The Ramsey Show - App - FAQs Around Baby Steps 4, 5, & 6 (Hour 3)

Episode Date: October 24, 2023

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. Jade Warshall, Ramsey personality, is my co-host today thank you for joining us american open phones at triple eight eight two five five two two five sean is in fort lauderdale hi sean welcome to the ramsey show what's going on dave how you doing today sir better than i deserve what's up um so quick question, I guess, um, about $14,000 in school debt. I am $38,000 in car debt. Um, I make about $50,000 a year.

Um, I'm 10% owner of my business with the ability to stake up to 30%. Um% once I reach goals of $250,000 on a yearly basis. And I have about $3,500 in credit card debt. My bills exceed about half of my monthly earnings. What is your monthly earnings? About pre-tax, it's $4,190, I think. So you're taking home $ taking on three grand yeah okay and then my bills are about 2700 including a 700 car payment now i would like yeah i would immediately sell my car um the problem is i got into a car accident about four months into having the car um and the motorist who was at fault in the accident

um had uninsured uh was an uninsured motorist so i didn't have uninsured motorist on my insurance either and yeah i exceeded about i think it was twenty six thousand dollars in damage um so yeah um kind of in a rut here your collision should cover it even if they are uninsured it did it did it did um so why are your car fixed no the car is fixed i'm now driving it again um it's it's all good now but it took about two months to repair and i needed to get to work at the time what's that got to do with you selling it you need to get to work at the time. What's that got to do with you selling it? You need to get to work and you did what? So I needed to get to work at the time and I started renting a vehicle while I didn't have my car while I was getting fixed. Okay but you're still right now you still have a $38,000 car. Dan what's the car worth today? It's fixed you're driving it. What's it worth? About $29,000 worth about 29 i'd say who said tell you the book for private sale or trade in private sale

okay so you're nine in the hole and how old are you i am 25 okay all right well i had a job prior to this where i was spending probably a little more than my means i was making about a hundred thousand dollars a year. Um, and then the company sold and major layoffs. Um, so I am a business owner. It's just, um, you know, business just started. Okay. All right. And so what's your question? How can we best serve you? Just trying to get out of this. I mean, my mom's always told me i got uh hands that just money flows through you know so um just just start listening to podcasts and i think hearing it from you might might really help so you're brand new to the ramsey stuff i am okay that's cool

all right well um the good news is your hands are not a DNA issue. Your hands are money flowing through as a choice. Agreed? Right. It's not like it's a curse. It's just that's how you've chosen to do it. And I don't want your mom speaking anything negative like that over you again. Tell her to quit doing that. No, it's all in good fun.

But even joking, you kind of owned it. And I want you to own, I am a responsible, extremely sharp 25-year-old guy that recently made $100,000 and soon will again, that used to make mistakes with money, and I don't make those mistakes anymore. That sounds more like the guy I know. Yes, sir. Okay. Because that is actually who I'm talking to. You're calling me on a radio show in front of a whole bunch of other people, bearing your soul, taking a great risk in order to figure out how to fix something that you don't know how to fix. I think that's pretty courageous.

Yes, sir. I appreciate that. So for me, my two cents in this whole thing is, you know, I'm always going back to the baby steps. And I know that right now you're making $50,000 a year. I'm always looking for a way to increase my income if I'm you. Is there something else that you can do on the side? I know you're a business owner. I know you've got a lot on your plate. Is there something else you can do to bring some more money in? I was thinking about getting a second job at maybe a bar or something where I can, you know, go make a good amount of money.

I mean, I know some people in the business who would take me in with open arms. It's just I don't want to exceed my ability to be able to run the business as an operator. I don't want to impact my day to day. Well, you know, he's getting no sleep or something in there. There is part of this that you're going to have to embrace that you're going to go through a season of difficulty. And that difficulty does look like long nights, being tired, working your fingers to the bone. Like there is going to be a season of that. And I think that's part of you into that i would just go ahead and move forward with that assuming that the return on that time is going to be worth it how much do you think you could make um i had one of the girls who worked there tell me they made 700 a night i mean i'd probably say average 400 a night 500 a night so you can make almost as much doing that at night as you're making during the day right now.

Right, right, of course. And so that solves a lot of problems right there. And again, it's a temporary thing. This is all to clean up the mess. Because if you had zero payments right now, your life would be completely different. Agreed? Absolutely. That's where we want to take you to.

And so we're going to put you on the, we're going to put you on the every dollar budget. It's an app that we have, the world's best budgeting app. I'm going to give it to you free. I'm going to put you in our class. It's called financial peace university. I'm going to give that to you for free because I've been 25 and scared. I remember how it feels. And I and i used to have uh money running through my fingers too i know exactly how that out of control feels and you wake up with a financial hangover which is worse than a real one yeah and um so yeah that i don't want you having that anymore i want this to get this out of your life so here's the deal we're going to put you into all of that if and

i want you to start immediately paying down, cutting up the credit cards, get debit cards, don't spend money you don't have, and begin to tear through these first two debts, the credit cards and the student loan. What's your student loan payment? It's about $170 a month. Is that as low as you can get it for now? That's as low as I can get it. now? As low as I can get it. I mean, I can definitely try and give them a call and see if I can decrease that.

But it's a temporary thing because really what we want is $14,000 to make the whole thing go away. Yeah. All right. And so here's the deal. If you add $4,000 to this equation, credit cards are gone in one month. Four more months, the student loans are gone. Yeah. Right? You do the math with me there yeah that's pretty amazing that's why so jade's jade's telling you the secret sauce baby it's you okay and then we're going to tear into this and if you are not up back up to a hundred

thousand dollars a year in your current job by march you do need to sell this car. It's too expensive. If you're making $100, you can keep it, but you've got to pay it off ASAP. You should be 100% debt-free in your world in a year from today, if you'll follow the stuff we teach. And that involves selling the car if you don't get your income up. But if you do get your income up, you'll be able to pay it off and still keep it all within a year. Hang on. We'll get you signed up for every dollar. 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 at chministries.org slash budget. Jade Walsh, our Ramsey personality is my co-host today. Angela is in Washington, D.C. Angela, welcome to the Ramsey Show. Hi, Dave. And hi, Jade. How are you doing today? Better than we deserve. What's up? So I am a 37 year old single female um and i have found myself in a little bit of a whole lot of debt um i have two whole life insurance policies um that i would like to cash out their surrender the policies they total about eleven thousand dollars um my question is the cash value is 11 of the face the cash value is 11 000 what's the face what's it11,000 or the face? The cash value is $11,000.

What's the face? What's it pay if you die? The face value for both of these policies is about $200,000. Okay. And you're paying monthly on them? Yes. Okay. All right.

Go ahead. And about four years ago, I was diagnosed with cancer. And at this current point in time, I'm uninsurable. So I was thinking about cashing them, surrendering the policies for $11,000 so I can start baby step two and create an aggressive plan, a snowball method to pay off my debt.

Should I keep these policies considering my illness, or should I surrender them and start my debt repayment? What's your income? I make about $140,000 a year. This includes a 20-year $1,000 from a rental property. How much debt do you have? Right now I'm probably at about $240,000. What kind of debt? $128,000 student loans, about $45,000 in credit card debt. I have about $30,000 left for the

home renovation loan and I have a $30,000 car on a home renovation loan, and I have a $30,000 car loan. And what's your, with the cancer, how are you doing? I'm doing good. I'm doing good now. Some of this debt is contributed to that, just kind of paying medical bills. I'm not a medical expert, but are you in remission? Are you okay? Or are you still in the middle of fighting it and you're doing good?

Or what's going on? No, I'm doing good. You're in remission? I'm in complete remission and I'm on maintenance therapy. Okay, great, great. What kind of cancer did you have? It was breast cancer. Okay, all right. And so it is in the rearview mirror right now. what kind of cancer did you have? It was breast cancer. Okay.

All right. And so it is in the rearview mirror right now. How long have you been cancer-free? Since about 2021. Two years. Okay. All right. I'm thinking more like an insurance person than a medical person right now.

That's what I'm trying to do because i don't i mean i know very little about this except just having been around it as a human being but i'm not a medical person you follow me so um but the experience that um i've had i mean i have uh two or three ladies ladies almost within eyesight of me right now that on our team that have been through that and are a couple of years the other side of it and are doing fine um and the prognosis is excellent for them um but you're right they're not they're not insurable for life insurance today uh but in terms of their life their life looks really good you follow me yeah and that's i'm just judging it based on that. Again, it's not a medical diagnosis.

I don't know anything about that. But I do know you can't get life insurance. I do agree with that today. So you're single. Do you have any children? No. So you have no dependents. Okay.

And that affects this. I'm very hesitant to have someone who's uninsurable cancel insurance. Because you can't get it right now. And if you even have a scare, let's say you go three or four years and then you have a scare. You're not going to get it for another three or four years. So you might end up going a decade. With no hiccups, maybe three or four more years you'll be getting it, right? But if you had a minor hiccupcup it could be a decade without it

and your life could change a lot at 37 in one decade you follow me all right so i'm always hesitant to lose something that you can never get back and that's this insurance you can't get it back anytime soon um the good news is i also go. I also have a term. Oh, great. It's term 80. It has a face value, a death benefit right now of $150,000. Okay. That's extra information that's very helpful.

Thank you. Yes, cancel your whole life. Cancel your whole life. I have a long-term disability policy and a long-term care policy. And I had all of these policies before i was diagnosed good okay okay yes i would cancel your whole life if i were you because you here's the thing no one is counting on your income if you were to pass away so 150 000 cleans up takes care of your funeral and cleans up, takes care of your funeral, and cleans up the vast majority of your debts. And the sale of your house cleans up the rest of them. Agreed?

Right. So your mom, dad, brother, sister, somebody cleans up your estate, and you've got the money to do every bit of that, and there's no burden left to anyone. There's no one that was left counting on your income that doesn't have it like a child left behind that kind of a thing which is the primary use of life insurance is to make sure the family's okay so given all of that and that you have this 150 internment place um and uh three years from now you get married and have kids and you get some life insurance to

just you know to cover a family situation and you've had then five or six years in remission you're become insurable uh most likely at that point then yeah then you've got a fine plan you see what i'm doing yes and that's that i'm just trying to kind of anticipate but the eleven thousand dollars doesn't fix your debt mess you got to go fix that with your $140,000 income, right? And you've got to start really cleaning that up. And you have to get very, very serious about living on beans and rice, rice and beans. But getting rid of the stinking payment, because this whole life payment is what, $500, $400?

All of my life insurance policies, premiums, I 508 a month for every yeah but how much of that's the term 90 uh the the term insurance is 88 a year my whole life is about two thousand dollars a year yeah so we're saving two thousand dollars a year that's what i'm more concerned about than the eight thousand okay and so are the eleven thousand the eleven thousand dollars yeah you can pay off some of the debt um start cleaning up uh you know the car the renovate whether you keep the car or not i don't know all that but yeah the answer to your question is yes i would you drop you got a whole picture here we're looking at that tell you to drop this but the number of times in 30 years on the air I have told someone who's uninsurable

to drop a life insurance policy, even as much as I hate whole life, is very, very low. Almost never. Well, yeah, because what are you going to replace it with? Nothing. You're in a mess. And I almost never would tell you to do that. I hate whole life life insurance. It's a piece of crap of a product.

But in your case, we're saving you $2,000 a year plus putting $11 thousand dollars in your pocket for something that you don't even really need yeah yeah in our case no and uh so the uninsurable just adds drama to the question well luckily she had the term policy in place if she didn't everything if she didn't she had two whole lives worth two hundred thousand would you have advised her to keep both of them or let go of one i might let go one i would have parsed them out and figured out which was which and that i'm afraid the term insurance is probably expensive that's why i guess i guess accurately on the price because she bought it from a whole life company when you buy a lot from a whole life company they jack the term price up to try to show you that there's not much difference between the

two and you end up paying more than if you went to Zander Insurance and shopped among a bazillion companies and got the best possible deal. So, you know, if you go to a whole life company and buy term insurance, expect to pay 25 to 50 percent more. So for nothing, for nothing, absolutely nothing except their marketing plan. So but the whole the whole industry is just wicked. The term insurance is the only way to go, 15 to 20-year level term, about 10 to 12 times your income. Go to zanderinsurance.com. They'll shop about a handful of different companies, a bazillion companies, get you the best possible deal.

And, you know, you're going to be in great shape then, and you're going to kick everybody's butt in the marketplace, if you're insurable. She doesn't have that option. Yeah. So, good question. Thank you for calling in, and I'm glad you're doing okay. Me too. This is The Ramsey Show.

Jade Walshaw, Ramsey Personality, is my co-host today. So when I started teaching this information 35 years ago, I had discovered common sense, God's and grandma's ways of handling money. After I went broke, when I went broke, I was making a couple of hundred thousand dollars a year, and I had a net worth of a million dollars in real estate, and I have all the letters and licenses after my name and all the academic bull crap that says I'm supposed to know something about money, and I went broke. So obviously something I learned with the academic bull crap was just that, bull crap.

Now obviously some of it was right, but I learned from old people that had money and from basic common sense things in the Bible that you have to live on less than you make. You have to live on a budget, a written plan. No one goes to success accidentally. You have to get out of debt and stay out of debt. Your most powerful wealth building tool is your income. You have to save and invest and discover the eighth wonder of the

world, Einstein called it, compound interest. And you have to be outrageously generous. These are five components that are principles of life that are ancient, and they are proven. Then the next thing I had to figure out, and it took me a few years, was in how do I apply them in the real world? Well, I'm going to cut up my credit cards. I'm going to get on a budget. I'm going to not borrow money for a car. What do I do if I'm in debt? Well, we're going to use the debt snowball and get out of debt. Oh, I've got to have an emergency fund. Do I do that before a retirement plan? Oh, I've got to save for my kid's college. Oh, wait, we need to pay off the house. Oh, my goodness. Where do we start? Which

of these comes first? I don't know what to do. So we took the five principles and I put them into a process, a proven plan, a path that we nicknamed the baby steps. Now the baby steps are not ancient. Well, they're 30 years old, but they're not ancient like ancient wisdom from Proverbs. Okay. But the principles that i talked about the five things are all woven into the baby steps and it gives you an order of attack and we've taught people that the first thing you do save a thousand dollars a little starter emergency fund it's not enough but it's just for now the second thing you do baby step two is you pay off all your debts except your house with great focused intensity you live on, and you list your debts smallest to largest

and attack them in that order. Then when you're out of debt everything but the house, boom, you're in the top 10% of Americans right then. And then we're going to go ahead and finish the emergency fund at three to six months of expenses. Then we can let off the gas and let the intensity go down and let it change to intentionality, and we simultaneously do baby steps four five and six save for 15 for retirement

save for kids college and start paying off the house six when the house is paid off it takes you to baby step seven which is everything is paid off now there's nothing left to do but build wealth and become very very generous so in the midst of that, Jade, we've taught this, and you've taught it as well. You're running into some detailed questions about four, five, and six, the retirement, the college, and the house. Yeah, the people on social media are like, you're always talking about paying off the debt, Jade. What about for us who have gotten through it?

Can we have a deep dive on baby steps four, five, and six? And I'm like, yes. So I went through. I look at my dms on instagram and i do look at some of the questions on facebook and i try to pull 10 that i feel like are the most asked questions so let's frequently asked questions on jade's dms yes let's clip through these so the first question dave reads mean tweets well let me add one to it just because you mentioned it so on baby step four dave is it my pre-tax number that I'm

doing the 15% or is it my after-tax number, my take-home? Pre-tax. Pre-tax. So there you go. Your gross revenue. So if you make $100,000 a year, you need to save $15,000. If you make $200,000, you need to save $30,000. There you go. Well, Dave, if I'm on baby step four and all of a sudden I use up my emergency fund, do I have to stop Baby Step 4, which is investing the 15% in order to restock my emergency fund? If you can't restock it within two months, yes. Within two months. So there's your- You don't want to be going without an emergency fund.

When you walk around without an emergency fund, it attracts bad luck. It's like Murphy is looking out, got me one. Oh, yeah. You know. So two months is the rule on that. How about this one? How do I toggle between baby step 3B, which is saving for a down payment on a house and baby step four? Do I pick

one or the other? When do I focus on one over the other? You take that one. All right. So I would say that if you're going to spend more than two years saving up baby step 3B, I might consider adding baby step four to it. if you're going to able if you're able to save up that down payment really quickly then i would just stop baby step 4 when you're done go on to baby step 4 yeah like six months pour the heat on no retirement yeah and then go back to then go to retirement full on yeah okay and sometimes people do i'll take the match my employer matches six so i'll do six percent instead of 15 while i'm doing 3b yeah you can't yeah you can't do them at the time, but ultimately we don't want you to elongate either of them.

You don't want to do no retirement for more than two or three years. That's right, that's right. Let's see, number three, what do I do if I make too much day for a Roth IRA? Backdoor Roth. Aha. Backdoor Roth is you open an after-tax IRA, traditional, and roll it to a Roth instantaneously. I do it every year, and I do it for my wife as well every year. We have fully funded Roths every single year. Perfectly legal. It's a loophole in the tax law.

That's right. And by the way, when you say you open, what you really mean is work with a i work with my smart investor pro they do it i don't do it there you go i just want to clarify that because on the instagrams they're saying you do it like you do your own investing the only thing i do on my investing is um i throw money in an s&p 500 park it till i get my next real estate deal but that that's oh that's maybe step seven stuff there yeah so let me jump down to question 10 because it goes along with it. It says, do I really need to use a financial advisor to choose the funds in my 401k or can I just pick the funds myself? You can pick them yourself in a 401k, but you need a good financial advisor in your

corner, not to tell you what to do, but to teach you. That's right. And then the other thing, if you're watching the news and you go, oh God, Israel's at war, the stock market's going to die, we're all going to die. You know, you need somebody to talk you off the ledge and keep you invested because you don't want to jump off in the middle of the roller coaster ride. I know, that's right. All right, what to do with extra money when your home is paid off?

My home is paid off, I've maxed my 401k,k my iras and my hsa is also maxed what else can i do uh well there's two things that people do i only do one well three things i only do as far as investing what kind of people i buy real estate that i pay cash for and as it goes up in value you do not pay taxes on the increase in value until you sell it uh dave i'm not really into real. I don't want to be a landlord. Buy a low turnover mutual fund. And that means they don't sell the stock inside of it very often. So it doesn't have taxes.

You only pay taxes when you sell out of the mutual fund on 98% of it. You know, if you've got a low turnover ratio mutual fund. And so like an S&P 500 generally would be that. And that's why I use those to park extra money in what about these REITs they're fine uh just check your track record on that's a real estate investment trust it's basically a mutual fund for real estate uh in the old days they stacked them with fees so high that the returns were much less than growth stock mutual funds but in the last 10 years or so they they've really come on. They're doing a much better job of running them.

And I don't buy those because I buy real estate. Right. But they're not bad. And just check the track record on them. Love that. What amount extra should I put onto the mortgage? Or should you ever stop the mortgage to increase investing or vice versa? 15% of your household income into retirement at Baby Step 4,

something into kids college at Baby Step 5, and any other money we find above lifestyle, we put on the mortgage until the mortgage is gone. The two key areas of people that get their first one to five million dollars of net worth and all the research and data that we have says a beefy 401k Roth IRA retirement plan and a paid-off house. Love that. Those are the two places to go to get rich. For college saving, ESA or 529? They're the same thing.

The ESA, the good news about it is there's only one kind, and you control it. The 529, there's three different kinds, and only one of them is good. And the one that you control is the one that's good. True. But don't get into 529. It's three different kinds, and only one of them is good. And the one that you control is the one that's good. True. But don't get into pre- 529 is prepaid college. You don't do prepaid college. You don't do that.

That's a bad 529. And ESAs do have contribution limits. But a traditional 529 with your SmartVestor Pro is the same thing as an ESA. You select the mutual funds, and you're just fine. Cool. Good job, Dave. Quick, rapid fire. Our Scripture of the Day, Proverbs 14, 15.

The simple believe anything, but the prudent give thought to their steps. George Bernard Shaw said 2% of people are thinking, 3% of people think they are thinking, 95% of humans would rather die than think. Oh, gosh. Hardcore, George. Hardcore, buddy. It's probably right. Amy's in Charlotte, North Carolina.

Hey, Amy, welcome to the Ramsey Show. Thank you for taking my call. Sure, what's up? I have a question. So I just, I'm about to close on a house. It's a $330,000 house that I put 18% down. So I put $60,000 down. And so the house comes in bare, doesn't have refrigerator, nothing at all. And of course, those are the things that I have to buy. And I'm just wondering, like, how should I go about it without getting into debt? Did you know, I'm just, I have to ask, going into buying this house, did you know that there wasn't going to be any appliances inside?

Yes, I did know. So what's your plan? You know, so I have, so I put aside, so I still have like 20,000 kind of, you know, kind of my saved up to just get things at really bare minimum. And I have lived 35 years without having to ever buy furnitures. So everything is going to be brand. Like I have to get everything from bed to fridge to washer and dryer. Yeah.

That's when I found out. No. Was that your emergency fund? Correct. Yeah. I don't, I don't want you to use your emergency fund for something that's not an emergency.

So let's just play pretend a minute you close on a $330,000 house you spend your last $20,000 furnishing it the next day something's going to go wrong and you have no money right that's why jay doesn't want you to spend your emergency fund so how should i how should i do about them how should i go about i mean that was your plan to move into the house broke yeah so that dave said it that was your plan to move into the house you're gonna have to move very slowly and very methodically what do you make i make um i make uh 35 tax free and i make around like 40 have to be taxed so I make 75 70 yeah around there where do you get tax-free income from retirement from the military

like this all these okay so what's your what do you bring home each month help me out the class 5,000 okay so let's see here and you're completely debt free or did you buy this house with no three hundred thirty thousand dollar mortgage no no i meant other debt oh you have other debt so i have no other debt okay and i finance house two hundred and seventy five thousand oh you put a 60 down on 330 purchase okay that. Okay, so what this looks like is every month you're going to be doing a detailed budget in order to figure out how much margin do you have to put towards what the most important thing is. So if I'm you, I'm making a priorities list. The place you live now, do you have furniture in it?

No, I'm renting a room. So everything is furnished and I'm not sure if that's relevant, but my boyfriend's going to be moving in. And my other question is, it's going to be my house and he's going to help me pay for mortgage. And I'm trying to pay it this like kind of within like 20 years and he's going to help me have the mortgage. But since he's in my house and I wonder what is a fair amount that he should pay in because i you know at the end of the day if we don't work out it's gonna be my house and i don't want to screw somebody over and what do you guys think is fair so you get my second um yeah okay so let me back up to the other part first okay um you're a room, and you don't own a bed.

No, I don't own anything at all. Okay, all right. The first thing I want you to do is I want you to take $5,000 and go buy a mattress and a bed, and I want you to buy a used refrigerator, and I want you to use the laundromat until you can save up the money and buy wash and dry.

That's going to leave you $15,000 in your emergency fund. And then you're going to cash flow furnishing this place out of your income. So every month or two, you're going to buy another appliance, another piece of furniture, and you're going to pay cash as you go. You don't do this with a mattress, but everything else in the house, go to the rich end of town and go to the garage sale, and you can buy a $9,000 leather couch for $500 at a garage sale in the rich end of town because the lady redecorated

and didn't like the color anymore. And that's how you're going to furnish this place, the first round of furniture get a decent refrigerator that's kind of gets life started you can go to the laundromat until christmas and then you can save up and buy a washer and dryer if you want to do it faster you can buy a used washer and dryer and later on upgrade to a new one all with cash and sell your used one on craigslist okay so you're going to 15 000 you have to keep in the account five thousand dollar budget to get you started with a bed and a refrigerator and a couple

of other items okay okay does that make sense to you that way if you you have an emergency you don't lose your home yeah that would be so you know i feel like you know i got a beautiful house and my my but you took it all you took it all the way to the edge kiddo i mean you left no margin in this deal i mean you can't you can't breathe the way you've got this tightened up so tight then the second piece is um i don't recommend that you ever buy a house or depend on someone that you're not married to to pay for your house. And so if you're going to choose to shack up with him, I would my preference as an old guy who has a couple of daughters. And I know how sometimes people get treated in these situations is I would say he can't move in unless he got married because there's kind of that thing you know and it's much better for you you're the one that comes out on the short

end of the stick not the guy oh I thought it was the other way around no you're the one that comes out that does not go well for the ladies in these situations economically the economics really suck for the ladies in these things so um and somehow guys keep talking them into it but i'm not sure how um so i you know i'll just be old fogey and you can be mad at me if you want to i love you and i want you to win and i'm telling you the truth of what i would do if i were in your shoes or what i do tell my little sister or my best friend or whatever he doesn't move in unless he gets married um you run your own life and if he's a man and wants to step up and serve his uh spouse then yeah he can come on board here and we'll go

aside from that if you're going to do this don't depend on him to do it and then you can just decide there's not a fair price for shacking up there's not a shacking up schedule we don't have a schedule for that there's not a price on it so um you just gotta decide you know who's paying for the mustard who's paying for the mayonnaise who's paying for the bread who's paying for the lights who's paying for the water or what percentage or whatever and you got a roommate yeah it's a you know it's a roommate situation and it's just like in college that's my mustard you. Yeah, it's a roommate situation. You know, it's a roommate situation. And it's just like in college, that's my mustard. You know, I mean, it's the same stuff. And so that's the problem you get into.

And it doesn't bode well statistically. The data points don't bode well for your future wealth building in this scenario. And it doesn't even bode well for his future wealth building. There's actually what we call a marital advantage in the statistics out there, in the data. People who are married have an economic advantage over those who are not. The data is slam dunk. It's not even close. So something to consider.

I got all up in your business, but you asked, darling. But yeah, as far as the house goes, $15,000 in the account. Get a refrigerator and a bed, used furniture on the rest of it, work your way up with cash flow. What do you think? Yeah, I was shocked you gave her the $5,000 out of the $20,000, if I'm being honest. Well, I think she's going to go buy a refrigerator. I don't think we can stop her.

Look, Jade Warshaw would have said, you better get you an air mattress and stop playing. I'm not telling her to get a real mattress. You get an air mattress and you playing i'm not telling her to get a real mattress you get an air mattress and you get you a college refrigerator i'm talking about the little guy that goes on the floor because i want this as a reminder to never do dumb stuff like that again yeah never take never take yourself all the way the edge yeah that's the dumb thing you took yourself all the way the edge and then what should have been a blessing can end up being a curse and that's what we're afraid for honey living like a like a rapper in this big old house. And no furniture.

With no furniture. That's how rappers live? I didn't know that. Giant gold chain. I didn't know that. And no money. Just learned something. That puts us out of the Ramsey Show in the books.

We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Hey, what's up, guys? It's Jade. Look, if you like what you heard in this episode and want to know more about getting started on the Ramsey Baby Steps, go to ramseysolutions.com and click the Get Started button. We'll help you figure out the best next step for you based on your specific situation.

That's ramseysolutions.com and click Get Started.