Know Where Every Dollar Is Going Before the Month Begins

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, Rachel Cruz, hosting this hour with my good friend and co-host of Smart Money Happy Hour, George Camel, and we will be taking your questions, so give us a call at 888-825-5225.. We're talking about your life, your money, your relationships, your career, anything and everything here to help you out. So, first up, we have Ian out of Portland, Oregon. Hey, Ian.

Hi. Hi. Good afternoon. This is Ian. Thanks for taking my call.

Absolutely. How can we help you?

I'm in a bit of a juncture in my life where I'm purchasing my third house, which will be my primary house since I'm moving. I have two existing mortgages, and I was wondering what to do with them. The two options that have come up in my mind is, one, I can pay both these mortgages off because I have enough savings to pay them off, and subsequently have renters pay my primary slash, third mortgage.

Okay. Well, if I'm in your shoes, I would want my primary mortgage paid off, but I also don't like the risk of having two mortgages sitting out there with renters. And so if I'm in your shoes and you can pay off both mortgages today, I'd rather you leave with one mortgage than multiple. So what is the balances of the two existing mortgages?

Yeah. The first balance is about $25,000.. The other one is $150,000, so $125,000 total.

And how much do you have in savings?

I've got about half a million.

Wonderful.

Great. And how much are those properties worth?

The property, the first property is probably worth about $210,000 with the $2,500 mortgage. The other one is worth $350,000.. Okay. I'm sorry. The other one is about $800,000 with the $145,000 mortgage.

Okay. That's great. And then your primary, how much do you owe on it?

Good question. This is what I'm in the process of buying in my primary.

Oh, you haven't bought it yet?

My budget is about $800,000 on that.

Okay. I got you.

Are you single?

No, married. Okay. But a primary owner. A primary, yeah, breadwinner.

Okay. How quickly could you pay off all of this? Let's say, you depleted your cash down to just an emergency fund. You knocked out the two existing mortgages. How much could you put down on the next property?

That's a great question. And that's where I'm running into some trouble is because I'm deciding whether I should pay this $170,000 off and pay off these two mortgages or use that for my down payment.

Right. Do you enjoy being a landlord? Do you enjoy the real estate part of life?

Good question. Yeah, it's been uneventful for the last five, 10 years that I've been doing so.

I mean, they're great. I mean, you're so close, Ian, of having two paid-for properties, and then they're going to be cash flowing. And we always say on the show, obviously, when we say passive income, it's not really passive income, because you have work, you have to do upkeep, right? You're flipping renters maybe once a year. So, I mean, there is work in there.

And it frees up those payments. What would those payments add up to, just the principal and interest on both of those properties if you freed them up?

Good question. If I freed them up and I'm getting rental income from both those properties, I could probably get $1,500 from one and maybe $3,000 from another, so $4,500..

That's great. And if you then threw all of that onto your new mortgage that you'd be taking on for your primary and knock that out within a few years, I think that's a great plan. Got it. There's not really a baby step for this, because of the way you did it. You know, we would say, hey, get your primary paid off, then pay cash for any investment properties.

Okay.

How much do you make a year, Ian?

About $300.

Okay. And the two other properties are near you. driving distance-wise? Yeah. It's not cross-country or anything?

Yeah. Three hours maximum.

Yeah. And I think that's great, Ian. And then if you get two years down the road and you hate your primary mortgage so much because you're like, oh my gosh, I just want to pay it off, then sell one of the rentals and pay it off. Yeah. Or you could just leave it in that baby step six.

So, another caveat with this foreseeing is that if I use my savings to pay off the first two mortgages, I'm going to now have very little money for a down payment for my third mortgage slash primary mortgage. And given the interest rate right now for mortgages, I feel like I might not have much sort of leverage to decrease the interest rate because my down payment will be low.

So, that's the downside, Ian.

Is that an acceptable risk?

Yes. So, you could look at it then, in that case, as you're running out all your numbers, that you sell one of these properties and take all the money from there and throw it at your primary and just have one rental.

Because either way, you're going to have a mortgage on this new property. Because you don't have enough to do cash.

You can eat it too.

Exactly. Yeah. And the interest on this, if you do it our way and you pay this thing off within a few years, the interest is not going to be the deal breaker here. We're not telling you to keep this primary mortgage for 30 years. You're going to knock it out.

Yeah. My plan was to take a 15-year mortgage and then, yeah, depending...

Let's say you took a half-million mortgage and you can throw 100 at it a year, making 300.

Got it. Awesome. Awesome. Hey, thanks for that clarity.

Yeah, way to go. Absolutely.

Thanks, Ian. Thanks for the call. Yeah, and I always feel like... Yeah, because it's always... It's kind of one of those things, especially if you want to get into the rental game, that if you already have the home and you already have equity built in and you have as much margin as he does, he's so close to paying them off and he has the cash to pay them off, right?

You're about to get a $5,000 raise.

That's right, yeah. And the power of being able to throw that at the primary mortgage. But again, all you listening and watching, I think that's the motivation, right? We're trying to get debt free as quickly as possible, while also looking and saying, okay, how can we diversify our wealth building strategy here? by not just retirement, but also with him getting in the real estate game, which I think is great, but doing it with cash, which is key.

And you could tell there's some calm in his voice. He's not freaked out. He's not desperate. Yes. He's making this decision out of a place of strength.

That's right. Exactly. This is The Ramsey Show.

I'm going back out.

I know, for my new kids book. I'm glad for where I am. I'll be in Atlanta, you guys, on Friday from one to two o'clock at the Barnes and Noble in, I think it's called...

Mansell Crossing?

Mansell Crossing. Mansell Crossing. How did you know that?

I just.

Alpharetta. Are you from Georgia?

No. I've just... We've been pitching this all week. Go see Rachel. Go see Rachel.

That's amazing. Okay. So I'll be there Friday.

And remember, you have a manicure tomorrow at three.

He's like my assistant. Knows my schedule.

I'd be great.

But yeah, if you're in Atlanta, come say hi from one to two on Friday. We'll be there. All right. Next up, we have Haley in Ontario, Canada. Hey, Haley.

Hi. Thank you for having me.

Yes, absolutely. How can we help?

So my spouse and I, back in July of 2021, we purchased an investment property. And we put $100,000 deposit down. And that was when the COVID interest rates had gone right down. And in Canada, they're right back up. I don't know how it is in the States.

Was the financing already approved?

No. So we did down with our bank. And essentially, I think if we sold our current home, we would be able to get the mortgage. But my predicament is that even if we do get approved for a mortgage, we're looking at a $5,000-plus mortgage per month. And we've been looking at different avenues, potentially renting.

So have you guys been building for that long?

Yeah, the builder was very delayed. Through COVID, they stopped a lot of the building. And it's been ongoing for a long time.

Okay. Was it a custom build or was it one that was within a development and you pick a floor plan?

Yeah, it was in a development.

Okay.

What does the contract say? Because you signed the purchase agreement. Have you talked to the builder about what it would look like to back out?

So we did ask them about a mutual release.

Yeah. So that would be sort of the stupid tax, I guess. Yeah.

How much would the full mortgage be? If you did go forward, I'm just curious how much the house is.

We originally purchased for about $1.

Okay.

So you're going to put nothing down?

Well, if we were looking at the option of renting, if we sold our current house, we have enough equity that we could probably get the mortgage down.

Why wouldn't you sell your current house?

My husband's military, and he's posted here. So it would be so many loopholes and jump-throughs. Like, he might not even be able to move.

But then why were you getting this new house?

Because we didn't realize that he would be posted out at that time. We were posted to that base. And so this was back in 21.. This is about three years later now. And also, too, we thought with the interest rates, honestly, we weren't thinking ahead.

Right, right. Hayley, how are you guys financially overall? Do you have savings? Do you guys have debt?

Our debt is paid. Like, we don't really have any debt. We have some equity in our home. My husband's, like, military serving. right now.

Okay. Do you guys have money saved?

Other than whatever we have in equity, no.

Okay. I'm starting to forget how big this $100,000..

I don't see a world where you guys could have afforded a million-dollar home, regardless of what interest rates are doing. I think you guys weren't thinking through this and got a little starry-eyed at what a new build would be. And life happened.

I agree. And you cannot keep both.

There is no world where you keep both of these properties.

Absolutely.

So, if you're going to make this move and not lose your $100,000, you need to sell the property, save up as much as you can until this build is done, and minimize the mortgage as much as possible. And you might not even be able to stay in it that long. Because it sounds like it's unsustainable. You guys barely make $5,000 a month.

Yeah, it's not sustainable.

I don't think you guys can do it. I don't think you can do it.

What's your mortgage now?

My mortgage, well, they just increased it because we had a variable rate. It's about $3,000..

You're barely covering the mortgage now. What's the take-home pay? I'm sorry? What's your take-home pay every month between you and your husband?

I don't even know. My husband does the finances.

My guess is about $6,000, and half of it is taken up by your mortgage.

Yeah, it would probably be around there. And I'm more on the side of mutually releasing. It doesn't immediately affect us. With regard to losing $100,000, it sucks. But I just wanted, I guess, your advice and kind of clarification on that before I move ahead.

Yeah. I mean, almost, I would...

I don't think you have an option. I was going to say, I would... I think you have to release it and lose $100K. Yeah.

I mean, I think that's a better option than going into a million-dollar house that you guys can't afford the mortgage, that the mortgage payment is basically what you're bringing in every month. I mean, that's...

You'd foreclose on it within months.

Yeah, that's not ideal.

I know. And we have children. I don't want to jeopardize that. His parents have offered to... They have multiple properties, offered to sell one of their properties.

That's right. No, no, no. Okay. I would keep this clean. I think this is a decision.

So we did it originally on our first residence that we had purchased. It was our first home, and we had purchased it for about $500,000.. And then, when we sold, we sold for nine. But we had taken out a home equity line of credit, but that is paid off. There's no debt owing towards that.

Okay. So the $100,000, it's just... It'll just be gone. It's not debt that you have to repay.

No. So my husband just told me, he said our income is 8907 per month.

Okay. That's better.

Yes.

For your $3,000 mortgage. So that's net. So that's a third of your take-home pay, which is a lot, but it's not going to crush you financially. So I would just stay put where you are and mutually release this, lose the $100,000, and learn from it.

Yeah. It's a tough learning lesson, but I definitely needed to hear that, so I appreciate your help.

Yeah, absolutely. Sorry. Sorry, going through it. That's not a fun thing to deal with. And for anyone watching out there, who's military or they move around a lot, this is why we tell people it's okay to rent.

And that's one reason, you know, our house purchasing formula at Ramsey is pretty conservative and people say they don't like it very often, but this is one of the reasons why, too, is like, we just know life happens. And if so, much of your income is being taken up by your mortgage, or what you think life will be like when you're doing a build that's two, three, four years long, like, I mean, you just have to be realistic about it. And so, and also too, I think, when you have information and you have facts, you're able to make wiser decisions. And so that's one thing too, and this isn't to, you know, harp on Haley by any means, but, you know, she was like, I'm not sure my husband takes care of the finances, which happens a lot too in families. But if you're married, you guys, you together, need to be making these decisions, meaning both of you need to know the facts, both of you, because you both bring a perspective to the table, right?

This show is sponsored by BetterHelp. Hey, good folks. It's Deloney. And with back-to-school madness on deck, my family's schedule is already so packed. And we haven't even made room for things like exercise and date nights and counseling and all the other things that make our life even worth living.

Welcome back to the Ramsey Show. So, George, some fun things that we do here at Ramsey is we put on some pretty incredible events.

That's true. I've been to other events. Ours stand out among the rest.

Ours are pretty great. And actually, there's a group of them right now in Dallas for the Entrez Leadership Summit.

That's right. Thousands of business owners and leaders out there learning from the best.

In real time. right now. They're there in Dallas. But what we're going to talk about is the Total Money Makeover weekend. So this is May 10th and 11th.

I think it's the third time we'll be doing this.

You just read my mind. That's exactly what I was about to say. I think it's the third time. And it's always so fun.

They say that's the charm.

Third time's the charm. It's going to be the best Smart Money Happy Hour recording.

We have a good time with the live crowds.

That's right. So all the Ramsey personalities will be there that weekend. Dave Ramsey, myself, Dr. John Deloney, George Camel, Jade Warshaw, and Ken Coleman. So get your tickets right now at RamseySolutions.com.

This is not just for, like, if you're new to the Ramsey plan, if you've been doing it for a while. Some people need the motivation because they have been doing it for a long time, and they kind of fall off the wagon, got a little lazy, a little sloppy. Some people, it's, hey, I have a friend that I'd love to come, or a spouse that needs to get on board. This is the perfect event for them, too. And so, whether you're ish off the wagon, you're new to the plan, this is a great way to just kind of get dunked.

And it's right here, on our campus and right outside of Nashville.

Beautiful brand new event center.

So, yep, come hang out. All right. Up. next, we have Nicole in Indianapolis. Hey, Nicole.

Hi, guys. I'm so excited to talk to you today.

Oh, so glad you called in. How can we help?

So, my husband and I are on baby step two, and we were kind of just wondering what you guys suggested. as far as my job situation. About three years ago, I landed my dream job. I am a provider in a private practice, and so I've been working there, and I've been very happy. The problem is if I were to go to, like a hospital or something of that nature, even work in urgent care clinic, I could work half the time and make the same amount of money and would be able to pick up more shifts.

So you'd essentially double your income.

Basically. But it's hard, because this is what I thought I wanted to do since I was a little girl. This is the place that I thought I wanted to work, and that's where I've said I was always going to work, and then I landed it. And now I'm sitting here with a little bit of resentment because I'm like, I can't be home with my son. If I did move, I could pick up extra shifts if we needed it, have a little more flexibility.

Okay. But you guys are working. How much are you making now?

Total. together we're making $195,000..

How much is yours out of that?

So I make about $95,000.

Okay. And you could be making $95,000 working half the amount of time that you're working.

With more flexibility.

Yeah. It would be two 12-hour shifts. I work four days a week now, and one of those is a 12-hour shift.

Okay. Wow. I mean, do you think you would enjoy it? Like, is there a part of you that it's still, you know, you're working with people and helping them in that way? Or do you think, are you like, oh my God, I'm going to be miserable if I take this?

I mean, I think that it's definitely going to be harder work, for sure.

I mean, honestly, Nicole, I would take it. I understand the idea of a dream. I mean, if it was your dream job that you're in now, and what you're going to be doing is so vastly different than your dream job, you're doing something completely, you know, that is not anywhere near what you were doing, then I would say, okay, let's, hold on, let's back up, because I want to make sure Nicole's enjoying her work. But it's in the same realm. Do you know what I mean?

Yeah, it's okay for that to shift and change, as you're, as you, you know, got married and had kids, and it's okay for your, your dream job is one part of your dream life, and I think your dream life now looks different, because that looks like being home more with your kid, and having a little more flexibility. So, I think that you, you, kind of have to grieve and celebrate the fact that you accomplished your dream, you did it, and now life has changed, and you have a different dream. And guess what? You'll probably have a different dream five years from now. So, this decision is not fatal.

Okay. Yeah, and there's. no, there's not a lot of upward trajectory at the job either. We haven't got raises in a few years.

Yeah, for sure.

And who knows? Maybe one day you stay home for a season. And so, I don't want you to base everything off of this one decision, but I think for the next step, as we're looking at it on paper and what you've told us, it's the right next step for you to take this position.

It's still in the type of work that you love. You have to work half as much for the same amount of money. I don't know. In my head, it sounds...

That's hard to pass up.

Yep, it sounds right.

That sounds like a dream to me.

And it's changed you, Nicole, and that may be some of your fear. It's just when you just do something different, where you thought, I'd be in this forever. It is scary to take that step, but it's a really solid, secure step. So, I don't want you to question that. Thanks for the call.

Hi. How are you?

Doing well. How can we help?

Okay. So, I want a car. I can't afford it. It's fine. I don't have any debt.

What's your household income?

My income is over $120,000 a year.

And what cars do you have now? And what are they worth?

I have an old Suburban, probably only worth $3,500, and a couple of work vans. I own a small company with a few employees. Okay.

But your personal car, is that Suburban?

Yeah. Yeah. And it gets the kids around all their sports and everything. Yeah. And I've been working for a long time.

So, our kind of rule of thumb, Shane, is anything with wheels and motors, we don't want to be more than half of your annual income. Okay.

To me, that's about $60,000 is the top, if you add everything up.

Yep. So, I would look at, yeah. But if you have the cash, you have $50,000 if you wanted to do this.

All right. Yeah, like I said, it might be a quick phone call.

Yeah, but do you have the cash, Shane? I've had a hard time.

You have $50,000 today to spend on it? And you're okay losing that money? Yeah. Because it's a toy. It's going to go down in value, and you've got to be okay with that.

Yeah, you see, that's my personal problem. So, I just didn't know if you guys would tell me, no, that's stupid.

No, I mean, if you have the cash and you have an emergency fund and no debts, at that point, I mean, I think that's when you get to.

Yeah, if you're still investing.

And you get to enjoy it.

Living out the baby steps. Yeah. You can get that car.

Maybe go on the cheaper end of it, the $40,000 mark, and have it. And then maybe you upgrade in, you know, three to four years to something nicer. But, yeah, if you have the cash, we're all for it.

You have our permission. Yep.

Great job, Shane. Congratulations. Have fun. This is the Ramsey Show.

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Welcome back to the Ramsey Show. One of the best ways to spread the word we have found is not just in marketing, George. It is word of mouth. It's you guys sharing the show on your social media, sending clips to your friends and your family, and just really getting the word out that way. So we really, really do appreciate it.

Hello. We bought a property three years ago, and the property owners committed fraud. They withheld the fact that the well runs dry about half of the year.

Oh, gosh.

Is it a problem?

It will cost $24,000 to drill a new well or $30,000 to bring in city water. My husband wants to spend our emergency fund on the well, but I don't think it's an emergency because we've lived with it for three years. We spend about $80 a month on laundry, and we're debt-free. besides the mortgage. My husband works full-time and makes $60,000 a year.

So you don't have the money to cover this anyways, even with the emergency fund, if you did the $24K or $30K option?

That's right.

And nothing in the – was there a lawsuit because of the fraud? Anything legally that they had to pay you guys because they didn't disclose it?

We are still in the process, but we do not believe that – we will probably win the case. We don't believe we will get the money to cover it.

Why?

Because we believe that she doesn't have the money to pay us back for it.

Okay. Okay, so how long at least would it take you guys to save up the extra $13,000 to make this a possibility for a $24,000 fix?

We have saved about $11,000 in the last four or five months.

Okay.

So it'll take us another six months probably.

Okay, to do that. And you don't want to do that? That's not – because you're good with how you guys are functioning now? Because, I mean, I guess if the well runs dry, do you guys have water? I mean, what does life look like on the –?

Is this a little house on the prairie? How does this work?

Well, I do laundry at the laundromat. I can only do one load of dishes a day.

Lisa, it kind of sounds miserable. Is it?

It is very miserable.

Okay, yeah. I would probably save up and get this.

I would categorize this as an emergency.

Yeah, this is kind of a necessity.

It's not life or death, but it's pretty close.

Well, I'm worried that if we spend our emergency fund on this, another emergency will pop up, and then we have no money.

Well, I mean, that's always a risk. Most emergencies, for the most part, you're able to get by with a couple of thousand dollars. So maybe you guys save $28,000, have $4,000 left over just for a little bit of cushion, and that will be a few extra months, right? So maybe you give yourself a deadline and say, okay, in eight months we're going to fix this well issue, do it, and still have some cash left over, and then keep saving. Because sometimes when stuff comes up, I mean, just like this.

Is there a temporary fix? Let's say, you bought the used rig. Do you guys know how to do this yourselves, or will you still pay someone to actually do the work?

We could do it ourselves.

Wow. If you feel capable.

Are you guys, like, do you know how to, like, is that something that's like, oh, yeah, that's a totally possibility, and your husband's like, yep, for sure. That just seems complicated.

Yes, we could for sure do it, and we have a friend that has actually built a well drilling system in the past.

Okay.

Then I feel like you could go this route for now.

Yeah, why wouldn't you do that route?

It just makes me nervous. to buy something that we're not positive would work.

And why wouldn't it work?

Just because it's an old, I mean, it's a 1980s truck that has an old well drilling rig that hasn't worked.

Can you test it somehow?

Yes.

Or have someone inspect it?

Are there other ones out there that you guys can rent for a month?

We cannot. I've looked everywhere. There's no well drilling rigs for rent. You'd have to buy either a new or you'd have to find a used one somewhere, and most of them aren't big enough because we are drilling through rock, and most of the ones that you would buy for $20,000 would drill through sand or gravel, not solid rock.

I feel like George and I are probably not the right people.

Beyond our pay grade. to talk about drilling wells. I know. But if I was in your shoes and I felt comfortable and capable, I would inspect it, make sure it's mechanically sound, and buy the used one, because that's what you can afford right now. And later on, if that buys you time even to save up $24,000, to do it officially or get the city water, I would do that down the line.

And it's only $2,400, right?

You said $4,800 for the used one?

There's a used one for $4,800.

Talk them down to $4,000.

I mean, there's not a lot of buyers, because apparently there's not a lot of ones out there.

And maybe you can sell it once you're done with it and make some money back out of it, right?

Yeah. We've also thought about using it around here locally, because there's only one well drilling company.

Hey, you got a new business on your hands.

Yeah. There you go. Yeah. Well, I hope that helps, Elyse. So yeah, maybe do that if you feel capable.

Well, my first thought was if I would just go drill it myself.

I mean, George with his tools.

I'm sure there's a YouTube video out there.

With his tools, George could figure it out.

Honestly, I think your husband, Winston, could figure it out.

How to drill a well.

I'd call Winston.

Yeah. You two together. I just feel like it would work.

That would be a TV show. I feel like it would work.

I know. So great. Okay. Up, next we have Andy in Miami. Hey, Andy.

Hi, Rachel. Hi, George. Huge fan here.

Thanks. How can we help?

So I currently work for a bank. And you guys might not like it, but I underwrite commercial real estate loans.

We'll still be friends.

We can still be friends, Andy. Thank you.

Thank you. At least not personal loans or residential mortgages.

There you go. See?

So work from home setup, base salary is around $113 plus some other little perks. $20K bonus. They'll give me $2,000 for my 401K just because every year, and about $1,000 towards my HSA. Fully remote. Love my bosses.

Where are you guys financially? Do you guys have a lot of debt?

We are recently on baby step three. I just finished FPU at church, co-leading it two weeks ago.

And you've got a spouse?

Have a spouse, two kids.

This is a move.

May not be done with the children. Mother-in-law, who's been a huge help, is about two miles away.

Oh, man, that's tough.

That's a big life change.

Unless you plan on moving, I wouldn't do the hour commute. I don't think I would do it. It's not worth the money.

That's two hours in the car.

I try to make more, doing what you're doing now and stay put.

Have the peace. You've set your life up to have peace. I don't know if I would do it for the money. That would be tough. Thanks for the call, Andy.

Hello. Hello.

How are you all doing?

We're doing great. How can we help?

Can you hear me?

Yes, we can.

Good. Well, my name is Tanashia Scales. I'm from Nashville. I'm a registered nurse. I recently moved back in with my parents and moving out of my townhome because I've been renting for six years.

How much debt do you have?

Having one stream of income.

So how much debt do you have total?

So my student loan is 71.

The rest is in credit cards?

I did the math on it, real good.

And the rest is on the car. So you've got about 14,000 on the car loan, 10,000 on credit cards, 71 on student loans?

Yes.

Okay. And what's your income?

Yes, sir.

75 an hour. And is that temporary?

Yeah, I bring home, like, I'm contract, so I'm internal. I'm not on, like, a travel nurse assignment, so I'm internal. So it's longevity.

Okay, good. So are you making, like, 150K a year?

It's part time, but we've been pulling full time hours because they've been so short of staff.

Okay. So we'll call it around six figures. We can work.

Yes, sir.

Okay. Well, here's the key. I want you to become a homeowner again, but I don't want the home to own you. And so, regardless whether you're a single mom or not, obviously you've got a lot more on your plate with a one-year-old and childcare and all of that, but as far as the plan, it doesn't change. We want you to become completely debt-free, then get a fully funded emergency fund, then start saving up for your next house.

Yeah. If you got on a really, really tight budget, considering you're now living with your parents, are you paying rent or are they letting you live there for free?

Let me live there for free. I'm so burnt out on renting.

Yeah, no, no, you're great. I've been renting for seven years. Yeah, I'm just trying to figure out for you, the amount of money you bring home per month, since you don't have a big expense like rent, which is great.

Could you throw 50K at your debt a year if you've done it two years?

That's right. How much could you put towards your debt? Because if you're making a hundred grand, I mean, you could, you know, without a housing expense, there's a good chance you could throw exactly what George just said, 50,000 a year and be completely debt-free in two years, and then keep at that. Right. Keep at that same motivation to get an emergency fund and some savings and then save up for a down payment for maybe a condo or a townhome.

Yeah, and that debt snowball, when you make that every dollar budget, you're going to list out all of your debt payments and all the minimums, and it's going to show you exactly how to lay them out. So list them out individually, attack the smallest one with a vengeance, put minimums on the rest, and you'll start to see that progress.

Yep, that's right. So thanks so much for the call. I hope that's helpful, and you're doing a great job. I mean, you're making great money.

That's the key, the big shovel.

Yes, that you're able to attack this. All right, next we have Monica in Philadelphia. Hey, Monica, welcome to the show.

Hello, thank you for having me. So. I'm a single mom in Philadelphia. I'm currently debt-free. I'm on baby step number six.

Amazing.

Currently, my dilemma is I have some money saved up, and I don't know if – so I have 100K saved up. I owe approximately at the moment $65,000 on my home, but I also want to move. So I don't want to reside in Philly anymore, so I want to move out of Philadelphia. However, on top of that, my mother inherited a house that she can't afford to pay inheritance tax on. I don't know if I should use my savings to cover the cost for the inheritance tax, knowing that the property would then later on go to me.

Yeah, I hesitate to do that. I just know how much change happens, and by the time this house gets passed to you, you may not even want it anymore, right? There may be a situation where you may not even want to live in it. And, of course, you could sell it and obviously get the proceeds from that, which is great. But there's a part of me that I would use your money for your life, and I think that you're so close to paying off your house, which is incredible.

I would think maybe $100,000, maybe.

Okay, so it's worth about $165,000, the house?

Yeah, that's what I believe it's worth.

And what's the inheritance tax? How much and when is it due?

Well, and that's the thing. I don't actually know what that tax bill is like, because my mother can't afford it, and she hasn't really done anything with it. She had hoped that she would leave it initially to my siblings and I, but no one can honestly take on the tax bill except myself, so I'm the only one that can entertain it in a sense.

Well, I'm worried. your mom can't afford this house long term, and it may not be the right spot for her.

Well, right. Now, she has resided in that home for, like, she was a caregiver for my uncle that then passed away and left for the house. So to my understanding, she would be able to live out the house.

Okay. Yep. Sorry, Monica. We have a hard out right now. We have to go.

Yeah, we're going to cover the foundation, the basics, of course, but we're also going to get into the kind of 201 and 301 content, stuff we've never actually taught before. I mean, Dave's investing strategy when it comes to real estate, his personal playbook, how he's built his wealth. What I've done is sort of the everyman to go from being broke to millionaire in 10 years. And it's a lot simpler than you think, but there's also some nuanced pieces that we're going to dive into that are really interesting. So this is a very different event.

I was getting some questions about that.

Hey, what if I can't make it for those two hours? You're going to have access for, I think, about a week. And I think, VIP. you have access for two weeks. So you'll be able to watch it a few days later if you can't make that specific time on May 21st and 22nd in the evenings.

For sure. So go to ramsaysolutions.com slash events and get your tickets for Dave Ramsey's Investing Essentials event, all online, with our very own George Camel in the mix, which always will make it more fun. Always more fun.

That's my job is to pull that out of Dave. Bring the fun. Pull the fun out of Dave as he's getting to the weeds.

If he gets cranky, you just say, Dave, come on, this is fun.

I know how to push his button. I was like, I drive a Tesla, Dave. And he's like, brah, you know.

Unbelievable. Unbelievable.

You kids these days. It's fun. I used to drive uphill both ways in my gasoline car.

My diesel. That's what he'd say.

Yeah. He loves a diesel. The louder the better for that generation. I think he's scared of cars that don't make noise. They sneak up on you.

Didn't hear you coming. All right, let's go to the phones. We have Cassie in Atlanta. Hey, Cassie, welcome to the show.

Hey, thank you so much for taking my call.

Absolutely. How can we help?

So I have a few collections that one of them is equaling about $3,000 that I'm trying to get paid off. It's been on my credit for about a year. now. I have a car that I'm struggling a little bit to get paid off. But the biggest thing that's affecting some of my stuff is I have a car loan that was with my ex-husband.

Is he paying on it, or is this in collections?

He is paying on it.

So he's paying the full amount every day, but you need to get off of it. So you would need to refinance that loan and get your name off.

I actually don't have any contact with him, though.

Well, you need to contact the lender, and he needs to be able to sign off on it. I mean, you guys co-signed on this, and the only way out is for you to—.

Do you have an attorney that could contact the attorney that he worked with during the divorce or anything? Is there a way to have, like, a third party? go at this too?

When we did the divorce, we didn't have any attorneys involved. We did it all ourselves. But that was. my next step, is, if I didn't have any way of trying to figure out how to get out of it, I was going to look at getting an attorney.

Yeah, I mean, I probably would. I mean, you would be liable for some reason, and the fact that you don't even know—you can't get in touch with him—means who knows what he's doing. I mean, like, he could turn up tomorrow and not pay starting tomorrow, right? And then you would be liable for that $45,000.. So, yeah, I would look into that.

But you'll need to apply for something called a co-signer release. And the problem with co-signing is that there's a reason that you were required to be on that, because they didn't trust him to pay. So if he's got a good track record, they may do this co-signer release, but you need to contact them and see if they're willing to do that. Otherwise, you need to refinance the loan.

Okay.

And so the debt that's in collections, Cassie, is it just the $3,000?

Yeah, so the in collections is $3,000.

They probably won't negotiate or settle much if it's a pretty fresh debt in collections. But you can always try and say, listen, I simply don't have the money, if you truly don't. And say, I'm willing to give you $1,000. if you're willing to settle this and call it paid in full and get that all in writing. And again, don't give them access to your bank account.

Okay.

But they may not be willing to. And if you have the money, just go ahead and get it out of your life.

Do you have any savings, Cassie?

Yeah. I do have my $1,000 emergency savings.

Okay. Okay, that's great. So you have the $3,000 in collections. And then what else besides the car with your ex-husband?

With him having that car, I had to get my own car. Okay. I am pretty upside down with it. So I bought the car February of last year at a buy here, pay here. And bought the car for $15,000, not thinking anything of it.

Oh, man.

What's the interest rate on this?

18%.

Oh, man. Okay.

I hate those places so much.

I know. How much money do you make, Cassie?

About $53,000 a year.

Okay. Okay, well.

If you can get out of this cosign loan, knock out the collections, and just leave you with that $12,000 car loan. Yeah. We can knock this out within the year. You can be in a very different place even six months from now.

And do you have the ability to get a side hustle, like at night, maybe like three nights a week?

I work pretty late some nights during the week. But I have been looking to try to find something on the weekend, for sure.

Okay. Yeah, I would do that, honestly. Because even with $53,000, I would want to up that while you're doing this. That'll just give you some power. And it's really encouraging.

Just doing it for fun.

Yeah, and it wasn't this, you know, crazy amount of hours. I wish I could remember now. But I think it was like maybe three or four days. He's like, can I just drive and make $1,000?? I'm like, well, that's awesome.

Yeah. And if you can do it at a lump sum, they'll usually take it down a notch. But make sure you get it in writing. Yes. Because these people can be scummy.

That's right. Yeah.

Sometimes, when you get stressed out and kind of weighed down with the emotion, it helps to look at the math and go, okay, if I can find two grand a month in this budget, I can be debt-free in six months. Yes. Sometimes that basic math actually gives you hope when you see a way out. Instead of going, oh, this is going to be years of paying it off. Not if you do it our way.

That's right. Yep. You're able to look out and see. Dr. John Delaney always says that.

Here we go. Spencer asks, my social security number was compromised when I was 18.. It was caught pretty quickly, and I haven't had any problems since that one incident. I'm 25 now, and I'm wondering if it would be smart to get identity theft protection. I don't know what all that covers, but I'd like to know what I can do to protect myself both now and in the future.

It's a good one, though.

It's a juicy one.

You should tell America what happened to you, George.

Essentially, I got a call from a debt collector, and they were like, hey, you owe us $1,700 on this AT&T account, $1,700 on a Verizon account. I was like, why would I have two cell phone accounts? What monster?

I'm 23.

I don't have any of these accounts. And it turns out someone used my social security number, an old address in Nashville, my name, all of that, and opened up these accounts. Never paid a dime on them, racked up bills. I don't even know how you rack up $1,700..

How do you do it?

So anyways, it was a nightmare. Luckily, I had Zander ID theft protection through Ramsey at the time. Dave covers it for all Ramsey team members, and they helped me kind of restore my life back to its former glory. But it was so much time and paperwork to just deal with it.

And weren't they like two old women that you found out did it? Two old.

I did some sleuthing, because it turns out the police are not going to dedicate their life to this mission. But I did. So. I found out who they were.

You went all the way, George, all the way to the bottom.

I still got my eye on them. I'm always watching.

Figuring them out.

But all that to say, there's some things you can do that are important. And number one is freeze all of your credit with your credit bureau. So I'm not talking about debt and credit cards. I'm talking about the credit report with the bureaus, Experian, etc. And so I went on there, froze all of my accounts so that no one can open up new accounts.

That's right.

So that's an important piece to do. And then having Zander ID theft protection, it's a great product. We sort of look at it almost as a type of insurance because of how it protects your information. And so they'll notify me and they'll send me an email if any of my information was compromised. They have restoration services to get all of your stuff back and making sure that you're protected.

But ID theft, the insurance side of it, it's so inexpensive that it's one of those. just to get. You guys can go to zanderinsurance.com because, again, it's not that expensive. And they just take the amount of time that it takes to unravel all of this. If your identity is stolen, it's exhausting.

Other things, they cover home title monitoring, up to $2 million for stolen funds and expenses, personal and financial monitoring, VPN encryption, antivirus, 24-7 customer and recovery services. So there's a lot that is included, and it's very inexpensive. We're talking like $7.. I mean, you can get family plans for $12.. So these are cheap things you can do to help protect yourself and sleep better at night.

That's right. All right. Let's go to Emily in Greenville. Hey, Emily. Welcome to the show.

Hey. Thank you. How are you?

We're doing great. How are you?

Doing great. Thanks.

How can we help?

So we own about three acres of land. And we have some debt, mainly from our business that we own. And I was wondering if it would be a good idea to sell... Someone was looking at our property, about half of it, an acre and a half, for $150,000.. And I was wondering if it would be better off keeping the land and paying on the debt, or if selling it would be a better option.

How much do you guys owe on your business debt?

Well, business debt, total combined, is almost right at $150,000.

Okay. And what's the other debt?

So $20,000 is the land that we have. We owe $20,000.. And then the other is student loans and credit card debt.

Okay. So that's about $50,000.. That includes all of that.