Chapter 1: What is discussed at the start of this section?
Brought to you by the EveryDollar app. Start budgeting for free today. Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network and the Fairwinds Credit Union Studio, this is The Ramsey Show. I'm Dave Ramsey, Jade Walsh, our number one bestselling author, and Ramsey personality is my co-host today. The phone number is 888-825-5225.
The call is free and some say the advice is worth exactly what you pay for it. Savannah, Georgia. Sally is calling. Hey, Sally, how are you?
Hi. Thank you for taking my call.
Sure. What's up?
So we found y'all through our church, through SPU, about a year and a half ago, and we are on Baby Step 4. And my in-laws kind of popped this idea to us about six months ago. We bought our house about two years ago, and it has a very large unfit
have had this idea that when they retire which is going to be my father-in-law's retiring at the end of the year that they want to kind of put some money into our house and finish off our basement for them to kind of be snowbirds to be here go in the south and then go up north and then eventually kind of transition to living with us in our basement so
And I'm not totally against the idea because we have a good relationship. It'd be great for our kids to have grandparents close by. But I'm a little bit concerned about the long-term effect of this. You know, they wouldn't really have an ROI putting money into our house. Do they know that? Yeah. Or you decide to move and take a different job.
Yeah.
And my husband said that to them, and they kind of were like, oh, well, I guess you just mean that two more people are moving with you.
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Chapter 2: What are the implications of moving in with in-laws?
And so... But if they do move in, I can't think of an exit strategy that works unless both of them died in their sleep. No, everything becomes— I mean, other than that, I can't think of a good exit strategy here.
No, and then everything becomes a family decision.
And they need to do that in time for you to move. Yeah, I mean, no. This is just—no. No, no, no. There's going to be aging problems and disability issues and care issues and you all and boundary issues. And you guys, there's like 99 things that can go wrong and only one that can go right.
Yeah. And all the risk is on you guys. There's no risk on them because they get built in health care.
The risk is on them as if you sold the house after they did a bunch of improvements.
Yeah, that's true.
That's the risk is on them. But still, they need to use their money more wisely.
Yeah.
And have a good life that it's fine to be close by, but we need good, healthy, physical boundaries. It's a good thing. Man. So. You know, we are now getting calls in the last three years that in 40 years of doing this show, I've not gotten much of. The parents? Much of. Just this idea of multi-generational housing.
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Chapter 3: How can I balance debt repayment with family obligations?
This is what we're going to spend on whatever. And by agreeing to that, we're also agreeing that we're not doing anything else.
Right, not veering off.
Yeah, and he's not doing that in advance. Instead, he's way up above it in the clouds going, I think it'd be good to get out of debt. We got babies, but I really want a gun. Because he's not gotten involved yet.
That's right.
And I want to get him more involved in the detail, not in the execution of it. You can do the execution. You're the nerd. You're good at it. But I do want him to be involved in feeling the emotional weight of the plan that is going to be executed, the detail of the plan that's going to be executed.
That's right. And even in every dollar, when you can see that roadmap in front of you and you know it's going to take X amount of months and something that you think is small, $300 or $400 a month, that adds up to time that this is going to take to finish this.
So we're having a kitchen put in one of the houses that we own. And obviously, my wife's going to be real involved in that design.
You think?
And so she's real involved in the design. I'm real involved in the design because I want to oversee it. Yeah. The builder is understanding the design. And the three of us have gotten in-depth, detailed agreement with the kitchen designer of what is going to happen on paper. Then they build the cabinets. Mm-hmm.
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Chapter 4: What strategies can help manage impulse spending?
Right, right.
How do you make the money? What kind of business is it?
So I'm a land broker, so I sell farm, ranch, and hunting and fishing. Good for you. That's fun. I've got a friend of mine that does that. He makes that kind of money and more. Yeah, well done. That's great.
I'm really fortunate to have a job that I love.
Yeah, yeah. I get to walk around on beautiful land all day long. That's neat. All right, our drive on it. So here's the thing. The emotion that you're having is that it's regret. It's disgust that says, I make too much money to have nothing to show for it. Yuck. It's a bad taste in the back of your mouth, right?
I would say yes.
Yeah, and I want to use that and say, okay, I'm going to lean into that and use that to say that's going to force me to fix this. Because you don't want to wake up 10 years from now and have made $4 million over the last decade and have zero, except a new shop in the backyard. And that's what you're saying. You're saying that out loud.
So the first step to solving a problem is recognize there is one. So you're right on target. Yep. The way you fix it is you develop a detailed game plan before the month begins. And so download the EveryDollar app, and we'll give you a year free on it. And I want you to start with saying, okay, this is my monthly budget. Now, your budget is erratic because your income is. Sure.
It's also cyclical, which is why this is important now. Exactly. But we also need to set a baseline of what it takes to operate survival per month. So if you're making $300,000 and we said, okay, we're going to spend $10,000 a month, that's $120,000, to operate the household.
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Chapter 5: What should I consider before selling my valuable watches to buy a home?
So I can pay off deferred stuff versus just the smaller stuff. I can kind of go out of line there.
I would, you know, just temporarily. It's only $900. Yeah, the zero, that's nothing down, 0% interest until X, and then they backcharge you at 38%. Yeah, that's how they screw you. And 89% of those contracts, people do not pay them off in time.
Yeah, if you can get out of that, that's wonderful.
So, yeah, you want to knock that in the face, and you want to do it a month and a half, two months early. So there's no question.
Chapter 6: How can I effectively manage my debt and prioritize payments?
So they don't say, oh, we didn't post it, and now we really are going to charge you the interest because the mail didn't get here or bull crap, okay? Pay it and get verification a month early that it's paid.
Okay.
Because they're going to try to screw you. It's what they do.
Yep.
Nope, I agree.
And clean them up as fast as you can. I don't know how many of them you got, but, yes, I want to get rid of those. And if you need to shift your debt, snowball around just a little bit. Because you're saving, you know, probably 30% or 38% interest, something like that, 20%, whatever it is. Over the course of however many months and that kind of thing. Yeah, that's a 100% knock.
It goes away if you pay it early. And, folks, that's the ripoff of the nothing down policy. you know the rooms there they went right and uh you know you buy this couch and not pay for it for 24 months no payments no interest and yeah that 24 months goes by in an eye blink and then you get charged all that back and almost nine out of ten people don't do it
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Chapter 7: What steps should I take if I'm considering bankruptcy?
It just leaves you confused and exposed. Guardian is different. They're not some call center. They're real attorneys. And with Guardian, you're assigned an attorney from day one. That means if your creditor sues, you're not scrambling and you're not hit with surprise legal fees. Now listen, I'm always going to tell you the best way out of debt is the old-fashioned way.
Clean up the mess and pay it off. But if bankruptcy is staring you in the face, Guardian gives you a legitimate alternative. They've helped over 55,000 people settle more than $600 million in debt. So before you make a decision that follows you for years, go to GuardianLit.com slash Ramsey. That's GuardianLit.com slash Ramsey. Well, I wish we could get to every call here, but we can't.
The lines are always full, and I know a lot of you get a busy signal. Sorry about that. We do have an alternative, though. If you go to RamseySolutions.com, you'll find our Ask Ramsey AI tool there. And it's based, the data in the AI tool is based on three years of calls into this show, plus Financial Peace University lessons, plus the books we've written, plus the articles we've written.
And so only Ramsey information was fed into this, so only Ramsey answers come out of this. That's how AI works, by the way. It's artificial, if you hadn't heard. It's not real. And so it's going to produce an answer almost as snarky as you would get here on the air. And so we haven't been able to add quite the sarcasm level to it yet that we have in person, but we're working on that.
So the rest of it, though, the answers are exactly what you would get here on the air. Ask Ramsey. It's a free tool. You'll get the same answer. Try it out. Ramseysolutions.com.
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Chapter 8: How can I use my Roth IRA to leave a legacy for my family?
Steve's in Green Bay. Hey, Steve, what's up?
Thanks for taking my call. I'm really excited to talk to you and Jade. So I have a very simple question. I'm 62, retired. My wife is 60 and she's going to work for four more years. I want to know how much we should be contributing to my Roth now because my investors are telling me that I have a $500,000 investment. in my investments, and I only have 150 in Roth, and the rest are 401k and IRA.
And I don't want to create a tax liability for my kids or grandkids. I have two children and four grandkids. But I only have an effective tax rate last year of 10%. So I just thought I should be contributing more to Roth. And they said I'm good because of the way things are going to roll. And let's get your opinion on that.
Well, when I first started this stuff, when the Roths first came out, it was after we started this stuff, the Roth came about, I was so excited that, you know, I was in my 30s and 40s, that I could have tax-free growth. And I was pushing everybody to get tax-free growth, and I'm pushing me to get tax-free growth. And so I had everything in Roth.
And then anytime I could convert something to Roth, I would. And so I was always moving into Roth because I was getting tax-free growth. Now that I'm 65, it suddenly has occurred to me that there's two other benefits to having everything in Roth that are even more powerful than tax-free growth or add to. It's not more powerful, but add to it.
Number one, at 73, I don't have RMDs, required minimum distributions. So all of your 401k traditional, you're going to have to begin to withdraw at 73 under the RMD rules.
Whether you want to or not.
Whether you want to or not. And, of course, the more you have in traditional, the more that check is going to be. The second thing is, and in my case, all of mine's in Roth, so 100% of mine's just going to sit there and continue to grow tax-free because I don't have required minimum distributions, right? Right.
The second thing is that Joe Biden passed the SECURE Act, and the SECURE Act says that all inherited IRAs, in other words, if you name your kid as a beneficiary on your 401k or your IRA, and it's traditional, if they inherit that, they have to withdraw that money within 10 years. On a 10-year schedule. So they have required minimum distribution.
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