedule and all of that and it and it it, you know, over a course of time it just makes sense. Yeah.

And it does in the right order, but you want to get this stuff cleaned up. So, if you if you went down to just your mortgage payment, how much does that free up a month?

Uh, probably about another thousand or so. Oh, great. So, how much could you reasonably put towards this IRS debt every month if you got aggressive?

Well, this is where it gets tricky because, you know, I listen to your show constantly and people are like, well, I make this exact amount every month or every two weeks. And for me, I have months where it's 15 20,000 and I have months where it's

2,000. But you've been doing this a while. So you probably could look at a calendar and semi- guessess like this probably will be good months here, low months here. So yeah, so you may be putting, you know, maybe, you know, 13,400 towards this on a low month, but a good month you could be throwing 3,000 at it, right? Um, sure. So I would kind of just

and I'm already set up on like their minimum amounts, 400 something a month. Uh, so I've been actively attacking it for a couple of years. Uh but it seems like every dollar that goes into it's just paying off the acrruing interest, you know, you need to get way more aggressive on this, which means all focus is on this IRS debt. No extra on the mortgage. Your budget is bare bones. You are just covering four walls, food, utility shelter transportation insurance, anything else is going towards this. And try to make make it to where there's no gap in income. Now, I understand you're going to have some really good months and some rough months, but I don't want you just sitting around going, "Well, there's no work to be done right now."

Sure. So, I guess in general, you you wouldn't, you know, I mean, I could run the HELOC up more and pay that and it might be less percentage that I'm paying.

We are not adding a scent to the HELOC. We're not going to keep going with this line of credit. We are done with that. So, just keep it where it is. keep up with the minimum payment and then all of your guns are pointed toward this IRS debt for the time being.

Now, do you think it would make sense to sell off additional assets to try to do this or

what do you have? Well, I've got a considerable number of vehicles and machinery that are mostly associated with the business. Uh I mean, they're for all intents and purposes mine, but the business owns them.

Yeah. Would it would it decimate the business income if you sold these off? Would you need it though to to run your business? Well, I it's probably like a half and half kind of number. I mean, you know, skid steers and tractors and things that that are relatively essential. Um,

but do you have one piece of machinery you're thinking of that you're like, "Okay, I could sell that and be okay."

Doesn't get a lot of use. Doesn't create a lot of revenue right now. Yeah. Yeah.

What could you get for that? Uh, I mean, probably somewhere between 15 and 20. Wow.

Thousand. Yeah, that period with your savings gets you out of the IRS debt like tomorrow.

Yes. I kind of figured y'all would be on that that boat. And you can always buy it used later if you need it, right? With cash.

Sure. Yeah. And that and again, that's all saying that that's not affecting your business. I don't want you to have to turn

I don't want you to lose half your income because you sold this thing. Right. Right. Right. So, you want to be smart about it. But if it's something that you're really not using or really need and you get 20 grand off of it. Yeah.

I'm doing that for sure. I mean, yeah. I'm a huge advocate of not having car loans and and I fix them all myself and whatnot. So that

that's great. Yeah. Anything you have, Matt, I would I would because I think if you had no IRS debt and no HELOC, how would you feel?

Well, like I could scream like amazing. I would scream. I'm debtree. Exactly. Yeah. So I'm like, yeah. Whatever you could do to get to that level of peace and control is what we're after. And then later when the business is doing great and you have all this freed up money because you don't have debt, you're able to save. And if you need to go buy some equipment,

cash flow some equipment. I'm changing the Dave quote. Now it's sell so much stuff the skid steer thinks it's next cuz it is my friend. Good luck selling it. Hope you get a great buyer who's happy to pay you what it's worth.

Welcome back to the Ramsey Show in the Fair Winds Credit Union studio. I'm George Camel joined by Rachel Cruz. The number to call is8825-5225 if you want to join the conversation. John is in Jacksonville, Florida up next. John, welcome to the show.

Oh, how are y'all doing? Right. How can we help? Uh, yes. Um, first of all, I'd like to say thank y'all for everything y'all do. Um, my wife and I are 36 years old, and by the time we're 40, we are potentially going to be net worth millionaires due to what y'all teach on this show.

Oh my god. God, that's all the work you've guys done. That's just sit here doing jack squat. You did the hard work, man. Proud of you.

Well, thank y'all so much. Um it's definitely changed a family's trajectory. However, unfortunately, um my mother and father are not in the same state. My father passed away on 12 January and I am my mother's financial power of attorney

and they are in or she is in some pretty bad financial jeopardy. So, I look for y'all's advice.

Oh, no. I'm sorry about your dad. Would you say it was just this January? Like this month?

This month, correct? Oh, I'm so sorry. Um, okay. So, what Yeah. What did he what did he leave your mom with?

Um, so we'll go ahead and set aside the $70,000 of mortgage. Um, but it's a total of $113,526.54 of debt. My mom is 61 years old. She's still currently working, but only nets 37,000 a year.

Okay. Um, what kind of debt is 113? Yeah. So, the 113 is $50,000 worth of IRS debt.

Um, $23,000 is owed to collections. Um, let's see. We have um got to get my stuff together here.

Yeah, it's about 40,000 more somewhere. There's credit card debt, right? Right. Yeah. So, let's see. $22,3529 in credit card debt.

And that's different than the debt in collections correct? That is different than the debt that's in collection.

The debt and collections, what is that? Is that medical debt? Is that credit cards?

Uh, well, it was a personal loan um that he he he dealt with some dementia later in his life.

Oh. That that that personal loan he ended up forgetting to pay, forgetting to pay, forgetting to pay. It got pass off collections.

Okay. Got it. Um, so and how much is Yeah. Any more I'm sorry. Yeah. Any more consumer debt?

Uh, yes. They have um $14,755.73 in um auto and personal loans. And then there's another $3,465 in a personal loan as well.

Okay. the the um 14,000 is that one car or two cars? So the 14,000 the auto the auto loan is $2,634.74. The other part of that 14,000 is two personal loans.

Gosh. Okay. What was he using all those personal loans for? What was he doing? Yeah, that's um we don't even know why they were taken out. We really don't.

Oh my god. Now, were these all in his name or were they jointly held? One? No. So there all three of these are in his name. Um but there's one person loan in my mom's name which is um $3,465.

Well, I just want to make sure that we don't go paying debts that she doesn't legally owe if they're only in his name and not jointly held. Now I'm assuming they did their taxes married filing jointly.

Yeah, that's a good question. I actually think they did them separate. Um but I can't speak to that confidently.

Yeah, because the IRS debt would be Yeah, if it would if they filed jointly, then she's going to be responsible. But if not, she may not be. The estate would pay it, but not her personally. And if the you know,

so if the estate can't cover it, she may not owe it personally. That's where I want to get clear on this. And you may need to work with an estate attorney to kind of go through all this mess and figure out what was owed, whose name is on what, what does she legally have to pay. Then we can get a real game plan of what we're going to do.

I got you. I'm taking notes now. Cuz if you know 75% of the debt is wiped away, you know, you send a death certificate and they go, "All right, we can't collect. It wasn't in her name." And that might really save her in this in that regard cuz she can't pay 113 grand. IRS debt is is definitely going to fall on her I think regardless of whether or not they um file jointly because um it for whatever reason and she didn't know that she wasn't doing this since 2014 at some point in time there's something that changed to where she her taxes were not getting withheld.

Okay. Um so and his for whatever reason were not getting withheld. We don't know if he found a way to change that without her knowing.

Um, yeah. So, it since 2014. Yeah. Now, when she found out that that was an issue, she got it changed, but that wasn't until two years ago

um that she found out that and he if her taxes were not being withheld, then yes, then some of this IRS that might be in her name. But I would that's where George is saying like to get clear on whose name Yes. is on this debt because that that will make a significant difference and things like collections. Um John, you guys can I mean and on her behalf, you can help with this. You can settle that kind of stuff so quickly. You need the money for it, but they may settle pennies on the dollar, you know, with this $23,000 and it's not been paid. It's not been paid.

They're not expecting to get their money. So, you may be be able to settle for gosh 5,000. Yeah. Um, now you would need the cash to do that and go through that process, but um, yeah, there's some hope in that, but with the credit cards and all the personal loans, contact the banks and know and and figure out whose name is on the debt. That's going to be really important.

Yeah, I I've already put all the leg work into whose name's on the debt. The the tax question I definitely need to get answered.

Okay. So, have you pulled his credit report? I have. Okay. So that's going to give you a pretty clear picture of what is owed and then you can check the tax records as well.

Did he have retirement savings or anything? He had no savings at all. Oh, I I will give you this. So we we did get a sigh relief

and I I know how Dave preaches against whole life insurance. I guess in November

he took out two policies for um whole life insurance that nobody knew about. But whenever I started going through statements, I found the payments and one of them is 10K, the other one's 20K. Um, and then we also just found out that he had a from his retirement, he had a group term life that is still that my mom's a beneficiary of for 29.

Wow. So that there's like 60k sitting here to clean this up, right? We're working on trying to get my mom through the leg work of getting that stuff. Um but you know that's going to take some time. Right now they got a lot of payments coming out monthly.

Yeah. And you know she gets paid on a weekly basis. Yeah. Can she make more? I don't know what she does but at at 61 she she might still have you know another 15 years of work to go. And so if she can go make 50 or 60 this changes her life dramatically. um she currently works for the city. Um and she's trying to work on that retirement. Now, she might be able to pick up a side gig because there is a retirement involved in her currently her current job. Um but she may be able to look into picking up a side gig. I'm not so certain that she'd be willing to leave.

Yeah, it would be better for her to work hard and work uncomfortable hours honestly to get some of this cleaned up while she's young. So that way in four, five, 6 years, she can possibly scale back while still saving for retirement and hopefully maybe still have enough there. But yeah, John, I'm so sorry.

When you're tired of feeling stuck with money, there's just one solution. To get different results, you have to do something different. No one accidentally wins with money. You have to have a game plan, and that begins with our getstarted assessment. Go to ramseyolutions.com/start. Answer some questions and we'll show you what steps to take next. Don't stay stuck. Take control of your money starting today. Go with ramiesolutions.com/start.

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Today's question comes from Lucy in Oregon. She said, "I'm concerned about being a target of deed fraud if we pay off our mortgage. If we keep our current mortgage, the bank would have to notify us if someone tried to take out a second mortgage to steal our equity. We're both in our 70s. I am retired and my husband plans to retire soon. The balance on the mortgage is $48,000 and we have the funds to take out of our 401k to pay it off. What should we do?

Wow. Okay. Well, I mean, deed fraud, it does exist, but I'm not going to be so paranoid that I keep my mortgage around for us to do it,

right? Because you can always, you know, if, god forbid, that happens. It's not super common. Uh, more when you're like, you know, buying homes, making sure the deed's, you know, good. And I don't know, there's something.

We bought a home recently. And we got owner title insurance which protects you against that. And so if you're worried about it, I would look into one of those policies.

Yeah. To do that. And you can sign up with your county and get deed alerts as well.

Um so that's also one way to protect and you can also, you know, if it did happen, god forbid, you're not going to be on the line for it because it's fraud. And so you can go through the bank and, you know, maybe some, I don't know, lawsuit stuff, but at the end of the day, you're not going to have to owe it because it's fraud at that point.

Yeah. So, I wouldn't I wouldn't be so worried that I avoid paying my house off. That's wild. Um, you're in your 70s. There is a much more risk with this mortgage hanging around than there is that you guys experienced deed fraud. Y

So, I wouldn't worry about that. I would just pay it off and do your due diligence to stay protected. You know, freeze your credit, check the records with your county regularly, get the owner title insurance if you can, all of that good stuff. But, it's a good question and it's a valid concern. So, thank you for that. Allan is in Colorado up next. What's going on, Alan?

Thank you for taking my call. I um have a question about a 529 account uh that my wife and I have for our son. When he is finished with college, which is just a couple years down the road, there'll be approximately 120,000 left in the 529 account.

Oh, wow. Way to go. I haven't Yeah. Yeah. It's pretty strong. Um, I have an opinion on what to do with it, but I was just curious to get yall's take.

How old is the 529? When did you open it? Oh, boy. Um, our son is 20, so let's say 20 years ago.

Oh, great. I was going to say there's the with the new secure 2.0 act, you can roll over up to 35 grand if it's been open for 15 years. You know, you can do that periodically. You can't do all 35 at once, but up to the Roth IRA limit, you can start funding that. So, that's one option.

Yeah. Do you have Do you have other kids Alan? Uh, no, we don't. Just We don't. Okay. It's just this. Yeah. Well, if you do that, you know, that's 35 out. So, you got about what 85 or so, 95

left. Um, you said you had a plan already. I'm curious as to what you wanted to do.

So, we My thought is is keep it. Keep the 529. It's we're we're the guardian of it. Put it in his name. He's an adult now. But don't let him touch it. Just have it be there. So it's generational. You know, when his kids are ready to go to college, that's going to be a pretty large sum. When his kids' kids get ready to go to college, it'll be astronomical.

Um it's something that you can really just just leave. That's true. A lot of people don't think about that. It becomes like an endowment basically for your own family, generational wealth that no one ever goes into debt for education. And that's personally what I'm doing. A lot of people go, "Well, I don't want to overfund it because what if they don't go to college?" And I go, if I overfund it, they're going to love old old great great grandpa George for setting up this 529 many moons ago.

And can I do some math for you? Your kid is 20, right? He's 20. So let's say he has a kid at what? 25. Is that fair?

Um, it's optimistic, but sure. We'll see. Should we go 30? Is that more realistic?

That's Yeah, go plus 18 years. That kid then grows up. Yes. So your son will be 48 when your grandson granddaughter goes to college. Theoretically, how much would be in the account?

From 20 to 48, if you just left, let's say, 90 grand in there, right? Didn't do anything.

You never contribute another dime, you'd have $1.4 million when he's 48. I hope that's enough to cover college at that point. And and something too I was thinking is even if his kids don't want to go or do go and there's extra at 65, correct me if I'm wrong, he can start using that for his own retirement with with no penalties.

Yeah, there's a lot of stipulations with the 529 that and even if he used it in before then, you know, he'd pay the 10% penalty, but other than that, it's not like wasted money thrown down the toilet. So, I think you're being very wise with this. And I love the idea of creating generational wealth. And a lot of people don't realize the definition of beneficiary family is pretty loose. And so, siblings, nieces, nephews, future kids, yourself, your spouse, a grandchild. There's so many options here that you could bless someone with in your family.

Agreed. That's right. So, let's say you got a brother and they're like, "Hey, they didn't prepare, but the kid doesn't deserve to go into crippling debt just because of that. I'd love to transfer this to them." You can change at that point. Yeah.

Yeah. There's a lot of ways you can go with it. Yes, for sure. Well done, Alan. That's usually not It's usually the opposite problem that we uh talk to people about. So,

it's like a parent plus loan. This is the exact opposite. So, I'm curious, how much money did it cost for your kid to go through school?

So, first off, something else, too. We we owe it to Dave Ramsey from like 2005. You all have been a blessing to both my wife and I. Um so much so we we actually taught many many FPU classes.

Thank you. So yeah, you're welcome. You're welcome. So th this 529 account, we actually showed him how compounding interest works. We stopped investing uh in the 529 when he was a freshman in college at 150. That's about where it was at. He's gone through three years of school and it's at 159.

Wow. It's crazy. So, you're telling me that it was growing faster than you were withdrawing?

That's what I'm telling you. That's incredible. That's amazing. And it sounds like he went to a reasonably priced school and maybe even got some other scholarships.

A few scholarships. He wasn't, you know, he wasn't Albert Einstein, but he did okay. And uh yeah, it was it was a state school, so 20 22 23,000.

Totally. That's incredible. Yeah, that's the dream. Allan, well done. Well done. We just just applaud you. I mean, honestly, that is

if you're in the family tree of Allen, you should be thankful right now. Pretty awesome. Thank you for the call. That's that's a cool kind of case study in what actually happens when you do it right.

Yes. And so I always recommend get started early on that 529. Even if it's a 100 bucks, 200 bucks, 300, 400, 500. Now you're talking six figures in there by the time they're 18.

For sure. And the college conversation I feel like has been around a little bit changing, right? That college is changing. We don't know what it's going to look like.

Are we all going to be YouTubers and AI is going to do all the work for us? Yeah, that's right. Like we don't know. But just remember, it's not stuck in there. To your point, it's not like you're, you know, it's an insane amount. If you were to pull it out, just say like, god forbid, you're like, listen, we don't we don't need this at all, but we need the cash, so we're going to take the penalty. Okay. Okay. So then you do that, right? And you pay some of the penalty, but then you have your cash. It's not like you lose it completely. So

absolutely. And people ask, well, what if I want to invest for my kid for something else other than school? I say, great. Do the 529. Don't trade those dollars for investing over here. If you want to invest on top of that, you can just open a brokerage account in your name, a non-retirement account, and put money in there. I'm not a fan of putting the accounts in your kids' names because they legally then have access with the, you know, the UGMA, UTMA. At 18, this kid might have 120 grand that's legally theirs.

That's frightening. I don't know if you know or any 18-year-olds, most of them cannot be trusted with a $120,000 pile of money. Most adults can't be trusted with that.

I was going to say, yeah. And so, I like the idea of me being able to control how much to give to that child for a, you know, a wedding or a down payment or a car, whatever it is to help them get a leg up.

Yeah. delayed gratification for a uh 45year-old, 50-year-old, it's probably a little bit more embedded than a 18-year-old. So,

they need to their prefrontal cortex is not yet fully fully there. So, that's personally what I'm doing for my kids. I got the 529s for each of them and I've got the brokerage accounts. So, they'll be very thankful one day when homes are $4 million.

That's right. And your grandkids. And my grand great great uncle George. That's so weird to think about. But I think Grandpa George, I'm going to settle into that.

I love it. I'm going to be cranky. You're going to be like George Banks on uh like Steve Martin on Follow the Bride.

Oh, that's a good one. I thought you were going George Bailey. A lot of good Georgees up there in movies.

Oh, it's a Wonderful Life. That's a good one too. How many of you are ready for a fresh start with money this year? Maybe you want to pay off debt or start saving for retirement. And those are great goals, but you're also probably thinking, "Well, sure, Rachel, but with what money? My budget is so tight as it is." Listen, I hear you. But you can do more with your money this year. And our Every Dollar Budget app helps you find margin to make it happen. This is such a game changer. Every Dollar digs into your money situation just like we do on the show. Then it finds extra money you could put towards your goals every month. And the average person is finding $3,15 in just 15 minutes. Think about what that could mean for your family.

Think about how much more peace you would have. Guys, you can make this an amazing year with money. Go download Every Dollar and start for free today. Buying or selling your home is a big deal. And with all the clickbait headlines and conflicting data out there, it's hard to know what's really happening in the housing market. So, we're here to make the latest trends easy to understand. Median home prices dipped to about 400 grand last month, which is typical for this time of year. And mortgage rates also dip to 5.48% in December, down from 6.27% to 7% last January, giving buyers some breathing room. I just saw a 30-year mortgages dip down below 6% for the first time in a long time. So, rates are unpredictable.

We don't know what's going to happen, and the best time to buy is when you're financially ready, not when you hope home prices or rates drop. And if you want to learn more about the market trends and get free tools to help you buy or sell with confidence, go to ramseiesolutions.com/market or click the link in the show notes if you're listening on podcast or YouTube. All right, we've got Lonnie up next in Dayton, Ohio. Lonnie, you with us?

Yes. How you doing? Great. I see on my screen here that you were a baby steps millionaire.

Is that true? That's correct. That is fantastic. Congratulations. Every now and then, we like to highlight a real person who followed the plan, follows these principles, and has won with money doing it with a bunch of zeros on the end. And you are that person today. So, congratulations.

Thank you. So tell us your age. I am 54. And what is your net worth? Uh 1.86 million.

Fantastic. And break the mix down for us. Uh, I have about a I have a million in mutual funds that are scattered through my deferred compensation, a Roth IRA, um, a small annuity, and a few hundred,000 in a uh, investment through my uh, bank.

Cool. What else? And uh I have 400,000 in my pension which is a PERS and that's the account value. If I were to quit they would give me that amount or if I stick it through a couple more years I I would get the uh pension.

Awesome. And and I have uh 500,000 in real estate. Fantastic. Is that your primary home?

I have uh I have two homes. I have a my primary home which is just a modest uh couple hundred,000 home and then I have a condo in Florida which is another couple hundred thousand too.

Awesome. Awesome. And they're paid off. Yes. Fantastic. Well done. Lonnie, what do you do for a living?

Uh I'm a manager for a municipality drinking water facility. Okay, cool. So kind of public works utilities.

Yes. I've been there 30 years. Fantastic. Okay. And what was your worst year of income in this field and best year of income?

Um, I started out um $11.25 an hour in 1996 and I thought it was great pay. That's still pretty decent, honestly.

Yeah. And these last few years, we've been so short-handed. Uh, I've been doing a lot of overtime. So, it's just these past couple years have just been tremendous.

Six figures. Yeah. Easy. 150,000 a year. Close. Awesome. Great job. Okay. Did you inherit any of this money?

No, I I did not. But I I would like to say that my f my dad, he did give me close to 10,000 when I was a a young kid, a minor. And I uh since I I would get these statements from that money and I would see that grow and that just fascinated me that this money would grow like that. And uh being a minor of course I couldn't touch it but I could you know I still felt like it was mine.

Yeah. So what once I became an adult I just it just made me want to save more. That's awesome. So did your dad teach you these financial principles? Yeah, he he did. He was uh he's he's uh very, if I could say, tight with his money and uh and you know, and I can understand why. So that he taught me that.

Yeah, that's awesome. Did you uh get a four-year degree? I have an associates in mathematics and uh yeah, I have an associates degree.

Awesome. Fantastic. Yeah, man. You've really been crushing it. Are you single? Uh yeah, single, no kids. That does that did help. So it

just helps speed things up. Less expenses, less people in the way as you are building wealth.

That's good. What kind of car do you drive Lonnie? Um I have a couple vehicles. Um uh you know, the just the average uh truck and a car. I've I've never owned a new car.

What's the year on those? My truck is a 2012. Pretty low miles. Is it a Toyota?

It is a It is a GMC. GMC. Okay. We get a lot of Hondas and Toyotas on these calls, so I was curious.

Well, those are those are good cars. Yeah. What else you got? Uh, I have a Ford Crown Victoria. It's an old cop car that that I was able to buy and it's a heavy duty car. So,

fantastic, man. So, what do you do with with all the extra margin now at 54? I mean, you could retire if you wanted to, but it sounds like you love what you do.

Uh, you know, that's that's a topic I wanted to talk about someday. You know, later on as I have this pension and I and I if I can if I can wait two more years, I'm I'll have my 32 years in. But, you know, just thinking about that, I just God, I don't know if I can do it. You know, could I could I retire in just a year? Is it worth waiting for that pension? What happens in two years with the pension? You get a big monthly payment.

Yeah, in two years I I'll have once you get your 32 years, you qualify for your monthly pension,

which is how much? But you uh $8,200 a month. Nice. That's a sweet payday. Yeah. At 54. I'm waiting.

You're still a young buck at 56, my friend. And then you don't even have to touch your investments ever again. It'll just become like generational wealth.

Yeah. Right. or you don't really have a lot of people to leave some. But also, Lonnie,

go have some fun. Go do something crazy. What is the thing that you still want to do that you're like, uh, I want to do this thing. This is the big splurge for me.

Yeah. What's like the big thing? I I just I I want to travel. I I love traveling.

Yes. What's the next trip that you're excited about that you want to book? Uh, looking for I'd love to go to Norway. Um, just I I I been to Europe a few times. I've been to Australia. It's just I just

I love the idea of new places. That's fantastic. Love it. Man, you're an inspiration, Lonnie.

A lot of people want to be you when they grow up. And you've done a good job. You can you can tell these principles start early. You can make up for lost time if you're starting late at 40 or 50. But man, you've been working hard for 32 years, living on less than you make, putting money into the investment accounts day in day out.

Yeah. And his, you know, his best year, he was saying, was recently at $150,000, which is a lot, right? But also, it's not like he's making

$500,000. You don't have to make half a million dollars to do this, right? But it is that consistency over time that we see day in and day out with these um net worth, you know, baby baby subs millionaires. And it's it's awesome.

It's encouraging. And that really is is these are the principles, guys. Here's the recipe. If you're like, "Well, how am I going to become a millionaire or a multi-millionaire, which, you know, he's on his way to?" Here's the principle. Live on less than you make. Invest the difference consistently and then just wait and compound growth will eventually take over. And what you realize is you put $100,000 in over time, but now it's grown to a million dollar. So $900,000 might just be the compound growth.

Yep. Because your $10 made a dollar, so now you have $11. Well, that made another, you know, one $110. And so, it keeps spiraling and adding up over time. And it's hard because you don't see it at first. At first, you're like, "This isn't even doing anything. I'd rather enjoy this money." But if you just wait and hang on and you can type some numbers into our investment calculator on our website, it will blow your mind. And if you got kids, I mean, he said, "I got this at 10 years old."

Yes. And he didn't even have the internet back then to pop in an investment calculator

to see what that would He had to do like math on paper. But that's a what a testament to his dad though. His dad brought him in and showed him how and it worked. So to to Lonnie's credit like he it stuck for him.

But there's something about, you know, exposing your kids to this stuff to be like, "Hey, this is what can happen, right? You're giving them that knowledge and that's a gift." Like what Lonnie's dad did. I'm like, "Yes,

that's huge." I love that we have our Ramsay education foundations and personal finance curriculum in high schools all across the country and we show them the com. That's one of their favorite edition. So, yes, you can buy it for your kids at home.

So, ramsyeducation.com, if you're like, "Hey, I want my kids to get this earlier than I did." Or maybe you still need to learn. That's okay. Just lead and say, "Hey, I want to learn along with you." And that compound growth lesson will blow their mind. They're going to go, "Hey, maybe I shouldn't buy that toy. I'm good to I got enough toys. Mom, can you teach me how to like save this money, invest it?" That's a cool lesson.

Hey, George Camel here. So, you're thinking about buying or selling your home. It's exciting, but there's a lot to think about, and all those decisions can feel overwhelming. Well, here's the good news. You don't have to tackle the process alone. Ramsay's Real Estate Homebase is the place to find all of your free tools and resources for help to get prepared to buy or sell your home with confidence. You'll find calculators, start to finish guides, a podcast, and even an in-depth video course hosted by yours truly. What's not to love? So, if you're ready to take the next steps toward your home goals, go to ramiesolutions.com/realestate.

That's ramiesolutions.com/realestate. Our scripture of the day, Psalm 94:19. When anxiety was great within me, your consolation brought me joy. Jim Collins said, "Greatness is not a function of circumstance. Greatness, it turns out, is largely a matter of conscious choice and discipline. I like it. Paul is up next in Phoenix, Arizona. What's going on, Paul?

Hey, guys. Thanks for taking my call. Um, I'm probably overthinking this. I know you guys I listen to you pretty religiously and um, you say pay off your house as soon as possible. Um, we owe maybe 180 on our house. Um, it's worth in the mid 400s and we have the cash to do that. But my only concern, not a concern, is we refinanced in 2020 when the rates were 3%. Does it make sense at this point still to pay that off or use that money elsewhere? Um, we have we have IRA, 401ks, owner KS, stuff like that. Um, going and I didn't know if I should put be putting more money in that or just pay the house off.

Well, where are you guys at in the baby steps? Do you have any consumer debt, credit cards? Um, I have a work truck payment. Um, I do home remodeling. Uh, general contractor.

How much do you owe on the truck? Like 40. Okay. And how much do you owe on credit cards? None.

Oh. Oh, no credit cards. I'm sorry. What else? Um, minimal scooter loans. I I don't know. It's like Oh, I shouldn't say minimal. 35,000 maybe.

Okay. And how much do you have in savings? Um, I want to say 350 350,000. Why are you Why don't you pay pay off everything?

You could pay off all of your debt and your mortgage, like your consumer debt plus mortgage, and still have money left over. Well, I'm looking at possibly buying a lot or two and building a house. Like I said, I'm a general contractor. And

building a new house? Yes. And still keeping the old one? Well, yeah, it would it would be for um selling uh buying a lot. We can build the house roughly for 200,000 with the lot. Maybe 220 and sell it for 320 330.

Okay. Well, here's also not to live in. You're just It's like a speck home that you just want to sell because you can do this stuff. Okay. Well, here's where that would fall in the baby steps. And this is the plan we teach. It's the one Rachel and I follow. And here it is. You pay off all consumer debt. Then you get a fully funded emergency fund. Then you're investing 15% of your income into retirement, putting a little away for college. Anything else can go towards mortgage principle. And so if you followed that through, which you can do in one fell swoop, which is amazing, you would pay off consumer debt. That's 75 total.

Um, roughly, yes. 40. Okay. And you said you had 350, right? In savings. Yes. So, you pay off the 75 in consumer debt. Let's leave another, I don't know, 40 for your emergency fund. Is that fair?

I I would think so. Yes. Okay. And then we're going to subtract your mortgage. Um, that had that Yeah. 180. So, that leaves you with a cool 55 grand left over to then start. That's kind of your your new fund to start on this house project. So, what's the lot going to cost?

The lots are 30. Okay, roughly. So, you could buy the lot for now after doing all of this. And by the way, think about how much you have freed up. What is your truck payment?

Um, 800. And what's your student loan payment? I want to say 300, 325. And what's your mortgage payment?

Um, I pay more than the minimum. I don't remember the minimum, but I pay like 1,600 a month.

And that's with extra. Yes. So, should we call it 1,200? You think you're putting a few hundred extra?

I think it's in the 12s. Yes. Okay. So, you would free up $2,300 a month, which means you could save 28 grand in one year just by freeing up the payments. That's by doing nothing else. That's without your extra.

Okay. Which means you could probably cash flow this build after I pay everything off.

Yeah. Exactly. And it reduces your risk. Think about that. Now you're not freaking out cuz you don't have a mortgage payment. You don't have any consumer debt. And you can cash flow this whole project. And then you're less worried and less desperate as you go through with this.

Okay. That puts you in baby step seven. So then the world is your oyster. You can invest more than 15%. You can purchase real estate in cash. And that's exactly what you're going to be doing, right? You're not taking out any debt to do this lot or build.

Um I wasn't planning on it with the cash I have currently. Plus, one of my 401ks is actually a money market, which I have like 130,000 in it. So,

you're telling me you didn't invest the money? Um, was it ever invested? Well, some of it, like I said, some are in Roth IRA, Roth and traditional IAS and and a couple owner one owner K.

So, that's all that's all through this market. Yeah, but if your 401k, if the money's in a money market account, that's not invested. So,

well, it's a separate amount that that's Okay. So, you you do have a 401k that has investments,

correct? Okay. And then you just have a separate money market. I wouldn't touch any of those. I think you can cash flow this. You It sounds like you have a great income, too. What do you make a year?

Um, most years in the mid low to mid 200s. Fantastic. It's great. And so worst case, this this lot and build might be delayed a tiny bit, but man, the piece it's going to give you and the the d-risking you're about to do by paying everything off, it's going to feel so good. And I have no doubt that you're going to be able to stack up that savings account right back to where it was.

And I know it's such a weird way of looking at real estate because people, you know, they don't have the cash, Paul, like you do, right, to be able to go in and and do something. But the beautiful thing when you do it all with cash and you know this being in real estate I'm like you know even if the world you know goes up and a pandemic again or whatever and everyone kind of freaks out and I don't know there there's just something about saying okay I don't owe a bank this money on this real estate and if we have to sit on it for a little bit we're in no rush we don't owe anyone anything on it so we can actually we're not urgent to get rid of it because there's a payment and we're all stressed about it and you would actually possibly lose money in that way. we're gonna just have the ability to have time on our side and all the control and all the power and then when it does sell and I'm praying it

does and you make a hundred grand that's an extra hundred grand just to you guys right there's nothing to to pay back so there's something so nice about and I know you said originally you were going to do that anyways um but I would encourage you to because this plan the baby steps it does cause a little bit more patience because you are going to have to save up to do this where you think like okay but I could just do it today because I have the money But doing it in this order, it's a little bit slower, but it has way more control and way more peace. And that's kind of that's what we're solving for.

Okay. All right. So, the big question everyone wants to know, are you about to go pay off your consumer debts today?

We are going to plan it. Yes. Yeah. That's a win, man. I'm so proud of you, Paul. Dude, you're a stud. That's incredible.

Well done. Cuz if you have the savings muscle to save up 350 grand, that tells me you're going to build massive wealth. And so this debt is just a little, you know, it's an ankle biter at this point for him.

That's right. That's right. Just get rid of it. That truck drives different when it doesn't have a payment attached. And you can never be underwater on a paid for truck. That's the beautiful thing.

Yes. Not having that payment. That is a controversial Ramsay principle is paying cash for investment real estate. It usually shuts. It's like we're dream killers.

I know. Like Rachel, can I get a property? I want to be an investor and I want to have an Airbnb. And we're like, do you have money? You

do that? No, I can do a nothing down program I found on Tik Tok. I bought a course from Jared and he's so

never trusted Jiren with a course. It's so true. But again, our plan is not about well, what is the fastest way to get a bunch of money quick, you have to factor in risk. You have to factor in your own mental and emotional health when you have that payment you have to make every month and it has to work out and you have to get it booked on the Airbnb and you have to have a tenant. You have to have a buyer for that spectrum

or it's coming out of your pocket and then the whole thing it's just like and then there's a job loss or a spouse wants to stay at home or there's a health issue.

Life happens. That's the thing when everything's going perfectly. Sure on paper you might be able to make it work but right

we plan for the things that are unplanned. Yes. Because if or when life happens and all your plans go up in smoke then that's where that's where the stress in life comes, right? And so if we can be avoiding that for Yeah. Maybe not making the risky big moves, but over time, just like um Lonnie, we talked to, you know, our baby steps a millionaire. Over time, it works. That's the thing. This is slow and low. Yes, it is.

You got to be a crockpot in a world full of microwaves. And that is so difficult cuz our world is moving so fast. And if you just go on social media, you're like, I'm behind. It's too late. I need to do 17 things. Why don't I own 10 Airbnbs by the time I'm 30? I'm a total failure. That's how it feels if you just start scrolling the internet. And so you've got to unplug, get the blinders on, going, I'm going to build wealth with peace instead of risk. That puts this hour of the Ramsey Show in the books. Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.

Questions about this episode

Who speaks in "Financial Shortcuts Won't Build Longterm Wealth | January 21, 2026"?

George Camel (Host), Rachel Cruz (Guest), Daisy (Guest), Shane (Guest), Trina (Guest), Lonnie (Guest), Paul (Guest).

What is "Financial Shortcuts Won't Build Longterm Wealth | January 21, 2026" about?

The discussion centers around the pitfalls of seeking financial shortcuts and the importance of building long-term wealth. Through a conversation with a caller named Daisy, the hosts emphasize the need for careful financial planning and the potential for transition into more sustainable income sources, especially in the context of personal life changes like starting a family.

What is mentioned in this The Ramsey Show episode?

5 people, works and ideas are mentioned, including Better Help, PERS, IRS, Trina, Lonnie. Each one on this page links to its own page with every episode that mentions it.

How long is "Financial Shortcuts Won't Build Longterm Wealth | January 21, 2026"?

The episode runs 2 h 7 min; the transcript is about 24,175 words in 522 timestamped sections.

More from The Ramsey Show

About this transcript: the episode's spoken words as captioned on YouTube, split into timestamped sections. Reclip.Me locates every person, work and idea in the text, keeps the time it is first named, and quotes the words around it verbatim. Last updated January 24, 2026.