The Ramsey Show - App - From Jail to Debt Freedom - This Couple's Inspiring Journey (Hour 1)

Episode Date: October 4, 2021

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Thank you. Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studio, it's The Ramsey Show, where America hangs out to have a conversation about your life and your money and your family and your relationships and all of the things that matter to you. I'm George Campbell, Ramsey Personality. Joined this hour by my good friend and Ramsey Personality, Christy Wright. And it's a free call today, 888-825-5225. Don't be shy. Pick up the phone. It's not just for texts and apps. It actually makes phone calls, Christy.

Did you know that? You can talk to people with your voice. It's amazing. Yes. And I just saw your media hit that you did on Fox Business talking about taking back your tech. Yeah. And taking back your life when it comes to technology. That's right. But, you know, you've got to pick up your phone to call these days unless you have a landline.

Well, it's so great because so often I feel like people feel stuck in life. They feel frustrated with challenges they're facing or a decision they have to make. And that is exactly the heart behind this show. We want to help you, give you advice when you're at that fork in the road. You've got a few options. You're not sure which option is the best. And, of course, we're known for money. But, you know, whether it's a business question or a question about how to have more time, how to manage your time, relationships, whatever, we're here for you. So, yeah, pick up your phone call.

Maybe you're sitting in traffic. Give us a call. If things get slow, I have a lot of questions for you, Christ. We're here for you. So yeah, pick up your phone call. Maybe you're sitting in traffic. Give us a call. If things get slow, I have a lot of questions for you, Christy. I struggle with this. I am glued to the tech. My wife is trying to help, so she'll be appreciative of that. I gave you a hard time. Was it last week when we did game plan?

Oh, yeah. And all of us, after we get off stage, are like, you know, getting some water, taking a minute. And George here, he's on YouTube. I'm jumping in the live stream chat. Hey, guys. Hey, guys. I just love it

I feel like I'm missing out on the party be with your people what are you on the disc are you like really high I for like relationships

people I'm about a mid I and then a real high S and then C follows that so I care deeply and I love the details so it's a very neurotic

personality type to have very stressful anxiety inducing but hey it makes me a great friend hopefully there you go there you go at the very least So it's a very neurotic personality type to have, very stressful, anxiety-inducing. But, hey, it makes me a great friend, hopefully. There you go. There you go. I love it. At the very least.

So we are taking your calls, folks, and we're going to kick it off with Paul in Atlanta, Georgia. Paul, welcome to The Ramsey Show. Hey, gang. Thank you for having me. How's everyone doing? We are doing great. How can we help? Awesome.

Awesome. Well, I'm going to throw the situation out there. I'll catch it. Me and my wife are starting to hit the next drive. We just got married. First child's on the way. We just found out we're five weeks along. Congrats.

Thank you. Thank you. We have $175,000 left on our current home. She moved in with me. She has about $17,000 left on the car I'm going to pay off. Between the two of us, we got about $180,000 cash, $700,000 in savings, just north of $700,000. Savings, not retirement? Retirement, yeah.

Okay, that's different. I was like, man, you've just been stockpiling. Yeah, yeah. So we got those six months and all. Here's the thing. That's different. I was like, man, you've just been stockpiling. Yeah, yeah. So, yeah. You know, so we got those six months and all. Here's the thing. We are now looking to move just a little north of us. There's a home that we're having built.

We only have to put $5,000 on it, and we can walk away from that if we want to. It's $550,000. We could do $150,000 down payment, but we estimate with, to get down to $400,400,000. We're trying to figure out if it's the right move to us. My mortgage goes from $1,000 to $2,500. She would like to quit work for at least a year, at least, and I'm getting the perception that this might be a permanent retirement, to be with our child, which I'm all for. So she wants to stay home if you guys do this move? She wants to stay home, period, with our child, which I'm all for. So she wants to stay at home if you guys do this move?

She wants to stay at home, period. Okay. With the child. With the child. We're having our new one on our wedding day. No less. Yeah. So what's your take-home pay after that?

If you're down to one income, what's that income? Let's go with $90,000. I can make just a little more than $100,000, but the year before it was $90,000, and I like staying in that number. Okay, so $90,000. I can make just a little more than $100,000, but the year before it was $90,000, and I like saying that number. Okay, so $90,000, and what's your take-home? The take-home, whatever after. So probably closer to $70,000 or so?

$5,000, $75,000, $75,000, yeah. Okay. So what we would recommend here is for that mortgage payment on a 15-year fix. Is that the numbers that you were laying out, or was that on a 30-year mortgage? No, we were doing it, and that's the other thing. We were doing a 30-year at $2,999. So it's $2,500, and that is on the 30-year. Yeah, that's on the 30-year, exactly. Yeah, just looking at these numbers, it just feels like a lot of house for where you guys are at right now.

And you said that she's got $17,000 on this car loan? Yeah, I'm going to pay that off. And so that $180,000 we have in cash, I'll go down to $160,000, a little change. Yeah. I mean, you guys have a good down payment, but based on the house that you guys are wanting and the take-home pay with you going to one income. We'll be home poor. That's how I feel.

Exactly. Yeah, I mean, you have the right head space. And my wife is a wonderful person, so just before we even go any farther than that, I don't think she sees it the way I see it. Well, I want you guys on the same page. And I don't want to sit there and I only have $300 at the end of every month to go enjoy life with, which we could. What would it look like, Paul, to have a – does she work right now? She does. She's got a good job.

What does she make? She does around $65. Okay. Still at got a good job. What does she make? She does around 65. Okay. Still at 60. Okay. George is over here with his notepad running some numbers. I'm not doing the mental math that this would work, but would a conversation be possible where you say something like,

hey, I know you want to stay home for a year. You may want to stay home longer than that. What if we stay put to see if you want to stay home? And if you want to move, then if you want to move then it's going to look like some type of sacrifice either a child care are you working from home are you going back to work in order to your point paul because it's going to be so tight it's like it's kind of an either or situation in this season if you get a raise or you guys make more money in the future she may be able to stay home business owner so there's no raise other than my there you go

gotta give yourself to raise i mean I'd love to give myself a next you know, go to the boss, but I am the boss, so I make what I go for. It might just be a conversation of which do you want more right now? Do you want to move or do you want to stay home? Because at some point we might be able to do both, but right now we kind of have to choose. I don't know.

I can believe it. We put together a game ball. I threw one down because of the 700 we have in combined. I have a little bit more. And we look at it as our money. Yeah. But I had added in a little bit more than 70% of that quote combined savings or retirement funding. Well, I don't want you touching the retirement.

Well, you know, like in 10 years, we could just take a chunk of that and pay off. It would be down to $300,000. Well, I don't want you ever touching this retirement money until you're actually retired. So, I mean, you guys, you've got a good head on your shoulders here. I think what this is going to take is some patience, and you might need to say, hey, we're either going to downgrade in-house and not get a $550,000 house right now, or we're going to be patient for a year, let her continue to work so that you can stack up some extra cash. Because what I'm seeing here is you need a mortgage payment that's going to be about...

Even with the baby being born next year or like a year, because that's what she really wants to be there on with the child. I'm all for it. Yeah. For the baby's health, first and foremost. Then that answers your... If I take her being home, I'm all for it. Then that answers your question.

And the reality is, if she stays home for a year and y'all stay in this house which you can more than afford it sounds like then she's got the option to do that and if you move to a big house then you're taking that option away for her ability to stay home year two three and so on so i think from what i'm hearing from you it sounds like your values and her values are for her to stay home and the best way to put you in that position to be able to live from your values stay home with this new baby which y'all are so excited for her to stay home. And the best way to put you in that position to be able to live from your values, stay home with this new baby, which y'all are so excited about, is to stay in this house, which y'all can afford.

I think you know the answer, Paul. I think you knew when you called. You may just needed us to validate it. We've been battling this back and forth, and I'm the jerk because for the last four months, I go, I'm all in, and then I'm out. I'm all in, I'm like, no, we shouldn't do that. And I'm vacillating, and that's my problem. For that's my problem Paul here's the thing don't let emotions take over here we got to stick to the math and you're doing

the math and I love that but it's going to take some patience and let the baby come and we'll have a great time with that but be patient maybe a year from now you can be looking at getting that house hey i'm christy right let's be honest when it comes to our quiet time with god sometimes we struggle to make the time and get into good habits. That's why I'm so excited to tell you about the Glorify app. For me, it has been an absolute game changer. Every morning, Glorify guides me through God's Word with a bite-sized Bible reading,

a daily devotional, and a guided reflection that simply helps me to connect with God. Give Glorify a try. Just search for Glorify in your app store. It's free to download. 825-5225 is the number. Give us a call. I'm George Campbell, joined by Christy Wright, and this is The Ramsey Show. And we are headed to Springfield, Illinois, to chat with David. David, welcome to The Ramsey Show. Hey, thank you. How are you guys doing?

Great. How are you? I'm doing pretty well. What's your question? So, earlier this year, I started a lawn care and landscape company after a few years in the industry. Now, this question may have been asked before, but like I said, it's our first year, and we're kind of wondering what to put away for maintenance or business savings and mainly what we should be paying ourselves. If it's like a percentage that you recommend or if it kind of varies per person,

per industry. Right now we're paying ourselves about 50% of everything that we're making from the company. Yeah. You know, David, I've got a few follow-up questions because while in general the money flows the same regardless of the size of your business, sometimes it does need to get more sophisticated the bigger the business is. So if you're running like a side gig and it's just you, it's a pretty simple formula of saving for taxes, setting aside that 25%, saving for emergencies,

three to six months of business expenses, obviously all your expenses of cost of goods if you've got a product or overhead in either situation. And then you pay yourself out of the profit that's left over. It sounds like your business might be a little bit bigger than that. Do you have team members? What are we talking with, like top-line revenue and stuff? No, it's just me. My wife is a stay-at-home mom, so it's just me. My wife is a stay-at-home mom, so it's just me. And for our first year,

we're doing pretty well. We're like halfway to our goal of being able to go full-time, because right now I have another part-time job. Oh, this is a side business then. Okay. Yeah. But eventually we're going to have the goal, you know, eventually we're going to be moving into full-time possibly next year. Then within the next few years, we'll probably be hiring some employees. Cool. When did you start this business? March of this year. Okay, cool. So I'll give you kind of a high level answer and then this will get you started on the

right track. But there's a couple other things I want you to consider. You're going to need to set aside, there's a few different ways that you allocate the money. You want to set aside 25% for taxes. So this is something that you set aside on the front end. You don't want that sneaking up on you. You don't want the IRS after you. And so go ahead and plan in advance for taxes. The other thing you set aside money for would be business expenses. This is if one of your mowers goes down, your truck breaks. All the business numbers I'm talking right now are separate accounts. The tempting thing when you're starting a side business is you just run it through your personal accounts and you don't want to do that.

So I want you to have a separate business, separate checking. And out of that, you'll know, okay, my expenses roughly to operate this or whatever, three to six months of that, just like we teach you in personal. Set that aside in a savings account that's super accessible. And then you want to save for large expenses. So if you're saving up for, hey, I know this mower's about to go out. I'm going to need a new one by next year. I need the, what are they called, zero turn,

all these fancy things that you know in that world. If you're saving up for some of that stuff, then you would save that in a separate savings account. Again, just like in the personal, we save up for large purchases. After you've saved for taxes, after you've covered all your expenses, after you've got your emergency fund and that type of thing,

then what's left is yours. That's the profit. That's the beauty of running a business. And so it sounds like you guys are doing really well. The one thing I want you to keep in mind, and I'm sure you've thought of this, David. I'm not telling you anything you don't know. But I do want to remind you, you're going into winter. And so since your business is so seasonal, I want you to look at how you've done this year.

And then also look at how you're going to be able to maintain some level of income or sustainability in these off seasons and ramp it back up in the spring and that type of thing. But it can be pretty basic. And as you move to full-time, and maybe even before, but when you're ready to move to full-time, I definitely recommend getting a CPA to help you. Often they will save you more than they cost you. And it's just great to have a professional in your corner doing all the technical tax stuff. Because I'm not an expert in that. I'm guessing you're not either, David.

And so we need someone that is to help us. Okay. Yeah. I really appreciate the information. Yeah. Well, great job. Great job starting your business. Way to go.

He's crushing it. I mean, March of this year. Yeah. And already doing these things. Already the goal. Yeah. I love that. I love that.

This is a really interesting time to start a business, George, because so many people are, I mean, Ken Coleman has been talking about the great resignation. 95% of people are considering doing something different. Something, I think David said this, where something about COVID and your world being turned upside down makes you look at your life differently and go, I don't know. Am I happy in my job? I don't know. Do I want to spend more time with my kids? Do I want to do something different? And I think you're seeing businesses, maybe starting on the side, which is a great way to start, springing up out of this kind of midlife crisis slash revelation of like, Hey, maybe I could do my own thing. And they're doing it, making more money, by the way, in their business.

There's not really a season, a ceiling. There's not a cap on that in many businesses. And I think that's really cool of the innovation, the creativity, the scrappiness that's coming out of the last couple of years of crazy that a lot of small businesses are starting. So it's a great time. People are going, hey, you know what? There's a lot of things I can't control that scared me this year. And what if I could be my boss? And what if I could do that thing I've always wanted to do now that my life is a little more flexible?

That's right. And I'm working remotely or whatever those things are. And so people are starting to have this kind of existential crisis. You know, it doesn't take a midlife crisis anymore. It just takes a pandemic. Well, you know what's so interesting, too? And I'll say this really quickly. But over the last decade specifically, I've been coaching business leaders through Business

Boutique for the last six, seven years. But even over the last decade, you've seen this massive rise inside businesses. Solopreneurs, freelancers, independent workers, contract workers, whatever you want to call it, home-based businesses. And what's so interesting is you have all these people getting into business that know their craft. In David's case, landscaping and lawn care. In someone else's case, making jewelry. Someone else, a fitness coach. They know their thing and they love their thing. And they want to make money doing their thing. And they can. What trips them up though

is the business stuff and they think, oh, but what about taxes? Well, what about the money management? I don't know how to do social media. I don't know email marketing. They get caught up in the business side of stuff. And the thing that I just want to remind people of and encourage them is that feels really big and overwhelming because it's unknown. Most business owners will tell you 95% of the job is doing that thing you love. The jewelry, the fitness coaching, the landscaping. Yeah, there's five to 10% of operations. There's five to 10% of you need someone help you with taxes. You need some business stuff. But it's once you have someone explain it to you. And once you have someone

walk with you and just get some help in those areas, it really does make it so much more, so much less intimidating. We're like, oh, I can do this. Maybe I can do this business stuff. So it's a great time to do business. It's why I love helping people through Business Boutique. When you get the help you need, you'll realize the majority of the business is doing that thing you love to do.

And you've got the academy that just opened up, the Business Boutique Academy, which rolls perfectly with all the small business talk. What is that for? Who is that for? So that is my coaching group. This is my online training and coaching group. We open twice a year where I walk with you for the next six months. And basically, I'm your coach. You get access to live sessions with me where I do things like answering David's question where I'll answer questions for what you're dealing with, what you need help with. I teach you how to raise your prices. I teach you

how to post content on social media. I teach you how to have an email campaign. I teach you some business best practices that you can apply to your specific business. So it doesn't matter what type of business you're in. You're all in business. And that's actually my sweet spot. That's what I know. That's my background.

I'm a certified business coach. So I take what I know and love and help these business owners, these side business leaders, small business, whatever, side gig. I help them do what they love. I take the intimidation factor out of the business stuff. And so, yeah, so we're open until Thursday night.

You can go to businessboutique.com, get your spot. It's $244 for the next six months, which is a steal. It's like $40 a month for coaching, which is crazy. I thought you were going to say for like one session. That's what you've been charging me, Christy. I'm getting ripped off. That is the special George rate. No, that's incredible.

This is huge because a lot of people get stuck, especially when they go, I love doing this thing but now that it's a business and there's profits and I've got to make money doing this, it gets stressful and you can help really give them the confidence that they're making the right decisions. What's interesting is, I've done research on this for years, business owners, they get excited, they get creative, they put their thing on Facebook,

they made a quilt, they cut someone's lawn, like, hey, maybe I could do this. They get all excited at first, which is awesome. But then eventually, pretty early on, they hit a wall where they get overwhelmed. And the determining factor on whether or not they make it over the wall is if they get help. I have years of research to show this. I'm like, hey, let me help them get over the wall. And then, by the way, you can actually do this.

You can actually stick with it. So good. Well, I'm really excited about it. If you guys want to check that out, go to businessboutique.com. Business Boutique Academy, open through Thursday, and then it shuts down for another six months. That's right. We're going into hibernation. That's right. It's the new members. Check it out

while you can. Christy Wright, she's the best in the business. More of the Ramsey Show coming up. Thank you. this is the ramsey show i'm george camel joined today by christy wright it's a free call 888-825-5225 in the lobby of ramsey solutions on the debt-free stage with the matching t-shirts, it is Derek and Amber. How are you guys doing? We're doing really good. We're nervous, but we're good. It's just me.

No one has ever claimed that I'm intimidating. No one is scared of George. We can't start with y'all. I'm a savior at play. So where are you guys from? We're from Salt Lake City, Utah. Very nice. Okay, so let's talk about this.

How much debt have you guys paid off? We paid off $61,373. Awesome. And how long did that take? That took us eight months. Eight months. Yes. And what was your range of income during this time?

We started about $44,000 and ended in about $160,000. Whoa. Oh, I'm going to need that story. Did someone get a job here? How did you quadruple your income? Well, COVID kind of came, and I was working at a youth treatment center, and they didn't need the help anymore.

And he's a tattoo artist, and his shop closed. And we were actually living off unemployment and my student loans. And that's why our income was so low. And then things started opening up and I finished school and I got a job at the social worker in child welfare. And then he went back to work.

Plus we had some side hustles in there. Wow. So business came back some side hustles in there. Wow. Awesome. So business came back with a fury, apparently. Yes. We were ready. Were people coming out of the pandemic going, I need tattoos, man? What's going on here?

Seriously. I just, all I did was work, you know, and my books just started failing. And I, so during, when COVID came, I mean, when we closed down, I actually, we're both recovering addicts. I ended up relapsing and I went to jail. And so we, during that time, I mean, I didn't, we didn't have my income, you know. I ended up getting out of jail and I went to a treatment center. And then we read the book again. And we started listening to this podcast every day. It was our motivation.

And back in November, we downloaded that app, the EveryDollar app, and just stuck to it and listened to the podcast every day. That was our motivation. I went back to work. She graduated college and went to work, work and um worked every day every day tell me about that's so interesting as a part of your story tell me about how having this goal and this plan affected your relationship affected your stability affected your focus in other areas of your life having this this plan that that you guys were so disciplined about? How did that affect other areas of your life? I think for us, it affected our communication.

So, I mean, we had to really sit down. I mean, I thought I was going to have my student loans forever. Like, I just accepted that. Like, I'm just going to have this payment forever. But, like, sitting and like it takes courage to look at yourself and be like okay well i spent way too much money eating out or do you know what i mean like to be able to talk to each other he didn't know how much student loan debt i had was this all of your debt the 61 000 student loans no what was it what kind of debt was this

we had uh student loans um that was my major, but we also had car loans. We had medical bills. When I went to jail, I ended up racking up some back child support. We had a little bit of credit card. We even had debt on our phones. I think we upgraded our phone through our service. There's debt everywhere. So what got you started on this journey eight months ago to go, you know what? This is it. No more. So, I mean, it was a couple years ago a friend of mine had given – I didn't know what Audibles was back then. And he had given me the book, The Total Money Makeover.

And we listened to it, and then we were kind of Dave Ramsey-ish, you know, for a little bit. But then when the pandemic came and we both lost our jobs, and that whole situation happened with me going to jail. And when I – it's just what happened. I mean, I'm nervous. it's just what happened well i mean we never said we um we're just listening to the podcast every day um and starting every dollar out that's that's what changed us um it was the motivation hearing everybody's stories um it was it was nice and it was losing like being so low and being scared yeah um with neither one of us working, even though we had the unemployment,

it was, we were still like kind of living paycheck to paycheck. Are we going to be able to pay the rent? Are we going to be able to buy food? We had our car payments. And so I think being kind of, and then him going, and I was by myself,

you know, I was scared. I didn't have an emergency fund to pay the rent. Yeah. We didn't have anything to fall back on, but having that now, it's kind of... It's nice. I was going to say, talk to me about now.

You guys have been through it in the last two years. What does it feel like now, standing on that stage? You're completely debt-free. You have an incredible income. You've turned your life around. What does that feel like? It's free um and peaceful actually um i like my whole life i think like i've always waited for payday you know when payday like

let's i can't do this because i don't get paid like i i forget about painting payday now i mean i get reminded by people at work they're like it's it's payday. And I'm like, oh. Is it? I had money before payday. I don't have to wait for payday. Like if we were able to bring his parents on this trip, they've never been out here. We came early and we went and ran the Spartan race. We can travel and do the Spartan races like we like to do. I think it's just strengthened us and motivated us even in more ways to just continue with our kids.

My son, he saved a lot of money and bought his own car, $6,000. Wow, awesome. We actually have envelopes for his kids. His daughter is the sweetest. She puts money. We don't tell them where to put their money. And we'll have like a payday meeting on Sunday.

They do jobs around the house. They have to check it off. And she was putting money in her give envelope because we're on Baby Step 3B, so we want to buy a house. And she was putting the money in her envelope and we looked at her and we're like, what do you plan to give?

Like, what's your plan? And she says, well, I'm going to keep putting money in there and I'm going like, what do you plan to give? Like, what's your plan? And she says, well, I'm going to keep putting money in there and I'm going to give it to you guys to help buy the house. Oh.

Sweet as that. Oh my gosh. Incredible. Yeah. Look at the example you're setting with the legacy you're creating. You guys are amazing.

You all are amazing. Well, thank you for being here and sharing your story. What a story of resilience. I know it's going to inspire someone out there who may be going through something that you guys were eight months ago, a year ago. So thank you for being here. We've got a copy and sharing your story. What a story of resilience. I know it's going to inspire someone out there who may be going through something

that you guys were eight months ago, a year ago. So thank you for being here. We've got a copy of The Legacy Journey for you. That's obviously the next step for you guys, and you're changing your family tree in so many ways, not just with money, but you guys have taken control in all kinds of areas. And we have a copy of The Total Money Makeover.

I know that inspired you, and it's going to inspire someone else. You can pay that forward. So we're so honored you guys made the trip to be here. Tell me that inspired you and it's going to inspire someone else. You can pay that forward. So we're so honored you guys made the trip to be here. Tell me what the t-shirts say on there. Yeah. I'm going to read hers.

He's the tattoo artist so he designed them. I love it. So we have matching ones on the front that say Team Beast. Hers says, if broke people are making fun of your financial plan,

you're on the right track. I'm debt free and they're like Team Baby Beast. I love it. And now you guys get to scream it. Okay, you're on the right track. I'm debt-free. I love it. I love it. And now you guys get to scream it. Okay, you ready? You feeling good?

Oh, we got to read it right away. So it says, don't buy things you can't afford with money you don't have to impress people you don't like. Love it. That's perfect. That's a long tattoo to put on skin, but it works great on a T-shirt. Okay, let's do this, guys. It's Derek and Amber from Salt Lake City. $61,000

paid off in eight months, making $44,000 to $160,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! I love it! This is one of my favorites I've seen in a long time look at them

I love that so much I wish everybody listening could have seen that go watch that on YouTube you know what's so cool as they said one of the keys to staying motivated on their journey was hearing other people's story that kept them motivated and now they get to be that story that is motivating someone listening right now.

That's going to stay with it. That's the power of the Dead Free Scream. That is so beautiful. It never gets old somehow, Christine. 30 years of Dave doing this, I can hear him all day long. Puts a smile on your face, gives you some hope that people are out there willing to transform and change their lives, but they have to decide. And Derek and Amber decided we're going to do things differently.

We're so proud of you guys. This is The Ramsey Show. I'm George Campbell, joined today by Ramsey personality and number one bestselling author, Christy Wright. We are taking your calls on life, money, relationships, balance, family, you name it. 888-825-5225 is the number. Now, right now, you're probably focused on all the fall stuff. You've got to buy Halloween candy, the jackets, the sweaters. But here's what you should start thinking about right now.

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All right, let's go to the phones. William is in Columbia, Missouri. William, welcome to The Ramsey Show. Hi, George. Hi, Christy. Real quick question. I'm going into a divorce. Before we were separated about two years ago, we were completely debt-free. I have about $10,000 in an emergency fund.

And facing the divorce, I'm kind of afraid of that money getting split and I basically lose out on it. And there's a lot of things I've been holding off on, upgrading. My phone is 8 years old, my computer is eight years old. My computer is 10 years old. My car is 13 years old. And I've got things that I can spend it on and, you know, children's college funds and stuff. And so I'm very hesitant to spend that money because, you know, I really like having a stockpile of cash that I can deal with emergencies. But then I'm also really not a big fan of the idea of just half of it going away,

and I have no control on it. Well, William, I'm so sorry you're going through that. How fresh is this divorce? Well, filed two years ago, and it's still pending in the court, and COVID kind of messed with things quite a bit. So you've been going through this for a while now. Is all the money stuff separate? What's going on financially? been using a different approach on her finances. And I don't know how much legally those things are going to be considered separate, even though they have been separate. But yeah, so like I said, I'm just worried about just giving away money that isn't being used for the way I think it should be used. But then again, I don't want to give up having an emergency fund. Here's what's interesting though, William. I just want to help you think through this from a couple different angles

because you're going through a really tough time right now. And so obviously that's affecting how you're looking at the money. It's not just money. There's an emotional context around it right now. Let's pretend there's a scenario where you're not going through a divorce. You gave some very valid purchases that may need to happen from a car to a phone to whatever. If you were not going through a divorce and that was not part of the factor with this decision, would you need that money to fix those solutions? Is it an emergency? Is it something where you're like, I need to replace my phone

because it's dying tomorrow or my car or whatever? Is it an emergency that you actually need to use this money for outside of the divorce situation? Yes-ish. I've been really holding off on doing any of those upgrades

or maintenance kind of stuff that does need to happen just because I don't know what next week or next month looks like. And so there's a lot of stuff that does need to happen. If the personal life were more stabilized, then I would be able to predict and schedule those things a lot more effectively. And so there are some things that need to happen. I don't know that it's necessarily critical as in like the next week or next month, but it is stuff that definitely needs to happen within the next year or so.

Yeah. Okay. So let's look at this differently. Okay. Let's look at, there's a difference between an emergency and an upgrade that you plan on. It sounds like these are upgrades that you can plan on, not emergencies that need to come out of your emergency fund. You can save and upgrade your phone. You can save and upgrade your phone.

You can save and upgrade your car. And those are things that you can start working on without dipping into your emergency fund. But the thing that I want you to keep in mind is if you spend this money, this $10,000 in your emergency fund on something just to use it up, or if half of it goes to your soon to be ex-wife, either way, the money's gone. You don't have the money anymore. We tell people to not make decisions based on fear or it's like, what if scenarios, what if, what if you have no idea how this is going to go. And then you're just spending it

up to try to avoid something that maybe half of it is gone. But either way, it's, it's gone because you don't have the money anymore because you've spent it on that thing. So what I would encourage you to do, and this is more of a gray area. It's a tough time. It's not like, oh, we have a baby step for a specific, you know, in this scenario. But what we do encourage you to do is not make decisions based on fear,

not jump the gun because of what if this, that, or the other. Right now, you have an emergency fund. You can hold onto that. You can save for these upgrades of a car, phone, whatever. And then if something happens and you, and 5,000 of it, you still have 5,000 left that you didn't waste on something. And then if not, and you in 5 000 of it you still have 5 000 left that you didn't waste on something and then if not then you have all of it and you still have your emergency fund intact i just you know when when people call in george sometimes they call and say

well should i stop paying on my debt in case i lose my job and we're like well art is there a sign you're gonna lose your job no well do you know you're no and so sometimes we can get into that worry state where we make decisions with our money today based on something that could happen it may happen or may not and so we just want to go based on the information we have today today you don't have any emergencies that need that money spent on it so i wouldn't spend them on him it's not an emergency you can save and upgrade those things if you need to yeah if i were you william do you have any any margin right now since you're debt? Do you have cash flow coming in that's not going towards bills and things? It's pretty tight. My income's around $40,000 a year,

and I've been paying her each month just even though it's not legally required for child support. I have been, but that makes the margin pretty tight. I'm in the black maybe $100 a month. Hmm. Well, I would want things kind of legally stated as part of the settlement before, But that makes the margin pretty tight. I'm in the black maybe $100 a month. Well, I would want things kind of legally stated as part of the settlement before you start doing things outside of that. So if this thing's over, I want it to be over. Two years is a long time to drag this thing out. So if there's anything in your power you can do to move it along to get some finality so that you can move on with your life and move on with your finances, I would do that. But to Christy's point, these are things that you need to be cash flowing. They're not true emergencies.

We have three questions we ask when it comes to emergencies. Is it urgent? Is it necessary? And is it unexpected? And a lot of these things you told me, they're really not unexpected. They're just kind of wearing out. And so make it a line item in your budget. Maybe even if it's $50 a month towards the phone and $100 towards the laptop, whatever you can muster up.

Maybe you take a side job right now if you've got the bandwidth to do that to bring in extra income to get these things taken care of. But unless you actually had something go wrong with the car, that is when you could dip into that. And I want you to feel free to do that. You've worked hard to have the security blanket, so use it when you need it. But don't let it become a fun money, well, I just want to upgrade my life real quick so I deplete myself of this money. So do it the smart way but make sure that you are doing a monthly budget and if you hang on the line,

I'll have Kelly pick up and I'll gift you one year of Ramsey Plus and I just mentioned that every dollar budget. That's going to really help you dial in every single expense as you go through this divorce. So hang on the line. Kelly will pick up and once you get into Ramsey Plus,

I want you to do two things. Number one, create your every dollar budget and it'll connect to your bank account so you can literally drag and drop things coming in, give every dollar a name and make sure that you have a plan. Along with that, you can go through Financial Peace University and get some fresh reminders. If you haven't gone through it, this is going to educate you and give you the motivation you need, especially coming out of this divorce, Christy. This is a really, really hard season and you need to have people alongside you, tools alongside of you to help push you through this. Yeah. And then once you know exactly what the circumstances are, what all the conditions are around the divorce, you'll be able to set that budget much more expected because right now I hear it in your voice. You've got some fear

of the unknown. And so once that's behind you, you can have a fresh start, a budget you can plan on. That's really going to help you, I think, have peace of mind and confidence in that. Yeah, right now there's not a lot of clarity for him. That's why I want this thing finalized so he knows the terms and knows how to move forward with his budget. Well, that puts this hour of the show in the books. My thanks to James Childs, our producer, Kelly Daniel, associate producer and phone screener, and, of course, my fabulous co-host, Christy Wright. We'll be back with you before you know it. This is The Ramsey advice in their life? Let them know about the Ramsey Call of the Day podcast.

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