Don’t Follow the Trends and You Won’t Fall for the Traps!

This is the Ramsey Show where we help you. win in life, win with your money, win in your work and win in your relationships. I'm Ken Coleman, George Camel, with me today in another fine looking jacket. He's ready to go. The phone number to jump in is 888-825-5225, 888-825-5225..

We can mix the two.

All right, so when we get together, we try to have some fun. Let's have some fun today, as we talk about the very serious stuff. George is our resident money expert and I'm your resident income expert. I want to help you make more money and George wants to help you do good stuff with it. So we're going to get right to it and I'm going to tease this, George.

Whoa.

That's all I'm going to say.

Is this dangerous territory? Should I be-.

As a matter of fact, I think the audience is going to love it, because it's a unifying statement and it has to do with money, George.

Okay. How about that? We can all agree on that.

So now everybody can take a deep breath. There's not going to be anything controversial.

No vitriol.

No vitriol and nothing controversial, but it is that time of year, George. And so more on that a little bit later, but first let's get right to the phones. Heather is going to start us off in Knoxville, Tennessee. Heather, how can we help?

Hi, thanks so much for taking my call. My aunt, it was in her mid-70s. She's been a widow for about seven years now, has been the victim of a romance scam. we've just found out.

Oh, gosh. Is this like the catfishing that we hear about?

Yes. On Facebook, a guy had reached out to her and she'd been talking to him for about a year. We found out and we said, you know, this is a lot of red flags. We think this is a scam. Whatever you do, do not send this guy any money and you don't need to talk to him anymore.

Oh, my goodness.

So she didn't send him money, she racked up debt in her name and bought him stuff?

Yes. And then sent him the money. So we are trying to figure out what to do. She lives off of Social Security. She only brings in about $1,200 a month.

Before we get to the money part, I just have to ask, is there any potential help from Facebook in any of this or the credit card company on this?

I mean, that's a good question. I have a feeling that it's from overseas, because she was buying a bunch of $500 minute cards for phones that she was sending them. So that makes me feel like it's out of a lot of jurisdictional hands.

OK.

Yeah, it's rare that anything can be done about this stuff.

I just had to ask. My stomach is turned here for you.

Oh, yeah. It's horrible.

Have you reported the crime, at least, to your law enforcement's non-emergency number and at least have this on file? Yes.

Yes. They reported it. They're going to be getting all the details. I'm not sure how much they can help, though, since she took out loans in her name and things.

They're going to go, hey, this isn't fraud. You did this. Yeah. But at least it's on file and maybe they can track this scumberger who's doing this. You can also report it to the state attorney, FTC, at least to make yourself feel a little better.

Well, we're trying to. Just trying to. I don't know if we've gotten the full picture yet, but, yeah, we're. we're going to get the girl's credit cards canceled, her bank account. We had to close the bank account because what had happened was that she was going to get reimbursed by this guy.

So she has a new bank account now?

Well, we're going to have to set one up and her son is on the bank account. So that is one good thing. But I don't know if we have the ability to. I don't know if she should have access to an account, if that's even an option.

Does she realize what has happened?

I think on some level, but I'm afraid on another level, she hasn't really processed it because she keeps thinking that he's going to send her the money like he promised. Even now, it's very sad.

How old is she?

She's about 75.

Is she? is she having struggles with just mental acuity?

I think she's just very, very lonely.

And you're the and you're the niece. Like, where where are your cousins at in all of this?

They are around. Unfortunately, they don't have a lot of financial security to help in this instance. But my, my aunts, sisters, my mom and everyone are trying to kind of gather around her and help where they can to help her get out of the negative on a lot of her bills. But that's about all that we can do.

And so were you calling us for ideas or were you calling us for some type of approval on something you're thinking about? That's what I'm trying to get to.

I'm wondering, is it moral or ethical for us to say, just don't even don't try to pay back these credit cards, put those aside and and just let them go into collections? And maybe at that point, she can settle for pennies on the dollars, if she will even have that money at that point.

Or do you mean she truly does not have the money? And so I don't think there's anything wrong with saying, listen, she was a victim of fraud. This is what happened. She doesn't have the money. She's living off of twelve hundred bucks in Social Security.

Yeah, I agree with that. I'd do that instantly.

I think the son does need to manage the money from here on out. She's shown that she's incapable and she's still not even convinced. this is fraud, which means it can continue to happen if we continue to give her access to more money.

Absolutely. OK, that's a great point. Freezing, freezing all of her accounts for the credit wise. And we need to get her to sign something for us to be able to do the money, because I think she does have her mental faculties other than this gigantic blind spot. But is that or would you just set up a new account?

You might need a financial power of attorney, unless they both say, hey, this is a joint checking account. The son is on it. Mom is on it. If we do it that way, you'll be fine.

This feels like a family meeting, though.

But yeah, this needs to be the fact that the niece is calling and tells me, number one, you really love your aunt, which is so sweet. Yeah. But I think we need to have a big family meeting. Go. Here's the next steps that we're going to take.

Yeah. If this were, if this were my aunt or my mom, there would be an absolute come to Jesus meeting to make sure she understands she's been scammed and this is not real. And let's address the loneliness as well. But, man, we got to rebuild here. And I would.

Maybe even third party counseling.

But protect her, by the way, before we help her, or else all those good deeds, George, and all that money raised for her is going to go back out the window on the next thing. Wow. Tough call. Don't move. We'll be right back.

Hey, guys, George Camel, here as a new dad, I see a lot of things in a new light, the cost of diapers, the value of sleep and how crucial it is to have a will, because if something happens to me, I don't want my family stressing about the details. And that's why I recommend making a will. with Mama Bear, Legal Forms. A will gives you peace of mind, knowing things will be taken care of the way you want, instead of a random probate judge deciding who gets your fine china or precious moments collection. Looking at you, Aunt Shirley.

Welcome back to the Ramsey Show, where we help you win with your money, win in your work and win in your relationships. I'm Ken Coleman. George Campbell is with me this hour, 888-825-5225.. All right. So we've been talking about this for a while, George.

That's right. That's the official title. Do you know why it's called that?

Because if you live like no one else, later, you can live like no one else. So you can go buy a ticket and and go on a cruise with us, with Dave Ramsey, George Campbell, John Deloney, Jade Warshall, Rachel Cruz and myself and other guests. And you can just do that by simply putting a deposit down, George, of six hundred dollars. You know why? Because you've got six hundred dollars.

You got the margin. So this is for folks who have done the first part. They've lived like no one else. They've made the sacrifice. They pay it off the deck, got the emergency fund.

cruise. Are we going to be checking people's baby step status at the door?

That could be fun. I would love to volunteer to be that guy.

You give you a clipboard, you would be so happy.

I know. How do I verify? Are we pulling credit reports?

You can't. How are we going to do this? It was a joke. It's a ludicrous suggestion. But nonetheless, you got excited.

But what if we freak people out as they try to get on board? And I go, no, no, no. Let's check that credit report.

What if we had Dave shoot a video and it was kind of like an A.

I got. I got to see your DFV, your debt free verification.

Oh, see, look, you've already run with this. All right, George, tell them where we're going, because the the lineup is absolutely unbelievable.

We're going to Turks and Caicos, St. Thomas, Puerto Rico and the Bahamas. Yeah, that's an amazing lineup.

It's a great, great, great lineup. We also have some good friends going with us. Big time chef Maneet Shohan, Deanna Carter of country music fame and Stephen Curtis Chapman of Christian music fame. So we got a little something for everybody there. And all the personalities, including Dave, will be speaking, hanging out with you, and George is going to swim with the dolphins.

It's a synchronized experience.

Yeah. So we're working on that. By the way, George swims in a swim shirt. So that's always worth seeing. And it's an extra bonus with the floaties.

International. International. We have Scotland, Australia and more.

Yeah, it's unbelievable. So always fun to meet you, fine folks. And we'd love for you to come see us. To the phones, we go 888-825-5225.. Tampa, Florida is where Matt waits for us.

Hey, thanks for taking my call.

Sure, what's up?

Hey, I'm separating from the Air Force next month or in a couple of months, and I have a few job offers lined up for airlines. I'm a pilot in the Air Force and I'm switching to the civilian sector. And we're looking at probably a 40 percent drop in pay. If I can start right away when I leave. We do.

OK, let me get out of it. There's a lot coming at us. So, George, let's break a couple of things down here. that'll help us. First thing is explain the training delay and, and in context with, do you want to fly commercial airlines?

That's right. Right.

And so if they're delaying training, that means they're delaying hiring.

Well, sort of. I've got three job offers. They just haven't said. they just say we're not going to start you until they can train January at the earliest, to start you in training, which means essentially start you and pay and pay you.

Why are you leaving the Air Force?

I basically I want to stop moving so much.

But do you have any option to leave, or is this like, hey, on this date, it's over, or can you hang on to the Air Force?

I could, but the it's really important to me to be able to get with an airline, a major airline, at the earliest possible point.

If this is the difference between you guys losing your house, I'm going to go, well, let's pause on this career move until we know what it's going to look like and that we can afford it. Yeah.

I mean, let's skip ahead then. So we're jumping around, but I think it's important to jump around, George. We don't like the idea, George. Why? We don't want him to try to sell a house and take a loss on this.

Yeah. Well, and the question is, how do we get you from the Air Force position to another position without a gap in income and without a loss of income? So what are you making now and what are the job offers offering?

So what I'm making now is about taking a pay of $11,000 to $12,000 per month. And the first year of pay with any airline is a little bit lower. So I'd be looking at about $6,000, $7,000 per month.

Even with your experience?

That's right. The first year pay is always lower.

Does your wife work?

It bumps right back up. My wife works. She's a nurse. She makes about $4,500 a month.

So it would still be a $40,000, excuse me, a 40% hit in your first year. How quickly does it jump up in year two? And does it get back up to where you currently are? Or is it still below that level?

It would, it would go back up to where I currently am.

So for one year, you got it. You basically got to float the 40% difference in one year. But you don't have. I mean, being an airline pilot, you don't have a lot of time for the side gig, do you? Or some something else that you could do to make up that money for one year and not lose the house?

So that's true. And the the other big concern is what if they don't start training for longer?

Why is this the only option? Could you not do cargo plane? Could you not fly private? Why is commercial day one the only option?

So I could. I could do other other things in the meantime. to you have to come, Matt.

You have to. you're basically telling us that we're looking at six months from today at the earliest, that you would actually start to get a paycheck. And you're looking at leaving the military when?

At the end of September. And now I would get about $15,000, $15,000 of extra pay with upon leaving.

But that's a, that's a month and a half. That's a month and a half.

What's your mortgage payment?

Mortgage payment is about $3,600.

Okay. So, based on our parameter, about a quarter of take home pay, you need to bring in about $14,000 to make this house sustainable. Right. And right now, if you you and your wife, let's say you took the pay cut, it was $7,000.. Your wife makes $5,000..

I have other job offers that if they did start me, one of them is scheduled to start me. They could bridge the gap in between now and then.

Well, you just answered your question.

I really could not.

I think, George, we like that. I want to wrap it. We're about shy on time here, George. I think we prefer he take that option, not sell the house.

You can't take a job that brings home less than $10,000 a month. So if you make that the one thing you're focused on, you'll focus on it.

What you're saying, not sell the house. Try to avoid selling the house.

Avoid selling the house. Because they're underneath it. Delay your dream of leaving Air Force until we figure out what's next.

Because they could turn this house into something that's an asset.

Yeah. Moving in with family, all because of an urgency to get out of this job. I don't see it. I don't see the need.

All right. Thank you for your service, Matt. We appreciate you. You're a great American. Don't move.

This is a paid advertisement.

How you doing out there, America? You doing all right? You doing okay? You making enough money? You keeping enough money?

It's awkward. Some of y'all still are trying to Venmo each other and their spouses. Yeah. That's a scary scenario, Ken.

How's that American dream idea? to work really well, to work really hard and keep moving up? Maybe start your own business. How's that going, folks? How's it going?

And people are starting to lose hope out there, Ken. There's a lot more. They're hanging on to hope for the wrong reasons.

Yeah. And so we want your hope focused on your actions and what you can control. And that's what we do here. I'm Ken Coleman. George Campbell joins me.

Hi, guys. Thank you so much for taking my call.

You bet.

It is Devin. You are correct.

Okay, good.

All right. So my question is, my husband and I, we have three children. They are 20, 18, and 16.. And our rule has always been that if, after high school, you don't have to go on to college, that's fine. if that's, you know, what you select.

My first pass is, I don't know that I would change the expectations for her. Now, I'm assuming that if she's careful in this role as a makeup artist, or whatever you call it these days, an esthetician, I mean, that she can do that with low risk. Is that true?

Yeah. I mean, there's no rhyme or reason. as to when she fractures. I mean, she's, again, broken so many bones. I mean, she can sneeze wrong and she can break a rib.

It is what it is.

And we've always.

But I like the idea of her working full time and having her own insurance. It's time.

But the stipulation was, if she's working full time, which I assume is 40 hours a week-ish, then she has to get her own insurance, regardless if the employer offers insurance? Yeah.

Well, no, if the company she works for offers it, she has to take it. You can no longer stay on our insurance. It's just the new insurance.

See, Devin, here's where I'm at. I don't know what George thinks. I just, I would not make a decision to limit her earning ability, to limit her dignity building, simply to save her a little bit of money. on insurance. I mean, because, in other words, it's like, well, she could stay on my husband's insurance, but she has to only work part time, which means the way I look at that is, I'd say it this way.

Yeah, no, no.

Okay, so you get my point.

Right, right. I mean, she could get disability, but we have said absolutely not. You are capable of working. You're going to work.

So walk us through this. Let's say she's working at Sephora full time. She has insurance through Sephora. What are the downsides there compared to what you have right now?

So if she, you know, ends up in the emergency room or she has a series, a bunch of different specialists that she does have to go to, um, the copays are much higher. There's a much higher, you know, out of pocket expense.

Well, let's be prepared for the out of pocket maximum and let's teach her how that works. And let's make sure she has that amount saved.

It's a great point.

And depending on the insurance, we also don't know what the insurance is going to be. Let's look into that. Depending on the employer, let's find out what the copays are. And then it becomes a line item in her budget that she needs to manage. As a working adult, though, this is going to be a higher percentage of my budget than all of my friends.

That's right. She's going to have to effectively have a, I think, a line item in the budget, that is, I'd call it copay. And, and I just think teaching her how to be self-sufficient here, you guys are going to sleep better at night knowing that she's figured it out. And it's literally a function of saving and allocating that in the budget to go. It's kind of like a mini emergency fund, but it should be actually in her budget.

And she's going to continue to live at home. What's the plan there?

Yeah, no, she'll probably, yeah, she'll be, she has to live at home for probably the next few years.

She, yeah.

But see, I like that, but see, I like that because now she can stack more money away in that actual line item of copay or medical. Okay. Like, she has a medical line item and it's like a mini emergency fund, George. How does that feel to you? Correct me if I'm wrong.

I feel real good about this. And so show her, hey, we're going to get a high yield savings account set up for you. This is what an emergency constitutes. We're going to make sure we have the out-of-pocket max. Here's what your copays might look like year one.

That's huge.

While under the care of mom and dad and under their roof. So she has minimal bills while working full time. There's no reason why she can't put away money.

Yeah. All right. Wonderful. I appreciate it, gentlemen.

You're an amazing mom, by the way. You are. I can't imagine the difficulty of that situation. Three kids, one with that special need requirement. And I'm wishing her the best on her journey to become an esthetician.

Yeah. Devin? Appreciate it, guys.

Thank you. Devin, can I, can I put you on the spot? I think you can handle this. If you don't like this, just say no, and it won't be awkward at all. But I just have a feeling right now, George, and I'm going to trust this feeling.

So our faith has been absolutely crucial in all this. We did not know she was going to have this disease when she was born. She was diagnosed at six weeks old.

Wow. That's beautiful. Devin, thank you. Thank you. You really encouraged some people today.

I cannot imagine. I mean, first of all, the trauma that would cause me, let alone the financial aspect.

That's what I'm saying. From every aspect, here's your little one.

So what I'm hearing is for special needs parents, they can't go, well, the Ramsey plan is not for me because we have different circumstances. You have to do this plan. if you've got that. I think it's vital. You have to have the emergency fund.

That's what I heard from Devin, not from us. And wow, what a special family. But then fun to see that, you know, their daughter is coping, and not just coping, winning and thriving. And thank you again, Devin. I hope that encouraged those of you out there that are in that situation.

Wow.

Great stuff, Devin. Thank you again. All right. Don't move. Quick break.

Nick says, I wanted to ask your thoughts on getting an American Express charge card. I'm completely debt free and see there are major benefits in terms of points and airline miles for using these cards that you pay back the next month and never carry a debt. What is the downside to using them like a debit card? This is a question we get very often, Ken. And the part that frustrates me is that you can't use a credit card like a debit card because they're so different.

Because they don't want to pay the percentage.

They don't want to pay. And American Express has fees upward of 3.5% versus a 2.5% with the other card. So the businesses are saying, hey, we're not going to take the hit on this. The consumer's paying big annual fees. And on top of that, what do you think happens psychologically when you're chasing the points and airline miles?

That's why it works that way.

You got 1,000 tickets. And you're like, oh, man, I'm going to get the boom box at the top. And they go, nope, you get a pack of sweet tarts. Sweet tarts and a sticky hand is what you're walking away with. The sticky hand.

Yeah. Good stuff. Thanks for the question. All right. Let's go to the phones.

Hi, guys. So, I'm going to achieve Baby Step 1 by August 1st. After starting Baby Step 2, when should I park to save for a basically guaranteed and necessary professional move?

How much would the move cost, do you think?

It varies. I'm not taking any of my furniture wherever I go, but I'm in early career academia. So, I'm thinking $3,000, like the bare minimum, to potentially get me across the country and start over wherever I end up.

Is it traditional in the academic world to offer, when they hire someone, to offer some type of a moving bonus?

It depends on the position. If it's a tenure-track position, yes. If it's like a visiting lecture position, usually no.

And what are you going for?

I offer everything because of my field. I don't get to be too picky.

Well, why make this move, then, to be a visiting professor, or whatever it's going to be? What's the upside for you versus staying where you're at?

I can't stay where I'm at here in my position here, and it does not renew. So, I have to apply for academic jobs this fall, and then I have to move accordingly. And professionally, it's better for me to leave my home institution where I got my PhD, go somewhere else, and kind of get some distance, and then pop around. It's a weird job market.

Well, okay. So, George, what do you say? He thinks he's got about $3,000.. We're estimating about three. Let's round it up a little bit.

Well, you've got $1,000 already with Baby Step 1.

I think he was stunned by the level of detail you gave him there. All right, let's go to Cheyenne. Can I just tell you something, George? I've never been to Wyoming. I've heard it's beautiful.

Well, yes, sir. Our household income is around $900,000 a year. We live on $200,000 of that. We don't have any debt.

I hope not. I was going to say, that was what I was expecting you to say. when you're stocking away $700,000 a year. That's pretty good.

Well, we've been married 12 years and not had debt since our third year of marriage.

I assume your house is paid for as well.

Yes, correct.

So you've got a few options. And this is for any high-income earners out there. You don't have to make $900,000.. Even if you make $250,000, these might be options you can look into. So you do have a 401k through your employer?

No, I'm self-employed. My wife has a 401k through her employer.

Okay. As someone who's self-employed, are you doing any investing through that? Have you set up a solo 401k or a SEP, anything like that?

No, I'm just contributing.

Well, you've got to be doing a backdoor Roth IRA with making that kind of money.

So I need to do that.

That is an option. You need to, legally. You cannot contribute to a Roth IRA with that kind of income. What you can do is use after-tax money to fund a traditional IRA, and then you can immediately convert it to a Roth with no penalty. So I'm going to set you up with a team, because that's what you need.

My wife does, to her employer, I do not.

Okay. So with that HSA, you can also contribute there. And beyond a threshold of about a thousand bucks, you can invest, and when you're 65, it can turn into a traditional 401k, essentially. You can use that money for things outside of medical expenses. So, beyond all of that, the brokerage account is your best bet, where there's no tax advantages, but there's no income limits, no contribution limits.

Yeah, a smart investor and a tax pro would be absolutely your number one options here.

Good problems to have.

Oh, yeah. You're going to love it. He's going to love the plan they developed for him. Really good stuff. All right, that's going to do it for this hour.

Oh.

And then we're going to talk a little politics. We're going to take on one single issue that I believe every American can get united around.

And that we should be talking about.

And we need to be talking about more. And in light of the presidential race and as wacky as it's been, holy moly, July's been a month. Feels like a year.

So that's coming up.

You do not want to miss it. Trust me. And for those of you that are getting squeamish, don't be. We're not going to take on that.

I don't think you can be offended by this.

I don't. In fact, I would challenge you to try to be offended by what I'm going to say. How about that? So we'll see. That's coming up.

Ken, George, it is great to be able to talk to you guys today. So quick question. My wife won't let us let go of the last credit card. And I just need your help convincing her.

What is her reason?

She kind of likes the buffer of it. You know, we just pay it off at the end of the month. She kind of likes the thought of the safety and the travel. My friend's gotten stranded before and all he had was a debit card. So he wasn't able to rent a car to get home.

All right, question for you, Charles. Question. Yeah. What's the limit on this one card that you guys have? What's the max you could charge on it?

Oh, I don't know. About $5,000 or so.

I got an idea. I'd come up with $5,000 and say, Babe, I have replaced the comfort of the credit card with the absolute max that we could borrow. And so I've got an additional $5,000 in our emergency fund. That's why the emergency fund exists. But I've long since wanted to answer this question this way, and I haven't had an opportunity to.

There's some really simple workarounds, Charles, and I could hit you with. here's what you could do. Here's what you could do. The truth is, this is emotional for her. It's been a security blanket for a long time.

I think that she might go for that. And let me tell you the reason that it's only maybe is she can't stand the Ramsey plan.

There it is. Ding, ding, ding.

See, and that's exactly.

So why doesn't she.

It's probably you.

Actually, that would track.

No, actually, George is who got me into the Ramsey plan. I didn't like it at first either. He's a real good salesman.

I know, I know. I was just thinking that maybe your wife... I thought, maybe your wife didn't like you. I was trying to come up with something.

Well, maybe your wife would like Rachel. Is that a good, you know... Rachel's inoffensive. Everyone loves Rachel.

Yeah, exactly. So why do you...

It just feels like.

It's restrictive or intense, or what?

It's for broke people.

Well, that hurts my feelings.

It is for broke people.

It is.

And.

And it's for rich people.

Well, they become rich.

Right, right. Luckily, we skipped Baby Steps 1,, 2, and 3 when we found Ramsey. And she just feels like it isn't for us.

Oh, because you were already.

That's correct.

Okay. So what is your household income?

Through 1, 2, and 3.

Are you guys exactly where you want to be financially? Do you think you could be doing any better? Or is she like, hey, we are crushing it. Don't mess with it. It ain't broke.

She doesn't. actually... I feel like she doesn't understand how well off we are.

Is she also financially responsible? Or did you kind of...

She's extremely financially responsible. I'm actually... I'm the nerd and I'm the recluse.

So she.

Um, I would say zero, but it actually happened a couple months ago on her own card.

So she got bit by the snake and she says, no, no, no, the snake is still my friend.

Yeah. Well, it was my fault.

We're best buds. I mean, it's not the snake's fault.

I picked it up.

Right. It wasn't a full bite. It was just that it snapped and barely missed her. It was only like a $10 balance or something she forgot. You know, it wasn't big enough to really leave a mark.

So here's the deal, Charles. I'm going to send you a copy of Breaking Free from Broke. And in there, I want her to read the credit card chapter. specifically. In the credit card chapter, I cover the eight archetypes that I found of credit card people.

Right now, we have a $10,000 emergency fund. We have on top of that around $17,000..

Oh my goodness. And she still thinks this is the path. Is there more? Is it a fear thing? Because another one's the fear tranquilizer who says having a credit card makes me feel more secure.

I feel like part of it, we had a lot of fraud on one of our bank accounts. So sometimes she brings up, oh, she doesn't like the bank we have.

Switch banks.

But yeah, I feel like-.

Put a freeze on all of your credit. Switch banks.

Yeah. But here's the thing.

We got to address this. And problem solved.

We got to address the relationship piece. So you're going to have to patiently and methodically address all of these concerns for her. Or else you guys are going to still be at odds over this. This is not... I said this earlier and I was being glib and I need to retract it.

Hi, I just want to say thanks for picking up my call. I'm a new Ramsey, I guess, member here. I just started listening like about two weeks ago.

Well, awesome.

Wow, you're like the hot. now sign at Krispy Kreme. I mean, fresh.

I love it. Yeah, pretty brand new to all this. My question is, I have a spreadsheet of mine and my wife's budget. And I put all of our bills and all of that stuff into it. This was probably about two or three months ago.

That'll leave a mark.

Hold on, George, I'll get the Tums for you.

I actually got some Harper.

You got some, yeah, a little Harper.

All right, so what is the mortgage? And what is your after-tax monthly income?

The mortgage is $180,000.

So, all together, we're talking $5,000,000 and the mortgage is $1,500,000.

What do you guys do for a living?

She works for the state of Texas and I'm an electrician.

I don't know if the number's right here, but what you just told me would mean your mortgage is 28%. The mortgage is $1,428,000.. You guys are bringing home $5,000,000.. Did I miss something?

Oh, well, maybe I looked in my, or maybe I have a wrong calculation in my spreadsheet. But I guess that leads to my question is like, we don't really have much debt. We have about $1,500,000.. We have about three months of our expenses saved up. And I was just basically trying to figure out, like, it feels like we're not saving anything any month, but I don't know if that's because of us or...

What kind of debt do you have?

We have like $1,500 in credit card. Both of our vehicles are paid off. We have about an $800 medical debt that we're paying off.

Okay. So if you paid off the medical, you have savings right now? You said you have three months of expenses saved?

Yes.

What's in savings?

We have $16,000 in our savings right now, as well as.

What are you doing? hanging on to the debt? Why not just pay off? I mean, you got $2,300 in debt. You have $16,000..

I guess it's just kind of scary watching that money go away.

It's scary watching your money go to lenders every month.

Yeah. Yeah, that's true.

I mean, you're actually wasting money making these payments when you actually can get rid of it right away.

You have 22% interest on that credit card. That scares me.

And just for information here, how much are you saving on a given month?

I mean, it really depends on if.

Give me an average. I want you to... Come on, man. Your last three months, give me an average. What do you think?

Saving from just our income, probably basically zero.

Well, then how did you get the $16,000 saved up?

We actually saved it up probably a few years ago and we've been dipping into it. It was actually more than that.

So you're telling me right now, you guys are paycheck to paycheck. as far as expenses. You have nothing left over when you pay everything.

We aren't necessarily paycheck to paycheck after everything is paid. But I mean, after all the bills and groceries and stuff come out, we probably have anywhere between $100 and $400 a week.

Well, $400 a week, that's $1,600 a month you could be saving. So I think what's happened is you're new to the plan. You guys are just new to paying attention to where your money's going. And you're making pretty good money, but it's disappearing. And that's where the budget comes into play.

Yes, she is.

Why is she only bringing home $2,000 a month?

Because she works for the state.

Well, a lot of the money in her paycheck goes towards insurance for us and our kids.

What's her gross income and what position is she in?

She's, I don't really know what you would call the position. She works in child support, but her gross is probably around 38..

Yeah. And so is that, yeah, and so she's just kind of capped. There's not a lot of room for promotion. And even with a promotion, in that, it's just not that much money from a state job. So she's, she's what I would call George, a little bit capped.

Anywhere from mid thirties to, I'm in the forties now.

Okay. Craig, I'm going to ask a question, and it's, I'm shocked. Are you early on in the trade and are you not, are you not seeing that there's massive opportunities for electricians now all across the country, but certainly in Texas?

I'm about three years in, but we live in a pretty rural area. We're not actually in Dallas.

Oh, I see. Okay. So, but you feel like you're, you, you've got your best option. right now. There's no upward mobility.

With where I'm at right now, I think I'm on the upper end of it with where we live.

Are you, are you, are you married to staying in this rural, remote location?

Oh, we're pretty invested here. We're right next to all of our family. We grew up in this area and we bought our house here, and our kids will go to school right across the road.

I get it. So here's the deal. The only way you make more income is if you actually start doing some stuff on the side.

Yeah.

So that's a viable option here to get ahead. You don't have to do this forever, but if you want to get ahead, more income into a budget that George is telling you to. So here's what we're getting at. Discipline budget. And let's bring in some more income.

Yeah, for sure.

Well, that's less than two grand a month for a guy who's a working electrician. I mean, I don't think I'm painting too high of a goal, am I?

No, I don't think so.

All right. So let's get a bigger goal. So if the number's 30 or 40 or 50, using George's discipline in the budget here, you guys are going to be in great shape.

And you need to prioritize savings. It's not, well, if there's something left over, that'd be nice. It's, nope, we're covering our four walls, food, utilities, housing, transportation, insurance. Beyond that, we are putting money away in savings. We're going to invest it in a Roth IRA.

I agree.

Okay. Well, that's definitely a plus, because we really love where we live and we're trying to make it work how we can.

Yeah. So, and by the way, the numbers you gave George were correct, not the numbers in your spreadsheet. Is that right?

Yeah.

Okay. Then so he ran the numbers. You're fine on that.

And Excel lied to you. So go check out EveryDollar. It's going to be much easier to use. You type in your income at the top for the month. You lay out all of your expenses for the month.

And again, this is a great example of some people who, by the way, I love this, you know, they go, this is where we want to be. So when you're in a smaller rural area, you are limiting your income possibilities. So then you're going to have to deal with that. And maybe you have to do some things different for a short season. But that is a reality.

otherwise.

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Hello.

An assassination attempt. And then a sitting president deciding to bow out of a re-election race. You just don't see those headlines. And it's been crazy. So obviously the election is coming in November, George.

What a tease, can I just say.

Well, let me tell you something. It is a growing problem, and it is growing by the second. The issue that I believe that the American people should unite on is the national debt. Here we are at Ramsey Solutions, where, for decades, we have helped people get out of debt.

We've come dangerously close to, by the way. This is not like a thing that, oh, it'll never happen. We've been on the precipice multiple times.

We have. And we've also seen the national debt explode. I asked the team, as we speak, the national debt is growing. So we're going to throw it on the screen for our listening audience.

The national debt calculator.

We are right now, George, at $34,960,000,000,000 in debt. And it continues to go up. They're literally, if you're watching right now, you can see it on the screen. If you're listening, this is out there. They have this at bus stops in Washington, D.C., by the way, where it's literally going, and it's a ticker.

This is like the opposite of Xanax. This is very anxiety inducing.

Yeah.

So we see those numbers grow at that alarming rate. We are just, and we owe money to a lot of people.

100%.

Which puts us in a precarious position. Right.

So, before I break down the five factors, the five ways this will affect you, I want you to understand something. The reason that we, the people, you, me, George, we just don't pay attention to this, because we somehow think the federal government's got this ultimate insurance policy or that they're all going to come together at the last moment of crisis and figure it out. But, folks, if you pay attention to the headlines, year in and year out, we see Congress deal with what we call raising the debt ceiling. They aren't doing anything about it.

It's like raising your credit card limit every year because you can't get your spending under control.

So here we are, on the doorstep of $35 trillion. Now, some of you think this is not an issue, Ken. You're being a little dramatic because it's the Ramsey Show. No, I'm not. Here we go.

So the cost to borrow goes way up.

For everybody and everything. You think interest rates are uncomfortable now? We're talking about double-digit interest rates overnight.

So credit card interest rates, mortgage interest rates, student loan interest rates, car loans, everything.

Number two, the stock market would probably experience a significant volatility. Am I saying crash? I can't guarantee this. Massive decline in the stock market. What does that mean to you?

Well, when people get spooked, including the big-time investors, they sell off their equities. And when they sell it off, the stock price goes down.

But how does it affect the average American person?

Well, you look at your 401k and we all remember the 2008 crisis or whatever. We saw this just a few years ago. My retirement just got cut in half because of what just happened with the market.

Number three, you think inflation has been bad over the last couple of years? If we default on the national debt, inflation skyrockets.

AKA, you can't spend more than you're making as a state.

This ticker the team just put up here. where we're barreling towards $35 trillion can't happen. And so how would we do this if we, the people, to Congress, to our senators, demanded a balanced budget amendment? Because it would take that kind of support. The American people would have to be in absolute unity in massive numbers.

We need like a national rice and beans type diet. here. We spend less than we make, which we joke about Congress, spending like crazy, writing new bills. That's right.

I think we, the people, need to say, you know what, instead of fighting over social issues and fighting over insults and accusations, we ought to go, you know what, the thing that threatens us the most is the actual national debt. And we need an amendment to the constitution.