Chapter 1: What financial struggles are discussed in the beginning?
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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 Jade Warshaw. Next to me, George C-C-C-Camel. Hey, love it. That was not a sound effect. That was actually me. That came straight from the camel's mouth. Nailed it. I know. I did nail that.
And we are going to nail it here with Marie, who is in Cleveland, Ohio. What's going on, Marie? How can George and I help today? Hi, thank you so much for taking my call. Unfortunately, my husband of 46 years old, we were married 21 years. He died suddenly 10 months ago. Oh, my goodness. Yeah, it's been really hard, but we are trusting in God to take care of us.
We have three teenagers, 17, 15, and 13 that I'm now raising. My husband was the main breadwinner, and I was a stay-at-home mom with the kids. I homeschooled them, and I'm wondering how much money I need to have in the bank moving forward if I want to buy a home. We have no debt. We own both of our vehicles, but I am raising three teenagers now by myself and having to figure out an income.
The only thing that adds an interesting twist to this is that my husband's, the company that he worked with, they're very generous, unbelievably generous, and they have offered to continue his salary for a year. Wow. I know. I am still absolutely blown away by how God has lavishly taken care of us, but I just don't know what to do.
Another situation that's been an incredible blessing is that someone has offered to pay our rent. We currently just rent a home through the rest of this year as well. So I am in a position where I can save quite a bit of money and potentially pay for a house in cash. I just am wondering what would be a wise decision to have in the bank if I do find a property.
Marie, was there... I'm so, so sorry for your loss, first off. Thank you. Was there life insurance at all? Yes, there was half a million. Half a million, okay. And have you received that? I have. I have it in a... like a savings account, you know, a high-yield savings account. Okay. So it is drawing a little bit of interest. Okay, good. And that's just where it should be.
So I hear two main questions.
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Chapter 2: How can Marie manage her finances after losing her husband?
I hear, you know, how do I basically plan for life and budgeting month to month as the years go by? And also, how do I set myself up to purchase a home in cash? Is that right?
Yeah.
That is correct. Okay. So I love the generosity that you're experiencing with the folks around you, the year of salary, the year of rent. What I would do is I would go home tonight, we'll send you every dollar at no cost to you, and I would...
go through and i would just budget out what my expenses are and i would not right now play in uh the year of rent i would still put the the rent on there just so i can see what it is because instead of paying the rent you'll just pay it to yourself in savings um and that way you'll get used to that muscle of this money comes out and even though right now it's going to savings you'll you won't get used to spending it month to month and i think that that's a good thing
and you can even keep your husband's salary on there since they're going to be paying you a year's worth of salary. And then after that, I'd say, okay, with this life insurance, can I draw the same amount of my husband's salary and just keep that budget going? So what did your husband earn? Well, he was self-employed, and so he did have to pull out quite a bit
Quite a bit for taxes, and he didn't have very many write-off expenses, but he was earning gross about $140 a year. Okay, and that's what he took home into you all's personal budget? Well, that was gross. So after pulling out a tithe and taxes... I would say probably more like around $90,000 or $100,000. Okay, cool.
So if you can look at that monthly amount and say, okay, this feels good for me to live off that amount, so that's going to be somewhere around $6,000 a month? So you'll get to test that out and see how that feels. And in the meantime, I would, George, get with a SmartVestor Pro and start looking at the best ways to invest this life insurance.
Yeah, what they can do is look at all of the assets in the picture and then show you projections of...
how what kind of runway you have for this money to work for you because if it's invested it's in the market so it could go down temporarily could go up and the last few years in the market have been great and that doesn't tell us that much we don't know what the future holds but investing it for the long haul is going to do you way better than just keeping it in a high yield savings account now can you replace 140 000 income off 500 grand for the rest of your life
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Chapter 3: What should Marie consider before buying a house?
So if they do go public, it's going to be a big payday for you. What does your $20K potentially turn into if they go public? Yeah, I don't know what they would go public at. Probably maybe $15 to $20 a share is an estimate. So you could 3 to 4X your money?
Yeah.
would be the hope a couple years from now. What baby step are you in? Do you have any debt? Yeah, just mortgage. You know, I got to tell you, if I were in your shoes, I wouldn't do this. It feels like a gamble. And I think that you could take the same money and invest it and know that you're going to get the return on that money.
And I certainly wouldn't want to drain my savings knowing that I'm going to go through a 90-day drive spell with no income. I won't have a 90-day dry spell. There's just a 90-day purchase. Could you come up with that money outside of the emergency fund or close to it? Yeah, I could.
It would have to come from probably Roth or... No, not from retirement, but from your future income or any other assets that are liquid.
Okay.
Yeah, I possibly could. I just like the idea of you setting a guardrail for yourself of saying, hey, I'm not going to go less than three months of my emergency fund, but I'm willing to drain it down to three months and use future income in order to purchase the options if you're going to do it. And that way you're not stuck in alerts because Murphy will come knocking, man.
As soon as you buy those stocks, you're going to have a $15,000 emergency. It's just how life works. Right. So I'm not mad if you do this. There's not an all-or-nothing exercise option on them. I could do a certain amount. Oh, that's good to know. Then you're going to go – if they do go public, you're going to go, dang it, I should have gone all 20. I could have made more.
There's always going to be that element to it of the what if. So if you feel strongly about this company, and even then, once you do – once they do go public, I would then move those stocks into a mutual fund or index fund versus keeping it in a single stock. Correct, right. Well, just a question. Why are you leaving the company if you're expecting them to do well and go public and all this?
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Chapter 4: How does the conversation address Marie's options for debt management?
Same investing schedule over four years, but it's a stock that's pretty well traded right now. And so I think it's just a better opportunity also for my career. And maybe one other question I should have asked early. How much do you currently have in retirement? My right for now is probably around $350,000, $350,000 across 401k, Roth and others.
I mean, yeah, I can get on board with what George said. I think that if you can find a way to either cash flow this or not go beyond the three months, I think that that's a fair – I think that's a fair play on this. Otherwise, you're going to call us back three years from now and say, you guys told me not to get it, and I could have made $100,000. I know. I know.
You know, it's like one of those things, though. They're so – When I look at all the companies out there who are trying to go public and make that transition, it's like then you go, well, gosh, this really is a toss-up. You really don't know. Yeah, I've got a friend who's in that exact situation.
They have all of these paper stocks that aren't worth anything yet, but one day they could be, and it could be their future nest egg or it could be nothing. Sure. Like that's basically, now we're just playing the lottery. Yeah, it's a lottery play. And at that point, because of his baby, let's kind of break this down, what the logic is.
Because of his baby step, in many ways, and because of the net worth that he's built, I think in many ways he could take that money. It's like buying a car. Can you take this and kind of just burn it and it not really affect you? I think he's right on the line of that being the case. Yeah. He makes a great income. If he was in debt, I'm not going to say, well, don't pay off the debt.
It would be a no brainer. But because he is in a good spot, good financial foundation, it's a risk that he can actually take. Yeah, I agree with that. All right. Very, very good question. All right, George. There is not a. Oh, there it is. Dylan is in Baton Rouge. Here we go. I was about to say. All right, Dylan, how can we help?
Hi, I'm just wondering if I should drain most of my savings to pay off our only non-mortgage debt. Drain most of your savings to pay off your only non-mortgage debt. I'm going to go with yes, but tell us more so that we can run this thing back and make it interesting. Okay. Well, the debt, the only non-mortgage debt is my truck, which is at $24,524 is left owed on it.
And we have about $39,000 total in savings. What kind of savings? It's not retirement, is it? No. $31,000 is in a high-yield savings account, and then about $6,000 is in a regular savings account. Okay. It's a no-brainer for me. I'm paying off the truck yesterday. Why haven't you paid it off so far?
Well, mainly because my wife is apprehensive about it because she sees the amount that we have in savings and dropping it down drastically scares her. She wasn't apprehensive when you got a $40,000 truck that went down in value as soon as you drove it off the lot with a giant payment? No. We weren't married at the time.
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Chapter 5: What are the golden handcuffs in financial decisions?
Yeah. So there's some golden handcuffs there. So never think, well, it's super cheap. I just pay it every month. That's what they want you to do. Can I tell you, I kind of got tricked because I didn't know.
Chapter 6: How can resetting your phone improve its functionality?
So this was several, several years back. I was going, I got a notice on my phone that was like, time to upgrade. And to me, when it's like, it's time to upgrade, I'm thinking, okay, I'm just upgrading my phone. It's time to just swap them. Swap them. There you go. And I didn't even realize because they just did one phone for another. And then I realized it was in my bill.
It was just automatically. And so all of a sudden one day our phone bill went down and I was like, why did our phone bill go down? And I realized I'd been paying payments on the phone and I didn't even know it. That is brutal. Diabolical. Oh, the other thing I need to mention is that a lot of people think, well, my phone is broken.
Chapter 7: What should I consider before buying a home?
It doesn't work anymore. No, it's just user error because you put so much crap on that phone, it can't function anymore. Too much, not enough memory. You gotta clear some space. And so resetting your phone and cleaning it, you'll feel like you got a new phone. Just like with a car. Get your car detailed and that car fever will go away pretty quickly. You know what though?
Some people, that's just their thing. Like if it weren't for Sam Warshaw in our house, I would have no dealings whatsoever.
Chapter 8: How do I know if I have enough saved for retirement?
With the technology. Like he does all that stuff. I get frustrated. One thing doesn't work. I'm like, that stupid phone. And he just walks by and pushes one button and it's all fixed. See, me and Sam, we're tech support. Tech support. Every household needs a tech support. I can tell it was you in your house. I can't use a screwdriver, but I can fix your Wi-Fi. No problems. Tech support.
We need it.
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$25 forever requires customers to remain active on Boost Mobile Unlimited plan. Ask Ramsey is our free AI tool that's built and trained on proven Ramsey principles. And so today we're going to talk about some of the most asked questions that you guys ask Ramsey. We get questions all the time around budgeting, paying off debt, but this time the top question was around retirement savings, George.
As a matter of fact, the most asked question was this, how do I know if I have enough saved to retire? Well, the simple answer that you will hate is you know you have enough saved to retire when your retirement income can cover your retirement lifestyle without depending on Social Security.
So figure out how much you'll need to live on each month in retirement, which easier said than done because we don't know what inflation is going to be. Will Social Security be there? How much will it be? Healthcare costs, all of that. But to the best of your ability, go, okay, here's what I'm living on now. Here's what I think it'll be 10, 20, 30 years from now. Right.
then list all of your expected income streams. Hopefully, if you follow our plan, you've got the 401ks, IRAs, maybe even a pension. And if your monthly income is close to or above that expected monthly spending, you are probably on track. And if there's a gap that tells me you need to lower the lifestyle, you need to increase how much you're saving now or plan to work part-time in retirement,
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