The Ramsey Show - App - Beware of “Debit” Cards That Claim To Build Credit (Hour 2)

Episode Date: April 28, 2023

Jade Warshaw & George Kamel answer your questions and discuss: "I'm drained and hate my job... can I afford to quit?"  "Should I pay off my car lease or sell it?" The danger of debit cards that claim to build credit, Rolling over a 401(k) into a Roth, "We're in a house we can't afford" 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 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

Девочка-пай Live from the headquarters of Ramsey Solutions, broadcasting from the pods, moving and storage studio, it is The Ramsey Show, where we help people build wealth, we help people do work that they love, and we're helping you create and build actual amazing relationships. We want to talk about what's on your mind. We want to talk about your money. We want to talk about your relationships.

Give us a call. The number is 888-825-5225. And let's just go straight to the phone lines. I'm your host, Jade Warshaw. I'm joined by George Campbell, and we're going to take your calls. So let's talk to Sophia. She's in Baltimore, Maryland. What's going on, Sophia?

Hi, guys. Thank you so much for taking my call. I'm calling because I dislike my job. I want to quit. I want to find something that's more aligned with me. But I don't know if I'm financially in the place to do that. And I was wondering if you guys could help me figure that out and maybe make a plan for the next step. Sure, definitely. So tell us about your job a little bit. What do you hate about it? What's

the problem? Sure. So I'm a government consultant. I work eight hours a day at a desk. I just don't feel like I'm doing impactful work. I'm a people person. Everything's Zoom nowadays. And I just don't feel like I'm making an impact. And I just am drained every day at the end. And I'm not excited to get up to go to work the next day. But it pays really well. And I have really good benefits. And there's safety there. What do you make? $125,900. Okay, plus the benefits. Do you think there's another place that would pay you $125,000 plus good benefits? Yeah, but I don't know if what would satisfy my soul and my heart and what I'm meant to do would ever pay that. So I think maybe there's like a little come to Jesus moment about just accepting that maybe for me to be happy,

I need to accept making less money. So what is that thing for you where regardless of money, if money was not an object, what would you be doing? Honestly, like I bought a home a couple years ago and I love working on it. I love like flipping houses. I love doing a lot of hands-on work. I would maybe event planning, teaching. I love to teach. I would love to teach at like a community college or something. Those are the big ones for me.

But I'm also at a point where I'm figuring out, you know, what is my true calling. So I'm still in that limbo phase. So is it, you said flipping, you love creative things, events, teaching. So is it like transformation that you like to see? Is that what, that's the common thing that I see there. I like quick returns. I don't like working on something for years

and maybe not really seeing results. And I like helping people. That's the government. Yeah, oh yeah. I'm jaded now. Are you single? Are you you married i have a boyfriend um but he's definitely going to be my husband um so awesome okay call me in a couple years so tell us about your financial situation do you have any debt do you have any savings yeah so um i would be uh

what you called um a stupid butt whatever. I've made some bad choices. In sum, I'm about $307,000 in debt, but the majority of that is house. Okay. Aside from the house, what's left in consumer? So I have about $1,500 credit card. I have a payment plan for a treadmill that I got. I know, stupid. And then also I needed some roof work. I don't have a slate roof um for a treadmill that i got i know stupid and then also i needed some roof work don't have a slate roof so that was really expensive but 1500 um payment on that

um i have the payment is 1500 what's the total amount of the roof um total amount of the roofing work was 1500 okay um i took another loan when i was buying my house again stupid stupid I can't believe I have to say this out loud definitely come to Jesus moment out on my term life I took some cash out to help me get my $25,000 down payment on my house and then I owe my dad $4,000

he doesn't want it back but I want to pay him back so what's the total amount of consumer debt you have everything um would be about 45 000 whoa so there was some numbers in there you weren't mentioning it i was like oh that's like 10 grand or so here yes do you have any money set aside do you have any money set aside for savings i I have my $1,000 emergency fund, and I'm in the middle of paying everything off. So I have a car loan and then also a personal loan. Stupid. I know. Stupid, stupid, stupid. It's okay. It's okay, Sophia. Don't beat yourself up. We've all been there. I'm just kidding. Yeah, we're not going to yell at you today.

But I have a plan. What's your plan? I have a plan. So I i basically have end of the month i have about 3 000 cash balance left over after all of my budgeting and i've just been throwing that at my you know smallest debt some of that's right uh snowballing but um my car 17 000 left in debt it's about $22,000, $24,000 in value. I'm kind of thinking sell the car, pay off the debt, right? And then just be able to pay cash on a smaller car that's just reliable and doesn't need to be fancy. Here's the thing. When you look at that car and go, that's what's keeping me from the next job, that makes me want to sell the car even more. Heck yeah. We got to get to this place of happiness where you're feeling content with what you do on a daily basis.

So there's a twofold plan here. Number one is the baby step, which you're currently following. Stay on track for that. Sell the treadmill, sell the car. And then on top of that, I would be sharpening up the resume. I'd be looking for jobs out there,

even if it's a slight pay cut for now. Uh-huh. Now, what about not having three to six months emergency savings? You need that eventually. Is it okay to look for a new job while not having that safety net? You're not going to just quit willy-nilly with no job lined up. That's what we don't want is a gap in income.

So as long as there's no gap in income, you'll be okay. You can switch jobs while on the baby steps, absolutely. You can, but you also have to look at the opportunity costs there because right now you've got a $3,000 margin. And if we really look at this and figure out like how long you can realistically pay off this $45,000 of debt,

it might be worth it. Now, this is just me. You've been in this job. It might be worth it to stick it out another year to get this debt gone. And then when you transition, get that three to six months saved up. And then when you transition, it can feel a lot more peaceful and you can just really just step into this new phase of life. So there's something to think about

there. Because remember, from what you've said, and we don't, we haven't done the research fully yet, but you think that you're going to take a decent pay cut. You might, you might not. You need to check and see what's out there. But if you do find that it's a, you know, maybe your pay starts in half because you're starting at the bottom, you have to weigh that out and go, is it going to be worth it for me to go from a $3,000 margin to a $1,500 or $1,000 margin? And, you know, only you can decide that. But I am always about getting out of debt as quickly as possible. And you can go do event planning on the side. You can help event planners on the side and get your feet wet and also create a little extra income. Like that. Yeah. Yeah. I also do grading for universities. I get between one and five

thousand per semester for grading. Awesome. I have a whole life policy that I can cash in because I know you guys aren't into like life insurance and whole life especially but if I just make sure you've got the term life coverage make sure you've got the term life coverage in place before you cancel the whole life um on that and I mean I think this is really exciting for you thank you I appreciate it okay thanks for the call I'm gonna get rid of the car do it do it wow I love a live amputation on air. It feels good. I feel freer, lighter.

She amputated the car. That's exciting. I think she's really going to change her life here. I want to give her Paycheck to Purpose. If she's still on the line, Austin, will you pick up and give her Ken's book, Paycheck to Purpose? And Ken's Get Clear Assessment. Ooh, I like that even better. The both and combo from our friend Ken Coleman.

That's going to help you find work you love. I love it. Man, she's on the right track. I'm excited for her. This is The Ramsey Show. This is The Ramsey Show. I'm your host today, Jade Warshaw, Ramsey personality. And I'm joined by George Campbell, my host.

And I think we want to just go straight to the calls today. So if you want to give us a call, we'll talk about your life and money. You can give us a call. The number is 888-825-5225. Give us a call and we'll chop it up with you. In the meantime, let's go to Noah. He's in Tampa, Florida. Let's see what Noah's talking about.

What's going on, Noah? Hey, thanks for taking my call. Yeah, no problem. How can we help? Yeah, got a quick question. So I currently have a truck that's on lease and it's due at the end of the year. I'm able to make the payments and still put away 15% of my retirement and still stack up in my emergency fund. But I like the idea of aggressively putting away more money. Due to the current market conditions with the auto and the cars, I'm sure you guys know, I have equity in the truck. So I was thinking of getting out of the lease early while I'm up and

buying a junker instead. Should I wait to pay the truck off at the end of the lease, or should I just buy a junker now? If I'm you, if I can get out of it and not have to pay, I'm getting out of it. So you've got to find out the early buyout amount. Have you done that homework? I have. Yes, sir. What's that amount? The buyout's going to be $30,000. And how much money do you have right now? I have about $70,000 in savings. Heck yeah. I'm for sure doing that. What's the truck worth? The truck is worth 42. So we do the early buyout, which is 30.

We can then sell it for 42 and net 12, and that'll buy us a car, right? Plus if you have, you know, do you have any other debt? Just my mortgage. That's it. Great. That's it. Great. That's good. So essentially, you would actually be a baby step four tomorrow if you got rid of this car and got a junker.

Because right now you've been doing all the steps at once. Yeah, I absolutely agree. I'm only hung up on if I should get the junker or if I should pay it off and then work at getting the amount put back in my savings account that I use to pay off the truck. That was my only cost. What's your income? About $175 right now.

Do you like the truck? Do you want to keep it? I really do like the truck. I had it since 2001, right before everything started going crazy for COVID. So I really do enjoy the truck. I love it a lot. I live here in Florida where, you know, the truck is pretty of a utility. So why not keep the truck? I'm not mad at that. That's what I was thinking. But my only thing was if I should save the rest,

just buy a Junker for 15 and take the difference and just put it back into my savings account. What's the savings for? Nothing. I don't have any kids or anything just to have it. So let's say, let's walk through this. You keep the truck, you're down to 40K in savings, which we'll call three to six months of your emergency fund plus a little bit, right? Yes, sir. And we're back on track. Let's continue investing 15%. Any extra money we can throw at the house. So even in that savings account, anything beyond six months, I would throw at that mortgage. And get that mortgage down as soon as possible. Yeah. Well, what's left on the mortgage? 200. So you said you make 170? 175. Yes, sir. And so I started to get excited going, making 175, how quickly could I pay off a $200,000 mortgage?

Mm-hmm. I know that's right. So I use your guys' calculator, and it comes out to about four and a half years. And I bet you'll beat that. I bet so, too. Yeah. And so that's my only expense right now. Yeah.

I'm following this plan. You like the truck, keep it. There's no need to go buy a junker that you hate that you're going to want to upgrade and probably make a bad decision down the line. Just keep the truck. You make great money. It's not a big portion of your world. The thing we want is it to be paid off. Very cool. I love that call. Again, options, George. We see this all the time. A very cool call when you get to, you can keep the car. Well, it's great when they actually want to get out of debt. A lot of the times they go, why would I pay off the car, Jade, when I can make more in my investments? I'm like, oh, you found the secret formula to always make

money in the stock market. Tell us more, my friend. Please. I love it. The stock market was down 18% last year. Everyone's going, well, Jade, I can make more in the stock market. Well, that's funny. I feel like that's one of those arguments when they want it to work, it works, and when it doesn't. Because when we tell you to invest your car payment, instead of paying $717 a month, suddenly people are like, you can't make any money on the stock market. That's right. I'm like, what's happening here? It's got to work on both sides. The train can't leave justification station for a lot of folks out there.

We're stuck. Oh my gosh. Well, today's question of the day is sponsored by Neighborly. This is your hub for home services. If you own rental properties, Neighborly's local real property management offices can manage them and help you optimize your ROI and your peace of mind. Visit Neighborly.com to schedule a consultation with real property management pros near you. Today's question comes from Nick in Florida. I know you don't recommend credit cards, but what are your thoughts on debit card, extra, and prepaid charge cards that say they help build your credit? So extra is the name of a specific debit card company out there that kind of operates like a credit card by helping you

build your credit because they spot you. So Jane wants to make a purchase and you temporarily go into debt and then they'll spot you and pay it off quickly. So that's the idea behind extra. And it's similar to some of these prepaid charge cards secured. It's technically not one of these secured credit cards. Yeah. And the way secured credit cards work is you pay an upfront deposit of one to two times your credit limit. And if you don't pay, they keep your deposit. That's what makes it secured.

There's collateral involved. Yeah, but with these extra cards, here's what I don't like. A, I don't like that they're marketing it as a debit card because technically that makes it sound like you're using your own card and they're just monitoring your accounts. And that's not true at all.

You do have to spend on their account. And they, and I actually, I don't know. I actually called. You do have to spend on their account. And I actually called Extra because I wanted to know more about this because I've had other people ask about this. And I asked him, I was like, so how does this work? And he was like, you spend the money on our card first, and then we go back in your account and pull the funds out. But it can take up to three days for them to pull that money out. So from the time that you make that purchase, as many times do, if something comes out of your account unexpected

and suddenly you can't fit the bill for 300 or however much you spent on your extra card, suddenly that has the ability to go to collections and they'll send it to collections within 30 days. Yes. And so the heart of this is to build credit. The people who are using this product, they have bad credit. They have mism so the heart of this is to build credit. The people who are using this product, they have bad credit. They have mismanaged money. They haven't made

payments. And so they're going, well, I may not be able to get the credit card. It has higher interest. So I'm going to turn to this extra card. Here's the problem. Extra ain't free. It costs you 240 to 300 bucks a year, depending on the plan you choose. And then the other thing they get you with is, oh, we have rewards too. So they're using the same marketing tactics as the credit card companies to get you to overspend with money you already didn't have, which is part of the reason you have bad credit to begin with. That makes sense. I mean, there's even been, I mean, yes, it's the bad credit people, but then there's even been people who are like, hey, I'm kind of like doing you guys' plan-h, but I still kind of care about my credit

score. Maybe I can use this to still kind of have a credit score, even though I don't want to borrow money in quotes. And I think like that's just one of those dangerous things where it's like, hey, you got to buy all into this. You either are saying I don't, I'm living a life without debt. I don't care about my credit score and I can rock my life with a zero credit score. Or you're on the fence and you're playing these games where you mess around and you get burned, man. Yeah. At the heart of the question of building my credit, the solution is not to build your credit. It's to get rid of it. Facts. And that scares so many people because we've believed the myth and we've touted this myth that FICO is almighty and you got to have a good score to survive. And I'm out here going, why do you need a score for? To go into more debt. And what does debt do?

Helps you get a better score if you pay it off perfectly and play kissy face with the bank so that you can go get more debt. And the only legitimate question is, well, how do I get a house without a credit score? And I made a whole video about this on my new YouTube channel, Jade, because I was so angry at everyone going, this's lying after I said no I'm telling you I did it I'm not like pitching this as a theory Jade has done this too yes and I have to say this because I look I'm gonna catch the flack for it but I he I see you guys in the comments talking about well George is easy for you you've got white skin no no no I'm gonna squash that I'm gonna put the smoke on that right now thank you it does not matter what you look like if you are out here in in these americas in this united states you can pay off your debt

you can live a life with no credit you can get a zero credit score loan i did it i've done it before so don't just say oh george did it because of the way he looks don't be judging a book by its cover my dad's from egypt okay i I know another language. What do you know? Jack squat. Pipe down in the comment section. Come through, George. I'm proud of you. Thank you. Speak up on that. When Jade's here, I feel brave. And the thing is, we're not trying to yell at you. We just want you to know what's possible. We don't want you to believe all that noise out there that says that it's impossible for somebody, quote, someone like me to get ahead. That's not true. We believe more for you. This is The Ramsey Show.

You're listening to The Ramsey Show. I'm your host today, Jade Warshaw, Ramsey personality, and I'm joined by one of my favorite co-hosts of all time, George Campbell. I'm talking to you. It means a lot. There's only like four you can choose from, so I appreciate being one of them at least. You know know you know that you're in the top four that's great

we're taking calls today about your life your money give us a call the number is triple eight eight two five five two two five george it's national financial literacy month the cool kids call it fin lit a and we're taking i don't think i'm one of those kids, but you are. You can do that. Look, somebody said that to me the other day. I was like, what the heck are you talking about? And they're like, financial literacy. I was like, well, why didn't we just call it that? But the cool kids say Finlit. And we're talking today, taking today to celebrate that. Financial literacy is very, very, very important stuff, guys. And it needs to be taught in school. I don't know about you, but I'm one of those folks who was like i didn't learn it didn't learn a dang thing i got the pythagorean theorem down pat

but i have no clue how to budget didn't know anything about taxes wow none of it it's crazy why weren't we taught how to budget in school why didn't anyone tell us that we should stay away from credit cards or show us how to save money they didn't do any of that think of all the dumb mistakes i can think of a lot of dumb mistakes that I could have avoided if we had been taught this. Well, the good news is we're changing the game out here. Yes. With our foundations and personal finance curriculum, which I had the pleasure of hosting. I got to meet some of the high schoolers that are going through this, Jade.

Yeah. I was like a little celebrity to them. It was hilarious. I was like, y'all need to get out more. Why were you a little celebrity? Well, for obvious reasons, but obviously also, you know, it's through a curriculum in a school, but the kids were like, man, I'm going to go to college debt-free. I'm paying cash for my first car. And I was like, we got future millionaires here. And the curriculum is now taught in over 45% of schools in America. That's incredible. That gives me hope. That's incredible. Well, this is really cool. Today, we have one of of our foundations teachers. She's on the line. We've got Michelle from Tulare, California on line five. Let's talk about it. What's going on, Michelle?

Good morning or good afternoon. I don't know what time zone you're in. We're in central time zone. Where are you? We are in California. All right. So we're Pacific. Cool, cool, cool. Well, I just, you know, we wanted to take a moment and celebrate you today and just celebrate you and see what's going on. We want to know about what you're teaching your students and how many students you have in your class. Can you tell us? Yeah, I teach at Accelerated Charter High School. It is a charter through our local district and we are

a credit recovery high school. So kids come to us their junior and senior year to help make up credits at an accelerated rate so that they can graduate on time or with their friends at their homeschool. That's awesome. That's really, really cool. So like how many, like how many grades are you teaching? How many folks have been through this with you? Well, this is our seventh year of existence. It is my seventh year teaching Ramsey Classroom. I started it when we had the workbooks and the videos on DVD that you showed the whole class. And we have progressed. Yeah, seriously. And we have progressed to the online curriculum and the kids can work on it at their own pace or I can choose to watch or show the videos. And it just works out really, really well. That's really exciting. So George mentioned before we brought you on that we had a bunch of students here yesterday and they were

just going on and on about, you know, how it's affected them and they're going to be future millionaires. Do you have any success stories that you want to share, whether from current students or previous students, about how this is really changing

and impacting their lives? It's changing students' lives tremendously. I have kids tell me, you know, this is the only class that makes sense. It's the only class that applies to real world stuff. I have had several students come back to the school to, you know, pick up paperwork, transcripts, whatnot. And if they see me, they say, hey, I'm following what you taught us. I'm using only cash.

I don't have any debt. And I have friends who have debt and they're miserable. Wow. So thank you for teaching me. I also want to point out that it's not the students who are the only ones benefiting from this. I benefited from it. I have no debt except for my house. And we have an administrator who has also taken the courses offered and has applied them and is also credit card free. Wow. That's awesome. You know, I also got to wonder how it's affecting the students' parents. Oh, because the kids are now going, mom and dad, no, no, we're not going to use that credit card. You know what that's doing to you? Do you hear stories about that, Michelle? Are

the parents upset with you going, what are you teaching my kid? No, actually, when I meet with them, like at back to school night or, you know, open house, that kind of thing, they actually thank me because their kids are helping them to budget their money better. Wow. That's something. I love this. That gives me hope for the next generation. When the kids are keeping the parents accountable, we are doing something right in America. I love this. So what's one of the most common questions that you get from your students when you're teaching this class? Is there anything that they're kind of hung up on or is it... Getting excited about?

Oh, they're hung up on credit scores. Oh. That's crazy that a 16-year-old's already freaking out about their credit score. They need to be freaking about their prom date, not their credit score. Right? Right. No, because it's been early indoctrinated in them that they need to have a high credit score. Their parents tell them that.

Their grandparents tell them that. Aunts and uncles tell them that. When they come to me and I say something different, it ends up not an argument, but it becomes a lively discussion. I bet. It's a nice way to put it, Michelle. I bet. That's something. Well, Michelle, we're so grateful for you.

You said it yourself. You're out here changing lives. You're changing these children's lives. You've changed the lives of fellow teachers around you, probably impacting the parents as well. So we really, really thank you. Thanks for hanging with us. And thanks for coming on the line today with us today. Well, I appreciate the opportunity. It was my pleasure. Absolutely. And for any teachers that are listening, don't forget

to enter the Ramsey Teacher Appreciation Giveaway. It's sponsored by the Army National Guard. And one teacher, guys, is going to win a $5,000 vacation. George, that ain't nothing to sneeze at. Let's go. $5,000 and two more teachers will earn a $3,000 vacation. All you've got to do is go to ramseysolutions.com slash teacher to enter. Again, ramseysolutions.com slash teacher to enter. Man, that is cool. That's something right there.

Very exciting. Teachers are heroes. They are heroes. Just warms my heart talking to teachers. Gives me hope. I agree. That's something right there. Very exciting. Teachers are heroes. They are heroes. Just warms my heart talking to teachers. Gives me hope. I agree. It gives me hope too. Well, let's go back to the phone lines.

We got Jeffrey from Sacramento, California. What's going on, Jeffrey? Hi, guys. Thanks for taking my call. How are you? I'm doing well. So I've just recently tried to figure out what my 401k is, and I found out that I could switch it over to a Roth.

So I did, but I was wondering what I should do with the $90,000 I have in it right now. Should I switch that over to a Roth and just pay the taxes on it now and just not worry about it? Or should I just keep letting that grow and deal with that when I retire? Where are you at financially? Do you have any debt? No, and my house is paid for. Whoa, way to go. Fantastic.

Wow, how old are you? I'm 35, but there's a caveat. I got into a really bad motorcycle accident, so I had a settlement payout. So not the way you want to become debt-free, but we're here. No. How are you doing now? Like, physically. Physically, I lost the function of my right arm, So I am still with the same company,

but I definitely decreased in my pay. What's your household income now? Household income is around 70 right now. It was around 120. Okay. And do you have the cash to cover the tax bill for this conversion? Yes, yes, I do. Okay. So this is the time we would say it would make sense to do a Roth conversion. When you're in Baby Step 7, you have no debt, including your home. It's all paid for, and you have the cash on hand to cover that tax bill. So I would be doing the math and get ready to pay that bill,

but sure, roll it over, man. Retirement, that money's going to be all completely uh tax-free to you which feels good when you look at that account number absolutely all right thank you so much for the call jeffrey that's a good question i think a lot of people wonder you know when's a good time to roll over if you've got money that's sitting in a traditional and you want to because we're always preaching r, but don't convert it until baby step seven. Because you got priorities before baby step seven. That's true.

You got to wait till baby step seven and then it's a good time to do it. That's a really great call. I think that's a question a lot of folks have. All right. Thanks for listening, guys. This is The Ramsey Show. You guys are listening to The Ramsey Show. I'm your host today, Jade Warshaw, joined by George Camel, fellow Ramsey personality.

And here's a fact about Ramsey Solutions, and I'm super-duper proud of this. We've never laid off anyone, ever. And I felt good about that coming into this role. I don't know about you, George Camel. There's a lot of fear out there in the job market with all these companies doing layoffs. Yeah. No worries over here. I know. I bet Dave feels good about that. For the past 30 years, we've been doing what we preach.

We run a cash-based business here at Ramsey Solution, which means that we budget for everything. That includes salaries, compensation for team members, and you deserve the right to work for someone that you trust. I believe that wholeheartedly. Someone who won't cut you loose because of their poor planning. Can I just interject? I was on a podcast today talking to a friend and she's in the tech industry and got laid off. And she was explaining how it was like a little more than a text. It was like, hey, you don't work here anymore. And within 30 minutes, she was locked, basically locked out of the company. No more access to email, no more access

to any, I mean, just like that. And she said she had a sense that it was coming and she had actually talked to a leader about it. You know, I'm sensing this. And they said, no, no, no, everything's fine. Everything's good. And within a couple of weeks out of there. Wow. Terrible. So you deserve to work for someone you can trust, someone who won't cut you loose because of their poor planning. And guess what? While other people are firing, Ramsey Solutions is still hiring. We have several open roles on our marketing, our sales and technology teams. And we need people like you to come join us, come work alongside us. We're way more than just a radio show. We help people build real wealth. We help them do work that they love and create connected relationships in a common sense, but also in a very countercultural way,

which you hear us talk about on the air all the time. If that sounds like something that you want to be part of, we would be honored for you to apply. Check out all of the open roles at ramsaysolutions.com slash careers. And you can roles at ramseysolutions.com slash careers, and you can apply at ramseysolutions.com slash careers. That's what I did. And it worked. And it worked. Can you believe that? But you got to be as awesome as Jade. Well, you know. Or close to it.

You know, we could talk about that later. In the meantime, we will take a call from Steven. He's in Asheville, North Carolina. What's going on, Steven? Hey, Jade and George. Glad to be speaking with y'all. You're welcome. Honored to talk to you, man. What's going on, Steven? Hey, Jade and George. Glad to be speaking with y'all. You're welcome. Honored to talk to you, man. What's going on? So I was calling. My wife and I bought a house about a year ago. And I think it's, well, I know that based on the Ramsey plan, it's definitely more than we can afford. We've been following you guys for a long time and we're in steps four and six now. We don't have any kids. But I think the house that we have is a little bit more than, you know,

we kind of bid off more than we can chew. It's a 30-year mortgage. We're making the payments fine on a 30-year, but if it was a 15-year, it'd be kind of tight. So how much are the payments and also how much are you taking home every month after taxes? So our take-home pay for the past year, couple years really, it's been pretty steady, anywhere between like $7,200 and $7,600 a month. And the payment is like $17.49 a month. That's like 23% or so. Yeah, it's like 23%, 25%, but that's on a 30-year. Sure.

So is the issue that you want to pay this mortgage as though it were a 15-year mortgage? You're not considering refinancing, I'm guessing. You just want to do it as a 15 year pay it as though it were so i guess my question is like should we sell it and is it worth the whole selling it and paying the um you know the capital gains taxes on that and getting us into a home that is on a 15 year fix you know i don't think this is an on-fire situation, Stephen, which there's something deeper here going on because just the financials, the numbers here, you guys still have plenty of margin every month. You have no debt and your mortgage payment's $1,750.

You're making $7,500 a month. Where's all the other money going that you guys are feeling so tight? Well, we've had some medical bills in the past year. Not anything major. I i mean there's been some dental work um little minor car repairs here and there but if we were to take like the extra i mean when i punch it in your calculator we should be paying around 2500 a month um to pay it off in 15 years and that kind of makes things tight that's that puts us at like 35 or 40 percent that's what i'm confused about yours that's an extra 750 right so that's how much margin

we need to pay it off like a 15 why can't we find 750 out of 7500 i don't know i was thinking it was more like a thousand or twelve hundred dollars the math i did i'm just looking at the numbers you shared with me yeah yeah yeah no you're right so let's attack this from a couple of thoughts number one i'm with george i'm wondering where this money is so are we doing a budget still or is it kind of like hey we're on baby step four and six we don't need that we don't need that anymore we're going we don't need budgets we're in We're in every dollar probably way too often. I mean, we look at it at least every weekend. We don't have the plus, so we're tracking all of our stuff on our own, all the expenses.

But we're in every dollar. We do a monthly budget every single month. And it just seems like the things keep creeping up and the mortgage isn't getting the extra attention that it should. We're putting 15% away. We are, you know, I mean, that's my question. I don't know where it's going. Here's the thing. And this is not just for you, Stephen. This is for anybody listening, because a lot of times, you know, what do we hear all the time? I'm not sure where the money is going. It's just stuff happens and things pop up and that's the way it is, almost as though we have no control of it. But we do have control over how that money is being

spent. And if I'm real, it sounds like you guys are deciding, if you're doing a budget, you're deciding how that money is being spent every month. And when you are in baby steps four, five, and six, there is a level of intentionality that needs to take place if you want to pay off the mortgage. There are plenty of people who have caught on to the baby steps later in life, and they already had a 30-year mortgage. And the point is not for you to feel guilty or feel like, oh man, I did bad. And now you don't have to rush out to change that. But of course, you do not want to take 30 years to pay off this mortgage. And I love that you're trying to pay it like a 15-year mortgage. And it's not to say that, oh, I've got to sell this house and go get another house on

a 15-year fix. Like, that's not what we're telling you to do. I think what you're attempting to do is great. Pay it as though it is a 15-year mortgage. But you've got to accept the fact that you're the one who sits down and writes that budget every month. So if the money is going somewhere, you decided where it went and you've just got to go back in and say, okay, maybe our lifestyle has crept up a little bit more or maybe we're, you know, and I'm not saying

that there is not a time for it to creep up a little bit more, but if it's keeping you from doing an intentional act that you know you need to do, then it's time to rebalance that. Absolutely. And Steven, I'm going to gift you every dollar premium because you said you're using the free version right now. I think this will help when those transactions just immediately pop up. It's connected to your bank. You can also use their paycheck planning tool in there. There's some really cool financial roadmap and goals tools that will keep you on track. So if you'll use that, I'll give it to you for free. Hang on the line and Austin and Skylar will pick up. We'll get that over to you. But this is a common question, Jade. People are going, I make good money. I'm even following the steps. We don't have any debt. Where's our money going? So I like to do a little thing called the budget audit.

And it sounds scary, but it's kind of fun. And what you do is you have every single expense listed out. You have a zero-based budget. Income minus expenses equals zero. And then we ruthlessly go through every single line item. Ruthless. And go, are we doing the best we can with this category? Yeah. Do we still need it? Are we overpaying for insurance and we haven't shopped it with our friends over at Zander in a while? Let's go reshop our insurance premiums. Someone messaged me the other day. They said, dude, I did that. I saved 500 bucks.

You should do that every year. Yes. At least. So that's one area area food is the other area yeah even when you're in baby step four through six you can't just go eat out whenever you want no you can't you can't it will add up faster than it'll make your head spin so those are the two biggest areas is food and insurance and then the subscriptions oh my we're addicted we got subscriptions for the subscriptions jade it's out of control can i can i admit something my subscriptions it's a lot i have a lot of subscriptions george i i have the subscriptions you have them she has

them all she's collecting them i might need to do an audit of my subscription so if i do it y'all gotta do it with me okay i just did a video on my new youtube channel about the streaming service wars and how they're we're all going to be casualties and how to rise above it. And I found out people are spending over a hundred bucks a month just on subscriptions. Yeah. We don't need the Peacock app. We don't, not if we have Amazon. I'm talking to myself right now. Jade, you've got Amazon. You don't need Peacock. Jade, you've got Netflix. Do you really need Hulu? Cut it. Probably not. The Wine of the Month Club, the Peloton, the Birchbox. They're all over. Don't put that evil on me, George, because I don't have Birchbox and I don't have Peloton, but I do have Scentbird. Ooh, I know. That's for another time. I know. All right. That does it for this hour, guys. Be sure to join us next time. And remember this, when it comes to changing your life and your money, you can tell me that you won't do it, but do not tell me that you can't. With God, all things are possible.

Hey, George Campbell here. If you love the show and you want a deeper dive on your money journey, we've got a weekly newsletter that gives you helpful articles and tips on following the Ramsey way. Just go to ramsesolutions.com today to sign up for the newsletter.

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