The Ramsey Show - App - Here's How To Adjust Your Budget for Inflation

Episode Date: April 6, 2022

Ken Coleman & Rachel Cruze discuss: How to adjust your budget for inflation, Thinking through a guardian for your kids, Feeling guilty for leaving your job for another, The financial effects of choosing to be a stay-at-home mom, What to do when both people in a marriage are the "spenders", Selling a classic car. 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

🎵 Live from the headquarters of Ramsey Solutions, this is The Ramsey Show. It's where we help you live your best life by being healthy relationally, successful professionally, and peaceful financially. I'm Ken Coleman, joined by my colleague, Rachel Cruz. We are here for you this hour, 888-825-5225. It's toll free, 888-825-5225. We know that life is hard, and yet we know that there is a way to overcome those challenges and move forward to live the life that you desire.

We want to help you do that. Let's go. Emily is going to start us off in Rio Rancho, New Mexico. Emily, how can we help? Hi, thanks for taking my call. You bet. What's up? So my son is getting ready to turn 18, and we talked about switching our will that he would get the other three children in the event that my husband and I passed and he wants them. But I just don't know if that's like way too much to put on a kid. Uh,

my, my knee jerk is, yeah. Um, his entire life would be paused and he'd be taking care of three kids. What, how old are the kids? The other kids?

Uh, 15, 14 and 10. Why him? I'm curious. Why him? Well, right now we have him with my sister, but her marriage is pretty rocky, and so we've just never had peace.

And he wants them is what brought it up he's a he's a freak of a kid i mean he's like the best boy he's always been such a great kid super responsible he almost has his associates so yeah he sounds incredible i mean to even have this conversation and make it an option. I can only speak to it from having three kids, and we did this many years ago before I was even working with Dave. Dave said, you know, I follow what Dave teaches, and so we put our will together when we had our first. And in our situation, we chose Stacy's sister and my brother-in-law. Obviously, they're a much healthier situation than what you've got,

but we had three or four other options. And I'm just curious, do you have other options, even if they're not family, but they're stable friends that you know would take care of the kids until a certain age? Yeah, we do have friends that we would definitely love them to go to. It's just yeah, is it okay to tell him no? We don't want to

put that on, I mean, because he wanted them. He's so kind, but I mean, I would say, I mean, of course it's okay to tell him no. Yeah, I mean, as your mom, I want to say how thankful and grateful and how close you can still be to them. Right.

If God willing. Right. And we're hoping none of this happens. This is a worst case scenario situation. But if something were to happen, he can still have a close relationship with them. And even with the friends having their permission to still live with them, if that's what they, he wants, but to be able to still have the ability to have other options

in life. And at 18, he, right, I think your frontal lobal cortex isn't even completely formed until like 24, 25, right? Do you know what I'm saying? So like, as his mom, I think you're loving him very well. That he can still be as involved with them.

Uh, cause, cause let's be honest too, Emily, if something were to happen to you and your husband, I would pray that the siblings become closer. Right. That like, like you, so you just went through tragedy. So you guys are going to hopefully, um, that brings you together, especially at these ages, but I wouldn't put the responsibility. I mean, he'll have to be the, you know, the executor of the will. I mean,

he would do a lot in an 18. I just wouldn't. It's more of a burden than a blessing. I think, but I agree with Rachel. And when he turns 21, 23, you know,

maybe in like four years, you can even change it with it where the 10 year old is. I just don't think he needs to be legal guardian. I love what you said. I think he's big brother. He's their hero. He's their hero. He's their number one influencer. He's intimately involved, but he's not the legal guardian.

Let another couple who are parents and they're responsible and they can make the big legal decisions, things of that nature, if there would be a trust involved. That 10-year-old. Well, 10 and 14, they're not driving. They're not. He would have to be responsible. And even at 21, 22, 23, I think it's still too much. Yeah,'re not driving. They're not. He would have to be. And even at 21, 22, 23, I think it's still too much. Yeah, it's true. It's true.

That's a good point. I would say, hey, you're amazing, kiddo. Oh, my gosh. Blown away. But we're going to set you up to where if this awful, horrible, worst-case scenario happened, it would not in any way impede your life goals. Yes. That would be the reason to tell him no. And explain explain him why

but i well what a what an interesting call thank you so much for the call what a great young man that is let's go next i wasn't asking for my siblings i'll tell you that's the truth yikes uh let's go to russell now who joins us in tampa florida russell how can we help uh good afternoon ken thanks for taking my call. Sure. What's up? I have a little bit of a complicated situation. I got headhunted by a buddy of mine that works for a consulting firm,

and they've offered me a job that is $60,000 more than I make a year. Wow. Which sounds great, but here's the problem is I work for a government entity and they're going through a really tough time now. And I know that I am crucial, if not almost irreplaceable in the situation that they have. I put my notice in, I was expecting to take the job, and then they've come back and they've offered me more money to where the Delta is only $35,000 a year now,

and then they've also offered me a vehicle to take home, which is worth, I don't know, about $10,000 or $15,000. So I guess I have a crisis of conscience here, right, where I love where I work, I love who I work with, but the opportunity is also something I love as well. Yeah, okay. All right, this is great. What situation are we in?

Yeah, yeah, yeah, that's good. If you weren't so crucial to them, and they weren't going through a tough time, would you have been calling me with this wrestling match of your head and heart? I would not. No. So let me absolve you from what you feel is guilt. The word guilt comes up a lot in these situations. The word guilt has a legal connotation,

and it usually applies to a jury saying that somebody broke the law. Are you breaking the law if you take this great opportunity, Russell? I am not. No. All right, let me ask you another question. Are you doing anything unethical? No, you're not. I'm not unethical, but...

No. So hold on a second. It's a government entity. They were around before you joined them. They will be around. And if they weren't going to make it with you or they're struggling to make it with you, they will struggle to make it without you. I'm trying to set you free. You're a great young man.

You're a great guy. The very fact that you called with this tells me you are so classy and you need to go do what's best for you. It's a government organization. They're all horribly run. Yeah, but he loves it. Doesn't matter. He also said this other opportunity was better.

Yes. He loves the people. Yes. But this is a better opportunity. And you feel obligated to take care of it. But you shouldn't feel obligated. That's what you're saying. Yes, yes.

Take the right opportunity for you and your life. Be classy, but take the right opportunity. Here's why. The very people you're afraid of hurting and upsetting, you will eventually resent if you don't take this opportunity. I would rather disappoint people than resent people. There is a word for the day. Big difference. Russell, congratulations. Take the job today. Tell the government, thanks, but no thanks. This is The Ramsey Show. You've got a lot on your plate.

A job, your home, your marriage, and your growing family. While you're enjoying the present, you can't help but, your marriage, and your growing family. While you're enjoying the present, you can't help but think about your future and your finances. As you explore your options, consider Christian Healthcare Ministries, or CHM, for your health care. Their generous maternity program and budget-friendly monthly programs have been a blessing to members welcoming children into their families. Visit chministries.org slash budget to see if it's right for you. Christian Healthcare Ministries is a Ramsey Trusted Provider. Welcome back, America. You have joined The Ramsey Show.

So excited that you have. I'm Ken Coleman. Rachel Cruz joins me in studio this hour as we take your calls, 888-825-5225. Okay. I don't know if you're like me, Rachel. I'm sure a lot of these people out there that are watching and listening are sick and tired of this inflation. Number one, we're tired of seeing it in our pocketbooks. We're seeing it at the grocery store. We're seeing it at the gas station. We're seeing it everywhere. And we're tired of hearing about it and talking about it. All the excuses. One way that it's like,

what's going on? But it has some real life effects. And the fact of the matter is, it's got to be changing budgets. If you're not changing that budget out there, it's going to really bite you. But in the other side of things, while it's never fun to see prices rise, we can budget through this. Yes? Yeah, absolutely. I mean, it hurts. It's not fun. You're like, man. So the average American budget is going to go up, or I should say the average American should budget for an extra $5,200 this year, according to Bloomberg. The Business Insider put out an article about this. And so I think that's so fascinating

that $2,200 of the $5,200 is food, energy, all of that. So it comes down to about an extra $433 a month. Which is substantial. It's a lot. I mean, it's a car payment is what it feels like, you know? Wow. So if you've not been intentional with your paycheck up until this point, if you've not been budgeting, if you've not said, okay, I am going to watch every single dollar,

now's the time to do it. This is the kind of thing that if you just don't really look up and you go, this is the time too where people, you know, have credit cards and like, oh, I'll pay it off every month. But you slowly start racking stuff up and then you look back and you're like, oh my gosh, how did this happen? So you have to be intentional, you guys. You have to

and the budget, it's going to help you do that. And you're going to have to probably say no to certain things that you've said yes to in the past so this kind of clears. But also the flip side, we've talked so much about jobs and careers, I feel like on the show with you. The flip side is true too that wages are going up as well. It may not be completely correlated, obviously, but it's getting to the point that we're looking at all these options.

When the wages go up, we tend to think, oh, we can spend more. And so there's just natural. So if there's no natural discipline, no natural budgeting. The lifestyle creep. It's the lifestyle creep. Very well said. You know, it's funny. I was in Los Angeles the last couple of days doing some work and I was in the airport and

I was noticing I'm starting to pay attention to things that I didn't pay attention to in the past. The old snack. The old snack for the cross-country flight. Oh, yes. It's crazy how expensive it's gone up yes stuff before was like a couple bucks and now it's like four or five bucks yes totally totally so you know we have a little bit of fun with that but you start doing that over groceries that's right

oh yeah and everything else it can catch you quick so wow wow so hey uh every dollar should we be telling about that i feel like we yeah oh yeah. Yeah, it's the best budgeting app. I check it every day, literally. Your transactions come in, you connect your bank account, and you watch it and you know exactly what is going on. And again, it's never fun to make the sacrifice or to say, gosh, we're going to just eat in tonight. It's not fun to make some of those decisions.

But at least you're in control. And as this passes, you're not to just eat in tonight. And, you know, it's not fun to make some of those decisions. But at least you're in control. And as this passes, that you're not more in a financial hole than when you started. Well, you've said it many times. A budget gives you permission to spend. That really connects to people. We hear that all the time. Every dollar is the budget app. Wherever you get your apps, check it out, RamseySolutions.com.

Phenomenal budgeting tool that, for those of you who've never done it before, it will really help you get started. And you're going to skin your knees a few months as you figure it out. But we do recommend that you check it out. Let's go to Columbia, Missouri, where Amanda joins us. Amanda, how can we help? Yes. Hi.

I'm so glad to be talking to you guys today. Well, we're happy to talk to you. What's up? Yes. We are a dual-income family with three kids kids age five years, three years and four months old. We're on baby step four, five and six. And right now our 15 year mortgage is less than 25% of our take home pay. Wonderful. However, I desperately want to quit my high stress job and do a stay at home mom or part-time. But if I do that, only on my spouse's, my husband's salary, our mortgage goes up to like more than almost 40%

of our take home pay. It's just not doable for us. So my question is, should we consider a refinance of our home or consider moving or consider just paying it off with gazelle intensity before a career change or quit? How many years do you have left on the 15-year? We have about 13. Okay. Yeah. Do you love the house, Amanda? We are quite partial to it.

We've cash flowed remodel of the house. It's two doors down from my parents. Oh, yeah. Yeah. What's causing this job to be so high stress? Uninterested and massive amounts of mandatory overtime. What's your take-home? I mean, what's your gross salary or gross pay?

It's about close to $67. What do you do? I work for a major insurance company as a claims specialist. Uh-huh. Rachel, I mean, I'd like to see you look at changing jobs, and it doesn't necessarily have to be $67 for $1, $67,000. Maybe it's a little bit less money, but it's a whole lot more enjoyable. And again, I mean, if you could replace it with a job making the exact same money and you really enjoy it, that'd be great to go ahead and knock this house out but i know you want to be home um and and and so i just think

at this point selling the house is not a good move i think it's a different place of work feels like the best fit right now yeah it's that or amanda you know it's we're in april right now so maybe you say hey for three months i'm gonna work and we're gonna put right now. So maybe you say, hey, for three months, I'm going to work and we're going to put my paycheck in a separate account over here and live off of your husband's salary. And to say, okay,

what would life feel like? Give it a shot. Of what this would be. Because I know as a mom, and I go through the, Amanda, like these seasons where I'm like, I should be home with my kids. And if that's where you're at and that's where I'm like, I should be home with my kids.

And if that's where you're at and that's where you're like, man, this is part of getting out of debt. You guys are at the point in the baby steps where you're able to make big life changes because you've done the hard work. You don't owe anyone anything. Yeah, you have this mortgage and we'd love the house to be taken care of. But man, to be able to make these decisions in life that you want to make and be home, I would love to see you do that. Unless you kind of still want to work. And what Kim was saying earlier, that would fit perfect. Where you're like, man, there could be a side thing.

I could bring in some money. Because I think I'd go crazy if I was home all day. Like, I don't know where you're at. But I would give it a test run through the summer. And then, because your kids are still little. So summer is 12 months a year, right? Right.

Isn't that true? It's not like you have elementary school kids. So you've run the numbers. That's where the three in daycare gets a little. Yeah. Oh, yeah, totally. Wait a second. Wait a second.

Wait a second. So I'm assuming that you've run all these numbers, but Rachel makes a very good point of kind of test running the thing. But let me ask you this. What's the monthly bill for three kids in daycare round round numbers um it will be around pretty i have a pretty reasonable person for 1500 a month okay okay so so right there so have you run the numbers i'm guessing you have but i guess i should ask are you running the numbers to where you could say because you said there's no way we could do it on my husband's income.

Do you know that for a fact? Yes, with the mortgage just jumped up with taxes and insurance to $1,285, and with daycare is $1,500, and then his income is about the actual take-home pay is like $3,300 a month. Okay, but what if we change those numbers just right here on the air real quick and we put the $1,500 back into the old pot because you're not having to pay that? You could definitely do it, could you not? You're at home, not even working from home. You're just a mama.

Yes, and his monthly take-home of $ 3,300 it'd be about um the mortgage would be right now 1285 it just went up to right but my point is that 1500 you guys could definitely do that without paying that child care yes or no yes yes i had considered also trying to pay off the house real fast because we only owe $114 on it. And since I have the ability to do overtime, it's almost doable. Well, you've got a couple of options there. It's what you guys want. It's a values question at this point for you. Do you want to be home more or do you want the house paid off faster?

What do you want more of? And that's only a question you guys can answer. We just made that budget a lot fatter with $1,500 because she's now at home with the kiddos. Maybe that's a season. She can always get another job. She's always stressed out. When they start school again, maybe you go back. I like Rachel's test idea.

Let's save $1,500 a month for three straight months just by being at home. She doesn't like the job anyway. This is The Ramsey Show. Welcome back to the Ramsey Show. I'm Ken Coleman. I'm joined by my colleague, Rachel Cruz. And we are here for you. Tax season is ending soon. Oh, jeez.

I wish that were true. Does it ever end? Of course, filing taxes is what we're talking about. But I am just so put out with all the taxes. But anyway, if you're filing online, which is about 95% of you, you need to find affordable tax software that you can trust. And that's hard to do when so many companies claim their tax software is free, and then they end up charging you somehow, some way. So don't put up with that nonsense. Try filing with Ramsey SmartTax.

It's super easy to use, and you'll get every federal form you need with no hidden fees. Right now you can even use promo code TAX22 to get $25 off filing your federal tax return. That means you get our federal classic software for free or you can get our federal premium software with priority support and a financial coaching session all for just $20. So if you're ready to file your taxes with confidence, go to ramseysolutions.com slash smart tax to get started today. That's ramseysolutions.com slash smart tax. Derek is up next in Omaha, Nebraska. Derek, how can we help? Hi, guys. Thanks for taking my call. You bet. Well, I had kind of another

mortgage question. I know the last question was about mortgages. I'm 31 years old from Omaha, and we have about $370,000 left to pay on our mortgage. It's a 15-year mortgage, so we're a year into this, and we only have a two and a quarter interest rate, so it's fairly low. It's about as low as you can get, I think. And I was thinking, should I be investing when we get out of debt, or should we probably try to pay off that earlier than 15 years? Because that's a really low interest rate compared to what you could probably get on an investment.

It's true. So we want you to do both. So we talk about funding 15% of your income into retirement. And if you guys have kids starting kids college and then throwing the rest at the house. So what I and I hear you 100% because when you look at the numbers, and you run the numbers out, sure, you can make more in an investment versus paying off the mortgage. I hear that. But the problem that we have found over decades of doing this and talking with people is personal finance, it's not always about the numbers. There's a level of not having a mortgage, having zero risk in your life that changes the game. And there's not a number for

that feeling of you don't owe anyone anything. Because when you don't have a mortgage, you can do whatever you want. You have no payments. And in fact, you could take that mortgage payment and invest that if you wanted to. So there's a peace of mind. There is a change of heart, a change of spirit. Something happens when you don't owe anyone anything. And that's why we're just big on even paying off the house. So the math, this interest rate versus that, if you invested or if what you're paying, I mean, all of that, I get it. In an intellectual, just math side, could that work out? Yes. But you never factor in life. you never factor in things that can happen you never factor

in the peace that comes with not owing anyone anything so so i want you to do both derek i want you to do both i want you to fund retirement and you guys are still young which is awesome pay off the house early and then you're going to have your entire income to do whatever whatever you want yeah i mean they're on a 15 yearyear. That's fantastic. Yeah. You're doing great. They're going to knock it out. Yeah. Keep on going. The reason why Dave put the baby steps in order is because they need to be in order.

And so Rachel's right. Baby step four, that 15%, you are investing. Now knock out that. Every extra dime that you can, knock it out. You're going to do it faster than you could possibly imagine. I mean, the amount of money we see from debt-free screamers that come in here, they pay off in four or five years. It's extraordinary.

Yeah, seven-year is the average right now for people on the baby steps paying off their house. Yeah. So, wow. I mean, seven years from now, that's the vision, Derek. Seven years from now. And you're not even 40. I know.

Seven years. You know what I'm saying? Like, you have so much time, so much time on your side. I'd appreciate if you wouldn't act like 40 is like the way you said that. I'd appreciate if you'd say that a little differently. You're not even 40. You're not even 40. Like he's going to have a cane when he's 40.

Jeez, for those of us that are older than 40, it just, man, maybe it stung a little bit. You just feeling it? You feeling it, Ken? Kenneth? Old Kenneth over there? Hey, what'd you say? Why the cybervirtual? What'd you say?

Huh? Turn your mic up. What's happening? All of a sudden we've turned into characters. You're not even 40. That was an inflection of, you're still so young. I know. I'm faking.

It's all fake outrage, folks. I know. It's all fake news. I got you. All right. Erica's up next in Boston, Massachusetts. Erica, how can we help? Hi. So I have a question regarding both my spouse and I being spenders.

We have three beautiful kids, ages six, two, and four months. And I've been using the every dollar budget about two, three months now. And it just seems like we keep going over budget. I'm spending on stupid things. And, you know, I'm just sick of being stupid about it. I'm sick of not being content with what God has given me. And I'm sick of acting pretty much like a child with our money. And I just want us to be adults about it.

I want to be adults with our money. And, you know, like my mom's been trying to help me to, like, stay on track. But, you know, I don't want to put that burden on her. So I've been calling her when I'm feeling vulnerable about the spending. And she's been trying to help me through it. However, I just want to know, like, what are some things that I can do, like, on a daily basis, on a weekly basis that can help change the behavior? Because that seems to be the problem. Like I'm really good with setting the budget.

I'm really good with like stuffing my envelopes. What can I do to help the behavior? So two things that come to mind. My first question is, is your budget realistic? Are you setting a budget that is realistic with your lifestyle, Erica? Like, are you, you know,

I know this is an extreme example, but you're not putting like $50 for food. It's a reasonable budget. It is. And I give us like a little leeway. So I give,

he gets 80 a month to spend and I get 80 a month to spend. Okay. Okay. So my next question would be, what is causing you to spend? What are the things that are coming up that you're spending and then you're regretting and you're thinking, man, I just want to be content. You know, I heard you say that.

So, so what are the things? Do you guys have good community around you? Are you lonely? Are you, you know, what, what, what is the emotion? I think it's just like hobbies. So like he canceled his gym membership. So we got a really basic like dumbbells and like a bench so that we can set it up in the basement and he can do it in the basement. Yeah.

And then I like to garden. And like I just, I've always wanted to get just like, you know, just little pots so I can plant my seeds. And that's literally what we overspent on this month. And it's just like those little hobbies so that we can enjoy our home without having to spend going out. Yeah. Yeah. And it's just so stupid when I think back. I get that like buyer's remorse about it because I have three little babies depending on me.

And I can't live this way anymore. And I just want it to stop. Yeah, absolutely. Well, I hear it in your voice, Erica. And I don't want, it feels like you have so much shame and so much guilt of it, which part of it I understand because you feel like you're making the same mistake month after month until you're frustrated with yourself. So I hear that. But I also want to relieve you to say, like, everyone screws up, Erica.

Like, nobody, even us sitting behind this desk, every Ramsey show, like nobody's perfect when it comes to money. So they're going to be mistakes. Um, so are you guys, tell me more about your situation. How much, how much debt do you guys have? How much y'all make a year? So we have about like $50,000 in debt. Um, most of it, like, um, 30 of it is my, my school loans which he even took on an extra job so that we can pay that off more. I'm putting in $600 a month plus what he's getting paid on his side job. Okay. What's the other 20?

What's the other 20? The other 20 is a car loan. Okay. How much do you guys make a year? We make, take home is $64,000. Okay. Okay. So what I want you guys to do, and you've done it, is the budget. Okay. So that budget is going to help in the nuts and bolts of this idea. But when things come up that you feel like, God, I want to spend, but I can't, call your mom. You're not being a burden.

She is someone in your life that's going to be able to help walk with you through that. And then I want you guys to have a detailed plan of how you're going to be paying off the car first, the $20,000, and then the student loans. I want the debt snowball dialed in, and I want an end date to say how much, when we can be out of debt. I need a motivation for you. It's your kids. It's getting out of debt and a motivation a motivation for you. It's your kids. It's getting out of debt and a motivation. But Erica, give yourself some grace, girl. Breathe.

Give yourself some grace. And it's a daily grind. You wake up and you make your decisions. And you do. There's a level of grown-upness there that you need to have. More of your calls coming right up. This is The Ramsey Show. I'm Kit Coleman.

Rachel Cruz joins me in studio this hour. Our scripture of the day comes from Proverbs 4, verse 7. Wisdom is the principal thing. Therefore, get wisdom. And in all you're getting, get understanding. Our quote of the day from Maya Angelou, the great poet, do the best that you can until you know better. Then when you know better, do better. Speaking of doing better, you can do better when you look back on the mistakes you've made, learn from them, and go forward. That's why Rachel and I, everybody at Ramsey Solutions,

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You can preorder your copy today at RamseySolutions.com for only $20, and you'll get some amazing added bonus items for free, including the audio book, the e-book, and one month of free weekly therapy sessions from BetterHelp. So go now and get it, ramsaysolutions.com. The book is Own Your Past, Change Your Future. Let's go to Tracy who joins us on the line in Charleston, South Carolina.

Tracy, how can we help? Hi. I thank you for taking my phone call. You bet. My question is, we have some debt. Um, my husband owns a classic car that we still owe. We took a 401k loan out to pay for it. All right, let's go back just real quick so we can catch up with you. How much debt do you have total? Okay. So we have about $11,300 in credit card debt. Um, we owe with our mortgage and then also we took a second mortgage out. We put a pool

in last year, so we owe about $275,000 on our house. It's worth about 59090,000. We still owe the $13,300 on the 401k loan for the car, and that's at a payment of $565,000 a month. Whoa. Yes. Okay. Is that everything? Well, and the thing that's upsetting with me, my husband watches you all all the time and wants to talk to me about

finances. And I get very frustrated because we have absolutely no liquid savings, nothing. If something were to happen, we have absolutely no emergency fund. We're 51 years old. He's talked, you know, he talks about retiring early, which I'm on board with. But when I look at all this on paper and I say, okay, I'm ready to do the baby steps with you, you know, my thing to him was, well, I mean, the car rarely comes out of the garage. He rarely drives it. He doesn't like to drive it long distance. He doesn't like to drive it on the freeway. We paid $55,000 for it.

Oh, what car? What is it? It's a 1965 mustang fastback oh let me just have a moment real quick for your husband ouch okay that's a fabulous car um and i and i and i get that and so if you tell me you know what you can do this i'm fine with it i just i just sort of feel resentful because it's like every time we make a $600 payment on that thing, and it just sits there and it barely gets paid. I get it. Listen, listen, listen.

I get it. And so there's tension between you two because you want him to sell the car because it's worth $55 at least, if not more. Correct? Yes, exactly. If we sold it, we would eliminate the 401k loan. That would free up $565 a month in payment. I figured out we could pay off the $11,300 credit card debt. That's right.

We could put our maximum on our Roths this year. Tracy, how much do y'all make a year? Combined growth, we probably bring home about $190. Holy cow, yeah. Listen, you said he listens and watches the show. I'll do this because Rachel's way too nice. I was going to say sell it. Okay, good.

But I'm just going to tell him, hey, listen, I love classic cars. And you have? I have a classic car. I have a 1972 convertible Volkswagen Karmann Ghia. It's absolutely gorgeous. She's gorgeous. But I don't owe anything on her. And this car, you can get another great Mustang.

This is going to change your life, and it's going to change your marriage. He has to sell it. You said he listens. What's his name? What's his name? It'll change our marriage only in the fact that the only thing is like the other day, he gets a little resentful when he has to

give up his toys. Yeah, but you resent him. Yeah, but let me say this too, Tracy. You guys make an incredible income. Great money. So $24,000 out of $190,000. You guys could clean up this mess. Y'all need to clean up your mess.

I mean, this credit card debt. I mean, you guys just have stuff everywhere. You put in a pool. I think both of you, both of you need to sit down and say, all right, what's going on? The car, yes, it's an issue. And it's frustrating because you're seeing the math. Absolutely. But you guys make good money.

And if you both buckle down and say, hey, together, we're going to do this. Because if you had a plan, Tracy, that you guys could be completely debt free. I mean, obviously, except for the house and the 270, if you all could pay off the 401k loan and the credit card and you could do that in four months, would you be still bitter about the car if it was paid off in four months? I don't think so. Not so as much. I think the thing that bothers me is I'm a person that I need to see a little bit of money in the bank for me to feel comfortable. A hundred percent. Well, of course. It's a safety issue.

But the big emergency fund, though, Tracy, comes after you guys take care of this mess. So maybe it's either, yeah, sell the car because that's going to take care of a lot. You guys are going to be able to pay off these two debts, put money in the bank for that emergency fund, and then actually have a stable foundation. How much is the second mortgage? What's that? How much is the second mortgage that you took out to get the pool? The pool was $60,000.

So our home, we owe $219,000. The pool was $60,000. So our home, we owe $219,000. The pool was $60,000. So I kind of said to him, well, I can't dig up the pool. I mean, there's nothing I can do now about the pool. I can't dig up the pool. Right, yeah, sure. And the thing is, with the housing market the way it is, we bought our house pretty reasonably about five years ago.

So it doesn't make sense for us to rent. We already looked into it. Rent is more expensive than we already looked into it. No, no, no. Nobody's telling you to sell the house. Listen, you guys need to have a come-together meeting, okay? And look at each other and go, we both want to do this. We're both going to make sacrifices. You can't make it all about the Mustang, right? And he can't make it about whatever, whatever. This is big boy, big girl conversation. And we've got to go, what future do we want? And the fact of the matter is, yes, it hurts to get rid of the Mustang, but he's got to do it. It makes everything go fast forward. But then what can you do? How much of the $11,300 in credit card was you buying

something? Can you sell something for two grand? We both got to put some skin in the game, I think, to where we stop doing this. Well, you did this or you're not going to do this. I think that's your problem. I think you both want the same future, but neither one of you are willing to make a sacrifice and both go, all right, we're both going to take on some pain here, Rachel, I think is the issue. Yeah, and do it together. This is painful. But look, can I just say this? Make it $190,000 after they clean this mess up.

He can go pay cash for another great Mustang. Or you guys can choose an intense plan to get rid of it. But you both have to agree, though. That's the problem. And Tracy, you're feeling this level of fear because you're not going to be taken care of if something happens and a fifty five thousand dollars mustang is sitting in there and it almost feels like that's become more important to him than her level of safety and fear right so i mean like you you guys have a yeah you can keep it

it's the it's the conversation that needs to be had of the yeah there's marriage stuff here too so um yeah but but we always say too around here i think dave says it all the time which i just love how do we get from point a to point b the fastest the most efficient way the baby steps are that and part of the baby steps is you sell everything to to fast forward this process so to get to point b to have money in the bank for you to feel secure, for him to retire early, all these things y'all want, then Mustang makes sense to sell. To get there the fastest.

Unless you guys choose a different plan to pay it off and all of that. But y'all have to be on this. Both of you. Hang on the line, Tracy. I know he listens and watches. Let's give you guys a copy of Total Money Makeover and just follow it as it is written. $1,000, baby step one. Get that little emergency fund and then walk it out. You guys can do this. You have plenty of, you have big enough shovel. You do. Yep. You can do this. Great job, Tracy.

Thanks for calling. Thank you for the call. Boy, I hate to see that on a steak. I think it has to. Hey, Rachel Cruz, thank you. Thank you to the team. This is The Ramsey Show.