The Ramsey Show - App - Don’t Try To Solve an Income Problem With More Debt

Episode Date: October 31, 2024

From the Ramsey Network, it's the Ramsey Show. I'm Jade Warshaw. Next to me is Dr. John Deloney. We're going to be taking calls about your life, your money, your relationships. You guys already know this, but Dr. John is the resident relationship. Can I call you a guru? You can call me anything you want to. Guru would be the nicest thing somebody call me today. I'll go with guru. And I'll hit you up on the money side and we'll cross paths as needed. If you want to get involved, this is a live show. So you can call in right now.

888-825-5225 gets you on the line. All right. We got Eric from Seattle, Washington, starting us off. What's going on? Big E. Hi, guys. Thank you guys so much for having me. You're welcome. How can we help? I'm a little bit nervous. So I'm currently a small business owner and I'm looking for your advice on what to do legally, morally and ethically. So I started a business two years ago with a good friend of mine. Well, I just knew him professionally. And after one year, he called me out of the blue and told me that he has cancer. And I felt really bad. And we decided to, you know, kind of close up, you know, our business. At that time, we had about $16,000 of outstanding balance that we owed

in various debts. At that point, I just messaged him once to see, you know, if he's okay with covering his share. He didn't respond. So I didn't want to press him because, you know, you know, he has cancer. So I just paid the $16,000 from my own pocket and we closed the business. It's been about two years now. I've been kind of just calling him, just not even mentioning money. He's like, hey, are you okay? How's it like? Is everything okay? He hasn't answered me. Doesn't reply. I was wondering what you guys would do, like, you know, legally, morally and ethically. Should I just let it go? Should I try to pursue it? Yeah. So do you feel like he's ducking you because he thinks that you're going to ask about this money?

What do you think? You know, the guy and you know what your relationship was like before this. Or is it that he's quite sick and he's kind of off the radar? I mean, knowing him, he's a little bit I feel like it can be both, really. My gut tells me that, you know, he's actually sick, but I feel like he can at least answer a text or a call in, you know, three years. I mean, you guys were friends, right? And I'm not even mentioning about the money. You were friends?

We weren't, like, friends. We just knew each other, like, professionally from, like, previous work. We worked at the same place, and, yeah. I mean, what was it like when you guys closed the business? What did that look like? Because I can't imagine running a business with somebody that I'm not in direct contact with on a daily basis. I mean, you're you're doing everything together. So what happened? Something happened that caused you guys to kind of we don't talk much anymore. Something had to have happened in my run. Am I wrong?

Yeah. Well, so we were just planning for our next stages of expansion. He was in charge of, you know, like tracking down new clients and trying to expand us. And he just called me like one day and says, hey, like, well, he hasn't been picking up my phone lately. And, you know, he finally got back to me after a week and he told me that, hey, I'm currently dealing with some health issues. And I was like, what happens? I got currently have cancer and I know he's a single dad. So, you know, I just wish them all the best. And then on the same call, we're

like, okay, well, like, you know, let's close up the business then. Cause I want you to focus on this and I can't carry this on without you. Um, so the next step was we called our accountant and, you know, we term, we submitted the, you know, the notice of termination, we got his signature. Um, and you know, then, you know, our accountant sent us the bill as well. And after that, didn't really hear back from him. Here's my thoughts, dude. On any front,

let's say he's a total scumbag and he's just playing you. To run a two or three year, I've got cancer, I'm a single dad ruse dude i want nothing to do with that human being let's say he does have cancer maybe he's in remission he's working really hard it scared him to death he's just trying to keep one foot in front of the other um or i i just go back to the emotional and spiritual calories you have burnt over the last two years for eight thousand dollars which is a lot of money yeah i don't i don't want to minimize

it but bro i i mean if i'm in your seat i'm i'm brushing my shoulders off and i'm going on about my life interesting john interesting because either you're gonna sue a guy that told you he's got cancer right yeah i don't think you have to go to that i mean can i just ask have you i know that you're saying hey i'm i'm contacting him and i'm contacting him under the guise of like seeing how he is but have you just actually said hey i don't know if you realize this but when we closed the business there were 16 000 i just paid it but are you know truthfully we went into this together um because there's business is business this is not your brother this is not your uncle like it's

not your dad like business is business and so there's part of it that i would be like hey um i would love for you to pay your half because i came out of pocket on this and sixteen thousand dollars is a lot of money and then maybe he does say bro i'd love to pay you but here's what's going on like i don't feel like there's anything wrong with opening up that conversation there's nothing wrong with it okay but what let me let me put it this way what you're doing is not working yes so either you're you're a true friend and your buddy's dying of cancer your buddy your your former business partner buddy and and you go knock on the door

and you say hey man i miss you you're not returning my calls are you all right um or you let this thing go but you just like bought lobbying a text every once in a while or log lobbying a voicemail it's just not it's it's making you crazy and if there is a hurting person on the other end of this phone uh on the other end of that line it it's not working. It's not getting through to them. Okay. So you recommend just visiting him in person or just forgetting about it?

I mean, I think, I mean, Jade and I, I mean, I think she's exactly right. Business is business. And so if you want to go track down your $8,000, the way you're trying to track it down isn't working. So either knock on his door or send a letter from a lawyer. That's really your two options. Or you've tried for two years or two and a half years. Either he's a scam artist or he's just struggling, man. And either way, he's communicating to you through his behavior. He don't want to talk to you. So let it ride. Yeah. For me, you've said nothing about this guy that denotes, man, I had a great relationship with him and I really want to keep that together. Like there's been nothing of like we used to be best friends or good buddies. At least you haven't said that in this conversation. So in many ways, it's like if you kind of press this, there's not it doesn't feel like there's much lost if you press this and he kind of gets, you know, he starts feeling some type of way about it, right? It's not like it were your dad or if this were your best buddy.

Am I right, or is there more that you didn't tell us? No, yeah, you're completely right. You're completely right. Yeah, I'd press it. The truth is, if somebody says, I don't, I'm not going to give you this money, yeah, you're not going to get it without some sort of illegal situation going on there. And you get to decide that. But I'm with John, man. I'd press him. I'd find out where he works or I'd find out where he lives and I'd pay him a visit. I'd be like, hey, man, what's going on? You just dropped off the face of the earth and check in with them first. But then it's like, hey, let's talk about this $8,000 because that's not a little bit of money.

Most people feel that greatly. So thanks for the call. Are you struggling right now financially? No, no. I mean, $8,000 is a lot of money, but it's not like it's going to kill me or I'm going to be homeless or anything. I have about some savings. Okay.

Do you want to be friends with this dude? Are you genuinely worried about him or are you reaching out just to get your money back? At this point, I think it's more about the latter than the former because it's just giving me a little more like my suspicion is just growing more and more um just because it's been you know about two years and i just even haven't heard from him back like hey is he alive okay or you know

that's what i'm wondering is he with us i i have no idea yeah so. So you're creating stories that are keeping you up at night, not him. So I would say act. Either make it a point in your spirit just to let this thing go, go get in a car and go visit him, or go contact a lawyer and have a lawyer write a letter. But those are the three direct things. You can drop it, you can friend it, or you can make it a legal action. But you just sitting around spinning up stories about what he may or may not be doing, that's making you crazy on the inside. It's not worth it.

This is The Ramsey Show. This show is sponsored by BetterHelp. All right, so I was born and raised in Texas, and I love the myth of the lone cowboy. You know, the guy who doesn't need anyone or anything. It's a fun story, and it's a lie. In our self-obsessed society, we're obsessed about our own diets, our own workout routines, our own jobs, our own social media feeds, everything.

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Happy Halloween. If you celebrate that sort of thing, are you a spooky Halloween, like creepy Halloween? I like scary movies and I like haunted houses and I love eating my body weight in candy and having everyone not like look at me like I've got something wrong with me. So I want to have a normal night without everybody looking at me like I'm crazy. Yeah. I mean, you can just mainline candy and everyone's like, yeah, it's Halloween. So I feel like I get a pass. Um, but also I like going to bed like at nine o'clock. So this is a tough night for me.

Yeah, I hear that. Are you like a chocolate or like a candy, like hard candy person? I'm not super discerning. Okay. I'm not super discerning. I always get frustrated with the Jolly Rancher folks, but other than the Jolly Rancher people,

and I got a stiff dad tax. I'm trying to teach my kids about the future of the world they're going to be inheriting with high, high taxes. And so when they get home with the candy, I go through it and dad tax it. Got you. Got you. Got you. Pretty hard. Listen, I always say payday is very underrated. I get sad every Halloween. There's less and less paydays that are given out as candy. And that's one of my favorites.

Kids like mine ruined it. Yeah. There's less and less Butterfingers going out. That bothers me deeply. With all of my heart. Yes. Kelly's less and less butterfingers going out. That bothers me deeply. With all of my heart, yes. Kelly knows what I'm talking about. All right. Well, because I talked a lot. I used to make fun of everybody when I was a kid. And that's what the universe gave me, a peanut allergy kid.

They're like, oh, that's what you get, Delaney. So it's kids like mine that are ruining it for everybody. I got you. I didn't make that connection. Now I know. There should be. Oh, my gosh. If there was an adults only peanut like candy party.

Let's move on. I realized I just wandered into some fragile territory there. That's not what I meant. I was just saying. If there was a bunch of people that got together and they were like, hey, let's all bring paydays and Butterfingers. It would have been awesome. It would be awesome, John.

All right, let's go out to Mobile, Alabama and talk to Michael. What's up, Michael? Hey, how's it going? That was a little bit weird with the adult party. Y'all are all weird. That makes perfect sense. I'm glad you called it out, Michael. We're sorry. What's up?

What's up? How are y'all doing? Good, good, good. What's up, dude? I was actually calling. I live paycheck to paycheck, man. like right under 40 grand a year um my wife doesn't work she stays at home with the kids um i've cut costs i mean as much as possible and we're still just not really saving any money like i just feel like i'm beating my head against the wall and I'm trying to get us into a house and things like that. But my main question is what is the best way for somebody like me?

I have no retirement. I have no savings. I have nothing for the future. I'm 32. You got to be, Michael, you got to make more money, brother. Like you're not making, you're not making 40 40 grand what do you do for a living um i'm uh i'm a cemetery maintenance manager okay um and you know i work 40 hours a week or whatever but i i started my own business this year uh landscaping and stuff what's that bringing it's gone it's gone pretty well i've brought in right at like $18,000 this first year. Okay. But I've also spent every single dollar getting new, better equipment,

just, you know, stuff like that. So you invested it all back in. You didn't. Yeah, and next year I'm actually in a good spot to, I think, actually make a profit, but I haven't paid myself out of that business. And I feel like I'm just killing myself trying to juggle everything and then not getting anywhere yeah on top well let me let me bust in here um tell me tell me a little bit more about your financial snapshot because we know that you're

making the 40,000 that it's I'm not gonna lie to you it's gonna be tough to to to make your way with that um and then you started the side hustle, but you're reinvesting all the profit, which in this case, if it's a side hustle, pay yourself and grow the business later. Right now you need cash. So let's find out about the debt. Do you have any debt going on? Is that robbing you? Well, so the past year and a half that I've been here, I've focused on paying all my credit cards down. I have practically no credit card debt. How much? $150. And the main things I have

are mine and my wife's vehicles. Okay, tell me what they're worth and what you owe on them. What they're worth is and what you owe on them. I mean, probably collectively $20,000 together and I owe probably collectively $30,000 on both of them. Tell me

individually tell me what you owe on it and tell me what. 41 percent interest rate um and I'm actually refined I'm in the process of refinancing it right now um but it's really all I could get at the time. And so I took it, the truck, I bought it for $15,000. Okay, at 41%. Exactly, yes, yes. Okay, and what's it worth? You bought it for $15,000, what's it worth now? If you were to Kelly Blue Bucket private sale? It'd probably be about $9,000 or or 10,000. Yikes. Okay. And what's your payment

on it? My payment is $445 a month. Sheesh. Okay. Now tell me a little bit about your wife's car. Cause I'm going to try to find you a way out of some of these payments. Cause these are what are, uh, you can't breathe you know so tell me about your wife's car uh she has a tahoe it's a 20 it's a 2013 okay um we got for 25 000 oh my years ago hey yeah what's going on here is your cars your cars are almost what you make in a year. Trust me, I know. Yeah, that's the problem. I mean, it takes literally bi-weekly, and it takes one of my checks to pay both of the vehicles and most of insurance.

Okay, so now that you feel that, then I don't need buy-in going forward. We know we've got to get rid of one or both of these vehicles somewhere, somehow. So hers is worth 25 or you paid 25 for hers. What's hers worth? If you were to sell it, not, not trade in. Probably 12,000.

Oh, what's going on? I'm sorry. Why are you going into these subprime loans? Why are you paying 41% interest in doing all this? What does it get you? On the Tahoe, we got like an 8% interest rate. I got a pretty good interest rate on there.

The thing is, it was just older, but like an 80-year-old woman had it. It had like 60,000 miles on it. It's still going great today. Yeah, but here's where I want to get you to. Here's where I want to get you to. I want to get you to the point where you look at these vehicles and you go, this was the worst decision. This is getting me nothing.

As long as you look at it and go, oh, well, it was kind of good, or I needed this, or da-da. There's not going to be much I can do to help you. You have to look at this and go, that was the dumbest thing I ever did. I'm never doing it again. That's how we know there's a turning point that's going to happen. And I hope you get to that point because, truly, something's behind this for you to make $40,000 a year

and have almost $40,000 in vehicles. I mean, you're shooting yourself in the foot at that point so to john's point michael i think i think i know what it is you don't make any money but y'all are living a life that you want to be living and what i mean by that is bro you can't afford for your wife to stay home right now y'all don't make that kind of money and i know you want that and i want it for you but you can't afford it. I have three kids as well and that's the main reason. That's even more reason.

I totally get it, dude. But you got cars that are nice and they may be old or whatever but you can't afford it. It's like this, I want to have a Tahoe. I want to have this nice truck. We're going to be a stay-at-home, single-income family. All of that works good on paper, and it looks good on Instagram.

It doesn't look good in reality. How old are your kids, man? 13, 10, 2, and my wife's pregnant right now with another one. Okay, so you have two that are in school, and you have a 2-year-old, right? Yes. Is she homeschooling also? No, no. school and you have a two-year-old right yes all right is she homeschooling also uh no no the the girls are in school and she she stays at home with my youngest and like i said she's she's seven months pregnant now okay um so she hasn't been working for i guess it's

been the past two years um she took off for my youngest let me ask you what happens we're gonna we're gonna run out of time here I just need to say this out loud, bro. You got to look yourself in the mirror and I want you to, like there's nobility in the job that you do. There's nobility in starting a side hustle. You've got to go make more money. You've got a family of five and another one on the way. You got to get rid of these cars, right?

You got to figure out these car loans and stop doing what quote unquote looks fine. You got to go scorched earth with cars, no debt. Hang on the line. We're going to give you FPU as our gift. I want you to watch those videos. And Ken Coleman's career assessment because your core income is an issue. No side hustle is going to help you get out of this. You need to change career paths and Ken Coleman can help you with that. 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.

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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. You're listening to The Ramsey Show. I'm Jade Warshaw. Next to me is the doctor, Dr. John Deloney. I'm really excited because the time is running out yet again to book your cruise, John. I've told you many times if you don't book it, you got to book it now. They're more than 90% full. And so if you were thinking about going on this cruise, now's the last chance. And there's no guarantee that you'll have another chance. So you better book it.

Yeah, it's going to go as a Christmas gift. And don't forget the Ken Coleman Pickleball Challenge and the George Camel Cannonball in the Pool Challenge. He's taking on all comers if you want to go see that. Interesting. Okay, Speedo required. Speedo required. Well, that's George's personal request. That's right.

That's right. Well, I do need to say we're talking about all of these fun amenities, but it's not your average cruise. This is actually a very premium cruise. Holland America is top draw, if you will, John. It's a nice cruise. And we're going to really nice destinations. I've cruised a zillion times.

I've been to all these places. They're actually really, really great. Turks and Caicos, Puerto Rico, St. Thomas, Bahamas, and more. Holland America's Neustadtendamm ship is beautiful. The way the theater is theater is john it's like around and all the way around uh 360 basically are leds and so it's a very immersive experience so it'll be really really fun um really great food really great entertainment there's specialty restaurants on board um there are excursions that you can do so this is all included right

everything's room services included everything's a man you can go you can have a hot dog at 3 a.m and no one's going to stop you and will they bring you uh they bring you like indigestion and anti-diarrhea that you might have to provide on your own but all the ramsey personalities are going to be there and i keep saying by the end of this is a seven-day cruise by the end of this we're going to be bffs forever we're going to be nffs we're going to be no forever friends i think we'll be bff i think we will too as long as nobody wears a speedo but there's going to be lots of celebrity guests uh it's just going to be great so book your cruise ramsey solutions.com slash cruise is how you do it or you can click the link in the description if you're listening on youtube or podcast all right i'll see you there.

Let's go to the phone lines, shall we? Wichita, Kansas, we've got Drew. What's going on, Drew? Hey, I appreciate you guys taking my call. It's a little embarrassing of a phone call, but here we are. My wife and I bought a car two years ago and we are absolutely upside down in this thing. Kelly Blue Book, I can trade it for $3,000. I could probably do a private sale of $5,500 to $6,000. We owe just about $14,000 on

the car. We are trying to figure out, do we just let this thing get repossessed and deal with the money that we're going to have to pay later on to free up that five, $600 today, or do we keep it? No, I would not do a voluntary repossession. That is going to drop an atom bomb on your credit, which is unnecessary. And you're still going to be on the hook for, it's not, I would not make that option. What's the, what's the payment on this hook for, it's not, I would not make that option. What's the payment on this for you? What's it costing you? We, $450 a month.

Okay, that's a lot. Tell us about your income. So my wife and I stepped down from ministry, just obeying Holy Spirit and rest. And I am currently driving a semi-truck. So I'm gone a lot. What do you make? Right now I'm sitting at about $40,000 to $50,000 a year. $40,000 to $50,000 a year. What are you taking home? What's it look like monthly after taxes, after all your expenses are taken out? What's it look like monthly after taxes, after all your expenses are taken out?

What's it look like that you're bringing home in your check every month? It just depends on miles. Obviously, we're looking probably two to sometimes four thousand a month. OK, two to four thousand. And is your wife doing anything during this time? No, she is a stay at home mom. mom. She's actually having a baby tomorrow. Wow, okay. And is this going to be your first child, or how many do you have? This will be number three. Wow, okay.

You know what? In many ways, this call is very similar to one we took earlier this hour. Regarding the car, you're probably going to have to bite the bullet and pay this thing off. Is it your only debt? We have a credit card of like $1,000, and then we have student loans, which are probably about $20,000. And that's all the debt that we have. Okay. Because here's the thing.

If I said, hey, go to the credit union and get a loan for the difference, but then also keep some money out to buy yourself a cash card, you'd be right back at $14,000, right? And so there's really no way getting out of it. The only difference is you might have a slightly lower payment every month, but not by much, okay? So for that reason, I would say you're going to have to bite the bullet, and how quickly can you pay off $14,000? That really needs to be the goal. This could be a lot worse. You know, John, we're not talking about a $45,000 situation. This is a $14,000 car plus a $1,000 credit card. If you both decided it's, and I'm not saying this to be ugly, but it's adult go time and

we've got to work and we've got to bring in an income, then you can clean this mess up very, very quickly. But the problem is making $2,000 to $3,000 a month, it ain't happening. Yeah. Yeah. I hesitate to get into this, but when you say the Holy Spirit told you to stop working at the church, what does that mean?

Did something happen? Did y'all get in trouble? Or did you just say my time here is done? It was a little bit of church hurt with it. I'll be honest there. But we definitely needed rest. My wife has had some health issues through this pregnancy. We just needed to focus on us and our kids.

That way, later on in life, they did not, you know, hate the church and hate being a follower of Christ. If I can be honest, just listening to your voice, you sound terrified. A little bit, yeah. Okay. You've got a pretty brittle tenor. You've got a baby coming tomorrow.

You have a job that is putting you on the road all the time. You're not home. Your wife's not doing well. You've still got – my dad was a minister for a while, too. There's a hurt like no other when your church family turns on you, right? I think you're worth more than $40,000 in your current area. Okay. And I applaud you for going to do the next thing you could do to get a paycheck to take care of your family. That's noble and that's good.

But if I were you, I'd go down and see if what would, what I could make being an assistant manager at Walmart or stocking or something like that. Cause you need to be around your family when you have this other kid. And if your wife says has had health issues, I know that's weighing on you. And I want you to make more than $40,000. Yeah. Okay? It's a scary moment right now.

Does that sound tenable? Every trucker I know is struggling right now. It's just a reality. It made a jillion dollars three years ago and people are gnawing off their arms and legs to try to make it work right now. And so I'd rather see you walk away from that and go work at McDonald's and make 11 bucks an hour and go from

there and then go down the street and throw boxes at Walmart until 11 o'clock at night and do the night feeding so your wife can go to bed. I'd rather y'all figure that out the next six months. And even if you're only making 40 or 50 grand doing that until you cobble something else together. But man, oh man, oh man, I can hear it in you, dude. I mean, the truth is when you really put math to this, if you just say to yourself, okay, let's take it a thousand dollars at a time. I need to make a thousand dollars more. If I can make a thousand dollars more a month, for the most part, I can have this car paid off. Right? I mean, that's what we're whittling it down to. And if you do that,

you're out of this car. And you do a little bit more than that, you're out of the car and you're out of the credit card, right? And then the next year you start tackling the student loan. And so just by breaking this down into bite-sized pieces, because again, similar to the call we took earlier, this is a core income issue. I don't know if your plans are to go back into ministry or not, but whatever your plan is career-wise, it has to shift from where it is right now. And I'm not going to sit here and act like that's a light switch. I think that that's more of a journey that you're going to be going on. But in the meantime, do what John said and take the jobs that you can get, because a lot of them are paying a lot more than what you're making right now. And you miss your family, don't you?

Absolutely. Yeah. If you were making $140,000 a year and this was a season, I'd give you a hug and say, man, this is a season. You're making $40,000. It's not worth missing everybody in your family and your life and watching your little baby be born without you to do that. Not when there's $40,000 worth of jobs down the street, if not more, and you can get on an assistant manager, an associate manager track,

and then go make yourself some good money down the road here. I'm proud of you, man. Let's reverse engineer this thing. And congratulations on having a new baby. And Jade and I will be cheering you guys on that you guys have a healthy birth and everything's good to go this time tomorrow. Blessings, man. This is The Ramsey Show.

You're listening to The Ramsey Show, where we help people build wealth, do work they love, and create amazing relationships. I'm Jade Warshaw. Next to me is Dr. John Deloney. Today's Ramsey Show question of the day is sponsored by YRefi. Hey, it's hard to make progress when you're trapped under an avalanche of defaulted private student loan debt, but YRefi helps you dig out and get momentum with custom refinancing based on your ability to pay and a lump sum payoff option that you could qualify for after 24 months. That's a good thing. So go to YRefi.com slash Ramsey. That's the letter Y-R-E-F-Y.com slash Ramsey. Remember, this may not be available in all states. All right, today's question comes from Isaac in Arizona.

At my current job, I was given the option to take a voluntary severance package, which I accepted. I'll be leaving at the end of the year with roughly $150,000 before taxes. My wife and I have a $175,000 mortgage, five grand in credit card debt, and we owe 40 grand on two cars. I'm already job hunting, but I don't have anything lined up yet. Given the current bloodbath in the tech industry, pause. Hey, you know what we should do? Let's make a bunch of things that make our jobs obsolete. Yeah, that sounds great. I'm praying

for the best, but planning for the worst. Assuming I'm still jobless in a couple of months, would it be better to leave the money alone until I find a job and pay myself every two weeks for living expenses or go ahead and work the baby steps regardless of my job situation? All right, so off the top of my head, you tell me if I'm wrong here. Okay.

I don't feel like Isaac's taking this seriously enough. And what I mean by that is you have no job and you're looking on the horizon and the prospects for the war. I'm assuming he works in tech. The prospects are going away. Okay. And so this is a sell cars.

This is a scorched earth. We're going to live like as though we just lost our job because we did. And yes, I guess I don't think you pay yourself a salary for living expenses but you cover your living expenses with the seven that's what a severance is for right to pay for the fact that you don't have a job yeah uh i think that you're half right okay and mostly right um this is a storm mode situation so my goal would be to not touch this 150 he listed out and there might be some information list missing here he told us how much debt he has but he didn't allude to the fact that he had any other

savings laying around which makes me think okay now is not the time to take this money and pay off a bunch of debt now is not the time to be walking the baby steps now's the time to pause and go okay this money's sitting there in case i it, but let's make sure we don't need it. And get up at six o'clock in the morning, go to the grocery store, start working. Yes. Start bagging groceries, dude. You don't have any money.

Otherwise, you're going to look at this and it could be a false sense of security. That's exactly right. And it could cause you to kind of like sit back on your haunches a little bit, wait for the perfect job to roll up, as opposed to no, I'm going to act like this money doesn't exist.

I'm going to go get it. And, you know know it might take a while but i've said this to ken and this is just my thought when you're unemployed take any job until you can get any and all jobs multiple and when they say like i'm searching how long does that actually take yeah like an hour two hours of course you can take time off if you get an interview right right right but you're shooting emails you're you might be having coffee every once in a while somebody you're making phone calls and texts go work and then work on top of that and work on top of that you're unemployed you have no job yeah because the last thing you want is to feel like the longer you go

without a job the less your self-esteem is there that's exactly right and it just you you go you bring that into the interview yes and you it sounds lame, but this is how it works, you guys. I'm sitting here because I gave a talk at a university and one of the executives here was dropping her daughter off. Show up in other places. That's right. And it might be that you're bagging groceries and somebody that you used to work with who also took this bag and found a new job is like, bro, what are you dude i'm i'm taking care of my family and they'd be like i got you

so go be seen that go bag groceries go drive go get out and take in any kind of job you can get kind of job i might um if i have 150 before taxes and you probably take home 100 110 000 or whatever that would be i might pay off this $5,000 credit card. I mean, like maybe clear that if that's all the debt you have. And I'd probably try to sell one of these cars because the 40,000 bucks total in cars is going to be what?

A thousand bucks a month probably? Oh yeah, he could definitely get out of those cars. Definitely. And I'm not mad if you paid off the 5,000, but you definitely don't have to yet. But listen, I'm with John. Go work and then go work. And on top of that, go work some more.

And go do things that cause you to form relationships with people because that's where the opportunities are in the relationships. Yes. All right. We got Brandon. He's in Grand Rapids, Michigan. What's going on, Brandon? Hey, thanks for taking the call. I appreciate it.

You're welcome. How can we help? I have $140,000 in student loan debt and a house payment, a house mortgage of $75,000. My wife and I just started on the Ramsey program. We're trying our best. I think there's a lot of fear that the mountain's just really big. Welcome to the cult, Brandon. You're in good hands, man. You're in good hands. I started having panic attacks, different things.

I picked up a second job. So working full-time plus a second job, just trying to figure out how to get the mountain taken care of. Okay. As quick as I can. Are they private? That's the only debt we have. Are they private? No, they're federal. They're of. Okay. Um, because I can't, are they private? Are they private? They're fed? Okay. Um, I'm still paying on them cause they're in the forbearance right now. So I'm still making payments on them. I've knocked about actually about $10,000 off already. That's great. Good

for you. What's the monthly payment combined? My monthly payment on the IDR is 182 but i'm putting about like three to four hundred dollars on it i think you're doing everything right as far as these student loans are concerned you you've you've utilized a payment plan to make sure the minimum payment is as low as possible and that allows you to free up all of that extra money to throw out the smallest student loan. So are they lump, is it all one lump thing or are they individual loans? So I have one that's consolidated for like $101,000 and some change and then individual ones that make up the rest of that total. Okay. And you're throwing all the extra money at just the smallest one, right?

You're calling it in or you're going on there to make that principal payment? I can, on the services website, I can dictate. Excellent. Okay. So where the money goes. You're doing that exactly right. I wish there was a easy button that I could hit for you. The only thing that's going to make this, I know, and I wish it was. The only thing that makes this go faster is you making a bigger shovel but even that i mean there's going to be a time aspect to this but tell us about the panic attacks yeah i think uh dr john i've read your book and i think the panic attacks are my body doing what it's supposed to as uncomfortable as it is yeah i was gonna say i wonder if your body's telling you the truth, right? Yeah.

They started years ago when I tried to just shove the debt thing aside and forget about it. I mean, I never did not. I was always making payments. I never shoved it aside at that point. But it was always something like, oh, I'll just pay it for the 20 or 25 years and be done with it. And then it just kept building and my body was like, which is always waiting for the other shoe to drop.

And it, it didn't, my body was like, no, we're not going to wait for the other shoe to drop. Good for you, man. What do you do for a living,

dude? So I work, believe it or not, with panic attacks. I work in community mental health. Okay. So I'm a community-based mental health worker. What's your schedule look like?

I work about 7 a.m. to 4.30 p.m. I'm a salaried employee. There might be times where I might have to work a little bit on weekends, but I try and protect that time as best I can. So can I tell you something? And you're not going to want to hear it, but this is me just trying to help, okay? Yeah.

I did a lot of my internships at a community mental health program, and they're some of the most amazing people in the world, and I've got a big heart for those programs. They also hire people who are service-oriented, who are in this for something other than the money. And I love that, but you can't afford to be doing this right now when on the other, on the other shoe, you could go do private practice and take 120 bucks of cash and get

your loans paid off. Okay. And so it might be a season where you go see what that would look like. And I'd probably tip dip my toes into it and say on Saturdays, I'm going to do private clients on my own. Do they, would they allow you to do that? Or have you signed your life away? I have not signed my life away. I'd be allowed to do that. Okay. I would recommend you start going to see clients on Saturdays, all day Saturdays at a hundred bucks an hour, do cash or 120 bucks an hour and do cash and begin to build a client list. And if in two months and three months, if you're like a lot of good therapists in town, you'll fill up real, real, real fast. And you can get up to a hundred grand or 150 grand in cash, just cooking, and then go back

to community mental health. When your, when your family is in a more secure place, you just can't afford to be making 60 grand with that kind of debt right now. That's awesome, man. There's like little to no overhead on that. Amazing. All right. That does it for this hour of the show. Thanks, John, for hosting with me. Thank you to the folks in the booth. We'll see you next hour. From the Ramsey Network, it's The Ramsey Show. I'm Jade Warshaw. Next to me is Dr. John Deloney. We're going to help you build wealth. We're going to teach you how to do the work that you love and create amazing relationships. That's what we do here. So if you want to get involved in the conversation, we'd love it if you did. It's a live call.

888-888-8255-225 is the number. That's a lot of numbers. I did a lot of eights. Do that again. 888-8255-225. It's Halloween. We got lots of kick cats. It was spooky the way I said that.

All right. If you want to get involved, call the number. And who's back there? Christian? I can't see. We'll pick you up and get you on the line. We got Vince. Smooth Jazz Christian.

I like Smooth Jazz. He answers the phone. Oh, yeah. Is that what you get? He's got the best phone answering voice on the planet. Interesting. I've never heard that voice, Christian. Whenever I see you in the hall, it's like, hey, Jade, what's up?

No, when he answers the phone, he's like laid like laid back okay good to know i got vince he's in indianapolis indiana what's going on vince hi guys thanks for taking my call you bet so i'm currently working through the baby steps right now but my question isn't about me. It's for my parents. How do I get them to be gazelle intense and, you know, start budgeting, working through the baby steps? You know, what can I do to get them on board? Listen, when you find out, tell me. Bro, write that book. You'll make a billion dollars. And hey, your second book will be how to teach teach my parents about sex oh man the two things that no parent wants to hear from their kid about is get lectured on his money and sex so tell me what is happening that has landed you here yeah so i mean i just sat down sat down with them earlier this

week just to kind of get a financial picture for them and, you know, what their retirement's going to look like. They're both 53 right now. So they got another 10 years or so before they retire. If they can afford it. Right, exactly. They've got about a hundred grand in debt, a hundred grand on a mortgage. And to my knowledge, I'd say they probably have around $800,000 in retirement. Okay. And what do they make? My dad told me that they're around the $200,000 mark, which is a lot of money. Yeah, they're doing great. They're doing good. I mean, the truth is this lump sum, a lump sum is going to double every seven years. So this $800,000 at some point is going to be $1.6,

and on down the line it'll double again. Do they have a house? Yes, they do. They have about $350 in it, and they said they can sell it for $450. For all intents and purposes, your dad and mom are millionaires, right? Almost, I think, yeah. I think if you tacked on the debt, it'd be just shy of it.

Okay. But obviously, you know, that's got to last them 20 years in retirement or whatever else. Did you call the financial picture meeting or did your mom or dad call it? You know, I kind of called it just to make sure that, you know, they're going to be okay.

Okay. Good for you for having the courage to do that, and good on them for sitting down and walking you through where they are. Most parents wouldn't do that, so that's a pretty cool situation you found yourself in. Good for you. Here's the truth. In 20, 21 years, they're going to have $6.4 million,

doing nothing different, all right? And they're in their fifties. So that puts them in their seventies. They're, they're what I would call normal in that way of, Hey, we're, they're clearly putting aside in their retirement,

but they're also carrying debt, right? That's kind of the normal American way to their point to the, into their credit. At least they've continued to save in retirement. And so I I'm with you. Yeah, I want them to pay off the $100,000 of debt. I want them to be mortgage-free before they retire.

I don't know that you will be able to convince them to do that. I like that you're thinking about that. But either way, what I thought you were going to call and say is, if my parents don't get their life together, I'm going to be on the hook for taking care of them. But I don't think you were going to call and say is, if my parents don't get their life together, I'm going to be on the hook for taking care of them. But I don't think you're going to be. Because I think they're going to have plenty of money to be able to float what they're doing.

It could be more peaceful, to your point. But I think they're going to be okay because they'll be able to live off the interest that this floats off. John, what can he do? I mean, here's what I'm going to do for you, Vince. We're going to give you a copy. We're going to give you a, I think it's a digital link here to Financial Peace University.

Okay. And it's all nine lessons. I'm going to hook you up with it. And I want you to share that with your parents. And all you have to do is say, hey, dad, mom, it really means a lot to me that y'all sat down and walked me through the finances here. Most moms and dads won't do that or they can't do that because they don't even have their house in order to even know. Thank y'all for doing that. This is something that's meant a lot to me.

It would mean a lot to me if y'all listen to this, if y'all watch these videos. That's it. And if your dad wants to ask you questions, cool. He's probably not. Like I say, he's got a million dollars. He's probably feeling pretty good. Yeah. And so he's probably got a plan,

and that plan's different than yours. We're going to love him anyway. And what we're going to do is we're going to live consistently, and we are going to reverberate peace. We're going to eat anxiety at the dinner table, at Thanksgiving, at Christmas, and eventually your family members will ask, hey, can we go for a walk?

Tell me what you're doing. Okay? But we'll give it to you, and you can give it a shot, but I think it's done fully, respectfully, and with gratitude for the transparency with which they met with you earlier. But don't get your feelings hurt if they say no. And I want you just to keep living the values and principles that you believe in. It's good for you. Yeah. Thank you for the call. That's tough. I mean,

what I thought he was going to say was what he ended up saying was a lot better because so many times we get the call where it's like, listen, my parents have misbehaved with money. I'm in my 40s. I've got my own kids. I've got my own kids who are going to college and they're hitting the age where it's like it will all hit the fan at the same time. Right. Right. When my kids are going to college is right about the time that my parents are going to be going to Social Security age. Social Security is not going to be enough. They're going to be hitting me up for funds. Right. And when you see that oncoming train, you want to have that talk with your parents to say, hey, let's talk because I don't want to be on the hook for this. I can't afford to be on the hook for this. But then to your point, John, you have to deal with the fact that they're not having it.

A lot of times they're thinking this is my life. I don't have to tell you what I'm doing with my money. Who are you to tell me what? That is a very difficult situation. And parents, if you're listening, please don't do that because in many ways, it's not that they're trying to control you. It's not that they're trying to tell you what to do. They're trying to get themselves in order.

That's right. That's right. And I think any 30 or four-year-old person who's got any sort of thinking about tomorrow in their mind and spirit is thinking about am I going to have to take care of my parents I wonder what that's like are they going to have to move in like you mentioned

we're going to hit college right when they're hitting their late 70s and I'm hearing more and more Jade that the boomer generation owns a big chunk of the real estate with a ton of equity in these homes but they're saying I'm not moving this is my house and why would they but it rate i mean but but but it's like oh your nest eggs in this house yeah like yeah i ain't moving though like what are you gonna help

out with groceries you're gonna have and it's like no no that's why we have this then you're gonna sell it i'm moving well and then the painful part of that is it's and forgive me if this sounds any sort of way but it's like if all the equity is tied up in that nest egg and you're thinking, okay, like, you know, when they pass away, this is going to the family. But then if they have a bunch of debt and you also know, like, not only is it,

but the debt is going to eat up that estate. That is just like, ah. So parents, if you can, I know it's tough, but if you're in your fifties and your kids are sniffing around trying to get information, they're not trying to tell you what to do.

They're not trying to get up in your grill. We just want to make sure we are planning. That's all I'm saying. Invite your kids over for dinner and tell them about your financial situation. Just tell us. We want to know, do you have life insurance? How much? We want to know, what do you have in your 401k? We're trying to help us by knowing about you. This is The Ramsey Show. What does the future hold for business? Ask nine experts and you'll get ten different answers. Economic growth or a recession.

Business taxes will go up or down. AI will help us work or it will replace us all. But there's no such thing as a crystal ball. That's why more than 40,000 businesses have future-proofed themselves with NetSuite by Oracle, the number one cloud enterprise resource planning system. Ramsey Solutions uses NetSuite, and you should too. Whether your company's earning millions or even hundreds of millions, NetSuite helps you respond to immediate challenges and seize your biggest opportunities. With one unified business management suite, there's only one source of truth for the visibility and control you need to make quick decisions. NetSuite's

real-time insights and forecasting help you see into the future with actionable data. And when you're closing the books in days, not weeks, you can spend less time looking backward and more time focusing on what's next. And speaking of what's next, download the CFO's Guide to AI and Machine Learning at netsuite.com slash Ramsey. It's free at netsuite.com slash Ramsey. You're listening to The Ramsey Show. Thanks for hanging out with us. I'm Jade Warshaw. Next to me is Dr. John Deloney. We are your hosts for this hour. Something exciting coming up. We're heading into the fall, and you all know that. Before you know it, it's going to be Thanksgiving, and then it's going to be Christmas, and then it's going to be New Year's. And if you're not careful, your money can go down a

slippery, slippery slope, John. But we're here to help you. We're doing a series of webinars and we've been doing them a couple of months here to make sure that you have everything you need not to lose control. And so join Rachel Cruz and the EveryDollar team. We're doing a free live training. This one is Monday, November 4th at 1 p.m., 12 p.m. Central Time. This is your lunch break, right? I just got off of one and it's great. There's so many people on there.

Over 100,000 people have registered over the lifetime of these events and people love them. If it's your first time, you can do it. If you've been to a couple before, but you still have more questions, you can still sign up. And by the way, if you're not available right at that time, still sign up because you can watch it later on

when you are available. And so the way to register is you just go to ramseysolutions.com slash webinar. And this, that's it. We'll provide the rest. This is the number one way, guys, for you to eliminate your debt. This is the number one way for you to learn to build wealth,

the number one way for you to get on the same page as your spouse, and the number one way for you to eliminate stress. It all starts with the budget. So get help with what you need. These EveryDollar webinars are popping off again. That's Monday, November 4th at lunchtime. We'll see you there. All right, John, you ready to go to these phones?

Let's do it. Let's go out to Harrisburg, Pennsylvania and talk to Shannon. What's up, Shannon? Hi. Thanks so much for chatting today. I very much appreciate all of the advice we've gotten from you and FPU over all these years. So it's great to talk to you. Thank you so, so much.

How can we help? So my husband and I are 54. We are debt-free except our mortgage, which will hopefully kick off next summer. Wow. Congrats. Yeah. Thank you. So we have three children.

Our oldest is halfway through college and doing well. I'm sorry, our youngest. But our oldest is halfway through college and doing well. I'm sorry, our youngest. But our oldest is 25. He's also a college grad. He's got a great job, works with Excel. He's a numbers guy. And he's paid off all of his student loans that he had. He's a great saver.

He's thriving by pretty much any measurements you put out there on paper. He lives with us still, not because he couldn't live on his own necessarily, but he has autism. And by staying with us, he stays connected socially and emotionally, which is definitely in his best interest, but not something he would necessarily do on his own. We think at some point down the road, he will likely move out on his own. But as much in his life has been, it's just kind of on a later track. So we're trying to think through how best to help him be well positioned for that independence when the time comes, personally and financially. And I would welcome any guidance or input you have on us helping him be well set and think through those things. Yeah. I mean, kudos to you all.

It sounds like y'all have done a lot of work and walked alongside him with, in the places where he's accelerated past his, those who would be inside, you know, his like the normed age of development and those times when it's been slower, right. And it's just taken more time to get there. So good for you guys. Over the course of my career, I've worked with graduate career, I've worked with graduate students. I've worked with law students. I've worked with any number of students who are somewhere on the spectrum. And in fact, where I went to grad school, um, the connected to the

college of education where I was in, um, the, the Burkhart school for autism was there. And it was a, it was a magical place where I saw them do some amazing things with young people um transitioning in and out i think the here's some i can just throw it out there and only you will know where your son falls in terms of um where his spectrum disorder is and how he does socially let me ask you this one question before i start just throwing things out there if If he finds himself alone, meaning like you go, you guys go out of town for a week, does he end up just watching YouTube over and over again or watching videos over and over again or playing video games over and over again? He, that is certainly his bent. When we have gone out of town, we'll have friends or family kind of check in and make sure he gets invited to dinner or to movies or something so that he's not either working or being on a video game. who are on the spectrum disorder at some place, on the spectrum someplace,

the allure and the way they've engineered these screens and social devices in the games, it's like their brains have been hacked. And it's tough for any of us, much less somebody with some sort of processing challenge. So I would recommend this. One, and this is a hard thing, this isn't me indicting you, this is just my experience working with parents.

You and your husband, y'all check yourselves first. Sometimes, not always, but sometimes letting go of the leash a little bit or a lot robs a parent who has spent their whole life advocating and defending and fighting for their kids with special needs or exceptionalities or specific challenges. It robs them of their identity. And so make sure that you and your husband are intentionally together and you're

intentional about feeling that loss, that sense of purpose as you let him go into the world. The second thing is I would get with a, an ABA usually works with younger kids, but I'd find any sort of group or any sort of connection where he can begin what I would call a, this is the wrong language, but some sort of outpatient where he can go hang out with some guys in the evenings, hang out with different groups in the evenings. You might host them at your house, but we just want a group of people that he's going to be able to stay connected to. And then you guys are going to watch that closely. And for some students, they fly. I mean, it's just been, I remember it was amazing. There was one group of students at the Burkhart Center

that got involved with the theater department and they were a part of theater performances that unlocked parts of it was magic i always sat there and wept through the whole all these shows um and then there's some students who at 28 29 30 years old just slowly loop their way back to watching youtube 12 hours a night and then never sleeping until they collapse right and so you will truly come to know your kid over time with space and distance with intentionality after you're out. And it might be that he's never fully on his own. It might be that he, part of a special needs trust after you're gone, will get him a garage apartment in

one of his brothers and sisters' houses or in like an extended care kind of place. But I think it's you guys just facing that reality head on. Right. On the financial side, like I said, he has a great job. He is a phenomenal saver. So what are some ways that beyond us considering a special needs trust, like we have him set up. He started a Roth IRA this year. What might be some other ways that we can encourage him, even as he is such a saver, to be making that investment in his future?

I think a lot of the things that you would do for yourself, you just transfer it and teach him how to do it. So if you're a proponent of the baby steps, then we're teaching that same method of managing those finances. The fact that you're doing a Roth IRA is great. If you max that out, then now we're going to a brokerage account. And so having that money there, does he make enough that if he were able to live on his own that he could? Oh, yeah. Yeah, I think that's great. I think at that point, you're managing the funds the same way you would. You're teaching him about how to budget. We're

saying this is how much we're spending and we're giving every dollar a name. And then we're going and saying, OK, beyond that, what are we investing for? Are we going to buy a place? Is there going to be a property that he lives at? And you guys are, again, with the social things, I think John has given you a good construct there. But I think if you find that there's a time where he moves on and out of your house, I think it's great to have those assets in his name. And then all of that stuff can transfer to him when the time comes and his care. Or maybe a brother or sister that's got their name on the accounts too, just in case they need to step in. But also I always want to lean in the direction that's opposite of my kid's natural bent, just in case they need to step in. But also I always want to lean in the direction

that's opposite of my kid's natural bent, special needs or not. And so if I have a kid that's a natural spender, I'm going to teach them really, I'm going to let them watch me save. And if I had a natural saver that's just obsessed with saving, I'm going to show them the joy of spending money

every once in a while and the joy of giving. So, and your kid will be none the different. Congratulations. in your budget because it always goes up, never down. So when you're ready to buy, make sure you work with a mortgage partner you can rely on, Churchill Mortgage. Churchill is Ramsey trusted to help you make the move from renting to home ownership wisely. Churchill understands that when you buy a home the Ramsey way, your mortgage payment will be a consistent, manageable part of your monthly budget. Plus, when your home is paid off, that was your largest expense. Now it's extra money in your pocket and an asset towards turning you into a baby steps millionaire. So get started on the

American dream of home ownership today at churchhillmortgage.com. That's churchhillmortgage.com. This is a paid advertisement. NMLS ID 1591. NMLS ConsumerAccess.org. Equal housing lender. 1749 Mallory Lane, Suite 100. Brentwood, Tennessee 37027. You're listening to The Ramsey Show. I'm Jade. Next to me is Dr. John. We're taking your calls this hour. Get involved. 888-825-5225. Hey, has there ever been something money related? And you're like, I know I should know this, but I don't. Like I've been on this planet for a long time and I should know what the lingo is. I should know the jargon, but I just don't. And you're embarrassed to ask. That's me every day on this show.

So we started a new segment here asking for a friend and listen i'll be honest i may have been one of these people that for the longest i was really confused about like what comes out of your paycheck when you get paid i still i'm not confused i just get mad listen i know i'm not the only one and when i saw this clip, I was like, that is me. Take a look at this. My first paycheck. Look at the window. There's my name. Hi, me.

Isn't this exciting? I earned this. I wiped tables for it. I steamed milk for it. And it was totally not worth it. Where's FICA? Why is he getting all my money? Relatable.

That's so true. Like, you look at your paycheck. I mean, it happens all the time here. People call in, I'm like, how much do you make? They're like, I make $100,000 a year. But then, like, by the time, what they actually take home after taxes. Or it's funny to me,

I get madder now when I hit potholes. I'm like, no, no, no. You took my money. You fixed the potholes. Well, let's talk about what is it? Like what's happening with this payroll tax? What is FICA asking for a friend? You know, some of you are going to be today years old when you figure this out. But it's basically these this is Federal Insurance Contributions Act, right? This is that's what FICA stands for. This is what you're required to pay into basically as an American citizen.

It says the FICA tax, also known as just payroll tax, just refers to taxes that employers and employees have to pay. And these are programs like Social Security and Medicare, right? And when you, when that money goes out of your check to fund those programs, it's funding them in real time. It's not like I'm just setting this aside for me for later. It's for

everybody. It goes into a big pool for everybody. And so big picture is when you pay those FICA taxes, your money just goes into that big pool, a big fund, and it's for whoever's currently receiving Social Security, whoever's currently receiving medicare that's why we say all the time to people like hey go on ahead and fund your own retirement because you don't know what social security will be when your time comes i think they're really clearly telling us it's not gonna be very much i mean i feel like they're like we don't know and they're like we're gonna run out of money it's like yeah but we don't know i just want to know what happens if we do i want my refund back because I've been paying.

So FICA tax, it breaks down into two categories. Like I said, you've got the social security and then you've got the Medicare. And if you're wondering like, how much is this? So for employers, you're withholding 6.2. They're taking 6.2% of your taxable gross, which is, it can be pretty high depending on how much you make. But, and then they take that and they match your contribution. So 6.2 on your end, 6.2 on their end, and it goes into that big pool. And then for Medicare, it's 1.45% of your taxable wages. And again, they match that. Now the kicker is, if you are like self-employed, you pay both sides because you're the employer and the employee.

And that hurts like, you know what? Especially when you're trying to get a small business off the ground. Man, what? Yeah, yeah. I remember my mother-in-law, she always helped us with our taxes because she's a bookkeeper. And when she explained that to me for the first time back, back, back in the day, I was like, my jaw was on the floor. I was like, it's so much money but you know even if you're self-employed you still got to pay old old mr fika so freelancers

like i said independent contractors self-employed workers they're required to pay both ends um yeah and so again just make sure to plan yes you can't stop it it is the force of the government there's there's nothing you can do you got to pay it but at least you know what it is. And if you were so excited to earn your paycheck, and then when you looked at it, it was a little bit less, that's probably where it went. For more information about taxes, go ahead and visit ramseysolutions.com slash taxes, or you can click the link in the description if you're listening on YouTube or podcast. And think about this. If you're like, wait a minute, 6%, that's not very much. I pay way more than that.

This is not state income tax and federal income tax. This is just the other numbers. Yeah. This is just Social Security and Medicare. That's right. That's it. And I love, Dave said this once, and it never occurred to me. He said the greatest scam the government ever pulled was automatic deduction.

Facts. He said if you had to write and honestly when it comes to like medicare like taking care of the least of these in our communities i don't think that'd be the uproar i think the uproar would be those that state and federal tax if we had to write a check every month and give it to the government i think that the average u.s citizen would be much more no i don't think we would get i don't think we'd be where we are because it wouldn't be this money that's just out of sight out of mind and just given to a small group of people

who just do whatever they want to with it I think people would be much more invested as citizens like you're going to take my money you're going to demand it legally from me then I'm going to demand my voice be heard with how you spend that I mean they basically tapped into what we say all the time

about credit cards which is when there's no friction that's it you don't feel it and you're like yeah take my money i'm fine with it then they came up with scam number two which is every year some of y'all we're gonna send you some of your money back and you're gonna think you won something right they're gonna think you scratched something off and got it isn't that crazy we think that we're getting like a treat or a prize when really they've just... They held our money interest free. Interest free! By the way, they lent it out or are making

money off of it. Right. They're making interest off our money. Listen, we could go on and on all day. Maybe we should, John. Nope. Let's go out to Phoenix AZ where it's still 1,000 degrees even though it's October. Talk to Scott. What's up, Scott? Hi. Thanks for taking the call. How are you guys are you guys you got it bro what's happening to your weather out there it's actually really nice right now did it finally break it's been bananas

wow well that's good to hear how can we help man well we're looking to replace our family minivan and I'm debating how much to spend and whether or not I'd feel okay buying something new, which is something I've always thought I wouldn't do. And I can hear Dave in my head talking about how much a new car depreciates as soon as you drive it off the lot. So I'm just trying to balance being responsible and not being a cheapskate. I love that. I love that Dave's voice lives lives rent free in so many americans head okay well tell us tell us what it is and we can tell you if if it's a good idea or not or at least point you in the right direction so what are you thinking of getting what is it cost uh we're looking at the 2025 kia carnival which was just updated and i'm expecting it to be around $52,000 or so. Wow.

Previously, we were looking at the 22 to 24 models, and this is going to be, you know, $10,000 or $12,000 beyond that. So a 2024 would be, what, $40,000? Yeah, like about $40,000 was what we were planning. Okay. My wife is at home with the kids full-timetime but she's a rock star and still brings in an income too and she's just been saving up like nearly all of her income for a while so she saved up like 38 000 so we were going to pay cash for it then we started looking at the newer one um and then i actually fortuitously happened to get a bonus. So we actually do have the money that we could pay cash.

For the $52,000 one? Trying to get over the mental barrier of the depreciation of the new one. Well, let's walk through that a little bit. So you've got cash. There's a couple boxes we need to check to get the green light. So you've got cash. That's good. Let's talk about what your combined income is. What do you and her make together? Because again, this needs to be no more than half of your annual salary, give or take. So what do you guys bring in? Yeah, together it's about $190 or so.

Okay. Okay. So we're firing on that cylinder. Well, how much is your car worth? Maybe $8,000 to $9,000. Okay. So we got a checkbox there. Now, if you're talking about doing this 2025, the brand new vehicle, you know what has to be in place next, don't you? All the insurance and registration that goes into that. That's way more too. Yes. But there's something quite critical to buying a brand new car. You need to have a million dollar net worth.

Oh, gotcha. And here's why. Here's why. And this answers the question that you're talking about. When we're talking about this depreciating asset, you've got to basically be okay with putting that money right in the center of your living room and burning it and saying, I could care less that this thing is going to lose 60% of its value in the next three to four years. Yeah. The million dollars is an arbitrary number, but it's right. It's a good, it's a good, like, like it checks you.

It checks your gut. It's a gut check to go, how, how much can I really afford this? How meaningless is this money to me? Right. And donating 20 or 30 grand to the car dealership over a couple of years. The truth is, if you have a million dollar net worth, all boxes and all roads lead to you being able to do this. But if you don't, you need to go with the 2024 and pay cash. This is The Ramsey Show. Hey, you guys, health insurance costs are only moving one way and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor

are longer, and it's harder than ever to get anything approved through the bureaucracy. So, if you feel like the system is working against you, try a biblically-based alternative to health insurance, Christian Healthcare Ministries. CHM is a health cost-sharing ministry that's helped hundreds of thousands of families like yours take care of over $11 billion in medical bills since 1981. And CHM has also helped them stay true to their values and avoid miles of red tape. And CHM support goes far beyond meeting financial needs. They'll also help meet spiritual needs.

Members become part of a family who will pray with them and for them when they experience a medical event. So listen, y'all, there's no better way to take care of health care costs. CHM programs start as low as $98 a month. So learn more today and join at chministries.org slash budget. That's chministries.org slash budgets at chministries.org slash budgets. This is the Ramsey Show, helping you with your life, your money, your relationships, your career. I'm Jade Warshaw. Next to me today, the doctors in the house, Dr. John Deloney. What up? How's it going in your world?

We're, dude, I'm, we are busy, busy. We had a wild and adventurous money marriage this past weekend and it was off the hook dude you spoke at it it was the deepest and probably most impactful thing I've ever been a part of yeah yeah what you got right there I got these questions for humans the intimacy deck they actually sold out on campus they're gone you can get

them online now I'm waiting for our own new shipment back this is the only deck that exists in this in this building but it's just questions about sex and intimacy and connection and communication and couples trying to find their ways back to each other with all the anxiousness and schools and games and stuff

and stuff and things we've got to do. Like it. Just sit down across the table and get to know each other again. I like it. I'll be getting a deck. Alright, let's go to the phone lines. We've got Wes Evansville, Indiana is where he's at. What's going on, Wes? Hey, guys. How you doing?

I appreciate the time. You got it, Wes. What's up, man? Yeah, for sure. So this may be a question for more of a counselor, and I might need some serious therapy. But let me lay it out here for you if you can give me just a second. Go for it.

So I feel like I got a couple problems, and basically they deal with internal conflict within myself. I feel like I got a value disorder. Lay it out there. I'm seeking. Lay it out there. Yeah, yeah, yeah. So I feel like I'm seeking comfort while I'm trying to seek my dreams in my business. I've got a money problem, debt versus cash flow, and then a self-belief.

So let me lay it out here. I'm 35. I'm divorced. I've got two kids living at home with me over half the time. I started a window cleaning business 12 weeks ago, and I've made $12,000 in 12 weeks. My expenses are about $5,000 a month, and I make $4,000 a month, as of what I've shared with you. I got $32 in the bank.

I'm behind on two credit cards, my light bill, and my mortgage as of 30 days ago. And here's where I'm basically looking for some counsel here. I'm kind of frozen in time with building this business and getting gazelle intense, um, because of the, you know, where I'm at financially. And so I'm struggling with getting gazelle intense to climb myself out of my hole. Um, you know, with my business of my own, uh, a one-man show, and basically I'm at a place where I'm considering getting some, you know, getting a debt relief company to do their thing.

No, you're not going to do that. I can do that. With my bills. All right, Wes. Okay. Yeah, go ahead. Did I hear you right? You make $4,000 a month, but it costs $5,000 a month to run this thing?

Yeah, basically my expenses. There's hardly any overhead. I'm a one-man show going door-to-door getting window cleaning businesses and home services gigs. But how does it cost $5,000 a month in expenses? Is that just business or is that your personal stuff rolled in? It's basically all personal because there's really no overhead. Like I'm banging on doors and cleaning.

So to clarify, you're going out, you're hitting the pavement, you're making $4,000, you're pocketing it all as income, you're one man show, that's fine. But to run your personal life is five thousand dollars your personal budget is five thousand dollars a month so you're a thousand dollars deficit every month yeah so give or take forty six hundred bucks one month okay you know and how do you how do you account for it is it going on credit card what do you do when you're when you're at a loss um yeah i well it's only been 12 weeks

but um i'm behind on those those you know so you just don't pay them you don't you're just not paying them but are you putting more debt on a credit card is what i'm asking well i'm maxed out everywhere so i don't really have anywhere to go i'm kind of at a place where i might my credit's toast. I can't get any more. Okay, okay. And I just need to put energy into this thing. No, no, no, no, no, no.

That's not it. That's not it, dude. Okay. How long ago was your divorce? So it finished about a year and a half ago. Is that still hanging around your neck? It was a crazy divorce. Yeah, it's trauma, man.

It was crazy. It was a circus. It was, but I'm talking about is. Sit with me for a second. You back and forth, you toggle to keep yourself safe from the past and, oh my gosh, it's crazy,

to the future, it's all coming down. I want you to sit right here in the middle, right here in the middle. Is it still weighing on you that the person you said I do, the mother of your kids, that y'all had to blow up like this? Yeah, I mean, I'm still, I'm still kind of hoping that we can kind of fix it. Okay. You got to let that go. We're in process doing that.

Are you, are you dating again no okay so here's the thing i think you have a core reality problem okay i don't think it's like i said value disorder yeah yeah but it's not a value disorder it's that you you want things to be you want to be your own boss. You want to be a present dad. You want to re-get together with the ex-wife that blew your life up. You want to do all this stuff all at the same time. I do.

I want to do it all now. I know, but in the meantime, math is working against you because math doesn't care what your dreams are. It doesn't care what pain you've been through. It just keeps doing math and you're doing math yes you're getting further and further and further behind and your kids absorb that tension in your house and you want to have a different mindset people think they can just um they can just think their way to confidence confidence is built through i can't you can't you gotta go do and dude you're grinding and i'm proud of you you're making four grand a month on a brand new business that's amazing and you can't eat on four grand a month

no dude it's it's been a bummer yeah and so here's what i want you to do. I want you to not think about, okay, I'm going to grind here. I want you just to exhale and sit in reality. And most people, most of the time, myself included, when you have to face reality, you have to grieve it for a minute. That woman's gone. This job, this dream we have of going all in, it's not a right moment right now. I wanted my kids all the time. I only

get them half the time. That's exhale. And then I'm going to go get a regular, boring, bummer job where I'm throwing boxes somewhere, but I've got health insurance and I'm making X number of dollars an hour. And then I'm also knocking on doors and putting up flyers and washing windows when I can to get this thing going. And you're going to find out that the life of a solopreneur is wall to wall, 24-7, 365, until it finally takes off, if it ever does. Right? And then your kids are going to have this ringside seat to a dad that got his knees capped in a divorce, but he got back up and he started grinding and he was still a person of integrity and character. And you're going to wake up in two years and three years, you're going to be really, really confident, not because you thought your way to some mindset moogly boogly, but because

you just went and did the next right thing. And the next right thing is? You got to make enough money to eat. Yeah, I sure did. How many hours are you putting into this every month, every week? Yeah, that's where it gets embarrassing because I'm putting about 20 hours in, but the rest of the time I just can't get myself to move. I'm frozen. Okay, then let that dream go.

The thing is, here's the thing, though. If you're putting 20 hours a week into this and you're making $4,000, imagine if you put... Right, that's why I think... Yeah. Why don't you want to do it? Yeah, yeah, yeah. What's causing you to not do the other 20 hours?

That's where my value disorder comes in, the seeking comfort versus the dream. Cause it's, I mean, it's hard stinking work. Um, I'm good at what I do, man. I can get jobs every day. I go out. It's not a value disorder. It's not a diagnostic. Don't call it that. What is it? I just need to figure it out. There's nothing to figure out. It's a choice. I like this work. I want to make this solopreneur thing work. I don't like this work, and I'm not going to do this solopreneur thing. It's just a choice you have to make.

Or you go and pick up another job for the other 20 hours. But either way, you got to work. As an adult, we have to go to work. That's it. It's not a disorder. It's not a thing. It's just, it it is you got to make a choice do i want to do this job or not yeah and jade you and i we have on the outside it looks like a mate the dream job these jobs are hard you and i get frustrated there's a lot of hours it's early it's late i'm wearing makeup right now for crying out like wow it's a whole thing right every? Yes. Every job's got hard, hard, hard seasons. Every job does.

Yeah. You got to decide, is the hard season worth the work, man? That's it. This is The Ramsey Show. Live from Ramsey Solutions, this is The Ramsey Show. I'm your host, Jade Warshaw. Next to me is Dr. John Deloney. And if you're listening, thanks for listening.

That means you're inside the Ramsey Network app. We're happy that you're here. Keep listening. As always, if you want to watch the third hour, this is the only place to get it. Unless you're on the radio. This is where the party happens, dude. Third hour on the app. Anything goes. Anything goes. We even got a new producer, man.

That's right. The other Dave. Yeah, that's right. There you go. I was going to say, go to his face. Go to his face. All right. Look at all that extra hair he's got. The other Dave. Yeah, that's right. There you go. I was going to say go to his face, go to his face. All right. Look at all that extra hair he's got. Taking calls still about your life, your money. Happy Halloween. Let's go straight to the phone lines. Kobe in Salt Lake City, Utah. What's going on with you? Yeah, so a few months ago, I quit my job that I was getting paid really good at. And since then, I've just been doing freelance work in kind of the same industry, but I'm not making even close to what I was making. Why'd you quit?

I'm just trying to decide if I want to continue down the entrepreneurial path or go back and get a steady job again. Why'd you quit? Yeah, why'd you quit? The boss and management structure, there was some real jerks there. So I hung on as long as I could, but ultimately decided to leave. What kind of work is it? Like social media management. Okay. Okay, cool. And what were you making at the job before you quit? I was making over a hundred grand. Like 101 or like 150? No, probably closer to 150. Yeah. And now that you went out and did freelance, what are you

making now? About 50 to 60 grand a year. Okay. And how long has it been since you stepped out on your own? I left that job in June. So it was probably late June when I started my freelance business. Is it fair to say that if you kept trucking, you could be up to 150 by this time next year? Or are you tapped out as far as time and resource? Yeah, time and resources are a bit of a problem. I don't know. I've toyed around with the idea of hiring and to try to free up some time. But that's just, you know, I don't have much experience in that.

So it kind of scares me a bit. Okay. So the choices are embrace what's scary and grow your business or go get another job working for someone. Yeah, that about sums it up. I've got a pretty good, I've got some good padding. I was able to save up a good amount of money while I was at my last job. So that helps with some freedom. What do you have saved? I think all together I have about probably a quarter million. Nice. Okay. And is it just you? Is there a family to speak of? I live with my girlfriend. I'm only 24. So yeah, we live together right now in an apartment

and probably going to get married in the next year or two. So bro, it sounds like you knew this was coming. Like the boss you're working for, the management structure, whatever you want to call it. You didn't love it. My bigger question is why did you quit before you had another job? That's a great question, honestly. I don't know. It feels a little temper tantrum-y to me. Or was it like a moral issue?

Like, I can't be here because I'm seeing professionals hurt other people. I'm out. It was more of that. I mean, it wasn't just like i hate my job type of thing it was like morally and like i didn't feel like i aligned with their values at all okay well most most people find out the hard way there's like a joke like i'm tired of working for the man i'm gonna start my own own business. I talked to one guy.

He was in my garage just a few weeks ago and was talking about how he's working like 24-7, 365 for somebody, for a company. And he's like, dude, I'm going off on my own. I just want to come by and let you know. I want to spend more time with my family. And I just started laughing. And I was like, oh, dude, your life's about to get 10x busier until the next three to five years until you scale this thing up. The guy who used to run social media for me, an amazing man, he left to start his own company. And now he's got a bunch of employees. But his life is real, real busy, right?

So if you don't like that life you don't like that life go work for somebody that you have that you trust their values if you do like that hustle and grind some people just wired that way if you do then like jade said give yourself two years and with your skill set clearly you're good at what you do or somebody else wouldn't have given you 150 grand to do it um yeah go get after. And maybe you find a business consultant that can help you with the business part. Maybe you're really good at the social media or at the account getting, but you're not good at the books and stuff. Figure that stuff out. Here's what I don't want. You've got a quarter of a million dollars saved. I don't know about you, but I hate touching

my emergency fund. Like even if it's an emergency, I hate touching it. So I think that you will despise touching this money that's taking you so long to save, especially if it's not even really an emergency, it's you kind of dilly dally and trying to figure out what you want to do. I love entrepreneurship. I love solopreneurship. So I love encouraging people to go that route.

The fact that you were able to turn this around so quickly points to like what John said, you're obviously good at it. There's a get it factor that you have involved there. I want to get you set up with some of our entree information, because if you dig more into it, you might find, OK, I can do this. So maybe we'll give you the book Entree Leadership by Dave Ramsey. And I want you to check out the Entree Leadership podcast because it will help close some of those gaps and help you figure out what to do next if you decide to stick with this. Is there anything else that we should know about that plays into this?

I mean, are you carrying a bunch of debt or anything like that? No, I have a car loan that I have probably 1515,000 left to pay off, so I could pay that off. However, the interest rate on the car loan is lower than the interest I'm gaining on that money that is in my money market account. So it doesn't make sense to do more than the minimum payment right now. But you're missing the calculation because not only is the difference between the money market and what your interest rate is, but you're not factoring in the depreciation on the car. You're not winning. You're not winning that financial arrangement. You're losing.

I'd pay it off today. I paid today too. And everyone on TikTok is going to tell you not to just, it's going to be your car. Right. That's true. It's just one piece of one piece outside of the puzzle. Yeah.

Well, thank you so much for your advice. Yeah, you got it. Good call. Yeah, that's a tough one. You know, I think, to your point, John, I think when you strike out and do something on your own, you are working more.

I can speak to this. When my husband and I were building that talent agency, you're working all the time. There was a time where we were working seven days a week and really basically on call 24 hours a day. And the hard part is you're working all the time. I think the allure of it is, but I'm on my terms. You know what I mean? So if you can find a way to make that work, a guy like this, I mean, if he was able to turn a $60,000 a year profit around pretty quickly, I feel like you've got a little something.

I mean, we talk to people all the time who are like, I'm starting my business. I made a thousand bucks. You know, it's like, all right, you gotta keep going. You know what I mean? So there's something there, but. But I will also say,

if you have a job and you're making a good living and you're just getting frustrated or you start to see something like, hey, this doesn't look right to me. Yeah. Go find another job. You gotta get another job first.

Before you jump. Yeah, before you jump. Or if you're gonna go out on your own, set it up to where you've done the homework. Yes. Unless you just walk in and there's a body laying there on the floor and you're like, I quit.

I come out today. Most of the time, this stuff builds and builds and builds and people don't want to face reality until the last moment when they have to. Yeah, that you're forced. Find another job and make your exit gracefully um especially in those tech centers like those worlds are small those worlds are small so um yeah don't jump before

you have another boat i like it this is the ramsey show what's going on you're listening to the ramsey show i'm so glad you guys are here listening to us if you like the show you liked it enough to come into the ramsey app so thank you for that i'm jade warshaw next to me is dr john deloney happy halloween one and all john are your kids dressing up they are dressing up uh my son's going to stay ramsey that was his whole idea that's amazing and i was like hey man please don't do that that's my boss and he's like uh i think it'd be great and i was like i'm just telling you it's not gonna be great oh okay um but he's going for it dude i think that'd be great he's going for it it's funny i think it's hilarious are you gonna do anything um yeah i'm gonna be

looking for jobs because my son's going as my boss so you're going as an unemployed individual i'm gonna be on linked. Love it. Love it. Love it. I got to shout out my little brother today. He went to work and on the way in, he forgot that they were having a costume contest. So he grabbed a little sign and it just wrote nudist on strike and he was in full clothes and he won the little contest. That is so smart.

That's very creative. Well done. Gave somebody an idea. Well done, little brother. Well done, little brother. Let's go to the phone lines. We've got Eric in San Jose, California. What's very creative. Well done. Gave somebody an idea. Well done, little brother. Well done, little brother. Let's go to the phone lines. We've got Eric in San Jose, California. What's going on, Eric?

Hey, I was just calling. First off, I've been listening to the podcast for the past, since I found it two days ago. Yay. And it's very knowledgeable and very helpful. Well, welcome to the cult, my brother. I'm glad you're with us. It's not a cult, John. It's for sure a cult, dude.

We even have our own Kool-Aid. I don't mind a joint if it's a good one. That's right. So what's up, man? Hey, so for the past five years, I've been making poor financial decisions. Me and my wife are about $70,000 in debt. Yikes. And yeah, yeah. The more I think about it, the more it makes me sick to my stomach. And scarily, a few months ago, I signed up with National Debt Relief. No. And then the more I hear you guys, I know. The more I hear you guys podcast, I'm like, what did I do? What did I do?

And then I tried to call today to cancel it because I'm like, you know what? I can just call these creditors myself. Yeah. Because I tried to do it before National Debt Relief, but they're like, oh, give us $2,000. I'm like, I don't have that. So I tried to call today to cancel it. And they're but they're like, oh, give us $2,000. I'm like, I don't have that. So I tried to call today to cancel it. And they're like, oh, you owe a fee of $1,500. Do you want to set up a $100 account?

I'm like, I don't have money for that. I'm sorry. So I don't know what to do and where to go next. Did you sign anything? Did you get paid off? With National Debt Relief, yeah. We've been with them for the past four months and i'm like i'm paying 646 to them and half of it goes to fees and half of it goes to the actual

principal and i'm like this is going nowhere fast they're like oh yeah you'll be done by 2028 i'm like no i want to be done like by next year yeah you got the bug like you you got it what's your exit i mean have you looked at your paperwork? Because most of the time on those debt relief, you'll lose what you've already put in, but you don't owe them an exit fee. So right now, if I were to cancel,

it's just like, Oh, for the fees that have accumulated to them paying off this stuff. So it'd be like a 1500500 fee for them already making payments. And I'm like, that makes no sense. Yeah, I don't think that's accurate. Can you check your paperwork? Yeah, yeah.

He explained it, and he went back over to more payments. And I'm like, okay, now that you explain it, that unfortunately makes sense. I'm like, this sucks. Like, do I just still cancel? And then he's like, oh, yeah, well, our legal team that's going to support over you guys, you'll no longer have that. So if they come after you guys, like, you're by yourself. Bro, you don't have any support anyway, dude.

That's just part of the scam. Yeah. So I'm like, man, we have $70,000 with different credit cards and two car payments. And I'm like, I'm just trying to get there as fast as possible. Walk me through. You've paid them for four months, and you've already given them $600 a month for six months. So you give them $3,600. Half of that has gone to their internal fees, and half of that has gone to, I'm assuming the principal balance. Correct. And most of these companies, they'll hold your money until the credit card company

defaults you and then sues you. And then they negotiate a settlement for you. They basically take your car. They negotiated the settlement for one of them, the largest one, a loan that we had. And because the settlement that they negotiated was a lot less than what it was worth, they negotiated one that was for $17,000 and they got it down to like $11,000. And they're like, oh, because we negotiated this and already got the settlement for you, you owe us $1,500 fee.

And I'm like... Got it. Then I'd pay the $1,500 fee, dude, and don't do business with crooks. If that's how they're going to treat you, man, then I'd pay them the money and walk away. I would too. I would not continue on with this.

Do not continue on with this. So would I cancel it and just pay $100 a month and add that onto our debt? Yeah. Because I've been listening to you guys and I kind of heard about the baby steps and like the snowball. Uh-huh.

Okay, now I need to Google more stuff. But I'm like, I don't have money to pay for this stuff. I'm like, dang it. Well, what's your income? What's your income? Right now now me and my wife's income is um i make 3,800 and she makes 1,400 so it's like 5,200 a month okay good bills are 44 29 a month 44 29 okay yeah um here's the thing let's talk about these cars because there might be some money there uh the first car what did you pay for it and what's it worth?

Or what do you owe on it and what's it worth? So we're leasing it out and it's a Nissan and we paid $1,300 or $13,000, I mean. And we're making $210 payments a month and we owe about $5,000 left on it. And then we have a Lexus. When's the lease over or can you buy it out? I mean, we can, but we don't have the money for it. We have no money in savings. Okay, when's the lease up?

When we're done paying it. Okay, so as quickly as you get the $5,000? Yes. Okay, let me make a note of that. Eric, you're leasing a Lexus? Yes. Bro-town. Why? What are you doing? I was looking for, personally, like an SUV that, so we have a son who's one year old now,

and we have a dog, so I was trying to look for an SUV that's like, it was cheap. It was cheaper than what it was worth, and then it had good miles on it, and plus my brother works in car industry he's like hey lexus is that year like there's no problems with engine it wasn't good it wasn't your brother jacked you it wasn't good okay what did i do listen hey hey before you get going, me and Jade have both found ourselves with our respective spouses owing hundreds of thousands of dollars each. Any mistake you've made, we've made it 10 times.

Yeah. Okay? So you're not an idiot. You're not dumb. You're just doing what's the next right thing in front of you. It just so happened you're doing what everyone tells you and it's normal. And normal's broke and normal can't breathe. Okay? So glad you're with us don't beat yourself up jay's gonna

give you a path out okay what about what about the second car tell us about that so it's a lexus we originally got it for 17 000 we got it down to right now 13 000 okay and we're paying months monthly pays of uh 310 okay what's it worth if you were to sell a private sale have you checked i haven't because we're making lease or finance payments on it i'm like i didn't know i can sell it and if it's a lot less the second car is financed right it's not leased okay if it's financed yeah the goal here what i'm looking for is if you can sell this for what it's worth and break even and get out of that car or or if you're a little upside down, you can get a, you know, $2,000 loan for the difference. I just want you out of these payments to free up some margin so we can start

getting you out of this lease, right? I want to find that money there. And you guys might have a quick season where you're a one car family until you can save up a couple of grand to buy a cash car. We call it a beater. I know you're somewhat new to the show, but we talk about the idea of paying cars for cash. And that usually starts with you paying off a car and saying, I'm never buying a car note again, or you sell off one of them and say, we're going to get the next one in cash. And you usually start with like a $5,000 beater. And then you go, okay, I'm going to drive this for a while. It's temporary. And as soon as I can add a couple more thousand to it, I'm going to trade up and now I'm driving an $8,000 car. And then I trade up again and I'm driving a $10,000 car. So that's how this works. And you'll

find that when you buy cars that are that cheap, they don't lose a whole lot of value in the next, you know, 10 months that you drive it. Right. So that's a temporary solution. The other thing here is practically speaking that, you already know we're going to tell you to side hustle, but practically speaking, I mean, are you investing? Are you contributing to your investing right now? If so, I would tell you to cancel that. Okay. And every year, are you getting a tax refund? Like when you file your taxes, do you get a tax refund? Now I am, yes, because I have a son, but I wasn't. Okay. So there could be some money there if you change your withholding. What I would do is I would look at what my tax refund was and say, okay, let me divide that by 12.

That's the amount that you could have back in your paycheck. So those are just some practical ways to find money. Beyond that, it's a numbers game. Like John has said many times, the math doesn't lie. So let's add more money to the math so it can math in your favor. This is The Ramsey Show. You're listening to The Ramsey Show. Glad you guys are here. I'm Jade Warshaw, joined by Dr. John Deloney. You already know this. We're talking about your life, your money. We're teaching you to build wealth, do work that you love, and create amazing relationships. Speaking of relationships dr john

what in the world is in that box what you got in that box after years what's in the box listen after years of people asking uh we've we've created these questions for humans uh we talk about um we've got decks for couples we've got decks for friends we've got decks for parents and kids grandparents and kids um the one people would ask me it started in private like hey man do you have like the intimacy cards like the ones for like behind closed doors in our house and then it got um some direct messages can you give us some help and then it just got to be where everywhere i went so we got our heads in a room and we've got questions for humans. Intimacy. It's sold out.

They're gone off campus, but they are not sold out from the store. So you can order them from the Ramsey store at RamseySolutions.com slash store. You're going to learn unexpected things, get deep connected moments, learn what people are into or not into anymore. You think you know, you probably don't know. You have no idea. So they're fun um they're gonna there can be some hard questions for you to answer it's all of it and i love it i love it we also have third editions of questions for humans for friends questions for humans couples and questions for humans parents and kids so go again ramsey solutions.com slash store get them

go get them go get them, go get them. Hey, give us a behind the scenes. How do you come up with the questions? Is it just you sitting in a room, like racking your brain or what happens? Well, the first iteration, yes, was me. And then I got called into a room and they're like, yeah, we're not doing that.

So then my wife and I sat down and my wife was Dr. Deloney way before me. She's brilliant. And then I brought those questions up. And then I asked some other people in the room to bring some questions. And then we pitched them back and forth and we whittled them and distilled them down. And then everybody goes home and tries them out in their own home. Okay.

And then we got a lot of smiles and thumbs up when they got back to work. So that's how we got there. I love that. I want to know what didn't make the deck. That's what I want to know. But that's another conversation for another time. Here's the truth. So my wife said, somebody said, hey, this is awkward.

Like some of these questions are just, and I said, I ask these questions to all my friends. It's not weird. And so I went home and I said, Sheila, I've been asking these questions to our friends at dinners for years. And she's like, yeah, you've been making dinner really awkward for a long time. About that. I was like, oh man. Okay. oh man okay my bad my bad love it they're amazing the questions for humans intimacy go get them um ramsay solutions.com store i promise i promise they're gonna they're gonna help your house all righty love that all right john let's take a call let's go to dallas texas detone where you're neck of the woods and let's go a call. Let's go to Dallas, Texas. That's kind of where you're neck of the woods.

And let's go to Kyle. What's going on, Kyle? Hey, how are you? Doing good. We're going to answer your question, but you tell us what the Cowboys are doing. Oh, man, I don't follow professional sports. They started kneeling for the national anthem. I stopped watching.

All right, so you're probably not following sports. You probably have better mental health than the rest of us. All, all right. So tell me about your 401k. What's up? Well, so the, I earn about a half a million dollars a year. The only debt my family has is the mortgage. The mortgage is $358,000. The house is worth about a million and a half or a half a million dollars or so. And I'm trying to figure out the best way to pay the mortgage down to zero. We have about $80,000 in an emergency fund. Right now we're paying the minimum payment on the mortgage, which is about $2,600 a month. So kind of options that we have at our disposal. Do we pay more than the minimum and just keep chugging along? Do I borrow money from the 401k to pay the mortgage? Do I use some money

from the emergency fund to pay down the principal on the mortgage? Looking for some advice there. So you owe $358,000. Is that right? Correct. Okay. And how old are you guys? I'm 38. My wife is 34.

Okay. At this point, this is all about you guys kind of deciding what do we want our life to look like and what does it take to get there? Now, I will caveat it with this. When it comes to paying off the mortgage, this is way more of an intentional act than it is that intensity. We got to do this as quickly as possible. Now, it is possible that if you and your wife are like, we want to go fast, we want to do that, that's your choice to make. But truly, at this point, it's whatever you decide. You could say, hey, we have the margin that we can double our payment every single month and still have a really good life. Or maybe it's you say, okay, with our budget, we're putting $300

extra on the mortgage every month. Or maybe it's a quarterly thing or an annual thing. It truly is up to you. What type of margin do you guys have to work with? I mean, what do you have? We have a lot. I mean, we live very modestly. Like I said, I earn, you know, a half a million dollars a year. And, you know, we live, we own both of our cars. I mean, literally the only debt that we have is the house. So aside from monthly, you know, grocery bills and stuff like that, and the power bill and the mortgage, that's the only debt. I mean, we could triple or quadruple the, the, the monthly payment. You're bringing home what, what, what 30 grand a month? Uh, yeah. So the income that I make, it's, uh, you know, I have, uh, I'm, uh, an airline pilot.

So I make about 400,000 from that. And then I own two businesses that makes up the other hundred thousand dollars in income. So, uh, the way me and my wife like to do it and mostly me, I like to go in, my wife makes fun of me, but I like to go it and mostly me i like to go in my wife makes fun of me but i like to go numbers in front so right now you have a three and a five on the mortgage what would it take to get a three and a four right and then what would it take to get a three and a two or get a two in front of two 299 like right so it becomes a game though but it's like like jade said it's an intentional let's have some fun with this but let's get this done as quick as possible. If we're taking home over the course of a year, $30,000 a month, or if you get all your bills paid and suddenly you get a $100,000 check, what if you all just agree, let's knock this thing out and get down to $250,000.

Let's get another $100,000 check and let's take it down to $150,000. That's where the idea for the loan from the 401k came from because so unnecessary yeah we would yeah we you don't need to borrow you have so much money that is yours at your disposal you don't need to borrow against and set yourself into a situation of risk like that's the last thing you want to do what's the panic panic? Well, so the, I mean, it's not panic so much as it's a moral thing. I just don't like the idea of the mortgage. I want to owe, I want to have zero debt. So it's, it's more of a, how do we, you know, we're finally in a financial position where we could afford to really hammer the mortgage down to zero. I'm trying to figure out, in my mind, I want to

owe zero money. And then the long-term goal is to turn this house into a rental property. After we get the mortgage paid to zero, we'd like to save up enough money to buy property and build the dream house on the property. I love that. I love it. If you've got a moral dilemma with debt, I think we all do here, by taking out a 401k loan, you're simply, you're just moving to a new lender. Isn't the lender me though?

And I'm paying myself. But yeah, but it's you with you through the guise of the government. And not to mention, if you were to lose your job. You have an overlord, right? If you were to lose your job, that money is going to become due within the calendar year from that point. And so that's a crazy amount of stress. I'm not saying that that would happen. But there's just no room for that.

There's no reason that you would need to do that. So go backwards and say, okay, I make $500,000 a year. What does it take to actually make our household run? Like when we do our monthly budget, how much are we spending every month and how much is really just going towards savings in an overage, right? That we can get our hands on. And I would work back that way. If you say, listen, really, we live on 180,000, then that lets you know, okay, for the year, this is what we have access to. And so monthly, what does that break down to? You don't need to add anything else to your emergency fund. My guess is that you're investing above 15% to your investment accounts way above. So you get to decide, do we want to pull back to 15% on the

investing? And really all of your overage can go towards this if you want to. It's up to you guys. I think you could probably have this house paid off. It's $400,000 in 18 months to two years. Yeah. I'd hammer it. Go for it. Do it. This is The Ramsey Show. This is The Ramsey Show. Our scripture and quote for the day is from James 4.3. It says, When you ask, you do not receive because you ask with wrong motives, that you may spend what you get on pleasures.

And then Scottie Pippen said this, A Gucci wallet and a Target wallet hold the same amount of money. A $10 million house and a $100,000 house host the same loneliness. A Ford will also drive you as far as a Bentley. Pippin, dude. Wow. That's deep. Scotty P. Scotty P.

Profound. My guy is pontificating on this. I love it. All right. Let's go to Rob. He's in Philadelphia, Pennsylvania. What's going on, Rob? Hey, happy Halloween, everyone. How are you doing today?

Thank you. We're doing good. Good to hear. So my question for you was how much I should be contributing to my 401k currently. My employer is currently doing 14% and I'm doing 10% Roth to my 401k. I feel like I'm currently not saving enough funds or as much as I would like to. So I was wondering if I should maybe lower that amount since that's around 24% currently going to the 401 or if that's roughly around where I should be currently. Wow. What are your thoughts there? Well, number one, way to go. So you're contributing 10% to your Roth 401k and then your employer is also contributing 14 to that same roth 401k uh 14 but for them it's pre pre-tax okay so for the okay great

listen that's a wonderful benefit um man typically i would call this some sort of a match and typically we would say that the match is kind of like icing on the cake, like let them do their thing and you get in the habit of doing your 15%. In this case, or another situation would be like, hey, I have a pension or some sort of education job where they're putting this money aside and I can't really control it. In those cases, we would say, yeah, if they're doing 10%, treat it like half, treat it like 5% because you have less control. It might not be as solid of an investment. In your case, it's yeah, 14%. It's in a great 401k. Let's see, if you can invest 15%

and it doesn't hurt your world, I'd go ahead and do it. Um, and if you wanted to treat this like half, you could, um, but I kind of, I kind of like just treating it as a match. What would you do, John? Yes.

Treat as a match. It's a really great match. I mean, it's, can you, I mean, you can do 15% and here's the reason why here's, here's why I'm kind of in the way of treating this just like

a giant match. Because I think it's really important to build the muscle of, I invest 15%. It's just what I do, no matter what job I'm at. Because the truth is, you could move on to another job, and they don't give you a 14% match. And then you're like, oh my gosh, this feels crazy to have to invest this much. Do you see what I'm saying? Yeah, absolutely. So for that reason, I think I'd still stick with the 15% on your end. Okay. Yeah, definitely. That makes sense for sure. I'm also doing like $100 a week into a taxable account as well. I have about $20,000 and that's taxable, $48,000 in my Roth, and then around $33,000 in my 401. Good for you. So I'm currently 24, so I was just looking for around what I should be sticking at currently.

But yeah, I'll try to aim for that 15%. Yeah, do it. Get to that 15% because who knows how long this is going to last. And this is a very sweet situation, if I do say so myself. Let me tell you this dude um the biggest thing i want you to work on that is this is the pot talking to the kettle all right and if i had told 24 year old me this i would have rolled my eyes out the back of my head so i know i want you to practice patience because yeah what you're going to find if you ask anybody who's built significant wealth over time is the most important component is consistency and time. And you're 24 and you're like,

dude, I want this number to be a million dollars right now. I know. I need it. I know. And so just listen, go slow. This is when 24 year olds who are really hard workers like you, who are also really smart like you, this is their make or break moment. They get themselves in trouble and they do something stupid and they lose a bunch of money or they try to, you know, no interest loans. And this whole company is built on the back of Dave Ramsey making some goofball-y decisions that look like he could hack his way to money. Or those that just stay the course and stay the course and stay the course. They keep lifting weights three to five times a week,

and they look up in three years, and they're really strong, and their muscles are big. They didn't try to go hack their way to it. Same with your money, okay? Yeah. I definitely appreciate that. Have some fun, dude. Enjoy your life.

You're 24. It goes quick. Yeah. Now, I didn't ask you this, but do you have any debt? Because you know the way we teach about when it's time to start investing. So let me just do my due diligence here. Yeah, no, I currently have no debt, which I'm definitely very happy about, very fortunate for it. I am currently looking to, within the next two years, hopefully purchase a home.

Okay. So I didn't know if that was, I guess I should have mentioned that at the beginning as well. It's really like, should I be putting more towards, you know, a taxable account where I can use that eventually for a home? Or is that something where, you know, I should just keep doing that 15% 401k? That's a good question. Well, first off, the way we teach,

so the fact that you have no debt, excellent. Very, very good. After that, what we would say is we'd want you to have three to six months of your expenses liquid cash. You can keep that in a HYSA, something like that. Do you have that laying around? In my bank account, I currently have about $7,000. Okay. How many months of expenses is that for you? For me, probably about 14.

14 months of expenses? Wow. Yeah. I currently just moved back home. Got you. you don't have rent or mortgage okay yeah exactly okay so what i would do is i would just look in your area and i'd project what's rent or mortgage when i buy what do i think that'll be and i would use that number as a basis to go ahead especially since you know at some point you're going to buy a place use that as a basis and save up three months of what you think that might be and i'd take it out of your checking account and drop it in a high yield savings account. Now let's talk about if you do want to save for a

down payment on a house, it's up to you. If you think you can save that payment in less than two years, you could pull back on your 10% contribution and you could say, okay, for the next two years, I'm going to focus on saving everything for my down payment and then push play again on your contribution, especially since you're getting that 14% from your employer. Or you could do a mixed match and say, okay, I'm going to do, you know, 5% in the Roth, and I'm going to do, you know, the other 5% to save this down payment. Or you could say, I'm not ready to save right now. You have some options there, but just know that 3B and baby step four, which is what we're talking about, the down payment

versus the investing, they kind of can toggle between each other. But I'd make a clear decision within the two-year mark. Once you get to two years, it's like, hey, if I can't knock out this down payment, I really need to make sure that I'm hitting that Roth IRA and not neglecting that. Does that make sense? Yeah, no, that definitely makes sense for sure. I think I'm in a good spot where I honestly think I can do it within two years. I, to be honest with you, I have like 40,000 in crypto as well, but I didn't mention that. I know you guys would tell me to liquidate. I would. But yeah, I could definitely liquidate that and that is on the side as well. Just know that I wouldn't invest anything that you're thinking to save for your down payment.

I would not invest that unless you think the horizon on that is going to be five years plus. But if you think you're going to buy in the next two to three years, I would not invest in a brokerage. I just keep it in a high yield savings account. Okay. Just because the numbers over time kind of point to the likelihood of you really having a return is right at that five-year point. It's more of a, hey, I can get to this money. I know it will have grown for the most part as opposed to five years and below. There's more chance that when you get to it, it's like, ah, it's not where I want it to be.

Does that make sense? Yeah, absolutely does. And Rob, you're going to have to make a choice. Okay, here's your choice. A 100% chance that your money will have grown a little bit and that it will be there or all the tiktok bros yeah telling you that what jade and i are telling you is stupid old school thinking that's wasting money leaving it on the table you you get out you have a choice and you're 24 you probably don't remember 08 and 09

oh i remember and you don't you don't remember the the fall offs okay they just happen they're just part of it we're due for one they just happen so there's this idea that like man everywhere you look for information is going to be telling us that jade and i are crazy we're just telling you to stay the course. Keep doing the next right thing, the next right thing. And yes, cash out your crypto, man. You're hanging on to it, bro. But you got a choice to make.

If you want to make sure this money's there, you get yourself a house. You can look up in three years. You're going to have a huge chunk of money in retirement. You're going to have your own place. It's going to be amazing. Or roll the dice. See what happens. We're just telling you, our plan always works. Rob is going to be balling. Rob dice see what happens we're just telling you our plan always works

rob is gonna be balling rob he's 24 years old 14 employer match my guy way to go way to go this is the ramsey show hey thanks to everybody in the booth for making this show happen thanks to my co-host dr john deloney and thank you to you for being a listener and hanging out with us we'll see you next time.