The Ramsey Show - App - Break the Paycheck-to-Paycheck Cycle (Hour 2)

Episode Date: January 5, 2024

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🎵 🎵 🎵 🎵 🎵 🎵 🎵 🎵 🎵 🎵 🎵 Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. I'm your host, Jade Warshaw, joined by your other host, Rachel Cruz. We'll be taking your calls all hour. So give us a call.

The number is 888-825-5225. We'll talk about whatever it is that's on your mind, especially in this new year. I'm sure you've got so much that you're trying to accomplish. This is the season of setting goals, right? And I'm sure so many of you have money goals, financial goals.

You're trying to save money. You're trying to get out of debt. You're trying to start the new habit of budgeting. And if that's you, we've got the perfect encouragement for you. Because we're about to get into the time, Rachel, that people already start moonwalking. Right? Y'all are already moonwalking. And I'm like, wait a minute.

It's only the fifth. So you need some encouragement. And we've got that for you. January 11th. Write this down. Like George Strait said, January 11th write this down like george straight said january 11th this is thursday all right 7 p.m we're doing a free uh live stream event and it's actually live it's not pre-recorded like some of these folks are doing it's actually

live and we're going to be giving you the tools you need to break the cycle and y'all know what i'm talking about there's been a debt cycle there's been a paycheck to paycheck cycle and y'all know what I'm talking about. There's been a debt cycle. There's been a paycheck to paycheck cycle and you're ready to get free. And you're like, Jade, Rachel, how do we do this? Help. We're here to help. It's free, guys. You can register at RamseySolutions.com slash break the cycle. And when you register, you can enter to win a thousand dollar giveaway. We're giving that giveaway away to 10 different winners. So be sure to do that. That's the Break the Cycle live stream, January 11th at 7 p.m. Be there or be square, as they say. Let's go to Atlanta where we have Paige on the phone line. What's going on, Paige? Hi. First of all, I just want to say thank you for taking my call. I feel very blessed to get to speak to you both today. My question is, so I have the

EveryDollar app and the Baby Steps app on my phone. And so I'm on step number two, the debt snowball. And my situation is kind of unique in that I'm only 26 years old and my mom is disabled and my dependent now, um, she got really sick a couple of years ago and we finally kind of got out out of the craziness of the last couple of years into like a zone where I feel very fortunate to be now where her health is better. She lives with me and not in a facility, which that was a lot of money. And, you know, she's not doing hospital trips and things like that anymore, fortunately, hopefully, fingers crossed. But with that, you know, she has debt, I have debt. So my plan, I'm trying to tackle kind of both of our debts and I manage both of our finances.

I mean, we live together. We basically share finances and manage medical, everything basically. So, you know, I put all the debts into the Baby Steps app where and put like the money that we can put on a monthly basis towards the debt and we can pay a little currently because she's got some insurance page um policies as well as her retirement right now for the next two and a half years um we can put like 2600 to three thousand dollars a month towards our debt which kind of totals like ninety thousand dollars and that's a combination of her credit card debt, her medical debt, my credit card debt, my student loans, and my car.

So how does it break down between the two of you? I'm just curious. I know, number one, you're a hero, like it's admirable that you're doing this. And you've honestly, essentially put your life on hold to help your mom and you're seem more than willing to combine your debts like that's not normal and like good on you for choosing that um but i am curious because you are two separate people um and so i just i do want to know out of the 90 000 of debt what, what's yours and what's hers? So I have 25,000 with Sally Mae for private loan, for student loan, 7,700 in federal loans. My car is 26,000. I just got that one new this last summer. That's a whole other story. And I have like $7,000 or $8,000 in credit cards. And then as far as I know, my mom has $30,000 in credit cards, $18,000 on one card, about seven other, about, you know, 7,700 on another.

We fortunately have had one card, like, I don't know what the proper word is, but like, pardon us or whatever. And just so we just charged it off. Yeah. And we wrote it on the taxes and all that stuff. So we had one card do that. Cause my dad had, you know, her ex-husband, he's an attorney and he had been helping me try to alleviate some of her debt. It was just like hardship type. Yeah. You know, as far as, yeah. Cause I mean, basically when she got sick, I was on the, under the oppression that she managed her money well, and she had a lot of money in savings that's at least what the situation was when my parents got divorced when I was eight something happened

and she had a higher loan on the house 12 years after purchasing the house higher than what she bought it for but now she's now the only debt she has is the 30,000 in credit cards and it's mostly the credit card is it medical or is that separate that's just that's all the credit card that she had once i got into her account and then what's the medical debt she carries so that i have like i have a thousand dollars that i know of we've fortunately been able to get the hospital wanted to do 16,000 and we did that's great you did the right thing thing and they wrote that off yeah okay so for time ambulances for time for time let me let me get into this um the car that's the first thing i'm looking at because what's your take-home pay

um or what do you make per year 40 000 a000 a year. Okay. Um, if you really want to move through this, I would consider getting out of this car and getting into something cheaper. You just got it. You should be able to sell it, kind of break even and take some cash and buy something cheaper, five or $6,000. I would do that because I think it's worth it for you to move quickly on this. I'm a little bit inclined for you to have two separate snowballs here and for your mom to have her money and you put your mom's money at her debt and you put your money on your debt and

you're the you're just the one stewarding all of it and making it all happen yes but I don't want you combining them and combining the money because you are two separate people with two your names on two separate sets of bills and at the end of day, even though you've combined your lives in many ways, you're still two separate people and you're not married. And Paige, and the truth is too, this is not to be harsh on you, but you've gotten $8,000 in credit card debt. You've taken on a car loan.

Your behavior and habits are one way. And when you feel the weight of, oh gosh, it's not gonna be an insurance policy that's gonna be paying off my debt. I have to do this. That changes your behavior page. And that's what we're all about here is your behavior has to change. And by you doing the work and paying off that debt, that's going to cause the behavior change. So I want you guys to be cutting up these credit cards. I want you to be selling the car.

You guys really have to clean this up. You're in a dire situation of like, there's a lot of mess here, but you can get it cleaned up. You really, really can, but you have to change the way you've been viewing it. And so Paige, you're doing an amazing job taking care of your mom. Absolutely incredible. But your money habits and where this has led has gotten you guys in that spot.

So that has to change. That has to change today. Cut up the cards. This is The Ramsey Show. You're listening to The Ramsey Show. I am Jade Warshaw your host joined by Rachel Cruz and we are taking your calls all hour long the number is 888-825-5225 give us a call and we'll chop it up with you um you know we're always looking at what the what's going on in finance what's going on on social media what's going on in the news and what the trends are because this is what people are talking about and we want to be talking about what y'all are talking about and what's important to you guys and so um i saw

initially an article come across my email that was talking about this and then there's tiktoks and it kind of started popping off a little bit so i it was like, we need to talk about this. And it's essentially, Rachel, this idea that if you make $74,000 a year, Gen Z doesn't think that that's middle class. Like they don't think, they don't agree with that. And so I don't want to say much more. I want you guys to watch this and decide for yourself. And then we will discuss. Gen Z doesn't agree that $74,000 is middle class. No kidding. It's not even close. Check this out.

If you take $74,000 for a Gen Z, or let's say they have a bachelor's degree and they're 25 years old. First of all, $74,000 is much higher than the average income. Most Gen Zers are probably making anywhere from $40,000 to $50,000, maybe $60,000 $60, but let's use $74. The take-home after taxes 401k and health insurance is $4,300. The average college monthly payment on a loan is about $500. You're down to $3,800. Let's say this person is financially responsible, decides to split a two-bedroom apartment in a medium-sized city like Orlando so that their payment is $1,200 a piece, $200 for utilities, so $1,400. Now, unless they're going to have Lucky Charms and peanut butter and jelly, their groceries are going to cost about $600 if they're trying to get chicken, beef, and some healthy stuff. You have a $400 car payment,

$200 insurance, $150 for gas, $100 for a cell phone, leaves you with $950. This is no savings investment, no emergency fund. Let's give them at least $300 to go on a couple dates or hang out with their friends for the month so they can enjoy life a little bit. They're left with only $650. A bachelor's degree, 74K salary. You are splitting a two-bedroom apartment with a friend and only have $650 left a month. It would take you years to save up to $30,000 that you would need for a down payment on a house with the closing cost. But even if you could get that down payment saved, you would still need to make $120,000 a year to be considered for a $400,000 loan. The middle class, the goal

post has been moved from 70K to $120,000 in just the past two years. Okay. Okay. I got some thoughts, Rachel Cruz. I did too. You go, Jade. Number one, when my guy said only $650 left, there were a couple of things that are screaming at me. A, only $650 left. I think that if you're just starting out, you're in your 20s, I'm like, yeah, that ain't bad. If you're 22 years old and you have $650,000 left over. Come on, somebody.

Number two. I think we're doing pretty good. That's good. Then I'm like, okay, I'm just getting into it. $300 on fun money. Again, that's good then i'm like okay i'm just getting into 300 on fun money again that's a lot of money like that ain't bad i'm can i be 100 real talk yeah on my budget right now yeah where it says jade fun money it's 300 and i'm telling you i make more than 74 000 a year so okay okay and then so then add in which is normal i get but what if you decided to get an extra job and pay off this debt you would free up a car payment

and free up 500 student loans that's 900 600 for groceries for a single person i think you can do it at 500 so that's an extra hundred that you take out so there's an extra thousand so that's really sixteen hundred dollars extra uh yeah i think i think we're okay i think this is an expectation conversation yes yes and we're not gonna make seventy four thousand dollars forever ever amen no or forty thousand dollars forever and ever and amen or whatever it is right as you get older and work, you will be making more money over your lifetime. That is true. I just, this really rubbed me the wrong way, Rachel. I just, I think that like what you said, this is all expectation and it's kind of tunnel

vision and getting caught in the now. You know, it's like you're looking at everything that you're seeing on social media and you're creating this bar of what you should have you're even looking at maybe what friends and family members have like so many people they come out of their parents house and you've been living in this environment where there's um nicer cars the home is larger um and you immediately kind of feel like oh yeah i'm supposed to have that too and i'm like listen these things take time it took time for our parents to get where they are if that's what you're comparing it to yeah and and we'll say this i'll say this number one has life changed yeah over time yes absolutely is stuff more expensive real estate

being one yes yes like we are not denying that of course it is it is more expensive real estate being one yes yes like we are not denying that of course it is it is more expensive but the problem i have with it is is honest it's kind of it's kind of his attitude of like oh mark versus saying well i have 650 what can i do now to better my life with that what do we you know what i mean there's that there's an attitude shift as well of how you view this you can view it like eeyore or you can view it like this is an opportunity. So what am I going to do? What am I going to do different? How am I going to pay off debt so I can free up an extra thousand dollars a month?

Yes. What am I? What are what's my opportunity here to do? What if I invested 300 of the $350 every month from 22 to run those numbers like find the opportunity in it. I agree. Versus this like, well, you know, run those numbers, like, like find the opportunity in it. I agree. Versus this like, well,

well, well, you're, you're all screwed. We're all just screwed. I don't know what we're going to do. You know? And you're just like,

Oh my gosh. Like, yeah, they're approaching it from the wrong angle. It's just like, yeah, that drives me crazy. I agree.

It's like, Oh, must be nice. Like you, you're looking at it. And like you said, he's, he's $50.

That's a lot of money. That's where I'm like, listen, I'm standing on business. That's $650 that's a lot of money that's where I'm like listen I'm standing on business that's $650 a lot of money talk what we what we do on the show is talk to real people every single day for three hours a day people are in the red they don't have $650 left over so and that's what I'm saying the mindset if you if it's almost like he's solving the wrong problem or focusing on the wrong thing and not just him because there's he's speaking for yeah yeah totally hundreds totally you know thousands and maybe millions of people who feel this way but if you're like you said if you're looking at 650 that's not enough and you're looking at um 400 and he's not addressing that

and he's not addressing the the student loan it's just, this is the way it is. There's nothing that's going to change. You're looking at the wrong piece of the puzzle. You've got to look at, I was listening to somebody today that was saying that healthy people, whether it's in a relationship or just you as yourself, you always look at something and go,

okay, what am I contributing to this? Like if there's a problem, it's very easy to point out there and say, it's because of that, that, that, that and that. But when you're healthy and have this area of maturity, you're always looking at and going, what can I own in this situation? And if you're finding yourself, even if it's not a seventy four thousand dollar budget that we're looking at, if you're looking at your own finances and you just find yourself feeling trapped, blaming your job, blaming the fact that you have student loans, blaming your spouse. You have to stop for a moment and go, OK, wait a minute. What am I contributing to the situation?

Because here's the guarantee. If there is something that you're complaining about in life, I don't care what it is. At this point, I'm beyond money. If there's something that you're complaining about, I guarantee, I bet your bottom dollar there's something that you are doing that's contributing, even if it's slightly, that you can tweak to make your situation better. And if you start to turn the dial up on that and start focusing on that, that's going to point to another thing that you can change. And you start focusing on that and that points to another thing. So it really goes back to that idea of whatever you're looking for, that's what you find. So if you're looking for problems, all you find is problems.

If you look for solutions, you're going to start to see even if it's so small like rachel you just went through all of this like okay like what would happen if you paid off your car what would happen if you paid off your student loan what would happen start asking yourself those questions what can you contribute listen it's a whole different equation at that point i know and i do wonder you mentioned it earlier, but expectations. And this is something I always wrestle with. And it almost could be just subconscious of what we just naturally expect in our world because we're so exposed to everyone's lifestyle. I mean, whether it's like reality TV or social media, Instagram, TikTok, like you see into people's lives more than at any other time in history yeah and you start to see a glimpse

and you start to expect what you see you become numb to it almost and it's like oh this is normal and if i don't have that i'm not normal i was talking to my mother-in-law at christmas and she was like oh my god you know she just made a comment how all they did with their little kids at the time they just all played in the driveway and all the cul-de-sac would get together in chairs now i'm like there's memberships to things. There's all this stuff that's normal, but I'm like, that doesn't have to be normal. Yeah, so it's just this subconscious expectation.

We have to reevaluate all the time. And I think it's really important to keep us grounded in it because you can just float off into this world, spend a lot of money that's unnecessary, and complain and do a TikTok video. That's a word, Rachel. That's a word, Rachel. That's a word right there. Check out your expectations. Figure out what's motivating

you. Is it the money or is it an emotion that you're seeking out? This is The Ramsey Show. Hey, you guys. Health insurance costs are only moving one way, and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer, and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer, and it's harder than ever to get anything approved through the bureaucracy. So if you feel like the system is working against you, try a biblically-based alternative to health insurance, Christian Healthcare Ministries. CHM is a health cost-sharing ministry that's helped hundreds of thousands of families like yours take care of over $11 billion in medical bills since 1981.

And CHM has also helped them stay true to their values and avoid miles of red tape. And CHM support goes far beyond meeting financial needs. They'll also help meet spiritual needs. Members become part of a family who will pray with them and for them when they experience a medical event. So listen, y'all, there's no better way to take care of health care costs. CHM programs start as low as $98 a month. So learn more today and join at chministries.org slash budget at chministries.org slash budget at chministries.org slash budget. You're listening to The Ramsey Show. I am your host, Jade Warshaw, joined by your other host, Rachel Cruz.

And we are with you today. So give us a call. The number is 888-825-5225. We will call. We will take your call and answer your questions. Today's question of the day is sponsored by Neighborly, your hub for home services. Now you can find expert local help. You can schedule appointments and get special offers exclusively in the Neighborly app.

So download the Neighborly app now and get started on your home repairs, maintenance, and home improvements done. Today's question comes from Ryan in Arizona. My wife and I have been using the envelope system for over 15 years and debt-free for almost that long. Awesome. My wife takes care of the finances, but we make decisions together and trust each other. The issue I have is at the beginning of each month, the envelopes still get the same amount of money they did when we started 15 years ago. You should talk to the TikTok guy that we were talking to. I can't convince my wife to increase it.

Is it part of your budgeting system to increase the amount in the envelopes as the cost of things goes up? Please help. Oh, Ryan, yes. Tell your wife to put some more money in those envelopes. If y'all have it, which I'm assuming you do, it's been 15 years. Yes. I mean, what we say, which I'm assuming you do, it's been 15 years. Yes. I mean, what we say is once you're out of debt, you have the ability now with your income

to do more with the three things you can always do with money. Be giving more, be saving more, and you can be spending more. So increasing your lifestyle, I would do it by percentage points. So you guys, yeah, I mean, up everything by 10%, 15% for a little bit, right? And just feel that. Now, I also will say, we were just talking about our personal line items in the break because the TikTok video we just talked about in the last segment. And I have not increased some of ours dramatically.

We've increased our out to eat, our groceries some with everything kind of going on and adding more kids. But ours is not dramatically, it's not dramatically different. eat yeah our groceries some uh with everything kind of going on and adding more kids but ours is not dramatically it's not dramatically different it really isn't like i look at i spend more on clothes like maybe by again by small percentages um and so i think that's what you that's what you want to work in yeah i i'm thinking about what you're saying and i'm thinking about this question and you know i'm with you I reluctantly raised our grocery budget you know when inflation got crazy I tried to stick to the old numbers and finally I

remember coming home and being like listen it doesn't work like I gotta raise this item um and so I do remember doing that um I think if it's when it's gradual like I think what she's trying to avoid here is lifestyle creep yeah or well let me go back your girl needs to loosen the purse strings I think she's just super tight but I think most people what their hesitation is is they're trying to avoid lifestyle yes yes and that's a good conversation to have because when you start earning more and you're like okay I'm doing better I'm out of debt like I've done all the things sometimes there is still that guilt that you face of can I really spend this like can I really do this for myself um and I'm gonna go with as long as you're taking care of business the answer is yes sure I mean

yes absolutely and you want to be be able to enjoy your life and I think that's part of it too so increasing it but increasing the other areas to be increasing your giving and saving. But doing all three with extra money is is really important. So, yeah, Brian. Yeah, probably more after 15 years up it a little bit. And I want to I want to hit one more thing on that, because with spouses, be willing to like your spouse can be into something that you're not into. And they want to spend some money on something that you would never spend money on. and it's like i feel like that's when it gets a little difficult it's like hey we're making this money now i love i'm really into this and you know my husband would be like why would you ever like do you know what i'm saying like i remember being on here with dave

and we were talking about wine or something and he was like a 300 bottle of wine i'm like i would never like i spend i spend 9.99 on wine dave like I I could he was like oh go get yourself a bottle well I was like I can't I like I physically can't do it like there's certain stuff that I just yes I can't I can't do it captain I can't don't make me please don't make me oh gosh I gotta go to the phone lines this is Kennedy in Pittsburgh PA PA. What's going on, Kennedy? Hi, ladies. Thanks so much for taking my call. I have a couple of things. My husband and I have been married almost 34 years. And, you know, we've worked hard our entire life to build what we have built. And we're kind of at a crossroads on a few things. And we have 17 rental properties that we have acquired.

They're all paid for. Wow. Great job, Kennedy. This is the question I have. You know, you would think, because, you know, we want to retire eventually. We've never taken vacations.

We've never been extravagant with things. We have no debt whatsoever. This is what we're at a crossroads because we were envisioning this when we retire, you know, all of our rental income, which is over $200 a year, would just keep us afloat and not have to dip into what we've built over the years. Now I'm noticing that the rental income is just not growing like it should. And so we're trying to decide if we should sell the property, which are probably worth around $3.2 to $3.5 million in total,

and just put the money, you know, away and earn the interest off of it. Because, you know, just in property taxes alone, like I just wrote a check for almost $50,000 just recently for property taxes on some of the properties. And so I'm just trying to make sure. And if an air conditioning goes out, things just add up. And it's like that account doesn't build like I think it should build. Why hasn't the rent gone up? Well, I do go up on the rent.

Now, I will say I am terrible because I manage them all. And I am a very sweet landlord. I don't go up like I should, especially if there's a lot of longevity with my tenants. So I know there's room for growth on that. But I just feel like the expenses, if we just were drawing interest, we could probably draw the same amount in interest every year than what we would be actually bringing in. I don't think you should feel guilty about, you know, you're in a real estate business, essentially. And I don't think you should feel guilty about passing along the cost of business to the customer.

And for you as a landlord, there are prices that increase and some of that you do pass along. And I don't think you should feel guilt in that. Now, if you're still interested in selling, I, you know, I have my thoughts on this,

Rachel, you know far more about real estate than I, Rachel, you know, far more about real estate than I do. So you take not really. Yeah, that's where and I don't want to sound cold hearted. But where you've chosen to put your money and your investments is in real estate and real estate involves people. So when you have a big heart like you, Kennedy, and you see it like that, you're not gonna get the same return financially when you don't raise rents, right? I mean, that's just the mathematical fact.

So my question to you would be, if it's less hassle, less work, and you're gonna get a bigger return somewhere else, then yeah, I would probably highly consider that. Or if you say, no, real estate is my end game. It is my business in a sense. It's my investment because I want a percentage of what I've bought this. This is the rental. I mean, the rent basically is your income. It's what you're making. And your income has to stay at

market value. And if that's how you run it, then I think we're having a different conversation. But it doesn't sound like you necessarily want to run it like that. Well, you know, the rental properties are just a side. You know, I have my own business and my husband's also an executive for a company. So we both still work. How much do you all make a year off those, off that? Without, okay, we're at $800 a year without the rental income. The rental income was just...

Okay. Is it a hassle for you, Kennedy? Like, are you to the point in life where you're like, I don't want to deal with 18 tenants and I would rather... It is a hassle. Okay. So if that's it, if it's not, I think real estate has to be a passion. And for some people, they love the diversity.

They love getting a property, getting a good price at the front end. And they're doing that. I mean, it is part in their blood. That would be Dave. If he was sitting here, he loves it. But if it's a hassle for you, yeah. And if it's a hassle for you and you don't love it, you don't need to be in it, in my opinion. There may be a level, though, Kennedy, that you keep maybe five of these or something just for the diversification aspect. So I think having real estate as part of your overall, especially where you guys are financially, would be smart. So maybe you sell half of them, cut the expenses in half, pick your half that you love, keep those for a few more years.

And then if you look up Kennedy and you're still miserable managing these, sell them. Yeah, I mean, like this is the joy of your life. You want joy in your life. And if it's sucking the joy out of your life, don't do it. The great thing is they've got choices. Yes. Yes. That's what I love in conversations like this is she has choices. She's not like chained to one option. But when you are paying, look at the taxes like you need to look at the entire picture, too, if you decide to sell these. That's a very, very good point. This is the Ramsey show You are listening to the Ramsey show I'm Jade Warshaw joined by Rachel Cruz. Hey if you like this show

Consider liking and subscribing Wherever it is that you listen whether it's on YouTube or your favorite podcast app, when you like and subscribe and share, it helps in so many ways. Number one, it helps other people find this and use this message and find these resources and hopefully change their life. And obviously it helps us on our end because it helps us in the algorithms. There a couple of weeks ago, Rachel,

we were number one in podcasting on Spotify, which that list is always changing. And in my heart heart we're still number one but and an apple i looked at this podcast yeah yes i'd love it and that's really all because of you guys so keep liking keep subscribing and keep sharing in the new year we're so so grateful all right let's take it to the phone lines we got victoria in austin texas what's going on, Victoria? Hey, you guys. How are you? Great. How are you? I'm doing great. So my question was, what financial steps should I take as a college student with around, I would say, $15,000 in savings, considering I have no assets,

a small school loan of about $1,300, and a credit score of $693? And then this is like a two-part question. I just wanted to know like any college or not college advice any advice you guys have for young adults especially first gen college grads on managing finances and you know setting myself up for success and building wealth and what not to do as well man you're so smart like i'm so proud of you first generation college grad asking all the right questions awesome it's so so so good um yeah I mean I'll I'll throw my two cents in and I'm sure Rachel has plenty to say um I think you're thinking the right way number one you're out of school you're graduated do you plan on going back to school or

is this it like are you going into your career now I have one more semester left and I graduate in May okay and then I plan to go straight into my career. But hopefully down the line, I want to go to grad school for like MBA. Okay, cool. Yeah, my first thing is like, let's get through this final semester. Let's graduate with a degree. Let's get you into a stable job like in your field. And then yeah, I'd probably start looking at this and going, okay, first things first, I want to get out of debt. You don't have a whole ton. I mean, 13,000 student loans. So my first things first, I'd be like, all right, I'm going to commit to walking the baby steps. And so I'm going to, you know, keep a thousand dollars set aside.

And then the rest that you have, the 14,000, I'd pay off your student loan immediately coming out of school. That'd be my first order of business. And that leaves you with two thousand dollars. And then I just start saving up. You know, I'd be like, all right, once you're, you know, stable, does that make sense? Because you're going to graduate, you're probably I don't know if you already have a place. Are you living on your own? Are you living on campus? So after I graduate, I plan to be home for the first semester. I mean, not the first semester, for the rest of the year. And then I want to work remote. And then that job will probably transfer me to a different location. Yeah. Then that's perfect. You're at home for a year. You're paying off this debt immediately. But then during that year, you're saving up a bunch of money

so that when you're ready to strike out on your own, this job sends you somewhere, you can get your own place or maybe it's a place with roommates. And so you've really just set yourself up. You've got no debt. You've got three to six months of expenses and you've got money in order to get a place for yourself. And I don't mean buy a place. I mean, like rent a place. But, you know, you have that margin in your life. How does that sound? That sounds great. Thank you, guys. Yeah. And Victoria, I think, you know, long term, I think one of the best things that you can do from as a young person kind of moving into this adulthood and money is be proactive. I think one of the worst things that people can do with their money is they become apathetic.

They're almost reactive to life or they don't really care that much. I mean, they're just kind of floating, they lose a lot of time, and they end up losing a lot of money. And so if you are just proactive with your income, and you budget every month, you know where your money's going, you avoid debt, like the plague, you just say you just draw a hard line in the sand. So Victoria just is a person that doesn't go into debt, I don't go into debt. And you can avoid paying interest and you can avoid being owned by the banks and your income is completely free. You invest early, invest in, you know,

and save up for a good down payment on a home later, you know, maybe two, three years down the road. And you do that wisely and you're investing early and you do all of these things. Over time, Victoria, you're going to be great. You're going to do just fine. But I think your attitude towards money, it has to be proactive. You have to own the fact that you have to be the one in control. And you learn this early,

Victoria. And I still feel like I learn it even in my mid 30s. It's kind of this like reality, like swoosh that happens for me where I'm like, oh, it's up to me. Yeah, like I, no one's no one's making my annual doctor visit. I have to take care of myself. And now I have kids and I have to take care of them and no one's advocating for them. I have to be the one to speak. So it's this idea that you really are in charge of your life. And that removes a lot of victim mentality. I think that removes a lot of expecting someone else to take care of you and to fix stuff for you when you just kind of own it Victoria from the front end that's gonna do a lot it really is it's gonna do a lot for your money so there's a lot of tactical things yeah

and if you stay on the line Victoria Austin will pick up and I would love to give you one of my books know yourself know your money which plays out the baby steps within it, but also understanding why you handle money the way you do. And you already have tendencies around money, Victoria. You already have habits around money that you may not even realize, but understanding your why, why you handle money the way you do, when you can learn that early on, you can create great money habits for the future, kind of what we're talking about on this call. So I appreciate you calling in because, man, it's so big and all you gen z years out there there's a lot of them that have been listening and finding us on tiktok yeah all the places but for real you

guys i'm like you know when you when you listen to this show or you follow ramsey and our advice you know we kind of get we kind of get uh in the corner of the old school way of thinking. But I'm telling you, day in and day out, this is the way to do it. It really is. So whether you are Victoria and you're 21 years old about to finish college or you're 61, wherever you are, be proactive in this stuff, you guys, and follow the baby steps and do it because it works. It works mathematically. It works in so many ways. I like what you're saying, Rachel. And honestly, it's reminding me, earlier we were in a meeting together

and Dr. John Deloney, one of the Ramsey personalities, was mentioning how kind of the way culture is and society is definitely wants us to go into kind of a hands-off mentality. And I just can farm this out to them and they'll take care of it and i can take my hands off here and i can automate this and automate that and there is part of that where your mind kind of goes to sleep yeah on um having it front of mind does that make sense yes um

and there is part of that that going through life there has been seasons where i've been like you want to know what like this might sound stupid but there's been seasons where like you're giving you can automate it. Right. And it's like, all right, I can set it and forget it. And it's not part of my day to day. And it's like, oh, before you look up, it's like I've been giving the same amount for two years. Right. Right. But then there's those moments where it's like, you know what, I'm going to take that off automation and I'm going to be actively part of this each month. Yes. To where I know, OK, how does how am I feeling? What is my involvement in this? Even like paying bills. There are certain bills that I'm like, you know, I don't want to, like back in the day, there was like, I don't want to automate that. Like I want to see,

I want to feel the money going out. I want to know, and I want it to register in my brain that I just made a payment. Like there's something to that. Being an active participant. Yes. You're actively participating and you're not just putting it on the shelf you're not just letting someone else handle it yeah does that make sense absolutely such a good conversation rachel yeah i love it but the proactiveness is is huge around this yeah i like that listen i don't know do you want to take try to take this next call can we do it quickly all right All right, let's do it. Jacob in San Francisco, what's going on in your world? Hello. So I have a kind of a situation going on where I just got a $7,000 dental bill and I have like a pretty substantial savings. I'm pretty young too. I'm like 23 years old. Okay. And my situation is basically this. So I have two options. Either I

could just pay it all at once upfront and just get rid of it. Yep. So I have two options. Either I could just pay it all at once up front and just get rid of it. Yep. Or I have a high interest savings account with SoFi. It's like 5%. And they offered me to take out like an interest-free loan over 28 months. No. No. I got to cut you off.

No, it just paid off. Reach into your savings and pay it off. Okay. Let it be done. If I had that money sitting over those two years it would actually like accrue like no it's seven it's a seven thousand dollar dental bill that you have the cash to pay off don't don't complicate it i know we try to we try to finagle numbers like that jacob and try to figure out what works in our favor all of this but the truth is

when you don't have a debt hanging over your head you make different decisions in life there's a freedom there and that it's not hanging around and you're not trying to play the math game. So yes, pay it off, be done with it and be grateful. My gosh, that you have the money to do that, Jacob. That's amazing that you're diligent and incredible. So just yep, set it, forget it and then go and invest and make money that way. Love it. Love it. Listen, a dental bill is not going to be the thing that breaks you free financially on the interest. I love it. This is The Ramsey Show. We'll see you next time.