The Ramsey Show - App - Can I Be Sued for Cancelling a Contract To Buy a Home? (Hour 2)

Episode Date: November 24, 2021

Debt, Home Buying, Saving, Career, Investing, Budgeting As heard on this episode: Sign Up for a FREE trial of Ramsey+ TODAY: https://bit.ly/3rZTUAx Tools to get you started:  Debt Calculator: https://bit.ly/2Q64HME Insurance Coverage Checkup: https://bit.ly/3sXwUn5 Complete Guide to Budgeting: https://bit.ly/3utmVXi Check out more Ramsey Network podcasts: https://bit.ly/3fHhbVE

I'm Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225.

It is Thanksgiving Eve and so your ticket onto the show today will be to tell us what you are thankful for as you come on the air we want to know what you're thankful for because well that's what we're about around here thanksgiving gratitude generosity these are the character traits of people who have high quality lives george we have a wonderful documentary out called, that you guys all need to watch over the Thanksgiving holiday if you haven't seen it, called Borrowed Future. And it's already been highly successful. You can watch it on Google Play, on Apple TV, and on Amazon Prime as well.

And you can watch it at BorrowedFuture.com if you want to do that. We don't care however you want to do it, but pull it up online and watch it with your family while you're hanging out. Maybe your eyes are rolling back in your head just a little bit from too much turkey, and this will wake you up because it will scare the P.Y. out of you. The student loan thing is a real deal. And, George, you hosted the original podcast series called Borrow Future that led us into doing the full-length documentary.

And so when you and I see something like Ohio State President announces debt-free degree initiative, it gets our attention. Yeah, it's incredible. I was reading through this, and what they're doing is they're going to offer undergraduate students the chance to graduate debt-free after four years with this new initiative, and that's going to include a combination of scholarships, grants, and paid internships. And I love the President, Christina Johnson, her heart behind this is not to do free tuition and free college, but instead to offer this in exchange for financial literacy instruction and students committing to graduate within four years. They're doing a lot of endowment and fundraising, of course, to help offset the cost of this. And what's really neat is it covers everything, tuition, room, board, fees, books, the whole shebang. So that's a pretty incredible initiative. Yeah, this is brilliant because it's the way people ought to be going to college on their own. But the president of Ohio State has,

Christina Johnson, has just done a great job spearheading this. And all she's saying is, we're going to help you get the scholarships. We're going to put you into an intern program where you work, particularly in the summer between. Duh. And then you go back with that money, and we're going to get some private funding, some private donors, to be able to help cover the difference.

She said it begins with a small pilot next year and will cover tuition room board, estimated cost of about $100 million a year once it's fully implemented, at the end of 10 years. And the university plans to an $800 million fundraising campaign to create an endowment to where it just feeds that in perpetuation. And it's brilliant. It's a way to do it. And there's no reason, if you're going to an in-state school, that you should have student loans.

You should be able to get enough scholarships to work enough and manage your time and get out in four years, not six years. I love that commitment as part of this initiative. You're not getting free college. And it's not a socialized thing. She was very clear to say that in the press release. It is not free tuition. It is not free college.

It's not any of that. It's a program that allows you to go to school, work, get scholarships, get done in four years, and be done debt-free. I love this. way to go we salute you yeah they're rolling it out next fall with 125 low and middle income students and uh you've got to fill out financial forms every year kind of similar to a fafsa situation but i think it's so great that students can do this knowing they're going to leave with zero debt as long as they commit to four years paid internship really simple things that anyone can do well and this is again it's they're committing to doing stuff they should be

doing so it's not like it's harsh it's not some kind of bizarre thing they're not training their souls you don't have to train tigers i mean that's not what it is you're not you don't have to run backwards for you know in front of a speeding car you don't have to do anything you work yep you apply for scholarships you do internship and you finish in four years what a concept wow i mean this is neat i hope this works i hope this is a model that other schools can take and go we're going to do the same thing Ohio State did, and all of a sudden we're going to see so many more students walking off that stage completely debt-free. Well, and what's interesting is the Associated Press, which generally comes out pretty much to the left of Karl Marx on stuff, has given her a positive push on this.

They took the press release from Ohio State and ran the good parts. So somehow they convinced the AP that this is a good idea, which is freaking amazing, because generally the AP is, whew. Well, I think the one thing that unifies us all, regardless of your politics, is the fact that this is a mess and it's a nightmare. And I love what Borrowed Future did to really paint the picture of where this is at and offer a solution. Yeah, I agree with that. I mean, regardless of politics, we all think there's a problem, but the difference is we think there's different solutions. Yes.

And she came out on the free market side, not the you should, you know, college tuition is a human right bull crap, you know. So instead, it's your right to go pay for it. And here's how you can do it, and we have a program. I love it. I think it's fabulously done. It's a great initiative. It's well laid out.

They put enough information out in the press release to make it where the whole system is believable. It's a 10-year rollout. It's going to take them some time to do the thing. They're doing it right. It's not announced. It's not flash in the pan. It's notvable. It's a 10-year rollout. It's going to take them some time to do the thing. They're doing it right. It's not announced. It's not flash in the pan. It's not microwaved. But, you know, I think you could get your alumni behind something like this.

I mean, there's a Sharon Ramsey scholarship at the University of Tennessee now. That's cool. That's over there that the Ramsey family foundation funds every year but i can tell you this that this is the kind of stuff alumni that have done well in the business world would come back and support kids going to school free or going to school if they're working and you know i would support some scholarships for stuff like this this is the kind of thing i think you could draw a lot of money in. So her needing to raise $800 million to create the endowment for this is very doable. Yeah, I think even outside people would say, I'd love to throw some money in the pot and be generous in this way

to allow someone to go to school debt-free that otherwise maybe couldn't. I would rather do that than be taxed even more. And be forced to. So that the government, with its inefficiencies, actually decided that it was Grandpa and was forced to so that the government with its inefficiencies actually decided that it was grandpa and was going to give everybody free tuition which is a bunch of crap yeah i mean this is socialism and so um this kind of stuff is a good free market answer to generosity to get people uh through school so we salute you, the president of Ohio State University, President Christina Johnson. Well done.

Well done. Some of you other universities, especially you state schools, could follow suit. It might be the smartest, best things you've ever done. Because higher ed kind of has a black eye right now. Oh, by the way, be sure and you watch Borrowed Future this weekend with your family. You don't want to miss this. Several hundred thousand have already watched it, and it's already stirring up a holy ruckus, which was our full intent. So be sure and watch that documentary and make sure some of the people in your family that think that this student loan thing is OK or whatever.

Make sure they get to see it. People all over the country are discovering a faith-based and budget-friendly way of meeting health care costs through Christian Health Care Ministries. Christian Health Care Ministries, or CHM, is a nonprofit organization that helps members carry one another's burdens with health care expenses, and they have successfully shared each other's medical bills for nearly 40 years. See if CHM is right for you by visiting chministries.org. CHM is a proud sponsor of Dave Ramsey Live Events. George Campbell Ramsey, personality, host of The Fine Print, also host of the Entree Leadership

Podcast, is my co-host today as we talk about your life and your money. Open phones at 888-825-5225. You jump in, we'll talk. Darlene is in San Antonio, Texas. Hi, Darlene. Welcome to the Ramsey Show. Thank you, Dave. Thank you for taking my call.

Sure. I've been trying to get through since last Friday, so I'm really excited to speak with you. My question is, I put a contract offer in on a small fixer-upper, and it was a cash offer, and they were asking high 90s. And I came in just slightly below that, so they did accept the offer. And basically, basically, I was going to buy the house with the loan. I did not get the loan. So I had to terminate the contract within the three-day termination period. And the seller and the seller's agent did not like that. So they said, well, we're still going to hold you to the contract and the earnest money. And my buyer's agent said she's perfectly within her three-day

termination period. And I did speak with the title company and the title company, the lady who pretty much manages the title company, she's the main person there, told me that you're in your three-day termination period. You did not present the earnest check, and also the contract is full of holes, and the contract is incomplete. There's two pages missing, and I'm not going to accept the contract. And she asked us, us being my buyer's agent myself, what is your concern? And the buyer's agent said, well, they're going to try to hold her liable for the earnest money and possible breach of contract.

And she said, well, I don't see how that's going to happen when the contract is dissolved. So I just kind of wanted your thoughts on that. Where's the earnest money now? It was never presented because I didn't get my loan. Oh, so they want to sue you for the earnest money and for specific performance on the contract. Okay.

Well, I'm not an attorney, but it sounds like the title company has looked at it, who looks at contracts every day and has said this is not an enforceable situation. So you can sue someone for anything. You can just make up a lie and sue someone. That's happened to me recently. So you can just make up crap, okay, and just sue somebody and just a completely bogus thing that didn't even occur.

And so in your mind, this is a contract, it's bogus, it didn't occur, but they could go sue you on it. The question is is would they win um and do they really want to write all the legal checks they got a right to sell a stinking ninety thousand dollar house because even a state court action is going to cost them fifteen to twenty five thousand dollars in legal fees to make you close on a ninety thousand dollar house right and the house needed a roof they had it was just a shell and i thought well maybe i can afford it a little at a time and it didn't there was no way i could come

up with the money so i was declined and i said i i'm sorry but my agent failed to put that in you're failed to put that the contract was contingent upon financing? Yes. Well, that's dumber than a rock. It was. My buyer's agent failed to include a clause saying that, depending on the loan, if the loan is approved. Yeah, it should be contingent upon financing. And she didn't put it on the line. I mean, you shouldn't have signed it. You should have been able to read where's the contingency on financing.

Would you do sign it blind? Yeah. The offer was, she said, as soon as the offer is accepted, it is the contract. It becomes the contract. I know. So why did you make an offer that was not contingent upon financing? You and your buyer's agent ought to have your butts kicked. Well, I explained that she didn't get that part.

So I told her my loan was declined, so there's no way i can no you're you misunderstand me the offer that you made did not contain the offer that you made when was accepted did not contain a contingency on financing meaning the contract was not contingent on financing you nor your buyer's agent made sure it was in there that was dumb and that's what i was asking my buyer's agent no no i'm asking you you're the grown-up person that signed the contract your buyer's agent was done but so were you i mean you said you stepped up into this trap now i don't know what's the three-day thing is texas got a three-day right of rescission on residential real estate contracts? That was their write-up in the offer. Oh, they gave you three days?

They gave me three days. That was the first thing on the offer. So that's the termination period that you get three days on a cash offer. And that was the seller's write-up. That's weird, too. And they did not complete the contract. They left out two pages. Well, if the contract is not completed, then it isn't.

Listen, in every state in the United States, a real estate contract has to be signed by both parties to be fully executed and become a contract. Otherwise, it's an offer and a counteroffer. And it sounds like that you have dealt with the most incompetent group of people I've heard of in a long time in the real estate business. None of this is rocket science. And so, yeah, I hope you learned your lesson.

Don't make stuff count on three-day rights of rescission. Put in there what is going on. If the deal is contingent upon financing, put it in there. Make it part of the deal. Sounds like they're trying to take advantage of this whole. They did take advantage of it. And they took advantage of the fact that there's not a three-day, that the contract wasn't completed properly.

So there isn't actually even a contract. You said there's two pages missing. It wouldn't be enforceable anyway. And there's no earnest money actually transferred hands to start with. So, you know, the whole deal was just really handled. It sounds like they're trying to spook her into getting some easy money from this earnest money. Well, they're just mad because she didn't close that's all it is and and they all ought to be mad at themselves for doing this deal everyone should be all four parties should have their butts kicked

in this deal it's just horribly executed and that's why there's so much disappointment but i don't think you're gonna get sued and i don't think they're gonna win if you do so you know i'm not a lawyer you'd have to talk to a lawyer to be sure but um i think your title company person is maybe the only one that's competent in the whole discussion here so real estate get messy if you don't do it right guys if listen not referring to her situation uh but just in general i was talking to real estate agent the other day when i got my real estate license in 1978 people used to like consider writing a contract like giving their word like you're going to keep your word like it's like when i sign a contract that says i'm going

to do something that means i gave my word and i'm going to do it even if i don't like it even if it hurts my feelings even if whatever i said i was going to do, I need to do. That's integrity. That's gone. Apparently people just walk away from real estate contracts like they just, you know, decided, you know, I'm going to go buy 73 pairs of clothes, try them all on and take them back the next day. I mean, it's that kind of crap. That's the way they treat house deals now and they you know you're executing a real estate contract on a house including our caller but but everybody else out there more importantly than her make sure that what you're doing is something you are able and willing to follow through on don't mess with people's lives you know don't play games. And so I sold my personal residence this year, very expensive property, and I took a huge earnest money check for this reason right here.

Because I was going to be, if they didn't want to close and wanted to walk away, I was going to be happy to put it back on the market and put that much money in my pocket. And that earnest money check was camped at my title company. You know, and so there's, you know, there's just, you just cannot, you've got to, don't enter into these things willy-nilly. Don't enter into these things on impulse. This is a real estate transaction. It's massive. You know, make sure that before you shake hands and you sign on the dotted line that you're able and you're willing to do what that offer says. Now, if the offer says contingent upon financing, you're unable to get the financing, then you're out of the deal.

And that's what should have been done in this last caller. Instead of, you know, sneaking out inside of a three-day receipt right of rescission if the offer says contingent upon accepting the report from the home inspector then when the report comes in if there's three three dollar things morally you should close on the house you know now you have the right technically to walk away i don't like the inspection report yeah it's three three dollar things which means you were just playing freaking games to start with and you're screwing around with somebody's home now you shouldn't do that people do it all the time nowadays though yeah be careful out there lack of commitment commitment If you've ever gone through a life emergency you weren't prepared for financially,

well, we've all just about been there you know what sick to your stomach sweaty palms feeling is all about as a parent you hope your child never has to go through an experience like that but teaching teenagers how to be smart with money before they make dumb mistakes well that can be a big job too and this is how it gets you ready for life you don't have to resort to the school of hard knocks to teach your kids with our digital self-study courses, your teen can learn the right way to handle money no matter what curveballs

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Parents, get your kids off to a great financial start and go to RamseySolutions.com slash self-study to learn more about all of the different courses that we have available for your middle or high schooler. Our question of the day comes from Blinds.com, great American company. They have a 100% satisfaction guarantee. If you screw up, if you mismeasure, you pick the wrong color, I've done both, they'll remake your window blinds for free. That's a pretty big guarantee. Like a you're stupid guarantee, I'm stupid guarantee.

That's pretty cool. You get free samples, free shipping, and new promos they run every month. You'll save even more. Use the promo code RAMSEY to get the best deal at blinds.com. Today's question comes from Sebastian in South Carolina. I went gazelle intense the day I graduated college and paid off $38,000 in 17 months. I'm an engineer making $70,000. I lived on rice and beans and beans and rice while using around 45% of my income to pay off my student loans, which were my only debts.

I'm now struggling to make it through Baby Step 3. I have two months of expenses saved up already, but it's taken me three times longer than I had expected. Should I feel bad about how slow my progress is now that I'm debt-free? How do I find more motivation to save faster? I feel like I worked so hard to get out of debt, but I don't have the same intensity on baby step three as I did back in baby step two. This is pretty common. This is a tough one because people get discouraged. There's not the immediate reward when you see the debt payoff.

And you might be tired. You're in the middle of the marathon after baby step two. And I understand. I have empathy for those who go, man, baby step three isn't as exciting as the excitement of debt snowball, paying off those debts, getting rid of the lenders, and all of that. So I understand that. But here's my question. Where did that 45% of the income go that was going towards the debt? You should have been through this by now, but it sounds like there's some other things. We're getting a little lackadaisical with saving for baby step three. Not only did the motivation go go down but the spending went up

yes and uh the amount of money going towards this baby step three is not very good and that's what he's saying how do i get back to that and so what i would do is i think you need to lay it out there and go okay i can either let this pain go on for nine months or i can let it go on for three months and the deeper i sacrifice the shorter i'm in the pain because once you finish baby step three you're no longer in gazelle intensity now you're on intentionality and now you can loosen up and very carefully very intentionally spending money but very carefully very intentionally uh you know moving on through the other baby steps as well but the intensity needs to stay up through this and i think

if you just do sit down uh you know you are an engineer so you can do the math right and go okay if i go back to my old ways for three months i can be done but if i don't it's going to take me nine months now what do you want to do you want to kind of just slosh around for nine months or go hardcore for three and then be done that would give give me help. If I could see the light come closer as, you know, the light at the end of the tunnel comes closer as a result of increasing my intensity. Yeah, if I'm at the doctor getting a shot, I want it to be quick and painful versus not so quick and a dull pain forever. And so that's what I think we're feeling here with Sebastian's situation. He needs to just remind himself why he's doing this. He wants to get to where he's building for

the future instead of paying for the past. And this is that final force field between him and life where he doesn't have to worry anymore. And he has that financial peace. So I think you need to remind yourself of the why, get that motivation back and realize that you could be done in a month or two months, or you could let this sit for another 12 and be frustrated. That's exactly it. That's the only shot I've got at it if I'm in his shoes. I mean, no one thinks, oh, let's sacrifice and go deep. That's so fun. No one thinks that, unless you're kind of weird.

But, I mean, most of us are going, we're doing this. We're going to live like no one else so that we can live and give like no one else. He's so close. I mean, you did the beans and rice thing, dude, and here's the point. It's easy to talk to yourself and say that worked it worked so let's do it again logan is with us in atlanta hi logan welcome to the ramsey show hi what are you thankful for today so i'm thankful actually for family and then um i'm thankful for the owner of the company i work for because she told my brother

in law which is my manager about you guys oh wow and he told me about you guys so chain reaction cool how can we help um so i've actually offered a new position at work um the downfall i make about 19 an hour i'm supposed to specifically getting a raise, a dollar raise, annual raise with my evaluation at the end of this month. And the new position, I won't raise anything. I won't gain any money for a whole year, and I lose out on about $500 a month. But then after the first year, I'll make an extra $10 an hour. I'm just not really sure what to do. Okay.

Are you going to be paid hourly at both of these? Yes. Why are they cutting your pay then to give you a promotion? Well, it's not really cutting my pay. I make hourly, but then i get commission so depending on what i sell and how much i sell then i get 10 of that okay so you make 19 an hour plus commission now due for a dollar an hour raise what's the new position pay the new position what i make now but i'll be learning so i won't make any commissions 19 out of my own yeah how big a

company is this uh it's not small but it's not big it's probably about uh how many employees employees how many about 50 okay um so your boss that's making you this offer is talking to the owner it's uh one of offer is talking to the owner? It's one of the managers that's making the offer. Yeah, but not without clearing it with the owner in a 60-person company. Right. Yeah, so the two of them are talking it through. So here's what I would do. I would just sit down with them and go, I really want to do this,

but I'm taking a pay cut to do it. Did you all realize that? And is there some way we can structure this so I don't get a pay cut to do it. Did you all realize that? And is there some way we can structure this so I don't get a pay cut with my promotion? Because honestly, while I really appreciate the promotion and all, I don't know how that works in my head. And just question it. They may come back and go, you know, that's probably right.

I wouldn't want to get a promotion and a pay cut. And so, you know, we're going to give you, give you you know 21 or whatever so that it basically washes out with your old commissions and moves you into the new role because they're trying to move you up right now when you finish when you finish your training you said they're going to be training you will you be making more then yes so um the trainings i think take about a year just because of how much is into it, because it's fire protection stuff. So once I get fully trained in that department, I'll make about $30 an hour. That's a big jump.

Yeah. Okay. Well, maybe they do realize it, you know, and just go, Wow, I really thank you for that. I still would ask the question, but I wouldn't ask it with any entitlement or any arrogance. I would just say, hey, I really want to do this. Is there anything I can do extra in the new role that would allow you to pay me what I'm already making total? Right.

So that it makes this a no-brainer. Right. Just ask that. I just ask that step one right now so i just started out your guys's stuff and i i just wasn't sure what to do so i figured reach out to you guys here's the thing don't go in and slap your fist on the table that's not my point we're not going we're not going in with anything like that this is just going hey guys help me with this i'm a young. I'm trying to figure this out. I really want to do this. Is there anything I can do in the new position that would make it where you would want to pay me the total of what I'm making right now so that it makes it a no-brainer for me to take this promotion because I really want to do it? Yeah.

And just see if you can talk them up that way. The upside is making $20K more. So if he's going to stay stable i don't want him to take a pay cut but even if he does he's going to make 20k a year from now more than he is i like those odds if it's guaranteed i'm taking it either way but i'm going to ask the question in a small company you've got some there's not as much policies not as much corporate bullcrap to to get something like this considered. This is The Ramsey Show. Happy Thanksgiving, America. It's Thanksgiving Eve here on The Ramsey Show.

What are you thankful for? George Camel, Ramsey personality, is my co-host. Brian is with us. Brian's in Cincinnati. Hey, Brian, what are you thankful for? I am thankful for the wonderful extended family god has granted me because if it was possible i would trade in 90 percent of my blood family that's a good answer i love it how can we help yes my wife and i are working on our wills and of course we are leading each other everything if something happens to this one of us.

But we're wanting to set up college funds for our grandchildren if something happens to both of us. And at this point, the majority of the money would be coming from my life insurance and the 401k. Okay. And? And I have no idea where to start on that i wasn't sure if it's a trust fund that we would set up for that or how we would do it and what the 401k would be the second beneficiary and the same with the life insurance yeah i think that you would just name your secondary beneficiary on both uh to be a family trust, a grandchild trust. You can give it a name that is formed in the will upon your death. It's much like if you had minor children, you would leave everything in the case of both parents' death into a trust to take care of minor children until they're grown.

And you would name that trust. But that trust is formed only upon your death. It's not formed ahead of time. And so then both of these accounts, the life insurance 401K would pay into that, and then you put the terms on the trust, how you want the trust managed upon your death, that this would be formed, and who the trustee is who's going to be managing the money. And so, like in our case, when we had minor children, we said, okay, we want it invested in four types of growth stock mutual funds,

growth, growth and income, aggressive growth and international. We want them all to have 10-year track records. And we don't want the money sitting in a CD in a bank because it won't even keep up with inflation. And the kids can have money use out of it under these circumstances. And at this age, whatever balance is left in the account will be handed over to them and so on. And so you could do the same thing here that you say, okay, if they go to a four-year school

that is an in-state tuition or whatever you whatever constraints you want to put on it um uh and you know they need to graduate before they're 35 i don't know 25 whatever you know we're not going to keep we don't want lifelong students because of this we want them to get out and get a job and get move on with their life that's the purpose of it and so kind of think through some of that and you know you need to put some parameters on that trust and build out the guidelines of how it is to be operated by that trustee then and none of this will happen until both of you pass away okay and like our oldest granddaughter she's 10 right now she of course at 10 it's going to change probably but she has dreams of being a vet which is a lot more than a four-year degree.

Of course, she would be the first one to hit it. What would you recommend as far as stating like a cutoff point for that to make sure there's enough for the other? And right now we have two and a half more. The next one's due in four months. There would be three after her. I mean, you can just run the math out on it and see. It would not be unusual in something like you're doing to make it for the four-year degree only.

And if they do postgraduate work, they're on their own. Okay. Yeah, right now it would be like $650,000 if something happens to me tomorrow. Yeah. And there's how many kids? There would be four total at this point. Yeah, okay. And their babies, that's probably enough for four-year degrees is all in-state tuition.

Okay. By the time they get there. Now, it'll grow some during that time, assuming it's invested, because you said some of them are not even born, so that's part of the equation. But you've got eight years before the first one starts tapping it, so it'll double once more. I don't know. You may have enough to do more than that. But I think you could set up a formula, a math formula in the thing that says, you know,

when the account starts to be, when the first student appears, we're going to apply this formula to the current balance. And that tells you if you can do more than a four-year degree. Would it make sense to open a 529 in their name in this case? I mean, I know he wants it upon death, but it's something that you could open now and let that grow while they're alive. It's obviously not part of the will. You could, but it's not part of the will.

You'd have to do it with other income because you can't use your 401k money for that, and you can't use life insurance because you're not dead so but it would have to be other money that you came up with and funded it um yeah i guess i'm wondering is it you know why do they want it upon death versus while they're still alive start to set that up for them well the two sources are not accessible today will be the only reason but if they've got other money that is other sources of money that's accessible then you could look at doing that so very cool very cool leah is with us or lee in new york city is it leah or lee it's leah hi great hi happy thanksgiving what are you thankful for i'm thankful that my family is healthy and that we are on baby step three.

Yay! How can we help? Hi. So we have been on a budget for a while, but from time to time we keep running into this issue of that we can't wait for the next paycheck to come. It's almost like we're running out of money, and I feel like we're not doing something right in dividing up the money or the budget within the month. And also, even though we are on baby step three and we paid off all our debt,

we kind of still feel like at this point that we're almost like living paycheck to paycheck, so to speak. What's your household income? So, my husband is working, he's making $9,400 take-home pay. That's your household income? Yes. Okay. So when you guys were doing a budget when you were paying off debt, was there margin left over? Well, at the time I was also working. It was very hard.

It was not much. Is that what's causing this, the drop in income from you not working? I don't think so. I mean, we did have another child, and my income wasn't so great. I was working only part-time so and he also received the raise um in the past few months okay when you both when you do a budget both of you sit down and look at what is allocated to each category and you're both agreeing to that correct correct and then what happens that blows it up um the budget is is fine we have money for every everything and every

category it's just that as we start spending the money and starting to track the money it's almost like we run out of the actual money in the bank before um well no but the bank money is reflected on the budget so you're you're running out of money in the category if you're overspending you're either overspending a category or underfunding a category. If you have 9,400 take-home pay. So we're not doing that. It's just that, let's say, our bills are due earlier than the next paycheck would come in. It's like he gets to be a guy.

Why would you budget that? You need to budget what the reality is. Your budget's not a mythology template that just is the way you wish life is. Your budget needs to reflect what life is and it does no it doesn't because your bills are coming up in a budget outside the budget they're coming to you and they're not budgeted the actual money is not in our checking account you're saying it's a timing problem but you need to be budgeting for whatever that paycheck coming in you need to make sure that you've got a plan for that money, and that money needs to be able to cover your bills.

So within the month it's budgeted for correctly, it's just that the money is not in my checking account yet. And that's what we're saying is don't budget for money that doesn't exist. If you've got $9,400 coming in. But it will exist because we get paid twice a month. Okay. So you've got to learn to adjust the budget into two halves then, the two times a month okay so you've got to learn to adjust the budget into two halves then the two times a month where you've got a certain amount coming out for food in the first month first half of the month but you've got a bunch of other bills hitting so your food budget may be a little lower in the

first half and a little higher in the back half when you don't have as many other bills hitting so you may have to run two half budgets that are zeroed out to make this work, to get your timing right, until you can get a little bit ahead of the budget and have a little bit of slush in there to be able to make this run. But I think you guys are watching too much Netflix and not spending enough time on this budget. This is not rocket science. You can sit down and figure this out when both of you lean into it and sit down and look at it and push on it and go,

every one of these dollars needs a name, and it needs to reflect the reality of our month. The cable bill is due on the 25th. That has to show up in this budget. The electric bill is due on the 3rd. That has to show up in this budget. We electric bill is due on the 3rd. That has to show up in this budget. We have to see how that's going to work. And just spend a little bit of time on it, planning it out. I think you can do it.

Hey guys, this is James, Senior Producer for The Ramsey Show. Did you know over 18 million people listen to The Ramsey Show every week? And a lot of those people listen on one of our 600 plus radio stations across the country. To find a station near you, head to theramseyshow.com.