The Ramsey Show - App - Don’t Let Lifestyle Creep Derail Your Financial Goals

Episode Date: October 11, 2024

From Ramsey Network, this is The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Camel, joined by bestselling author Jade Warshaw, and we are your hosts this hour, taking your calls at 888-825-5225. Before we get to the calls, we've got an exciting interview that is dropping next week. You don't want to miss this. A few weeks ago, Dave Ramsey and I sat down with the one and only Ben Shapiro to have a real conversation about work, about building wealth and what it means to pursue the American dream in 2024 and beyond. And the interview will be available Tuesday, October 15th in the Ramsey Network app. So if you want to see it before anyone else, go download the free Ramsey Network app in the app store.

Then on Wednesday, the following day, October 16th, the episode will be released for everyone on YouTube and podcasts. So don't miss that. October 15th, the episode will be released for everyone on YouTube and podcasts. So don't miss that. October 15th, Ramsey Network app. Be there or be square. You know why they say that, Jade? Because uncool people are squares. The way I heard it is because you're not around.

So you'll be square. All right. There's my dad joke. We're moving on to Eric in Boise. What's going on, Eric? Hi, Jade. Hi, Jayden. Hey, George. Thank you so much for taking my call.

Sure. How can we help? Yeah, so the situation we're in, I'm in Boise, Idaho. I was a baby step seven, I guess, grad, and purchased a home and paid it off. Awesome. And yeah, I'm 31. My wife's 33. Wow.

You guys are super weird. Yeah, we are definitely very weird. And we were having our first baby. And so we decided to move into a home that was a little bit bigger and had a little bit more land to it. Cash on that one too, or there's a mortgage? Well, so what we did is we took a mortgage in order to just to get the home because we didn't want to do a contingent offer because it was pretty competitive here. So our plan is we're now currently selling our previous home and then we're going to take all that money and roll it into the mortgage and get it out of the way. So it'll be a very temporary mortgage. Once you sell,

you'll pay off the mortgage and move on. Exactly. Yep. That is our strategy. That's what we're doing. Not mad at it. so what we have found out, we've had the, our helm on the market, I think for two weeks, three weeks now. And we've had a couple of people who are interested and our realtors told us that they've come back and asked us if we would be interested or would offer a owner financing or owner carry loans. And I was just curious from the Ramsey Solutions perspective, are there any terms and conditions where that would be a wise thing to do? Or is it just a hard, no, we're not going to, we shouldn't be considering. I'll tell you on the seller side, if you're the one taking on the risk,

you're going to loan these people however much. What are we talking, $300,000? Well, that's what I've asked our realtor, what are the terms or what have they been asking for? And he said, really, it's just kind of up to us for what we would say, what we would be willing to offer. And they're trying to do this to save on interest rates right now? What's the upside for them? That would be, I don't have those details. I'd be curious about that. From what I've read into it a little bit, it sounds like usually people who are looking into owner carry loans are

individuals who can't get approved for a loan from a bank. And that's a red flag for me. That's the only red flag I need. If they didn't qualify for traditional financing, it's a hard no for me. And even then, personally, the Camel family would not be willing to take on that risk of someone owing us hundreds of thousands of dollars. Because if they default, you've got to foreclose on that home. So all the risk is on you instead of the lender. Yeah, I see. Yeah. And that's where I was thinking where if, because we own the home, is it, if we were able to create some terms where we could say, Hey, we want a

larger down payment. So that, cause I mean, the idea of behind us selling this home is that we want to get rid of our mortgage. So we don't want to carry that any longer. And then having a short term loan, something like five years or whatever, and you still, I guess, in that case, would have the, you know, like a bank, you own the home, and if they don't pay it off, you get the home back. What's the, can you give us real numbers? What's the house worth? Like, what are you selling it for, so that we know what the loan would be? Because if, there's a couple of things that don't make sense to me, and I'll tell you what they are, and then if you explain it, maybe you can help.

But I'm thinking, okay, these people weren't approved for normal financing. Normal financing is typically a 15 or 30-year mortgage, right? Correct. You put 5% down, whatever. And then you're talking about them having to put more down and having a shorter term. Like you said, a five-year term so i'm trying to understand why you feel they would be able to do one that is far less conventional over the other which is far more conventional i guess well yeah that's exactly like i i would be looking in in the term so the home we're asked the asking price right now is 369 000 and so for us i wouldn't be comfortable with like a zero down, one percent down, two percent. What do you want down? I mean, I would say probably at a minimum 30, 40 percent

down. Do you think or do you know that they would have that money? I have not heard whether they would be willing to do that or not. My assumption is probably not. Yeah. If they would, you know, if they went through a bank, they'd be able to do something like you said, anywhere between five to 20%. And so I haven't heard any kind of terms along those lines, but in my interest, that's where I would ask for a larger down payment, shorter terms. And so that's where I would think that it would be less risky on our end. Well, here's the thing. Here's the thing. You're not desperate. And I think that if you were in a situation where there was desperation or even in a non-desperate

situation, if we were talking about a buyer and you knew this to be true and maybe it was like your brother, I don't know, there could be a situation where you might consider this, but you're not desperate. The house is paid off. You're not floating two mortg is paid off. You're not floating two mortgages right now. I mean, George. Well, and the other piece of this, Eric, you got to realize the opportunity cost of you not selling the house, taking that money and paying off your mortgage or investing it. And so there's a lot of things that I don't think were totally thought

through. And I would also go, are there other buyers that are just going to go through traditional financing? Because there's not really upside here for you. Yeah, because that's where I was thinking. The terms that I would consider an upside would probably be shorter loan period, higher interest rates than what a bank would be offering, higher down payments. And that's where I would look at if I was a buyer, why would I do that? Why would you ever do that? Yeah. And you're not going to give them a lower interest rate than they would get on a traditional mortgage. That wouldn't make sense for you to take on that risk. And at that point, that worries me that they'd even be willing to take that deal. Yeah. Typically, this would be something that you would do maybe between,

I mean, and I'm not recommending this by any means, but maybe it'd be something you do between friends or family where you're trying, the intent is to give them a better deal. Maybe it's family property or something. If you're the one buying the property and they wanted to do owner financing, then we would go, okay, well, the risk isn't on you. And as long as you're getting a deal out of this, then go for it. But I just don't see enough green flags here to move forward.

I would wait and find a buyer who's willing to go the traditional route. Yeah, okay. Yeah, that makes total sense. That kind of gives me, that was kind of my gut feeling towards it. I would wait and find a buyer who's willing to go the traditional route. Yeah. Yeah. Okay. Yeah. That makes total sense. That kind of gives me, that was kind of my gut feeling towards it. And yeah, that definitely helped kind of clarify and give me a clearer picture on what it, because the only thing I would really be taking is probably a deal that somebody else wouldn't

want to take anyway. That's right. Yeah. We can be generous in other ways. Let's not do that with this many zeros on the end and put your financial future at risk. And I love this quote, the person with the most patience, information, and options wins. And you guys are in a place where you're not desperate. You've done things the right way. And so let's just move slow. And when the offer's right, you're going to say confidently, yes, instead of a, should we do this? I don't know. It could be risky. Thanks for the call, Eric. This is The Ramsey Show.

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Jessica's up next in Nashville, Tennessee, right up the road. What's going on, Jessica? Hi, thank you so much for taking my call. Sure. How can we help today? So me and my husband recently started listening to the podcast and really getting into finances, and we only have about $2,000 left on our credit card, which will be done within the end of the year. We're looking at our student loans, and we just don't know what to do. Mine are all kind of like little tiny, like $2,000, $3,000 loans, whereas his is like a giant $45,000 loan.

And we don't know if there's a difference in who we should tackle first. Okay. Well, I love, number one, that you guys are kind of on this road together. You've decided it's important for you both to pay off the debt and you've decided that it's important to work together. So kudos to that. For this, it really is just the methodology of the debt snowball. And all that is, is we list all the debt between the both of you in order from smallest to largest based on balance. So not payment amount, not interest amount, but by balance. So right now

you're kind of already doing that. You've got $2,000 left on this credit card. And then what you do with these student loans is you both pull up your screen of your provider and you go through smallest to largest. Like you said, yours are busted up in little bitty guys. And so you list those smallest to largest. And the same thing with his. Is his a federal loan or a private loan? It's a federal. Okay. And it's just one, right? Because sometimes you make one payment, but when you really go in there and look, it's still listed by semester.

No, he had one loan that was going to go into collections and they told him that he had a consolidated loan, a giant federal loan now. Okay. Got you. So that's going to be the final one that you pay. But the good news is because you've worked the snowball, you will have gotten back all those little bits and pieces of payments. So you'll be able to hit it with a big shovel. What's the combined amount that you have in student loans? I have about 65. 65 and he's got 45? Yes.

Okay. And then what's you guys' combined income? $100,000. Okay. So you've got a little bit of a journey here. You've got $112,000 to pay off and you're making $100,000. Have you jumped onto EveryDollar? Because we have a really great financial roadmap that you can plug in all your numbers and kind of project what your payoff date is going to be. And then you can project when you'll be on baby step three and how long that'll take. Have you done that yet? We are on my every dollar premium expires today, actually.

We just sat down last night. Perfect timing. All the numbers in there. You didn't pay for it yet, did you? No, sir. This feels like a plant, Jessica. Did you call in on the day of the expiration hoping we'd give you every dollar?

I promise I didn't. I just happened to look before I called and noticed. It's fine. Either way, we're going to give it to you. Yeah, we're going to give it to you. We're going to give it to you. So hang on the line after we're done and we'll help with that. And what I love about every dollar, at the bottom, you're going to list those debts with the minimum payment, with the balance, and it will list them all for you, smallest to largest.

And it's a great way to keep track of how much extra you're putting on that little one and when it'll be paid off. So that's going to be a big help. But it really is, I think, psychologically motivating to see the little ones get knocked out. And I know you're going to get to that big one and go like, oh gosh, we're in it now. $45,000 ahead of us. But you're probably also going to be making more money a year from now than you are, right? Yeah, hopefully. Are you guys doing any side hustles or anything to supplement that $100,000? He does. He does a lot of side projects on the weekends that probably bring in about $400,000. Oh, $400,000 a month? Oh, $800,000 a month? Yes. Okay, great. Okay, good. So yeah, my recommendation, I think that if you have debt, and this is not just for you, but

anybody has debt they need to be bringing in anywhere between five and two thousand extra dollars that for me is the five hundred to two thousand yeah at least five thousand but if you can get to two thousand you're you're swinging for the fences five hundred okay yeah yeah i like that plan and jessica the fun part for me and maybe i'm a math nerd i go okay how little can we live off of out of this 110? And that might mean we pause investing. It should mean that if you guys are currently investing, let's pause that to get some money back on our budget. And then with our take-home pay, we go, all right, it takes us $2,000 to cover all of our basic bills. That should free up another 2,000 of our 4,000 take-home pay to tackle the debt. And now you kind of know the gap

because if you do the math right now, how long is it going to take you to get out of debt at the current pace? Probably about 15 to 20 years. That sucks. Can we agree? 15 to 20? Wait a second. She's saying if she makes minimum payments on all the debt. Oh, minimum payments. Okay, okay, okay. But now with Jessica's current plan, it's probably more like four or five years?

I think so. And the Jade and George plan is like, how do we do this in two years, maybe two and a half? And that means there's a gap. All right, instead of throwing $1,000 of the debt, we've got to throw $2,000. And here's what we're going to cut. And that's where the budget is going to be your best friend and show you the reality of where you're spending and what can go. And here's a couple of freebies. I mean, are you guys getting a tax return every year?

It's only like $200, $300. $200, $300. Okay. I mean, you can look at that and see if you can get it down. Probably not. That's pretty close. What about investing? Are you doing any investing?

I only do the match my company does into my 401k. Okay. How much is that every month? It's 4%, but I just started a new employer, so it hasn't even begun yet because I have to be there for three months. Perfect. So let's just not start that because that's going to free up hundreds of dollars that could be going toward debt. And I promise you we'll get back to investing with a vengeance later on. But what happens for most people, Jessica, is they go, well, I want the match and therefore I'm willing to stay into debt longer and I'm kind of comfortable here. And then they do three or 4% for 10 to 15 years. That's right. I'd rather see you do 15%

two years from now. That's right. Next category, because I'm just trying to help you find money. I want this to happen fast. What do you spend every month on going out to eat? We have a budget of $50. Okay, good. What about groceries? It's just the two of you? It is. My husband, he's like a gym guy, so our budget is about $800.

Okay, that's not bad. You might be able to do it a little less, but that's not bad. $800 for two folks. Get that boneless chicken thighs from Aldi. You stock up on those. That's plenty of protein. I don't know about a chicken thigh, George. Well, yeah. She's not dabbling in that world. I'm a big gym rat myself, Jade, if you can tell. I could tell by your bulging biceps. But I do watch a lot of videos about protein for some reason. I don't know. I'm very intrigued by the lifestyle, Jessica. But the point here, Jessica,

is we're going through the budget with a fine-tooth comb. And this is, like I said, for anybody listening, withholding is a great place to start investing. Look at that food budget. Cars. A lot of times people's opportunity is sitting in their driveway. So tell us about your vehicles. My husband's in 2012 completely paid off. And then mine was gifted to me by my father, so I actually don't pay for it. Okay, so that's paid off too. Yeah, so 2018 Toyota. Okay, good.

Another thing that's really, people don't think about is insurance. Across the board, reshopping insurance. If you go to ramseysolutions.com slash checkup, we have a great coverage checkup. It'll take you just a few minutes to do the quiz. And I helped a friend here actually reach out to Xander. They reshopped their insurance and they had better coverage while saving 80 bucks a month. Nice. 80 bucks back in the budget. So just doing something like that, Jessica, with homeowners, auto across the board could save you

100 bucks, 200 bucks a month. Yeah. And then there's the utility type stuff. You can go in, call your cell phone provider and say, hey, are you offering any deals? If you still have cable and Baby Step 2, call them and say... Yeah, what are you guys paying for your cell phone bill? I'm sorry, can you repeat that? What are you paying for your cell phone bill? So right now, ours is separate because I do own my phone, and that should be knocked out by the end of the year.

But mine is $87 a month, and his is $60, but we plan on going to Mint Mobile where it's like $30 a month. I was going to say, Tello has been a great sponsor of the YouTube channel and they're $25 a month for unlimited. You can't beat it. Which is incredible. So that's a big savings. Some people are just paying like $120 a month for their phone plan, not even including the phone. So just some ideas, Jessica, along with EveryDollar, I'm going to send you my book, Breaking Free from Broke. I want you to specifically read the Margin is Breathing Room chapter. In there, I lay out a bunch of the ideas that Jade and I threw out and many more just to get you going because we're pumped for you guys to become

debt-free. Do you feel like it's closer just on this call? Yes. I mean, we also made progress. We started with about $16,000 in credit card debt and we're down to maybe two, 3,000, I think it's 2,400. So thank you guys so much. This was really helpful. Love to hear that. And you're right down the road in Nashville. So come see us for your debt-free scream. Looking forward to meeting you guys and celebrating in person. Hang on the line. We're going to send you every dollar premium and my book, Breaking Free from Broke. Hope those resources help you along the way. More of your calls coming up. This is The Ramsey Show. Hey, George Camel here with a not so fun fact. Every American social security number, including our children's, has been hacked and is now on

the dark web. And this is not a scare tactic. This isn't fear mongering. It's a reality that could turn into a nightmare for a lot of people. And believe me, I've been a victim of identity theft, and I would prefer it never happen again. Because once the bad guys have your social, it's the lifeblood for all of their activity. Think of all the places you use your social. Your banking, your employer, government offices, utilities, cell phone companies, everywhere. And once they've got it, thieves can open new accounts, drain existing ones, steal payroll, and wreak havoc all in your name. Not cool. And to be real, it's not a matter of if, but when. So you've got to protect yourself with Zander's ID theft protection. Zander has all the cyber tools to help, including home title monitoring,

full recovery services if you do become a victim, and stolen funds protection. Not to mention, it's the best value on the market. They've been protecting my family for over a decade, and I trust them to protect yours too. So get enrolled today by calling 800-356-4282 or just visit Zander.com. That's Z-A-N-D-E-R.com. Welcome back to The Ramsey Show. I'm George camel joined by jade warshaw open phones at 888-825-5225 we just took a friend a call from our friend jessica and we were walking through mentally kind of all the budget line items helping her find some margin and if you're wondering about this app that we're talking about called every dollar it is an app that our team

created here because, frankly, we were tired of seeing all these other apps not doing a great job and not allowing you to create a zero-based budget where every single dollar has a job, has a name. And so we created one a decade ago, and it just keeps getting better every single day, every single year. So if you want to check it out, it's totally free in the App Store or Google Play, or you can click the link in the description if you're listening on YouTube or podcast. And I'm telling you, this is the plan that is underpinning all of the baby steps. It is the budget. It's the way that Jade and her husband got out of hundreds and hundreds of thousand dollars of debt. It's the same way I went from broke to millionaire. It's every month, make a plan before the month begins. Stick to it. It's that simple and it's that hard, but it is so worth it.

So go check out EveryDollar in your app store. All right, Daniel is in Boston up next. What's going on, Daniel? Hey, how's it going? Thank you guys for taking my call. Sure. What's going on? All right, so I'm on baby step number two right now,

and my biggest question is if I should sell my car or sell both the cars that we have. We are about, so I just got married last year. We just had a baby. Main reason why we want to get out of debt is to get a house. But we are $55,000 in debt. $20,000 is the cars, $8,000 is student loan, and the rest is credit cards. Okay. The car that I'm looking to sell is a two-door car, so it's a little hard to use with the baby.

I owe about $12,000 on it, and Kelly Blue Book is saying it's about worth $14,000 to $14,500 average price. Good. I've listed it before a couple times before we even had the baby. I just never had good luck selling it, mainly because I didn't have the title. So my biggest question was wondering if I should get a separate loan to pay off the car and then sell the car and then pay off that loan that I took out, or am I overthinking this? Well, the simpler way is

you do this all in one transaction. So you go to whoever holds the title and you conduct the transaction there. Because not that there's, you know, you don't have a clean title. I mean, you just got to pay the loan off to get the title and therefore you need that person's payment in order to do it. Which is totally normal on private sale. Right. Yeah. Just a lot of people that I've seen didn't really, I guess, trust. It's because they've never done it before. Yeah. Okay. That's where I was in like wondering if I should, you know, get a loan for it. And same thing with the other car. I mean, it's one of my biggest payments. It's about the two cars, it's about $850 a month. What do you owe on it?

So the other car, the Camry, I owe $8,000 on that one. Okay. What's it worth? That one's worth about $14,000. Oh, and the payment's $850? Is that the total? That's the total for both cars. The Camry is $438,000. The two-door car is $413,000. Okay, so they're pretty equal. But the good news is for the Camry, you'd get more money back off the sale. For you, what do you do? Are you going to be a one-car family? What's the plan after you liquidate one or both of these?

Right, so we definitely both need the cars. She usually drives to clients' house. I drive to work. It's just my car was the one that we wanted to sell the most to get at least a car that has four doors. Sure. Just to make it a little bit easier for the baby not to do groceries because usually her car is the family car at this point.

So that was the whole point. And also, we obviously never realized how much debt we had until like the first year this point. So that was the whole point. And also, we obviously never realized how much debt we had until like the first year of marriage. So getting everything, you know, looking at all the debts and seeing what we can eliminate, what we should be better at with our money. And we just thought this was, you know, because it's the biggest expense that we had besides our rent. I like the idea of you selling the smaller car, you know, if you clear $2,000. I also wonder, I mean, I don't know how long you had it listed or what sites you had it listed on. How long did you have it listed before you pulled it?

I'd say so. I listed it twice and I had it probably for that duration, like a month, two months. Okay. That's not too, too long, but it does make me wonder if I don't know if all the feedback was, you don't have the title, you don't have the title, but it might make me wonder about the price, if it's accurate or not, if you're not getting any bites. So just put it out there again and ask people for their feedback so that you know what's going on. Is it the price that's the issue? Or is it really the fact that you don't have the title? And you can contact, you know, the different dealerships out there and see who'll give you what and some of these online car sellers as well and see maybe some of them out there back in the day, Jade, were giving people crazy top dollar. That's

slowed down, but you still might get a pretty decent deal to get out of this thing. What's your household income? So right now we both, I actually got a raise. I got a new job. We're about 95 now. Okay. And what's the 20, so you got about 27,000 in credit card debt? I do. Yeah. It's about a little bit of hers and mine. Yeah. Combined. Okay. Because making 95 and looking at your total debt load, I mean, if you wanted to keep the cars and you were gazelle intense, you could just go ahead and plow through it and the debt snowball and keep the cars. But it sounds like you don't really want this two-door car anyways. Yeah, it's a big hassle. And actually, I did get an offer from CarMax, which was $10,000. I don't think I was supposed to see this, but they said they were going to list it for $18,000.

Yeah, they're about to make some bank off of that. Trying to take you for a ride. Well, you owe $12,000, so I don't like the idea of you kind of going underwater for this deal. So I would hold and see what you can get for it. Top dollar, clean it up nice, take real good photos, list it on all the major places, Facebook Marketplace, Craigslist, Autotrader, you name it. Okay, cool.

Sound good? Good luck, man. All right, you're on the right track. I feel for my Bostonians out there. Yeah, it's tough. All right, let's go to Juliet in Winston-Salem, North Carolina. What's going on, Juliet? Hi, George and Jade. on juliette hi george and jade uh my husband and i are having a little bit of a disagreement

and was hoping that you could help sort it out yes we love getting in the middle of do you want to be right are you hoping you win i think there's an argument where we could both be right i like it i. I like it. Is he there? We are on baby steps four, five, and six. We raced through two and three in the last few months, thanks to your book, George. Oh, awesome. Love to hear that. Congrats. You guys did the work. You busted it. So the dilemma is we have been trying to have a baby. It hasn't happened. He wants to keep going through with stork mode, and I would rather put more towards paying off the house investing. So you're not pregnant yet? I am not. But he's considering it stork mode. Did I hear that right?

Yeah. We are a single income family with myself working, actually, and I think he's concerned that I could get laid off or something else happens and then we're having to cover daycare and I hold the health insurance for us. Technically, stork mode is kind of reserved for baby steps two and three. You guys have an emergency fund. How much is in there? We have around $40, guys have an emergency fund how much is in there we have uh around 40 000 in an emergency fund you sitting pretty more than six months and that's more than

your out-of-pocket max on your health insurance it is so i don't know what we're saving for at this point i think you would love to be able to have all of daycare saved up. We don't need to fund a year of daycare in our emergency fund. This guy, listen, I love the sentiment. He's thinking, if I can get ahead, I'll get ahead. Like, you know, the people who like pay their utilities years in advance and they pay everything up. Yeah, I think if he's listening listening or let him listen to this call later again stork mode and for those listening who are new it's just the idea that if you know you have a baby on the way but you're actively paying off debt if you're in baby step two you pause that

intensity and you stack up money so that you have it when baby comes but in you guys's case you're at a baby step two you've got 40 grand saved yeah you should be investing 15 of your income and anything above and beyond that. If you want to make extra home payments, you can. Now, if you're saving up for some sort of fertility, you can also do that on the side, but you guys are doing well. Yeah. And if, and when you do get pregnant, then we can say, all right, or you do get laid off. Then we need to pause and go, this is a storm. That's right. Let's pause and save up cash because you were laid off, but you guys are going to be just fine. And I hope you get that little baby here real soon. That'd be awesome. Good luck to you. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw. If you didn't

know, we've got a Ramsey Network app where you can tune into all of the shows distraction free including this show all three hours are in the app and we also have a place where you can ask questions and we'll occasionally answer those on air so this one is from dylan from the ramsey network app what does he have to say jade yeah he says my fiance has college grants and scholarships which she won't qualify for both our incomes. Okay. Should we wait to get married so she can graduate debt free? Wow.

That's very interesting. What an intersection. I want to know more. I want to know what the timeframe is. Like, are we talking, um, six months,

you know, are we talking four years? I want to know more about this. Um, my thought, are we talking four years? I want to know more about this. My thought. Can we cash flow? If we don't get the grants and scholarships, can we still cash flow? Yes.

And avoid debt. I mean, there's part of this where I go, okay, I'm thinking traditional college student. So maybe she's what, 18, 19 going in. I don't know, George, I, 18, 19 going in. I don't know. George, I feel like we need more information. I'm going to say if it's a year to postpone it, maybe. And I want to know how much school is.

When did you plan on getting married? Were you going to wait for her to graduate anyway? Yeah, yeah. So many questions, so little answers. So little answers. I can't answer this in good faith and really know what's going on. And how much would we be, is we talking $100,000? Right, or are we talking $40,000?

I don't know. Can you even go to school for $40,000? It's an interesting one, though. Dylan. I don't think there's a straight answer here. Yeah, there's not. Absolutely, you should wait, or absolutely don't wait and just cash flow it. But Dylan, call in.

I want to know more about this. I know. And does it have to be for the entire four years or are we talking semester by semester? Maybe you take it semester by semester and go, okay, you know, she starts, okay, it's about to be November. So the new semester comes up here after Christmas break. Maybe she does that one and you guys reassess. And go, can we flow the rest yeah and just combine incomes and get married and we've got it from here so that that would kind of be my thing is how can we put ourselves in a position to not need the grants and scholarships if we're itching to get that wedding and get married yeah well either way either way we don't go into debt i think that's the key point coming out of here um debt's not on the table. And if it means you have to wait a little bit,

that might be the solution. All right, we got some more. That was good. Good question, though. All right. It was all right. We need more details. Let's go to Todd in Phoenix, who we can actually talk to.

That's nice. Todd, what is happening with you? Hi. My wife and I, we've been kind of going back and forth on selling our home to pay off debt. I've been kind of an idiot the last few years. We can all say that at some point in our lives. Thank you for having the self-awareness. Yes.

Hold money out and, you know, build a pool and these things we probably didn't need to do. And, you know, we, I guess the issue, we pay our bills, we eat, we live, you know, pretty normal lives. But it's gotten tighter and tighter, and it feels like we're not really moving at all, kind of just spinning our wheels. What's your household income? About $170. And how much consumer debt do you have?

Everything but the mortgage. About $182. Okay, yeah, you're feeling it. So tell us, can you break down that 182 and by the way does that include the mortgage yeah no it doesn't okay can you break it down for us so we did a uh he lock for 60 um and built a pool and actually paid off paid off some debt with that which we then kind of racked up again. Another personal loan for about $57,000. I've got a car loan that's got $17,000 on it. What was the personal loan for? What'd

you spend the $50,000? Is it $57,000 or $5,700? $57,000. Okay, what was that for? Really stupid. I outsmart myself from time to time and I thought, okay, I'm going to do this personal loan and we're going to pay off debt. Like we paid off both of our cars and used it what I thought was kind of the right way, but then have since just kind of racked up money in other areas. Okay. So you took on debt to pay off other debt while changing zero habits and you are right back to where you were. That's a cautionary tale for anybody listening. We talk about that all the time. So you're teaching a lot of people. Thank you, Todd, for being transparent. What else do you have? So the $57,000 personal loan, what's next?

I've got that. Now I have another car loan now for $17,000, about $20,000 in credit card debt, and then 28 in, like, I did a debt consolidation kind of thing to get rid of, it's kind of the same thing, get rid of credit cards. Man, okay. I transferred to zero, you know, zero percent, like, transferred money. Are you done playing the game, you think? Like, are you, you're like, all right, I'm not going to move debt around to other debt. I want a way out. So what are you thinking about doing? Well,

so it was debating selling out. My wife is not on board. You wanted to sell the house? Possibly selling our house to pay off debt, but it wouldn't pay off everything

but do you want to know why i don't like that for you do you want to know why i don't like that for you because it's the same thing you've been doing it's another one of todd's schemes todd shortcuts and i think yeah and don't get me wrong um when people get a great opportunity maybe they get a large sum of money they get an inheritance they get a large bonus or they were going to move anyway and it ends up clearing their debt i'm happy for them but you have laid out a very long pattern of the same behavior and i'm not getting on to you for it i'm just telling you what i see based on what you said and i'm worried because the worst thing ever todd would be that you sell your house even when your wife didn't want to and you wind up in debt again. So for you, walking through the, because I always tell people when you

walk through the baby steps, right, George, that is the opportunity for you to change your habits because it's built in. You can't get out of the baby steps without changing your habits. It's automatic almost. And so I, as painful and as tough as it can be, I would prescribe if I were the person writing the prescription that you walk through the baby steps and you do this the old-fashioned way. Okay. And we've done that before. I mean, we have been relatively dead, I said,

minus a car payment or something, you know. Sure. We've paid off credit cards before. We've paid, you know. But you've never been completely dead-free while you've been married? No. No, I mean, when we first bought our house, the only thing we had was the house and a car loan.

Is your wife on, is she on board to do the baby steps? Because I think what you're going to have to go back to her and say is, all right, fine, we won't sell the house, but we're going to have to go back to her and say, all right, fine, we won't sell the house, but we're going to have to sacrifice like crazy. No, she's much more responsible than I am. Okay. I was going to ask who's the spender. It's me.

And she doesn't insist on anything. She doesn't ask for, you know, to do any of the things that I come up with. It's mostly like. So she's been a passive passenger for all of your schemes. Yeah, she never tells me no. Not even a disdainful look? I don't think my wife would allow me to do all this and not have a blow-up argument yelling at me.

How has she been totally cool with all of this? I mean, we pay our bills. You wouldn't... She doesn't feel it. Outside looking in, we pay our bills. Like, you wouldn't, you know. She doesn't feel it. Outside looking in, we pay our bills. We haven't made a payment on anything in, you know, 20 years. So everything is comfortable, but it's less comfortable. And that's what I want to warn you about, Todd, going into this.

George and I see both sides of this all the time. When people call in and their income is low and they've got to go out and hustle and grind to get the money, it's almost easier for them to do what we teach than a person like you who has a great income and you're going to have to downsize. And kind of what you just said before, like the debt didn't really show, we were able to cover it up and make the payments on time. When you get out of debt, I'm just letting you know right now it shows and it's going to show. And that same part of you that kind of liked being able to show off with the money and the pool and doing all those things. I'm talking to you because I recognize myself in what you're saying. That same part of you that liked showing that that's going to be the part that hurts the most when you

show the opposite, which is we're downsizing our cars and we're downsizing and we're selling things and we don't go out as much. And I don't buy the things that I used to buy. Your family's gonna see it. Your friends are gonna see it. You're gonna feel it. And that's just part of the process. Don't let that deter you.

That's how you know it's working. That's how you know the medicine's getting in. That's right. So let's get to work. I mean, 60K a year thrown at this debt, three years, it's all gone. Making 170. How do we find that margin? We need to make more. We need to spend less. Let's get to work. I mean, 60K a year thrown at this debt, three years, it's all gone. Making 170. How do we find that margin? We need to make more. We need to spend less. Let's get to it.

Thanks for the call, Todd. That puts this hour of the Ramsey Show in the books. Thank you to Jade Warshaw, all the folks in the booth, and you, America, we'll be back before you know it. 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.

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1749 Mallory Lane, Suite 100. Brentwood, Tennessee 37027. From the Ramsey Network, this is The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm Ramsey personality, George Campbell, joined by the one and only Jade Warshaw. We're taking your calls.

Open phones, 888-825-5225. That's the number to call. We'll try to help you take the right next step for your life and your calls. Open phones, 888-825-5225. That's the number to call. We'll try to help you take the right next step for your life and your money. Kate is going to kick us off this hour in Raleigh, North Carolina. Kate, welcome to the show. Hi, thank you guys for taking my call. I'm so grateful to be able to speak with you both. We're happy to help. What's going on in your world? Okay, so my husband and I own an investment property and we have a tenant that's gradually falling farther and farther kind of behind. We're also in baby step two. She's almost current right now. And we want to be gracious landlords and give her, you know,

as much grace as we can. But at the same time, we know that when she moves out, we're going to need probably $10,000 to put into the house to get it ready to rent to the next tenant. So we're trying to navigate how to help her if we can to stay so that we don't have to pay that $10,000 while we're still in baby step two, but also help her not dig herself deeper into a hole that she can't get out of. When's the lease up? So actually October 31st, and it goes into a month-to-month term after that.

So we need to give her 30 days notice at any point that we want to terminate. Okay. How much debt do you guys have? So we have about $60,000. We're like in gazelle intense mode right now. So we should have that paid off by March if everything stays according to plan. And do you own your house? Do you live in a house? Yes, we do. And the $60,000 is not including our mortgage or the mortgage on the

rental property. What's the mortgage on your house? Right now we owe about $200,000. And what's the mortgage on the rental? About $100,000. What's the rental worth? Probably $250,000. What's your household income? About $175,000.

Is that with the rental income? Or I guess right now there isn't a lot of rental income. Correct, yeah. That's including the rental income, yes. How much was this rental bringing in in its heyday when the tenant was paying? So we net about $500 in profit a month. It rents for $1,500 and the mortgage and HOA is about $1,000. So we get about $500 a month

in profit on it. Well, it's less than that because you got maintenance and repairs. You just told me you've got $10,000 of work to do on it too. Right. Yes. So you're losing money on it currently. That's not every year. We've only owned it for about four years. And so we haven't had any major repairs that we've needed to make to it yet, but we know that we're going to need at least paint, carpet, and a couple of repairs whenever she moves out. How long has she been in? She's been in one year.

Okay, so the whole year she's just struggled. What's the story when you talk to her? What's going on? So it's been a different story every month since May, which is what really has our antenna up. Yeah. So we want, like I said, we want to be gracious and give her the benefit of the doubt. But every month it's been, I'm having a problem with my bank or I'm traveling out of town or something just keeps coming up. And right now she only owes about $275.

What does the lease agreement say? The lease agreement says we can give her 30 days notice at any time for any reason now that the lease is going to be up at the end of October. We could, I mean, file court paperwork. Like I said, right now she only owes $275, so I don't want her to damage the house on the way out. No, but I think you could just say, hey, you know, it's $275. This doesn't seem to be working out for either of us. So when the lease is up, you know, it feels like this is too expensive for you. And I think the way you lay that out, because I definitely wouldn't want to renew a lease with

someone who's not paying. Yeah, I would find a new tenant ASAP. And you're not kicking her out. The lease is up. And as long as you give her the, you know, the days. Is there anything in the agreement about her not paying and what happens if she doesn't pay? Well, I mean, we have the right to take her to court and pursue eviction filings and all of that. I wouldn't do all that. Yeah, I don't want to. Yeah, I'd get her current and then

say October 31st, you got 30 days. Right. My concern is that she can't afford to move and she can't afford to save up for another security deposit. So she just stays and doesn't pay the rent. Okay. Well, yeah, but you can't, you can't worry about something that you don't know is, is, or is not going to happen right like let's not play that let's not assume we know what will happen if you just remind her hey just a reminder your lease is up the 31st i want to talk about that and then you guys talk talk in person not via email or letter or any like that anything like that talk in person and say hey this has been a problem you know um we love you or we like having you here but it's clearly too expensive

for you so for that reason you know and maybe i don't know i'm not a realtor and i'm not a landlord but maybe you offer an olive branch and say hey you owe 275 you're going to need some expenses to move so we're willing to waive that do do what you have to do to make this a clean break because i think to your point if she's the type of person where you are worried about her damaging the house when she leaves, that lets you know, okay, this is not somebody you want to be in bed with much longer, right? Yeah. And I don't think that she would do anything intentionally. I just, um, I'm concerned that she's going to stay longer than she needs to. And so we're not only going to not have rent coming in, but we also are going to stay longer than she needs to. And so we're not only going to not have rent coming in, but we also are going to have that expense. And you might have to listen. You might go through

that. That is part of renting is every once in a while you get a dud. But you need to remember, you're not running a charity. Yeah, this is a business. And so I think it's great to be kind. You're not being a cruel landlord. You don't the payments you can't afford this and it's it you can't let that fall on you uh because she can't rent somewhere else she can and if that might mean she gets a roommate i had to get a roommate i never could live alone up until i got married and so that's up to her to figure out what's next you did the due diligence of giving her 30 days which is what was in the contract she signed and so I think you need to be firm and you seem like a real sweet person. I don't want her to walk all over you when she sees that she can. Okay. Is your husband a part of this too?

He is. Yeah. He's more, give her notice and get her out. Yeah. He's in my boat. Yeah. and I mean, I'm not against that either. You've been very kind so far. Nothing here feels like you've been a greedy landlord who's a big jerk, but I do think you need to move on, find another tenant, and you may even want to consider selling this property. I was going to say that was my next move. Because y'all are broke, your tenants are broke. I think we might get a fresh slate if we sell this thing,

use it to pay off our debt, use it to pay down our mortgage, and then later on in life we can become landlords again when we're at a much more peaceful place financially yeah because if you sell this you're out of debt you've got three to six months of expenses there um and you might have another 10 10 000 or so left to do something else with i love that i don't know that it's worth the you know five grand a year you're making off of this okay because think about this you had a paid for property making 1500 a month that's a that's a different number but for all this hassle to make six grand minus expenses repairs maintenance i don't know that i would do it

especially while i'm in debt yeah why why grind it out when and have a tenant who's not paying when you can just go you know what i'm washing my hands of all of this. And that's a great way to get her out. Say, hey, we're actually going to sell the property. You got 30 days. Okay. I like it. That's an easy out right there, Kate.

That's what I would personally do in your shoes, but I'm not going to force you to sell your property if you love it. But right now, it's not the blessing that it seemed to be when I saw the TikTok video about becoming a real estate guru. I know. This is the reality of being a landlord. Yeah. It can be a real blessing.

You were tough, George. You were tough. I was trying to give her back the $275. You don't want to mess with landlord George. I was trying to be nice. Not today. Which is a rarity. Good cop, bad cop.

This is The Ramsey Show. Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw. Claire is up next in Raleigh, North Carolina. Claire, how can we help today? Hey, I was calling because my husband and I are working through the baby steps. We just, we're about to finish baby step two, paying off our debt this month. And we are, I'm pregnant with our first child right now. All right. When's the due date?

Yeah, so our due date's March 5th. Awesome. So I'm halfway through. Yeah. Congrats. Thank you. But we are going to finish paying off our debt this month, and we have the $1,000 emergency fund.

I currently drive a Honda sedan, and a lot of people have been telling me that I should get a minivan because it's safer for the baby. So between now and the due date, we can save up about four or $5,000. And with selling my car, we could buy a used minivan or we could build up our starter emergency fund up to about $5,000 or $6,000. So my question is, which one of those do you think should be the priority before having Which one do you think should be the priority, regardless of what everyone around you thinks, because they're so smart and they pay your bills?

What do you think you should do? I'm not sure, because the plan is for me to stay home with the baby so it'll be the first time that we're living off of just one income so that like building up the emergency fund for that seems to make sense to me but i also don't want to like get hit by a car on the highway and then my baby's well let's not have the fear mongering happen and guess what a honda sedan is plenty safe yeah and unless you're having triplets there's no need to go out and buy a seven-seater minivan just because people said it's a good idea clara i'll let you cheat off my test the answer here is we do the emergency fund because you a the baby's coming and you're gonna have to pay you might have to pay something out of pocket right so we definitely want more than a thousand dollars there you don't know how it will go i i know that it

will go safely but you know you never know and if you're staying at home we're not going to be doing a ton of traveling other than to doctor's appointments that's right yeah you you're about to be locked locked down and i gotta i have a-old, and my wife stays home, and we upgraded her car, not because we needed a safer, fancier car, but it was because Mama wanted it, and we had the cash, and we saved up. But we were in a very different place. We were in Baby Step 7. And so in the stage you're in, I would rather see you with a pile of cash to create some peace versus upgrading in car right now. Is the car reliable? It's running fine?

Yes. Okay. You're better. I mean, get a good car reliable? It's running fine? Yes. Okay. You're better. I mean, get a good car seat. That's what I'll tell you. That's really the- Invest in a good car seat. You do that and you'll be just fine. Kudos to you though, for looking at this the most economic way though. I love that you were like, we can buy a $5,000 van in cashflow as opposed to the ridiculousness of going out and trying to get payments. So kudos to you on that.

But I do believe that the emergency fund is more important. It is more important. And ask anyone over, I don't know, over 60. I mean, back in the day, you weren't getting a minivan just because you had a baby. We didn't even have seats. I'm aging myself, but I don't even feel like I was wearing a seatbelt in the back of that Cadillac that my parents drove. It was uphill both ways. No seatbelt. No seatbelt. We've come a long way with safety.

But also, I think drivers have gotten crazier and stupider over time. Well, have you seen there's a meme going around that it's like, basically, people think that drivers today are dangerous because they're texting while driving. But then in the meme, it's like, this is me in the 90s. And he's got the giant like cd book and he's flipping through the cd book while he's like driving and putting it in his six disc changer that was me simpler times simpler times all right let's move on to dimitri in springfield missouri what's going on dimitri hey um so quick question so i'm currently in alaska i already moved my family out to missouri I'm moving to Missouri as well.

So here I've been doing tile since I was 14 years old. I got my own business since I was 18. One of the bigger contractors here. And I hate my job. My question, and I'm a talker. You know, I can talk anybody into buying anything. My question is, when I move down to Springfield, should I continue with doing what I do and what I know how to do,

but hate, or should I try to pursue doing something in sales or, I guess, yeah, something in sales, because I sell people on stuff all the time. Okay. You act like you've been doing it. You're like, my whole life I've been in tile since I was 14. I 18 now i'm like okay so no i'm 20 i'm 24 okay so you've been doing this for a decade you're going i fell into the tile business don't love it i want to do something else i think sales is the skill set that i'm actually good at and that i enjoy correct yeah

okay correct well in the you know you could just try to find a sales job. I don't know what the market is in Springfield. I dropped out of school, so... The best news about sales, no one gives a rip about your degree. It is, can you sell? True that. Oh, okay. It sounds like you'd be a good interviewer.

So I would look for a sales job, and in the meantime, if you need to cover the bills, I would be doing tile because that's what you know how to do. Yeah, that's a great side job, something you do on the weekends and projects that you do on your off time. But the goal is we do tile as little as possible and we start to get the boat close to the dock so we can go into sales. And I think you'll do very well. How much were you making doing tile?

My best year so far was almost 100. Okay. So here's what I would be doing. I'd be doing tile full-time, sales on the side. And as I get better at sales and it starts to really pick up, I would do less and less tile until we've replaced that 100K with sales income. Especially because you got a family, right? Yeah, I have two kids and a wife. So we don't have as much risk tolerance as we did when we were 18 and single. And so that's why I'm telling you I would find something that's stable, consistent income. Is your wife working or is she just at home with the kids? Once we got married, I told her she's never going to work a day in her life. Wow.

All right. You're the provider, Dimitri. So I would find something you can do in Springfield. And you might find a great sales job and go right into it. I don't know. I hope you do. Okay. But I'm going to send you...

What's that? One more quick question. For me to switch professions like that, yeah, I know it's scary and risky, but on the back burner, what if it does not work out? Do I just stick with what I know? I mean, it's nice to have something that you know makes you money, right? But at the same time, with sales, I do think it could take a while to get your footing under you. I think what will happen is you'll just end up switching industries.

What you sell. Yeah, what you're selling might change. But the skill set is there. You're telling me that's what you love, and that's why I'm going to send you a copy of Ken Coleman's new book, Find the Worker You're Wired to Do. It comes with the Get Clear Career Assessment. I think we need a little bit more bones on this of I'm really good at selling. Okay, selling what?

Because you're just going to hate what you do if you sell something you hate. And so that's where we need to dial in a little bit more, dig a little bit deeper, and this resource is really going to help you. So stick on the line, and we'll help you with that. This is a common a common thing i'm seeing jade people uh especially kids they go down a path maybe that's a business that their family ran yeah maybe it's a degree they thought would pan out or a degree their parents wanted them to get and they go this ain't it yeah and i've spent so much time maybe so much money even with zeros on the end if you got student loans and it's not it. It's not it. What do you do? You got to pivot.

In the words of Ross Geller, pivot. It's hard. And I think there's a grieving you have to do. Yeah, you do. The picture of what I thought was going to be, it wasn't it. And you spent time on it. And you're probably angry, frustrated, resentful toward the people around you who said this was a path, angry at yourself.

Yeah. But there's a moment where you go, all right, I'm 24. I got a good 70 years left in the tank. You've got time. Oh, yeah. Let's change track and do it in a way that doesn't implode our life. That's right. Especially when you've got a family.

So that's why we say you want to get the boat close to the dock. What we mean is do the thing that you really want to do on the side and get it going. And then as you get better at it, you make more money doing it. Then it becomes clear what the path is going to look like to make the jump. And by jump, I really mean like a little baby leap. If it feels like a giant leap of faith, it may be not the right time. That could be tough. So George, if you were not a YouTube radio host, live speaker extraordinaire,inaire what would you be 17 things at once

i would probably be i would run like a an ad agency coming up with really creative ads to reach people in creative ways i could see that i could see that we're doing a super bowl ad for honda like it's gonna be at it okay i think just something with a lot of creativity with media that reaches a mass audience which going madman on i'm doing that now just trying to help people get out of debt instead of getting into a Honda Odyssey. So it's a different life. I like it. How about you, chef? That was easy. She knew and she'd be great at it because she is great at it. 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,

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a medical event. So listen, y'all, there's no better way to take care of health care costs. CHM programs start as low as $98 a month. So learn more today and join at chministries.org slash budgets. That's chministries.org slash budgets. Welcome back to The Ramsey Show. It's a show about you, your life, your money, your relationships, anything that matters to you. We are here to help. The phone number to call is 888-825-5225. The Ramsey Show question of the day is brought to you by YRefi.

Listen, we've all made money mistakes. So if you have defaulted private student loans, we're not judging you, but we are saying you can do something about it. Contact YRefi. YRefi was created for people in your exact situation. So go to YRefi.com slash Ramsey. That's the letter Y, R-E-F-y.com slash Ramsey. Might not be available in all states. Okay. Today's question comes from Stella in Kansas. I can't help it. Stella!

Street car named Desire? No? Wow. You are older than I thought. I have an old spirit. But anyway, today's question comes from Stella in Kansas. Our realtor is advising us to use some of our equity in our home towards buying down the interest rate on a new home that we're purchasing. Is it smart to do this instead of just putting all of the equity down into the new home? If not, is there another way that we can fund bringing down the rate? So my first thought is you could go through and do the math on the points but typically it's better to just take the money and add it to the down payment to bring down the payment and make it more affordable um you know typically if you can afford the house and you just don't like the

rate like if you can you know if they're i don't know what they're offering you say they're offering you i don't know 6.9 or that would have been a while back but whatever it's like six three now so you can get it down to six or something like that if you pay a few thousand bucks well let's say let's let's consider it before you buy it down so let's say it's at 6.45 right and you're like we can afford this i just hate the rate then we would say the whole idea here is you date the rate and marry the home. So get the house if you can afford it. And then later on, you can refinance it. Now, if there's something going on and the rate is what's keeping you from getting the home because you can't afford it under that rate. And even with the down payment,

it's a slippery slope there. I like margin and I like knowing we can afford this and there's plenty of space here and all of that. So to buy it down, I'm not going to say this because I know it's not the case for some people, but it feels almost like a desperate move. It feels like I'm doing anything to get this house. And I don't know that that's the case, but I would check that. Using that same money as a down payment instead is also going to bring down your overall payment. So you're asking, should we use some of the equity in our home?

I'm wondering why don't you use all the equity in your home to use as a down payment on the next one? That's what I would do. It's what I have done. I've never purchased points. I don't think it's worth it in most cases. Yeah, put it on the down payment. You've got to do a break-even analysis to figure out, all right, if it costs me $2,400 to buy down the mortgage by one point, and that saves me $36 a month, well, divide that into each other, and that's 67 months. So it's five years and seven

months it would take you just to break even, just to make that $2,400 back in interest. Then you'll make that 36 bucks back a month. So I just, I don't think it's worth it for most people to wait six years to break even because by then the rates will have probably fluctuated, come down and you can refinance and do a break even analysis on that. So I would not do this. What I would do is I'd get with Churchill because one of the great things about Churchill is they're going to form a relationship with you. Churchill Mortgage, by the way. They're going to form a relationship with you and they're going to help you accomplish your goals the right way and the Ramsey way. So filter this through them and

make sure that you're just not painting yourself into a corner. I think that's the big thing here is to go, okay, this is an option, but it doesn't mean it's my only option. And don't do anything out of desperation because we got to get the house. Absolutely. And they can help crunch those numbers and do the break even with you and show you, hey, listen, you can do this. It's going to take five years to break even. Probably not worth it. And they'll shoot you straight. And make sure you understand the math. If you don't understand it, don't do it. That's a good life. Just principle. Just principle. Right. Love it. All right. Let's get to the phones garyana is in atlanta georgia up next what's going on hi um so i've been listening to you guys for like a month now i've just been trying to really figure out how to consolidate this debt

that i've racked up from a previous marriage it's about in all about $50,000 worth of debt. $20,000 is due to a car that we just got. Prior to that, most of it's credit cards, about $3,000 in that. Also, we're working on getting my husband's immigration paper. So that's like $2,300 plus lawyer fees is $1,500. And we just had a baby in March. So we're just getting a little overwhelmed and I'm just trying to figure out what would be the best way to do it. I just started back working to start helping. I work two days and I make between $200 and $300 a week and he makes about $800 to $1,000 a week depending on overtime. So I started applying to more jobs. I just

am trying to figure out what would be the best option for us right now due to us not having a big support with child care. That's the reason why I don't work more. So what would be a good idea for us? So in a good month, you guys are bringing in $5,000 a month. Is that fair? Did I get that? If he's doing overtime every weekend, I would say yes. But there are some days where, since I work off commission, I'm a mobile dog groomer. There are some days where I'm not making as much as I could be. There might be a week where I don't even get any appointments with who I work with.

So what's a bad month for you guys? Tell me your lowest month that you've had. A bad month I think would be probably anywhere between $1,300. Ooh, mama. So are y'all going into debt on those months to float your expenses? How have you been surviving? So before we did all this, we had to get the car i always had like a rainy day fund of about like five thousand dollars um so we had to kind of use a lot of that so to we still have a kind of a rainy day fund that we actually really can't touch i put it uh about twenty three hundred dollars in two different certificates that is supposed to i think it's that grow with interest for 12 months.

Yeah, but you can pull that money. Yeah. There will just be a penalty on the interest you earn. Okay. So that gives you $4,600? It's about $2,300 right now. That's the rainy day fund. That's not such at all.

And why did you have to get a $20,000 plus car? So when we first got the car that's not what we thought we didn't do our um research a lot because we got it from um someone in the family who works for a car dealership my husband my husband's car went kaput and it wasn't worth fixing it's like a 2013 100 000 miles and the transmission is out so the amount of money going into it wouldn't have been worth it so we got another car so i will have to be able to get to and from work so you owe 20 000 on it it's 20 000 but y'all are going to be upset because i was listening to you guys it's through exeter finance oh no that's the reason why I wanted to call you guys so bad, because I heard

Dave Ramsey talk about it about two weeks ago on one of his podcasts, and I was like, I have to figure out a way to get out of this or do something. Yeah, for those of you who don't know, let me catch them up, Gary, on Exeter Finance. They are a subprime lender, so when you don't qualify for CarMax financing, they send you over to Exeter with a 29% interest rate on this car loan. And then they ding you for every extension and deferment you make. They'll add on fees at the end for a giant balloon payment that people can't afford. When did you get the car? How long have you had it? I've only had it for three months. Okay. What's the car worth? It's worth between $16,000 and $14,000.

Is that private party value on Kelley Blue Book? No, that's when I initially bought it. But when I looked it up, it said between $14,000 and $16,000 when I did different searches. And you didn't think spending $20,000 on a loan that wasn't a red flag at the time to go, it's only worth $14,000 and I'm paying $20,000? And didn't you say a friend? Did you tell me a friend set you up with this? You said they work at the dealership, right?

A family worked at the dealership, yes. So they didn't, you know, I'm not blaming anybody but myself. I got you. I didn't do any research that I would have done. Like when I bought my first car, that was paid off but um if i would have went somewhere else we're coming on we're coming on the break we want to give you some help here if i were you i'd take that money you told me you had two cds for 2300 i'd take that money out and clear the difference that four thousand dollar difference and then you and your husband need to save up cash super, super fast and buy yourself a $5,000 beater. That's the only way. You've got to get out of this car note,

and I know the payment is redonkulous. Especially with this income. We've got to get the income up. That is A1, and that means he needs to work as much overtime. He probably needs to switch careers, and you might need to go to work full-time and put the kid in daycare if that means you can make more as well. I'm so sorry, Gary. This is not a fun place to be. Call us back if you need us. This is The Ramsey Show. What does the future hold for business? Ask nine experts and you'll get ten different answers.

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download the CFO's Guide to AI and Machine Learning at netsuite.com slash Ramsey. It's free at netsuite.com slash Ramsey. Welcome back to the Ramsey Show. I'm George Campbell, joined by Jade Warshaw. Open phones at 888-825-5225. You call us. We'll help you take the right next step for you and your money. Reminder, Jay, the Ramsey Cruise is upon us.

It's almost sold out. We are setting sail March 22nd through the 29th. There's still a few cabins available. And as I was looking at the site, the lineup keeps expanding. We keep adding more and more special guests. And the one I'm most excited about is Trey Kennedy, one of my favorite comedians and online creators. He's going to be doing stand-up on there. Of course, we have all the Ramsey personalities. We've got music. We've got magicians. I mean, what more could you want? All-inclusive premium Caribbean cruise.

You got to join us. Book your cabin at ramseysolutions.com slash cruise. Looking forward to that in March. Truthfully, selfishly, because I need a vacation, Jade. We could all use a vacation, George. Look how pale I am. I don't want to look at it. That hurts. Don't look directly at it. I need a base tan before I hit the set sail.

Will you go to the tanning beds? I don't think I would ever go into a tanning bed. Is that still a thing? I feel like we know too much. Like science is out there telling us like hey maybe don't do that that's worse than the direct sunlight is that what you're saying i'm hoping at 90 like i'm pale but i don't look leathery you know what i mean that's my goal at this point you don't want the leather no leather you don't want to look like a catcher's man i'm

gonna wear a lot of leather you know leather but i'm gonna like the fawns that's my goal good hair leather jacket okay george we gotta mix it up a little bit. Okay. Let's do a, let's do a wild card here. I don't know where she's going with this y'all. Well, you know, we were talking, we were talking earlier a couple hours ago and we were talking about lifestyle creep. Yes. And we were talking about how it's like, you know, you earn more money, but you don't necessarily start buying a bunch of stuff. You don't necessarily increase your lifestyle like that. Or else you'll look up and go, what happened to all my margin? Or you won't be doing.

So it all started with me sitting down in my Amazon jeans and the zipper. Every time I sit down, the zipper falls down. And I'm like, blast these cheap Amazon jeans I bought. And I thought to myself, some things are worth, if you can spend a little bit more, just creeping it up a little bit. Get quality. Get quality. Yes. Over quantity. So the question I have for you as the wild card is, what is it worth it for you to spend? Just go ahead and spend the money on versus no, I will buy that cheaply and it's worth it. I jotted down a couple of thoughts here. My first thought is anything that my body sits on or lays on or my feet sit in. So shoes. Yes. I'm not going to be

out here, you know, hurting because I got cheap shoes. Yeah. Mattress. That's a big one. Oh, okay. We're going spendy. Yeah. We got to be sleeping good. Now there's a lot of mattresses now they come in a, you know, fold it up in a box that's still fine you could you can still have a good mattress out of a box but you got to get one that isn't giving you back pain okay yeah okay i'm with you mattress matters toilet paper matters and what's your brand uh charmin ultra strong that's what the camel family rocks okay i go for the the kirkland brand that is basically the equivalent of that it's the strong one yeah not the the soft one the strong one. Yeah. Not the soft one, the strong one. That's what I like. How about you? What do you, what is worth buying

full price retail name brand? I think you have to spend money on your hair. Like if you're, if you're getting a haircut, like no sport clips, no great clips. Like you got to spend money on a good haircut or good hair products. I know all all about that i spend more than my wife does on haircuts and it shows okay not on her on me i was gonna say i'll let whitney comment there but you know women get their their like a cut and color a few times a year that's right i'm out there every two weeks back at the barber seat you see what's going on here george i don't know how you do it i don't do it i go to somebody and i spend the money so you got a new look every week. I try. It's like you reinvent yourself.

I try. That's part of what we do here. Bread. Okay. I think you need to spend money and get- Quality bread. Quality bread. Don't come in here with Wonder Bread.

No Sarah Lee for you. No Sarah Lee. Wow. Yeah. Spend the money. Get yourself some nice bread. Paper towels. That's a big one.

Okay. I've tried the store brand paper towels ain't cutting it don't give me no viva is it that's the one yeah i'm a bounty guy a bounty it's hard to beat the quicker picker upper again i go for the kirkland brand costco kirkland that's second best but i've noticed there's a difference yeah and definitely no no jeans from amazon that was a mistake and yes i am going to return these even though I've worn them for three hours. Wow.

Amazon can be, you can find some good things on, like Rachel Cruz loves her, some Amazon clothes. I have yet, and maybe you guys come tell me, everything I bought from Amazon, I end up returning.

It just, I don't know if I choose it wrong or what, but yeah. It's a personal problem. Now, what do you go cheap on? Pretty much anything else. Things that, again, i'm not ingesting or putting on or near my body okay you know that okay that's a rule of thumb don't okay things that i'm not going to use forever things that i don't expect to last

a long time i'm fine to get the cheaper what's your uh this is a tell-all this is a wild card air filters yeah sorry dave i i i went for it telling our producer so tell me a wild card not dave ramsey he's not in the booth yeah not dave ramsey the other dave so yeah james is out today so people want to know what's the line item on your budget that is people would be shocked to know that this exists so i just did a youtube video that will release soon for my channel on how I manage my money. Yeah. And it was legit,

like here's the camel family expenses. And as I was laying it out, I was like, what would people be shocked by? The dogs really stood out to me. If they knew like how much we spend on the high quality dog food

that's like hypoallergenic, that doggy daycare twice a week, the dog grooming, the mobile groomer that we get once a month. Okay, wow. They would be like, you spend more on your dogs than your daughter you know what i mean so that one i think is the most shocking to me in our own budget okay our daughter would be next because she's got the

high-end european goat formula oh wow so okay yeah she goes all out high but whitney's pretty crunchy she's pretty granola when it comes to that stuff so she's looking at ingredients and she's pretty same uppity okay george thanks for revealing shoes in the warshaw family probably yeah shoe budget is strong what is gone awry recently is since i'm training for this race i've bought a lot of sneakers and i don't usually do that um and so that's i think that would be the shocker of what's going on there wow i don't want to tell more about it because you will judge me shoes and dogs strongly it's what we value dogs there's a thing if it's in the budget you're paying cash and it's what you value and you're not trying to impress anyone couldn't give a rip about your opinion so what i spent the teaching here is

lifestyle creep and i think there's a part that if you're doing better than you were you do want to enjoy the fruit of your labor but but you have to filter it through. Are you doing what makes you a financially responsible adult? So in this case, if we're talking about the baby steps, you're out of baby step two, you're out of baby step three, you are currently doing baby step four. And as long as you're doing, you've done all that and you're investing your 15%, you know, when it makes sense, you're, you know, putting a little something away for your kid's college, you're putting something away towards paying off the mortgage. Then I do think that there's an area of like, yeah, all right, I can, I can up that category a little bit. Or

if you're looking to buy a house or, you know, change houses, you can say, okay, like we can afford to do this a little bit more. Yes. The problem is people go, well, I can afford this next payment. So therefore, I'm going to pick up another 50 grand in debt because I can afford the $800 payment. That's how most people think. And that's how lifestyle creep really takes over. It does take over. You have to be careful.

A good friend one time told me, he's like, in general, you should aim to keep your expenses low, truly as low as you can, just because you should aim to keep your expenses low like truly as low as you can just because you never know like you never know what could happen i think as you get older it becomes easier to just let go and stop caring what other people think that's truly the life hack that's a superpower to stop caring what other people think because you don't realize how much that actually affects the way you spend that's true i heard rachel cruz this was a long time ago i saw her do this was a long time ago. I saw her do, this was before I worked here.

I saw her do a post on social media and it was about the motivation behind what you buy. And basically the question she asked is, if you purchase something and no one would ever see it, if it was just, you bought it, would you still buy it knowing that no one would ever see it? And it really speaks to the motivation of why did I get that? Like, did you buy that specific purse because you were thinking, I want the reaction of these specific people?

Or did you just buy it because you like it? That's true. Yeah, I think the healthier you are, the more self-respect you have, the more discipline, the less you just need more stuff. I think so too. I just haven't seen someone with a lot of stuff that I've been envious of. It just seems like an exhausting life. Look, the stuff I wanted- Maybe I'm just an old man. I'm so too. I just haven't seen someone with a lot of stuff that I've been envious of. It just seems like an exhausting life. Look, the stuff I wanted... Maybe I'm just an old man. I'm like

a boomer. I'm the youngest living boomer, Jade. You're not wrong, George. The stuff I wanted when I was in debt, because it was like, I gotta have this, but I can't have it. It's almost like you know you can't have it, so you want it. But then when you're debt free, you're like, why did I care about that? Well, hey, that was fun pontificating with you to end this hour.

If you're listening to the show on YouTube or podcast, it is about to end. But good news, we are continuing in the Ramsey Network app. So go finish the show there. Download it in the App Store, Google Play, Ramsey Network app. Search for it. We've got some good calls coming up in this next hour. You don't want to miss it. You can also click the link in the show notes, and we'll link you over there to go download it as well. Until next time, this has been The Ramsey Show. From Ramsey Network, this is The Ramsey Show,

where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined by Jade Warshaw, and we are enthused to take your calls at 888-825-5225. And Jade thinks the word enthused is funny. It was good. It was a good word. I try to pull out my inner Ken Coleman with a $10 word every now and then just to stay sharp. I like that. If you don't use it, you lose it. That is true because I was looking for a word of my own and there was nothing there but a dusty tumbleweed.

Wow, what is going on? This is going to be a good hour of calls. Let's get to it. Alex is in San Francisco to kick us off. How can we help, Alex? Hi, guys. Thanks for taking my call. Sure.

So my wife and I are expecting our third child. Part T. And I was wondering if it's wise to combine health insurance to cover the cost for the labor and delivery. What do you mean by combine? So having dual coverage, basically. Do you have coverage? Are you covering yourself as individuals or is it like through work how are you doing it now so we both have coverage through our work but her coverage is really bad okay and uh if i add her to mine uh it's a hundred dollars extra a month okay twelve hundred dollars a. But we'll have dual coverage,

so the expenses will be covered. No brainer. If you have out-of-pocket. So for $100 a month, you add her and this problem is solved? And you're wondering, is that worth it? Yes. Yeah.

That's not bad at all. Okay, so now here's the curveball. Okay. Once the baby comes, I might have to quit. Why is that? Because if we don't find daycare for the baby, I would have to stay home. What are you earning every month? I think combined, we bring in close to $9,000. What do you bring in and what

does she bring in? I think I bring close to $90,000 with overtime and she brings $75,000. Okay, so when you're pricing out daycare, are you finding that that that it's going to cost oh i think um i want to say the lowest two thousand a month okay but each of you bring in more than two thousand a month right so why not just pay the two thousand for daycare because usually that was something we were... Sorry, go ahead. I was going to say, usually when that happens, it's because what one spouse is earning basically breaks even with the daycare. And you go, well, in that case, I may as well stay home.

If her take-home pay was $2,000 a month and daycare cost $2,200 a month, it'd be worth it for her to stay home. But if she's bringing in $5,000 a month and daycare costs $2,000, well, let's just pay the daycare and still have $3,000 left over of profit, of margin in our budget. So we are thinking about that. And one of the problems that I'm facing is that we've been having our past two children have been taken care of by my mom. Okay. And, you know, she's comfortable with that.

But now with daycare, with someone that she doesn't know, she's not comfortable with that. So you're saying now, are you saying all three would have to go to daycare? No, just the baby, because the other ones are 16 and 8. Okay, again, it doesn't really shake out the reason. Because if you kept the two with grandma and then put another one, the new baby, you know, in whatever daycare that you were looking at. Help us understand the math on it, what you're thinking. So basically, like, I'm worried about her mental, like, stability in terms of not having the baby with her close by or. So your wife doesn't like the idea of the baby being with a stranger all day. And so therefore, she's like, no, one of us has to quit to stay home because I'm not comfortable with this arrangement.

Yeah, before we had the privilege to have my mom and she had nothing to worry about. Well, there's other options. Could you do like a nanny share program, something like that? Yeah, that's something else that we can do. It's going to cost more. More, yeah, exactly. And if I quit my job, we will be out of insurance for sure. And her insurance cannot even cover us. Yeah, we're not doing this, man. We're not going to give up a $90,000 a year job with great insurance coverage all so that we can avoid daycare.

Why wouldn't she quit her job? Because she's the 75, right? Well, she just got a promotion, and she's going to be bumped up to maybe 100. OK, so then she'll be the so you're making 90, then she'll be making 100. And will she get better insurance benefits with that? Sorry, we don't pay any any living expenses for the rent and all that. She's they cover that. OK, but will you be getting better? Will she be getting better insurance benefits with it? No.

Will there be any insurance benefits with it? She has the insurance benefits, but if you want to cover multiple children, it's up to $1,300 a month. That's what we saw in the coverage plan. Okay. Well, I mean, you can shop that out. We have a great insurance coverage.

You can shop that out and check out Health Trust Financial. There's a lot of different things that you can look and shop. What's the better way? Because the truth is sometimes if you shop it out, it could be better for you to go out on your own into the market. So you can do that. And if you decide to stay home, we've got to go, all right, we've got to pay $1,300 for health insurance.

That's a part of this, and we and we gotta crunch the numbers and the budget but you're telling me you guys don't pay rent right? Yeah. And you're making currently like $160,000 so what are we doing with all this money? Are you guys making progress financially? So we've been living on less than we make for the past 5 years

close to 5 years so we just save up 50% of our income. So how much money do you guys have in the bank or in liquid assets i have a hundred for a down payment on the house which we can't even afford here um and as you set aside in a city and i have 30000 for emergency funds. Okay. And the rest is just retirement. Good. What's in retirement? No debt?

The retirement is $50,000 in a 401k and $20,000 in her Roth and $20,000 in mine. Okay. And no debt? I think like $5,000 in mine. Okay. And no debt? I think like $5,000 in credit cards. Can you pay that off today and cut up the cards? Yeah, we're going to pay it off already this month. Okay.

I'm saying today. This month could be turned into next month. It could turn into next year. I don't know why we're hanging on to five grand at 22 percent apr i know you guys have money right there i this is a question of values and it's also a question of what you're willing to do to get what you want for right now you're talking about cutting your income in half to you know you were going to be making 190 and now you're going to be making $100. So that's a huge jump, step down. But again, it's your values.

If she really wants to stay at home, then she can do that. If you guys decide, hey, we're going to live this life, we're going to live on $100,000 in San Francisco, California, and we're not going to use credit cards to float our lifestyle because here's what I don't want. If you keep this credit card around, George, you're going to be calling us back in two years talking about I'm in $50,000 of debt. And so you guys, if you're going to do this, you've got to commit to this is our lifestyle and it's going to look a lot different. And that house is going to get further away

if you cut your income in half. It might be a decade before we have enough to make this happen because it's going to be tight living in San Francisco off one income. So we've got some hard conversations with the wife to have about what's going to happen next. But I would not go ahead and just quit because mom's going to be upset. We've got to figure out a different solution. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw. Open phones at 888-825-5225.

Jade, it was very encouraging earlier in the show. Someone was like, hey, we got out of debt. We got the emergency fund thanks to your book, Breaking Free from Broke. And it warmed my heart. And I love seeing stories of people going, you finally convinced me to cut up the credit cards. You translated 30 years of The Ramsey message into my language. Yes. And you got to my objections in my head before I could.

And it was the very thing I tried to do with this book, Breaking Free from Broke, that we launched earlier this year was give people this guide to more money, less stress, with a lot of humor and snark. And show you that the Ramsey principles still work in 2024. It doesn't have to be as complicated as you think. I'm going to cut through the noise and just tell you the truth. And it's easy to read. It's enjoyable to read. I think that's because I'm not like a traditional writer. That's right.

I wrote how I would want someone to talk to me about money. I think that's the secret sauce with that. And with the Ramsey books in general, by the way, but we keep them. Yeah. Dave requires us to write on a fifth grade level, which was easy for me. I was like, all right, don't have to change my ways, but I did work hard. I wanted people to, I think when you can get someone to laugh out loud while reading a book, that is a true skill. Well, truly, usually people think of money as kind of like this stuffy subject and it's only for like the the big brain people and so to make it something that's entertaining because

i think that's a work of entertainment right there not just knowledge i think that's a really good combination good job george well i also wove in a lot of research i think we had like 130 sources in there because i didn't want this to be my opinion or just, well, yeah, George has to say it because he works at Ramp. No, this is like science, man. This is data that you can't argue with on top of all the experiences. So I break down the investing traps. I cut through all the schemes. I help you build wealth with a lot of peace and confidence, whether you're 22 or 52. And I wanted to give people hope. And my story's in there of how I went from broke to millionaire in 10 years. And I want people to have confidence that it works for them. And we also included three months of the premium version of EveryDollar in there to help you live out the

plan. So go check it out, ramsaysolutions.com. Love seeing you guys gift it to friends and family after you've been inspired by it. We'll also put a link in the description as well, wherever you're listening. All right, let's get to the phones. Angelica joins us in San Antonio. What's going on, Angelica? Hi, thank you for taking my call. I'm a stay-at-home mom. My husband is a sole provider. We have three kids, and he brings in about $1,200 to $1,300 a month. We have a mortgage of about $1,650 a month, and things are just getting really tight. It's hard to stay on top of everything. We have about, I don't know, maybe about $8,000 worth of debt,

$8,000 to $12,000 worth of debt that we kind of just stopped paying creditors at this point. We're in survival mode. Has he always been making $1,000 to $12,000 worth of debt that we kind of just stopped paying creditors at this point. We're in survival mode. Has he always been making $1,300? What happened? No. Well, he was making about $1,400 before he had his previous job. But that still doesn't even cover your mortgage.

I'm confused. How are you living? Yeah, honestly, the Lord. But really, it's just like with a family that'll help with like a little bit here and there um if he gets a paycheck we just put it all to the mortgage and then the next month we're behind because this is not okay what does he do for work he is a consultant for a big tax company. And they pay him at poverty level? Yeah, they pay him about $1,200. Is he working full-time? I'm confused.

Is it like a commission thing and he's not getting gigs? No, it's not commission. It's full-time. He's sitting in about 40 hours a week, which is kind of why I'm kind of confused. How long has he been doing this job? It's about a year. a week, which is kind of why I'm kind of confused, but he, that's, yeah. How long has he been doing this job? It's about a year. Okay, and what was he doing before that?

What did he make at his max? At his max, he was making about $2,800 a month. He needs a new job yesterday. What is his skill set that he could go move to a different field i mean he could go to any retailer and make more than he's making now you know that right he could go to wendy's and make more he's making 14 grand a year he has a bachelor's uh actually he so the gross income is about 1900 a check but everything taken out all we get is about 1200 that,900 a check, but everything taken out, all we get is about $1,200. That's right. Well, everybody pays taxes, but the problem here is this is not a living wage. That's the equivalent of making $10 an hour to survive, to feed a family of five.

And it's not sustainable. So either, I mean, the income is the problem here. Yes, you do have a large mortgage comparatively to your income because it's not sustainable. So either, I mean, the income is the problem here. Yes, you do have a large mortgage comparatively to your income because it's more. We can solve that one too, but right now we need income in the door. Correct. So, yeah, because I guess I have many questions

because even when he was making his max, $2,800, you were still paying $1,650 a month for the mortgage, which is bananas. What is rent in your area? Honestly, it's about in the 2000s, but we were paying about $1,800 like a year ago. I was able to get it down to $1,200. But then I guess with like the, I don't know if it was like the taxes that went up or the insurance that went up in our area. What do you mean you got it down?

I was able to do like the appraisal on the house. And so I got the taxes down. It was still too expensive. It was still too expensive. The problem here is not, yes, your mortgage is too expensive for what you earn. But the biggest problem here is you guys don't make any money. Like you're below poverty level.

And you mentioned before, you know, families helped you out and things. You need to call up the same family that's been helping you out by giving you cash here and there and say, I need to drop these kids off because I need to go work. And you and your husband need to sit down at the table tonight and go, we have to go work. This is the minimum that we're going to bring in. Okay. And you guys have to shake on that. He needs to get his income up. I want you both finding a way to bring in at least $3,000 a month. That's the goal. That's what I want you to find. Because that's the only way to put this mortgage in its rightful place, closer to it, you know. And you've got to be able to do this. You guys can't live like this.

You've got three kids. You're going to continually go into debt at this point. Yeah, it is very overwhelming, especially with medical needs and dental needs. What is your involvement with the household finances right now? I just pay the bills. I make the payments. So it's a dowsing act every month, really. What's your husband say about all this? How does he feel? What's his emotions around it? He's not too involved in the finances, honestly. Like he just brings in the income

and I make all the payments. Does he know there's a problem? Yeah, he does. But like I said, like, you know, certain family has helped here and there. So I think that he thinks that we're kind of like, okay, with the help, but we can't keep asking for. Who's helping? Who's helping and what are they doing? His dad will help us every month. He'll give us like a thousand dollars. He needs to help him find a job. Can he do that?

Well, he did try. I mean... Does your husband just not... Is he not interested in other work? I'm confused why he's settled for a $20,000 a year income as a grown man with three kids. For 40 hours a week? That's a lot of time to give for not hardly any money.

Yeah, he actually just got a raise too. I'm so confused how this employer is even doing this legally. Yeah, here's what I want. Number one, I'm sorry that you're going through this because I think you've normalized this somewhere in your brain to cope with it. But this is this is not good. And the fact that it's been going on for a year and the fact that he doesn't really seem bothered by it, that bothers me for you. And so you're going to have to shake this loose. You're going to have to really get into a mode that it sounds like you don't typically get into with him and say, listen, I'm scared. I'm the one that feels like I'm having to carry the weight of this. And it doesn't feel like we're in this together. And when I tell you the concerns that I have about the income,

it doesn't seem to bother you. I have to figure out a way to start working. If you're not going to work, like you're going to have to have some really tough conversations. And I'm sorry that you're dealing with this. I really am. If dad stops helping, you guys lose the house. You know that, right? Yeah. I think we need to have a hard conversation with him tonight. And he needs to feel the full reality of where you guys are at financially.

And luckily, there's a way out. He goes and gets a normal paying job, 40 grand even, 50 grand. It changes everything. And I think he's worth that, and I think he has the skills. I just need him to get his mojo back and start pounding the pavement. Yeah, and if you're listening, buddy boy, it's time to get on it.

If this was Sam Warshaw, it'd be a different story. Oh, yeah. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw. Open phones at 888-825-5225. Up next, we are headed across the border to Ontario to hang out with Joshua. How can we help, Joshua? Hey, how's it going? Good, how are you?

I'm good. So I have two questions, but I'll start off with the one that's more important. So during my undergrad, I tried three different programs. So I've racked up a lot of student debt. And I'm at the point now where I've been listening to your show now, and I'm at the point where I'm working through the baby steps. Kind of loosely, if I have to admit and be honest about it. So I've put aside a thousand bucks,

but I feel like because I'm not budgeting, I'm always dipping into that thousand dollars. And now I'm on kind of baby step two and really being aggressive about paying off the student loan. So pretty much 80% of what I make from my paychecks is going towards paying off the student loan. But I also want to buy a car at this point and I want to find something that's really cheap.

But because I don't have money set aside to buy this vehicle, I was wondering, do I kind of pause and really structure and follow the baby steps properly and buy something with cash? Or can I finance a vehicle that's fairly cheap, like a $5,000 vehicle or something a little bit lower than that. What are you getting around in now? So I've moved back home. I finally figured out what program I wanted to pursue. I'm currently applying to be a firefighter. I've gone through the schooling. I was successful

through my career, but I moved back home in order to pursue this career. My mom works from home, so I've been using her vehicle. But sometimes if I'm late at work, I work as a mover. So I could be delayed and I have to come back home. And then that kind of causes issues. So you've been driving your mom's car? Exactly. Okay. How much are the student loans?

So we're at $72,000. Okay. And so I think I heard you say that you're putting 80% of your income towards the student loans? Pretty much. Yeah. Okay. And what does that mean? That's you paying the minimum plus how much extra? So I get paid right now, my salary every two weeks, I'm getting about $1,800. So I'll put aside maybe $400 or $500 for my expenses. And the rest of that is going towards that student loan. Oh, wow. Okay. So you're busting like $3,000 a month on this thing. Yeah. I think I'm at the age now where I'm like 27. Everyone's getting married, having kids,

and I feel kind of behind. So I'm really trying to get this debt down. And I've been searching for a car and obviously looking at financing before listening to your show. And every single time I go to a dealership, they're like, your credit score's not good. You've had- Yeah, don't finance it. Don't finance it. I hope we're in your head every time you think about it and they go, nope, Jay and George are going to yell at me. Don't do that. They care too much about my future. So what would it look like? Okay, there's a few options here. What if you paused, you made minimum payments,

and you just stacked up $3,000 for two months, that's $6,000, and you go buy a car? Right? That's doable, yeah. There's one option. The other option is you continue to borrow mom's car and we deal with the weird situation. I don't know that you're going to be able to just do this

until you pay off your debt and then buy a car. It sounds like we're going to need a car before then. Yeah, and that's kind of like where my head was at, was that I think it's nice right now to not have to make any car payments or anything like that, and that my mom works from home, but obviously $72,000 is way too much for me to pay within the next six months or so, so I do want to get my hands on a vehicle sooner than later.

I like George's plan. That's what I would have said as well. Take two months, save up $6,000 and get you something that gets you from point A to point B. Do your research on it well so you feel good about the purchase. Get a pre-purchase inspection and choose a reliable make and model. That's where the research is going to come into play and that inspection is going to help you avoid getting a lemon because I don't want you going, well, I got a $ make and model. That's where the research is going to come into play, and that inspection is going to help you avoid getting a lemon because I don't want you going, well, I got a $6,000 repair because I bought a car that was on its last leg.

But there are some great $6,000 cars out there that will get you by until your debt is paid off. So just know this is not a five-year car. This might be the one- to two-year car while you get the debt paid off. Then you can upgrade with cash. Okay, sounds good. I like that one. Yeah, way to go, man. This might be the one to two-year car while you get the debt paid off. Then you can upgrade with cash. Okay. Sounds good. I like that plan.

Yeah, way to go, man. Love to hear that. You're doing the plan Canada style. Canada style. I like it. Going international. All right. Maple style.

Maria is up next in Washington, D.C. What's going on, Maria? Hi, all. Thank you for taking my call. Sure. What's going on with you? So I'm in a little dilemma I'm about to leave my corporate job in about two days Two months

Is this a layoff? What happened? My project kind of came to an end And so I wasn't able to find other work And it's just policy Whenever you don't find work like they just kind of let you go shoot i'm sorry so sorry yeah what thank you what does that mean for you tell us about your situation because it's obviously causing stress rightfully so very much yeah um so about two months ago i was getting really serious about going through the baby steps um i was currently

on step two and I was able to save about a thousand per month doing the every dollar budget. I'm actively applying to jobs every day, but I'm just very anxious given that my income supported half of our household and my son who also has cerebral palsy is on my health insurance that was obviously provided by my employer. Oh, man. Yeah. What happens with the insurance?

Does it go to like a COBRA or something like that? I'm actually not entirely sure. This is the first time that I've gone through this. Okay. Yeah. Make sure you get the details on that. Generally, there's going to be a temporary insurance that you have called COBRA. But we need to find another job with benefits ASAP.

You said you're married? I'm in a relationship. We're thinking about getting married soon. Are you engaged? Not yet. Okay. So I wouldn't necessarily count on that. Are you guys sharing a household, sharing money? We are sharing a household. So we're splitting bills 50-50. And then my income

was about $107,000 per year. Wow. So when you say you're applying for jobs, hey, by the way, we're going to get you set up with Ken Coleman's proximity principle, because I mean, I'm not the career expert. I kind of wish Ken was here, but he'll tell you this day and age, if you're just applying online and just dropping in your resume, it does feel like a digital stack. Yeah. You got to be messaging real people who you know, who know people who can get you connected to a real person. That's going to be the key to you finding something sustainable. Have you always been in the contract world where it's just kind of off and on? So I was actually with this company for about six years.

So, yeah, going into the interview world is very new again. What kind of work were you doing? Government consulting. Okay. Okay. very what kind of work were you doing um government consulting okay okay yeah i think george's advice is right on it can't just be i apply on these job boards and you've got to find somebody who's working someplace you've got to get your network open and start saying all right who's hiring who do i know that works here who can put a word for me in here? Who can hand my resume to the interviewer, to the hiring partner? Because that's going to be what causes you to stand out. And then the only thing here is just perseverance. Like you've just got to keep hitting it hard and keep going at it and keep going at it.

Even if that means part-time jobs, retail, Chipotle, Starbucks, anything that you can get hourly wage and even benefits. Some of these places working part-time, you can get benefits. And so this is a swallow our pride moment because you're going to go, I was making $107,000, crushing it as a contract. And now I'm out here working a retail job. Right now, this is survival mode. And to George's point, that's so true. Take any job until you get the job because what I don't want is for a couple of months to pass and you start losing your confidence thinking, oh my gosh, I'm never going to get anything.

But if you take what you can get, then at least you're waking up every day, you're going somewhere, you're putting your, you know what I'm saying? You're having to put on real clothes and jeans, you know what I mean? Not just stretchy pants. So use that to your advantage.

Stay busy. And I promise you something's going to open up. It's just a matter of time. Definitely. And then I guess my question was financially between now and when I do get a job, how do I restructure my finances? I do have some debt and then I do have some emergency funds. Yeah. You got to cover your four walls first. I don't want any lender or creditor to get paid

before you put food on the table. And if your boyfriend can help right now during this phase, that's going to be a saving grace for you because you've got to take care of that special needs child. You've got to put food on the table. You've got to get insurance figured out. And then the creditors can get paid later on. So I don't give a rip about them. I care about you and your family. So make sure you cover the four walls first in that budget. Everything else has to go.

We've got to cut our lifestyle down to nothing until we get some stability. Thank you so much for the call, Maria. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm George Camel, joined by Jade Warshaw, our Scripture of the Day, Ephesians 2.10. For we are God's handiwork, created in Christ Jesus to do good works, which God prepared in advance for us to do. S.T. Lauder said, I never dreamed about success. I worked for it.

That'll preach. That's a mic drop. About to start a makeup line. I'm inspired. All right, let's get to the phones. Kevin is in Asheville, North Carolina. How can we help, Kevin? Hey, guys.

Thanks for taking my call. I really appreciate it. The crux of my question really kind of centers around how to rebuild an emergency fund and to do it in kind of a state of panic. Why are you panicking? So we've had a couple of small issues that we've had to dip into the emergency fund for, and then obviously here in Asheville, the hurricane is basically wiping out the rest of that emergency fund. Oh, goodness. What was the nature of this? Are you guys okay?

Is your house okay? What happened? Yeah, everything's okay. We've got some damage to the house, nothing too significant. There are a lot of others that are way worse off than we are. We are able to recover, thankfully. Well, I can hear in your voice you sound really on edge. My wife thinks that I'm panicking more than I should be.

For our situation, I'm also just a little nervous calling in, first time calling in. Okay, okay. What did you use the emergency fund for? Yeah, absolutely. So before the hurricane, before this was even a thing, my wife and I, we were older. Parents had a hard time getting pregnant. We ended up doing very well for ourselves at the beginning, ended up undergoing IVF, had our first child, wanted to go for a second child, had savings set aside specifically for that.

However, that cycle did fail. So we felt at our age, it was worth dipping it a little bit into the emergency fund to go for a second cycle. That was successful. Great. So my wife is currently pregnant. Yay. The second thing that dipped into the emergency fund is before I got the job, or when I got the job or when I got the job here in Asheville, I was commuting. And so the engine on my vehicle exploded. And so I had to rebuild the engine. It wasn't typically appropriate for us to buy a car at the time. So it made more sense for us to rebuild the engine.

What that cost? That was about close to nine. Okay thousand so what's left what'd you start with and what are you at now tell us that yeah um so started at roughly 60 um and then with the damage to the house with our deductible it's going to take us down to like 10 ish okay is what we'll have left okay um you guys have any debt? So no debt. We are debt-free. We did end up downsizing our income whenever our child came along because it was IVF.

We wanted to focus on him. So she's at home? She is. And you're working? What do you make? $135-ish a year. So you're planning on to rebuild the emergency fund?

Correct, yeah. So we're doing okay in terms of retirement and investment. We've probably got our total net worth right now is probably about $450. Okay, good. How old are you? I'm 37. My wife is 44. Okay.

So what is your question? Are you thinking, do we pause retirement in order to build this up? Retirement investing. Yeah, so that's kind of where I was going. I've put a pause currently on my contributions to my 401k, but I don't know if that's the appropriate plan. You can do that if you... Maybe this is more validation. You're not pausing it long enough for it to matter all that much.

That's right. Because we're talking like three to six months, you've got your fully funded emergency fund. You're not going to need $60,000 in there. Correct. What's your normal household expenses for a month? We're currently on the high side because whenever my wife was working, we were well over $200 on income. And so right now, we're monthly about $7.5 to $8. Is what it costs to kind of just cover the essentials for the

house? Oh, no. For bare minimum, maybe $5. Okay. So we're talking a six month emergency fund, let's say 30 grand. So you need 20 grand more to save up. How much can we put away each month from your grade income toward the emergency fund? Probably three to four. Okay. So four grand times five months, that's 20 grand. So five months from now, we hit play on the 401k and we have our 30 grand and our goal is to not touch that. Okay. And when is your wife due? March. Perfect timing. Really good. So you'll have a fully funded emergency fund by the time baby number two is here. Yes. What's your out-of-pocket max?

Out-of-pocket max um out-of-pocket max for i'm sorry insurance medical um oh uh 360 for the family okay and then for her in terms of deductible yeah i'm sorry that's okay uh deductible, I want to say $7,500, if I remember correctly. So you have that now. So that should give you some comfort to not be freaking out. Nothing here is on fire. I do think what you guys have gone through, you've lived a lot of life in the past few months. And in the year before that, you've been going, going, going, going. And so I think we have have it just takes time to go

okay nothing's coming after me nothing's chasing me and you see the people around you who maybe are at a greater loss because of these storms and you go oh that could have been me and you start to put it all into and there's some survivor guilt too of man we're better than a lot of people are doing and we don't have debt and we got money in the bank i'm also a health care worker so that makes uh the trauma a little bit harder to deal with it makes it a lot harder because you're seeing things that everybody else is not seeing yeah it's tough wow well i wish you the best kevin yeah but you guys are in a good place and you've got the plan let's just get that emergency fund stacked up yep all right let's take a quick one here from Jason in Sacramento. What's going on, Jason?

Hey, guys. Thanks for taking my call. I'll try and make this brief. My wife and I are pregnant. She's four weeks pregnant. That's great. Thank you. Thank you.

We've been married five years. I'm currently applying to medical school. She's a chiropractor, but she hasn't gone through her board exams yet, so she's not practicing as of right now. And so I'm just wondering, like, without any high income, until she's practicing and I'm in residency making some meaningful income, what should we do? You know, I don't know how we can start a family, raise a child.

So where is the income coming in right now? She is working at a school system where we live, and she's bringing in probably around $2,000 a month. I'm returning to work. I was taking time off to study for the MCAT and do other things as well. But yeah, so we don't really have a meaningful income, probably around $30,000. When does she take her boards? The process, if she gets through them like on the first attempt, because there's four parts to the boards. As soon as she could be done, it's May of next year.

Okay. And are you on a hard deadline that you have to begin the next part of your process right now? Or is there a way to stagger this a little bit? Yeah, can you be working full-time until baby's here? And then she gets a job? I could. It would be challenging gets a job? I could. It would be challenging, but I know I could do it.

I don't know if you guys have a choice. Right. Yeah. Because she can't even work. And then when she does, when she's able to work, she's going to have a baby, right? Yeah. And so that's another thing is like if I get into medical school and I start in August of next year and, you know, I'm in school and, you know, I'm unable to attend to the child during my school hours. Yeah.

And that's where the staggering comes in. When you're heading to school, she needs to be working. So when's the baby due again? Well, she's probably spreading eight months from now. Okay, eight months from now. Oh boy. I mean,

there's almost a two year delay that you'd be on because or a little less than two years because this baby's got to get here and you've got to work and then baby's got to get old enough to be able to go into childcare. So you got to stagger this. I've got to work and then baby's got to get old enough to be able to go into child care so you got to stagger this i think that's your only way i'd be looking at the calendar

and the budget going what are we going to need to do who's going to need to work and when and that might mean delaying one of these dreams of you know passing the boards being cairo and you doing medical school but it can't all happen at once this is a lot of life but i'm excited for you a baby's a great reason to figure all this out. So thank you so much for the call. This has been The Ramsey Show. Thanks for listening. We'll see you next time.