The Ramsey Show - App - Do You Have Too Much Month Left at the End of Your Money?

Episode Date: January 21, 2025

Welcome to the Ramsey Show America. This is where we help you win in your life. We want you to win with your money, win in your profession, and win with your relationships alongside the fabulous Jade Warshaw. I'm Ken Coleman, excited to be together for you folks today. The phone number to jump in is 888-825-5225, 888-825-5225. And the new year is off and running. And I looked up today, Jadeayden it's like where did

january go man what come on and uh so hey if you're trying to get control of your money we're not talking about a new year's resolution you're just saying listen 2025 we just gotta we have to stand on business hey come on ken coleman yeah you're teaching me this is this is life change right we are making real changes, real progress with our money. And we have just the thing to help folks out, Ken. That's right. Coming up this Thursday, my friend right over there to my right, she is going to be on the stage with Dave Ramsey. They are headlining our free live stream event. Tell them what it's going to be and what it's going to do for them.

We are going to help you break the paycheck to paycheck cycle once and for all. That's really what it's about. How many can know how it feels to have more month left, but the money is gone, right? How many of us know what it feels like to be overdrafting our account? Then you pay that $34 fee. Embarrassing. Man, it's embarrassing when you're always checking your account before you swipe for your groceries at the grocery store because you don't want to, you know, you want to make sure there's enough money there. We're going to help you with that. The fact is people are feeling tightness with their money. They're not sure where to go. And the truth is people have tried to have goals in the past with their money and another year passes and they're still in debt or they still don't have that savings. So we're going to help you. It's a free live stream

event. We're going to go over exactly what it's going to take for you to get on a budget, start paying off debt, start building up savings. We'll touch briefly on investing. All of that, you can sign up right now at ramseysolutions.com slash live stream. And Ken, if you sign up, you're going to be registered to automatically be in our drawing to win $4,000 cash. We're doing five different giveaways. Yeah, isn't that crazy? Five people will win $4,000. And after you sign up at ramsayconsolutions.com slash live stream, create a free every dollar account to get a bonus entry in the giveaway. Because you guys are going to be using every dollar during the live stream to show you the fastest, most practical way to get control of your money.

So again, this Thursday, 7 p.m. Central Time. RamseySolutions.com slash live stream. And for anybody who was there on the last event, some of you are like, oh, are you doing an EveryDollar demo? I am going to go over EveryDollar, but it's a very small piece of what we're doing. So still tune in. Even if you've seen me do an EveryDollar demo, I'm going to do that like literally in five minutes. So tune in because we're talking about a lot. And Rachel Cruz and George Campbell are going to join us. It's going

to be a cameo. So it's going to be a lot of fun. Don't want to miss that. All right, let's get to the phones. Zane is going to start us off in Dallas, Texas. Zane, how can we help today? Hey, am I on live? You're live. yes. Oh, cool. This is your moment. Do you have something planned? No, I don't. I was wondering that, well, my problem, they told me to kind of get to my question. I'm $115,000 in medical debt as of right now, and I'm 19 years old. Oh, man. What happened? Give us the quick version of what happened. Three months ago, I got into a car crash at about 60 miles an hour, broke both my legs,

and had to spend a week or two in the hospital, and I've been out of work for the last three months. What's the status on being able to get back to work? I'm just now able to kind of waddle around my house like a penguin, but walking's still not that great right now, and the doctors are kind of telling me that I'm not going to be able to go back to construction for the next year or two, at least. So is there a settlement coming out of this? I mean, were you at fault, or are you going to get paid off of this? I think I was at fault, if I believe correctly, yeah.

Oh, that's tough, my man. That's real tough. Yeah. Oh, sorry for interrupting. No, go ahead. Well, my question was, is that at 19, I've kind of been given two options of how to handle the $115,000 of debt that I'm in and it's to either you know counter them and say that I'm not going to pay it and agree on a lower settlement of you know 60 to 80,000 or whatever or to just not pay it and let it really you know

hit my credit score and let the credit score drop and I don't know which of those choices to go with at this point because I've never had to use my credit and I don't know which of those choices to go with at this point because I've never had to use my credit and I don't think I will in the next seven years well again I don't want to be straddled with that debt tell me about were you on it did you not have medical insurance at the time tell me more about that because what I'm thinking no medical insurance no ma'am do you live at home I was living on my own in a travel trailer because, you know, it's the cheapest thing you can live in as a young teenager. But now I am. My awesome mother is taking care of me while I'm recovering.

So the truth is, if you don't pay these, they would roll into collections and some collections agency would end up buying them for pennies on the dollar. And the truth is when things go into collection, yeah, you're more likely to be able to strike some sort of deal and say, okay, I can pay you if it's 115,000, I can pay you 40,000 or I can pay you 60,000. And it's usually a cash deal. I don't like that for you because A, like you said, you're tanking your credit and it's kind of, it just feels like a hopeless thing. What I would do is I would start with, okay, is there any type of payment plan I can be on? And there's probably some sort of, I don't want to say the term forbearance, but you know, when you're going through a hard time and

they kind of give you a break there until you can start working again, because the truth is you're not able to work at this point and we have to figure out what that means for you next. Right. Yes, ma'am. I'm hoping to be able. I kind of through my dad. My dad's an oil field man. And he there was a plan for me to move out to the oil field and get kind of a desk job out there that would pay better than construction and allow me to work, you know, while sitting down. And that was the plan moving forward if I was going to be, you know, paying this off. It wasn't planned either way, but that was kind of my only way in my mind of being able to think that I could pay this off. When are you going to take that job? As soon as I can walk again and get my trailer moved out to Midland. Fantastic. Okay. So there's income. And I think Jade's right. You call the hospital.

Get a hardship or something. And you talk to them about what you'd like to do. And if you can settle for... Jade, what do you think about his initial idea of settling for a much lower number? I think that if it comes to that, that's okay. But I would not intentionally tank my credit. Like I would not intentionally not make the payments to tank my credit so that it gets sold off. I wouldn't do that. If that happened because of circumstances that you couldn't help, which happens every time and people call in, fine. That was his second option. His first option was going to the hospital and saying look i just i don't know if i'll ever be able to pay that back can we do a lower number yeah yeah okay i do like the idea of you going to the hospital and saying hey obviously this is the extent of my injuries

obviously i did not have insurance obviously it's going to take me some time is there some sort of payment plan i can work out that takes into account my hardship right now yeah and i think they will do that. But I don't want you to go into this with a hopeless mindset of saying, I'll never be able to pay this off because I don't believe that. I think you can. Yeah, I agree. I think you tell them, look, I'm 19 year old kid. I didn't have insurance. Here's why. Tell them your story. Yeah. And if you could get it to 60, that's a number you threw out. That's very doable for you to pay that off. But as soon as you can get healthy, yeah, man, you're getting out to Midland.

And, man, you're a young Billy Bob Thornton out there. Hey, Landman. I got to tell you. Ken, it's good, isn't it? It's so good. It's good. I got ahead of it and got in trouble with Stacey, so I had to slow down. Yeah, you got to watch it with your wife.

Get Mama caught back up on it. And I got to tell you. It's not for the faint of heart, though. Yeah, yeah. Whew. Great show. Get your popcorn out up on it. And I got to tell you. It's not for the faint of heart, though. Yeah, yeah. Whew. Great show. Get your popcorn out. All right.

We'll be right back. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Coleman alongside Jade Warshaw. The phone number for you to jump in is 888-825-5225. Today we'll focus on your money questions, of course, and also your professional questions

so we can make more money and create more margin through the baby steps. 888-825-5225 is the number. Matt is joining us now in Phoenix, Arizona. Matt, how can we help? Hi, thanks for taking my call, guys. So we are snowballing our debt and doing everything we can,

but we just got a letter from the IRS. It was a notice for intent to levy possessions for our 2023 taxes. We filed the taxes and everything, and we owed about $14,000 from 2023. So we submitted all the paperwork and a down payment to set up a payment plan to pay that back while we're kind of snowballing all of our other debt. But they somehow, they managed to cash the check for $1,000 as a down payment, but lost our paperwork to set up the payment plan. Classic. So it kind of got me thinking, is there debt that's more important to pay off than other debt? Or should I just throw this all into the snowball?

Because I know I have a work bonus coming up pretty soon that would pretty much wipe out that IRS debt. Yes, uh-huh. work bonus coming up pretty soon that would pretty much wipe out that IRS debt. So like, should I use it for that IRS or just keep on doing the snowball? Yeah, no, you are 100% right, Matt. There is some debt that's important than others. And in this case, it's always IRS debt. So when you're working your debt snowball, we always say if you have IRS debt or if you're behind on your mortgage, that sort of thing, that jumps to the top of the list regardless of the fact because they can do so much damage. And let's be honest, nobody likes working with the IRS. It is a pain in the butt and you want to get them off of your tail as quickly as possible.

So if you have this bonus coming up, when does it come? End of February. Yeah, I'm knocking that out instantly. And just make sure you keep record of everything because, listen, the IRS is notorious for making mistakes. I can't tell you how many times with our business we got sent a tax bill that was incorrect and we had to fight it and had to show proof. And, you know, you're always jumping through hoops with them. So whatever you do, make sure there's a very clear paper trail so that if this thing rears its head again, you've got everything documented. Okay. Yeah. Thanks for the call, Matt. Thanks for the call. Excuse me. My voice just went out on me

there. Yeah. Kyle is joining us now in New York City. Kyle, how can we help? Hello, I have a quick question. I am looking to get engaged soon, and my fiance has some student loan debt, about $65,000 of it. And I live at home. I own my own business. I've been able to save up quite a bit. I have about $180,000 saved up between different accounts, some in retirement, some in some brokerage accounts, and others in just normal checkings and savings accounts. I was curious about how should I go about handling paying this debt? Would something like a lump sum, just handling it right away, be wise? Would doing it over a period of time be wise?

I've never had debt, so I don't know the best route to actually paying it off. Listen, that's a great question. When do you guys get married? We're planning to get married in October of this year. Okay. So when and only when you get married after you've said I do, I think it could be a good idea to pay off this debt depending on how much of your $180,000 saved is in non-retirement funds. So can you kind of break that down? How much of it is non-retirement? Yeah. So about $30,000 is in a Roth IRA. And then I have like $50,000 in just like the S&P 500. And the rest is broken up between like a savings account. So like, uh, like the rest,

a hundred thousand is in savings accounts, like high yield savings and checking accounts. Um, and also in like my business checking account. Okay. So of the 150, that's we'll call liquid. Um, cause the index funds, if you don't have to touch it, you don't have to, but of all of that, um, how much would you say would be three to six months of expenses for you and your wife once you're in your lifestyle? Yeah, I haven't yet calculated that out. I know what mine is currently. OK, but that's something I would do is I would just set aside three to six months of what, once you guys are married, set aside three to six months of what will be your expenses and keep that in a high yield. And then if you still have the 60,000 liquid or 65,000 liquid to pay this off, I would pay it off. And even if you only have 55, I would do it in a lump sum and then I would cash flow the

rest of it until it's gone. Okay. Great. Yeah. Hey, I love your heart behind this. I love that for you. It's just as easy as saying, yeah, I'll write a check. That's a good sign, my friend. That's a good dude. Yeah. Very good dude. Let's go to Emily in Denver, Colorado next. Emily, how can we help? Hi. I'm going through a divorce and have two high school sons, and I'm wondering if I should rebalance some of my cash to help fund college or if I should try to get the lowest mortgage possible when I buy a different home. How much cash are we talking about? Well, I don't know.

I don't know what their plans will be, if they will go to a four-year school or do something more technical. No, I'm sorry. How much cash do you have? How much? Well, it would be coming out of the home equity when I move homes. Okay, so let's just back up so that we know what we're dealing with. We've got to kind of get an idea of what you're talking about. So you're in a divorce. You're going to move. How much equity do you have in the home? Well, I'm in an expensive area. So we have, I'm assuming we, I will walk away with about $700,000 in home equity, $600,000 to $700,000. But the cheapest thing I can buy is probably

$800,000 to $900,000 for maybe a townhome. And then how old are the boys? What grades are they in? Sophomore and junior. Do you have any college money set aside? About $12,000 to $15,000 per child. Okay. All right.

And I'd like to help them pay for college so they don't have debt. Do you work outside the home? I do work full-time, yes. What's your income? $160,000 a year. Okay, that's good. What would you say an all-in budget for you is? Do you have a pretty good idea what your budget is?

This is not frills, but just paying for your basics and being comfortable. What's that number? I don't have an exact budget because everything's been combined. Yeah. But I've been trying to crunch numbers and thinking I wouldn't want to mortgage more than $2,000 a month, including insurance, HOA, anything like that. Okay. Yeah, just a rule of thumb for you to keep in mind. including insurance, HOA, anything like that. Okay.

Yeah, just a rule of thumb for you to keep in mind. We would say no more than 25% of your take-home pay should be your mortgage, and that's including HOA, that's including taxes and insurance. So if 2K is 25% or less, then you're good. Something to keep in mind here, have you priced it out in the Denver area? So if you're spending $650,000, yeah, you're getting like a decent size townhouse. Is that right? I'm just outside of Denver. And right now, the only three-bedroom townhouse is $900,000. It'd be the cheapest I could afford.

$900,000 to a million is what I'd probably be looking at for property. Have you considered going further out? Like I have friends that are, you know, 25 to 30 minutes from the Denver area, family of four, and they're looking at things in the $600,000 to $700,000 range. And I've been to their house and it's fine. Where I am, I'm between mountain passes and I wouldn't want my kids to have to drive mountain passes in the winter to get to school. I hear what you're saying.

Okay, so... So there is a balance for me on that cost. Two things to keep in mind here, and I'll speak on the home side. Can you speak on the college side? We have to have very clean and clear expectations and very realistic expectations because the money that's going to come from the sale sounds like a lot, but it's not a lot. And I think you're starting to feel that.

And so expectations on college, are they the types of kids that will go to college? You've got some money saved. They're going to have to work, and they're going to have to come up with scholarships and grants. And then there's the father. So I would tell you that this is not all on you. I think you've got to make the right decision for your home. Keeping your expenses low as you're now out on your own. That's your number one priority, not cash flowing their college. And that's another good point. It's just you now. You've got kids that will be coming home, but that won't be a part of the home full time. And that's going to weigh into what you purchase when it comes to this home. Yeah. So sorry you're going through

this, but take care of you first. The boys will be fine. 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 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

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YRefi refinances defaulted private student loans. Defaulted means when the borrowers can't make the required payments. So if that describes you and your private student loan, please contact YRefi. They can offer a low fixed rate loan built for you. Go to YRefi.com slash Ramsey today. That's the letter Y-R-E-F-Y dot com slash Ramsey. It may not be available in all states. Okay. Today's question comes from Jared in Florida. He says, my wife and I are trying to get our debt under control. We aren't drowning by any means, but we have been

using credit cards to build our credit. We have some credit cards that are 0% interest for a certain amount of time. Since these have a higher balance and are at the bottom of our snowball list, they would revert to full interest by the time we started aggressively paying them. Would you suggest paying the remainder of the 0% interest off ahead of the other debts to keep them from jumping to 24 to 26% interest oh okay that's a lot of percentages uh what i think you're getting at is moving the debts out of order to avoid paying interest towards the end of your snowball i might add and no i wouldn't i would keep them in order because the truth is you're going to be going so fast by then and the amount that you're going to

be throwing at the debt is going to happen so quickly. My guess is the math on this is going to be negligible because it's probably going to be the difference of a couple of months that this is going to take place. And I would use this as fuel. Like when I know, Ken, if they come on the weather report and say that a snowstorm is coming, what do you do? I laugh at how middle Tennessee is going to react and realize that if we need any bread or dairy product, I should probably go now. Yeah. Thus contributing to the problem I'm laughing about. Yeah. You, you prepare is what I'm getting at. That's probably not the answer you were looking for. No, that's fine. What you're saying is you prep, you know, what's coming. So you do what you have to do to be prepared for it. And it's the same thing when you know that this interest is going to hit,

you will have prepared for it. You will have thought, okay. And if anything else, you might have tried to avoid it by going faster earlier so that you don't get to that point. So I think that this can be used as fuel to pay off the other debts faster. Yeah, I agree. Good advice. Levi is joining us now in Minneapolis. Levi, how can we help? Hey, so I guess to kind of jump into it, I'll give you guys my situation and where I'm at and everything with my life. I'm 22 years old. I am engaged with a one-year-old. We had our little one not too long ago. And ever since we found out about her, I've been on a debt-free journey. I had about $15,000 in debt, which had a mix of, it was a home equity loan kind of thing.

And then some credit cards and stuff like that. I got all that paid off in about eight months. I am a full-time electrician making about $55,000 a year. And then I also do a lot of side work doing electrical stuff and handyman things on the side. Uh, now that my daughter, she's getting up to the age of where she's kind of starting to realize like, Oh, dad's around. Dad's not around. I've been really wanting to spend more time with her. I have my three to six months emergency fund and fully debt free. And we're getting married in September. We are cash-flowing the whole wedding.

We pretty much have everything accounted for. We have our tax returns going to be the last little bit of our money that's coming back to pay for the rest of the wedding. But my main question is, I don't know if I want to keep on doing these side jobs. I cut back a little bit. I was getting more calls from people. The more I did on a daily basis to do stuff on the weekends and I was getting burnt out. So I cut back a little,

but I'm wondering if I should cut back even more now rather than only do a couple of months because I'm only being able to afford like around 6% of my income to invest in retirement. And I feel like I should be doing more even though I'm only being able to afford like around 6% of my income to invest in retirement. And I feel like I should be doing more even though I'm 22. But I mean, I got a good growth rate for my income. I mean, that's going to almost double in the next two years once I get past my journeyman's test. So I guess that's where you guys are at for that. Well, first of all, I want to congratulate you on you find out you got a baby on the way, and you talk about adulting and growing up and manning up. I just want to call out,, Jade, and Levi, for you, is you said you're not able to afford more than putting 6% away for retirement. And I guess I don't

understand that. What do you mean by I can't afford it? Well, I mean, I can afford it. It's just more, I guess, so for say the comfortability of everything, like I'm thinking like I have, I have all this time ahead of me. I'm like looking at how much I'm investing now. If I continue investing what I have now, I'll have over $3 million by the time I retire, which is going to be more to live off of. But I'm wondering like if I kind of hold back so that way we don't have to

give up like all of our lifestyles so I can do more fun things with the little one on the weekends and stuff like that and just do this 6% for the next two years. And then once I pass my test and you have to $10 an hour bump. And then from there I can keep my same lifestyle and then invest that full 15%. Listen, I'm curious to know what my friend's going to say here. She's got a big old smile on her face, so I'm going to get out of the way. But my reaction to this is you are rationalizing this, and if you rationalize it now, you're going to rationalize it later

when you've got more income to do more fun stuff. And I think that the crux of the issue is that started you down this path is you've been working like a madman doing a great job. Can you cut back a little bit? Should you cut back a little bit? I think yes and yes, but I would use that extra weekend, one or two weekends instead of four. And that's how I would fund my 15%. You know what I mean? I just, I would go ahead and start doing it now because my friend, don't get Jade started on her investment calculator. That's all I would say. Well, he's already run it and 3 million is great.

Listen, I'm smiling because you're 22. You have so much life to live and I love that you have a path for your income to go up and it will uh right now my biggest the questions formulating in my mind uh as you were talking are more so along you said that you make 55 000 a year which is really good um but that that's including side hustles so my my first question is well if you drop the side hustles what will you be making a year and i don't like that number only because it's already lower than the median in the United States. And I kind of want you at least above the median. That's the median or above is what I would love for you. The next question I had was the wife. You know, when you guys get

married here coming up, you know, what's the plan? Is she going to have income? Because that definitely factors into this right now. It will factor into as soon as you get married. So tell us about that. Yeah. So my, yeah, $55,000, that's my standard electrician job. And then on top of that, I have side hustles, which this year has been better this year than the last two. I've been picked up. I picked up a lot more. I've probably, this entire 2024, I probably made around $15,000 in side hustles throughout the year. $15,000, okay. Yep. And then once we get married, we have one little one right now, and my fiance, she's working part-time, working with our, at my mom's home daycare. So doing that, we get free

childcare and then she also makes an income of around 20,000 a year. But once we have this second kid, my mom can't afford to pay for, have two kids there because it factors into her numbers. So the plan is to have my wife go be a stay-at-home mom at that point, and then I will just be the main breadwinner at the time. And then she would do, like, being, like, a sub and stuff for the daycare here and there when, like, grandparents could watch the kids and stuff like that. So, I mean, her income may be, like, $10,000 a year after that. Those are the numbers you need to run and run them clearly, and both you and your wife have to decide this is the life we've agreed on.

John Deloney and I have talked about this many times that sometimes what you're signing up for is the used Camry lifestyle. And if you decide, hey, I don't want to do these side hustles. My wife's going to stay home. That is 100% your prerogative. But just know that making $55,000 a year, that is going to mean you're on a used Camry lifestyle. And there's nothing wrong with that. Just know, I want you investing at least 15% off of your base income so that you're used to putting away $687 every single month, whether you side hustle or not. And if that's a problem, check out where your mortgage or rent payment lies, because if it's tight, that's likely why. But congrats on just stepping into being an adult

and being responsible at the age of 22. I got a sense that he's going to be okay, whatever he does. This is The Ramsey Show. There's a time in your life and in the baby steps for renting, but you don't want to do it forever because when you rent, you're still paying for a mortgage, just somebody else's. Plus, rent means instability in your budget because it always goes up, never down. So when you're ready to buy, make sure you work with a mortgage partner you can rely on, Churchill Mortgage. Churchill is Ramsey trusted to help you make the move from renting to home ownership wisely. Churchill understands that when you buy a home the Ramsey Trusted to help you make the move from renting to home ownership wisely. Churchill

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1749 Mallory Lane, Suite 100. Brentwood, Tennessee 37027. Welcome back to The Ramsey Show. I'm Ken Coleman. Jade Warshaw is alongside. The phone number to jump in is 888-825-5225, 888-825-5225. And we are here for you. And my friend tells me right before we go live, she goes, I got to throw a little thought at you.

You watched the inauguration? I i did of course you did so uh now you we need to explain that because people make assumptions i am a well you're a political like you love politics student of the process i love the peaceful transfer of power i like the tradition we're the youngest country out there true that true that so it's kind of fun. I did watch it. Nice. I did a media hit this morning about the whole tariffs. Yes. What say you?

Oh, I'm not pro-tariff. I'm anti-tariff. And the reason is- On all imports, regardless. I think it's a lot. I think that they are a, I think tariffs have been useful economic tools. Many times they get turned into weapons. And here's my beef with tariffs for all the pro-Trump people who are automatically canceling me or mad at me. Let me explain why. I was going to say, explain the pros and cons. Because a tariff is meant to penalize a foreign country. All right. So let's just say that Trump puts a tariff on all Canadian products that American companies import in here and sell to you, the people. Yes. It is meant to penalize Canada by making their products more expensive and thus

trying to motivate American companies to pick another product. Here's the challenge. When we say American made and nobody's more America first than me, and I'd love to see American workers make American products. However, our people, and I'm proud of this, get paid more than everybody else in the world. So it is very expensive for a small business. Let's take small business XYZ. Let's say they import a widget from Canada. When Trump puts a tariff on that widget from Canada, it doesn't just penalize Canada. It's going to pass on.

It's going to penalize a small business because let's say they've got orders coming in all the time and they go, I can't find a comparable widget from some other country and I certainly can't find one in America. It's going to cost me more. So that tariff is paid for by the small business. Sure. Well, that small business can't afford to change their margin. So what do they have to do? They have to raise the price of said widget.

That's right. So in all reality, and i don't want to hurt anybody's feelings but this is economics 101 this is not democrat this isn't republican this is just this is how economics works uh-huh tariffs do become a tax for the consumer well in the short term therefore i am never for raising taxes ever listen i so there you go i think i'm with you i i'm what did you say well on the media hit i was talking about how obviously like to your point if you if you put a tariff on the importer that that price is going to pass along to the consumer and if we really look at what we're importing the the main ones that are affecting you know everyday people

in the united states crude oil i mean you're going to see oil prices go up you're going to see gas go up like number one and then even you know things like food you know, everyday people in the United States, crude oil. I mean, you're going to see oil prices go up. You're going to see gas go up like number one. And then even, you know, things like food, you know, we import things from other countries because we want avocados year round. You know what I'm saying? Like we have gotten used to certain comforts here in the United States that we'll definitely feel that we'll feel it on coffee and, you know, certain fruits and vegetables and I don't know, chocolate, that sort of thing. But is there a, I'm asking you, is there a short-term benefit, long-term gain thing here where we say, yeah, we might feel it in the short term, but long-term, would we begin to see it play out in the way of, I don't know, what's the end game here? More business being done internally? Well, again, we're talking about President Trump.

This is his policy. He's very pro-tariff, and he comes at it from a, other countries need to be paying us more. I want to bring more income to the United States and through the treasury, so forth and so on. It's just not that simple. And so therefore, the answer to your question, I can't even simplify that because it's a, the answer is we don't know. But traditionally, when you raise costs for American businesses, it leads to inflation. Yeah. No one wants to go back to that again. Yeah.

2022. You know, I'm consistent on this. People ask, I've been on Fox News and I made the host, he got his feathers ruffled when I just said, look, this is what I think about tariffs. I think the best thing that Trump can do or any president is cut regulations. So government regulations, things that cost businesses money to comply with and cut taxes for businesses. When both of those things are cut, prices go down. When prices go down for the American people, theoretically, and this is what we're here to do, is that allows people more room in

their budget if they aren't spend crazy. So I am always going to be low tax, low to no tariffs, because I believe in a free market system that takes care of itself. In other words, if the consumer wants to pull back, they pull back. That means if they pull back, guess what the companies do? They lower prices. Car prices go down when demand goes down. Right, right, right. Housing prices go down when demand goes down.

This is called a free market system. And the market drives what's going on. I don't like government weighing in. And I'm libertarian on that stuff. But again, that's just my position. I got you. You don't have to agree with it. No, I think it's nice to hear. I mean, I felt like that was pretty. You know who needs less money? The government. You know who needs more money? Folks. You find people. If you want to know, like vote for me because I'm pro people i'm serious the people

ken coleman the people's president i just don't want more money in the federal government they don't know what to do with it and i think each of you people that are listening today and watching and i mean this from the bottom of my heart i mean james childs has known me a decade he knows i'm telling you the truth well what do you think about I believe that you all can handle your money if you work with Ramsey Solutions and we teach you how to budget. But I believe the American people and the people of the world can manage their money better than anyone else can manage it for them. And I'm talking about government, bureaucrats, and politicians. That's what I believe at my core. Yeah, I agree with you. I do think that regardless of what the policies are, if you do the things that

we teach, like I always talk about five pillars of personal finance, right? It's budgeting, like the idea you get out of debt, you stay out of debt. It's carrying the proper insurances, it's investing for the future, and it's prioritizing generosity. If you're doing those five things, you're winning. And obviously you can use the baby steps to do that um but the truth is like certain things can impact us in a moment in a positive or negative way like i would never sit here and say like this doesn't really matter it doesn't affect you sure it does uh what do you think about um the idea that like people who work on tips and things like that that that might not be taxed uh love it i like that too I love any policy that lowers taxes.

Now, I mean, you throw it at me. I'm going to have a hard time saying I'm not for that. I mean, I think people who rely on tips, they are relying on the generosity of the people that they serve. So if someone, if you and Sam and Stacey and I are at dinner, and we were just at dinner a couple months ago, and remember that guy, kind of an artsy guy, musician guy? Either way, you don't remember him. Maybe. Tell me more.

He did a great job. Oh, yeah. I do remember him. We sat outside. Yes, I remember. And the four of us, I feel like we all commented on, the guy did a really good job. So here's my point. He served us so well that then the Warshaw family decides at that moment of the check to go,

how much of our money beyond the meal are we going to give to this guy because we appreciate how he took care of us? And then the Coleman's do the same thing. He should get to keep that. The government gets to tax my generosity? No, no, I'm sorry. The government gets to tax my appreciation? Well, they've taxed it. I mean, this is- Don't tax my appreciation. Yeah. My man did a good job. He's out hustling for us.

Yeah. I'm going to give him a little extra. Plus, they already got- You're going to tax him? They already got their cut when I earned the money or when Sam earned the money. That's the other thing. And now- Now they're double dipping.

Just because I'm going like this, you get to tax it again? They taxed you when you got it. Now they're going to tax him when you give it? Nah, man. Man, this is unifying the country. It is. I feel like a lot of people do feel that way. Everybody feels this way.

No, don't tax my tip now. So anyway, I hope that that goes through as well. But yeah, I think in general, I want people to have more of their hard-earned money. I agree. So that they can give, save, and spend, as we teach here at Ramsey Solutions. Give the way they want to give. Yes.

Save what they want to save, and spend how they want to spend. This is what Thomas Jefferson meant when he said the pursuit of happiness. Get into it, Ken. It's just this idea that this is the life that I choose to live. You said it earlier.

If I want to drive a used Camry the rest of my life, then freaking drive a used Camry the rest of your life. This is your life. That's right. And I think we need more of our money. So there you go. Good word, Ken. Economics 101. Politics, by the way, is simple when you make it about that. This is The Ramsey Show. Welcome to The Ramsey Show, where we help you win in your life. We're going to help you win with your money, win in your profession, and win in your relationships. 888-825-5225 is the phone number. I'm Ken Coleman alongside Jade Warshaw.

888-825-2225 is the phone number. I'm Ken Coleman alongside Jade Warshaw. 888-825-5225 is the phone number. By the way, our Ramsey Show annual listener survey is now live, and we would love to know what you think of the show, what you like, what you don't, what you want to hear more of. Whatever it is, we'd love to get your feedback. There's two ways to participate. You can text the word survey. That's the word survey. Text that to 33789, 33789. Or you can go to ramseysolutions.com slash survey,

ramseysolutions.com slash survey. Or you can click the link in the show notes on podcast or YouTube, sign up today, and you will be entered to win a $500 gift card, but we would love to hear from you. All right, Alyssa is now on the line in Albany, New York. Alyssa, how can we help? So 2024, like many, it sent my family in complete financial turmoil because one thing had to happen after another and really a lot to do my husband and I we were on the same page with things but like the execution it just doesn't happen and we're about to crash and I just need help trying to get out of it. Oh tell us a little bit more what do you mean we're on the same page but it's about to crash give us the specifics. So just to give context, I had my second child last January.

I was on maternity leave until May. My daughter, my oldest daughter, had a couple of seizures. She's only two. She had a couple of seizures in April. So unfortunately, that kind of opened the floodgate of a lot of issues that we're still dealing with now. And with that, you know, the medical bills and all that stuff, that's besides the problem. But anyway, I got back from maternity leave and I got let go as soon as I got back. I'm sorry. Yeah. So then I went six months without a job, which was kind of okay because with finding out about my daughter's issue, my baby also has the same problem.

So the only good thing is we know about it now. Now we're just trying to deal with things. So throughout that six months where I didn't have a job, our savings is empty. I had to dip completely into my Roth IRA. I still have my regular IRA. I didn't have to touch it. I had to dip completely into my Roth IRA. I still have my regular IRA. I didn't have to touch it. I had to totally empty my Roth. And now the good news is I have a job. I start a new job next week. But the problem, my husband is really heavy. We talk about the money and he says one thing to me, but really, if if there's an issue he just covers it up

and tries to do all the gig work and the the ride shares and stuff and to try to just fix it because he doesn't want to tell me because he knows I'm so overwhelmed I'm just going to get upset um so now that I'm about to go back to work and everything's going to change and I'm not here and I can't just settle up everything and try my best to start over again. I'm just afraid that everything's going to blow up in my face even more than it already has. Okay. Well, first of all, you need some type of help. You can't go through this on your own. And this is a marriage issue, but you can just hear your voice.

You can just hear how stressed out you are. Yeah. Take a deep breath. I need to take a deep breath after hearing that because I mean, you're transferring that feeling. We feel it. My chest got tight just listening to you. That's right. The good news, let's start with the good news. The good news is you've got a job. Yes. The good news is you at least have the information surrounding what's going on with these kids' health. Okay. So it's good to know so you can know what you can do next. Let's talk about what's happened since you've emptied out the Roth. What's done is done. You can't go back. It's spilled milk. You know, you kind of have to just move on from that. You've emptied out the Roth. What's done is done. You can't go back. It's spilled milk. You know, you kind of have to just move on from that. You've emptied out your emergency fund. Good news is that's what the emergency fund is there for. It's there for when it rains and pours. Okay. So let's look at things as they are now and give me a sense of what it is that you're trying to accomplish. Like if I said to you, Alyssa, what's next on your,

what's most important on your things to do right now? Give me the top three. Our credit cards are crumbling. They're, they're, they're crippling. They're completely crippling. Our cars paid off. We rent. So, you know, the rent, the rent's getting paid. The credit cards are getting paid but barely okay and then a lot of the issue really kind of stemmed from my we had there's so many credit cards i i had a lot going into them we've been married for eight years i had a lot going into the marriage um and then um just time goes by things get worse how much credit card debt do you have between the two of us i think it's around 80 okay 80 000 But you said your cars are paid off, which is good. What other debt do you have? Student loans. I think between the two of us,

we have 130 in student loans. Okay. Are you making active payments or is it a super low payment right now? He's making payments. I'm not making payments right now. Okay. Do you know how much he's spending on payments every month? 340, I think. It's not a lot. He's really paying minimally. Okay, tell me what you guys are bringing in. And I know, let's say it like this. What's at your disposal income-wise every month? Like, what are you bringing in? And I don't know what's going on with your husband,

but if you feel like you can include that or can't include that in this equation. No, no, no, no, no. No, it's fine. He brings home, I think it's like take home, I think it's 15 every two weeks. Okay, so $3,000 a month. And then the new job I just got, it's a little bit, it's less. So I want to say probably like $2,400 a month.

What does he do for a living? He's a meteorologist. Oh, he's on air. No, he's not on air. It's complicated. He works for a company where they like forecast for like cruising cargo ships and stuff like that. So it's kind of like private type of thing. And how much is your rent? How much you guys paying in rent every month? We're only paying $1650 for a small house. Okay. $1650 you said only, but the truth is it's only

25%. It's over 25% of your take-home so you probably are feeling it um it's not much over but it's 350 over so you're you're feeling that a little bit okay uh what's on fire here is i think you're just i think you've experienced so much in a very little bit of time and it's still like reverberating in your day-to-day life but a lot of it is it feels like based on what you've said, it feels like a lot of it has kind of started to settle. Is that fair enough? Like all this craziness happened

and now the ash is settling and we're going, okay. And you're kind of like surveying, like, where do we go next? You've got the job. You guys are making 5,400 a month, which is not, you know, it's not a bad place to start. I think that's good. You've got $80,000 in debt and then 130 in student loan debt. So that's probably what you're feeling right

now. But it's not because of the payment, because you're not paying on all of that. So it's just that idea of the debt resting on your shoulders. So let's break it into small pieces because I think right now that's what you need to do. If I were you, it's the debt snowball on these credit cards. Are they current? Are they in collections? Tell us more. They're all current. The big problem was my husband had them on auto pay and he doesn't check them.

So I guess there was a month where it didn't go through. And then it does that thing where it's not getting a payment. So it adds and adds and adds. Okay. So what you can do is sometimes in relationships, there's people that are better at handling money than others. Everybody needs to be involved. But it might be for you to be the one that actually monitors that and pushes play on it. And it sounds like it's going to be that.

I want you to be on top of this and try to drag your husband in to get on top of this as well. But Ken Coleman, they probably need to go into some counseling. I think they got to scrape some money together and you guys need a marital counselor so that a mediator can show him how you're feeling. And he's got to wake up.

This is The Ramsey Show. This show is sponsored by BetterHelp. All right, so I was born and raised in Texas, and I love the myth of the lone cowboy. You know, the guy who doesn't need anyone or anything. It's a fun story, and it's a lie. In our self-obsessed society, we're obsessed about our own diets, our own workout routines, our own jobs, our own social media feeds, everything. It's easy to forget that no one can do life alone. And I don't care if you're an introvert, an extrovert, or whatever you want to call yourself, we all have to have a community and a support system to do life with. It's time to shift the focus from doing it all by ourselves to knowing that we can only be well and whole when

we ask for help. Therapy can be a great source of help and support for any area of your life. And if you're thinking about starting therapy, try BetterHelp. BetterHelp is 100% online therapy, so it can fit with your schedule. To get started, just fill out a short online survey to get matched with a licensed therapist. And if it's not the right fit, you can switch therapists at any time for no extra cost. This month, start to build your support system with BetterHelp. Visit betterhelp.com slash Ramsey Radio. Welcome back to The Ramsey Show. I'm Ken Coleman alongside my friend Jade Warshaw. We're so excited to be together for you today.

888-825-5225. 888-825-5225. All right, let's go to Salt Lake City, Utah, and Haley is joining us. Haley, how can we help? Hi, guys. Thanks so much for taking my call. You bet. What's up?

Yeah, so to give you some context, me and my husband just got married last May, and since then we've been able to pay off his $15,000 car loan. We purchased a house and saved up a six-month emergency fund. Nice. Yeah. So my question is, we bought the house knowing it would need a kitchen renovation. I thought I could last a little longer with the current kitchen But it's literally falling apart What's going on in the kitchen? Define need Well, she says it's falling apart So, Haley, talk to us

Paint us a picture of this kitchen Yeah, so our house is 100 years old And, yeah, it's awesome But the kitchen probably is from like the 1940s 50s i the flooring i can see the baseboards if to give you some context that the floor is crumbling the sink is caving into the um to the the counters and um this is more of a luxury, I guess you could put this, but it doesn't have a dishwasher. The electrical is outdated. It's actually not up to code. Oh, that's dangerous.

Yeah. But you falling through the floor is not a good idea and feels like the sink is about ready to turn into a massive plumbing expense. Fair? Yeah. So it's functional, but yeah, it definitely needs to be updated. And we knew that. But so we're wondering if we should one, suck it up, save another year to cashflow the renovation, two, take from our emergency fund, or three, get a renovation loan with a 0% financing. No, no, no, no, no. So three's off the table. You knew that Haley, right? Um, yes, to an extent. Okay. So let's go back to one. Let's go to option one, suck it up and save for a year. Um, how much are you anticipating that the reno would cost?

We're thinking it will, like on the low end, it would probably be around $20,000. Okay. Okay. And how much do you have saved towards that right now? We're not talking your actual emergency fund. Do you have any other savings? Yeah, we have probably, like, outside of our emergency fund, about $8,000. That's awesome. That's good. You're not going to like this answer, Haley, but I would absolutely, the two of you go, okay, what's it going to take for us to come up with another

$12,000, and how fast can we do that? And i would be so motivated by that floor and that sink i would be selling stuff i would be doing everything that i could do to come up with that 12 grand and to be completely honest with you i would i would cash flow as you go and what i mean by that is if this were my house and you were my wife and I was your hubs, I'd be going, I got to fix the floor first. We can't fall through. So, okay, what is it going to take to fix the floor? All right. And then I'm making this up, Haley, but let's say, do you have any idea? Have you line itemed it out? What's the floor going to take um we we've we've done some quotes before unfortunately the the floor that that i've thought the same thing uh the floor has to unfortunately be like

the very last it has to be that's what i was oh is that right yeah all right never mind so especially if you're changing the footprint well what about the sink that's literally falling into something what is it going to cost to fix that? That would probably be the most expensive part is like the cab, you know, getting new cabinets and, you know, do you have to get new cabinets or you can, can you reface the old ones?

That's what I'm doing. Um, we have to get new cabinets because they're not, basically we have to redo the electrical and the sink is taking up all of the counter space. Cause we don't have a dishwasher it's like a really old so you're changing you're changing everything yeah it basically i mean to an extent it kind of has to be gutted listen the thing i'm most scared about is the electrical because i'm like how are you only going to i mean i'm not an electrician but

if you tell me the electricity is 100 years old or at the very least from the 40s, how can you only fix it in the kitchen and not fix it in the rest of the house? Like, I'm afraid I can't imagine opening a 100 year wall and it only being that there being no problems. So part of me is like, I was trying to get her to pay for an appetizer and save up for the entree. She's like, nope, we got to have a five course. Does your husband know how to do work? Does my husband know electrical? No, any of this stuff. Oh, does he know? Sorry. Repeat the question. You guys know how to do stuff in your kitchen. Oh, we've, we've, we've thrown out the idea of doing stuff ourselves to save money. And I think there's some things we can do, but like, I also don't want my husband to

get electrocuted. You know, 100%. Well, again, Haley, listen, back to the point I'm trying to make. Do you disagree with this, Jade? I think they just really hustle and come up with 12 grand. I think you need to come up with this money, but I think every plan needs to have a contingency. And in this case, I would be afraid for you to start knocking walls with only $20,000. I don't know how you're doing it on 20. Yeah. Unless this thing is a teeny tiny space, I don't know how you're doing it either. I want you to treat this like,

I want you to treat this home budget, this home reno budget as though, I don't know, somebody prominent has hired you to do their, but like you, you can't play around with this. Martha Stewart's hired you. Yeah, man. Like you need to go through detail and really make sure you know your numbers on this, really make sure you've priced things out and gotten accurate because you can't, I've lived in a hundred year old house. You can't mess around. You can't mess around with it. And $20,000 feels light. I'm not going to lie. Try to get that number up. Don't finance it because then you're going to be stressed out over it. I would try to live around it and make that your motivation. Yeah. That's you guys are saving every penny i'd love for you to have like

30 to 40 thousand dollars to start this like just in case like this is the type of thing you open up the wall and then you find out there's mold everywhere or you open up the wall and you find out there's asbestos like i'm only going off of what I saw on HGTV. You're trying to depress her? No, but I've seen enough of these home shows. Homes on Homes. No, I totally get it. I totally know what you're talking about. She's so happy with herself.

She's watched a lot of HGTV. Watched a lot of TV. She's watched a lot of HGTV. But yeah. Don't finance it. And the reason is I know where you're coming with this because you were going like this. Well, look, it's our kitchen.

I mean, it's the house we live in. But you knew that getting into it. Yeah. And the finance charge on this adds to the stress. Just avoid this at all costs. Get really innovative. Let me tell you something. I've read a lot of books on innovation, and I'm going to steal something from innovation

to give to you, Haley, and I hope it becomes inspiration. As long as it rhymes. Come on, Ken. Innovation to inspiration. I knew it. I knew it was going to rhyme. I know. Don't make me do this.

Here's what we know about the great innovators. They innovated. They created something because of a lack of resources. It was the lack of resources, tools, elements, whatever, that led them down the process of what we call innovation. And innovation happens best and most, this is a fact, when we are limited and we have to then dive deeper into our imagination. And I really believe that if you treat this kitchen project like that, like we ain't got 20,000. We ain't got it.

We ain't got 50,000. We ain't got it. We got a problem that we got to solve. How many different ways can we solve this? And next thing you know, you've got an episode of MacGyver. That's right. Ken, you're exactly right. We find it time and time again when people walk the baby steps when we say hey you're you now are cutting up credit cards and you have a thousand dollar emergency fund right it causes you to think

differently necessity is a mother of invention and you start to go okay what can I do to make this work you start looking for other options because we know, Ken, that when people utilize debt, A, you don't have to be creative anymore. You can just spend and spend and you tend to spend more. Slap some plastic on it and that doesn't fix anything. So I really would challenge you. I think you two can figure this out. And I think on the other side of this, it's going to be less stress, better marriage, better kitchen. This is The Ramsey Show. Welcome back to The Ramsey Show. Alongside my friend, Jade Warshaw, I'm Ken Coleman, 888-825-5225 is the phone number for your call today. You don't want to miss our two-night virtual event with Dave Ramsey

and George Campbell. It's called Investing Essentials. We did this last year, and it was just a huge success. People want to know about how we teach people to invest because it's overwhelming and confusing, to be quite frank. And you can't figure it out in a 60-second reel. But at our virtual event, we're going to walk you through maximizing your 401k, mutual funds, you get the most out of your money. It's the only place to get Dave's personal playbook on real estate investing. And he'll explain how he's made hundreds of millions of dollars

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Get your ticket today at ramseysolutions.com slash events, or you can click the link in the show notes. Have I talked about the show notes yet today? No. I'm going to talk about the show notes. Tell us. If we ever talk about stuff, and we talk about stuff, we know you all are moving around, you're on the exercise bike right now, or I don't know, some of you are on a snow plow, I don't know,

and you hear something, you go, oh, I can't remember what the URL was. Some of you don't even know what a URL is. Just go to the show notes. If you're watching on youtube uh it's right there in the comments right there below the video window and your favorite podcast app the show notes jade it's a treasure trove it is a treasure trove all right that's all i want people to know because i'm that person what do you say stacy's like what'd you say and what'd you say and we're like we don't even know what we're saying. Click the link in the show notes.

Don't go. All the links. That's all I wanted to say. It's a PSA. Yeah, good. All right. Let's go to Green Bay. Oh, this is exciting.

Because, you know, years ago, Dave wrote, not too long ago, Baby Steps Millionaires. Love it. And from time to time, we have fun when Baby Steps Millionaires call the show and tell us their story. So we've got Alyssa who is waiting in Green Bay, Wisconsin. Alyssa, you're on the Ramsey Show. How can we help? Hey guys, thanks so much for having me on the show.

So you're a Baby Step Millionaire? I am. Oh my goodness. You sound young. Oh. I think I'm young. Thank you, Jade. I'm 34.

Hey, come on now. Oh, wow. You really, let me just say, Alyssa. It's a baby. 34 is young. I don't care what anybody tells you. That's young. I'm telling you it's young. Yeah, it's a fact.

Well, that's very exciting. Okay, so tell us your net worth. So it's just over a million, about a million and 20,000. Oh, okay. Nice. That's awesome. And how long ago did you crack the 1 million mark? It happened this fall. And then there are some ups and downs in there,

certainly with the market, but we're thinking about it. All right. Give us the mix of what is making up the 1 million network. Okay. So in investments, so that's regular IRAs, Roth IRAs, 401ks, our HSA, we have 4430,000. And our 529 for our four children, we have $42,000. We have about $480,000 in equity in our home, which will be paid off here soon. And about $68,000 in cash. Nice. All right. So I love this. I mean, just hitting that one million mark and I love how it's spread out. This is real everyday people. Yeah.

Are you actually in Green Bay or in surrounding area? Surrounding area is Appleton, which is 25 minutes south of Green Bay. Yeah, yeah, yeah. Okay, gotcha. I love this because a lot of people think a net worth, like when people say, oh, I'm a millionaire, or this person has a million dollar net worth, Alyssa, they think it's, they earned a million dollars or they made a million dollars in a year. And people forget that your home equity is part of that, right? Like for you, it's cash savings, your 529, your retirement. I just love this picture. It makes it feel so

accomplishable. Well, you'll notice none of it's inherited at all you've just been building up and at a very young age as we like to point out uh what's it what's the income household income um 2024 we topped out at about three hundred thousand dollars very nice where'd you start um we were married in 2013 and we started around 125 nice that's a good start what do you guys do yeah my husband's a high school teacher slash some like administrative duties and i am a pa a physician assistant wow very processed people uh-huh interesting uh and gpa in college for both of you oh my goodness um my undergrad i was probably pretty good, like a three, seven. And then in grad school, closer to like a three, Oh, just tough.

Yeah. Good for you. My husband probably did better than me. He was probably closer to like a four. Oh, well, I don't, I don't like people. How much, how much did like having a plan for your money, having a budget for your money, how much do you feel like that played into you guys being able to accomplish this? It was everything, Jade. Honestly, I will go back and say like we got, someone gave us

the total money makeover. We got married and I like looked at the book and said like, oh, this is not us. I was like one of those classic people who didn't think like school debt was real debt. I was just like, oh, that's good debt. And then I picked it up a few years later. And that's when everything changed, just being intentional because we were never bad with money. We were never like super reckless or anything, but we were just super intentional. And now for the last probably five years, we have our every dollar budget that we're always looking at. And I think one thing I wanted people to really know from this call was we don't like, we don't live in a cave either. Like we don't, I know Dave always talks about like, were you like collecting lint and dust

in a cave? No, like we have a budget, but we have a healthy income and we still get to do really like fun things and save and pay off our house. So, yes, we were like very aggressive with some things, but we've also been super intentional and definitely the budget and the program and just being being motivated by things bigger than us was a big part of our story for sure. And I love it sounds like you're still working to pay the house off. So I love the idea that you're a baby steps millionaire. Again, it doesn't mean that your house is paid off and you're living in a million dollar mansion. This can look a lot of different ways. And each of those ways is extremely, extremely successful and aspirational.

Very, very good. Very cool. And I was going to ask you what advice would you give to somebody, that young couple like you, but I feel like you just gave the advice in telling us what you all did. But I would ask, you told us what you did, but is there a mindset that you would describe for young couples that are listening or watching right now and hearing your story? And they're going, man, 34, they just crossed the millionaire line not too long ago. They started out at 22. What would you say about mindset?

Right. I think that's everything. I would say start. You're not going to reach a goal that you don't set. So I think having a goal is like number one. And I think we always talk, my husband and I always talked about, we have to understand as a couple what we want. Not what, I mean, you can look at social media and you can even like talk to friends and everyone's going to have their things, right?

So maybe you love going out to eat or you love vacationing. You can't love it all. I mean, you can, but you can't spend your money on it all. So choose what you're going to spend your money on. And then, you know, don't spend money on other stuff just because other people do. Like we don't, we don't spend a lot of money on clothes and I don't judge other people that do. We love to go on vacations. We love, you know what I mean? What kind of cars you guys drive? Um, really crummy ones. Really? How crummy are we talking about? 2013 Kia Sorento. All right. That's not bad.

That has like 130 miles, a thousand miles on it. And a 2016 Kia Sedona. That's my minivan. You are like Sam and I. You guys are trying. I drive a 2013 Cadillac. I think he drives a 2016 Yukon. And the miles are about the same. Yeah. And they're not crummy. Yeah. I know know they're perfectly fine for fine for us yeah fine for you not flashy good for you and they they're worth probably less than

twenty thousand dollars together so right so what did you do that moment that you logged on to you know whatever your app is that moment that you saw your real estate value and you you kind of calculated it and realized oh my gosh we made it made it. What did you do? How did you celebrate? I was like, whoa. So I talked to my husband, but then we actually have some best friends who are the same age as us. And it's like, she is my like Ramsey person that I talked to about all this stuff.

And we have such a cool relationship that we can chat about that stuff. So I called her up. They had just reached a million dollar mark. So we went out for this amazing dinner together. So fun. And it was super fun. Love it. Alyssa, thank you so much for calling

and sharing your Baby Steps Millionaire story. 34 years of age. Got started a young couple at 22, Jay. I love it. Yeah, really fun. You got to have friends that you can share money wins with. All right. I hear you. I like that. It's good advice.

Hey, don't move. We'll be right back. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Coleman. Jade Warshaw is alongside 888-825-5225. 888-825-5225. Now, my partner and I here, we were talking earlier in the show, and we talk all the time around the office about this, inflation. Yeah. Right?

And just there is a natural progression of inflation over time. The Fed, just kind of a quick review here, because Jade's got a little something to share here today. So teeing you up here, because everybody's heard about the Fed. Jerome Powell, unfortunately, has become a name that everybody knows. And to his credit, the Fed is attempting, sometimes I agree with them, sometimes I don't, but they are always attempting to keep

inflation in that two, two and a half percent range or so. And when it gets above that, they start paying attention. And this is where we get the monetary policy that you all are paying attention to the headlines all the time when you see, are they raising rates? Are they dropping rates? All this kind of stuff. So it's always an interesting tension between wages are wages going up uh are they outpacing the inflation very hard for that to happen over long term so anyway nonetheless what do you got here you got a little something for us well i'm just trying to i'm trying to make heads or tails of all of it right because it's like we knew in 2022 that inflation was going

bananas. Like we felt it, the numbers were there, the data supported what we were feeling was true. But then we started to see inflation taper off. And we saw wages start to jump ahead. But yet we were still saying, oh, it's so expensive out there. It's so crazy. And so my thought was like, okay, what's really happening? Because, you? Because you're a guy that's following employment, you're following those numbers. And I'm looking at this graph here that I saw that really around March of 2023, a little earlier, wages really did start outpacing inflation at a decent rate. And I thought, okay, that means that we've got a little bit more margin back as American people. Where is this money going? So I started looking around and obviously we feel it at the grocery store. That's the main place people say, oh my gosh, back as American people where is this money going so I started looking around and you know obviously

we feel it at the grocery store like that's the main place people say oh my gosh it's so expensive and around about the time I was looking at this I saw that NPR came out with a grocery study that basically said they followed the prices of groceries from 2019 until today they went to Walmart and they picked I believe it was a hundred different items. And they said, we're going to track this over the course of six years, basically. And what they found is on average, out of those items that they tracked, 21 of the items actually got cheaper. 27 products got more expensive and the rest of them basically stayed the same. And when you think about it, you're like, okay, that's interesting. That's not as much as I would

have thought. Like I'm thinking everything has gone crazy. Everything's exploding. And so again, I'm like, okay, things have started to taper out. What's going on with this money? We're also seeing articles that are saying like people are spending more on their credit card than ever before. But at the same time, like investments are doing better than ever before. So the question is, is there margin and what are people doing with it? Is it true that wages are actually outpacing inflation? And from your point of view, what do you think about that? Well, no, they're not. And they can't, it's unsustainable. So for instance, if we look from a macro, so real big picture, wages can't outpace inflation on the regular because it just gets to be too much. So there's this give and take between wages.

It kind of comes up and down. It's a bit of a roller coaster. So even if you see it at a moment, you're saying it doesn't generally last. It does not. So you don't want to get into an apples for apples is what I'm saying. The conversation, this idea that, well, inflation over the last quarter was this, so wages should have done that. It's not how that works. You're looking at the total.

This is kind of a complex conversation, and I'm trying to keep it simple. Keep it simple. But, you know, you can't force on companies this idea when you're in an inflationary period like we had been, if you go back about two years ago, and inflation is really, really high, you cannot expect companies to go, well, because inflation is up here, I've got to raise everybody's wages because that, again, that drives more inflation. Right. Because when they raise wages, they're raising their expenses, they pass those expenses.

So you've got to be careful is my point. So this back and forth and trying to keep that, that's not what you want. What's interesting about this article, as you were talking, that I saw the reason why people feel and really see it at the grocery store. By the way, we saw this talked about in the media leading up to this last election. That's right. You saw it on MSNBC. You saw it on CNN and Fox. My point is it didn't matter what side of the aisle. Everybody was feeling the pinch on a lot of consumer goods. And this is what's interesting. If you look at 2019. Yeah. So this is right before the pandemic. Remember, just kind of a quick history lesson because this is crazy. It doesn't seem like it was that long ago. No, it doesn't. But here we sit almost five years. We're almost five years to the

day, not quite, but five years, a couple of weeks when the pandemic really begins to hit the U.S. March. Yeah. That's when it started going bananas, but we now know it was at the Super Bowl. That's right. In Miami. Nobody knew. All right, so here's the point. So if we're January 2025, if you go to December 2019, U.S. prices cumulatively are up 23%. That's where people are feeling it. For instance, a four-pound bag of Domino's sugar now costs $4.46. That's 74% more than 2019 compared a dozen eggs $4.90 that's 83 percent more tied liquid I could keep going on and on why these are the staples

so when you're buying these every week these aren't your splurges yeah you feel it so that's interesting so well this is then that's that's i mean it goes back to our conversation earlier when we were talking about the tariffs and new administration and that sort of thing if we were feeling it before and it was because of other issues you know back then right now they're saying the prices are up because of you know all sort it it could be uh utilities and insurances for businesses to run and so they're passing that along to the consumer it could be uh utilities and insurances for businesses to run and so they're passing that along to the consumer it could be extreme weather right with crops and so because

of that that price is passing on to the consumer but then if you add i don't know other things coming into this so you're saying basically what you're saying is no the consumer has every right to feel this and even if they have it's real. So here's what's happened. You can't get all hung up in inflation cost per month because what happens is you have large spikes. So back to the quick timeline, this will be helpful for folks. We go into the pandemic, Jade, starts in, let's call it 2020, early 2020, and the whole world shuts down. All right. So in that moment, you did have multiple, let's call it storms converging for a massive once in a generation, I hope, financial storm. Yeah. One, the scarcity because we had supply chains interrupted. The whole world shut down

for a while. Every state was different. Every country, it was like, what are we doing? Secondly, demand did increase a couple of months in when people started going, okay, I'm at home. I'm working from home, but I got to have food. Remember, we saw liquor stores. Things spiked. So here's what happened. This is interesting. So all of that comes into natural economic factors, which makes demand higher and scarcity, and that created an increase. Here's what this

article says, and it's absolutely right. I'm reading from this article, big price increases are rarely followed by equally big price decreases. That's right. Well, it's like, that's what I want to tell everybody. It's not going to go back to what it was. That's the key point. While the inflation rate has cooled, your $4 sugar is here to stay. It's not leaving. That's what's unfortunate. Unless you get into depressionary and very serious recessionary forces, that can make those go down.

But by and large, if we stay in a somewhat healthy economy, Jade, these prices are here to stay. Yeah, I mean, like you said, it's gone up 25%, but over the last year it's gone up less than 1%. So it's not still climbing at that ridiculous rate. Good news, bad news. Yeah. Good news is inflation, as we see it, has cooled.

Bad news is companies don't just go, well, you know what? For the last five years, people have been paying $4.66 for this sugar, and we used to sell it for only $2. Let's go back to that. They're not going's go back they're not gonna go back and so there comes in the evil capitalism cries and the rub between and by the way this is the tension that exists in america today absolutely is people go wait a second you used to charge me this now you're charging me this come on think about it uh There's the tension. Sam and I went out to dinner and

everybody has the menus on the screen now that you do the QR, which I hate. Because it makes you get your phone out at dinner. But they figured out. That was one of the things that they figured out. This is a lot cheaper for us and we ain't going back. Yeah, they're not going to print menus. You know what else they figured out? Go to the coffee shop in my neighborhood.

Sweet little gal makes me a coffee, then turns the screen and goes, Would you like a tip? I feel like going, no. I just want my coffee. This is The Ramsey Show. Welcome to The Ramsey Show, where we help you win with your money, win in your profession, and win

in your relationships. 888-825-5225 is the phone number. 888-825-5225. I'm Ken Coleman alongside the fabulous, the incomparable Jade Warshaw. I just burnt my tongue on my coffee, Ken. What? You got a sip? I know.

I got too over-eager. Okay. Well, if you can't speak clearly, you got to let me know. I don't know that I can do the money advice like you can. I burnt my tongue on my coffee. There it is, folks. She's ready to go. She's just developed a little bit of a list, but it's going to be okay. It's temporary. Let's get to the phones. Grand Rapids, Michigan is where Aaron joins us. Aaron, how can we help today? Hey, Ken and Jade, thank you so much for taking my call. I'll get right to the question.

My wife and I, we make about $255,000 a year before taxes, and we are $130,000 in debt. I'm an airline pilot for one of the big four major airlines, and I was wondering what your guys' advice would be about taking a $120,000 pay cut to go to a different airline. Not right now. That would allow me to be home more often. Not right now. Not right now. I'm willing to entertain it down the line.

Well, now wait, because if I can say this, we all want to know, is it spirit? No, no. No, he said major airline. It's terrible what's going on over there. He said one of the four major airlines. You missed that detail because I promise you, I promise you they ain't that.

Okay, I just wanted to check. So you're making $255,000. Is that just your income or is that spouse as well? No, that's my wife's and I. I make about $180,000 this year that I've been there. So you're proposing to go down to $60,000 a year doing what? Flying a crop duster? No, the income would be $100,000 over there.

So that way I'm able to be home every night. I thought you said you were taking a $120,000 pay cut. Yeah. Is it like bonuses? It's like total pay cut with like my wife and I's income. Got it. So you would go from $180,000 to $100,000. And so essentially, and is your wife lowering her income as well or just you yeah yeah we were thinking about uh

potentially changing jobs that way that she could uh be at home with the kid every day and that way we don't have to pay for uh you know uh yeah child care what will hers be yeah i'm sorry say it again what will hers go down to? Hers will go down to about 30. How old is the baby? Five weeks old. Yeah, listen. The answer is, I'm going to go back to my initial gut. No, not right now.

You can reset your life once you fix your life, but you're $130,000 in debt. So you and the wife taking a pay cut while you're $130,000 in debt is absolutely ridiculous idea. The five-week-old doesn't even know. They're there. That there's time and space and all it knows is food and poo. That's it. And so I would say you got two, three years to clean this up before you need to be worried about two three years sorry i what i said was the kid doesn't know you're there for the first

got you in kid the kids years in time yes time and space for a two to three year old they don't know that dad's gone for eight hours or two days 100 that's all i'm saying you're exactly right take that long i'm sorry But it will not take that long. Thank you for catching that. To pay this off. Take 12 months to pay it off. Yeah, but dude, you're not going to pay this off taking a massive pay cut. Well, you will, but it'll take you really a long time. Why? I would rather work really hard right now, really miss the five-week-old, then the 10-week-old, and then the one-year the one year old and miss them and know that I'm doing this for them. And there's a season coming when I can spend more time with them because I did what I had to do to clean up the mess that I created. Yeah. I mean, sorry about

that. I agree. I agree with Ken wholeheartedly. I'd lean in and with the intent, like when both of you know, okay, if we just lean in and get this debt cleaned up, then yeah, you take the the pay cut you get to make 130 000 with no debt it's gonna feel great it's probably gonna feel like nothing changed as far as yeah money how how money feels in your house the only thing is you're just gonna feel peace about it so i i definitely would stick it out for another 12 months unless there's something like i don't know like messing with your moral button at work you know but you didn't seem to say that it just seemed like one was a better opportunity as far as time I think this is a tell me Aaron if you're I remember I remember when we first brought our first born home and I had to go on a trip I think within the first week and I couldn't leave I physically I kept coming back

and giving him a kiss on the head and then I I it was like you have a heart Ken that's why I know but my point is is like I was back 48 hours later and he had no clue no the kids don't know we it when they're that young it's us so your So your heart's hurting, right, Aaron? Yeah, it definitely sucks, you know, leaving the kids and the wives and everything. I'm usually gone about 15 to 17 days a month. And, you know, so sometimes that really makes the wife feel like a single mom. And what I don't want to do is like we're trying to, we're going to be having more kids in the future. And then, you know, kind of get stuck in the lifestyle that we have so yeah but that's the career you choose yeah and the airline that i would be going to i could uh be home every night

pick up uh open time opportunities and then upgrade to captain in three years yes and then that would grow significantly but that'll still be there correct uh hopefully uh this year uh the airlines kind of stopped hiring a lot with the bowen product uh manufacturing issues that they're having and then we've seen what happened with covet as well well covet is uh i don't like to base things off covet because it was such a once in a century type deal yeah however i here's what i think i think ken is right i think you're feeling the emotion of right now which is 100 normal and understandable and nobody thinks that you're weird for that um however you have to look at this long term and go okay what's more important you have to sacrifice what you want now for what you want most, right?

Which is what you want most is to be home with your family long-term to have more time with them. So right now, sacrifice a little bit so that you can have that long-term. If you keep this debt around, that's what has the potential to blow up this plan long-term, right?

It has the potential to go on the back burner. You don't really pay it off and you're feeling the effects of it with this $130,000 income. Right now, you don't feel it because you make almost $300,000, but soon you will. So you've got to get this mess cleaned up while you've got this giant shovel, while your kids are young. Because let me tell you something, when they're four and five and six, you are not going to want to burn the candle at both edges to get this thing done. The only scenario, Aaron, that I would be in favor of you doing this is if you guys could somehow cut $50,000 of expenses out of here, it's got to be a trade. If you're going to drop 50K in income, you would have to show me that

you cut 50K out of your expenses so that it was a wash, but it makes zero sense to go backwards when you're in this kind of debt. That's another good point, Aaron, is you've got to play this out because what happens a lot of time, Ken, is people create a household based off their current income, meaning their rent or their mortgage is 25% of their current take home. Then if you turn around and drop that in half, suddenly that mortgage becomes too much. So really make sure you're running out the numbers on this and figuring out all that needs to happen and all that needs to change in order to make this happen and make sense long-term. You know, it just occurred to me,

you agreed with me twice in one call. I might try some bold opinions in the house tonight when I go home. Maybe the teenagers and the wife will think I'm right there too. I mean, this is strange. It's a possibility. I'm not used to being right this much.

This is a good day. Quick break. We'll be right back with more of The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Colmageade. Warshaw is alongside 888-825-5225. The Ramsey Network app is the only place to get our full episodes of The Ramsey Show. You can download it for free using the link in the show notes or by searching Ramsey Network in your app store. Today's Ramsey Network app question is from Alexis. I recently got married and my husband has $250,000 in student loans.

This is our only debt and we are aggressively paying on them. My mom is trying to convince me to save the extra money we're putting toward this debt in order to pay cash for a house four to five years down the road. She believes, I always love when you chuckle in the middle. This is exciting. She believes this is a better financial decision for us in the long run. Her logic makes sense in a way way but i would like to hear your thoughts jade i'm adding that personalization there on the end listen uh i'm laughing because the truth is listen leave and cleave baby once you get married it's my favorite line in any

marriage ceremony once you get even cleave the the the mamas and the papas don't really get much of a vote. Now, don't get me wrong. They try to vote. I do think that there's something that our parents, in some cases, can offer wisdom in situations. I'm not saying that they can't. But if you and your husband have decided, hey, we're paying off debt, we believe that's the best choice, clearly you understand the Ramsey plan plan you've been working that plan then you kind of have to you know give everything else the hand does that make sense you know like 100 that's the 90s thing but um it depends what

kind of mood are you maybe you give them something else hey now hey you're not gonna give you're not going to give your mother-in-law the finger, Ken Coleman. Metaphorically. Metaphorically. I love that you, wow. I wasn't even necessarily, I was just letting the audience's mind roll with it, run where it would. And you come out and make it all black and white. But I mean, metaphorically speaking. Listen, it's either a knuckle sandwich or it's a finger.

There's nothing much more you can do with a hand. I think you can i mean metaphorically speaking listen it's either a knuckle sandwich or it's a finger there's nothing much more you can do with it do it metaphorically it's not the actual act of showing it but it's kind of the uh thanks but no thanks yeah or go pound rocks wow this what this is a lot okay i know you're right you're right not to their face but a boundary okay so we give them we get them the finger behind their back. Yeah, yeah. Like all the emotion is there, and you're like, no, I don't want to hear what you have to say. And then you create a very healthy boundary. There's a guy in the lobby who's picking up what I'm laying down.

Listen, I get it. I get it. All right, good. And you're right. The truth is, the teaching takeaway from this is, yeah, the leave and cleave. When you and your spouse decide something, you've gotten on the same page. Don't let anything mess up the path that you're trying to take. Now, let's talk about it from a

logical side, Ken, because if you have $250,000 of debt to then go and make a home purchase where you're likely taking on, I don't know, in this market, probably at least $400,000 of debt. Oh, at least. Yeah. That's a lot. Now, before you know it, you're looking up and you're upwards of $800,000 a day. You're going to feel that. And so for that reason, take the mother-in-law part out of it.

For that reason, it's a horrible decision. If you can, there's plenty of people who have called our show and they've already bought a house while they're in debt. I'm not saying you have to go sell your house, but if you get the news now that you should pay off your debt before you buy a house, you should follow it. By the way, really quick, and we're going to get to the phones, but this is a little 20 second life hack. It's going to change some of your lives. If you've got a situation like this with a family member, someone of respect, so a parent or a mother-in-law or whatever, what I have found is when they've got an opinion about something in your life and you're just really not interested in their opinion, you know what you

got to do? You got to get them on another opinion that they're equally fired up about or more fired up about and misdirect. A little misdirection. Oh, so play it out. Ken, you're going to pay off your student loans when you could be buying a house with Stacey? Oh, I don't know. It's kind of crazy. We're figuring it out. But did you see what Trump did the other day?

You see what I mean? You misdirect. Okay. And they're either pro or anti. And then now they're off on that trail. And then you keep feeding them that and they never get back to your issue. Okay, so you take something that's more of a hot button issue. Get it off.

Get the hot plate off of your plate. Put it onto theirs. Just misdirect. Okay. And then feed them until it's time to go. Oh, you're not going to go. I got to go. See, my advice would just be smile and nod.

Right. Well well i want full misdirection so then i hope they think so then they think well i'd rather talk to he would rather talk about this yeah yeah that's good i like that that's better than smiling a lot of subterfuge there folks but i'm trying to help you people all right trying to help you have healthy relationships in this one little area misdirection is always the win. All right, let's go to Scott in Colorado Springs. Scott, how can we help? Hi. Yeah. So I was wanting to save up to buy a house and I was curious like what the best place to do that is. Like I currently have a CD, but I can't like add to that as I get income. So like what's the best way to do that?

Cool. How much are you trying to save up? I'm thinking in the realm of $120,000. Nice. And what's kind of like your horizon for this? When do you think you'll be buying the house time-wise? Hopefully like one and a half to two years. Okay.

If I were in your shoes, I would probably, yeah, I wouldn't do a CD. The rate of return isn't great. I would put in a high yield savings account where you can get a better rate of return for the time horizon that you're on. Some people might talk about the idea of investing it, you know, throwing it in an index fund or something like that. I would not do that unless the horizon was longer. If you said, yeah, I'm looking to do this five, six years from now, then I might say, yeah, okay. If you're depending on your risk tolerance, if you're like, I'm willing to do that. Yeah. But even for some people, their risk tolerance, even though the likelihood is that they would come out on top, if your risk tolerance doesn't feel good, then I'd still park it in a high yield savings. So yeah, that's where I'd put it. I use Ally. There's no, you know, we don't advertise for them or anything like that, but I just, that's the one I personally use.

Yeah. I love that. And that advice, by the way, really, really good for people to try to figure out, okay, I've got this big, because you get the house fever. That's what I like to call it. And you feel like you got to hurry. You feel oh i'm not gonna get a house that i want the interest rates are gonna go up or you start coming all the good houses will be gone yeah right and it's kind of like and i remember that i i experienced that fever twice once it was around

land you know i'm talking about like i would I would call Stacey on the way home. I'd go, hey, listen, I saw something. Meet me over here. And I'd be like walking land. Like I'm Billy Bob Thornton or something. You know what I mean? Like I'm going to put oil rigs on it. Here you are again talking about Billy Bob.

But I wanted to own some dirt. And it started making me, because I felt that fever, it started making me consider things that were just dumb. I mean, like, what am I doing? What are you talking about? I work a day for it. Just got to be careful not to extend yourself and be patient is the key.

By the way, I want to mention something because this is a really interesting question and nuance that Scott brought up. There's so much that goes into buying and selling a house and you got the fever part of it. You got the fear part of it. You got the fear part of it, right? You can get overwhelming, a lot of details. And our team, we were meeting about this recently. Our team created Ramsey's Real Estate Home Base. And I love that they call

it home base because you remember playing tag, freeze tag when you were a kid and that person who was it was just chasing you down on your heels. And if you could just get the home base, right? All the tension leaves. I'm safe. I'm home base. And that's what this is when it comes to buying or selling a house. Everything that you could think of, tools, resources to get prepared to buy or sell with confidence. These are like calculators, start to finish guides, how-to articles, a podcast, a book, even a video course. All of this at Ramsey's Real Estate Homebase. And they've created this to be a place where you all, you're running, your life is busy. I need to get to home base, safe place. I can trust Dave. I can trust Jade. I can trust the Ramsey Solutions team.

And I can make sure that I have everything that I need as I'm thinking about buying or selling. So go to ramseysolutions.com slash real estate, ramseysolutions.com slash real estate, or what did I say earlier? Show notes, baby. Show notes. It's just easy. And go click on it there. And this is huge. We don't want you to make, which is one of the biggest financial decisions you'll ever make. We don't want you to make it without all the information. That's why we created the Real Estate Home Base. So there you go. That's good, Ken.

Although, I don't remember freeze tag having a home base. Oh, yeah. You had to have a home base. Did it? Yeah, James remembers. All right, James remembers. I don't think you played a lot of freeze tag. If James says it, it's right.

I played a lot of freeze tag. A lot of freeze tag. I'll fill you in on the break. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Coleman. Jade Warshaw is joining me. 888-825-5225 is the phone number.

Let's get to Eric in Chicago. Eric, how can we help? Hey, guys. Thanks for the call. I'm just calling to make sure I'm on the right track. I'm trying to save for my son for a college fund. I've seen a couple of financial advisors, and one of them told me to start a 529 fund. And another one I talked to said start just a Roth IRA because I'm a little bit older.

So I ended up doing that three years ago. And he said, you know, since I'm older, I could withdraw that money at 59 and a half with no penalties if I wanted to use it for his college. And if he doesn't go to college and I had a 529 plan, I'd have a penalty. So you think that might be the right direction to go? I mean, he's definitely right about the fact that you could withdraw without penalty versus the 529. If it's not used for school expenses, then there would be a penalty, 10%. So the question is, how old are you? I'm 49. My son's 6.

Okay, your son is six. Okay, so there's part of this where I like using the right tool for the right job because when you're investing in your Roth, obviously you're limited on the funding there, and there's a good chance that you're going to want that specific money that you're able to withdraw tax-free in retirement for the purposes of you living. And you would want to be able to add a certain amount of money for kids college. I would not want you to, I guess what I'm getting at is I would not want you to invest less just

so that it's in a Roth. Does that make sense? Like if you have the ability to invest and do both, I would do both. I would not necessarily do one or the other, if that makes sense. Okay, yeah, I've been maxing it out for the last three years. Right, and if you've been maxing it out and that's part of your normal 15%, the 15% off of your gross income,

I would continue to do that because baby step six, or I'm sorry, baby step five, where you're investing for a kid's college is in addition to that 15%. So if you have the ability to invest whatever you choose to, I mean, I'm not saying it has to be a large sum. It could be, I don't know, $200 a month. But if you decide to put more in for education, I would do it in a 529 so that at least you're having like, this is my nest egg over here and this is for Papa. And then I've got kids college over here. Does that make sense? It does. Yeah. Yeah. Okay. I didn't know you could have both. Yeah, you can do. Yeah. 100%. That's why I say the right tool for the right job.

And the truth is, yeah, that 529, you don't want to overfund it. Listen, if you did, there's worse things that could happen in the world that's right worst thing that happens is you take it out and you pay the penalty and you have a lot more money than you had before i just think it's so broad that you can use it for some type of learning you can am i right like it's pretty broad it's pretty broad it you can change the beneficiary so if you have a grand kid on down the road and you say okay i can whatever junior didn't use i can pass it on to to grand junior and that person can use right so you have the ability to change who it's for and over time if they want to take it and there's extra money in there after education they can turn it

around and they can convert it to an ira at the yearly rate if that makes sense so if it's 7 500 they can contribute that much and transfer it year after year. Does that make sense? Yeah, totally. Yeah, it does make sense. Good question, Eric. Thank you so much for the call. Let's go to Boston now, where Natalie is waiting. Natalie, how can we help? Hello, Natalie. Hi, can you guys hear me? Yes, you're on with Jade and Ken. What's going on? Hi, Jade and Ken. Thank you so much for taking my call. You bet. So I found the Reign Team Baby Steps about 18 months ago,

and since then we've paid off about $180,000. Wow. Hello. Yeah, and I just, for right now, we're on baby step two, and I just want to be done. So I was just calling. So I have two questions. So the first one is, I want to see if I can get your help with a debate that I'm having with my husband. Oh, we love these. We love these.

What's the debate? Let's having with my husband. Oh, we love these. I love these. What's the debate? Let's start with that. So we got solar panels about two years ago, which I regret getting. I bet. And right now the loan on the solar panels is $115,000, which that included a new roof um so that's included on the loan um initially i was kind of treating that as like i guess our electric bill so our electric bill prior to getting the solar panels was about six hundred dollars a month which is why we yeah so that's the reason why we decided to get the solar panels um so initially we were paying 300 it's like 350 a month um but then after like a year year and a half so last year we got the tax credit and we were supposed to pay put that money towards the loan for our monthly payment to stay the same um so we decided to take that tax credit and just apply towards a snowball debt so which so now um what are you paying every month for the solar panels now? So right now we pay $515 a month.

So it's still less than $600. Right. And so are you saying that you just want to treat it like the electric bill line item? Like you don't want to consider it like a debt and put it in the snowball? Correct. Yeah. So so so I was treating it as a line item. But now now seeing how much progress we've made in 18 months. Yeah. I want to I want to now put it under like put it in the snow on the snowball. And you should. And you should have from the beginning.

I'm glad that you want to do that now because that really is the right move listen if i heard you correctly i think i heard you say that you paid off 160 in 18 months is that right 180 180 in 18 months so for you the juice is loose you guys are going so i think that like throw all the full power at this how much more besides these solar panels how much other debt do you have left to go so we have so the last debt was a home equity loan which was 98 000 that's the last one that we're paying right now okay and we owe so we owe 20 000 on that home equity loan that's the last's the last debt that we have besides the solar panels. So we should be done with that $20,000

by the end of, like, by March. March? Okay. How much money do you guys make? So last year we made $350,000. Okay. Man, good job. And how much are you going to make this year is it the same or are you on track to make more? We don't know because so I am on salary plus bonus and commission. Okay. Um so that was my next question was once we get to like baby step four how would I calculate the 15% if I don't really know how much I'm going to be making?

Yeah, I would start by calculating off of your base. And I would start by calculating it. If you don't really have a base, I would start from the previous year and kind of go like that. You could do it that way, or you could just do it check by check and just say, okay, what was the gross amount that I made this month on this check and do 15% of that. Same thing with your husband and do it that way. There's a couple of different ways you could do it. And I'll tell you what I do at the end of the year. Like in that last quarter, I'll kind of start to calculate everything up, what I've earned thus far. I'll look at my pay stubs and I'll also look at my contributions just to make sure it lines up. And if I'm off in either direction, then I still have a couple of months to make up the difference and make sure that I'm on par at the end of the year. Does

that make sense? So that's one way to do it. But the good news is, A, congrats on the income. B, congrats on moving so quickly. And C, you're going to be debt free by the end of the year, right? Yeah, so the debate is, so my husband wants to pay. You were supposed to say right. We never know. Yes, at $350, I hope that you will have paid off $135 by the end of the year. I think you can do it. It's going to take some clear intention, but it may be possible for you. Yeah, absolutely.

I mean, phenomenal income. And boy, they've got a ton of momentum up to this point. So fascinating phone call. Yeah. Really interesting. So we get into more of the debate, but no. We got next. There's always more time, Ken.

I know. You got to get the husband and wife on together. And then we're wearing robes, judge robes, and, you know, gavel and all that. Well, he wanted to keep the solar panels. Yeah've got to get the husband and wife on together, and then we're wearing robes, judge robes, and gavel and all that kind of stuff. Well, he wanted to keep the solar panels. Got to run. Quick break. Be right back.

Listen. Welcome back to The Ramsey Show. Alongside Jade Warshaw, I'm Ken Coleman, and we are excited to be with you. 888-825-5225. Our scripture of the day, 2 Chronicles 15.7. But as for you, be strong and do not give up, for your work shall be rewarded. Our quote of the day from Joe Vitale,

A goal should scare you a little and excite you a lot. That's good. You've got to feel it. I like that. Like Ric Flair. Thank you. You know, I got to say, you are one of a kind. I didn't expect you to drop a Ric Flair on me, but it's made my day.

Because I grew up with Ric Flair. And, you know, lower middle class. All right, there you go. John is joining us now in Phoenix, Arizona. John, how can we help? Hey, thanks, guys, for taking my call. Sure. What's going on today?

I need some help getting a spoiled, beautiful wife to live on a budget. Uh-oh. Them spiting words. We have two problems that you've identified. Getting a spoiled, beautiful wife to live on a budget. Uh-oh. Woo-hoo. Them spiting words. All right, we have two problems that you've identified. She's spoiled and she's beautiful. You're in trouble, pal. Man.

Who spoiled her? Oh, it's my own fault. Listen, at least you're living in reality. Was she spoiled prior to you? No. Oh, okay. So it's all you. Yep.

You've created a monster. Are you being serious? I am, absolutely. Okay, so tell us the depths of the spoiledness. Tell us what she expects based off of what you've kind of allowed and what you're hoping for, how you're hoping for, how you're hoping it'll change. Yeah.

Yeah, so we've been together for 16 years, been married for almost 10. And about three years ago, you know, up until then, we lived life very freely. We both made great money, you know, when she was working. She also contributed good money. And we did what we wanted to. We had nice vacations. We have nice vehicles, a nice home. And three years ago, we went out to dinner and we also have two little kids now. And I said, honey, you know, I want to make a change. You know, I want to work

for myself. And part of that change was having to change our finances, right? Living on a budget. Yeah. What was that in real numbers? And you agreed at that time? You went from what to what? Just, I'd say about $350,000. Okay.

At that point, it was just my salary. She hasn't been working for the last five years since we had little kids so she's a stay-at-home mom now right and at that point go ahead i was gonna ask you guys got a pretty healthy burn rate at that point yes yeah yes and and we we put that money over the last three years um we sold our sold one of our homes and I built us another and paid for it completely. All of our vehicles are completely paid off. We have zero debt whatsoever. And that was kind of the stepping stone to get to in order for me to be able to quit.

Who manages the money? I do. Okay, great news. So I'm telling you, John, I'm going to jump in because I can't wait to see what Jade said. I'm going to take the male point of view. You're the one that manages the money. She's running the house, right? Yep. Great. So it's the question was posed to us. How do I, and I'm paraphrasing, how do I get my wife to live on a budget? You have to live on the budget and you have to actually create the budget you have to manage the budget and make her life as easy as possible in the transition because she's

running the house so you don't get your wife to live on it he's got to live on it i'm throwing like 10 flags on this play really yeah i thought what i said was so good please tell me where i'm wrong well i don't i'm not to say that you're flat wrong. I'm just saying that I think that they've got to both sit down. Because if he's saying, I did the budget, here's what it is, I think she's going to be like, no. No, I'm sorry. This is good. I'm glad you—

Rephrasing. Yeah. Welcome to my life. Okay. Run it back. He presents. Yeah. Welcome to my life. Okay. Run it back. He presents the budget. He manages the money. She's got a whole host of other duties.

It's his job to go, this is our income now, and this is how things are now. This is our new reality. He puts a budget together. Hold on. I'm doing what you're saying. Listen, I'm percolating. Keep going. He sits down with her like you're saying, and he presents presents this as this is what i believe we should be doing here's the why behind it here's the where

he's not forcing it on her and then she then she weighs in on it and he shares with her some some real vision casting not things have to change vision casting is good i think that that is exactly right my thought is may yeah i think she pushes back she asked questions more part of it yeah oh 100 but what i was trying to say is is like it's not him convincing he's got a model this yes and now that that's what i mean yeah you've got to be just as much of a model but lost in translation it did get lost in translation it might be a generation gap might be easy easy i'm just kidding but let's go back to our buddy here i think uh the big question is you're debt free you gotta pay for house you make 350 000 help us understand where like she must really be spending that's what i'm saying they have a big i think they have a really really high burn rate what's she what what is she spending on we what's she getting the budget

early in early january we did the budget we agreed five grand a month was to be spent on as a budget right that's what we're going to spend between groceries and bills um and having fun and all that was five grand a month at the the end of January, we're approaching that. We spent nine. Listen, okay. I'm sorry. I'm sorry. I feel like that.

Okay, hold on. Let me just do some math in my head. So you're saying the entire budget. I'm just sorry. You're saying the entire budget should only be five grand a month when you're making $350,000 with no debt? Yes. Listen, Scrooge, you might need to loosen the purse strings a little bit. I was letting this play out.

I wanted to see where he was going. I'm like, why are you living like you make 60 you know like you make you know 70 000 you make 350 but well the idea is to to hopefully at the end of the year have a sum of money in the account right and reinvest build the company grow yeah uh and then finally and then get to a point where i can live off 10 grand a month how much do you need to build the company and what kind of company is it um it's a government contracting business and i need as much as i can get yeah and i get How much do you need to build the company, and what kind of company is it? It's a government contracting business, and I need as much as I can get. Yeah, and I get this.

He's being conservative. The more I have at the end of the year, the bigger I can grow the company the following year. I love everything about it. Why were we four grand off? I love it, too. I think you guys have to meet in the middle, and this is where what Ken is saying is going to go a long way. You guys have been married 16 years. She's probably feeling like, OK, we did the sacrifice here. We did the sacrifice here.

She's probably at the point where she's wanting to enjoy more of the sacrifices you guys have made. My guess is that you're going to have to do a lot more to Ken's point, vision casting about the business, not just about where we need to save and what you want to do with the money. But really, it makes me feel like she's probably very bought into what you want to do. She may not be bought into the sacrificial level. And as a woman, I could kind of understand that after 16 years. But you coach people on their budgets all the time. Don't they need to get together and go, why were we four grand off? I mean, I don't think they just backed into that accident i understand that is definitely a part of it i do think being four grand off is a big is a big deal but that being said i also think you guys

need to find a fairer split for this because i'm not gonna lie five thousand feels very low for your entire budget on a three hundred and fifty thousand dollar income no i i myself would be like why do we have to like if why do we have to live like, if we don't have to live like this, why are we living like this? So I can understand your wife's questions. I think you guys just have to really sit down and kind of do that list where it's like,

you get two vetoes. You know, it's like, what about this? Okay, that's fine. What about this? That's fine. That's fine. What about this? I veto that, right?

And get to a closer meeting of the minds because I think on your side, 5,000 is too low, but I think on her side, going 4,000 over budget is also a problem. But I think there's a we here, John. And I'm going to give you a little piece of advice here. I'm going to play an older brother card here.

I also understand exactly where your head is right now. If Stacey were sitting here, she'd be like pointing at me. I'm pointing at you. I know, but for different reasons. Here's what's happened, John. You have overcooked your goal because of how urgent you are to provide. And you're not going to be able to save as much as you think you should be saving. So let's back your savings goals off a little bit as we have these discussions. I think you're a little too intense on how much you're putting away because you're scared because it's a new deal.

And I get that. Thank you, Jade, as always. Thanks, James Childs and the crew behind the glass. Thank you, America. This is The Ramsey Show.