Building Wealth Means Choosing What Matters Most

The Ramsey Show

A caller struggles with rising college costs for their filmmaker son, considering selling their home despite strong retirement savings. Another listener faces financial strain after a medical emergency and a scam that drained their account. The hosts emphasize budgeting, avoiding debt, and verifying fraud alerts.

Key takeaways

• College costs don't always justify debt.
• Real-world experience often beats degrees for creative careers.
• Scammers exploit urgency and fake fraud alerts.

Transcript preview

Brought to you by the Every Dollar App. Start budgeting for free today. Normal is broken, common sense is weird. So we're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit Union Studio, this is the Ramsey Show. I'm George Camel here with Jade Warshan. We're taking your calls at Triple 8,825. 2.25. school. Yeah, we thought he'd be able to get some help. We thought we'd be able to get a financial aid package or for some kind of assistance. But still far, no luck because we're making too much money, they say. And we've saved that too much on the side. What's it cost every year? It's about $65,000 right now. Wow. What do you guys make? Yeah. Just over 200. And so the options we're looking at is, you know, I've got the house for sale. We've got the house for still, we're right now. I'm hoping to take some equity out of there to help him. Oh boy. What's he studying? You're going to take a helock to pay for your kids college? No, no, I was just going to sell the house and buy another one for cash and then put the money aside. Okay, would you downgrade anyways or was this just for the purpose of cash loan college? Our house like doubled in value in about five years and so we were thinking about just like, you know, making some cash off it and slightly downgrading. We're slightly down grading. We're you know with property taxes and everything else going up to we thought we could kind of you know have a win-win here and put the money inside and help him as well what would be the equity what would you take if you sold it we're looking for like 1.2 million and then to buy something for about seven or eight hundred thousand dollars okay let me ask you this what's he studying and is he the only child for her accounts will probably have the same problem there. And he's a filmmaker actually not too far from you guys at Belmont University there. Okay. Interesting. What's his end goal with filmmaking? What's his end goal with filmmaking? I mean he's already put out his own documentary that's on Netflix and Amazon Prime right now. Yeah, he was able to put something out professionally in high school. So that's nuts. What does he need school for? That's my question? about that people are going to school to get the degree to hopefully one day be on Netflix and he's already on there. I hear you I mean so I have I have no degrees and my wife has four degrees so we kind of see it both ways I mean I don't think you definitely I don't think you need a degree to do something great absolutely but at the same time like he I mean he's filling it there and you know he's connected in on music row there and with a lot of people there so we do think there so we do we do think there's some benefits there's also we do some benefits there it's also So we're enjoying that aspect of him kind of growing up in that But it's just more than we thought we'd ever end up paying and Have you to figure out should we let him you know I mean even if he takes a part-time job It's not gonna help that much I mean try your income is the secret sauce here So you've you've so obviously there's a problem to solve I agree with you on that you've explored the avenue of solving the financial side of it Has there been any talk or exploration on what other education avenues? Is there another way that he could pursue some education in the same field that's not at the expense of Belmont that you guys can actually afford? I would love for you guys to explore that side of the equation because it does exist and I would hate for you to feel like you're backed against this wall. This is the only place he can go to school. You see what I'm saying? What have you guys looked at it on that side of the equation? Yeah, we've looked around a little bit? We haven't really done all of our homework there. You're kind of a hard head. You're kind of a hard head. You're kind of hard head. a little bit so like when he finds the path you like the well you know that's probably he was able to put out his own documentary in high school basically right he just gets stuff done so that's true but he's not feeling very flexible there he has well can I talk to you like parent to parent yeah it's not his choice because you're paying so you do he doesn't get to choose that part right you can't say we can either afford this or we can't we're willing to do this or we're not so you still do say so in this conversation and I don't want you to forget that because selling your house and taking the equity is a huge step. George and I haven't asked you what you have in retirement yet and you know that the sister's coming on down the line and there could be some expense there. So let's ask those questions. What do you guys have locked away in retirement? Hopefully it's juicy. Yeah, we've been teaching F to you for a while. We haven't been the last five years since COVID, but we followed the Ramsey principals for a long time. So we have over a we have over a million. We have over a million. We have over a million. We have over a million. We have over a million. We have over a million. the house is a million plus. Awesome. And things are going really well kind of in her. About 110 or so right now. Oh, fantastic. Okay, that's good. So you're talking like, you'll walk away in profit of like $900,000 or something like that. Yeah, the goal is over a million. Yeah, and then buy something for, you know, I'm fine buying something for six or seven and you know, just putting some cash on the side. Okay. I really don't just lay out the options. It's going to be your choice. But here. But here's your choice, but here's. to cash flow the rest of college and probably locks them away for the daughter too. Right? Option two, we don't sell the house and we use this income that you have and that's going to mean sacrifices in the budget to go, we got a cash flow 60 grand of school out of our $200,000 an income. That's option two. And then the last option is what Jay's been talking about, which is, could he transfer to middle Tennessee state if they have a filmmaking program and still be just as fine? And he's. And he's got really fine. And he's got... relationships, keep building those relationships, keep getting indoors, keep working on set, like all of those on-the-job experiences is really what's gonna help him. So yeah, those are the three options. I tell you this is, this company has hired a lot of guys who have went to film school or have the audio degrees in this media creative space and they don't get paid more because they went to Belmont versus MTSU. I can tell you that right now. So I just want to make sure that we're clear on the ROI of this degree. he's the secret sauce in all this not this piece of paper that says hey you sat in class and did great and maybe learned a thing or two the real experience of making the films making the connections building his portfolio getting on Netflix his professor probably doesn't have a documentary on Netflix he should be teaching this class facts yeah yeah no that's I mean I think we're on the same page there so just wanted to hear somebody else say it so I appreciate you have him watch this call and he can message me you know just upset but I just think he's so sharp that we need to look at this a little bit more you know cautiously to go do you really want to graduate with a bunch of debt? No that's off the table. That's off the table. And you guys selling your house making all these sacrifices you can do that you're awesome parents but it just feels like a pretty drastic move for something that's avoidable. Yeah and I also want to call this out too and I don't know that this is worth saying I think a lot of the notoriety I think a university title sounds. Oh they went to Belmont. Oh, they went to Harvard. Princeton. Ivy League. Sorry. A lot of conversations to have, Reggie. I hope you can talk to him and come up with a game plan. The key is you guys are unified on what the plan is. There's no surprises and you make peace with whatever decision you make. Out of those three, you got to make peace with and go, all right, this is a season. It's not forever. We're gonna be okay. But the goal is we're gonna avoid debt and make sure he graduates in four years in four years or less. The This show is sponsored by Better Help. Summer is here and listen everything changes this time of year. The kids are at a school, the routines go out the window, you're traveling more, you're for sure sleeping less, and if you're not careful you and your family can end up running on fumes. Here's the truth. 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That's Better Help. dot com slash Ramsey. to you. on the weekend and make an extra a hundred each time, which I pay my tithes first, I pay my bills, I have excellent credit, but if something comes up out of the way, my washer tears up, I need new tires, I have to put it on the credit because I don't have it sitting around. I had an emergency fund, a thousand saved and something happened that I had to use that. Now right now I have a bill where I'm in the hospital five hundred and something so I'm paying that every month I get it paid off that I just feel strapped when I'm working as a nurse I made good money I'm thankful for what I get but if something comes up I'm just I feel like I'm in the hole again yeah any suggestions would help thank you a crisis financially. How are you living right now? Are you in a paid for a house? Are you renting? Do you have a mortgage? What's going on there? I have a mortgage and I've been adding some to it because I'd read if I can get an extra payment each year then that takes off so many years. What's the mortgage payment every month? Like $400 and $379. It was my parents' house for years and then I moved down here and was rent for a while but now I bought it. What's left to go on that mortgage? Probably, I don't know, 50-something or thousand and then I have a car that should be paid off within six months. Can you tell us what the mortgage is worth? If you were to sell that house, not that you will. maybe I think I saw that and that was where they raised the taxes to and they said it was worth that. Okay right now in this area some homes are a thousand something to two thousand. I wouldn't be able to take that. So let me recap your debt here you have about five hundred dollars in medical debt you've got the fifty thousand on the mortgage and then what's left on that car loan? Probably six thousand that's what I'm saying I'm hope to have it. Okay. money along the way I put it toward the principal and so that's about what's left. So I'm looking about six months have it paid off. And is there anything else on the credit card, Susie? Because you said you were putting other things like tires and things like that. Well before I got sick with pneumonia I had paid those back down to V-roll. Okay. Right now it's just what was left that the insurance didn't pay. I went in, but I've already paid 200 for that, so there's about 500 and something left. Okay. And you're bringing home about 2,100 a month, total? That sounds about right. And then, yeah, we're going to, right, and then the 200 for that side thing I do, but of one of those side things I always pay my car insurance out of one, which doesn't take it all. So we'll call it 23. So we'll call it 23. 300 a month. Okay. To be fair. Now, Susie, what about your health? You mentioned medical bills. Tell us about your health. Are you able to, if you did want to get out there and do something, are you able to get out there and do a small, small amount of work if you needed to? Well, that's why I do that on the side, where I make the extra $ 269. Yeah. I'm so much for almost 30 years, so that's all I'm going to say. No, it would be hard to do a regular job. Right. I've got bad shoulders, bad knees. Just keep on. You know, and like I say, I know I pay ties, God's faithful, but it's just, something's always going on. And, you know, I just get frustrated with what I call feeling strapped. Yeah, absolutely. I have a... Well, there's hard all around you. It's going to be hard either way. It's going to be hard to sacrifice and work 15 hours a week. It's going to be hard to be hard to stay in the So at this point it's going, all right, what's the hard that's going to get me to where I want to go five years from now, ten years from now, you know, God willing you live another 30 years, where are we going to be? How are we going to be living as inflation continues and our income stays fixed? Now your Social Security will go up incrementally, but not enough to make a dent. And so what you're doing a lot of good things, you're doing a lot of good things, you're just doing them all at the same time. And that's why you're doing all at the same time. except for your smallest debt right now and really you need to get that $1,000 emergency fund stacked back up. So if you stopped all of your extra payments you kept the side work could you save up three four five hundred dollars in a month to put away in savings? I could say something you know I'm just not for sure it just seems like I said I always pay my ties first and so that comes off first and we want you to do that. Have you ever done a budget, Susie, where you laid out, okay, here's my 2,300, here's all of my expenses, because you seem to know your numbers well, down to the pennies. I, well, I hunt for that penny too if I can't find it. But I pretty much when it goes in the bank, sometimes I even get up, and when I know it's in there, and I pay everything off and then what I have left, I have left. Okay, so yeah, I think. So yeah, I think we want, I think we want, I think we want, I want, I want, I want, I want, I want, I want, before that check hits and so we're gonna make sure we give you every dollar it's really easy to use it's very intuitive and that way let's pretend you get paid on the 15th you can go in there on the first and start planning here's the way I want to spend that money and it'll kind of let you make choices so once you've put your minimum payments in there you'll be able to see how much margin you have margin is just whatever is left over and to George's point instead of saying okay I'm gonna use that margin to put extra on the house or I'm and start paying off that, that medical debt. It's good that you're not currently putting anything on credit cards. Or what you can do, Susie, is kind of take that moment and look out over the horizon and say, okay, what do I see that could potentially be something outside of my normal budget? Do I need an oil change? Do you know, am I starting to notice that the tires are getting bald? And really take that time to plan and say, okay, I actually might need to, instead of putting... extra on the debt this month that might need to plan for an oil change or I might need to plan to replace these tires or I might do you see what I'm saying and the budget will really help you get ahead and be able to take care of the things because we think that you have the margin to kind of cash flow things as they come at least at this point but if we can get you doing that and then gradually pay off this five hundred dollars gradually build up a little bit more savings beyond the thousand then suddenly you get in a place where if something it may be an emergency but it won't feel like a crisis and you certainly won't have to lean over and rely on credit cards your debt. Susan, we're rooting for you to figure this out, get out of this consumer debt, build up an emergency fund, and at this point it's going to be surviving for the foreseeable future unless we can see a change in that income if you can get your health and energy back up to work even a little bit would go a long way. If you can double that 300 to 600 bucks, that's some breathing room right there. And Jade, it's a stock it's a stock, and it's a stock, and everyone out there that social security will not be enough and if you're young it may not exist and I'm looking at the data here the trust fund will be depleted by 2032 that doesn't mean it's gonna go away it just means that the benefits would be reduced by about 20% which for someone like Susie imagine her getting a pay cut of 20% yes it was already not enough and for Susie if I were in your shoes it sounds like you're in a good church community I'd be looking for families who need somebody to sit with the kids for a few dad get home, if you can get into that area, that's something that you can do to make a lot of money fast and it's, you know, you can, you don't have to be on your feet all day or anything like that. So try to get involved with some families that need help with, not babies but younger kids. health care is one of the biggest stress points in your budget. 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That's CH ministries.org slash budget and use promo code Ramsey. Buying or selling your home is high stakes because one bad deal could cost you tens of thousands. You don't want to overpay for your next house or sell your current home for less than it's worth. And that's why Ramsey Trusted connects you with vetted real estate agents who have the experience to guide you step by step to make smart decisions not expensive mistakes. Connecting is easy. You can compare agent profile, interview your top choices and pick the right one for you. Find a local Ramsey trusted agent who has your best interest at heart for free at Ramsey Solutions at or click the link in the description if you're on YouTube or podcast. Hunter is in Hartford, Connecticut up next. What's going on, Hunter? How is it going? We're doing great. How are you? I'm not too bad. Glad I got into talk to you guys today. We're happy to talk to you. What's going on? What's your question today? So I've just been recently engaged and we're looking to get married sooner than later, but she has about $18,000 in debt between a car. and student loans. I'm I live at home we both live at home still I have a very stable job and financially I have a lot saved up in savings. How much? What makes sense? About 135,000. Nice way to go how old are you? 23. Wow what do you make? About last year I think it's a call him like 88,000. Good. You're crushing it man. Okay. Thanks. So no wedding date. free with a whole bunch of money in the bank? Pretty much. Like, we obviously like to get out sooner than later, but the market's kind of tough right now. Like, we don't want to just jump on something just to live together. We're both comfortable at home and everything. Both, you know, looking better to save the money. But I just don't know, you know, I totally agree with Dave's rule. You know, once you say I do, you are, you're one. Everything should be together. And that's how my parents I see things, but would it make sense to start that debt-free and clear our marriage pretty much from the start or am I better off putting that say 20,000 into investing even more or something? I mean there's no date on the books and so I would not put any money on to her debt until, to your point, until the day that you say I do. In the meantime, because you've said that it's also important for you that you guys are thinking about buying a house, I probably wouldn't not invest that money I'd probably park whatever's left after you paid off the well and this is assuming there's debt left by the time you get married by the way because she should be working hard to pay that off in the meantime but I'd probably keep that 135 parked in a high-yield savings account I'd separate it though I'd put aside what you think is gonna be three to six months of your expenses at least three months of projected expenses once you were to move into a house and then I'd put the rest aside and start piling up a down payment three months of what you project your expenses will be is because you've said hey we want to move into a house we know that that's going to be more expensive right than living at home so really think about what that would be with a mortgage and with some of the other things that are required living in your own place and I'd make sure to have that stacked up but my biggest expectation is I'd be talking with her now and say okay these are my philosophies on debt what's your philosophy and do you plan on off in the meantime I mean I know we don't have a date set but I'd be looking to see if she's hitting the ground running on this debt yeah no 100% she was paying pretty much like close to 70% of what she makes throwing it into everything she has okay so she's mostly be gone yeah and whatever's left yeah let's pile our money together and one checking your savings account and go all right let's clear the debt let's have the emergency fund anything left becomes our down payment money and then see where you're let me add this to the mix so I feel like that part of the subject is kind of put to bed let's talk about the house buying part because both of you have been living at home it sounds like both of you have never lived on your own honestly George I would advise you guys to rent someplace first as opposed to just jumping right into home buying because home buying is a fabulous thing it's a wonderful thing it's necessary to build wealth but at the same time it is a huge change in life and if you've never your own, I would start with maybe renting an apartment or renting a small place together just to get the feeling of what it feels like, get that first year of marriage under your belt. Yeah, getting married is already enough of a change, so to add home ownership on top of that, it's just going to feel like, whoa, I just grew up real fast. So there's no rush to buy a house. You were doing so well. I have no fear that you're going to buy a great house and do it with a whole lot of peace with a whole lot of peace with this wonderful piece with this wonderful gow. off to get married. I would go ahead and go, hey, we're engaged. What are we doing wasting time here? Like don't you want to move in and spend your life together? Yeah, what is the holdup? Exactly. So, like, we've been together since high school, so we've been together seven years and now it just seemed like the right time where I felt financially enough that I could support her worst case or something happened. But the main reason also right now is like getting married soon and later is for health insurance. Okay. mom and dads. Correct. Yeah like I've had mine since I was 19 when I started my job which I work for the state so it's very good benefits and very good health insurance. Okay. But she's like kind of in need of the insurance. Understood. That was kind of a thing of why I wasn't sure since it would be like a sooner than later kind of move in date and stuff. Are you saying she's on her parents insurance and she'd lose that once you're married? Correct. And then you can't. Yes, like the main reason for getting married soon would be to get her on like the better insurance to see the normal doctors and stuff. You know, I don't love making a marriage choice based off of insurance. I would much rather you guys make it based off of here's when we think it's time, you know, we feel good about this. The insurance is a part of it. That was just like the insurance is like the urgency of it. But we've been saying like, I mean, for probably three years now I've been saying I've been saying, I have probably three years now, I've been saying, I've been saying, Well, that's neither here nor there. You got to get married before you have a wife. It's like, I'm dead free. Other than this loan I got to pay. This is the girl. Yes. I'm going to say it again. If it's time to get married, go ahead and get married. And don't let life insurance stop you. But my biggest pieces of advice to you, there's three pieces. So this is your homework, write it down. Number one, you said this and George and I said it, don't pay off any debt until you're is I would advise that you rent a little while at least one year before you get married and thing number three this is a new topic when you do go to purchase a house please please keep in mind if you know you guys seem like your planners and you're we're gonna do this and we're gonna have babies or just when you buy a house think about what it might look like if one of you were to stay home with a baby okay and make sure you're buying a house based off what those plans are don't bite off more than you can chew because you know all of that all of that matters in the grand scheme of things to 25% of your after tax monthly income. That's a win. Then anything she brings in is gravy. And now you guys are doing great. You could pay off the house. I mean, this is what my wife and I did, Hunter, and this is not saying, it's prescriptive, you don't have to do this. But my wife and I got really aggressive. We almost treated baby step six paying off the house like baby step two. And we knocked that thing out in 26 months. And then when we started a family, and she left her nine year Ramsey and so I want you to have those kinds of options and that's why we don't want you to rush into anything do everything with peace you're 23 yeah average homeowner is now 40 years old when I saw that I'm not worried about and then I have one more question too hit me I have a pension stuff like that. Yeah. What else should I be putting into right now being this young and having the savings? Oh I got you Hunter I'm gonna gift you a virtual ticket to investing essentials. It's happening September 1st and 2nd and you can tune in watch Dave Ramsey and I unpack this wealth playbook of how we've created so many millionaires what Dave actually does with his money and we'll walk through the exact steps the exact sort of waterfall you should do with that 15% that we recommend investing. That's the step that 15% that we recommend investing. That's you can wait up to three years if you want Hunter you can wait up to three years if you say I want to forego investing for a while while we're saving up a down payment and potentially doing what George said and paying full cash for a home I might absolutely do that you're 23 years old you've got plenty of time and to be able to buy a house in cash is really a major deal for you compound growth will do the heavy lifting as you work for the next 30 to 40 years so taking a year or two off to get into that house could be worth it I'm all about practical ways to save time and camps, deliveries, travel plans, online shopping, and trying to keep everyone organized, my mental load can get pretty full. That's one of the reasons why I love Delete Me. Most people don't realize how many data broker sites have their information online, like old addresses, phone numbers, and even family connections. And that can put you at risk