The Ramsey Show - App - Don't Let Subscriptions Own You (Hour 1)

Episode Date: June 2, 2023

George Kamel & Jade Warshaw answer your questions and discuss:  "Should I quit van life and sell my van to use as a down payment?", Jade & George share their monthly subscriptions and how they budget for them,  from the website: 5-Minute Coverage Checkup How to save for retirement when self-employed,  from the blog: 5 Investing Options for Self-Employed People "I have major storm damage to my house from a landslide and don't know if I should finance the repairs," "I'm $80k in debt and feel completely lost on how to get out of this,"  How to know if you should quit a commission job if you're not making enough income. Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Join a Personality-led FPU class. Click here! Want a plan for your money? Find out where to start: https://bit.ly/3cEP4n6 Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Interested in advertising on The Ramsey Show? https://ter.li/s64ye3 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the pods, moving and storage studio, it's the Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm Ramsey Personality, George Camel, joined by the incandescent Jade Warshaw this hour, and we are so excited to take your calls at 888-825-5225. This is a show about you, your life, your money, your struggles, your success, and we want to celebrate with you. We want to cheer you on. We want to encourage you. We want to give you some hope. And Jade, I've had about 17,000 people DM me with like in-depth financial questions and i go call the ramsay show i wish i could sit here all day long and ignore my family at night and answer all these

but it's so much easier to talk to you guys that's right please call in we love the dms but this is the right format to get through it i'm so glad you brought that up because I feel so bad. It's too many to answer. It hurts my heart. It hurts my heart. I wish I could help every single one. Me too. But I had a post go viral on TikTok last week. Of course you did, George.

Over 10 million views. And it was a clip from this show. I took a call from a 19-year-old who wanted to make a million dollars by the time he was 26. Okay. And so now all these 19-year-olds are messaging me going, I want to build wealth too how much should i have in crypto and i'm like okay call the show we'll walk you through this so thank you for the calls 888-825-5225 i'm yoda that makes you obi-wan i don't know what's the

big thing the oh what's that guy that i don't know what that was but i think what you're trying to get at was chewwbacca. Wookies? Wookies? Is that right? I was waiting for one of the nerds in the booth to help me out, but they left us all hanging. So we'll just get to the phones. I've never seen the movies, so I feel like I'm really winning at life right now.

It's time. All right. We're going to start off with Ethan in Austin. What's up, Ethan? How's it going? Hey, guys. Appreciate you taking my call. Sure.

How can we help? Yeah. Hey, guys. Appreciate you taking my call. Sure. How can we help? Yeah, my question is regarding whether I should sell my van that I currently live in, kind of an RV, for a down payment on a home. Oh, okay. So you're done with the RV life for now. You want to settle down? Well, not necessarily. I'm curious whether I should sell it or go into an apartment with my buddy and then either, you know, kind of rent out the van or to just live in it during the winters. So the options are I could sell it and rent somewhere or I could sell it, use that as a down payment, and buy a house.

Kind of, yeah. So sell it, use it as a down payment on a home, or rent an apartment in Boulder, Colorado, and then keep it, yeah. So sell it, use it as a down payment on a home or rent an apartment in Boulder, Colorado, and then keep it. And then the other six months of the year during the winter, travel around in it and then try to sublease the apartment. Do you need to sell it to make a down payment or do you already have additional cash set aside? I have additional cash, but not enough to avoid PMI. So what percentage are you at right now by the way 20 percent avoids pmi for anybody listening yeah i have about 10 grand um and i was looking to go

in on the home with a buddy so i would need 30 all in what do you mean with a buddy uh best friend from high school um we're thinking about either going in on an apartment together or uh the home oh boy but it would be under one person's name right like you're not uh yeah probably and then we'd figure out not probably no this is where it gets dicey because then five years from now one of you moves out and goes cool give me my half yeah what happens then one of you needs to own this and not only one of you needs to own it but whoever's the owner needs to be able to cover the rent on their own and the other person renting it's just gravy does that make sense so there's no weirdness okay that makes sense so i would not jump into a home unless you

can afford the mortgage on your own on a 15-year fixed where the payment's no more than a quarter of your take-home pay okay would that mean you'd have to wait? In that case? Yeah, I would rent until you can do that. It's just too risky to hope. You make 58? 68 gross, so take-home is probably about 50 to 55. Okay.

So we're talking close to 4,500, five grand a month. And so you don't want that mortgage to be more than about $1,200. And that means on a 15-year, you're probably looking at saving up for a longer period of time, even after selling the RV. Okay. Which here's the thing. Nothing's on fire, right? You've got this RV, you enjoy that lifestyle enough for it to continue to be a lifestyle even after you were to buy a home right? You've got this RV, you enjoy that lifestyle enough for it to continue to be a lifestyle even after you were to buy a home. So you've got time to really keep saving up and really keep weighing your options here. And I, you know, we said it before, but I also want to

clarify, even on the down payment, don't split the down payment. If you're buying this house, let it be your home. And just take, you know, take your time, maybe get your income up if you want to do this a little bit faster. And then to the point where, you know, okay, I'm ready to sell the RV or maybe you decide by then you don't want to sell the RV. So there's no rush is my point. How old are you? 23, just graduated college. Awesome. And how much debt do you have, if any? None, came out with no debt.

Great. And that 10 grand, is that including your emergency fund? Do you have, if any? None. Came out with no debt. Great. And that $10,000, is that including your emergency fund? Do you have a separate emergency fund? That is. That's including the emergency fund. With being in the van, it's only about $1,200 a month for living expenses all in. Okay. So let's say for your new life down the road, this $10,000 is your emergency fund.

So we're starting from scratch now to save up for the down payment. What could you get for the RV? Low estimate, 35 to 40 grand. Oh, that's pretty good. Nice. Man, that thing's going down in value. I might sell it while you can. Drop it like it's hot. While the market's still hot. Yep. And then rent with a buddy, which is a lot safer bet, while you save up. Could you still do that? I could, yeah. Boulder rents probably $1,200 minimum there. Oh, because you'd be moving. Yes.

Well, you might need to have three roommates and get a bigger place. That's right. Make it a party. But either way, you're 23. I know it feels like, man, I've got to get my money into an asset and I want to be a real estate owner. But doing it the slow way and the right way is going to give you so much more peace. Yeah, man.

Making this whole thing messy with the buddy of yours, who's I'm sure a great guy, but it's going to turn that friendship into a business transaction and it's going to destroy it eventually. And I like what George said about get however many roommates you need. At 23, you can do that kind of stuff. You're unattached. You don't have kids. That is such an opportunity that I think a lot of people don't see when they're in it. But then when you come on the other side like me, you got two kids and a husband, to try to live cheaply like that is like unheard

of. So really take advantage of that so that you can buy your home when the time comes in the best possible position. I love it. Does that help you, your home when the time comes in the best possible position. I love it. Does that help you, Ethan? Give you some options? It does. Yeah. Awesome.

Well, best of luck to you, man. That's a cool goal to have. I wish I was like the RV guy. I feel like I need like a normal shower and a normal bed, but I'm kind of jealous of the like, I'm 23, I live in the RV and I just travel. If I can have like the glamping experience where it's like you could park the camper where you want but there's got to be like a just like a hilton nearby where you can take a decent shot like there's got to be somewhere in between there

it is but the rv life is great for a season but i found many people call in and they do it for a while and they want to they want a semblance of normalcy. And they did it, they got it out of the system, and they're ready. And the problem is RVs go down in value. They do. Well, his has got a pretty decent value, and I love what you told him to do. Get out while the getting's good before it drops even more. Six months from now, that thing could be worth $32,000.

Six months later, $30,000. And so I'd rather put that towards saving up the down payment and getting into that home. Thanks for the call, man. More of those coming up at 888-825-5225. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw this hour. Open phones at 888-825-5225. Well, Jade, you came up with this idea. I cannot take credit, but you wanted to do the first tell-all on the Ramsey Show. Jade and George tell-all. Explain what's going on here. I feel like this is a moment of vulnerability. Like, I'm really Brene Browning right now, and I'm not prepared for it. Well, you know, I think when it comes to our budgets,

we're always wondering how we're pacing with the pack, right? We want to know is what we spend on groceries the same as what everybody else spends? What we spend on subscriptions? Is it normal? Is it in the middle? Are we going crazy? And so we thought it would be cool to talk to you guys about one of the areas that we're always telling people to cut down, cut back, subscriptions. So we're going to share on air our actual subscriptions that we pay for. The actual, factual numbers. In the Warshaw family and the Camel family. Who's going to go first?

That's the $10 million question. Should I be brave? You want to just do all of yours and I'll do all of mine? Is that how this works? Well, okay. Let's just go pound for pound because then I won't feel as bad good all right this is monthly like i'm paying monthly for this spotify okay that's legit what's yours mine is 14.22 a month uh so i'm on a family account because you can have up to like five accounts like my brother's on there my mom and dad my

okay that's great so that really brings the cost down to just a few bucks a month i think it's like four or five bucks a month i need to try that check it out all right xm radio 26 and eight cents oh you're in your car yeah serious yeah i don't do that i got the tesla you know so i'm just well i just have my phone so i'm usually just playing you know spot like your own playlist yeah yeah okay that's yeah that's good it is you want to know what we'll come back to that later because i have thoughts on that okay ring subscription like ring doorbell 399 oh you're right i have nest i have that too i think it's similar i think it's like five bucks a month for nest okay so while we're on that also i have nest and that is you got ring and nest, I thought I put it on here.

It's not a lot. Oh, there it is. Google Nest, $6 a month. Okay, that's the one I have. I got like five cameras all hooked up to that. Well, then I also have ADT. Oh my goodness, Jade. This is for home security.

It's Fort Knox up at the Warshaw Creek. All right. Hulu, $22.17, I think. Okay, that's fair. I don't think we have Hulu anymore. We cut it. Good for you. Thereulu, $22.17, I think. Okay, that's fair. I don't think we have Hulu anymore. We cut it. Good for you. There's just too many. At some point, I had to decide.

So then in that case, you're about to judge me hard because here we go. I'm just going to name these. Hulu, $22.17. Netflix, $21.61. Ouch. Peacock, $9.99. Disney Plus, $19.99. There it is.

Wow. I have laid. I'm proud of you. It bare here on. No caveat. We're not mad at subscriptions. We're mad when you're not paying attention, you're broke,

and you're wondering where all your money's going. Yeah. I mean, that's $125 a month. If I were to cut those, my life would go on. I'd probably be a more productive human being. I'd be more exposed to the world because I wouldn't have all my security but life would go on and i'd have 125 to throw at debt that's legit and your

family enjoys all of these hopefully now let's talk do you have yearly subscriptions like ones that you only pay once a year pay yearly and save a buck i'm i do that yeah so that's me so a lot of these are yearly uh shipped instacart i have both of those i'm balling i'm balling now i guess costco and sam's club count whoa that's a subscription kind of would you call that a subscription membership oh it has a an annual due oh that's a good point okay um i have costco i don't know what it costs i'll be honest i don't it always it's about 60 bucks a year for the normal membership that feels right but oftentimes i'm so frugal that i'll find deals like there's like a group on for sam's club where it's like 15 and they give you a 15 gift card and it's a wash and so

that's why we have both what's your most like out there subscription uh i would say dog food not for me just to be clear i was so shocked well chewy.com oh you know is that a subscription well i have it on auto so every month they ship us the very expensive dog food for our our broken dogs our french bulldogs who just have so many allergies i just don't know that i would call that a subscription because think about it like on amazon prime let's say like your paper towels you use it all the time. You can do that thing where it's- Yeah, auto ship. Okay.

We're not counting that. Fine. I don't think that's- Look, you guys can weigh in. If you're watching on YouTube, weigh in on the comments. I wouldn't call that. My most crazy yearly subscription, I have my husband- I got my husband something called Scentbird.

Oh, is that like cologne? Colognes, yes. That's cool. It's once a year. It's like a- I think it's $ cologne colognes yes that's cool it's once a year it's like a i think it's 144 a year okay then beach body oh they've gotten really expensive i had peloton for a while and i was like this is 50 60 bucks a month and i don't ride the thing so i just sold the peloton and canceled the subscription i might have needed to buy your peloton so i could have gotten rid of this beach body for $179 a year. Well, gym memberships alone can get very pricey.

Some of these bougie gyms. So you got to pick your poison there. Pick your poison. The other ones I have are nerdier. Apple iCloud storage. Oh. I got Google Drive storage now because they kept emailing me with threats of like,

we're going to delete all your emails from 2008 if you don't give us a dollar. I was like, all right, all right. Isn't that like 99 cents though it's like two bucks yeah okay and the apple iCloud i've got like the two terabyte because i'm an apple nerd i got too much stuff it's like two terabytes worth of stuff for 10 that's the world we live in so did you do any math on this like i calculated it for the year for the year it's about 1962 dollars a year that's fair i think mine adds up to about a thousand a year yeah so don't i guess the lesson the moral of the story here is just because

something seems small that stuff adds up to big numbers and this you know it kind of goes both ways if you're trying to make changes in your budget you're trying to pay off debt don't think oh it's just six dollars it doesn't count like you add that stuff up that's two thousand dollars a year if you got thirty thousand dollars of student loans wouldn't it be nicer to have twenty eight thousand dollars of student loans i mean that's really the way you gotta look at it and a lot of the time we forgot what we even subscribe to and a good way to do this on your iphone is go to settings click on your name i'm gonna do it with you and then here's the crazy part you go into subscriptions and it will

show you why you're broke oh yes a little list of active subscriptions and it'll tell you there's another one i didn't write down what is it it's called prompt smart that's right it's 20 and it renews may 4th wow well it just did there you go if you have an android device this is really easy you take your device throw it away and buy an ip. There you go. If you have an Android device, this is really easy. You take your device, throw it away, and buy an iPhone. There you go. I'm just kidding. The Android users can't defend themselves. They're all hating me.

I'm just kidding. But George, I've never had more respect for you than I do in this moment. Why? Because you just laid down the law. You laid down the nitty gritty right there. It's just fun. It's fun to push people. And because you got your ankles out.

That's true. And there's one I forgot about. My wife, Whitney, doesn't do this right now, but seasonally she'll subscribe to something called Nuuly, N-U-U-L-Y, hashtag not sponsored, but it's like a clothing subscription. So you can rent like six pieces of clothing for the month and then send them back and get six new pieces of clothing for the month and then send it back. That sounds like a great frugal hack. It's like for the wintertime, you want a coat. For the summertime, you want a dress. You can just kind of use them seasonally and not have it take up space in your closet. So this is

kind of like rent the runway, but for an entire wardrobe. Yes. Wow. And what's it called again? Nuuly. N-U-U-L-Y. All right. You heard it first here, guys. Again, none of the, we have no affiliation with any of these companies. We're just, we want to be specific. Yeah. But people then go, oh, they're spot. No, it's not spot no it's not yeah not advertisers this is not an endorsement no the point is your own caution that's right the point is to show hey like we're not up here trying to like look down on anybody we're doing the same thing every day we're trying to get our budget right we're probably have areas where we could cut back on if we wanted to you know like everybody's doing this everybody's doing their best nobody is that's right sometimes we do a little judgment here.

Let's be honest about that. But when you're in baby step two and you're going, well, I just can't, I don't have an extra dollar to spend. And I look at your budget and I see you way overspent on food. You're going out to eat three times a week. You're getting, you know, snacks at the gas station. You've got all these subscriptions that you don't need. It might be time to cut some of the luxuries that we love for a season so that we can have freedom and peace. So we cut subscriptions. That's a big one.

Most people need to cut out going out to eat or even food or grocery budget. What do you think the third big category would be? A weird one that people don't think about is insurance. People are overpaying for insurance. And I go, hey, go shop with our friends at Zander and see. And they go, oh, my gosh, you just saved me $300 a month. Wow. Between all of my different, my auto, my homeowners, bundling it all. I had this old insurance plan. I never checked it out. So that's a big one. That is pretty easy. And you can save a few hundred bucks a month. Wow. So do that coverage checkup tool that we have and you can kind of look through that. Yes. Love it. This was helpful stuff, George. We try to be helpful on the show. Even if it saves someone out there a buck,

it was worth our time. That's right. To do it. A buck is enough. Listen, we're not mad at subscriptions. We're mad at subscriptions that are costing you your financial future little by little, those little ankle biters. And it all adds up. Don't tell me it doesn't. You can have the subscriptions. Don't let the subscriptions have you. That's what it is. This is The Ramsey Show.

Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw this hour. The phone lines are open, 888-825-5225. You jump in, we'll talk about your life and your money. James is up next in Cincinnati. James, welcome to the show. Hey, thank you very much for having me. Absolutely. What's going on? So the biggest thing is I'm starting my own business this year, by the end of the year, I believe. And I went upon a best way to get retirement. And so I'm not working till I'm seven years old, like my grandpa in the same type of field. Cool. What kind of business?

It's a masonry construction business. Love it. And is this going to be solo for now? Yes, I believe I'm going to stay kind of more from over the years, listening to him and other people around us. I think I'm going to stay super small. I kind of want to be more like independent, maybe have a labor with me to help me out every once in a while, but for the most part, just stay kind of single. Yeah. Cool. And you're going, Hey, I don't work for an employer. I'm not going to have a traditional retirement account. What are some ways I can go beyond a Roth IRA, go beyond that to invest? Yes, exactly. That's the biggest thing right now. Cause I got money in the bank kind of sitting and I'm about to start up with my own business and everything. So I really don't know what to

do right now. I'm kind of stuck. I'm trying to figure that out now. Well, once you get started with the business, I like what George said for now, you know, just that Roth IRA while you're making money at your current job or moving forward. But once you get into your business and you find that you've got, you know, that margin laying around, then what my husband, there's a couple of options. A lot of people like the SEP fund, or you might look into an individual 401k. It really depends on how much money you have that's disposable that you're able to put away,

which is cool. We ended up with an individual 401k because you can contribute it from both the employer side and the employee side. And the limits are pretty high. I think you might want to double check this, but I think they're like 58,000. You can really throw some money in there depending on the type of business you have and if it's low overhead and you've just got money. Whereas with the SEP, you're only going to be contributing to it from the employer side. So you've got some options there. I love that you're

thinking ahead because so many people, when they set out with just their self-employed business, they kind of forgot, they forget about that part. Or it's kind of like, you know, they're head down, they're just trying to grow their business and they kind of forget, like, especially if they're the only one in it, I need to be putting away for retirement. Yeah, that's big. And the one that came to mind for me was the solo 401k that Jade mentioned. That can be a great option for a lot of solopreneurs out there and allow them to invest

even more than a traditional employee. So you have a lot of options out there. I would still connect with a financial advisor who can walk you through all of your options and get health insurance. This is a big one for self-employed people. They go, health insurance is expensive because I don't have it subsidized through my employer. I'm just going to skip it. Do not do that because you'll be the next guy calling in with a hundred grand

of medical bills because you got hurt in your construction business and didn't have health insurance. So look into the solo 401k and an HSA, which is a health savings account, which actually is kind of a really cool way to invest as well. It's a really cool retirement tool when done right. That's right. So James, you got a lot of options, man. I'm excited for you. Yeah, definitely. Me and my wife, we have a 10 month old baby. She's a nurse herself. So that's where I kind of get right now. I'm actually considered on my parents insurance because until I'm 26, I don't have to get off. So I'm under my dad's right now. He has a union teaching job, until I'm 26 I don't have to get off so I'm under my

dad's right now he has a union teaching job so I'm still under him so my wife is just paying for her and the baby right now um so yeah I definitely trying to plan ahead for sure because my grandpa he is 78 this year and he's still out there working and he never got a chance to do these things because he really never thought about it he told me the other day, if I could go back in time, I probably never had my own business. To me, it kind of scared me a little bit. I was kind of like, well, shoot, should I be doing this? But I think with the passion I have for it and the understanding with being as young as I am, the understanding of how to plan out, and I'm pretty decent with my money.

I have money saved in the bank, but I just really, I went to the bank the other day and deposited a check, and the guy was like, well, you have this money sitting there. What do you want to do with it? Oh, boy. Do not take advice from the bank teller, please. Someone just sent me a fortune cookie that said, a banker will sell you an umbrella while the sun is still shining. I was like, there it is right there.

But it got you thinking. Yeah, so it got me thinking the other day. I was like, there it is right there. But it got you thinking. Yeah. Like, so it got me thinking the other day. I was like, man, I need to do something because me and my wife have some money saved up. We have it set to the side and it's just sitting there and I just don't really know what to do. So I think I'm only a full fledged with this business, but I really want to just be successful, have money in the bank to where like, if I need to get something done or if I need to do something for my child, you know, it's always there and but still like to enjoy life. So like I'm just trying to find that happy medium like what to do. Well, I want to give you the book

Entree Leadership as you start your journey. And just remember, move at the speed of cash as you build this thing. Don't go into debt either on the personal side or on the business side. And I love, look, you're setting yourself up for success. You're asking all the right questions. You're digging in deep. I think that's what's really going to differentiate you from your grandfather, right? You're learning more, you're expanding your knowledge, and I'm proud of you. Very good. Yeah, you run this business debt-free. You put money away for retirement. You have retained earnings for whatever future expenses or emergency things that come up with the business, and you're going to be just fine, my man. I'm proud of you. At this young age, to have that kind of mindset, crushing it. Thanks for the call. Let's go out to San Jose. Nick joins us there. What's up, Nick? Hey, how's it going? Thanks for having me. Sure. How can we help? Yeah, so I live in California, and we had a lot of wild weather this year,

and I actually had a landslide at my house. Yeah, pretty heartbreaking. My house didn't go into the river, but a lot of our property did, and there's just a lot of repair work to get done, and I'm looking at a really hefty bill. I'm wondering your thoughts on paying for that. As you know, it's not something that insurance covers, land movement like that. So I'm looking at paying it by myself. What type of numbers are we looking at here? With engineering and permits and construction, around $250,000 to repair everything.

Goodness. Yeah. Okay. What's the house worth? About $750,000, roughly. And that's if you get these repairs done? Yeah, yeah. I don't know what it is today in the current state.

Goodness gracious. How much money do you guys have? Like in savings? Yeah. Yeah, like $120? Like in savings? Yeah. Yeah. Like 120 in savings. And then we have a brokerage account with like 90. Oh, good. What type of investments are in the brokerage account? Is it single stocks? Is it? No, it's money managed by a financial advisor. I'm not sure exactly what all the different funds are in there. What's your household income? About 160.

Okay. And do you have any debt? No debt, just a mortgage, but we have two other mortgages that are investment properties. Oh, okay. That's what I'm wondering really about. Do we sell a house possibly and pay for this, even though those are moneymakers every month and, you know, long term investments? Or do I take out another loan for, you know, 9% or more, you know? Well, we're going to take debt off the table as an option because this is an emergency.

And when you use debt for an emergency, it turns into an absolute crisis, right? Because now you owe, you know, with even more zeros on the end. So I love that you've got cash sitting around. I would liquidate the cash down to your three to six months of emergencies. And I put that towards it. And then you've got this brokerage account. That's aside from any other retirement. You could dip into that.

And then, you know, you could consider selling a house if you still need more money. The key here is cash is king, right? Yeah. So here's the sad news is all of the stuff that you've worked so hard for stacking up this cash, the taxable brokerage account, the investment property, we now need that to keep our life going. And you'll get back there. I have no doubt. The fact that you got here tells me you can do it again. But I would liquidate that brokerage account. Make sure to account for taxes on the gains on that. I would liquidate that cash you have on hand down to a three-month emergency fund.

And you might need to sell an investment property if you can't come up with the cash fast enough for the repairs. And can I find out about any coverage for landslides if there's anything out there. And if not, let's think about how we can plan. Hopefully this never happens again, but how we can plan more for the future. But between your cash that you have in the taxable brokerage, your savings and your future cash flowed income, you might be able to start this repair work and then six months from now, have another 50 grand saved to finish this out. So it's not going to be fun, man. I hate that you're going through this.

That hurts. And I'd also look into, do we need to move? Is it worth doing these repairs? Could this happen again? How do we protect ourselves for the future? Because getting another hit of 250, you know, six months from now, a year from now, that could tank you guys. And I don't want that for you.

If you listen to the show, you know that paying off debt is smart and saving and investing is smart. But there is one key to winning with money that people overlook all the time, and that is protecting your finances from emergencies. And that's exactly where insurance comes into play. Now, there's 10 kinds of insurance coverage you might need based on what your life looks like today. And to make it easy on you, our team has built a tool called the Coverage Checkup to show you exactly which types you need to add, drop, or adjust. We'll even rank your coverage list by importance. We'll email it to you and connect you with a Ramsey-trusted insurance provider

so you can get your plan in place fast. Seriously, this could be the most important five minutes you spend today. Go to ramseysolutions.com slash checkup and take that checkup coverage tool, and it's ramseysolutions.com slash checkup. Do not let an emergency sneak up on you. Protect your family. That's right, and I have to interject because we were hosting earlier this week and a guy called in, didn't have the right coverage on his wife, got in a wreck, and he owed big time.

Remember that? Yeah. I mean, not having the right insurance will cost you huge. And even if you have the right type, you might be overpaying. That's right. And so I like to shop mine every year just to see, am I still getting a good rate? Yeah. Some of our rates went down this year, which was great. Love it. All right. Let's get to the phones. John is in Wichita up next. John, welcome to the show. Hey, thanks for taking my call. Sure. I'm looking for some direction. I'm about $80,000 in debt, and I just don't know which way to go. What type of debt is it?

Various debts. I've got $20,000 in student loans, $26,000 in a car, $10,000 in a personal loan, $20,000 on a Snap-on tool truck, $3,000 on a Matco tool truck. Wow. Okay. So I want to get into this a little bit further, but let's just get the specifics out of the way. them on Mack Hotel truck. Wow. So, I want to get into this a little bit further, but let's just get the specifics out of the way.

What are you earning right now? Right now, I'm earning with two jobs about $67 a year. $67 a year. Two jobs. What are those jobs? I work for my father, a W-2 employee as a mechanic. And then at night, I'm a cook at Old Chicago.

Okay. Mechanic. Can you explain those two trucks a little bit more to me? What's that? The two trucks, the 20,000 and the 20,000? No, one's a student loan. And then the 20,000 is a tool truck. So I have tools that I use for work.

Got it. Okay, not an actual vehicle. No. Got it. Okay. Okay, so you're making 67. What is the car worth? The car is worth 14.

Oh, so you're way underwater on this thing. Did you roll negative equity into that? Right, got out of a bad relationship and got rid of the vehicle. And, yeah. Okay. How much money do you have liquid? Right now I've got a little over $1,000 saved up. Okay.

So that's your baby step one, your starter emergency fund. So our next plan of attack, there's no easy shortcut life hack here other than work your tail off, get the income up, get all expenses down, and throw the margin at that next smallest debt. Okay. Which in this case would be that small tool truck, the $3,000? Right. Okay. But here's where I want to dig in.

And you're never borrowing money again, right? Correct. I don't have any credit card debt. I got rid of that. I paid that off. I've been slowly paying stuff off. How old are you? I'm 35. 35. This is a tough lesson to learn. I mean, you're going to have to kick it. I mean, I can hear it in your voice. You're like, dang it. How did I get this much debt? But it's that reflection of looking back and going, man, what caused me to do this? What caused me to get this $10,000 loan? What caused me

to pay $20,000 for a tool truck? What caused me to do this so that you never do it again? Right. Right. So, John, here's a fun way to reverse engineer this. And I'd use this when I was getting out of debt. On average, if you follow the Ramsey plan, it takes people 18 to 24 months to get out of debt. And so if you went, all right, I have 80K in debt. I want to pay it off in two years. That's 40,000 a year. That's 3,300 a month. What do I need to do in order to throw 3,300 a month at debt? That helps me have a very specific goal because right now I'm guessing you don't have much to throw at the end of the month after your bills are paid. How much do you have you can throw at the debt?

Probably $1,000. Great. So now we know the gap. We need to go make another $2,000 somehow, somewhere. Maybe it's getting a better side gig. Maybe it's getting a third gig. Maybe it's doing overtime with your mechanic gig, whatever that looks like for you in order to shrink that gap. And let me, let me drill one bit further. Um, if in 10 years, career wise, are you a mechanic and a cook or what does that look like for you?

Um, hopefully just a mechanic and, you know, moving up in the business. Okay. So that's the, that's the dream job right there is the mechanic? Right. Okay. Are you able to do that work outside of your full-time hours? Yes. Okay. That, to me, is your best bet because your hourly rate on being a mechanic

versus being a cook, I assume, is much higher. Correct. Okay. It's about 22. Awesome. And could you even raise that? Could you say, I'm going to do side work at $35 an hour for people? Yeah, definitely.

And do you live in a neighborhood? Correct. I mean, there's probably a Facebook group in there. I'd post and say, hey, listen, I'm changing out breaks. I'm doing simple stuff I can do in your driveway. I charge $35 an hour. Here's a reference. And I bet you'd get a bunch of work this weekend just by posting that.

Okay. So get creative and get excited because right now, man, it feels hopeless, doesn't it? You're just like, oh my gosh, how did I get here? The breakup, the negative equity, the debt is stacking. I don't want to do the side job, but man, when you have that windshield and you're looking out going two years from now, John's going to be debt-free. He's going to be in a different situation. He's going to work a second job because he wants to, not because he has to. Yeah, definitely.

That's right. There is hope at the end of this. That is the good news. And we're going to gift you one year of Financial Peace University, as well as one year of Every Dollar Premium to help you along this journey. And I want you to call back when you're debt-free, we're cheering you on thanks for the call that's a tough one

george i know survivor said it there's no easy way out but john's not scared of work and that tells me there's hope yeah and he's got it he's got to just use that as fuel for the fire because you could hear it in his voice he was like defeated man like, like, ugh, I hate this. Yep. All right, let's take one more from Andrew in Atlanta. Andrew, welcome to the show. Hey, guys, thanks for taking my call. Sure. What's going on with you? Well, I have been in a sales role, base plus commission, almost two years,

and I have only been selling every single month consistently that I've been with the company, but I've only got one commission check, and I'm supposed to get it every 30 days. So in my mind, I've already made up what I want to do. I kind of want to just hear somebody else say it and make sure I'm not making an impulsive decision or for whatever reason, a bad decision. Well, have you spoken to your leader about this? Several times. What do they say? So I try, whenever I bring it up to the manager who pays it out, one of two things happens. It either gets pushed off or it gets yeah I'm working on it I get answers like yeah I'm working on it there's nothing to work on

though you close the deals right the money's in their accounts how big is this organization a total of 13 people do you think there's a lack of integrity here no and that's the catch it well not a catch but that's the i don't think anything illegal is going on my family i got this job from from a family friend basically they're there we've known them for years we you know years could go by and i find out this person's been arrested for embezzlement. I don't know. To the best of my knowledge, there's nothing shady or illegal going on. They might just be having trouble paying their bills and balancing their books and not have,

not being managing the money well, not necessarily doing anything illegal. Either way, I want to get paid on time. I cut my check, right? Yeah, you tell me I get to put food on the table and cover my bills. And therefore, I have to go find a job that can do that. I mean, you can fight for your commissions that you earned. I think that's wise to do, but I don't know if you'll get them at this point. Yeah, it's time to roll out. Man, I'm so sorry. What do you sell? So, industrial grade paint booths.

Okay, I would start looking today for something in a similar role that can pay you on time what you're owed and what you're worth. And get a new job before you quit your previous job. Leaders, treat your people well. Pay them what they're owed. It's not that hard. You can do this. Check out Entree Leadership if you want to learn more about how to run a business the right way, how to do leadership the right way. That puts this hour of The Ramsey Show in the books. Hey, George Camel here. If you love the show and you want a deeper dive on your money journey,

we've got a weekly newsletter that gives you helpful articles and tips on following the Ramsey way. Just go to ramsesolutions.com today to sign up for the newsletter. Again, that's ramsesolutions.com to sign up for our weekly newsletter.