The Ramsey Show - App - Are We Heading Toward a Recession? (Hour 1)

Episode Date: May 2, 2023

Rachel Cruze answers your questions and discusses: "Should we put money into my father's house or save for our own house?" "How should I budget money I make from surrogacy?" Knowing which debt to tackle next,  from the blog: How the Debt Snowball Method Works, Are we heading toward a recession? "Is debt-consolidation the right option for us?" from the blog: What Is Debt Consolidation? Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Join a Personality-led FPU class. Click here! Enter The Ramsey Cash Giveaway for a chance at $3,000! https://bit.ly/TRSgvwy Shop our bestsellers during the $10 Sale! https://bit.ly/TRS10Sale Enter The Ramsey Cash Giveaway for a chance at $3,000! https://bit.ly/TRSgvwy Shop our bestsellers during the $10 Sale! https://bit.ly/TRS10Sale Want a plan for your money? Find out where to start: https://bit.ly/3cEP4n6 Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Interested in advertising on The Ramsey Show? https://ter.li/s64ye3 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

МУЗЫКАЛЬНАЯ ЗАСТАВКА МУЗЫКАЛЬНАЯ ЗАСТАВКА Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studio, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. I am your host today, Rachel Cruz, Ramsey personality and bestselling author, taking your calls all across America. It's a free call anywhere in the country

at 888-825-5225. And I figured in this hour, I wanna ask all of our callers that call in one pain point when it comes to buying food. So with inflation and everything going on, I feel like the number one question I get when I'm out or on social media is around saving money when it comes to food. So whether it's grocery shopping or out to eat. So we're gonna play that little game with all the callers this hour. So first up, we have Ricky in Phoenix up first. So

hey, Ricky, welcome to the show. Hi, thank you so much for taking my call. Absolutely. OK, so I just kind of threw this curveball on you, Ricky. Do you have a great money saving hack when it comes to food? Before we get to your question. Gosh, well, I'm actually we're really, really blessed. We are on get EBT Get food stamps right now So that's kind of how What we're using to supplement

Oh yeah Being able to Supplement our food Every month And it's I know obviously It's not like a long term Solution

But in the meantime It's really been able To help us And it's been such a blessing Yeah well that's great And especially for people If they have a change of season Or something

For that's yeah Something to look for To kind of be that bridge Totally In their stage of life That's so great, that's great. And especially for people if they have a change of season or something for that. Yeah, something to look for to kind of be that bridge in their stage of life. That's so great. Okay, that's so perfect, Ricky. Thanks so much. All right, what's your question today? Okay, yeah, so just a little bit of background. So my husband and myself and my two children, we are living at home with my dad right now.

We do pay him rent. It's very reasonable. But other than that, I feel like we don't have like a ton of huge expenses. And so my husband, he actually just received an injury settlement check in the amount of $75,000. Oh, wow. So he's, he's okay now and is fine. You know, has a good standard of life. He still has like pain, but you know, for the most part, um, he, yeah, he is good. Okay. Good. Um, yeah. And so, so for with that, I mean, we, you know, we're living with my dad and really our goal is we would love to be able to buy our own home. Um, but just like in Phoenix and where we're looking with the house prices, even if we put like a 20% down payment, we can't even afford a mortgage, like a 30-year mortgage,

let alone a 15-year fixed mortgage on my husband's income, what it is right now. And it just feels, you know, really discouraging. And I know a lot of people feel that way right now, but, um and that just the thought of having to save you know another 50 175 grand you know whatever it needs to be to get that mortgage sure 25 percent of our take-home pay it just feels like what do you guys what do you guys make a year so he last year he grossed um 48 000 and then this year he's projected to make closer to 55 000 55 000 okay okay and you guys are you're living with your dad you're paying rent but you $48,000. And then this year he's projected to make closer to $55,000. $55,000. Okay. Okay. And you guys are, you're living with your dad, you're paying rent, but you guys really want

to do, be out on your own. Do you have kids? Yes, we do. Yeah, we have two. We have a, well, we have a baby. He's turning one on Thursday and an almost three-year-old. Okay. Two boys. Okay. And so I guess my question is if it would be a good idea for us to put money into dividing my dad's house to make it like a more sustainable living situation, long term and kind of plan to just stay here for the remainder of my dad's life, or, and then if that's not a good idea, kind of, secondly, where should we park that money in the meantime, we currently we just have it in our money market account at our local bank. But I'm just wondering if maybe there's something that is like more of like a short-term investment

or something like that that would be better. Yeah, it's a great question. And I know so many people want to be homeowners. I mean, I feel like this is such a, it's the American dream, right? And we talk about it a lot on this show. But the point is that math has to work for you guys, Ricky. And with the income that you guys have, which is fine, I want you to have a house,

not only that you can save up the down payment for, but that you guys can sustain, that the mortgage won't be a huge part of your take-home pay, that it's going to be something that you guys actually see as a blessing and it doesn't end up being a curse and a burden. And so you have to be able to look at the price points of your income. And that's the starting point. And I think some people

will jump to the house first and they're like, okay, what's the kind of house we want? Let's figure out how to make our life work with that house. Or sometimes that's backwards. You guys have to look at your income and say, okay, we're making $55,000 a year. What can we afford with that income? And letting that be the springboard to the math, which means it may not be a huge house. It may not even be a single family home. Maybe it's a townhome or maybe it's a condo for a bit. But I think getting in the market

is a great goal for you guys. Do you guys have consumer debt? So no, we have like a really small amount of kind of like non-traditional debt that my husband actually, we went to pay it yesterday and then there was an issue. So he's actually going to pay that today. And that was like a little under $10,000. Okay. And so, and that's it.

And then do you guys have any other savings besides? We had about $10,000 in savings as well that we had. And we both have Uberars and we don't like use credit cards really. We just had a couple ones that we were using to kind of build our credit, but we don't keep a balance. It's just like we use this to pair internet, you know, and that's it. Okay. Well, what I would recommend, Ricky, is I feel like you guys, it's a, it's, you're, you're kind of dabbling in one area. You have this money over here, all of it. And I think getting everything together

and looking at a holistic picture is gonna help you guys. So I want you to stay on the line and Austin will pick up. And I want you guys to go through Financial Peace University and your husband together because what it's gonna help you do is not only see, hey, our day-to-day life, like even you saying, yeah, we have credit cards, but we pay bills with those and we pay it off every month.

Like even having these lines in the sand when it comes to your money and the way you view your money is going to be so helpful. And so being able to get debt completely out of your life, having that emergency fund, which is that $10,000, which is great. And then saying, okay, beyond that, we want to save up for a down payment on a home. And that can be your next goal. And I think that it can be great. It may not be the house that you want to live in forever, but I do think that's something that you guys can start to work towards. And with the money that you have, the $75,000 from his claim, yeah, I would put it in a high-yield savings account or a money market account if you guys know in the next probably five years we're going to be buying something.

But I think that being your next big goal is great. But again, Rikki, I would encourage you guys to work around what you make, though. And it might be discouraging. You might be like, gosh, that is not the kind of house that we thought we'd have or that we wanted. But I want you guys to get into this home. Again, it may not be the home that you wanted, but at least it's home ownership and it's what you guys want. And it's reasonable. It's a reasonable percentage of your take-home pay because that's going to be the biggest boundary you're going to have to set in your mind and in your heart and expectations when you go in and start shopping for a home.

Yeah, we were actually, we were almost, we were in escrow to buy a house and then we ended up backing out of the sale because it was going to be, I mean, it wasn't going to be anything like the Ramsey principles. I listen to you guys, the podcast, literally every single day when I drive.

And so we just actually ended up backing out of that sale. And so then we were kind of wondering about putting money into my dad's house to make it, you know, to divide the house. Yeah. And you can do that. I mean, you know, depending on the health of your, of your dad, I would hate to like, just wait around, you know, to be a homeowner with his passing. I think you guys as a family can actually have a goal in place and actually start working for it. Get your income up for your husband and do what he can, if that means even shifting a little bit of career choices, but to be able to bring in some of that extra money and that you guys really do leave and do your own thing. And then when he does pass,

if the house is in the will and all that, you can talk about that further. But I think for now, that's a goal for you and your family. So thanks, Ricky. This is The Ramsey Show. Welcome back to The Ramsey Show. And if you guys enjoy this show and you're a listener on the regular, whether it's on podcast or radio or YouTube, please consider sharing it. I think this is one of the best ways for people to learn about it and hopefully take control of their money and find some peace when it comes to their life, whether that's in their relationships, their career, their marriage, their friendships, and also with their money. So again, leave a review, share the show, rate the show, all of it. It really is helpful in the algorithm of life and media.

It is so, so helpful. And I find always for me, whenever someone recommends a podcast or a book and it's a friend, I'm usually up to actually do it. I'm like, oh yeah, I want to listen to that. So your friends and family will listen to you people, I promise. So share the Ramsey show with them so that hopefully again, they can have some peace when it comes to their money. All right. Up next, we have Deborah in Orlando. Hey, Deborah, welcome to the show. Hi, Rachel. Good to be here. Yes. Well, thanks for calling. Okay. So I threw this curveball in the first segment to ask all the callers, do you have any money-saving hacks when it comes to food? Because this is the,

that's the one budget buster for so many people and it's been affected by inflation so much. Do you have any tips? So my big one that I've used that's been a huge money saver for me is I actually do a meat subscription box. Oh yeah. I get my meat and because it's, I'm a single mom and it's me and my two and a half year old, we like our, it stretches over like three months. And so I'm getting my money's worth out. So smart. Do you freeze the stuff that you don't use? Obviously. Yeah.

And they come like packaged up into like pound segments. So I can just take like, it's fantastic. Okay. And it's a great, and it's a better price than just going and buying it at the, at the store when you need it. Yeah.

For, for me in Florida, it absolutely is. Yes. Okay. The meat subscription. Well done, Debra. That's a great tip. Thanks for sharing. Okay. So what's your question for today? So I'm in the beginnings of a surrogacy journey and I'm going to be getting in extra income. I'm not sure if I should be incorporating it into my budget once, because once it fully starts, I'll have set dates of getting paid, or if I should just take it as

like extra commission bonus money and use it that way. Okay. Do you, where are you financially? Do you have debt? Do you have any savings? I have my starter emergency fund and I am, because I'll intend getting my $12, dollars paid off by the end of August. Twelve thousand six hundred dollars. So great. How much have you paid off so far? The on and off gazelle intensity, it's been paid off about thirteen thousand dollars. Good for you, Debra. Well done. That's awesome. OK, so how much will you be getting for this? What are the payments? What's the schedule and how much money will be with each payment?

So the payments baseline are right around $3,500, but there's different segments where like in month three, they're going to send me extra money for a maternity wardrobe. The last five months, if I'm carrying twins, I get an extra like $5,000. So there's a little bit of variation. Okay. Yeah, yeah, yeah. So will you know ahead of time, though, how much it will be? Yeah, the only unsure factors is if like I go on bed rest, and they'll cover lost wages. I won't know that until I go on. Okay. Yeah, yeah. Totally, totally. No, that's great. So yeah, so I would honestly see this more as a bonus because your current job that you're in, you're able to live off of that, correct? Your current income? Yeah, I actually, yeah, I just got full time and I doubled my

income. So I did my expense report and I'm able to pull an extra like $3,000 to pay towards debt. That's awesome. Okay. So I would just look at this. Yes, it's going to be technically income, but I would throw it at your baby step. So I would just see this as like a bonus every three months and use it to attack your debt or to save up for your three to six months of expenses for your emergency fund. Okay. That's wonderful. How did you get into this journey? What was the motivation for you? Being someone who's kind of always been a slave to debt, I've never had the ability to give financially to help other people. And it's something God put on my heart that was like, hey, you could give your body. You really enjoyed being pregnant. You could help another family. Yeah. I was like, yeah, let's do that.

Yeah. And that's a gift for people. I know people that have gone through that journey before. So you definitely are offering something really wonderful to a family. So that's awesome, Debra. So yeah, again, I would just use that extra money from those payments and throw it at your baby steps and continue it on. So I pray that it all goes well and health for you and the future baby and everything. So that's great, Debra. Thanks for calling. All right. Up next, we have Hudson in Portland. Hey, Hudson, welcome to the show. Hi, glad to be on here. Thanks. Okay. I'm going to throw my question at you that I asked Debra earlier. Do you have any grocery savings hacks or food saving hacks, Hudson, to save some money during this time? So it's kind of obvious, but buying in bulk is what my family has always done. And then the important thing about it, though,

is you run into Costco or Sam's Club or something and you see bulk amounts of things like Paragese, you've got to make sure you're buying bulk for your household size. So it might be tempting to get five loaves of bread for however much bread costs now, but for a really good price, but then it's like, oh, if you only got

four people in the house, you're not running through five loaves of bread every week. Yeah, you don't want to go to all waste. Yeah, for sure, but buying in bulk, that is when you can look at the price per ounce and all of that, especially the stuff that doesn't go bad. I'm a huge fan of that. That's so waste. Yeah, for sure. But buying in bulk, that is when you can look at the price per ounce and all of that, especially the stuff that doesn't go bad. I'm a huge fan of that.

That's so good. Okay, awesome. So what's your question today? So my question today is I'm about to, my wife and I are about to pay off our last piece

of credit card debt. We only have about $750 left on that. Congrats. And then I've got some student loan debt that's Congrats. Um, and then I've got a, uh, some student loan debt. That's about $2,500. And then we have a, uh, vehicle loan for 32 K. Um, and so basically what I'm wondering is what student loan, uh, interest rates still being frozen right now. Should we focus on paying off

the, the truck as fast as possible or should I go ahead and just get my student loans done and out of the way? Yeah, go ahead and get your student loans out of the way because what we found with debt payoff is it's actually less about interest rate and math and it's more about behavior. I mean, you guys, I can hear your excitement and your voice now of like, oh my gosh, we only have $750 left to pay on this credit card. And there's just something about the momentum and the progress that you create in life that you're like, oh, it's amazing the momentum that happens when you just don't have all these other payments going out. So financially, it's that snowball effect of having more and more money to throw at

the car because that is going to be your largest debt. So teaching people to pay off the smallest debt first, regardless of the interest rate, is the way we've seen it be most effective. So honestly, I would for sure pay off that credit card, that $750, knock out that student loan, get it paid off, and it's just going to feel better. You're going to feel this weight really lifted off of even having that amount of debt paid off, and then I would go after the truck. So for the truck, how much do you guys make a year? So combined, it's roughly, if I did my math right, 70k a year. Okay. And does your wife have a car? No, she does not. Okay. So you guys are a one car family? Right. Okay. Because you're kind of right at that cusp. We always say if you can't pay off the car

in 12 to 18 months you may have just too much car so i want you guys to kind of run the math out and make sure that you guys are able to to cut your lifestyle in order to pay this off but if you feel like you're going to be having this for three more years it's it's honestly not not worth it uh to keep the truck so you may want to look at even selling it. And our rule of thumb too, is not to have anything with motors and wheels that's over 50% of your take-home pay per year, your income. And so you're kind of bumping up a little bit against that with this truck. So just a couple of things to think about. I think if you guys can knock it out and do some side hustles and get rid of this truck quickly, then you can keep it. But if it feels overwhelming and it feels like a lot, you might consider selling it.

Right. And yeah, that's why I was doing a ton of research before, you know, getting myself into this mess. I'm like, am I going to feel overwhelmed or, you know, uncomfortable and living super paycheck to paycheck, but we're still able to feed and house ourselves with, even with the truck payment on here. I have been selling like crazy though, that I'd say you get that credit card knockdown, selling some other just stuff around the house that I don't need. Yeah, that's awesome. So that's, that's what's really helped me, you know, close out credit card debt. That's great Hudson. Well, you guys are on the journey. You don't need. Yeah, that's awesome. So that's what's really helped me close out

credit card debt. That's great, Hudson. Well, you guys are on the journey. You're on it. So yeah, hit that student loan next after the credit card and then start working to pay off the truck. But if it just gets really annoying and you're like, man, we just want to be debt-free faster, you can always sell the truck, buy a clunker, as we say, and then go back and save up and pay cash later. This is The Ramsey Show. Welcome back to The Ramsey Show. I am Rachel Cruz hosting this hour because most of our team is out of town. So all of the other Ramsey personalities that you hear on this show, including Dave Ramsey himself, they are all out.

Most of them are in Southern California, Anaheim, to do our Building Wealth event. So we travel all over the country doing different events depending on the season. And this season we've been doing Building Wealth. So we were in Indianapolis and Austin, Salt Lake City, and now the team is in Anaheim. So I pulled some strings texted a few people that I know and I thought how fun would it be for some of them to call in I tried to convince Dave so we'll see if that ends up happening in the show to call in and tell us how it's going on the road and just to talk about things that are going on in our economy so I this

is like a first time I think but we but we got, we got Kenneth Coleman, old Ken Coleman on the line. Hey, Ken. Hey, Rachel, how are you? I'm doing well. You're two hours behind. So did you, are you, did you sleep in? No, as a matter of fact, the old body clock won. I wish, I wish I could have slept in, but I think it was about 5.30 in the morning. My body was like, let's go. Let's go. Because I was sleeping in central time. But I got to tell you, I'm in my room here in Anaheim, and I'm overlooking Disney.

Oh, no way. Y'all's hotel is right by Disneyland. That's where we are. So anyway, fun times, and we miss you out here for sure. I know. I'm holding it down here in nashville in the studio all by my lonesome but that's fine you're doing great so y'all are excited about building wealth tonight y'all have how many probably 2 000 people out there yeah yeah it's

gonna be over 2 000 people packed out and uh it's gonna be a lot of fun always great to be out on the road and meet people and and uh you, help them and give them hope that despite the uncertainty of our economy, that they can control their life. So always a great time. So good. Well, the uncertainty of the economy, it's everywhere, Ken. I feel like I turn on the news or, you know, the app on my phone comes up and the word recession is happening, that like the GDP dropped again, inflation is still all over the place. So what are things that you're seeing? Because you talk to people all the time about being in a career that they love and that they're really good at and kind of meeting all those passions together.

But the job market is affected by things going on right now in the economy, too. Well, there's no question. So let's talk about your money. And that's what we're about on the Ransom Show and what it means to your job when you've got a potential recession looming. the big concern is, is with the Fed meeting tomorrow as we speak, most people believe they're going to do a 10th consecutive rate hike, a quarter point, and everybody's kind of watching to see, will this be the end, or at least a pause for rate hikes? Now, Jerome Powell, the Fed chair, has said, Rachel, that part of the strategy of raising interest rates is they want to see the employment market soften. And what that means is unemployment rate goes up. We're still at 3.5%, but the latest job data came out this week that

we saw less jobs open. So we saw contraction companies aren't opening as many jobs. Now, here's where that puts us. That does lean us toward a recession. Most people think in the third or fourth quarter, nobody knows how big it will be, but this is what it means to you, the person out there who's going, what about my job and my income and winning with money? When you see recession reports start to pop up more and more, and I think you'll see that in the next month to two months, you will start to see layoffs and you could see the unemployment rate jump. And so if that happens- And that's because companies are cutting where they can

to continue with cash flow. We don't know how bad it's gonna be, that's right. And so it's almost like when we, in our own personal budgets, when we sense that there's gonna be more expenses, what do we do? We hopefully tighten down everything. And that's the advice here today.

We don't know how bad the recession is going to be. We don't know when it is going to be. We don't know when it is going to be. But what we know is that we can be recession-proof. And you certainly understand that. We've got to cut our unnecessary expenses. We've got to keep dropping debt as fast as we can. And then we've got to increase our income. And here's the good news, Rachel. We are in a very good part-time job, side hustle economy, freelance economy. And I would be making as much money as possible, saving if you're out of debt or killing debt, reducing those household expenses so that if you are laid off, you've got a plan.

And that's the key. I want people to understand that you don't have to be victim to a recession and to your company laying you off. You can get ahead of this and be ready. Yeah, because I mean, Ken, I was in the lobby earlier and there was a guy and he said he paid off almost $100,000 delivering pizzas. Like it's, I mean, it's proof that there is availability to go and make money doing things that are not just your typical nine to five job that people think, you know, when they hear the word career, they may have this just like stereotype in their head of, yeah, that's going to an office and it's nine to five. But the world we live in now, I mean, it's so different. Like there are so many things you can

even just piece together if you needed to for a season and actually make great income. And I think that's what's encouraging to people is, you know, it used to be like, oh, yeah, well, if you did a certain level of job, you're not going to make much. But that's kind of just exploded, I feel like, in the sense of it's amazing what people are paying, what employers are paying employees for even these side hustles. Well, you're absolutely right. I'll give you four quick ones. So I just pulled up some information from all the different job sites out there, and I just did an aggregate, okay? And so let's talk about personal driving. Now, these are in areas where if you live in a wealthy area, in a metropolitan area, even if you're in the suburbs, people are looking for personal drivers.

Okay, this isn't delivering pizza. This is driving, delivering food and or driving errands and things like that for people that are wealthier, you're looking at about $20 per hour average. Nannies right now and babysitting, you know this, all-time highs. An average salary across the country of about $20 an hour in some form of nannying. Freelance work. Let's take a skill that you have right now in your current job. Can you offer yourself online after hours as a freelancer? The average freelancer salary right now, $22 an hour. And then one more, tutors.

You can't believe how online tutoring has exploded because you can tutor anywhere. The average tutor right now in the country is making about $24 per hour. So those are examples of what you just brought up, that in any economy, certain or uncertain, if you are willing to put in the work, you can stack money up to, again, get rid of debt, to save, and be recession-proof. It's all up to you. Yes, it's so good, Ken. And kind of talk to the person that may feel hesitant at times, because I feel like if you're used to a certain path when it comes to your career, especially before COVID, and everything has shifted. So whether you've shifted jobs or you've lost your job, if you're going to be somebody that's going to be affected by this, even in the third and fourth quarter,

there's no job that's beneath you. And you're really great at kind of hitting this right on, because of how important it is that it's like, put your ego aside. Like there's going to be seasons of life that you just need to do what you need to do to get that margin and to get that peace of mind. Yeah, it's a really good point. It does not matter what the job is. What matters are the results of the job. And if you are making extra money to put you and your family in better financial situation, to achieve financial peace, to be recession-proof, to take care of very important unforeseen medical expenses. Work is worthy, and it doesn't matter what you look like, smell like. What matters is that you're making money for the important things

in your life. All work is honorable, and I think it's a very important point, and no one else cares. Everybody else got their own problems, but if you are out there doing what it takes to get out of debt, to create that emergency fund, that full emergency fund to create so much peace in your life, to take care of some unforeseen medical expenses, to make a move for your child when they need maybe some special help in school or whatever, that is what you're focused on, the result of the work, not the work itself. Yes, that's so good. And not to let words like recession and these scary headlines that could be everywhere and could actually paralyze people, freak people out, and they make bad decisions because of

this fear, to actually focus on what's going on in your home and even the examples you just gave of actual needs that families have. And so focusing on you and your household is so key during times that feel all over the place and that fear can take over. So Ken, thanks for calling in all the way from California. I wish you guys the best at the event tonight. If you're in Anaheim, there might still be some tickets

that might be sold out, but you can check ramseysolutions.com and the team's over in Anaheim, California for our Building Wealth event tonight. This is The Ramsey Show. Welcome back to The Ramsey Show. We just got off the phone with Ken Coleman, one of our Ramsey personalities that's out in California doing our Building Wealth event. And if you guys love the stuff that he talks about on the Ken Coleman show or read his books, he's actually going to be in Chicago, Atlanta, and Dallas in May doing the Career Breakthrough events. And these are smaller

events, so tickets are limited. So make sure to go to ramseysolutions.com slash events to if you're in that city or want to travel to one of those cities and to listen to Ken because he has so much great stuff to say when it comes to your passions and your career. So people are either naturally a spender or a saver, and I'm definitely a spender. So having any cash on hand is something that I love that I can use to go you know, go out to

eat, buy something, shop. That's one reason I'm so excited to announce our Ramsey Cash Giveaway. It is back. So this is your chance to win up to $500 to $3,000, which is our grand prize. And it's really easy to enter. All you have to do is go to ramseysolutions.com slash giveaway. And you can increase your chances of winning by entering every single day. No purchase necessary, but you must be 18 or older to win. And we're not stopping there. If you love a good sale, we have our $10 sale going on.

It's kind of the infamous Ramsey Solutions sale where a lot of our products, over 30 products, are only $10. So this is everything from questions for humans, Dr. John Deloney's products, some of his books, Dave Ramsey's newest bestselling book, Baby Steps Millionaires, my book, Know Yourself, Know Your Money, and even more. So again, 30 items there in the Ramsey Solutions store online are just $10. And a lot of people buy this stuff for themselves. They buy it for people to give away. But go to Ramsey Solutions store online are just $10. And a lot of people buy the stuff for themselves. They buy it for people to give away. But go to RamseySolutions.com and check out the $10 sale today. All right. It is a free call anywhere in the country at 888-825-5225. And up next,

we have Nathan in Indianapolis. Hey, Nathan, welcome to the show. Hey, thanks for having me on and taking my call. Absolutely. Okay, so before we get to your question, we've been asking people this hour if they have any tips when it comes to saving money on food. So whether that's groceries or going out to eat, because with inflation and food on the rise, it's always the biggest budget buster category. So I'm kind of putting you on the spot Nathan but do you have any tips When it comes to saving for food I 100% do and that is Shop at Aldi for

Everything because Aldi Is the greatest store in the History of the world For people trying to save money and The food is still great quality so Yes that's a shameless plug No I love it and you know it's funny on my show the Rachel Cruz show that's one of the places I always tell people to go. I'm like, go to Aldi.

And because you do, you save so much on your grocery bill to the point that people are like, are you sponsored by Aldi? I was like, nope, but I should be because I promote it all the time. So we are on the save way wavelength there, Nathan. That's great. Great tip. All right. So what's your, what's your question today? Well, my question is in relation. So my wife and I, we have two debts left. We have a car loan that is $9,500 interest rate of 6.99% at the fixed rate. That's important to the second part of this question. Our other debt is my wife's student loan, which we have $22,500 left on, but it is on a variable interest rate, which is currently at 14.75% and has been climbing at about 0.25% a month. And I know I'm supposed to be focused on that smaller one, but watching the interest rate and therefore the monthly payment go higher every month on the other one is really starting to eat at me a little bit.

And so I was curious if there are like is consolidation a possibility to get just a fixed interest rate with the two of these, even though my name is not on my wife's student loan just so we can keep, because it feels like we're just working against ourselves with that interest rate going up, meaning the payment going up. Is it a private loan? It is. It's a private loan through Sally Mae. Yeah. Okay.

And we only, our salary is, I'm a youth pastor. We make $48,000 a year. And so when those payments go up, we start to notice it and lose some of that extra money that we want to throw at the car debt. And so we tried to refinance her student loan, but she has a couple of marks of delinquency on her credit due to some accounts that her mother opened without her knowledge. Oh, my gosh. Senior in high school. So I believe those should drop off sometime this year. But have you guys contacted the creditors about that?

Because, I mean, that's basically like a level of identity theft of her mom doing that. Right. I mean, that's basically like a level of identity theft of her mom doing that. So we have, but the issue is that my wife, she received like, so one of them was for like a computer. One of them was for some items that are like some clothing items that her mom gave to her. So because she received like benefit from it, then they, yeah, they said that there wasn't much we could do as far as disputing it. And obviously, there's a whole tense relationship there component as well. Right, for sure. So I was just wondering what our options are to lower that interest rate while we focus on the car. Is consolidation even possible in this situation or what your advice would be?

Yeah, it's a great question, because usually with debt consolidation for a majority of people, we kind of we shy against it because because what happens is, is it's like, you know, you're not going to be able to change your behavior because people are they work at the math issue. Right. So but for you guys, the one type of debt we do say to consolidate that we're OK with is actually student loans, because you're more than likely not going to go back into student loan debt. Right. So the issue of fixing the behavior is a big part of winning with money long term.

And debt consolidation ends up just trying to fix the math of it and not the behavior. But for you guys in this situation, it would it would it might actually be an option to go and look to say, okay, if we consolidate these because the interest rate is completely out of control and it keeps growing with these private student loans. So you can, again, I want to say out loud that the caution is that this isn't going to fix your life, right? I mean, the idea that you consolidate debt, a lot of people think, well, that's the fix and that's going to make it okay. But still the hard work and sacrificing lifestyle, taking on an extra job, doing the things you have to do to get above this debt

and pay it off is still at play. So math isn't always the problem. But in your situation, I see where math is the problem. I mean, it's an insane interest rate, but even credit cards, they're up to this type of interest rate too right now with inflation. So if you guys wanted to, it's something you could look into. But the problem is, is it's not going to go away. This debt is still going to be there. So I still want

that intensity from you and your wife to continue on, even if it's just kind of shuffling around interest rates and debt. But it may give you a little bit of breathing room month to month, like you're saying, because it continues to go up. And you're saying it's going up like 2% a month? 0.25% a month. 0.25%. Oh, my gosh. I thought you said 2.5%.

I was like, oh, that's not right. I would be probably dead of a heart attack. Yeah, that's right. That's right. Yeah. So, I mean, Nathan, honestly, at this point, I think looking at your income and you guys saying, hey, for a season, what does it look like to up that income, live on nothing, which I mean, you guys are doing, I mean, you're $48,000 with a family. Do you guys have kids? Yeah, two kids. Okay. Yeah. So you're feeling your wife doesn't work.

Correct. Okay. Yeah. So, I mean, for this season, Nathan, I really, I would encourage you to look to say, we were just talking about side hustles in the last segment with Ken Coleman and what you can do to get that income up to pay this off. Because again, you can, I mean, if you get off the call and go and consolidate, you know, there's, it's not, that's not a wrong thing to do, but it doesn't fix the problem. And that's what ends up happening with debt consolidation so often is people think it's the fix and it's not. You're the fix. You and your wife are, you know, you guys are the ones that are able to fix this problem, not math. So again, if it's something that you want to look into, you can. But you guys have a, you have a journey

ahead of you. Have you paid off any debt so far besides the numbers you just gave me? Yeah, we have paid off about $22,000 worth of debt since we got married. Oh, wow. Awesome. Congratulations. That's awesome. So you guys are on this. You're on this journey. You know what it feels like to win. So yeah, with these last two debts, if you want to do it, yeah, again, you can. But the secret sauce is you guys and what you've already accomplished so far. So I just want to encourage you on that. Again, it's not the easy way out, but if it helps you with the math and the interest rates right now while things continue to rise, you can look into it. But you guys are it.

People that get out of debt and choose to choose this path, they're the ones that end up being the heroes of their own story. So thanks, Nathan, so much for the call. And thank you, America. Thanks to all the guys in the booth as we host this show, as I'm hosting this show solo today. Thank you, America. Again, 888-825-5225.

Call in. This is The Ramsey Show. Hey, it's Rachel Cruz. If you love the show and want a deeper dive on your money journey, we have a weekly newsletter that gives you trending and helpful articles and tips on following the Ramsey way. Just go to ramsesolutions.com today to sign up for our newsletter. Again, that's ramsesolutions.com to sign up for our weekly newsletter.