Overcoming Your Bad Financial Decisions

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual, amazing relationships. You can give us a call. The number is 888-825-5225.. I'm Jade Warshaw, and I'm joined by bestselling author, Rachel Cruz. I know we've talked about this, Rachel, but I haven't gotten to talk about your book that just came out.

Thank you. Yes, it launched this week. My new children's book, my first one ever, and yeah, it's doing great.

It's so cute.

I love it. It's been so fun. It was a fun process, and hopefully that message of contentment can be all through our households with us, with little kids.

I'll be reading it to my kids for sure. So give us a call today. We'll take calls about your life and your money, and if you're interested in getting this book, you can pick it up where, Rachel?

RamseySolutions.com slash store or anywhere. books are sold.

That's right. Love that. All right. Let's go straight to the phone lines. We've got Stacey from Manchester, New Hampshire.

Hi.

It's nice to talk to you guys. I'm actually looking for what I'm calling a Ramsey rebuttal. My husband and I are about to, we're very close to paying off our house. We have about $15,000 left, and my parents are always advising us not to pay off our house because they tell us if anything happens and if somebody sues us, then they can take our home from us. Who?

Well, you have homeowner's insurance.

Yes, we do.

Who does she think is going to sue you and take your house? Who is she concerned about?

I don't know. My parents are very much, they think that people are very sue happy, and they are. They're not wrong, but-.

I'm trying to figure out. if you have a target on your back is what I'm asking.

No, definitely not. Definitely not. I think we make $92,000 after taxes, and our net worth is probably about $200,000.. We're sort of at the beginning of everything.

I'm just confused, Stacey. Do they have something that happens to them or someone? they know that someone, like taking someone's house. Getting sued in general is a thing, sure, but they could still take equity. With that logic, that means you wouldn't try to pay on anything and have no assets at all, because afraid someone's going to take the asset.

That's no way to live.

Yeah, I know. That's what I said. I'm like, okay, well, I'm not going to stay in debt forever just because of something that might happen, because there's a lot of things that might happen, but I was like, I'm just going to get somebody else's viewpoint on this, because, like I said, it's not going to deter us. We're going to turn it off because I don't want to own anybody money anymore.

Yeah. Oh, yeah. Yeah. Yeah. I mean, and a good umbrella policy will usually cover things like if someone falls on your property and tries to sue you or something, you know what I mean?

I talk a lot about money with anybody who will listen. Yeah.

That's fair. That's fair.

It's kind of my favorite topic. Yes. You know, and I'm just excited about, you know, how we're just moving along with things financially.

Yeah.

My dad was a contractor his whole life, and I think that there were a couple of times where, you know, people turned around and maybe tried to sue him, you know, and they, you know, it was probably like they were lying about things.

But I'm sure he was licensed and insured. He was licensed and insured. And if something came, that's what that's there for, right?

Yeah. Exactly. Yeah. And I think this is all out of fear on their behalf.

Oh, for sure.

For us.

Yeah.

You know, it's fine. They're my parents. But I was like, hmm, I feel like I could get a more expert opinion on this, because me just being like, no, mom, don't be weird is probably not as good as it sounds.

I mean, at the end of the day, I love what Rachel said, because it's true. If you go through life like that, then you're never going to have any assets, because you're just worried that someone could take them away from you. And in this case, typically, Rachel, I think we do umbrella insurance. once you get to like a half a million net worth. And then from there on, you could, I mean, if you don't have a policy, I think you're fine.

Yeah. And it's that relational tension too, Stacey, of going against something your parents obviously have voiced so strongly against. And I think, anytime as an adult still, you know, if you have a relationship with your parents at any level, it is that weird feeling of like, oh my gosh, and I had to learn, you know, God love my parents, they're wonderful. But even certain things, I'm like, I had to learn, I can't control them, I can't, it's not my job to change their mind about X, Y, and Z. And so, really, living in that freedom of like, you know, Stacey, you're deciding this for your life and being so comfortable with that, right?

I agree. Thank you for the call, Stacey. That was an interesting thing to talk about. Well, let's see if we can pop into New York right quick and see what Donna is talking about. Donna from New York, New York.

Hi. Hi there. So I have a situation. I recently was approved for a HELOC, a home equity line of credit, through the same bank that I have my mortgage through. And they gave me an introductory rate for only six months of 6.99%.

Suggestible rate. Yeah. It's a HELOC. Terrible idea. Donna, why are you taking on HELOC?

For several reasons. So I have about $60,000 in credit card debt, 40 of that is legal fees. I have a crazy family situation unfolding. So about $40,000 in legal fees, $20,000 in just regular credit card debt. And I want to do some home improvements.

Okay. Donna, how much do you make a year?

$125,000..

Okay. Donna, do not take this HELOC out. Don't take this out. Okay. You don't need to be doing home improvements right now.

This is the Ramsey Show.

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All right, you're listening to the Ramsey Show. I am Jade Warshaw. This is Rachel Cruz. Give us a call. The number is 888-825-5225 and we will take your calls about whatever it is you want to talk about, as long as it is related to your life, your money, and in this case, you know, tell us about your relationships.

It's a very real thing.

I know. It's a very real thing. But give us a call. We'd love to talk to you. In the meantime, we'll go to Miami.

Hey, Jade. Hey, Rachel. Oh my gosh. My friend would be so jealous because he has such a big crush on you, Jade. It's ridiculous.

That's so funny.

Okay, cool.

So let's cut to the chase. Okay, so I have a car loan of $4,629 left. on that. I have student loans of $5,420 left.

Okay.

And then I have a credit card for $39.49, like a monthly subscription. for. Okay. I'm moving in May to North Florida.

Okay.

And I don't know what to do, as far as like how to pay this and also like save to move, because I'm new as far as actually following the baby steps and stuff.

So what's causing you to move to North Florida?

My brother and his family there. I'm a single mom and my son's dad isn't in his life. And so I have a strong male role model for him and my brother is that.

So just to be closer to family and whatnot. Okay. Do you already have a job in North Florida when you get there?

I've been working from home for my current job.

Okay. Got it. Okay. So what's your current income? At the end of the day, this is just a dollars and cents equation.

Around 50.. Okay.

And are you currently on a budget at all? Or are you just, it seems like, you know, your numbers pretty well. So I'm just wondering.

Oh, I just wanted to be prepared. So I didn't waste your time on here. So I just started the every dollar. Good. And I just noticed I've been spending stupid, like going out to eat and stuff.

Do you have any money saved, Caitlin? Do you have any money that's not tied up in retirement or anything? Just in savings?

No. Okay. No. Okay.

And how much is the move going to be? Have you run any numbers when it comes to that?

No, but I'm guessing like after signing a lease and stuff, it'd probably be like three to six thousand.

Okay.

So in this case, what I would do is you could approach this in one to two ways. You said you're moving in six months.

Yeah.

In one way, you could approach it as kind of a storm mode, where you're just stacking up as much money as possible. And then you move, you get there, everything's calm, everything's good. And then you start hitting this, the baby steps. Because you have no money saved. The other side of this, though, is, and here's where I'm, the side of the coin that I land is, it doesn't sound like this is an urgent move, and it doesn't sound like it's something that must happen in six months.

Because my, I mean, I would agree. That would be my first choice, but my lease ends in May.

Okay. Will it be cheap?

And will your...

And from just like a standard of living premise, will you be, will it be cheaper? I'm assuming in North Florida than Miami.

Yeah. Much cheaper. Yeah. Much cheaper. there.

That's great. Yep.

So I'm kind of, I am, I lean on Jade's side of this, Caitlin. I, not that you have to pause all,

There's also another thing, if you were interested in paying off all this debt before you moved, you could check with your landlord and say, hey, I know my lease expires in May. Is there any way that I can do a couple of more months, just month to month? Because here's my goal. And maybe just talk to them and find out. And in these situations, I want to get as much information as possible.

Yeah, for sure. Yep.

Yeah, no, that's great. I actually didn't even think of that. So thank you guys. Yeah.

Especially if you've been there for a long time. Like if you've been a tenant there for a long time, you're trustworthy, you've always paid your rent on time. If it's me, there's no reason why I wouldn't grant the favor, because you're a good renter and I'd want to keep that person as long as possible. Especially if you came in and then said, hey, if I can have like three or four months, month to month after May, and when I leave, I have the perfect tenant for you. Oh, that's great.

Yeah. And Caitlin, remember your number one, your number one goal. But well, if I were you, I'd pay the $39 credit card and close it today. So I just get that out of the way. But besides that, making sure you have that thousand dollar emergency fund, that's gonna be the very first step.

Yes.

I mean, when you're it in every aspect of life and then you're taking care of a kid in the middle of it too. I'm like, it's a lot. Your mind is all over the place. Yeah. So there's a little bit of that.

And it makes a lot of sense wanting to be by family.

Yes, for sure. For sure.

I get that. Yep. Whew. I love it. Especially, you know, family, it's the Christmas season.

This show is sponsored by BetterHelp. This is Deloney, and I'm always railing against social media, especially in the summer, because everyone uploads the highlight reels of their perfect bodies and perfect vacations and perfect kids. And I know they're not real, and I also know that I'm blessed beyond my wildest dreams, but I still find myself wishing my life was like other people's. And, based on the data, I know this is happening to you too. Comparison is wired into us, but comparison can also become the thief of joy, because we can feel like we're not enough and begin acting and thinking in ways we would never think otherwise.

What's going on, guys? You're listening to The Ramsey Show. Give us a call. The number is 888-825-5225, and we will chop it up with you. I'm Jade Warshaw.

I know how to schedule. I'll schedule them. I'm ready. I don't want that. So today's question comes from Jim in New Jersey.

You'll be fine. When Sam and I started paying off debt, just the payoff, just the baby step two process was seven and a half years. No investing. Then we needed to save our three to six months. Then we wanted to buy a home and we needed to save up that money.

It's good.

Very, very cool. All right. Let's see if we can take some calls here. Let's go to Jacob. He's in Philadelphia, Pennsylvania.

Good afternoon. Thank you for taking my call. You bet. My question was, I'm kind enough to show up and listen to it. And I have some stocks from an employee purchase plan from a college job that I have.

Yeah. So how much money do you have in these stocks?

The employee stock purchase is about $50,000.. And then I have like index funds, which is like another $16,000.. So it weighs about $70,000 on average.

Yeah. Good for you, Jacob. That's great. And you have no just liquid cash?

I have about $20,000 in like an annual 4% saving.

Oh, okay. Well, honestly, I mean, at that point, I would probably just take the $20,000 and pay off the $14,000 car loan. I would go... The stocks, single stocks are always... It's always a risky move there.

They're S&P index funds.

Yeah. So, yeah. So I would probably get out... I would get out of the single stock game, put them in the index funds, but I would use that $20,000. you had to go ahead and pay off your car.

It's about... With my wife and I, it's about $3,500 a month.

A month. Okay. So y'all are right at... Okay. About $40,000..

What's the purpose of those index funds? What were you stocking that money away for?

It was just kind of... It was like, I got advice, put $10,000 away and over 20 years, it should be $400,000.. If the annual growth is 20%.

But it's non-retirement?

Correct. But I do also have a Roth 401k from this previous employer. that's like another $40,000..

And are you consistently contributing to that?

No, I work in a different area now, so I haven't been contributing to that. And that's kind of where I put the index... I was putting money into the index fund whenever I got, like a yearly bonus or some like extra money on the side.

I'd like to give you some... I'd like to give you a bit of a clearer picture of how you're using your money. Is that okay? Because I'm listening to you talk and it kind of sounds like there's some over here, there's some over here, I have this. But it's not working together as efficiently as it could.

Yeah, absolutely.

So, if I were you, and this is the framework that we use for everybody, that calls in and it works for everybody. If I were you, I would do what Rachel said, which is I'd take that $20,000 that you have. that's liquid, I'd pay off your car, right? Do you have any other debt laying around, or it's only the car?

Consumer, it's the car and then a house which is like. I have about $139 remaining.

Okay, awesome. So once the car is clear, you're consumer debt free and then you've also got $6,000 left. I would take that $6,000 and pull out whatever other money out of some of these stocks, and I would make sure I have six months of expenses set aside. Then, after that... Go ahead.

I'm sorry. In my mind, like when I was thinking about the 4% annual, that $20,000, I was kind of like listening to the stuff, so I kind of considered that would be like my 3-6 months.

Well, it would be, but the first thing you've got to do is pay off your debt. That's thing one. Once the debt's out of the way, you can stock, back up money in a similar... I mean you can use a high yield savings account. you're still going to get 5%.

Just got out of two under two, but yes, two young ones.

Okay, so then after you guys have already got a house, so you've already done that whole thing. but the next thing is, I'd start putting some of that money away in some 529s for them, so you and your wife can decide a certain amount chunk some over for baby number one, chunk some over for baby number two, and then whatever you have next. I would throw that at your mortgage and that might leave you go ahead.

about 4,000, for both of them set aside right now.

okay, and are you?

529s.

that's great. are you actively adding to it or you're fine with that?

I've been kind of just putting cash aside in the past couple months.

the point I'm trying to make is I want you to be making really clear, really intentional decisions about how you spend this money. I don't want you just saying I'm going to make a big chunk of it over here because it's not working. best for you. it sounds like the things that are important to you are your kids, education, it is having money saved and it is paying off debt. we're just going to give you the most efficient way to do all of those things and in the end, you should be investing 15% of your income every single month out of your paycheck once this debt is paid off.

fake it till you make it. it's popular career advice, but it doesn't work for very long. if you don't love what you do, you can't fake the enthusiasm and energy you need to win at work. you also can't fake your physical health and energy. everybody knows we should eat more fruits and veggies, but fruit chews and veggie chips don't count.

you are listening to the RAMSEY show. I'm Jade Warshaw, your host. I'm joined by a best selling author and host of the Rachel Cruz show, Rachel Cruz, and we are taking your calls all afternoon. long your life and your money. give us a call 828-825-5225.

Hi, yeah, I just kind of wanted to run by my car purchase with you and see if I made an irresponsible purchase. I don't think so.

this is fun. this is fun. pop quiz time. we'll tell you true or false.

if you

finance it. I'm probably going to say true, but let's, let's talk about it. what's going on?

so I needed a car because I had a car that I ran into the ground that put like 275,000 miles on it and I needed a $5,000 repair. but the car was only worth maybe $1,000 at this point. so I got rid of it and I decided to get something new, reliable, that I work a lot and the unforeseen. not having a car just doesn't work for me.

there's a lot of caveats here already, but keep going, yeah, yeah.

sure, and so I decided to get what I wanted and it wasn't too expensive. but from where I come from? like I, for a long time of my life, I was a drug addict with nothing I was.

congratulations.

thank you, so I decided to treat myself and get the car that I wanted.

how much do you make a year?

after taxes I take home about 96 grand.

okay, good for you. what are you doing now? work wise.

thank you. I'm a pipefitter, okay.

good for you. well, Matt, you're impressive. in general, I think the idea of beating addiction or being in a certain lifestyle and then completely by your own mission, just completely changing your life around, is the biggest thing ever, right car payment or not, like people like you do that. it's remarkable, absolutely remarkable, and I find that you know with a story like that or even, we talked to people. we talked to a lady yesterday who she battled cancer and she got over it, but she went and purchased a new car she wanted.

on my house.

I purchased.

the house and I have about $80,000 left on the house, do you?

have any savings right now?

liquid cash about $12,000.

okay, awesome, yeah, go ahead.

I have a 401k where my company puts in 5% of my income and then I put in 15% on top of that.

and.

the 8 grand a month is after I put in the 15% as well. that's just my take home.

and I'm.

union, so I don't have to pay for healthcare, I don't have to pay for any of that that take home is my money that I just get to do with as I please.

awesome, that's great. so what I would do, Matt, is I honestly in your position, I would pause that 15% going into retirement for now. get some of that cash back in your paycheck. I would take 11,000. you're not gonna like this, but I would take 11,000 of that savings.

I think I could get it paid off comfortably in the next.

think.

so too easily.

for sure. I know. I would say too don't do it comfortably. maybe it's really uncomfortable. you do it in four months, right?

I have a girlfriend, but no.

life financial.

clients, anyone else.

yeah, that's great. so I think now I mean like this is the time. it's the time just to do it, because the other power, Matt, and go to ramsay, solutions, dot com and look up our investing calculator. I think this is always fun, especially with a car payment, cause it's It's a depreciating asset. Throw your car payment in an investment calculator and just say from now till I'm 65, like how much could that be at retirement?

I'm pretty used to being uncomfortable.

Yeah, you would have to be.

I'm looking at these numbers and how you turned your life around, and that's just unbelievable to me.

How old are you?

I'm 29..

29,. okay, good for you. That's awesome. Well, thanks for calling, Matt. I hope that gives you some direction.

I owe it to myself.

Yeah, and I get that, right? I do too. You don't wanna drive the crappy car, but also that doesn't eliminate the financial ramifications that come with it. So being debt-free gives freedom in another part of your life, in that money side.

And luckily he didn't go too far off the rails. Like I was expecting him to be like, I spent $50,000 and bought an Escalade. So he kept it somewhat reasonable. Luckily, he'll be able to pay it off in the next year. If it was more than that, though, we might have given him different advice, but.

Yep, I know, selling the car. And for all you listening, it, and this isn't to pick on Matt by any means, but just in general, the car debt for me, Jade, is the one that hurts the most when people call in. Because I'm like, okay, credit cards, some people are doing it to keep up with their bill. Like you can, to a point, be like, okay, they're the student loan thing. We all know why people fall into that trap all the time.

The car payment, it's what keeps the middle class middle, and it's what keeps you broke. So make sure to get those cars paid off. It's not worth it to pay payment the rest of your life, when you could use that payment to become a millionaire, which is what Rachel Cruz so eloquently said. That does it for this hour of the Ramsey Show. Check us out next hour.

Live from the headquarters of Ramsey Solutions. It's the Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I am Ramsey personality, Rachel Cruz, hosting this hour with best-selling author, and Ramsey personality, Ken Coleman. So give us a call. It's a free call anywhere in the country at 888-825-5225..

so I was made a Division about two years ago. that haunts me up until today. Okay, where me and my family, we were renting and We decided that we were going to purchase a house together, and we all put like maybe like 10,000 each to get, like 50,000 to put, get the house and the house was.

My gosh, okay. So who all? when you say your family's, it's like your parents and siblings. or who does this? What?

Since you all aren't living in it.

We, we all, are living in it, but we all put together to contribute to the mortgage and the bills. But in the past year, I haven't lived there and I've been paying religiously, non-stop, every month, towards the bills 600 and Another hundred towards like utilities, but 600 towards the mortgage. It's a renting somewhere else. I'm living with a friend because it's closer to my job, but I'm not able to save and my student loans are about to kick in and I have credit cards and I.

Just don't know what to do. Well, sure you do, you know exactly what to do. This is you said you're in a fog. I'm using my words. You said you just stare into nothingness all day long.

Yeah, yeah, and I think, and I also think it's fair, because on their end they're thinking yeah, well, we've agreed to this, and And you're, and you're and you're breaking that. but, Damon, but to Ken's point, it has to like this doesn't sustain this. You can't, you can't live like this. So I think that even saying I Understand, I'm backing out of what I said, but I I don't even have that. I don't have the ability, I don't have the ability anymore to do this, and so if there's something else I can do to maybe help.

I'm 30.

How old were you when you did this deal?

I'm 28.

Okay, so just two years ago, Do they find it? Like what's the? was there gonna be a point that you guys would have this like paid off and they all would split the equity Like what was the plan?

The plan was because we moved to America, for the plan was to have somewhere to live and, okay, have a family home.

Yeah, I never really know tribute. Well, this everyone with your parents. Do you know the math of? When you do choose to stop paying? Will they still be able to cover the payment?

There. there are enough adults in the house where? They will be able to cover the payment. if I stop paying, they will be able to pay like maybe 200 X, and You know, they'll just have to adjust their spending habit. Yeah, one of my siblings already cut communications with me, attempting to have a conversation about this, and That's the kind of person they are.

I'm sorry about that. I don't make light of that, But it I mean you have no choice. you either choose To not have an awkward situation with them, or you choose to have an awful life.

And even, and that's, and can I say, if they choose to cut off communication with you? Because of this, that's, that's their choice. Yeah, you can't, you can't control that, and it's would be one of the most painful, Terrible scenarios when there's fractured relationships in life. I think it's just. I mean there's, there's grief in that.

we moved from New Jersey to New York.

But before you said we came to America. Oh.

We moved from the Caribbean. Okay, okay,

Because I do know too, you know, that Certain level of loyalty in your word and certain cultures right, holds Way more weights than others, right? So I I know that that sometimes is that play as well, But I do. I I would own what I, what I signed up for, and that I can't fulfill it. But them choosing to not communicate with you anymore, That's that's their stuff, right? And if it's not this, and if those are the kind of people they are, I hate to say it, There's gonna be something else in life.

I think you were calling for permission. We don't have the power to give it to you, But I will tell you that we're in agreement on what you should do, and so are you, and you need to do this. You're not a bad person for doing this, and I think you need to give yourself some forgiveness for not Living up to what you agreed to and knowing that you got to make a different decision, which is the right decision. So do it and move forward.

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Thank you so much for taking my call, I really appreciate it. Absolutely. How can we help? So I think your screener kind of helped me figure out what my question really is, and that is.

Okay, Well, getting spouses on board. I think, is one of the more common themes that we hear a lot, and.

She doesn't really express negativity. what she expresses is that all of the purchasing that she's making is for a reason, Yeah, and that every purchase that she's making is With is with absolute a lot of research, making sure it's the best value for the money, Yes, etc. But when I walk into the house and I see 15 boxes sitting there on the table that haven't been opened yet And I'm wondering what is all of that?

Okay, so There's a couple things a lot on the family. Yes, and you know, and what we find a lot of times is that in a household? sometimes not always full stereotypical, but it just ends up being true for a lot of people is that the is that the woman is the one that usually is Kind of the CFO of the household, meaning she's the one that's kind of keeping track of The paper towels and the toilet paper and who needs a Costco run and who's needs to do this, right? Like that functioning aspect. Not always, but a good amount of time is on the woman, And so I'm sure that's the role that she has played to a degree.

It does, and I'll tell you, just to give you one little piece. a couple days ago, I took a look at the mortgage and I Figured out a way that I can pay it off in seven years. Yeah, and I let her know about that and she was pretty excited about it. Yeah. Yeah, I think she is very much open to making it happen.

Okay, so do you guys have a do y'all have every dollar premium?

I would take the offer at the higher budget. One of the things we teach in budgeting is it takes 90 days, 120 days, Sometimes as much as six months to get budgeting, right? I would take this offer from her Okay, I'll do this budget. It may be a little high for you and you may have to adjust some of your payments on the pool and things like that. But let's just get a budget.

We're gonna give you a year of that. absolutely. Thanks for calling. Thank you.

You.

Welcome back to the Ramsey show. I am Ramsey personality, Rachel Cruz, hosting today this hour with Ramsey personality, best-selling author, Ken Coleman, and The holidays are coming up, you guys, and here at Ramsey We always encourage you all to get some gifts that are gonna help people, and we always do a $12 sale every year. So if you go to Ramsey solutions comm slash store, there's a ton of our books. I know baby steps, millionaires is their total money. makeover on your past, change your future.

Purpose the proximity principle. you want a new year, new career. Come on, you know I can't choose. my kids need shoes. I appeal to you.

Yes, were you going to? well, I was gonna say, and also in the store, Can I talk about the $12 sale? I know it's a few more dollars more. Yeah, but this the kids book this.

Where's the camera there? There we go. I feel like David Letterman. Remember you said yeah, there it is. This is Rachel Cruz's new book.

No, but the it's obvious. I haven't read it yet. What? no, it's fine. It's fine.

I mean, look at the art giraffe. get the artwork in this. This is great. It's like show-and-tell time. Yeah, there's a Rubik's Cube in there.

I know, I know, you know parents out there. if you, I always laugh because the Amazon catalog has come to our house and my kids have circled Literally everything in the catalog for Christmas and I was like, oh my gosh, but it is, It's just the stuff and the excitement of stuff, and I understand that you know this. I wrote a book called love your life, Not theirs, because the comparison game just getting more, Staying on top of it, all the upgrades, the bigger the better. I'm like, it's the American way of life. and what ends up happening Financially as people go down the avenue of debt to get that and they end up in a lot of trouble Or an emotional side.

Can I read just one little thing? Oh, do it. across the whole world on the sunny Savannah, an elephant said to her pops in her Nana when I get a toy. It's exciting and fun. Like anything's possible Under the Sun.

Thank you, Ken. Thank you. All right, we're sorry. are the phones Right now? we got Josephine in Vermont.

So I have a question about avoiding lifestyle drift as My income goes up.

Can I? can I jump in, Josephine? Can I jump in really quick, because I think for audiences will be interesting? Are you a part of the fire movement, or at least on the fringe of the financially independent retire early? Is that what I'm hearing?

No, I mean, I know what you're talking about, but my concern, I mean, my motivation, is more that my dad died when he was 54 and I I work really hard and I would love it to be optional, at least, you know. maybe I'll work longer, but

But it feels like you're at the point now where you've got a touch of that movement in you, where you're working So hard, you just want to enjoy a little bit of life And I just wonder if there's not maybe loosen there. maybe loosen the belt, one or two notches Sorry for that man metaphor there. But it's like you're living so tight and you're squeezed with your time Because of the money issue and the work issue, and I just wonder if you can still retire at a young age But also enjoy life a little bit. I Wonder what's going? what are you missing?

Well, I mean really nothing. I guess like I, I live very comfortably.

Yeah, what are you driving now?

It's a 2020 Mazda SUV, so like the cx-7.

The five. the five. Yeah, it's a great little car.

Let me say this I do For your dad and his and his story. What, what? what happened at 54 that made it, that caused him to pass away. He had an accident at work. Okay.

I think this is a mindset switch. Here's what I'm hearing. Okay, I'm gonna say this really fast. You tell me if I'm right or wrong, and I don't mind being wrong. Okay?

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Hello, thank you so much for taking my call. Absolutely. How can we help? So my question is Should I keep the house? My father passed away, I have two younger brothers and I'm trying to decide whether or not it makes sense to keep the house.

I'm so sorry, Tyler. What happened?

He was very sick for a long time and

So, sorry, Wow, so what kind of situation is the rest of the family in about this? I'm sure you're the one on the phone, but is anybody else involved in this decision?

So my parents are divorced. Um, my my. I'm usually living with my mom, with my brothers, my two brothers. They moved out to Casa Grande, where my mom was.

Okay, so they're still living in the house or they're still at home. So they moved with your mom. How far away is Your mom's house from Mesa Or from where your dad?

About an hour, okay,

And where will you be living, Tyler? Will you be closer to your mom over there? Will you be more near your dad's? your dad's house?

I'm still living at home. I'm going to college. Okay, so, but is that home in the home that your dad had?

No, it's my mom's home. So you're all with your mom. You're all an hour away from where your dad was.

Did you all get anything else? Yeah, as a result of his passing, anything else besides insurance or anything?

So Life insurance paid out About 90,000.. However, he set it up incorrectly and half went to my mom and half went to my aunt. fortunately, my aunt is a Really great person and she she gave. she gave me the money in and for the benefit of my two brothers and myself, And so that's been kind of keeping the house afloat. Yeah, he, He.

So have you been paying the house payment? I guess it's only been what? Three or four months that you've been paying the house payment through the money that your aunt gave you.

Yes, so the money my aunt gave me, I mean, and then He, he was receiving money monthly from a trust created by his father, okay, and so There was $20,000 in the bank account and my aunt gave me 45. We're down to about 28 and everything's on time. The house isn't going to get foreclosed on.

Yeah, how much is it? How much? how much would the house? How much is it? Worth right now.

About four hundred and thirty thousand. Okay, and how much is on the mortgage?

About thirty thousand. Okay, so it's almost a lot of equity.

Yeah, there's. it's appreciated a lot since he bought it. Okay. I know what I would do, Rachel.

I know, I know what I would do to Tyler. I just want to double-check like this this house carry any level of Significance to you in the sense that you want to keep it within the family? Like? did your grandfather build the house? Like?

My youngest brother.

Okay, so, Tyler. so what I would do and Ken I'm sure we're gonna be on the same page with this I would sell it, Tyler. I would sell it. It's an hour away from where you are. The renting game is something that you guys do not need to burden yourselves with.

I would sell it to, and, For all the reasons that Rachel gave you, you do not, in the moment of grief at this stage of your life, Want to be dealing with being a landlord, and the amount of profit that actually benefits you and your brothers is Limited to none at this point, and I know everybody's going. Oh, it's an asset you could blah, blah, blah. No, that's not helping you at all versus selling the house. Your dad's legacy lives on and the fact that he did pay the house down And, and, and and he paid it to a point where, hey, it's a huge asset and it split three ways between the brothers. I'm assuming that's what the deal is.

To work for three of you. because even if we painted a different scenario, Tyler, let's just pretend you were 30 years old, married with two kids, and you're like, and I love this house Even if you kept that house, you would still have to pay out your brothers, because that's an asset that's right between three people. So again, that could be another conversation if you had the money to do it, that's what you wanted to do, right? So there's there's different ways to do this, but a really clean Way that takes a lot of pressure off you, a lot of work that is unnecessary, of having a renter an hour Away, that's me calling you at 2 a.m Because they're heating, an air broke in Phoenix and they're hot, you know, I mean like. it's just, it's not worth it.

Go forward. I just got an idea. you and Winston need a show on HGTV if he starts flipping. I Want to see you two walking through houses. I want to see you with a sledgehammer, the cash and your fancy little shoes Knocking drywall out that America needs to see.

I like, and it's you. and when's the air conditioning in studios. This is my job and I enjoy my job. Thank you, Duncan. Well, thanks all the guys in the booth for making this show happen.

Okay. Well, this is my little situation and I haven't heard this much before on your show. I'm 59 and I'm a widow and I'm unhappy in my present position, my job. I've been in it since 2008.. I Have no debt, I have no electric, Electric bills and I Have.

Yeah, what what's wearing on you? is it the work or is it the environment or both?

well, and I'm a single employee employee for my company on site at a customer, and I've been there since like 2008 and Recently. my schedules have changed. all our all team schedules have changed where they require you to be on call for an additional 48 hours a week, but they won't pay for the on-call. what they do is you have, as long as you can prove, your time spent in email time or or conflict management of shipments. Then you can get your your time like 30 minutes and a night instead of you know, cuz I'm on call like five hours a night and And you only get paid for a small Dimension of that of 1%.

Yeah, so that's just that, just eats away at you. it's just irritating. yeah, I get it, and it's also your body, Yeah, and you're by yourself, too. I guess that's not wrong.

No, so I I'm looking, possibly to change. change my whole, yeah.

You should. yeah, you should. that's that's what I'm getting at, because, logistics, if you were in a different environment and different Circumstances, the logistics work, that the process, nature of it. You probably enjoy that because you're probably good at it. Is that true or false?

Well, I believe I am. Okay. Good. All right. So what's your always?

Yeah, first of all, we need to be looking to leave. that would be my first advice, But I guess you called for some other reason. Do you, do you know what you want to do, Judy?

Yes. Yes, I am looking. I'm actually to get a car and.

Okay. No. No, what do you make in your? well, number one? Do you have?

She told us she has hardly any expenses. So here's the question. Yeah, what do you? what is your current car?

Right now it's a 2008.. It's a ticket, a Toyota pickup, and I won't get rid of that. I'm going to keep it. I have a small farm. I raise chickens and quail and rabbits.

Have you done your homework? just figure out what you can. okay, and you can make plenty.

Well, I don't know about plenty. I don't take a much, though. I wanted you to put my more enjoy.

I get that 57,000 now. All right. Well, you're not going to make 57,000. drive an uber or Lyft in Indianapolis. All right.

Yeah, I'm not so sure. I want to go back and forth to an office anymore. Okay, and I'm fine with that.

I get it. I get it, but I'm still saying here's what happens. Let's say you buy a car for $30,000.. Okay? That car is going to continue to go down in value, whether it's brand new or it's used, and you're driving around and you're not Making much.

Yeah, cuz what I don't want to happen, Judy. as you look up in 15 years and you know You're 70 and you're like, I want to be done and you look like gosh, But I don't know if I feel comfortable being done yet because of my nest egg. So I want you to run some numbers for you, Judy, and just to see Okay, what would it look like?

To let me go over. Yeah, a little bit more. I'm sorry. Maybe I didn't make myself clear. I'm a widow, so I can get my husband's Social security at 67 or 72, but I'm very healthy.

Could call me on hours. All right, I changed my all right, Judy. Judy. You're awesome. You gave me new information.

Yep, do you think that's enough for me to live on? I mean, I don't really. I only have 150 K.

And that's what I was a little concerned. I want you to run those numbers. You I'll waffle between my two answers. first, piece of advice I gave you, I think is good, But I also think that you're frugal enough that if you try this for a couple years.

You can always make some changes. That's what I'm thinking. Yeah, go ahead and I would get out of the job. You're not happy there. You have enough margin today in the present, to drive.

Brita.

Brita like the water purifier. Yeah.

Very nice. Thanks for calling Brita. How can we help?

Thank you for taking my call, I got a quick question, I'm currently in baby step two. I've paid off 56,000 since January. Oh my god.

Look at you. I'm so proud of you. That's amazing. Thank you. Thank you.

So all of my debt was in collections when I started. so Nothing had like a minimum that I you know to keep it current. none of it was current. I have one debt that's not accepting payments right now because they say they're not allowed to collect in Colorado and California right now. I think they have a lawsuit going on.

Okay,

should I be making the interest payment on the medical debt to kind of hold the balance where it is, until I can get to these other debts, or Pay it and just let it go up, or how much?

Well, the I, the. the perfect scenario is that you're staying current on it and not getting behind on it. So my question is For you're going to be done with one of the debts end of this month. Is that correct? So how much money would that free up at the end of this month?

and no end of December I'll be IRS debt free. Okay, and I put about, I put about.

$2,300 a month towards that. Okay, so that'll be freed up. And then what about the January debt? How much do you pay on that January debt?

I'm currently paying 675 a month on and I was figuring I'll have it paid off in January because I was going to put The rest of the IRS money towards that one. Yep. Yeah, and have it paid off in January. and then what I'm left with is the one that's not accepting payments. That's a private student loan that has my dad's name on it.

How much do you make a year I?

Take home about a hundred thousand. Okay,

Wow, you've been doing a lot of work. then. I mean, yeah, you've, you've killed it. Um, For the medical debt, since it's in collections. Have you tried to negotiate that down at all?

Have, and I feel like they will. They say no, that they need the minimum payment, And they actually lied to me for months and months and said they can't accept payments on it at all, Unless it's the minimum amount, which is a total lie. I called back and I clicked the numbers to get to the payment one and all of a sudden they said they would accept payments, But just not the minimum. want to stop the interest, so.

I was just wondering, Because it's such a large medical debt and it's in collections Most of the time they will settle for, but you, you'll have to have that amount of money usually to make that deal possible. So your question is now, honestly, And I'll be curious, Ken, your thoughts on this. I I'm almost tempted, Britta, to to attack these two smaller ones, especially the IRS one. I would want that out like ASAP. Yeah, and it's gonna just free up three grand.

No, I I could pay that, but it would stop me paying off IRS right now and then it would slow the other one getting paid off in January. Yeah, so I I could put that towards it. No problem. But I feel like input my conversations with them that they will settle with me if I have some sort of lump sum. pain, Yes, yes, to give to them, and exactly the barbage.

Yeah, and usually they will. we find most of the time they will. You'd want to get it in writing when that happens. But again, I kind of I want to clear up the IRS stuff that I don't like, the IRS being around 100% and then you're so close with the other one to pay off.

So I agree, and I would I agree with you, Rachel, and but I would, I would go the step of Brit. I'd put a number out there. You cannot lose in this situation. I'd throw a number. I'd throw a lump sum number.

Well, I was thinking if I was just gonna pay the interest until June, I'm expecting a bonus. and I was thinking if I'm just paying the interest and I'm saving all this other back money up of Offering them 10,000 and then dropping it to 50,000.. I would be happy with that. I'm more than happy to pay my debt. It's my debt, but even if they would, you know, drop it down to 50,000 and then I could pay that off next year, No problem.

I'd say that tell them go. Hey, I want to pay my debt. I got into this mess. I'm cleaning it up. This is what I'm proposing, and just see what they say.

You could even go half on that, Britta, sometimes some of these. Yeah, I'm gonna say he's on the dollar. I was gonna say even 40.. Uh, yeah. Okay.

Hey, what would a lump sum? What would you be willing to receive from me on a lump sum? see what they throw out first?

Yeah, yeah, I kind of want them to show me their cards. Totally. Sorry. No, no, you're right. You're great, But I appreciate, you know Brenda's Britta, Britta, gosh, sorry.