The Ramsey Show - App - How Do I Make the Most of My New Income? (Hour 1)

Episode Date: April 26, 2024

Девочка-пай Live from the headquarters of Ramsey Solutions, this is The Ramsey Show. It's where we help you win in your life, specifically win with your money, winning in your work, and winning in your relationships. The phone number for you to get coached up today is 888-825-5225. 888-825-5225. I'm Ken Coleman, a Ramsey personality, and I'm joined by another

Ramsey personality, the fabulous Jade Warshaw joins me this hour. And together, we're going to help you. Jade is our money expert. I'll chime in if she decides to let me maybe. Rachel, yesterday, let me say a few things. It's always exciting. And I'm the work guy. In other words, when Dave has said for decades that your income is your greatest wealth building tool, I want to help you win at work. When you're winning at work, you're making more money. When you're making more money, we get through the baby steps faster and live the life we want to live. So how can I help in those areas? We team up. Jade weighs in on that as well. And so let's get to it. Melanie's going to start us off in the Big Apple, New York City. Melanie, how can we help today? Hi, thank you all. Thank you guys all for that you do. Sorry, I'm really nervous. You're doing great. So I listen to the show every day for the past six months and I've paid off $10,000 in debt, cut out all the cards, sold stuff, do my side hustle, work overtime. I check the EveryDollar app every day. I'm on track to being debt-free by my 30th birthday this August, which is a huge goal and accomplishment for me. That's awesome.

I do have a paid off Jeep that I've driven to the ground for the past 11 years. I've already put $2,000 into repairs since I started being Ramsey this October. The entire bottom carriage is rotting and oil is leaking into the engine, which would cost thousands of dollars to fix, and it still wouldn't be guaranteed that more issues wouldn't come up. I'm still gung-ho with the baby steps, preach them to my friends and family, but now I'm faced with the decision

to continue dumping money into the theater or taking out a car loan on a new-to-me car that will last me another 10 years. No, not car loan. No, no, wait, wait, wait, wait, wait, wait, wait, wait, wait. Let's talk about these options before you keep going, because I don't want this to hang out in your mind a second longer. Your option is not to keep the Jeep or get a card note. That's not the options. The options are to keep the Jeep or to temporarily pause the baby steps, stack up some cash and buy yourself a junker in cash.

That's your options, right? Those are definitely options that I keep on ruminating, but just logically and realistically to go from this beater that I've already put so much money into to then going into another beater that I've already put so much money into to then going into another beater just logically and realistically doesn't make sense to me. Where do you live? I live in North Jersey. North Jersey. How far do you commute every day? My commute's not far, but I do need a car to get around. I just asked you, how far is your commute?

It's a five-minute commute. Wait a sec. Okay. Okay. So I would like to throw that option back to Jade. That's a legit option. Yes. Here's the thing.

I want you to see where I'm coming from. Where I'm coming from, giving you the option, eliminating the option of debt, is I'm simply trying to honor all of the work that you just laid out that you've done. You laid out beautifully all the sacrifice you've made, how diligent you've been, how much you've done in order to get yourself to the place you are now. And I want to honor that by not saying yes to you going back into debt. And so that's where I'm coming from. Now, here's the

thing. All vehicles are not created equal. And you may have had a lemon before. That doesn't mean your next car is going to be a lemon. I've only drived used cars with 100,000 plus miles on them. And I think, I mean, recently, I haven't had any lemons. So I don't want you to think that just because your car has now gotten too old to keep that if you were to buy another used car in cash, that it would automatically be in that same time, you know, that same kind of frame of vehicle. Does that make sense? And I get it.

Like, it can be easy to think that, but it's simply not the case. So your Jeep right now, is it a Jeep Liberty, Jeep Wrangler? What kind of car is it? Because I used to have a Jeep Liberty and it was, it did it did you know that's not the car that you want to go the difference it's a liberty that is i'm just gonna be honest that car has a lot of special features like that's not the car that you want to go the distance i'm looking for like give me a honda civi you know what i'm saying like fine what's your locale i'm gonna pull up while she's talking i'm gonna pull up some used cars i'm gonna help you out what what would I put in used cars for sale under 5,000 in Wayne Wayne New Jersey okay Wayne New

Jersey so we're going to help you look this is Ken's specialty but truly like we need like a Nissan we need a Honda like we need one of those brands those are the brands that are going to go the distance with mileage the Jeep unless it's a Wrangler it's probably not going to cut it so first of all i'm not knocking jeep i should never buy high miles jeep yeah they do not have a good record it's that's not the one of course my struggle and i've also thought about this of getting a five thousand dollar beater or whatever i would still have to take out a personal loan and that would be at a much higher interest rate as opposed to taking out a car loan why do you feel like you have to take out a loan let's go through the numbers right quick so you said you're going to be debt free by august how much money how much margin are you

putting every single month onto your debt a thousand or more every month. Closer to 2,000 or closer to 1,500? 1,500. Okay. So if you're putting 1,500, what would it look like if we said, okay, this is an emergency. We're going to go in and we're going to save two months. We're going to temporarily pause the baby steps for three months and do 15,000 and then another 15,000. We're going to put 4,500 onto this next car what would that look like

and then you're you don't owe anybody anything you're just buying a four you're you're driving a 4,500 car temporarily until you pay off your debt that pushes your debt free uh date from August September October to November or December and that's just part of. I don't want you to view that as some sort of a failure or some sort of a loss. Like that's, these are the things that are part of walking the baby steps that, that most people encounter at some point. And it's not a, it's not, you know, a negative step backwards. It's, this is part of it. I mean, I did that yet. We had to stop and buy another vehicle. And it's funny because we had a Jeep Liberty and that thing just, it didn't keep going for us.

Okay, so I'm just going to give you three options here, Melanie, real quick. Because by the way, what's that? Did you say you can't hear us anymore? Did we lose her? I think she said I can't talk to you. I can't hear you guys anymore. Oh no, she said she can't hear us.

Melanie, can you hear us? We're going to have the guys in the booth are going to fix us. Hello? Melody? Nothing. Huh. Boy, that's a shame. Well, let's see if they can.

While we're waiting, let me just pay this off, okay? That, Jade, you're right. So I punched in on cars.com, just one of the services. We've got a 2012 Nissan Versa. I'm going to put her on hold until we figure it out. We've got a 2012 Nissan Versa. I'm going to put her on hold until we figure it out. We've got a 2012 Nissan Versa for $49.99. If you walk in with cash, I'll guarantee you can walk out of there

with maybe... get $3,800 on that. If I walked in with cash. I don't think so, Ken. Cash doesn't do what it used to do. Why? Why do you got to disagree with me? I'm just saying they want you to finance. I don't want to get her out of... She's got cash.

I know, but they want you. She's got cash, so $4,999. All right. We've got a Buick Lucerne, $4,900. We've got a Pontiac G6 for $4,400. All of these less than 120,000 miles. Go with that Nissan. It's doable.

And she could walk for two or three months, by the way. Five minutes. Come on. Where there's a will, there's a way. This is The Ramsey Show. Welcome back to The Ramsey Show. So excited that you are with us. I'm Ken Coleman.

Jade Warshaw joins me. And we are here for you. 888-825-5225. 888-825-5225. 888-825-5225. They want me to talk about the new book, and it is available for pre-sale. It's called Find the Work You're Wired to Do. And it has an assessment with it, the Get Clear Assessment. So both of these tools work together.

What does the assessment do? Oh, it's right there on the screen. There you go. I don't have to do that. I don't have to show anybody. The assessment helps me answer the question, who am I and what could I do? And then the book with it helps me figure out where I can do it and how. So these are important questions. Who am I? What do I want to do? Where can I do it? And

how do I get there? And so the book takes about 45 minutes to read. It's a companion to the assessment results to have a professional purpose statement. So this is about self-awareness, which gives you confidence to do the thing you're wired to do. And that's where you have the chance to make the most money. So you can pre-order it right now, ramsay solutions.com slash store. And I'm excited because when you pre-order it, we're not giving you a bunch of other stuff.

You're going to get the ebook with an assessment code. You're going to get the audio book with an assessment code and the hard copy with an assessment code. So three books, three codes, all one price. I think it's too good a deal, but I'm not in charge. I just do what they say. It's called Find the Work You're Wired to Do, and this is if you want to max out your income.

So you can get it now. It comes out May 7th. You can pre-order it now wherever books are sold or ramseysolutions.com. All right, to Salt Lake City, Utah is where we're going next. Carson joins us. Carson, how can we help today? Hi, I am a young realtor, and I was just curious on how do I make the most of my money to prepare me for my future?

How do you make the most of your money? Yes, to prepare me for my future. All right, Jade, take it away. I think the crux of that is always going to start with the budget. Are you a budgeter? Do you have a budget? Yes. Okay. Are you using our every dollar budget? I am not currently, but I am about to get it. Okay, I would. Matter of of fact we won't let you leave this call until you get it um with every dollar budget is great it just it um it helps

you create daily habits which is a big part of budgeting a lot of people kind of set their budget and then forget about it and it's like well i did my budget for the year ken and they're not thinking about the fact that every month holds something different your goals are constantly changing you're accomplishing goals it's time to move on to the next. So every dollar will help you with that. So that's thing one is the budget. Thing two is the way you make the most of your money is you know where you're going with your money. You have a clear direction. And so the next point would be, okay, well, let's look at what our goals are. Where are we currently in this moment and where do we need to get to?

So let's talk a little bit about that. Tell us a little bit about your finances. Do you have debt? Are you trying to buy a house? Tell us what you're trying to accomplish. I'm debt free and I've just been trying to save up for a home in the future and any of my business expenses. Okay.

So first off, we want to keep the business expenses a little bit separate from the personal expenses. And so I would always advise that if you're, you know, doing your small business or you're, you know, contracting in that way. Do you have any money saved? Yes, I do. How much? I have a few thousand. Like two thousand or eight thousand? Like two thousand. Okay. Just for personal savings, but then I have five thousand set aside for an emergency fund. Okay, so we've got seven thousand dollars saved. Is that, would you call that three or six months, or how many months of expenses is that for you? Six months. Okay. So let's group all that together. The way we would teach it is we save three to six months of expenses and that is our emergency fund. We only touch it if there's an emergency.

Tickets to Taylor Swift would not be considered an emergency. Quick question. $7,000 equals six months of your expenses, Carson? Yes, because I'm just a young kid. How old are you? I just turned 19 the other day. Okay, you're living at home? Yes. Okay, all right. Just getting started.

I was like, okay, I want to make sure I understand the full range of this phone call. Okay, so you're starting out. Okay, very good. I'm sorry, Jade. No, keep digging. This is gold, Ken. Yeah. Well, I mean, you're going to explain the baby steps and all that, and you have, and the investing part of this, but that's, you know, you stepping out in early on and learning the power of investing. And I know you love your investment calculator. I know you love to demo that. I think you need to set him free and show him what it could be. Because as a real estate professional, how much have you made so far as a real estate agent? I'm about to make close on my first deal. Nice. Very good. So very first home.

What do you stand to make on that house? It should be upwards in like the probably $20,000 to $50,000 because I sell ranches. Come on, Carson. That's awesome. Come on, man. That's awesome stuff. Okay. So now play with that number, Jade. All right. Here, listen, 20 to 50. I'm going to dig a little bit because I just, I want to know more. So you start doing real estate. You got your, you closed your first deal. Was this like you went out and grinded and you got the offer? Was this family that was like, hey, we're selling this land. Let's use cousin because he's trying to start out. Tell us more about this deal and tell us if you feel like you've got a lot of

irons in the fire. This is just from like my broker mentoring me and helping me. And so I was just able to hop in it and just, you know, kind of had a burning desire and just went and grinded to find some deals and they helped me along the way. That's awesome. So with any type of profession that's got the irregular income, you know, it is important, A, that on the business side of things that you're keeping that money separate, you're making sure that your business has savings. You're making sure that you personally have savings and figuring out early on, okay, what does it cost me to do business on a monthly basis? What does it cost me to advertise, to print out flyers, to drive people around town? All of those things, I want you to start keeping

track of what it costs you because those are your business expenses and you need to keep some of that money in your business in order to make it run right and then on the other side you can start looking at okay how much of this do I get to pay myself how much am I keeping and because it is a regular I love having almost aside from your three to six months I love in an irregular income just having almost an extra month's worth. It's almost like you're a month ahead all of the time. Yeah, I agree with that. I agree. And I would start investing now.

So let's say that he makes $40,000. Let's split the difference. You said between $20,000 and $50,000. So let's call it $35,000, Jade. Okay. So walking through, based on what you just said, what he would do, a sample, if he clears $35,000. Okay, so let's say you clear $35,000. Let's say that you are taking out your taxes, so you need to make sure that you're estimating your quarterly amounts.

And so what I would say is 25% to 30% of what you make, always set it aside for taxes. So that's thing one. Then after that, you can look at it and go, okay, what am I paying myself out of this? And whatever, let's say you pay yourself 15,000, right? And now you're going, okay, I need to invest 15% of my income. That's your income. Investing 15%, you can work with one of our smart investor pros, but essentially, that's what you're doing. If you don't have Carson set up where you can invest, whether it's you could start with a Roth IRA, but eventually you're going to want to do something through your business, whether it's a SEP or a simple 401k, something like that, where you're able to really take advantage of all that you could be contributing on a yearly basis, just as if you worked for a company that was offering you a retirement plan. So that's what we're looking to do. That's what Ken is getting at. So every time you sell a house, every time you get paid, you are taking out your quarterly estimates because, you know, you're an independent contractor, you're paying yourself and then you're paying 15%. You're contributing 15% to investing. And that's the step you're in. If you ever get to the point where you say, you know what, I am ready to move out on my own. I'm ready to purchase a property of my own and it's time for

me to save for a down payment. Then if you wanted to, you could pause that 15% that you're investing and put all of your, you know, financial efforts to saving your down payment, especially if you think that it's going to take you more than, you know, if you can do it quickly, if it's going to take you more than two years, I probably wouldn't pause it. But that's what we're looking at. He's got a lot to focus on. And I think that 19 closing on his first ranch. And I got to tell you, I like this ranch business. That could get really good. If you look at his growth over the next 10, 15 years, the kind of money he's going to be able to make. Great job. Thank you so much, Carson, for the call. We're excited about your future. All right, we're going to take a quick break, but we'll be right back. She's Jade Warshaw.

I'm Ken Coleman. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Coleman. Jade Warshaw is with me and we are here for you. 888-825-5225. Taking your money questions and your work-related questions. You're a professional and if you're not winning or you're looking to maybe switch gears, start something, take those questions as well today. All right, Jennifer is going to join us now in Trenton, New Jersey. Jennifer, how can we help? Hi, Dave. Hi, Ken. So my husband and I are kind of in disagreement about the 15 versus 30-year mortgage. He feels that if we just throw the same amount at it, then 30 years is fine,

but it's not obligated by that higher payment because it is a higher payment for a less amount of time. I'm all Ramsey and let's go 15. And how long has this discussion been happening? Well, probably at least a month. We're looking at buying a new home. We currently are in a home and we're going to sell it and then purchase a new home. So that's where the talk has come from because I'm just like, I really just want to bang it out as quick as possible. Can I ask a question? So obviously, if you have a 15-year mortgage, the mortgage is higher, like you're paying more per month, which in many cases could cause you

to have to get a less expensive house so that you can afford it. Is that playing any role in this? Or are you saying no matter what, here's the house we want or here's what we want to spend. The only caveat is whether we do it on a 15 year or a 30. I'm just curious. Is it that your husband wants more house for the money? So we have a realistic house amount that we're not going to go over for our income. So I think we can afford it. The 15 year, because like I said, it's like $350,000.

We're trying to stay at $350,000. Okay. $350,000. And I don't think it would be that much higher. I think he's thinking like he wants to be able to take vacations and do this, that and the other. Got it. We'll still be able to do that. We'll just have less play money. Well, I think that here's the first parameter. And I mean, I'm going to give you my opinion on this. But the first parameter that you guys have to agree with

is that the mortgage is going to be no more than 25% of your take-home pay after taxes. That's the first thing. And if you do that, then you will have money for the other things, saving for vacations and having a good time and having a good life. It's when you creep beyond the 25%, 30% range that it starts to get tighter and tighter and tighter. And then it's like, oh, my goodness. So that's the first thing to agree on. The second part of this that I would say is

you guys have to be aligned on what your goals are for your life, because here's what I know. The people, if you say to yourself, we wanna pay off this house and if we have a 15 year mortgage, we're gonna do that faster. It's just baked in, right? It's 15 years less.

Then why would you say, say well we'll get a 30 year and treat it like a 15 year then you're already saying I plan to not do this like I plan to give myself the freedom to say no some months and not pay that extra payment and the moment you do that is the moment when you start slip sliding and before you know it you've been paying for a house for 30 years right i agree with you well the the issue here though is um you're saying things like i think uh we should and i think this needs to be more of a conversation with real numbers like you guys need to get down and and get spreadsheeted out uh or if you write it down that's the way you guys do it but you you have got to cast a vision for him because he's just not comfortable. You've already, I think, really nailed what's going on.

He wants some more margin. You're going, I don't need as much margin as he does. So this is a relationship issue, not a money issue. And we've got to solve the relationship part, then the money will take care of itself. So you guys got to sit down and run these numbers out as best you can with the 15 year and the 30 and begin to walk through the stuff that he wants margin for, the stuff that you don't care about, he cares about. And so that's where this comes down to. And so you two getting on the same page as to this is how it's going to affect our life. This will be our reality. If we do a 15 year and him getting comfortable with that,

that's where you've got to get him. And you're not going to convince him. You're going to have to walk with him. Does that make sense? Yeah, it does. How old are you guys um so i am 47 and he is 60 60 okay this is the argument right here does he want to be paying off a home when he's 90 no i didn't think so and i know you don't want to be paying off a home when you're 77 that's not good enough argument but if she's worried about margin. He's worried about margin. But if he's worried about margin, like I said, the first thing is the 25%. And that's where you've got to go and do your homework and find out if we do this same deal at a 15-year fixed rate mortgage, what percentage of our take home is that going to make our payment? Because to Ken's point, you haven't been able to say yes or no on that. And so if he's

concerned with margin, my guess is that the 15 year would take you over that amount. That's my guess. I don't know for sure, but just based off of some of what you've said. So that's thing one. But then thing two is, okay, now let's meet in the middle and go okay that means we need to find a less expensive house because i don't know the rest of the picture i mean i could dig a little deeper it might be a can of worms but do you guys have other debt no that's why i think he thinks the 30 years fine because we paid off sixty thousand dollars worth of debt in 17 months we were ex exalting. We have no debt. Okay, that's awesome. Why are you selling the current house and buying something else?

It's too big. Okay, it's too big. So how much are you going to make on the sale of that house? Hopefully $400,000. So you're buying... Wait a second. You said you were going to stay in the $350,000 range. If you're going to make $400, why not pay cash?

Oh, we totally could. Well, then why are we having the last five-minute conversation? It doesn't make any sense. I'm not trying to be unkind. Just saying. We would have said immediately, there is no 15-year, 30-year conversation. If you walk away with $400, after you pay your realtor's fee, you're probably darn close to having the exact amount to pay it off. And then you guys are,

then you're really vacationing. What are we missing, Stephanie? I still owe on the current mortgage. No, but Jay just asked you, what will you walk away with in the sale of the current house? Okay. I misunderstood. That's okay. Okay. So we currently owe about. Oh, no. Okay. I misunderstood. That's okay. Okay. So, we currently owe about $180. Okay. And it's worth...

So, we sold it for $400. Okay. Well, that's $220 gross. Right. And then we got to pay the realtor. Yeah. So, you still have a massive down payment. Right.

So, I think you're're fine let's say you put 180 down on this next house that's almost half so have you run the numbers on a 15 year on that amount of money that would be very affordable i still think he's like... But here's the problem. You're operating in assumptions. This entire call has been assumption-based. And we're not getting on you. We're coaching you to say, you've got to sit down and actually on a computer go, all right, let's look at whatever the 350 minus 180 is. I'm not that good at math that quick, but we put that number in, the difference, and we see what the current 15-year mortgage rate is, and it will spit out a number for you. And then you sit

down with your husband and go, hey, babe, a 15-year mortgage on this balance is this much per month. You've got to be dealing in reality, not concepts. And right now, I love that you're all in on Ramsey, but until you start putting real numbers next to our theories and our philosophies he's not going to get on board listen i'm going to try to type it in for you right now i was hoping you were doing that i'm doing it stalling with my lecture keep keep stalling listen you're putting 51 down 15 you're fixed let's say the rate is uh this is saying 6.5 i feel like it's going to be closer to seven. So I'm going to change that.

So this is saying that if you were to do this, and it's estimating some taxes and insurance in here, it's saying that your total would be $2,000, $2,074 a month. So only you know what percentage of your take-home pay that is. Okay, it's estimating $321 for property taxes, $125 for home insurance. So only you know what percentage of your take-home pay that is. Okay? It's estimating $321 for property taxes, $125 for home insurance. And by the way, I'm on RamseySolutions.com using the home payment mortgage calculator. So that's all I'm doing.

You need to get clear, as Ken Coleman would say. Yes. And get these numbers. This is what you're presenting because you do not want to retire with a home payment. Okay. And I know you know that, but the key is making your husband understand that. Stephanie, thanks for the call. Do what we tell you to do.

It's going to be a much easier conversation. This is The Ramsey Show. Welcome back to The Ramsey Show. Glad you're with us today. I'm Ken Coleman. Jade Warshaw joins me. Phone number is 888-825- 5225. Let's go

to Chattanooga, Tennessee. Bo is there. Bo, how can we help? Hey, guys. My family owns a construction company. We do earth moving. I just graduated last year, and I did one semester of school, and I'm just so, you know, I dropped out, and I'm

just so torn on going back to school or just keep doing working. So I didn't know what y'all thought about that. Sure. What made you drop out? I don't know. I kind of just sat down with my mom and dad and they kind of just didn't think I would really need the degree. I was doing civil engineering, so it was pretty difficult for me. Okay. And so mom and dad were in support. We all kind of sat down and said, eh, maybe it's not for me. And you agreed. They agreed.

Is that what I'm hearing? Yeah. Dad, my dad owns the company, so he was more like, you know, you don't really need the degree. And I think mom was kind of more play it safe, you know, go to school. But I kind of just listened to my dad, to be honest. Now, is the plan at this point, and you're only 19, is the plan to work for the company and eventually take over, or just you've got a job now and we're going to see how it plays out? Yeah, the plan would eventually be for me to take over the company maybe four or five years down the road. Well, then I would not get any education that is not tied to

something that will specifically make you better at running your family company one day. And so if you and dad both come to the conclusion that you don't need a degree at a traditional school and you just need the school of hard knocks and your dad teaching you and bringing you along, then no, I would never darken the door of college at all in this scenario. And by the way, my general philosophy is when people ask me this is, I think it's two questions on the degree, degree or no degree. The Shakespeare thing, is this the question, right? That's the question. So it's, is a degree the only way to do what I want to do, or is a degree the best way to do what I want to do?

And it feels like a really hard no for both of those questions for you. So it's consistent with what I've said for anybody in any field. Yeah, I was kind of torn because I kind of eventually want to get into developing land, and so what I was studying was a civil engineer degree, and that would give me the ability to basically make plans where I could eventually develop the land into a subdivision or commercial homes, stuff like that. Well, wasn't that what you were pursuing, and it was too hard?

Yeah, I don't know. I think he really just wanted me to, because he's been doing it for 40, 50 years, and I think he kind of just wants to take a lesser role and give it to me. I understand, but you're kind of, it looks like you're flip-flopping on me on the phone here. So it was like, hey, I sat down and talked to Dad. It was hard. I didn't like it. We agreed I didn't need it.

Now you're going, well, I was leaning towards it. So I think you can learn how to develop land without ever going to a classroom and getting a civil engineering degree. I think that. I think you know that know that yeah so has your dad done it no he went to school um he didn't finish his dad uh was the one who started the company and he got sick and he had to come back you guys know people locally that develop land, and that was basically the other thing. I would just buy the piece of land and basically contract out the civil engineering part. That, but isn't it possible, Bo, at the young age that you're at, that you can begin to hang out with and spend time with these friends of your dad or friends of your family that

are really successful developers? And couldn't you pick up a lot of information from them over time? Yeah, you're correct. So I just don't think school is the play for you. But here's the great news. If that changes and the answers to those questions become yes, then go back. But right now, you need to learn how to run this business. And the best way for you to learn how to run this business is to be working with dad day in and day out.

And I don't want to ever throw some potential negative thing out there, but the bottom line is none of us are promised tomorrow. And so if I was in your shoes and I was the eventual owner, I would not waste any time. I'd be learning everything I could. I'd become a human sponge around your dad. You're going to develop your own management style. You're going to develop your own systems. And now's the best time to learn. So no, I wouldn't go back to school now. Make sense? Okay. All right, man. Thank you so much. Yeah, I appreciate the call. So good. Stephanie is now joining us in Atlanta, Georgia. Stephanie, how can we help? Hey there. My husband wants to retire

next year and has talked about pulling out his 401k to pay off our house oh okay well let's talk about it how old's your husband he is just turned 60 okay how old are you i will be 44 next month okay and uh do you guys combine your is your money combined yes uh yeah i mean we both we split expenses we keep separate accounts but yeah his money's my money my money's his okay uh i'm going with you on that so you're saying he wants to pull from your collective retirement and pay off the mortgage so can you tell me collectively how much money you guys have in your nest egg at this point i was trying to get a number from him. I think it's probably about $500,000 combined in 401ks. Any other money?

We have a rainy day fund that's about six months of living expenses. Okay, so you got your emergency fund. And how much will it take to pay off the mortgage? $130,000. $130,000. Okay, so essentially my thought here is this is going to double in seven years so if he never touched it it would be a million and seven years he'd be 67 and you'd be uh 52 53 and so you know and if he pays 180 towards his mortgage same thing's going to take place you said 180 sorry 130 130 mortgage okay

so I think what he's trying to do I'm and you can correct me I think what he's trying to do is clear all debt so that he can kind of be at peace okay yep then my next question is before I'm not saying yes or no yet I'm just just trying to get the information. So then my next question is, are you going to continue to work? And if so, what's your income? I will continue to work and I make about 100K a year with a notable bonus in August. Okay, so you're going to continue working. What will he, his retirement, tell me about that. Is he military? Is it just this 401K? Tell me more about his retirement and what about that is he military is it just this 401k tell me more about his retirement and what he thinks he's going to draw he will uh he will pull a pension okay and if he takes the full pension that's 900 a month approximately i believe and um he will do something whether it be working at home depot or he'll get a job for a while until he starts

collecting social security and i don't know what that amount is. Okay. So I feel like looking at the numbers and looking at what you talked about, I don't think that he has to do this. I think that if you guys buckle down, you can have this paid off in the next two to three years. If you guys go crazy. If you say that, hey, he's getting this 900, I'm working I'm working, I get $100,000 plus bonuses, plus he's going to be doing something. I got to believe that between all of that, you guys can find, I don't know, almost $200,000. How much are your bonuses? It ranges between 5% and 7%. Okay.

So is that fair enough? Think about that. It could be a lifestyle change, but mean how much how much of a lifestyle option because um we like to travel yeah but but what's your mortgage payment 1200 1200 and so how much would you guys put extra into that jade what's the number you're suggesting they put over and above that well i'm not i I think it's up to them because this is about intentionality. If he's working at Home Depot, I mean, what do you think he's going to pull?

Oh, I don't know, but he's been putting an extra $200 to $400 in, I believe, for the past several months. $200 to $400 in what? Into the mortgage to try and pay it off early. So we're already starting to do that. Yeah, but it's not all of a sudden this big pinch. My point is if he's working plus he's pulling a pension,

it's not like it's going to be, what's his current income? I believe he's around 70. So let's look at it like this. Can you guys live off of your income? Yes. Okay. at it like this can you guys live off of your income yes okay so if he says i i am i'm not doing the job i was gonna i was doing so i'm essentially retiring from that job but i'm gonna make it a point to make 43 000 a year if he does that you can pay and we take all of his money and throw

it at the mortgage you'll be done in three years yeah and you're working so it's not like you guys are traveling all the time you only get so much. I think you guys are saving up for the vacation. You're doing that. And to Jade's point, you're piling everything on the house. Here's the deal. That 401k, as Jade said, is going to double and he's only 60. Then you got social security. If you wait until 70, I would just sit on that. I would not use it to pay off the house. We're both in agreement on that. I wouldn't. You're going to win big. So good stuff.

Good hour, Jade Warshaw. Thank you very much. James Childs, our fearless leader in the merry band of people behind the glass that keep us on the air. Thank you. This is The Ramsey Show. Take care.