You’re the Only One Who Can Change Your Financial Future

is the Ramsey Show. I'm John

Deloney joined by George Camel

and we are taking your calls on

money in life and work and

relationships, mental health,

whatever you got going on in

your life. We're here to help

you. Call 1-888-825-5225. Show

is live. 1-888-825-5225. Give

us a buzz. Let's go out to

Washington, D.C. and talk to

Lucy in the sky with diamonds.

Hey, Lucy, what's up?

Hi. Thank you so much for

taking my call.

Of course. What's going on?

Can you hear me okay?

I can hear you great.

Perfect. Hey, so me and my

husband, we've been going

through the baby steps now for

about, gosh, six months. We're

on baby step number three. We're

doing a really cool job. We're

so excited. We're about halfway

through our emergency savings

and, you know, building it up.

And just today we've learned

one of our vehicles, which is a

2011 Lexus. We've had it for six

or seven years. It's been

great. We bought it used. It's

got a very expensive repair all

of a sudden. And we are like,

gosh, should we pay the $4,300

bill to fix it? Or is it worth

it at this point to try to sell

it and then go buy another, you

know, cheap car? We're just

like not sure where's the

break point. You know, when

should you, you know, keep

repairing a used car versus

switch to another used car?

Well, as a general rule, if the

repair costs are more than the

value of the car, you should

probably replace the car. Now

that doesn't always ring true

because if the repair is $1,000

and the car is worth $1,000, you

might want to just do the

thousand repairs because it's

going to be hard to find a car

that you can get for $2,000. So

what is this car worth right

now? Well, like I said, the

2011 Lexus 250 hybrid. So it's

a hybrid. And I think the last

time we checked it for about

$8,000 or $9,000. And that's if

the repair was done. Well,

yeah, if we try to sell it as is

right before this happened,

yeah, we could sell right, you

know, for $8,000 to $9,000 now

that all these lights are on.

What they say is wrong with it.

What's wrong with it? Well,

here's the interesting part.

About one week ago, we replaced

the brakes and the brake pads

and rotors. We spent $1,000 just

one week ago at the dealer to

fix that. And less than a week

later, all these lights are

coming on. And so my husband

said that the dealer said, hey,

it's the brake, brake rotor

circuitry or something. Yeah.

Just make it. It's the blinker

fluid. It's what that'll get

you. Have you gotten a second

opinion on this? Not yet. Go

get a second opinion from an

unbiased non-dealer. And don't

tell them. Don't tell them

anything about this first one.

Just roll in and say, hey,

we're getting some lights.

What's this going to cost

repair? OK. And if you get one

or two more opinions and it's

still all around $4,000, I

would probably replace this.

You guys have the money to do

it, right? Well, yeah, I don't

have a full three. We're trying

to get up to three to six

months right now. We're at

about one and a half. But do

you have the money? Do you

have 40? Do you have four

grand? Yes, I do. OK. I would

probably just make the repair

versus going out and buying a

new car. Right. That's what I

would do. No question about

it. Yeah. And the car has

150,000 miles. It's a Lexus.

It is not even halfway home,

honey. It's just getting

going. You know, here's the

deal. You don't like a great

car. You don't like it. Oh,

you do like it. Oh, we love

the car. Yeah. My husband is

the one. He's the one that

thinks, well, we should sell

the car. We should have done

this a year or two ago and

switched it, you know, moved

up. You know, he he likes

these cars, but just not when

they get really high mileage

like what y'all, you know,

high mileage is such a

relative word, you know,

depending on the make of the

car and the type. And that

Lexus can go 300,000 miles

if you take care of it. What

about the hybrid and the

battery? That's the other

thing he's concerned about.

He's like, hey, we're going

to drop 4,000 right now. And

then in another year, we're

going to replace a hybrid

battery. And I don't know how

he has a ball that can tell

you the future, but that's

amazing. Tell me to get off

the news apps. He has to

stop watching the news apps.

Both my cars are hybrid.

Dude, it's a good car. It's

a great car. If you were

here, I would buy it from you

at a comically discounted

rate and go get it fixed and

have an awesome car. It's a

great vehicle. I want to

tell you, we bought it on

Craigslist from private

party. And it was exactly

what y'all said. We bought

it six or seven years ago

and we've had no issues with

it till now. We're

literally just like...

Get a few opinions, take the

most reputable mechanic who

is giving you the best deal,

get it done. And then later

on, if you just hate it, you

can go sell it for nine

grand and use some more

cash and upgrade. And I,

George, I think there's

clearly something sketchy

here. Like, you don't have

a... It doesn't work

perfectly. And then

somebody repairs something

and then everything lights

up like a Christmas tree on

the dashboard. Something's

going on. So take it to

somebody else and have them

look at it. Right?

I always get, you know,

two or three estimates. I

have trust issues, I guess.

I don't have that kind of

time. Yeah. But I'll get

one...

John just has a good dude

in his life who will just

be honest with him.

That is true. That's...

Yeah, that's really

important. Let's run out to

Maggie in Charleston. Hey,

Maggie, what's up?

Hey, guys. Thank you so

much for taking my call.

Of course. Hey, we're up

against the clock. So

swan dive into it. What's

going on?

Yep. So my company offers

a SEP IRA and they pay an

additional 15% on top of

my paycheck each month.

Can I count baby step

number four as complete or

should I be putting in

additional money?

You're saying they put in

15% of their own money?

It's not your income?

Correct.

Okay. So we would

consider this similar to a

match where we need you to

put in 15% of your income

and there's a few reasons

for that. It's the same

reason why we don't count

the match. When you put in

15% of your income, you

start to build this amazing

savings and investing muscle

and regardless of where you

go and what job is next and

if you stay and if they

change the rules and what

they decide to do, you know

how to live on 85% of your

income. And so that's the

key here. If you have too

much money in retirement,

please call us back and

yell at us. I will be happy

to take the blame for that.

I'll give you my personal

address and you can just,

you can just, I'll take a

regular check. You can just

send it.

So should I do the 10

additional 10% into a

SEP since I can only do 25%

max or should I do 15%

into a different type of IRA?

Yeah, I would do the max

that you can through that

because it's a tax

advantaged account and then

you could open up your own

IRA outside of your

retirement account through

your employer and continue

there.

Okay. All right. That

makes sense.

To finish out your 15%.

Absolutely.

Hey Maggie.

Yeah.

Are you like me? Have you

already done the math on

the things you'll buy since

you didn't have the 15%?

A little bit.

Yeah. Okay. So here's,

here's what can be

frustrating. You're going

to get off this call and

feel like you just lost

something and I want you

to feel that and then know

that that's not true.

Okay.

You know what I mean?

Like if my boss says,

hey, today you're getting

a raise, it's going to be

amazing. Well, in my head,

it's going to be $100,000.

And if he comes in at

10 grand, that's an

amazing raise, but I feel

like he took $90,000 from

me.

Right.

Right. So you've already

spent that extra 15% and

you're already holding that

new car or guitar,

whatever it is you're

going to buy. And so feel

that it's totally real,

but it's not true.

And go use our investment

calculator, Maggie, and go

see what 30% going into

that SEP IRA will do for

you. You sound young.

You've got a lot of life

ahead. I hope you call

back in the Baby Steps

Millionaire Theme Hour and

tell us all about your

story.

It's going to be amazing.

Hey, Maggie, thank you for

the call. 888-825-5225.

This is The Ramsey Show.

We'll be right back.

I've been doing this show

for over 30 years and some

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taken are from situations

that are completely

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Yeah. And what's so hard

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Yeah. In the middle of

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That's 800-356-4282 or go

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This is the Ramsey

Show and it's a

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at 1159 p.m. Let's go

out to holy Toledo,

Ohio, and talk to

Grace. Hey, Grace,

what's up?

Hey, Dr. John. How

are you?

Pardon, dude. What are

you up to?

I'm just sitting here.

I, okay, so I called

in. I have a special

needs sibling and our

parents sort of set up

like, I don't know,

kind of like their

future a little bit,

like my sibling's

future. And, but they

haven't really done

anything as far as like

getting them the help

that they need or

securing like a,

really like a future

for them.

So what have they

done? I'm confused.

They, so one of our

parents, like, our

father has like no

life insurance. He

doesn't have, he, I

think he has like 50,000

in retirement.

He keeps talking about

buying a house. He's

in his seventies, like

five hours away. And

it's...

So he's broke and has

no way to help and help

set up his child.

Right. Well, he's

actually not at, like

he has a really good

pension. And then he

gets like Medicare,

Medicaid, with the

senior one. But he, he

just is totally

disinterested in maybe

helping us find a home

or...

And when you say us,

is this you and you

and your sibling?

And my sibling,

correct.

So you are now the

full-time caretaker?

Not yet, but I'm, I'm

just kind of like

preparing, I guess.

You kind of know this

is coming because no

one else cares as much

as you do.

I think so. Maybe

that's it.

All right, Grace. So

I recently ended up

with a whole bunch of

stuff going on at the

same time. Like a

bunch of house stuff,

a bunch of kid stuff,

like setting up stuff

with my wife, like

attorney stuff, work

stuff, like it all was

just chaotic. And it

wasn't literally, I was

walking through an

airport and I said to

myself, why don't you

take your own advice,

John? And I was like,

that sounds like a good

idea. And usually it's

not a good idea, but

this time it was. And

here's what I did. I

just sat down and I

pulled out a yellow pad

that I had in my

backpack and I started

writing down what I

know to be true and

the things I don't know

about and then the

things I know to be