The Ramsey Show - App - Financially Preparing for Your Future (Hour 2)

Episode Date: September 29, 2022

George Kamel & Kristina Ellis discuss: What to do after selling a house, Selling a car to pay off debt, Paying for a house, Preparing for the future, Figuring what debts you owe so you can pay them off. Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the pods moving in storage studios, this is The Ramsey Show, where America hangs out to have a conversation about your life and your money. I'm Ramsey personality, George Campbell, host of the Fine Print Entree Leadership Podcast and co-host of Smart Money Happy Hour with Rachel Cruz, joined today by bestselling author Christina Ellis. And we are pumped to take your calls today, America. The number is 888-825-5225. We want to help you take that next step with your life, with your money. You're at a crossroads. You're feeling a little anxious.

There's a lot going on in the world, Christina. There's a lot to be anxious about. We want to hopefully give you some peace. Yes. And I love that new ad to your intro, the Cohost of Feeds, Smart Money Happy Hour. Feels good. One of the top 20 podcasts in the nation right now. Y'all check it out. It is amazing. I haven't even listened to the latest episode. I don't usually go back and listen to things with my voice. I don't enjoy that.

And it's proof that I'm not a narcissist, James, despite what he tweeted earlier today. I'm just kidding. James, he's a sweet producer. He would never do that. I don't even have Twitter, George.

He doesn't even have Twitter. He's off the grid, man. You can't find this guy. His real name is not James. Well, what's crazy is you're sitting, you know, you're saying there's all this heavy stuff around money in the world, but y'all bring levity to money, which is so needed. I think a lot of people want to learn about money. They want to get better with their finances, but then they look on the news and it's overwhelming and it's all negative and it's all kind of depressing, but y'all bring

fun to money, which is so needed and so cool. Well, we just got this comment. Our team just sent it over to us. It says, my husband and I are really enjoying this podcast with Rachel and George. They really bring us laughter and we look forward to listening to them together in the mornings. We're in a difficult season. So to have something like this to look forward to is awesome. Thank you, Rachel and George. Keep it up. And that just, it warms my heart to know that, you know, everyone's going through a hard time. We need to laugh. Laughter is medicine. And that's why I love comedy. That's why I watch late night shows because the news is heavy. And so to make light of it a little bit while also staying informed is very important to me. So that's how I choose to digest the news through the lens of comedy.

And like money can be fun. Like we can talk about the Royals and their money and all the things y'all unpacked this week on the show. That's right. And I learned a lot. So go check it out. You can subscribe, follow Smart Money Happy Hour wherever you listen to podcasts and let us know what you think. All right.

Open phones, 888-825-5225. Nicole's kicking us off this hour in Toledo. Nicole, welcome to The Ramsey Show. Hi, thanks for having me. Absolutely. How can Christina and I help? So I took a job and I will be relocating between now and July of next year. And part of that relocation package was they're covering the sale of my home here and all the fees. They're covering the closing costs of my new home.

They are also providing me $17,000 worth of relocation assistance. I'll get about $15,000 from the sale of my home. And I'm a military veteran, so I get VA benefits, so I can get a 15-year mortgage with no PMI. So my question is, do I take that $30,000 and put it towards my $60,000 worth of debt, or do I still put it down as my down payment on my new home? Oh, that's a great question. Well, first of all, this company is very generous. That's incredible that they're doing this.

You must be very sharp. What kind of work are you in? Transportation and logistics. Cool. Okay, so you have $60,000 in debt? Yes. What's that made up of? Student loans, car, and a home repair that was done okay

and when you move do you plan on renting for a while or what's kind of your thoughts on housing so i was actually planning on buying and i'm looking to stay within 150 to 175 and what's the new area? It's a Cleveland-Akron area. Okay, so you're still in Ohio, and you know the home price is over there. And how much equity would you be able to roll into the new house? Between $15,000 and $20,000. Okay.

And that relocation money, would you need all of that, or is that, you can use that towards the new house as well if you have extra? I can use that for whatever relocation I need, whatever relocation assistance I need. So what's your income in the new position? Monthly take home after that, my military pay and child support is roughly $6,500 a month. Great. So an easy way to look at this to make a decision is to take that and divide it by four, and that will give you a quarter of your take home pay. And so that tells me that $1625 is my top, that's my top budget for a mortgage payment on a 15-year fixed. So how much would you need to put down in order to have that be the payment?

So I think I looked, and if I stick with $150, I would be at like $1,500 a month. Okay. If you go out $150 house, and how much would you have to put down to do that? Nothing. You'd have 0%? If I put nothing down, I think it calculated to $1,500 a month. Okay. Well, I would love for you, if you have 15 from the home sale, let's put at least 10% down. You said you're not going to have PMI because of the VA benefit. So let's put at least 10% down as the goal, and the rest we can throw at the debt,

knowing that our payment is still going to be less than a quarter of our take-home pay, which leaves you with a lot of margin to then tackle this debt. So then roughly half in debt and half on the down payment. Exactly. Yeah. And with you moving to this new city, is this somewhere you think you're going to want to stay for a while? Yes, I do.

Okay. Because, I mean, there is the option of taking a little bit of time to rent. We often recommend people rent for a year when they're moving to a new city just to even figure out the areas. Make sure that you love that new location and that job that you're not going to want to uproot somewhere else before you really commit to a home purchase. Because that is a huge decision. And if you do need to sell that home in the future, you may not have those real estate fees covered if you're not with that company. So there is the option to just take a little bit of time before purchasing to just kind of get to know the city and the areas. Now you have about, what, eight or nine months? Is that enough time for you to actually go visit and check out the areas and work with a real estate agent and really start to dial some things in? Yes, it is.

And on top of that, the next eight or nine months, we're going to be focused on knocking out this debt too. Correct. Love it. So you're going to have, how much debt do you think you could pay off for the next eight months from that 60? I think I can get at least 20 of it covered. Wow. So now we're down to 40. And if we put 15 on that, we're down to 25. And now, you know, by the end of next year, you'll be completely debt free with a fully funded emergency fund. That's the goal. I love it. That's a great vision to have. And thank you so much for your service and sacrifice.

And congrats on the new position. And what an amazing company. Thank you. That's incredible benefits. That's just awesome. That is very, very great. So if they're hiring, you know, I don't want to leave. But if you're out there listening, there are companies out there offering these amazing, amazing benefits. So don't be scared to look around to start applying. If you're looking for an increase in pay, you know, Ken Coleman's talking about this all the time.

It's one of the best job markets we've ever seen. So don't be shy, apply. That's my new tagline, Christina. I like that. Take it if you will. Hey, more of your calls coming up. 888-825-5225. This is The Ramsey Show

888-825-5225 you jump in we'll talk about your life and your money. John Carlo calls in next from Puerto Rico. All right, John Carlo, how are you doing? I'm doing good. How about you guys? We're doing wonderfully. How can we help today? All right. So just to give you guys context, right? So I'm currently in baby step number zero. I'm currently getting current in all my bills because I was about five weeks without income. So that set me back up, but I'm not too worried about that because I should be back on track in about three to

four weeks at most. And then baby step number one should take me a month at most. Now I'm thinking of baby step number two. Over here in Puerto Rico, the interest rates in cars are very high and I have around $24,000 in debt total, out of which 18,000 is in my car. However, my car can sell for about 14,000 with its current,

you know, model year and mileage. It can sell anywhere between 14,000 to 15,000, but I'll probably need to spend or lower the price by about $1,000 to $2,000 because of physical damage repairs. Mechanically, everything is good, but there's a physical damage in the bumper. So I'm just wondering, I've never gone through the process of selling a car, and my mindset is I'm thinking of selling it at around $12,000 to $13,000, and then instead of putting all that in the car, using about $1,000 to $2,000 to get then instead of putting all that in the car, you need about 2000 to get, um, the 1000 to 2000 to get a used car and then dumping the rest of the 10,000 and

all my other debt, which should cover all of my other debt and put around, put the car down by 2000, which would lead me to about 16,000. But that should leave me anywhere between $1,500 to $2,000 that I can put in the car per month. And I'm wondering if that's a good idea or how should I go about this? Because like I said, I've never sold a car. So I'm just looking for advice on how to go through this process. So you're not going to be able to sell the car as long as you have the loan on it. Okay. So you're underwater on this based on what you told car as long as you have the loan on it. Okay.

So you're underwater on this based on what you told me. You said you have $18,000 on the car loan, but it's worth $14,000 or $13,000? Correct. So that means you're in the hole by about $5,000 on the car right now. That's correct. So that's the part of the – I didn't hear that as part of the equation. What was your solution for that? All right. So what I'm wondering is how to go about this because I don't know if I can even sell it while I would still owe over it.

No, you can't. You need a clean title in hand. And you can't have – so what you need to do, one of two things. One, which I like the best, is you saving up $5,000 really quickly, sell everything, take on side jobs, and then once you have that $5,000, you sell it for $13,000, you're cleared. Now, you have $0 to your name and no car, so that's a problem. So you're going to need a little more to be able to even buy a car. The other option, which this is the only time we'd ever tell you it's okay to take on some debt,

is to take a personal loan for the difference from a local credit union. I don't know what it's like in Puerto Rico. In order to cover the difference, take out a $5,000 loan, you pay off the debt, and now we're in $5,000 of debt instead of 18. All right, that sounds good. And then another question, because that sounds perfectly fine. And then another thing that I'm wondering is, would it also be possible for me to just put on hold baby step one, for example? So first get put on hold baby step one. If I do that in less than five months, I should have enough to make that difference and then be able to sell that car and continue with baby step one. Is that doable? Or should I just wait until I am in baby step two? You would need to wait because the problem is if you try to skip baby step one,

then every little ankle biter emergency is going to set you back and throw you backwards into debt because you have no cushion. So the point of baby step one is just a tiny buffer to grab those ankle biters, the flat tire, the medical bill, those little things. Most emergencies in our lives that we think back on are less than $1,000. And so that's the purpose of that, is so that you actually feel some traction. Otherwise, you're going to be in baby step one forever. Yeah. All right. Well, that sounds good to me. I think that's pretty much it. Yeah. And also, when you go to sell that car, just make sure you really look at Kelly Blue Book, see that range. You mentioned that you've got something that you would knock down

a thousand or two thousand dollars for. But, you know, before you do that in your advertising, you may want to list it at 14 or 15, like you said, and then allow that to be part of the negotiation versus starting at 12 or 13 and then possibly having someone complain and want a little bit more knocked off. So just make sure you really look at the car's value and see if you should start a little bit higher so you have some negotiation room. Yeah. And on top of the private sale, Giancarlo, you can also look at a lot of these online retailers that are buying cars right now and they are paying top dollar still. So I would take advantage of that and do your due diligence, do your homework, research all of these sites like Carvana and Vroom that are paying sometimes more than you could get private sale.

And you're not dealing with the negotiations back and forth. And they're happy to go fix it up and resell it for a profit. So that's another option for you to look into as well. Absolutely. And I know that this sounds so basic, but just make sure to clean your car before you go to sell it. Having looked at used cars, I've been kind of blown away sometimes where I'm like, just vacuum the car. Go through the car, watch for $10 and use the free vacuums. I did this the other day to mine and it felt like, I have a brand new car. It's lovely. And when you're trying to sell your car, like you need

that. You need that like nice car smell. It like makes you more likely to buy. And it's just funny how many people skip that. Just breeze it down, guys. Come on. All right. Good stuff. Mary joins us up next in New York City. Mary, welcome to the show. Hi. Thank you for taking my call. My nerves have gotten to me. Oh, it's just us, Mary. You're going to be fine.

It's just us. Yeah, it's fine. So I have a question about at what point do you start saving up for a down payment of a house? Where are you at right now in the baby steps? We are past the emergency fund step. Then you are exactly where you need to be to start saving up. We call it baby step 3B. It's an optional step because not everyone is going to buy a house with their current state and where they live and all those things. So that's where you do it because you have a financial foundation where you have no payments

and you also have a fully funded emergency fund. So that's where we begin to save up 10, 20% down is ideal to avoid PMI at that point. So have you looked at houses in your area? Yeah, we've looked at houses in the area and it's more so like we know that the down payment is ridiculous at 20 percent um are you like in new york city proper i yes proper yes wow so have you what what kind are we talking a condo uh no no like like an actual house area um they have they have parts of like the city that you can actually get a house, which the down payment would be roughly $200,000. And so you're looking at like a million-dollar house?

What are we talking? That's the average price of any house in New York City. And what's your income? I believe the take-home combined is around... Sorry, you broke up on us. $150? Sorry. $150 is take-home. Okay. All right. So what's... I was confused if we should be saving for retirement at this point too, or do we stop that? Yeah, that's a great question. It becomes kind of a choose-your-own-adventure when you get to 3B4. Some people, how old are you two?

I am 34 and he is 39. Okay, do you guys have anything saved in retirement? Yes, we both have been contributing when we first started out at our first job. So we do have some in there in the 401k. And then I have a, we both have Roth IRAs and as well as I should be getting a pension from my company as well. Cool. Matt, how long do you anticipate it'll take you to get to that 200k?

That's what I'm trying to figure out now. Like we are going to sit down and have a big budget meeting on Saturday and kind of going to go over everything at that point as to where everything lies and how long it would take us. Okay. Because we don't want you in 3B for too long. Yeah. We don't want you to pause that investing portion for more than about two years. And so that's the purpose of it is you get really aggressive with the savings. And the truth is you don't get a pass on math in New York City. And I'm doing the math here on our mortgage calculator, RamseySolutions.com. If you put $200,000 down on even a $950,000 house, your mortgage payment is $7,000.

And if you're taking $12,000 home, that is a huge portion. So it may mean you live further out of the city. It may mean it takes you six years to save, and we're going to invest 15% while we do that. Okay. Did I hurt your feelings, Mary? I don't want to do that. No, no, no, not at all. Okay.

Never. I just want this house to be a blessing and not a curse. And so part of it is you live in one of the most expensive areas in the world, and it's just going to take longer if that's the goal and that's the dream. So stick with it. This is The Ramsey Show. Have you ever noticed when you commit to a change in one area of your life, it's easier to make progress in others? We've met thousands of people on their journey to building wealth who accomplished other amazing things along the way, like losing 50 pounds, improving their marriages, finding careers they love,

overcoming stress and anxiety. What seems impossible becomes possible when you have a smart plan in place and you turn up the focus and intensity on your goals. And that's exactly what we do at our Smart Conference event, and it's coming to Dallas, Texas on Saturday, October 22nd. This is a full one-day event where we help you build momentum in all areas of your life. Whether you lost your job, the credit card bill's eating up your paychecks, you need a little pep in your step because the financial journey is long and hard, or you're feeling all alone in this crazy world, we've got you. Ramsey Personalities, Rachel Cruz, Dr. John Deloney, Ken Coleman, Dave Ramsey, Christina Ellis, myself, we'll be on stage to give you a smart plan for your money, your relationships, your career, personal growth,

you name it. We'll also have special guests, Craig and Amy Groeschel there as well, speaking on marriage. It's going to be a good time and very entertaining, I might add. There's going to be live music. You never know which personalities will jump up there. Maybe Christina will do a solo on the guitar. Wouldn't that be entertaining? More likely John Deloney because this guy, it's his childhood dream to be ripping a solo in an arena. And so we're going to hopefully let him do that. So that's worth the ticket price right there, folks.

Join us live in person October 22nd. Get your passes before they sell out. Even if you're not from Dallas, we get people who visit us from all over the world at these events, and I love meeting them. And it's a full day. You're drinking from the hose on this one. I mean, you just leave exhausted, motivated, inspired, ready to make some changes in your life. So join us. Bring some friends along. RamseySolutions.com slash events is the place to go. Reserve your seats today. This is going to be a sellout event. Good times. You ready for your talk at Smart Conference? I'm excited. Yeah, I'm stoked. We just put on the final touches last week and I can't wait. You're ahead of me, but it's going to be great.

I'm very excited about where it's going. All right. Open phones this hour, 888-825-5225. Lori joins us up next in St. Louis. Lori, welcome to the show. Thank you. Thank you for taking my call. Yeah. How can we help? I need to know how to plan for my future and my children's future. I am debt-free except for my mortgage, but I've still got quite a bit on it. I'm in my 40s. I'm a single mom. I have two elementary school-age children. I make, well, 54 net, but that's after everything, so about 75 gross, so not a lot.

I do contribute 15% to my 401k. I do drive an older vehicle. I've got about $100,000 in like cash on hand in different accounts that I could access like checking savings kind of thing. I don't have anything set up for my children's education other than that, that cash. Um, I don't have any five 29s or anything like that. Um, so yeah, I'm just looking for what's the best way to move forward. Um, my investments in my 401k are just, it's like a program that invests for you automatically based on when you're supposed to retire. Oh, like a target date fund? Yeah, I don't...

And you can't choose it? Oh, I probably can, but I know nothing about any of that. Okay. So I just leave it like that. Got it. So... Well, Lori, you are doing a lot better than you think you are. You sound kind of defeated and you feel like you're not making progress, but you're amazing. Yeah, that was my thought. You're

just, you're doing a really good job. I think you, yeah, kind of feel heavy about it, but I think we should start with the foundation of you're doing a really good job. So let's dig into some of these details. You've got the mortgage left. What's on that? 167. Okay. That's not too bad. And you have a great income. You sounded like you feel like you don't make enough. Are you able to pay all your bills? Yeah. So the $100,000 in cash, does that include your emergency fund of three to six months? I don't have it broken. Yeah, I mean, I definitely have. My house payment's only $1,000 a month.

Awesome. Lori, what's kind of your financial background? Like, how did you decide not to take out debt? Have you been following the baby steps? What kind of got you started on this journey and made you want to call today? Well, I've always been really responsible with money, but then I went through a divorce that depleted me quite significantly. So I think there's a lot of fear that just because I had more. So now it's like I want to make sure that my children are taken care of and that, you know, I just, I guess I've been feeling old lately and I just want to make sure that I have a plan for the future and that I'm not dependent on them.

I don't want them to struggle. So I think it's a lot of it's probably fear based and, and I've never really taken, I mean, I had to pay off debt, so I was intentional at one point in my life. But for most of my life, I haven't struggled financially. So I've never really been too intentional about where my money goes. It's like if we go to the store, I don't have to think, do I have enough to cover it? I just get it.

Well, we can help with that side of it. I'm going to gift you one year of every dollar premium to help you make a plan for every single one of those dollars, because I think that will give you confidence and a little pep in your step that you're not just wandering through your financial life and making ends meet. Yeah. And have you taken Financial Peace University? No. Let's also get her access to that. I love it. One year of financial peace, one year of every dollar. And there's one more thing I think I want to gift her. Let's get you a copy of Own Your Past, Change Your Future by Dr. John Deloney, because you've been through a lot. And I think, like you said, you're feeling a lot of fear. I think you're feeling a bit defeated,

but you're really doing a great job. And I think that you've got a really bright future ahead. But this book will help you kind of walk through those emotions so that you can get rid of some of that heaviness and really take ownership of your journey. Yes. So Lori, we're going to do that at the end of the call. Austin will pick up. We'll gift you with all of that. But before we go, let me hit you with just some real tactical things you can do this week to make you feel some progress. Number one, there's probably an advisor, a financial advisor that's attached to your 401k plan at work. So contact your HR team and figure out who that person is so that you can get in touch with them and they can help you figure out what funds exist in that account that align with our principles. I want you in growth stock mutual funds diversified across

four types. This is, you can easily find this stuff on our website. And I want you in that instead of these target date funds, because what those do, they switch you to way more conservative investments over time. So you're going to be invested more in bonds than stocks. And bonds have, they're safer bets, but they also have very little growth. And I don't want that in retirement where you go, I'm running out of money because I'm invested in things that aren't growing. That's a problem. So that's number one. I mean, when I look at my 401k, that's where I get most defeated because, of course, it's not done well this year. Oh, yeah.

The market's terrible. Terrible year to look at your 401k. But we're thinking future Lori here. We're thinking 20 years out. And so there's a great track record on that. The second thing is opening a 529 plan or an ESA, Education Savings Account, which you can do with one of our SmartVestor pros at ramseysolutions.com and click on Ramsey Recommends. And they can help you set one of these up and they'll align with our philosophy on which mutual funds to choose inside of that. And the ESA has limits of about $2,000 a year.

But with the money you have, the $100,000, I'd go ahead and just fully fund that for the year, $2,000 each for each of the kids. You can also do a 529 plan that are state specific. They can help you choose one of those. And those have way higher limits for what you can contribute. So that will help you. What's the benefit of that? Well, that money will grow tax free and then you can withdraw it tax-free for education expenses. Okay. So that will set them up for college. They're in elementary school now. So, you know, think 10, 15 years from now, if you just do that every year, that money's going to grow to be six figures and help them go to college debt-free.

Okay. And then anything beyond that, you're already investing 15%. We're throwing some money into the kid's college. Beyond that, take the rest of the money in that account beyond your three to six months emergency fund and throw it at the mortgage. And let's start attacking that mortgage next. Okay. What if I'm not sure that I'm staying in my current home?

Well, the good news is the money didn't disappear because when you sell that house, you have all of that equity that you'll be able to roll into the next house. And so I love it because it's a forced savings plan because when it's sitting in the bank, it all of a sudden becomes the new car fund, the vacation fund,

instead of the freedom fund for Lori so that she doesn't have a house payment for the last 25 years of her life. So that's my dream for you. So start dreaming, get connected to a smart investor, take care of their 401k. You're doing great. There's just little tweaks along the way,

but you're a warrior. Single moms are very, very impressive. You're doing so great. I grew up with a single mom, and y'all are warriors. Amazing. Heroes. welcome back to the Ramsey show I'm George Campbell joined today by Christina Ellis and we are taking your calls it's about your life and your money. 888-825-5225. Colorado Springs is where we go next. Andrew joins us there.

What's up, Andrew? How's it going, sir? We are doing so great. How are you? How can we help? I'm doing. I have a question. I'm on babysit.

Sorry, you're breaking up on us. Can you try to get to a clear spot? Can you hear me better now, sir? A little better. Let's try that. All right. So I'm on Baby Step Zero with two credit cards, and I don't know how to figure out my debt. I'm trying to figure out how to start zero, but I have no clue at figuring out the how to figure out exactly what my debt is i don't know that avenue do you know who you owe that debt to um so me and the wife we've been together five years we know we have two credit cards i know i went to swift there might be a possibility with that company could owe some money but it just maybe think of it as completely negligent with money what is the fastest way to figure out who you owe debt to so you can start paying it off well the

first place i don't think we're yes ma'am yeah the first place i'd start with is your credit report so you can go in on your credit report it's going to list the different creditors that you owe money to and you can pull that for free. So don't pay for it. So I've already made a few mistakes, okay? You already paid for it? I did about six months ago, but it didn't show... It was totally clear? I believe it was one... No, I'm sorry.

It did show up like 100 or 150. I'm sorry, my friend friend you're breaking up on us i said it did show maybe 100 150 cell phone bill from the past but that's all it showed up but that was there was i don't know if like it fully considered me and my wife i i'm not for sure did you run a report for both of you? No, ma'am. I did it on my information. Okay.

And you remember signing up for two credit cards? We have two credit cards together right now, and the total balance is like $900. We can knock that out. That's no problem. We're just trying to figure out who else might be holding the debt gavel. Okay. How do you know that you owe the $900? Are you getting statements in the mail or where's that? Yes, ma'am. They send us, they send to in the mail and we know we opened these cards. Well, they should, you should have an account with them them can you contact them and have them pull up

your file and say hey what what exactly do i owe have you tried that yes sir no i i these two of the 900 i fully understand i just want to know if there's any more debt looming over us and how to figure out how to take care of that before we start on baby step one but to your knowledge these two are is all the debt you have. You have no recollection of any other debt sitting out there. Other than that cell phone bill that it pulled up, it did ring knowledge when I was 19 that I might not have paid the bill and now they're holding me for $150. Well, there'd be collectors calling you. You'd be getting some stuff in the mail. So

I don't think it's going to be much of a secret if you owe money. Well, and could you call up that cell phone company just to check? Yes, I can. I haven't yet. We just started on this journey for about a month now, less than a month. Okay. We're glad you're on board. And part of this plan, Andrew, is starting to be very proactive with money instead of reactive. We've got to start paying attention. We're not going to be passive. We're just going to be aggressive. We're going to be on the phones figuring out who we owe, what we owe, how are we going to pay this off, how quickly can we do it, how can we get a financial foundation under us so that we can sleep better at night and we have freedom.

And so we can help you with that part with a budget. And I'll gift you one year of every dollar premium and Financial Peace University for you and your wife to go through. Since you're new listeners, I want you to get a full picture of what this crazy plan looks like so that you can feel that motivation and progress. Yeah. And don't be afraid. Don't be afraid to get on the phone and just call people. I think there's no afraid to get on the phone and just call people. I think there's, there's no harm in picking up the phone and just being kind of shameless. Like if you think there's any chance that you owe somebody something, check. Like a lot of people have medical debt that pops up. They didn't realize that they had. And then one day it just,

they're getting a call from a collector and they're like, whoa, I didn't see this coming. So if there's any chance you have a medical debt, a traffic ticket that's outstanding or anything like that, just give the person a call and double check, you know, just to make sure. Andrew, both of you, your wife and yourself, go to annualcreditreport.com. You can pull for free once a year, your credit reports from all three credit bureaus, TransUnion, Equifax, and Experian. And so what you can do then is cross-check between all three to figure out what debt is sitting out there and what you owe. And that will help you gain some confidence and clarity.

As far as you know, is it just the $900 that you all owe? Well, plus the $150 for the self-employment that I do remember. So about a grand. Call it $1,000. What's your income? $70,000. I just got promoted promoted so i'm making seventy thousand a year great so this debt's going to be gone tomorrow uh pray to i just want to make

sure i because i don't want to get caught in trap of uh well now you didn't take care of zero so guess what you moved up but now you got to go back there i want to make sure you pay your balance talked about it i want everything kosher before even moving up. I want it done so I don't have to deal with it. Well, get it in writing. Anytime you pay, say, hey, I want this written. This is settled in full. And close the account.

Well, and also, I would encourage you to get that $1,000 emergency fund because we've got the baby steps and baby step one. You said you're on zero. Baby step one is get that $1,000 emergency fund. So I would do baby steps and baby step one you said you're on zero baby step one is get that thousand dollar emergency fund so i would do that even before you worry about these cards and then go to baby step two so that you can avoid going into any further debt understood i'll definitely do that but i love this i did miss is i'm sorry ma'am no go ahead uh something i did miss is the name that website i was trying to write it down but i've been in my hand annualcreditreport.com report okay and don't pay a dime yeah well i already messed up but it won't happen again you gotta learn that's all right hey i think you got to cut yourself some

slack you keep saying you know you messed up or i gotta have everything right and everything's perfect like it's a journey it's a financial journey we make mistakes all the time, even in our own journeys. All the time. I think Dave would say the same thing. It's just something where you can't expect. That means you're over 12 years old if you made a money mistake. So join the club, Andrew. There we go.

That's it. It's great. So hang on the line. Austin is going to pick up. We're going to gift you one year of Financial Peace University. Watch all nine lessons. You don't have to do it all in one night, but spread it out. Maybe once a week.

There's discussion questions along there. Some fill in the blanks to keep you engaged, as well as every dollar premium. What I want you to do is this weekend, sit down with your wife and you're going to map out your income for the month. And that's going to sit at the top. Beyond that is your expenses. List every single thing out that has hit your bank account. Every transaction needs a home in your budget. And what's going to happen at first is you're going to be disgusted. And you're going to go, we spent $800 eating out this month? Oh, my goodness. No wonder we don't know where our money's going.

And so this is step one is admitting you have a problem, and that's okay. I did the same thing when I first started doing a budget. Yep. Step two is to go, all right, we're going to try to aim for $400 for our total food budget, and we're not going to eat out because we are in debt. The house is on fire. We've got to do some things differently. So then your goal is to track every transaction with every dollar premium. It'll connect to your bank. You can drag the transactions up and track all of those. And your goal is to stay within those parameters for each category. And when you do that, you're going to see so much

progress and you're going to feel so confident about the future. And when you do that, you're going to see so much progress, and you're going to feel so confident about the future. And the sacrifice goes from difficult to addicting. Because you're like, where else could we save? We're paying too much for cable. You know what? Cut the cable. We got $400 in cell phone bill. Oh my goodness. No, we're switching. We're going to go $30 for the unlimited plan. We're switching carriers. We're getting ripped off. Right. And so you do that in every single budget line item. And it's amazing all of the money you'll find in the proverbial couch cushion. Yep. But again, show yourself grace in that process. Don't try the budget for a month and go, man, I suck at this. I didn't hit all my line items and I just must not be good at budgeting

because it takes the average person about three months to really get the hang of it. So give yourself grace that first few months because you will reach that spot where you're like, ooh, this is exciting and it's fun. But you kind of kind of, you have to walk through those periods of time where it's like, oh, this isn't very fun because I got to learn it and I got to get used to new habits.

When you're looking in the mirror and you're like, oh my gosh, I haven't worked out in a long time, financially speaking. Right. And it's not fun to look at. But then you see the progress day after day, month after month. And all of a sudden you got a pile of money in the bank and no payments.

And you're able to breathe and you have margin. And you can focus on your kids and your marriage because you're not hoping that next paycheck comes in. So thanks so much for the call, Andrew. Glad you're joining our weird club. Austin's going to pick up and help you out. That puts this hour of The Ramsey Show in the books. My thanks to my co-host, Christina Ellis, all the folks in the booth, Austin, Ben, James, Andrew, Zach, and you America. Thanks for listening. We'll be back with you before you know it. Do you love a good day, Brandt? Want to see the latest Ramsey Show videos going viral?

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